Closing Bell - Closing Bell: Best Year for Financials since '97 11/26/24

Episode Date: November 26, 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.

We begin with breaking news on Closing Bell. Welcome to our program today. I'm Scott Wapner. We are waiting on President Biden to deliver remarks at this moment in the Rose Garden. Momentarily, he is expected to address a possible ceasefire deal between Israel and Hezbollah. It is a significant development, and we will take you live to the White House as soon as we do see President Biden. I want to update you on the markets as well. What had been a bit of an uneven day has now turned green across the board, not for the Russell, but for the majors. Certainly here, we had talk today, obviously, from President-elect Trump about tariffs on Canada and Mexico and

increased tariffs on China as well. That unsettled the market for a bit, but we seem to be picking up a little bit of steam here as we head into this last hour, which really is our talk of the tape today. How to best position ahead of another Trump administration with talk of tariffs and tax cuts and so much more for investors to consider. On that note, let's bring in Liz Young-Thomas, SoFi's head of investment strategy with me here at Post9s. Good to see you. Good to see you, too. So I'm just going to remind you, we'll break away and go to the White House if we see the president. But how are you thinking about the market today, which is doing a pretty darn good job brushing off news of more tariffs,

at least what the president-elect is talking about? Yeah, I mean, if you tuned in right now, you'd look at this and say it's kind of a boring day, flattish to up. But knowing the news that we came into the morning with, knowing that the market was down and volatile earlier in the day, and then seeing where it is now, I think is just further proof that this has been a rally of sentiment. This has been a rally that can last, and people want reasons to buy. And

there continues to be a bid for a lot of different sectors, many, many sectors now almost in overbought territory, but almost brushing that off as well. So it doesn't really matter if they're in overbought territory. People still have appetite to buy equities. So the tariff talk today, I think what we're going to continue hearing is a lot of severity in the proposals, but then softening in the execution when it actually happens. And I think that's part of why the market is brushing this off. Also, even if the China tariffs do go into effect, these are not a surprise. This is almost exactly what most people expected. And perhaps they go into effect immediately when Trump gets

inaugurated. But again, not a surprise. I was going to say to you on that note, we've sort of seen this movie before. Correct. None of this comes as a surprise. Right. President-elect Trump campaigned on this. And the market was going up knowing full well that tariffs were likely anyway. Whether this is the first salvo in a prolonged negotiation?

That's right. We'll find out. But the market certainly doesn't seem to be too concerned about that. On the note that you said about, you know, so many different sectors have seen gains, if not record highs, right? Bank of America Securities today talks about the highest inflows that they've seen since September, that clients bought stocks in nine of 11 sectors, by ComServices, tech, financials and discretionary. Others are talking about a huge move higher in cyclical names. That was Civita at Bank of America today as well. Is that the kind of thing that we should continue to look

for those areas of the market to do the best? I think that 2025 will end up being a positive year, but more muted returns broadly and not as concentrated as what we've seen for the last two years. Why do you say more muted returns? If there's all this optimism about, you know, a pickup in growth, using the pickup in growth to get at the deficit, you increase oil production. I mean, I'm just saying what the expected policies and things that will be championed by a new Treasury secretary are going to be. If there's a lot of optimism about that, why are gains muted? So, for one thing, we came into 2024, and this is a question that I asked myself thinking about writing the 2025 outlook, right?

Can we have another 2024? And what's different about coming into this year than what was different about last year? We came into 2024 with the expectation of six to seven cuts by the Fed. We're going to end up with maybe four. And right now, two more priced in, two more priced in for 2025. So less monetary loosening, right? less wind at the back from that perspective. We also are coming into it with valuations at a higher level, but not just in certain sectors. They have gone up, as we have already discussed, across a number of sectors because of all

of the appetite for buying. So there just isn't quite as much room. And when you look at things like valuations, now, they're a terrible timing mechanism, but they're something that you have to look at over the long term. So speaking of rate cuts, we did get the Fed minutes at two o'clock Eastern time. So you stay with me. I want to bring in Steve Leisman, our senior economics reporter, to discuss. And Steve, I will remind you as well that we are waiting on President Biden. I'll go to the White House as soon as we do see him in the Rose Garden. So you'll you know, I'll beg your pardon if I have to jump away from you. But what seems to jump out to me most here is one word,

and that is gradually, about coming rate cuts. It sets the table for what is maybe a different sort of meal that investors thought they'd be enjoying a few months back. I think that's a great way to put it, Scott. If I continue the metaphor, they thought, hey, you're going to bring one course, we're going to finish that, bring another course and another course. Now take a look at the meals expected in the Fed probabilities now. Maybe we're going to get another course in December. It's 60% now. So yeah, we're pretty

much counting on getting Fed. But then we don't know what happens in January we don't know what happens in March and we're unclear on what happens in May all of those are running below 50% so Scott I don't know if the main course is coming or not but but right now it's like and by the way those three to the right of that 60 percent are all probabilities of the same quarter point cut it's not like one another one after another there's still there's 25 kind of built in there over that period of time but then a big question the market cannot get above the 50 probability of another course coming scott to use your metaphor there the the issue certainly one of them, is that the Fed itself, which suggests that these cuts will come gradually as they move towards neutral, they don't know where neutral is.

So they're not really able to say the extent of how far and fast they'll be able to go, while also keeping an eye on the economy itself. Yeah. and if I could, I don't know if Liz is still there, but there is maybe a sense that not everybody is quite so sanguine about the tariffs that are coming. I think they're terrible no matter how you put it. And about the best justification or rationale you see for it among the economists is, hey, it wasn't so bad last time. Well, look at the stock market flatlining in 2018. And if I told you, Scott, out of context, I'm going to put a 25 percent tax

on our two most important trade relations, would you say that's good for the economy? The idea that we knew this was coming doesn't change the economic reality of the negatives that this could potentially create, I think, especially for businesses operationally, Scott, that thought they were set up under the USMCA created by President Trump, that now he looks like he's in the process of potentially blowing up here. I mean, the world has changed a bit as well. So all of those are things to consider. Stay with me, Steve, because while we're waiting on the president, I want to bring in our other guests as well, because I gather they would have opinions on what you're saying, too. It's Ellen Zentner of Morgan Stanley Wealth Management, Chris Heisey of Maryland Bank of America Private Bank. Ellen,

I'll go to you first, since we're reacting to what the Fed may do. We all, of course, remember your conversation not long ago with the chair himself. What do you make of the minutes here and that word gradually and how we should think about that into the new year and expected cuts? Yeah. So I would put gradually in the same camp as carefully, cautious, measured. Right. When did we last use the word measured? And so, you know, do you want to put a definition on it? Does that mean every other meeting? Does it mean we carefully approach every meeting? No one knows, right? But it's to give the Fed full flexibility. And so, look, you're a very astute Fed watcher,

and you said that Chair Powell doesn't know where neutral is. But he said, as we approach where we think it might be, we want to slow down. And so I think what Steve pointed out with market probabilities being less than 50 for each meeting after December, I think that's where the Fed wants to be so that the data leading up to each meeting, the market can say whether it needs to push that probability higher or not. This is what data dependency is, means a lot more volatility and a lot more guesswork. And look, the Fed is guessing, too. The Fed also doesn't know where a tariff is going to land. Here, there, and everywhere is the answer. And it was painful in 2019. The world was headed toward recession.

The Fed started cutting. So we need to remind ourselves of that playbook. We need to remind ourselves, too, I suppose, Chris, that we don't need months to happen before you get tariffs in place. The president can do that through executive order by himself, which means that we could be dealing with this 12.01 p.m., literally, quite literally, on January the 20th.

Is the market prepared for that adequately as Steve suggests? Maybe not. Well, we know the market gets prepared pretty quickly. They don't need too much of a heads up on things. What we don't want is sharp surprises.

This would not be a surprise. The market will likely be prepared for that. I would caution, though, I would say this. Back in 2018, the Fed was raising rates when inflation was not at 2%. It was below 2%. And the Fed was raising rates, which really stopped growth in its tracks. And then you had the tariff surprise as well. And that's why they had to begin cutting. And those famous words were listening to the markets started in 2019. Now we have financial

conditions that are frankly easy. We have a precedent. We kind of know what happened. But to Steve's point, yeah, we know what happened. But still, we've got to see how it fleshes out. My final point is this. Tariffs are a tax. And there's a lot of discussion that they're inflationary. Frankly speaking, that could be a tax on growth versus a boost to growth overall. And that might balance out some of the discussion that a lot of people have had on inflation's going to be much higher than what many people are suggesting. So a lot of things to parse there. But I think I think the market will be pretty much ready for this. OK, I want to I want to push you a little on that. The idea, Chris, that the market would be ready.

You said earlier the market would be prepared for the tariffs. How can a market that many people think is going to go straight up between now and inauguration day be prepared for something like an increase in tariffs and yet another round of what could arguably be a more significant and serious trade war this time around when we haven't fully beaten inflation back into its place and we're worried already about a softening labor market. So this is different this time. How can the market be fully prepared for that? Well, I would rather have a garden of better growth, a garden of nominal growth that's likely to be 5 percent or better, a garden of better growth, a garden of nominal growth that's likely to be 5% or better, a garden of double-digit earnings growth and have tariffs than what we had back the first time, which was

a much different situation where you had to actually get growth up to a particular level from a very low level. Point number one. Point two is the market and investors are going to care about two big things for the most part. What is the profit cycle going to do for 2025? It's one of our five for 25. It's one of our super six for all of 25, which is double digit earnings growth for 2025. Yes, tariffs are going to be something that people are going to pay attention to. It could limit some parts of the growth. But overall, it's going to be very hard to stop

corporate America's double digit earnings growth for for all of next year, which many people were not expecting and still aren't expecting. Liz hit it right right out of the gates. A broadening marketplace actually is a more fruitful marketplace than just a narrow advance that we've all been witnessing for the better part of the last few years. The problem, though, Ellen, is that, you know, you have the equivalent almost of, you know, if you want to use these companies that are excited about what's about to happen, deregulation, you're going to have more, you know, growth forward policies they're assuming. So the wheels are turning and these companies are expecting to turn them fast. But if you have tariffs, now you're putting you're putting a nail on the ground

and you may have to stop and you may have to change the tire. And it's just going to delay some of the momentum that all of these CEOs were so excited about, theoretically, at a new administration's new, more growth-forward policies. Yeah, you've got to understand what's your pricing power. Households don't have unlimited pricing power, so who are you selling into? And also, does the strength of the dollar not matter here? A second term, Trump can say, I want a weaker dollar.

You can't just wave a wand and make the dollar weaker. And if you're going to have onerous tariffs on the rest of the world, where are investors going to go? The dollar is going to strengthen. That is going to be tough for a lot of large cap companies that do business overseas. And so those are some offsetting factors there. And Scott, even you said it, Scott, this can be raised prices in the near term. What about aggregate demand? You will weigh on aggregate demand.

So maybe this is something that is enough to get the Fed to maybe stop hiking, or sorry, stop cutting because you've got some inflationary pressures coming through. What about when the hit to aggregate demand comes through? That's a Fed that's been cutting more than expected later on. And yet, Liz, to the point that I made when we began this conversation at the top of the hour, new all-time high for the Dow. Right. Dow's up better than 100 points.

Certainly look to start the day as if it could be a down day because of the unknowns about the tariffs that we're discussing. So the market has had this incredible resiliency almost every step of the way, no matter what's been thrown in its face. Fewer cuts, slower cuts, possibility of tariffs. And here we are still wanting to move higher. What's the message? I mean, don't underestimate the power of positive sentiment. And I think that's what's been driving

this. And I'll go back to Steve. I'm still here. I'll go back to what Steve said. What I was trying to explain really is how the market is brushing off the tariffs. And I think what's happening today is either the market is saying they won't be enforced at this level. We won't put 25% on Canada and Mexico, because maybe there's some softening that happens in between now and when enforcement date would be. So the market is sort of brushing it off as, yeah, we heard you. That's a severe proposal, but maybe it doesn't actually go into action. If it does become reality, I think we would have to reprice that a bit. And frankly, I think the rally that we've seen since the election and perhaps even through inauguration will end up coming into question

once we get into 2025 and start to understand which policies will actually go into place and when they will go into place. So we may have to give some of that back. And that's why my point at the top of the show was this broadening out. We won't have such concentrated pockets of the market that will drive everything up. So you do have to own a more diversified basket, including cyclicals, noting that many of them are in overbought territory, but then also owning things like tech, because those are the things that investors look at as their staples today and as they're tried and true.

Steve, am I correct in suggesting that this feels to me like a true inflection point on the debate inside the room for the Fed? Because if you look at the the minutes today and you and you see that some saw pause, some saw accelerating cuts, it feels to me like the debate is about to get more serious and more heated, if you will, maybe some friction. And then I put that against what could be more volatility around a new president who wants growth to be strong, who traditionally has liked cuts and has also showed no shyness in laying into the Fed chair when he didn't follow his guidance. Are you saying it's about to get very interesting, Scott? Because it sure as hell is, I guess is the best way to put it. All of that is true. I think the way I think about where the Fed

is at right now is they were kind of careening along, thought they knew where they were going, and then they saw a street sign and said, thought they knew where they were going. And then they saw a street sign and said, wait a second, is this the right way? I think the best thing they're doing right now is they're slowing down. And I really like Liz's explanation, because I think what I maybe misunderstood when she first talked was that it's not that tariffs are OK with the market. It's that the market is discounting the probability they come in as advertised at this point, to which I would suggest we maybe make a mistake in thinking that President-elect Trump is not going to do exactly or more than he said he was going to do when it

comes to tariffs. And the other thing that bothers me, I'm interested in Ellen's take on this, Scott, if there's time, is the following. The market can adjust to it. But what about business on the ground? The whole supply chain that gets disrupted, the people who are running these businesses, who put in place certain supply chain connections, they don't adjust as quickly as the market does when the market hits a button and it adjusts. You don't adjust your supply chain with the hit of a button if suddenly something's already 25%. What worries me about that is you have the idling, potentially, of productive capacity,

and the idling of productive capacity is what goes along with downturns and recessions. Yeah, so that's always a possibility. I think that gauging. So here's the thing about supply chains. They take a very long time to move. It's a very expensive process and it's been ongoing. So this is not Trump's first rodeo. Right. And so he put tariffs in place, not universally like he's been talking this time.

Yes, we move them to Mexico. It's OK. Yeah, we I'm sorry. I just want to do the point of clarification. We move the supply chains to Mexico and Canada after the USMCA was put in place. We thought we had some kind of agreement in place to create these supply chains. I'm sorry for interrupting. Yeah, no, no. I'm so I'm getting to that. So don't be surprised if when we put fresh rounds of tariffs on that you'll find out just how much movement has already been taking place. Think of the European debt crisis, right, that it reared its ugly head in February 2010. It was such a slow-moving train wreck that we diversified away from it over time.

Supply chains will move and diversify over time. Now, you bring up Mexico and Canada. That is a new wrinkle. And I do think that's something that the markets are discounting right now because they are such important trading partners to us. But Mexico is really important because of the immigration issue as well. And so you've got to carry a big stick. And then maybe it just results in the renegotiation of the USMCA with something more strict in place than what it is today, but not a 25% tariff. But watch key sectors.

The motor vehicle sector is at risk here. You can ask them to quantify the percentage of parts in those vehicles in terms of what country of origin is in those vehicles. The industry on the whole is not prepared for that. Right. Yeah, we'll see whether this is, as I suggested, a salvo in a prolonged negotiation rather than some sort of solid in stone policy. Chris Heisey, lastly to you. I mentioned the market brushing it off today. You suggest that markets are going to be ready. I have a target of 7000, I think, is the high right now for next

year on the S&P 500. That sound reasonable to you? Yeah, you know, the investment strategy team at B of A Global Research just put one out just shy of 6700 and 6666. We think that that makes sense. As Liz said before, sentiment markets can keep running, but they're going to need a reason at certain multiple levels like now, and that's still profits. We would also say that a broadening out of the market is what's most important here. So this index can take itself as far as it wants to take it, and it's really taken a lot of those challenges in stride overall, whether it's tariffs, whether it's the unknown about what the Fed's speed is going to be, the certainty that we have is this.

Profits, for the most part. And the sectors that could be most harmed by tariffs are a percentage of the S&P are very small. Not saying it's not important. Very important. But the overall production of profits is coming from asset-like companies. And we think people should pay a lot of attention to those areas, including the cyclicals, like Lyd said. Small caps and mid-caps. Scott, you and I have talked a lot of attention to those areas, including the cyclicals, like Lyd said. Small caps and mid caps.

Scott, you and I have talked a lot about this. Got to be patient. It's working. It's going to take time. An M&A cycle is on the way as well. And small caps should benefit from the industrial side of interconnected domestic demand. And that is not something that tariffs are going to impact greatly. The Russell is making a run.

I mean, it's pulling up the rear for much of the year. And it's actually outperforming the Dow as we speak now. It's up 19.5% year to date versus a 19% gain for the Dow. So we'll see what's left in that tank over the final stretch of this year. That was fun, everybody. Thanks so much for your patience and being with us today. Liz, Ellen, Chris, and Steve, thanks to everybody. Happy Thanksgiving, too. Christina Partanel is now for a look at the biggest names moving into the close. Christina. I'm going to follow that conversation and say it could be a rocky road for automakers ahead. Just as you discussed, it pertains to the potential 25% tariffs on imports from Canada and Mexico,

while auto manufacturers have actually moved a significant portion of their production to those two countries, especially Mexico of course to lower costs since NAFTA, for example, in 1994 so Ford, GM, Stellantis, all tumbling on the news GM down over 8%, General Motors Switching gears, Zoom communications no longer Zoom video communications falling despite a beat across the board in Q2 and beating estimates on guidance likely not beating its guidance expectations by enough

after a blowout q1 quarter expectations are high the stock is still up more than 14 percent year to date but down almost six percent right now scott christina thank you that's christina parts of nevelos we're just getting started here up, Aldridge Anka Crawford is back to tell us where she is finding opportunity in the markets today. It's right after this quick break live at the New York Stock Exchange. You're watching an all time high earlier today. Again, the sector is having its best year since 97. And our next guest is still finding attractive opportunities within that space. Alger executive VP, portfolio manager Ankur Crawford is back at Post 9. It's good to have you back.

Nice to be here. So we always talk to you, I feel like, about tech, right? Everything we talk about is always about mega cap. But why are you zeroed in on financials even after a huge run? Well, I think as the market broadens, you have to find opportunities. And we do run diversified portfolios, so it's not all about tech. As the economy starts to hum again and reaches escape velocity, especially with this new administration, you need to have exposure to other sectors.

Financials is really interesting in that, you know, they touch on, you know, the lifeblood of the consumer of our economy. So, you know, companies like Square, PayPal, Blackstone, you know, they are really touching on some of the vectors of growth in the economy from here. You feel like this expected pickup in capital markets and M&A, I mean, a lot of these stocks have moved already in anticipation of that. What makes you believe that all of that's not in the names? Because they've moved so much since just since the election, even. Well, I think PayPal and Square are in a different category. I'm talking more about like the Blackstones of the world. I think

I think once this engine starts to hum for Blackstone, I think it is a very powerful kind of it'll have a powerful velocity for the next few years because there's a lot of unrealized assets that are going to come to fruition for Blackstone and will drive the earnings power over the next few years. You suggest to own deregulation beneficiaries. Specifically what? I mean, is that is that tailored to the financials or does it spread even further? I think it spreads even further. You think about M&A, right? M&A across, I feel like CEOs have been handcuffed because they're not sure about the regulatory environment. They're not sure if they should actually do it. Oh, they were sure about the regulatory environment. It was prohibitive. You couldn't get a deal done. Well, now you can,

right? And so that entire engine starts over again. I think you'll see a lot more M&A. You'll see a lot more IPOs come to market. And that's very good for the alts. Health care has not done well. Certainly since the election, it hasn't done well. I think the second worst performing sector. Is it getting any better? Not sure. So this kind of reminds me of Hillary Clinton in 2016, and health care had a really tough period of time for years, and in part because you can't really understand what they're going to do. I think with RFK at the helm, you know,

there's a lot of uncertainty as to where health care stands for this administration. I remember that when there was talk about drug prices back then. It was, you know, a tweet would come out in like 2016 and then all those stocks would hit immediately. You have your eye on the Terra in that space, in, why? Well, I think when you have so much uncertainty in an entire space, you have to reach for companies like Matera or iServes that have product-specific stories that can't get derailed by any kind of regulatory changes. And so that's why when we're looking at the healthcare space, our holdings are really

conglomerated in companies like this that have these product cycle stories. Let's wind it up with what we always talk about. How about that? Sure. Check. All right. So now a little bit away from NVIDIA and earnings. What do you make of the price action in that stock since and about mega caps going forward? Yeah. You know, I think what's happening in nvidia i mean three months ago i was on this show with with adam parker and the stock was at a hundred dollars and it had gotten absolutely decimated and both of us were like it's going higher 36 percent

higher than it was then so are people taking money out of nvidia and spreading it across into financials and sure sure, they are. Are they going to continue to do that? I think they probably will. However, if you look at NVIDIA from here on out, I think NVIDIA becomes a star performer again as we move forward. Why so? Because everyone's going to want to own it for the Blackwell ramp. The numbers are still, I mean, it trades at a sub-market multiple on 2026. That is not an appropriate valuation for a company like NVIDIA. So can it

rest for a little while? Sure, but just be patient. Are you as confident in the other names? Look, I think all of them, if you look at the valuations for the Mag sevens um most of them are quite palatable when you talk about amazon or meta microsoft and several of them have rested and you want to actually see some of these companies rest in the and their price rest before they start to make the next move all right well we'll talk to you soon anka crawford have a good thanks. All right. Up next, top wealth advisor Rich Saperstein. He's back with us. He'll give us his 2025 playbook right here. Post nine next. We're back. More record highs in sight. S&P 500 heading for its first closing high in some two weeks. The Dow setting its second record high in some two weeks. The Dow setting

its second record close in a row today. Looks certainly like it's going to do that. Here to share how he is positioning after his this record, his recent run. Trying to read this. Treasury partners, founding principal and CIO Rich Saperstein. They cut to you at the right timing. Just the camera off me as I was fumbling all this. How are you doing? I'm doing well. You feel pretty good about the market? I am. Yeah? More so than you have before?

The election changed things for you? Well, look, fundamentals are solid. We've got strong economic growth, full employment, accommodative Fed, declining inflation. And the Trump bump right now will lead to uncertainty. So we've got the— It'll lead to uncertainty? Yeah. It's going will lead to uncertainty. So we've got the need to uncertainty. Yeah, it's going to lead to more volatility. So specifically, lots of uncertainty about tariffs, whether it's going to be higher or lower than what's reflected in the market, inflationary impact, trade impact, earnings impact. So expect four years of increased vol versus the last four

years. What about returns? I think returns are going to be good because fundamentals are solid and we're going to have rising earnings. You got $266 expectations on the S&P earnings for next year, which is a 10% bump. It is doable. And I think the environment is generally good with deregulation, more M&A and lots of activity will occur next year. I mean, you've got a highly accomplished former hedge fund manager as Treasury Secretary. I mean, part of this has been the best in bounce, right? Since since it was, you know, became clear that he was going to be the one, the market seems to like that. Yeah, I think the larger impact was realized in the bond market, where from the last Fed meeting, September 18th, bonds rates were up,

what, 80 basis points? Yeah, backed up a lot. Yeah. And then when Besset was announced, all of a sudden market improved, rates dropped 15 basis points. So that's an indication that the long end of the market is less concerned about, you know, a runaway fiscal deficit and prolific spending and more bond issuance and higher inflation. So it's a sign that the bond market vigilantes are calming down. I want to show you a shot of the Rose Garden here. We have been awaiting President Biden to make remarks about a ceasefire deal. Good news report from the Middle East. I just spoke with the Prime Minister of Israel and Lebanon. I'm pleased to announce that their governments have accepted the United States

proposal to end the devastating conflict between Israel and Hezbollah. I want to thank President Macron of France for his partnership in reaching this moment. For nearly 14 months, a deadly conflict raged across the border that separates Israel and Lebanon, a conflict that began the day after the October 7 attack by Hamas on Israel. Hours later, at 2 a.m. in the morning, Hezbollah and other terrorist organizations backed by Iran attacked Israel in support of Moss. Let's be clear. Israel did not launch this war. The Lebanese people did not seek that war either, nor did the United States. Over the past year, including the days immediately following October the 7th, I directed the U.S. military to flow assets and capabilities into the region,

including aircraft carriers, fighter squadrons, and sophisticated air defense battery, to defend Israel and deter our common enemy at critical moments. Since the war with Hezbollah began, over 70,000 Israelis have been forced to live as refugees in their own country, helplessly watching their homes, their businesses, their communities as they are bombarded and destroyed. And over 300,000 Lebanese people have also been forced to live as refugees in their own country. And a war imposed on them by Hezbollah.

All told, this has been the deadliest conflict between Israel and Hezbollah in decades. How many of Hezbollah's senior leaders are dead, including its longtime leader, Nasrallah? And Israel has destroyed Hezbollah's terrorist infrastructure in southern Lebanon as well, including miles of sophisticated tunnels, which were prepared for an October 7-style terrorist attack in northern Israel. But lasting security for the people of Israel and Lebanon cannot be achieved only on the battlefield. And that's why I directed my team to work with the governments of Israel and Lebanon to forge a ceasefire to bring a conflict between

Israel and Hezbollah to a close. Under the deal reached today, effective at 4 a.m. tomorrow local time, the fighting across the Lebanese-Israeli border will end. Will end. This is designed to be a permanent cessation of hostilities. What is left of Hezbollah and other terrorist organizations will not be allowed, I emphasize, will not be allowed to threaten the security of Israel again. Over the next 60 days, the Lebanese army and state security forces will deploy and take control of their own territory once again.

Hezbollah terrorist infrastructure in southern Lebanon will not be allowed to be rebuilt. And over the next 60 days, Israel will gradually withdraw its remaining forces. And civilians, civilians on both sides, will soon be able to safely return to their communities and begin to rebuild their homes, their schools, their farms, their businesses, and their very lives. We're determined this conflict will not be just another cycle of violence. And so the United States, with the full support of France and our other allies, has pledged to work with Israel and Lebanon to ensure that this arrangement is fully implemented, the agreement totally implemented. You know, there'll be no U.S. troops deployed in southern Lebanon. This is consistent with my commitment to the American

people to not put U.S. troops in combat in this conflict. Instead, we, along with France and others, will provide the necessary assistance to make sure this deal is implemented fully and effectively. Let me be clear. If Hezbollah or anyone else breaks the deal and poses a direct threat to Israel, then Israel retains the right to self-defense, consistent with international law, just like any country when facing a terrorist group pledged to that country's destruction. At the same time, this deal supports Lebanon's sovereignty, and so it heralds a new start for Lebanon, a country that I've seen most of over the years, a country with rich history and culture. If fully implemented, this deal can put Lebanon on a path toward a future

that's worthy of a significant past. And just as the Lebanese people deserve a future of security and prosperity, so do the people of Gaza. They, too, deserve an end to the fighting and displacement. The people of Gaza have been through hell. Their world is absolutely shattered. Far too many civilians in Gaza have suffered far too much. And Hamas has refused for months and months to negotiate a good faith ceasefire and a hostage deal. And so now Hamas has a choice to make. Their only way out is to release the hostages, including American citizens, which they hold. In the process, bring an end to the fighting which would make possible a surge of humanitarian relief.

Over the coming days, the United States will make another push with Turkey, Egypt, Qatar, Israel and others to achieve a ceasefire in Gaza, with the hostages released and the end of the war without Hamas in power, that becomes possible. As for the broader Middle East region, today's announcement brings us closer to realizing the affirmative agenda that I've been pushing forward during my entire presidency. A vision for the future of the Middle East where it's at peace and prosperous and integrated across borders. A future where Palestinians have a state of their own, one that fulfills this people's legitimate aspirations, one that cannot threaten Israel or harbor terrorist groups with backing from Iran. The future of Israelis and Palestinians is to enjoy equal measures of security, prosperity, and, yes, dignity.

To that end, the United States remains prepared to conclude a set of historic deals with Saudi Arabia, to include a security pact and economic assurances, together with a credible pathway for establishing a Palestinian state and the full normalization of relations between Saudi Arabia and Israel, a desire they both have. I believe this agenda remains possible. In my remaining time in office, I'll work tirelessly to advance this vision for an integrated, secure, and prosperous region, all of which, all of which strengthens America's natural security.

Getting all this done will require making some hard choices. Israel has been told, has been bowled on the battlefield. Iran and its proxies have paid a very heavy price. Now Israel must be bold in turning tactical gains against Iran and its proxies into a coherent strategy that secures Israel's long-term safety and advances a broader peace and prosperity in the region.

Today's announcement is a critical step in advancing that vision. And so I applaud the crazy decision made by the leaders of Lebanon and Israel to end the violence. It reminds us that peace is possible. Say that again, peace is possible. As long as that is the case, I will not for a single moment stop working to achieve it. God bless you all. Sorry to keep you waiting so long. May God protect our troops. Thank you. President Biden in the Rose Garden, as you saw, announcing that ceasefire deal between Israel and Hezbollah. 4 a.m. local time. It will be effective tomorrow in Lebanon, 60 days permitted for the

full withdrawal of Israeli forces, the first of which will begin leaving within the next 10 days in France, as the president said, will help with the implementation of this. Eamon Javers, watching it in Washington, joins us now. Eamon. Scott, you heard the president there talking about the delay, apologizing for a delay. One reason for that might be the statement that we just got from Israel saying that the political security cabinet this evening approved the U.S. proposal for a ceasefire arrangement in Lebanon by a majority of 10 ministers to one. Israel appreciates the U.S. contribution to the process, reserves its right to act against any threat to its security. So it may be this hour delay that we saw in waiting for the announcement from the White House was waiting for that vote in Israel to make

sure that this was officially official. And now it is, Scott. I've just been texting with a former CIA station chief in the region to get a sense of what the analysis is of this deal. A couple of points to make there. One is that the Israelis will, I'm told, do what they need to do here despite the existence of a ceasefire, and that includes potentially attacks on any resupply effort out of Syria or other countries in the region such as Iran. And it also raises the question, as you heard the president mention there, of what happens now in Gaza. This is a first step in a multi-step process, potentially, that might happen over the course of two consecutive and diametrically opposed U.S.

administrations, which have similar interests. And the question now for the incoming Trump team and for the outgoing Biden team is, can they get a deal over the line for a ceasefire in Gaza as well? And what are the implications for that. That's the piece we don't know, and of course the fate of those hostages hangs in the balance there as well. Scott, back over to you. Do we have any reaction at all from transition team Trump to this deal? Not yet, but I think we will have it very soon.

I mean, if you're Donald Trump, you know, he very much wanted to be the person to make a big announcement here on this. He wants to be seen as the guy who can do the deal in the Middle East. They're very proud in the Trump team of the Abraham Accords going back to the first Trump term. Trump sees himself as somebody who can bring a measure of peace here. And because of his strength of his ties with Benjamin Netanyahu, he might have the sort of only Nixon can go to China credibility to get a deal done there. This sort of politically, in terms of political credit, if you want to look at it in those

crass terms, does rob Trump of some of his ability to take credit for this piece of it, the Lebanese ceasefire. But that big Gaza piece still remains out there. Yeah. Eamon, appreciate it. Thank you. Eamon Jarvis in Washington with the latest for us there. Rich Saperstein has been with us watching all this unfold. You know, one of the risks we really haven't discussed that much geopolitical moving

into a new year. There's been so much optimism about the domestic economy. We really haven't focused that much. Investors seemingly haven't on issues that may develop across borders. Yeah, what's interesting is that with the two wars that were going on, oil prices really have been subdued. And so you would have thought that with increased global geopolitical tensions, you'd see rising oil prices and weak stock market. But it's clearly moved right past that, given the fundamentals that we're experiencing. Areas that you like the most, are they the ones that have been really picking up since the election, the cyclicals, financials, industrials? I mean,

we talk financials every day, and they've been hitting new highs almost every day. Or the ones that have been in a little bit of a slumber, big tech, for example? What do you think? We continue to own big tech and look at Google as probably the most attractive right now. But I think there will be a broadening out and we continue to add utilities right now. You still do? Yeah. Most recent one is NRG, which it's a $20 billion company with $2.5 billion operating cash flow

and 21 locations where they could co-locate any type of large electricity demand. So there's great opportunities still in the utility sector, which should do well in 2025. Still love munis? Yeah, munis. Not getting off that train. All right, Rich, have a good Thanksgiving. Thank you. Likewise. And thanks for your patience as well.

My pleasure. We went to the White House up next. We'll run you through what to watch for when Dell and CrowdStrike of report earnings. We're going to the market zone next. We're in the closing about market zone now. CNBC senior markets commentator Mike Santoli here to break down these crucial moments of the trading day.

Plus two earnings reports in OT. We are watching closely. Christina Parts and Avalos taking a look at Dell for us. Kate Rooney on CrowdStrike. Michael, I'll begin with you. So we're on track for closing highs in the S&P and the Dow. Tariff talk. Oh, well. Yeah. I mean, look, even at its worst, I think it was like a two thirds of a percent drop in the S&P future. So it wasn't as if there was panic. And of course, that was off of record high levels just about. And we're up 4% in the last three weeks.

So obviously, the market is in a mode of forgiving a lot of complications that might come along. We're deferring to the seasonal strength, also the very kind of upside bias of this week. Now, the majority of the market is kind of flat to down today, but there's just enough strength in some of those large caps to push us over.

And it's this rotation and this kind of dispersion that's been helping the market as you've kind of cooled off from those highs of really like November, call it 11th or so, when we got that post-election pop. So everything is in order here. I do think that we have to notice that some of the economic numbers have softened up. Housing market seems really stuck. But beyond that, you know, there's just nothing to be too concerned about in the here and now, given what's expected into next year. You mentioned earlier today to me the economic surprise index reading. And then we have the PCE in the morning. So we still have some things to react to that are meaningful before we take a break for Thanksgiving. And coming along, as the minutes just told us, the Fed is basically going to just have to sift among the data as it comes in and deal with meeting to meeting what needs to be done.

But I think the stock market's fine with not much left in the way of easing in short-term rates. Yeah, I mean, the game's changed a little bit on that end, and the market's had a chance to get used to it. Christina Partsanovalos is going to be watching Dell. What should we pay attention to? Well, we know AI server demand offers Dell a potential lifeline.

It's gonna be talked about on the call, but supply constraints in weak traditional markets like PCs threaten to undermine its revenue recovery. So traditional servers have yet really to fully recover from an already weak 2023 as IT budgets continue to prioritize AI spend. PC sales, which encompass over 50% of Dell's revenues, are a little bit delayed. The PC upgrade cycle continues to stall right now. And then you've got storage and networking that haven't seen an acceleration

in growth. And then lastly, potentially the strong US dollar could impact guidance, which we'll get on the earnings call. That's why Dell investors are banking on Dell's AI server business to bridge any performance gaps. But as competitor Supermicro said on their earnings call recently, NVIDIA's GPU supply issues could limit that upside. Last quarter, Dell even warned that Q3 revenues would fall quarter over quarter because of that lack of supply. All right, Christina, thank you for that. Christina Partsenevelos, now to Kate Rooney on CrowdStrike, which has been a, well, in a hot sector, to say the least. It has, Scott. So the report today, though, is going to give investors a sense of how CrowdStrike has been recovering after that global tech outage this summer.

That is a big theme folks are watching. Analysts are expecting a modest decline in earnings. They're looking for 81 cents a share on EPS. That outage in July, you might remember, led to widespread crashes of computers using Microsoft's PC operating system. Truist analysts say they're going to be watching for how many deals CrowdStrike ended up closing in the quarter and then what other long-term impacts those outages are going to have on the business model. And then BTIG thinks CrowdStrike is going to face delays with new and existing customers. They say customers might ask for discounts on renewals as well.

Street is still overwhelmingly bullish on the cybersecurity name. 40 out of 50 analysts on FactSet at least have a buy. Stocks up more than 40% this year, Scott. Yeah. Kate, thank you. That's Kate Rooney. Mike, I mean, software versus semis, no contest. Not recently.

Semis really heavy again today. You know, NVIDIA couldn't really hold a little bit of a bounce back bid. I do think that that's one of the areas that the trade tensions are shadowing at this point, even though nobody's really got them in the crosshairs. It's been a nasty turn. Actually, the semi index is spending more time below its 200-day average right now than it has since late 2022. So clearly a retrenchment going on right there. And, you know, it's funny, at the same time, you talk about the big cap software is doing well, but also all of the kind of revived kind of upstart software, not upstart the company, but basically those emerging software

companies have been flying. And it's been kind of a speculative theme a day. You know, Kate Rooney was talking about quantum computing. That's been flying for a week for no particular reason, these penny stocks. Yesterday was the EV tall, like the, you know, the helicopter stuff. And so you have this funny kind of froth sloshing around the market. It's not impacting the main part of the market. By the way, MicroStrategy getting smacked again today. It's now like double digits. It's like 28% off a tie from a few days ago. All right, bell's going to ring.

Good to see you, Mike. Thank you. Good holiday to you as well. So we'll go closing high. S&P and Dow once again. Into overtime with Morgan and John.