Closing Bell - Closing Bell: Don’t Fight the Fed 11/25/25

Episode Date: November 25, 2025

Reports that Kevin Hassett is the front-runner to be the next Fed chair sent stocks higher today. We discuss that big move with our market panel – Trivariate’s Adam Parker, PNC’s Yung-Yu Ma and Requisite Capital’s Bryn Talkington. Plus, Former Dallas Fed president Richard Fisher gives us his prediction for what the Fed’s next move will be. And, we break down all the key figures to watch from HP and Dell when they report in Overtime.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Brian, thanks so much. Welcome to closing bell. I'm Scott Wobner, live from Post 9 here at the New York Stock Exchange. This maker breakout begins with the rallies resurgence. The scorecard with 60 to go in regulations looks just like that. The major's all green. Most names within the tech space continue their rebound. NVIDIA is an exception, however.

And how about the Russell? Small caps, along with the overall market getting a nice boost today on that headline earlier that Kevin Hassett is the frontrunner, said to be anyway, to be the next Fed share. rates moved a little lower on that. In fact, the 10-year broke below 4% for the first time since late October. It's sitting right at that level now. We'll watch it closely. It does take us to our talk of the tape. Don't fight the Fed. That's saying, especially notable today on that HACET report and the move in the treasury market. For more on what it all means, let's welcome in our panel. Trivariates, Adam, P&C's Young Yuma, and Requisite Capitals, Bryn Taunctington. Brin and Adam are both CNBC contributors. This is great to have everybody with us. Adam, you first. I mean, we talk all the time. Don't fight. the Fed, don't fight the cuts, don't fight the Hassett. Maybe the market is thinking about that today. Yeah, I mean, the poly market had him in the lead anyway. So I don't know if it's that surprising, to be honest with you. You know, when I was writing over the weekend, I thought

the sell-off last week was not about the Fed getting hawkish because the bond market was really stable. So, yeah, I think people are positioned in equities because they think the outcome for the Fed is skewed to the dovish, but at some point, I think 2026 is going to be the year where we get close to being done with the accommodation, and that might mean the Fed part of the bull case is less compelling. Did we overdo the worry about AI last week, or what was that all about, you think? Yes, and I think we did overdo it, and I think it was mostly when you decompose it a couple technical things to market, some, you know, hedge fund selling, some de-levering, some

ETF selling, some short gamut. So technical stuff, because the fundamentals, I think, are still quarters away from, you know, showing any weakness. Young, you're pretty positive on the market, aren't you? You don't think, I mean, you think the Fed is going to cut in December, right? Yeah, definitely. I do think there's a very high likelihood the Fed will cut in December. Once John Williams came out and gave positive comments about cutting, I think a lot of Fed members are on the fence, we'll fall in line behind that. And I think the prediction markets reflected that. Yeah, I mean, because it was, I think the thought was, okay, December's 100%, then December was close to 0%. And now we're back moving towards 100% for December. I mean,

is there any risk in that for the rally here? Well, I think what the risk is, is the messaging when the Fed cuts rates, because we do think that's going to come in December. I think when the Fed cuts, what's the messaging? Is it a hawkish cut? Is it more of a data-dependent, Let's see where things go, or is it more messaging that we're probably at a pause level for the foreseeable future? So I think that's where the risk probably comes in here, but I do think that incoming data will probably be on the soft side and will lean to Fed toward Dovish in 2026. Bryn, is that then overall bullish for where we go from here, despite some chop we might have or some increased volatility? I think it has to be because if we can actually get long rates to come down, as you pointed out, as they have today, plus don't forget, we have midterm. and the second year of a presidential cycle is typically the best of the four midterms, I think,

are going to be incredibly important. And so I think the fiscal side of the economy will start to get juiced from the OBBB. If you get rate cuts and the long end stays down, that's great for housing, that's great for hard assets like real estate. And so I think it can set up where GDP and the economy are actually starting to pick up. And the key will be, obviously, if those inflation signals can stay anchored. But I definitely say between earnings, don't fight the Fed, which you know I'm a big fan of, even if they're coming, kicking and screaming, that definitely bodes well for the economy. And with earnings backing up the economy, I think that would point signs that the market will continue to go higher.

I'll come back to you all in just a minute. I want to expand this conversation, though, on the prospects of a new Fed chair. And maybe if it is Kevin Hassett, let's welcome in Richard Fisher. He's the former Dallas Fed president. He joins us now. We wanted you so high in our show because the market liked this report. Do you like the report? Yeah, look, it would follow tradition.

Janet Yellen, Ben Bernanke, all came as former heads of the Council of Economic Advisors, even that's where Kevin Hassett was before. And we've always talked about the two Kevin's. Now, the only drawback to Kevin Hasse is he's not as photogenic as Kevin Warsh. You know the president likes good-looking people, and Kevin's a handsome guy. But I think it follows with tradition. I think Hassett is highly respected, probably more respected by the Federal Reserve staff, particularly at the board level, than Kevin, although Kevin's very talented and capable.

So I'm not surprised. And remember, he has to convince the committee to go his way. So I wouldn't get over-excited. I'd like to remind people that when Volker was there, we had four governors vote against him when Reagan had instructed. those four governors to argue for a discount rate cut, and Volker resisted. He had four governors vote against him. Alan Greenspan had two governors and a president vote against him at one interval. As you know, Ben Bernanke had three presidents vote against him.

I was one of them on a couple of occasions. So there's too much made out of this division. And as Scott Benson said this morning, I thought it was an excellent interview on Blockbox. These aren't, they're put up like baseball cards, but, you know, The fact is they're just trying to do their earnest best, focus on what's right for the U.S. economy. And I don't think HACID or even Warsh would be any different in that regard. They're going to have to convince the committee. And that's what's going on right now.

As to Williams, I don't believe he would have said a word without Powell's approval. Same thing with Mary Daly, who just talked about this recently, highly regarded San Francisco Fed. The reason, Richard, why people aren't. necessarily surprised at all by the Hassett name being floated, whether it's a trial balloon to see what the market does or not, who knows. But it's because there is a belief, at least in some corners, that Hassid would simply do the president's bidding. He, president wants rate cuts. Hassett's going to, he's going to cut rates. Or certainly he's going to advocate for it with the committee. Yeah, but look at Myron. He hasn't been able to convince good guy, by the way,

but he hasn't been able to convince anybody else on committee of his argument. I know, but with all respect to Myron. and as a governor, he's not the chair. That's true, but the chair has to convince the committee, and I just gave you one of the most glaring examples, the most powerful, most significant Fed chairman in our history. Paul Volcker had four governors vote against him. So this is something that a chair has to do,

and he's going to have to really get the committee behind him and convince they are not dictators. They are consensus builders within the committee. That's how it works, no matter who's the Fed chair. what it is. But for a president who I think has made no secret of the fact that he likes loyalty from those that he appoints into positions that he has the power to do so, do you take... Like Powell, for example. He appointed him. Yeah. Do you take this name in any way, if it becomes true, to be a mark on the independence of the Fed, given the person who's making

the appointment and how we know he feels about. the people he appoints to different jobs? Yeah, you know I worry about that, Scott. But I was very impressed again. I loved way Besson expresses this morning. He's learned a lot since he's become Secretary of the Treasury, how complicated the Fed is and how it's just not simply about the rate cuts or the balance sheet or just the regulatory side.

It's a complex organization. So I thought that was a way of sort of backing away from the president's focus on rates, rates, rates. Whoever's in charge, in my opinion, given that there are 18 other people at the table that they have to carry, is going to have to worry about what's best in terms of delivering on the dual mandate. And if they go too far, they carry on too far, and let's say they've adopted Steve Myron's approach to, and they got the committee to do it, my view is the markets would go through spasms, feeling that the independence has been thrown to the wayside. doubt that's going to happen, even though this president would like to get control of everything.

But he also backs off of things once he makes strong declarations. And I think a HACIT appointment would be backing off somewhat, particularly given what Besson said this morning. Interesting. I'm going to get back to my panel in a second. But last question to you, if you had a vote in December, would you be a yes for a cut? I probably would be. I'm sort of on the fence. And here's the reason why. In terms of the data, we don't have the hard data we'd like. I would want to listen to all 12 Federal Reserve Bank presidents, what their reports are in terms of what's going on in their districts. My guess is the net balance of what's going in their districts is a little weakness, maybe more weakness than they expected in the last meeting. And if that's the case,

then yes, I would be in favor of a quarter point cut. As long as they don't report that inflation is getting completely out of control, which I don't believe is yet the case. Well, it could be a hawkish cut. We don't know. We'll have to wait and see. Wish your great Thanksgiving, Richard. As always. Thank you. All right, that's Richard. That's Richard Fisher. He's the former Dallas Fed President.

Give me one quick word on this as you were listening. I think the balance sheet's what's going to matter the most. I think at the end of day, if they do two or three more front ends, it's less important than if they start getting more doubleished with the balance sheet. You've got to be bullish in equities if they expand the balance sheet. All right. The other big story we're following over this final stretch, Alphabet's assent towards $4 trillion in market cap got close today.

DeBosa is here with more on that stock's remarkable run. It really has been remarkable over the last six months, Dee. It really has been. You know, and TPU is sort of the cherry on top because Google already has the best model with Gemini 3. It's got search, Gmail, YouTube, other products. That gives it distribution and data. And now with META, a potential custom chip or TPU customer,

you have real vindication of that strategy, this vertically integrated play. So even if TPUs are not the Nvidia disruptor that some are calling for today, Wider adoption of them is good business for Google. They only run on Google Cloud, so that is sticky infrastructure revenue and could give it a leg up on the other hypers, Azure and AWS. Now, you can see how the market is positioning around that story.

In this chart from Morgan Stanley, the Google exposed infrastructure names like Celestica and Lumentum, Broadcom, they have surged. Meanwhile, the open AI exposed GPU ecosystem has pulled back. So this really puts it in perspective over the last few months. But because Google is so vertically integrated, Scott, meaning that it owns the model, the data, the chips and the cloud that runs them, Alphabet shares. They are the main beneficiary here. As you said, market cap within striking distance at that $4 trillion now. Yeah, Dee, thanks so much for that.

Perfect look at what's been happening with this stock, which really has been remarkable. Bryn, you own it, so I'd love your take, but also this idea that Tony Pascarillo puts forth today, and maybe this is a great reminder of it, there's just going to be a lot of dispersion within this. this group, more so than maybe we've seen over the last few years? Yeah, I mean, that could be true. But I think ultimately where I think Open AI is kind of back-footed here is, you know, Sergei's back. Sergey Brin is back.

And I think that you can definitely say it's causation, maybe a little bit of correlation between him coming back, him kicking down the bureaucracy. I mean, understand earlier this year, Gemini was banned from being allowed to code inside of Google. Like, that is insane. And he got rid of that, right? Working with Sundar. And so my knock on Google historically has been you don't have that founder mode. And I think with Sergey being back, you have this ability, this really need to execute. I think this is now Google's race to lose. And especially when you have Sundar with Sergey together, I think this is an exciting name to own for the next, for the for the next year. And I mean, that's Gene Munster's take with us right here

on this program. He thinks it's going to be the best one over the next year. Young you, the idea of more dispersion within the cohort of stocks we're talking about? You agree with that? I agree with that. I think it's very healthy for the market. I think it's a great sign that we see that. It's not the Mag 7 as a monolith. It's some being down 15, 20%, and some being up 25%.

And it wasn't that long ago that Google or alphabet six and nine months ago was kind of stuck in low gear. I think that speaks to the rapid developments in the space, the innovation, and how quickly things can change, and why we shouldn't get too negative when there's this pullback that takes place. innovations right around the corner. Hey, in your former life as a semiconductor analyst, how would you be viewing what's happening? Would you be putting out negative notes like this is insane what's happening with some of these chip stocks,

or would it be totally justified in your mind? You know, probably some weak triple-breaking putt call of, you know, near-term, medium-term, long-term so that I can't be totally wrong in all directions. Fortunately, I don't do that anymore, so I can take a shot. But you have to analyze these names, right? I'll take the turn of your question. You know, like Invidia.

I mean, you could say invidia is justifiably where it is in the market. Look, my North Star for years, as you know, it's been semis over software. I think we're in early phases of that, not the long phases. The world can't function. The most important asset on earth is Taiwan semi. Okay, world can't function without them. If something happens to the three fabs, you have depression followed by hyperinflation. Right.

So starts and ends with Taiwan semi. Can't function without them. There are software companies now that are big that, who knows if they'll be. companies in five or ten years. What about Broadcom? When you look at Broadcom, the fact that Broadcom's market cap has overtaken meta. Yeah. That's incredible, isn't it? Well, Hocktan and Zuckerberger, buddy. I mean, look, at the end of the day, I think compute broadly probably growths three, four, five percent above GDP for the next decade with higher margins, and the businesses are probably going to grow much faster over the next 18 months as data

center spends good. So I think you want exposure to semis. I think the question is the market right now parsing between cash flow generatives, you know, and, you know, and, you know, and, you know, exposure and non-cash flow or beneficiary or not. I don't really think I'm smart enough. I'm not Bryn. She is. I'm not smart enough to get these three-month calls right on these big eight stocks. Because as we just pointed out,

meta was everyone's favorite in January, and Google were the idiots losing share in search. And now six months later, the story's flipped and sucks a little crazy, and everyone looks Google. So I just think you've got to keep close to market week, the cohort, because they're probably all going to outperform in aggregate. What a great point, too.

if you look at the chart over the last couple of months, three months or so of Oracle, which was off to the races after its earnings report. And the AI announcements and all that. Now we're watching the stock on a couple of fronts basically every day, the price of the stock, obviously, and now the cost of insuring against a debt default. Sima Modi's on that case again today looking at both, because both are a big story. And Scott, just some color on the state of discussions. I've been hearing a credit investor at a reputable bank telling you,

me this morning. He's receiving more inbound calls from equity investors asking for clarity on this movement that we're seeing in Oracle's credit default swaps, what that tells us about the company's debt picture, how much more the company potentially needs to raise to fund its robust CAPEX plans and the rapid development of data centers. Worth noting Oracle's last debt raise of $18 billion was well received by the market. In fact, it was oversubscribed. So while there may be some more questions about Oracle's deployment of capital, there's clearly demand for it on the credit side. Now, separately, I spoke to DA Davidson's Giluria

on the sell side. He expects that given the increase in commitments from Open AI that were made subsequent to signing with Oracle, that it will need to reconsider the capital it's willing to raise and deploy. So if we actually see Oracle slow down as debt raises, that would be significant, Scott. Yeah, Seema, thanks.

He's really big story that she really has been in the forefront of, Tima Modi, thank you. Brinna, come back to you. Much ado about nothing, a market expressing a view in a short period of time that's going to be reversed, not to mention the fact that Dell reports after the Bell, which has been a story in and of itself in the whole AI trade too. How do you see those? Well, I mean, I think Oracle is much ado about something. Something's called OpenAI. And I think, you know, they to me are the most inextricably linked

to Open AI. And when you're like, this company is still nascent in its revenues, it's obviously negative free cash flow. Oracle's now going to go negative free cash flow to build this thing in the future. I think that has to be resolved. And I think, you know, obviously, you know, Larry Ellison has seen so many cycles. And I think with him still as chairman, there's a lot of, like, they will get it done. But to me, as long as, you know, Oracle's trading cheaply, it's telling me that the market's more moving away from open AI and not thinking they're actually going to be able to pull off the $1.4 trillion over five years, which I think is exceptionally aggressive that they're able to do that. So I think it's a weak name that's telling us a lot of things.

Young, you agree with that? I mean, the stock move has been pretty extraordinary since the day at POP. You don't cover individual names, obviously, but what that represents was very much what was in the market last week, a good bit of fear about certain stocks within this orbit. Yeah, I think the good news is a lot of these companies can pull back, right? Even though there are commitments, there's discussion, maybe some plans are underwear, not underway, not all this money is out the door. So I think there's a given take here in the market, and these companies are going to take signals from the market.

I think that's what people are thinking about or missing perhaps when I think there's just to be too much overinvestment, that if there does look like there's signals in that direction, there can be some pullback in that regard. But I do think there's something real there that they do have to pay. attention to. I mean, I just focused on equity, so within the U.S. equity market, my interpretation would be if the bolus of companies don't raise capax, the market gets killed. I think you need goldilocks right now, but you need belief that return on the investment still high. No matter how you do it? I don't think if they cut back on capax now, the market rewards that. It might be right,

medium to long term, but I think the short term will wait a second. I thought you were confident. So I think Oracle is just a weird one where every pod guy shorted, because it's the easy the easiest one to short. They've got to be neutral. And so they're saying, all right, well, this one's got a bunch of debt. And as Bryn points out, it's more, you know, in the future than everything else. And so Huberston debt calls the end of it. I'll take something that looks like it's gained its share right now and long it against it. So I think it's a little more tactical, very short term on what's happening to Oracle in terms of it's the easiest big, big, but you don't care. As long as the CAPX numbers remain solid, you don't care if it's using some

cash, using some debt, whatever you've got to do to stay in the race. I think at this point, CapEx has to slowly come up. It's goalie locks. It comes up too much. Then I think it goes right where Young You, people freak out. But if it comes up a little and you still say the return profile is there, AI trade will be on for another six, nine, 12 months. All right. We'll leave it there.

Bryn, thank you, Young You. See you as well. See you, Happy Thanksgiving. And Adam, you as well. Happy Thanksgiving to everybody. We appreciate you being with us once again. We're just getting started here. Coming up next, big money on the ice.

The puck just dropped on CNBC's NHL team valuation list. We'll tell you who has the top spot. Might surprise you. and later new developments in famed short-seller Michael Burry's big battle with NVIDIA. We have the full details coming up. We're live with the New York Stock Exchange. You're watching Closing Bell on CNBC.

Welcome back to CNBC out today with our annual list of NHL valuations. Average team now worth $2.2 billion. A 15% jump from last year. The Toronto Maple Leafs topping that list valued at $4.3 billion, followed by the New York Rangers, Montreal, Canadians, Los Angeles Kings, and Edmonton Oilers. Joining us now, the man behind the list, CNBC senior sports reporter, Mike Ozanians. Good to see you. Scott, always great to be with you.

Surprise with Toronto or no? No, not surprised with Toronto. They're going to get a new local TV deal next year. It's probably going to place them second overall in the league, only behind the Canadians, about $55 million a year annually. And one of the things we've seen with this list, Scott, like you'll notice, the Edmonton Oilers, have usurp the Bruins? Yeah, I was surprised by that, more than anything else.

How so? The Canadian teams are getting increases in their local TV deals, while many of the U.S. teams are getting cut or staying flat. That's one of the big differences driving revenue among the NHL team. Is that because the weakness that has persisted in the regional sports stats? Exactly. The peak was 2019. S&P Capital is projecting several hundred million dollars lower in RSN money by 2026.

And what's happening is some of these U.S. teams switching to over-the-air or direct-to-consumer. Most of them aren't getting anywhere near the amount of money they were getting from the RSN. The Rangers took an 18% cut from MSG network. It's interesting because we normally look at national TV deals when figuring what that means for overall. team valuations. Here you're telling me that the local TV deals have more of an impact perhaps than the broader deal with the major nets. Yeah, I think when you're looking at the pecking order, the ranking within the league, it's the local TV and the gate. Like the Rangers

get $180 million last year in that gate. The average for the league is 80 million. But to your point about the national deals, that's driving really valuations for all the teams because that money gets shared equally among all teams. The Canadian TV deal that starts next year doubled in value. And the U.S. TV deal, which is going to be up for renewal in three years, that also is expected to double.

So the Delta actually will be felt more by the bottom teams because their revenues lower. I was kind of expecting the Rangers maybe to be number one because of MSG. You know, you got the building which presumably is worth more than I think it's the Rogers Center maybe where the

Leafs play. Great point, Scott. What a lot of people don't realize is MSG Entertainment, which is a separately traded public entity, they have a hard and fast lease agreement with the Knicks and Rangers that are part of MSG sports. So MSG Entertainment gets a slice of that sponsorship, advertising, and sweet revenue. Unlike the Maple Leafs, who own their building, like you said, so they just split it with the Raptors. Glad to see my Washington Capitals on the list, at least number nine, $2.5 billion, $10. Ted Leonis and the gang doing a great job there. Mike, thanks. Thank you. That's Michael Ozanian. Appreciate that. For the complete list,

check out CNBC.com forward slash sport. Coming up next, fame shortseller, Michael Burry doubling down against Big Tech and raising the red flag on NVIDIA's financials. Now the company fighting back. We've got the details next. Welcome back, closing bell. Now to the battle over AI, and one notable critic says it should really stand for artificially inflated. Michael Burry, a big short fame in the thick of a throwdown now with NVIDIA. Christina Parts of Nevelos joins us now with more. This is an interesting back and forth.

What do we make of this? Well, Nvidia right now is firing back, specifically at Michael Berry over accusations that big technology is cooking the book. So Michael Burry is the investor who called the housing crisis and claims companies are depreciate, tech companies, I should say, depreciating AI chips over six years when they really just burn out in two to three years, which makes profits look bigger than they actually are. Depreciation actually spreads equipment costs over time, so longer lifespans means smaller annual expenses and higher profits. NVIDIA sent a rare private memo only to sell side Wall Street analyst. I emphasize only, I'll explain in a second, but that explicitly names Michael Burry.

The company says it's nothing like Enron or other accounting frauds. NVIDIA said also it doesn't hide debt, doesn't rely on vendor financing, and says 90% of sales come from profitable companies or customers like hyperscalers. And video also pointed to $22 billion in free cash flow last quarter up 60%, which is higher than what Michael Burry was claiming. But it's interesting that NVIDA only sent it to sell side shops, the ones who published reports on NVIDIA's share performance. performance. Michael Berry responded on X, saying he stands by his analysis and will release more details on his own timeline, but he hasn't delivered just yet. He is, though, promoting a newsletter, which is quite expensive, over 300 bucks a year. Wolf Research, as well, Bank of America, saw their memo and wrote reports saying Nvidia's days of inventory and accounts receivable numbers

do look reasonable. So the fight matters because if Barry's right, big tax earnings are inflated. If NVIDIA is right, which many argue is the case, the AI boom is stronger or has stronger economics than bears think. Are you surprised at all that NVIDIA responded to Bury? Yes. I think it has to speak to the stock's performance over the last little while. And also, if you look in Vidia's account, they also even commented on Google today. We know that NVIDIA shares have declined because of concern of Google TPU competition. Why, if they're the most popular kid at the school ground, do you just,

go and, you know, pay attention to all the other people that are making fun of you or stuff like that. It's just weird that Invidia would be addressing all of these concerns from other people that, you know, don't change the outlook. Invidia's demand is outpacing supply. They plan to hit $3 to $4 trillion in total addressable markets just in the next few years. Or they're being really defensive for a reason. Well, I mean, others in this whole universe have been more defensive. I suppose.

Out like that. I'm thinking of like Sam Altman against the short sellers, Nvidia against Burry. You know what I'm saying? Like we don't normally see it like that. But we, this is a four, over $4 trillion market cap company with barely any of the float shorted. Why does in video even feel like it has to respond?

Is it has to do with the fact that the share price has declined over the last little while? And this is really just about bringing that price back up. price back up. We shall see. To be continued, because I don't think this is going away anytime soon, especially given the new substack that Burry himself was teasing today. Christina, thanks. Christina Parts of Nevelos. Coming up next, Ed Yardini, he breaks out his 2026 playbook. He'll tell us where he sees stocks heading in the new year. We're back right after this.

Eyes of the day for the Dow up 677 points. Got a nice boost midday again on that report that Kevin Hassett said to be the front runner to be the next Fed chair. Rates came down to 10 years. sitting right at 4% dipped below that level. First time or the lowest at least since October will stay on it right until the close. We're back after this. Welcome back. At least one big time bull says the Fed won't cut in December and won't cut that much next year either. And stocks will still climb even higher. Ed Yardinney. It's the president of Yardinney Research. joins us now. It's good to see you. Don't shy away from controversial takes. Some might find this to be just that.

Why do you think this market can go higher, even if the Fed does little? Well, I think that if the Fed does cut rates, we'll have to watch what the bond market does. Because last year, when the Fed cut the Fed funds rate by 100 basis points, the bond yield went up by 100 basis points. I think much will depend on, you know, the ongoing data here. We do still get initial unemployment claims. We got retail sales numbers today, which are a little bit on the weak side, and the PPI was not too hot. So I'm not committed, you know, to this notion that the Fed isn't going to cut. I mean, I go with the market's perceptions right now.

And so I would say that it's not going to happen. But I don't think it needs to happen for the market to go higher because earnings have been phenomenally strong. First, second and third quarters of this year, analysts expected single digit, low single digit increases in earnings. They came in at 10 to 15%. But you don't want the Fed to make a mistake. even if all of that is correct, right?

I mean, you don't want them to make a mistake. The unemployment rate is up. That's got some people nervous. If they wait too long, they get way behind the curve. That's a mistake. And the market would pay for that. Well, I think you're right about that. And that's apparently increasingly the perception at the Fed

and increasingly the perception of the market. I think the labor market isn't necessarily going to be solved by lowering interest rates. The idea of lowering interest rates is to stimulate demand, economic demand for goods and services that then boost the demand for labor. The problem with that thesis right now is GDP looks like it's growing around 4% in the second and third quarters. Demand is very strong and yet the labor market is weak for a lot of reasons that probably defy any solution from the Fed. A lot of it has to do with retiring baby boomers, skills mismatch, a lot of inexperienced work. And I think companies are going full bore increasing productivity.

That's why GDP is rising faster than payroll employment. Yeah, but I mean, some would say, yeah, well, imagine what would happen to housing and how that would be freed up pretty dramatically if the Fed was able to cut rates more than one time. It's been all but a, you know, a non-player. It's been a non-starter. Correct. Well, the same story was told at the end of last year, right? the Fed cut interest rates and bond yields and mortgage rates stayed up.

Maybe this time around it'll be different. You know, inflation is still stuck around 3%. It's not at 2% and it's not clear whether the bond market is going to give it a pass and say, all right, we're going to get down to 2%. But, I mean, you're making a good point. Clearly, everybody swung to the ID that what's the big deal if they lower rates? You reduce the risk of things getting weaker. and if inflation remains persistent, then you raise rates.

I think that's kind of the mentality at the Fed right now. I mean, it's not like a quarter point is going to do much of anything, except, practically speaking, maybe not, but except it helps with the narrative that the Fed's on the case. The market can at least take some comfort with the fact that the Fed is less likely to make a potential mistake if they do it. Yeah, my main concern about lowering interest rates when the economy seems to be living with the current level of interest rates, broadly speaking,

we still have rolling recessions in places. But my main concern is a melt-up in the stock market. You know, that was less of a concern last week. And now, you know, how quickly things can change. Now, suddenly all this talk about the Fed put being back as driving the market back up again, which is fine with me, but I just don't want to see this turn into a melt-up, melt-down situation. No, I hear you. many respects, too. The wealth effect created by the stock market going up has helped the economy

stay pretty strong in the face of a very much bifurcated consumer picture, too. Ed, you have a great Thanksgiving, okay? I'll see you soon. I know I will. Thank you. You'd be well. Absolutely. That's your, Denny. Up next, we'll run you through what to watch for from HP and Dell. Those names are reporting in OT, as you know. The market zone's next. We are now in the closing bell market zone. CNBC senior markets commentator Mike Santoli and 314's Warren Pies here to break down these crucial moments of the trading day. Plus two big earnings reports in OT. Cima is covering HB.

Christina is covering Dell. Mike, I begin with you. We got 700 for the Dow. We got 2.5% for the Russell. We got a decent move back in the NASDAQ 2, which looks to me to be at the highs of the day. This is a pretty nice move yet again. Yeah, there's definitely progress on the whole repair from. last week's rupture. You know, coming into the week, Scott, I was saying, you know,

are we building a more balanced bowl? That was my line. And it's kind of working according to plan, meaning the market attacked a lot of the AI excesses. It purged a lot of the low-quality froth, reset positioning, you know, kind of got everybody's expectations back into line and restored the ability for pleasant surprise. So now you get, you know, obviously, doveish-fed rhetoric and expectations coming back into the market. which helps, but I think mostly just to remove that like doomsday scenario of late 2018 when the Fed was perceived to be too tight and we melted down into the end of the year. So we're right back at Thursday's high on the S&P 500, right before we fell off that little cliff after the NVIDium move. So a lot has been done.

You know, I still think we're in in convalescence mode. You have to be aware that there's upside still to the old highs and you don't want it to necessarily get too wild in the next two days. But everyone knows the history, the days around Thanksgiving tend to have an upward bias. Tighten that S&P up again for us, guys, please, and to control them. Because you've been talking about V-shaped recoveries. Look at that. That's a V. This has become very much, I know it's not March Madness time, but survive in advance.

Yeah, no doubt. You survive the tremor, and then here we go, and we advance. And even today, I was saying earlier, you saw that drop in NVIDIA. And there's times when NVIDIA is down 5 plus percent, the rest of the tape's not taking care of it. Today, no real problem. We got non-tech kind of rising to the occasion, and that's allowing the VIX to bleed below 19. And so everything starts to fit together when a lot of that rotation happens. Well, thank you, Alphabet and Apple, new highs for those stocks, too. Seema, tell us about HP. Okay, Scott, the big concern is going to be around margins. Morgan Stanley recently lowered

its price target on HP from $24 to $21 a share, maintaining an underweight rating on this idea that rising prices of memory chips will challenge margins of the hardware players like HP. Analysts there also referencing the last cycle in which memory spot prices of DRAM and NAN went up from 2016 to 2018. At that time, hardware players had to respond by raising device prices, though not fully enough to offset the cost. That may already be priced into shares of HP, which are currently down about 25% this year. More coming out when earnings hit at 4 p.m., Scott. All right, Seema, thanks so much for that. Christina, how about Dell? Oh, it's going to be very similar to what Seema just said.

The big focus is whether soaring memory chip prices are going to squeeze profit margins. Memory accounts roughly 10 to 70% of the bill of materials, depending on the product. So AI servers, for example, it's a lot cheaper. The issue is that Dell's gross margins estimates have barely budged, despite these higher memory costs setting up for a potential for a miss for margins. But there's definitely a bullish counterargument. Dell's inventory did climb. It was under $4 billion to over $7 billion, suggesting they stopped.

stockpiled memory chips ahead of price increases. And competitor Lenovo just reported that memory pricing isn't hurting their margins, saying they remain confident about the outlook. Beyond margins, though, investors are going to be watching AI server guidance. The company needs about $10 billion in the second half to hit their $20 billion full-year target. And the earnings actually are going to reveal Dell's inventory, whether it worked or not, or if they're about to face some serious margin pressure. Scott?

We shall see. Christina, thanks very much for that. That's Christina Parts of Novos, and, of course, Simumodi. Warren Pies, I'll bring you in. You say there were some signs of capitulation last week. Tony Pascarello put out a note suggesting the same. Maybe it just looks a little different than historically we're used to. Yeah, thanks for having me.

Yeah, we upgraded equities at the end of the last week to overweight, and we expect new all-time highs. Good chance to surpass 7,000 for end of the year. You know, I'll just give you a few things to think about. Our sentiment model, which is, it takes, like, as many of the most important positioning and sentiment things that we look at. It's registered extreme pessimism. So that's important. Specifically, we look at inverse ETF volume as a way to look at retail capitulation. This speaks to something Mike was talking about. We saw inverse ETF volume spike up to the highest level

we've seen in two years outside of Liberation Day. And those have always marked near-term bottoms. The other thing I would bring up is that under the surface, there was a lot of pain, really, in this pullback. Even though the index was down 5%, maybe a little more than 5%, maybe a little more than 5% peak to trough, the median stock was down more than 16% from a 52-week high. So if you back out and look at what does that usually imply for the index, that's usually closer to a 10% correction. So when I put all that together and then combine it with where we're going seasonally, I think we're set up for a very strong end of the year. Mike, that mess with you? Yeah, for sure. Tactically, that does all fit together. I do think that the idea that we sort of

talked ourselves into this notion that, you know, the Fed was going to choke things off, and maybe the economy was seen to be a little bit weaker. We were looking on the down the downside of it. The other piece of it, I'll say, is, you know, as we've been in this process, right? So we're at the levels the S&P reached, like, you know, October 9th or something like that, a month and a half ago. In that month and a half, we've gotten through an earnings season. We've rolled forward where the 12-month forecast is.

it's higher, therefore you've sanded the edges off the valuation concerns to some degree. And so, yeah, I do believe that there is room, you know, again, whether it means we're going to get all exuberant again, whether this rotation toward the equal weight S&P, which is up a percent and a half today, after, by the way, starting today at almost dead flat on a 12-month basis, you know, that remains to be seen. But I do think you basically have to sort of, I always say keep expectations slow, but be open-minded about how far these things can go once they start to run. Not to mention, you know, so much for that narrative that the Russell can't get out of

its own way, Warren. You look now, we've eclipsed a 10% gain year-to-date for the Russell 2000. We're 10.7% now. Yeah, I mean, it's encouraging. I think it's encouraging to see Equal Aid and Russell do well. I think you have to understand the bet you're making if you're going to be long Russell 2000. It's very much a rate's bet.

So it's one of the things we decompose instead, you know, of all the other. Of all the sub segments of the market, the rustle is the most sensitive to these rate moves. So, yeah, we're down to 4% of the 10-year. If you're long the rustle here, you're betting on, rates continuing to fall at this kind of glide path lower and economic growth hanging in there and being sort of robust. It's a needle that needs to be thread, and it's healthy for one day to see it doing this. But again, this is not, I've been on with you many times saying this is not where I would put my chips right now. Is the best hedge on all this gold again?

Are we back? Are we going to be talking about this again? Yeah, we like gold. We like it all year. I think this is a secular bull market. We had a 9% pullback. We went from record outflows of the GLD ETF, something we watch for retail sentiment,

and now we have outflows. So it kind of goes with what we saw in the equity market. You know, we had to go through something to work off this excess sentiment. You're getting these reports of Kevin Hassett being the next Fed chairman. I mean, we're not here to make Norman. policy and my job. My job is to navigate markets. But when I look at that, I think that when you have a really extension of the administration coming into the Fed, that's going to create the environment where I think gold is going to have another strong year next year. That's

a conviction for us. How are you watching this chart, Mike? You know, I think that all fits together. I think it's also been impressive the way that gold is just kind of hung in there fine as Bitcoin got wrecked. I was going to ask about that. And the fact that Bitcoin is hanging in there is fine. I think it's a prerequisite for this market to actually kind of rebuild. What's also interesting, you know, Warren was talking about the volumes in inverse ETFs as a sign of retail capitulation.

This was not a dip, in my view, that retail stepped in and really bought aggressively and was ahead of the pros on, because they were really impaired by what happened in crypto. If you look at the kinds of stocks that are working today, they're not the retail favorites. And so maybe we're kind of past that moment when we lionize the risk-seeking individual traders as if they always get it right. Sometimes you actually have to be humbled and have the market reset in a different direction. Yeah, we'll see if they, you know, regroup, so to speak, and come back in because, you know, retail has been a pillar of this full market. Warren, what about Bitcoin? How are you watching that? Yeah, I mean, I think that it's a show-and-tel type of situation for Bitcoin.

We have seen the outflows. They're just similar to the GLD, ETF, is I prefer gold over Bitcoin in this environment, but theoretically, Bitcoin should do well. I look at it more from Mike's perspective, exactly what he said, which is this is a proxy for retail risk appetite. And I think that even though the market was only down 5% peak to shop, this goes to that median drawdown stat, is that everything around the edges, all that speculative froth, I mean, Bitcoin down over 30%, crypto, the whole crypto complex collapsing, DAT, digital asset,

digital treasury companies, those all getting hit. I think this is a great sentiment gauge and sets us up for a reset for the market more generally. All right, man. I appreciate you. Have a great Thanksgiving. Mike, I'll see you on the other side of the holiday as well. Bell ring. We've got a nice couple days, free holiday.

Dow's going to go out better than 600. I'll see on the other side of that. I'll see on the other side of that.