Closing Bell - Closing Bell Overtime 11/1/22

Episode Date: November 1, 2022

A fast-paced look at the after-hours moves and late-breaking news live from the New York Stock Exchange. Closing Bell Overtime drills down into stocks and sectors, interviews some of the world’s most influential investors and gets you ready for the next day’s action.

Welcome to Overtime. I'm Mike Santoli in for Scott Loeffner. You just heard the bells, but we're just getting started. We have key earnings reports about to hit the tape from Airbnb and AMD. We will bring you those numbers as soon as they hit. But we'll start with our talk of the tape. More trouble at the top. Steady selling in the wounded mega caps weighing on the indexes ahead of tomorrow's crucial Fed meeting. Let's bring in Virtus Investment Partners Joe Terranova. Joe, also, of course, a CNBC contributor. Joe, this has been a pretty persistent theme. You know, today we see Amazon down 5%, Alphabet 4%, Apple and Microsoft off a percent and a half. Sometimes you point to yield. Sometimes you point to what the Fed's going to do.

This seems more just like a liquidation in that style and size of stock. The average stock actually doing OK today. Equal weighted S&P up a little bit. How do we read it? Is it just kind of the tail end of the process we've been in for a while, or is there a new reason to worry about what it means for the indexes? Well, I think two things. First of all, I think it is strategic to your point. But second of all, we have been in an evaluation recession since Q4 of 2020. It's rolled through different equity size classes. It's rolled through different strategies and through different sectors. It's now touching the last place where that pristine valuation,

that premium was maintained. And that's in the mega caps. That's comforting from the aspect of it means we're closer to the end of this valuation recession. But you still have to wonder what's the overall impact on the market. How much longer can the indexes keep the resiliency that they've had the last several days if the selling pressure in mega caps continue? For sure. And I wonder what you think is now implicitly in the market when it comes to what the Fed's going to do, how much that actually is the decisive swing factor from here on out. Are we again setting ourselves up for one of these hope-based rallies where it looks like resilience

until you run into a central bank that doesn't want to see the market being resilient? Well, I do think that what is priced in is the unprecedented 75 basis point hikes. We've priced in that the Federal Reserve is going to take that tool and put it back in the toolbox. The expectation clearly is that we'll begin to see a change in the interest rate hikes. We'll see 50 basis points in December or something along those lines. So that, without question, to me, is priced into the market. Yeah. But do you think that we need to hear something explicit about, look, we have the destination in sight in terms of what the target Fed funds rate is going to be in a few months? Give the market some sense of we're nearing the end of this process,

or do you feel like a step down to 50 basis points is enough? I think it's really more offering the market a chance to catch its breath. And, you know, it seems as though the Federal Reserve, because they're playing catch-up, Mike, it's making the market run. It's almost as if the market's enduring a stress test, and it's on the treadmill and the Federal Reserve keeps turning it up higher and higher and making the market run faster and faster. I think all the market really needs is a sense of let's take a break, let's catch our breath.

And ultimately, I think why you will get that is the Federal Reserve is going to look towards the shape of the yield curve. They're going to look at that recession, three-month to 10-year part of the curve. And we've had sustained inversion now for multiple days. We haven't witnessed that so far during this process. We've had brief inversions for maybe a couple of hours, but now it's sustained. There has to be an acknowledgment on the part of the Federal Reserve. To your point, we're close to the end. It's actually, it's again, toggling right around

that zero line between the three-month and 10-year, depending on when you look at it. But other people pointing out, you know, Powell has mentioned the three-month versus 18-month. In other words, any structure of bond yields and bill yields that say, look, the market thinks you're in danger of overtightening. The next major direction of policy moves is lower in response to weakness in the economy. Have we given up the idea that the landing can be softish at this point, or is it still there? The earnings don't necessarily tell you to run for the hills yet. Well, it depends what you're looking at. If you're looking at the economy, the jury is still out on a soft or a hard landing.

If you're looking at risk assets, without question, we had a hard landing already and in particular for a variety of different strategies. So does the Federal Reserve, is that their care? Is that the concern? I don't think so. And I think the Federal Reserve is going to walk a very difficult line here in the coming days where they don't want to create elevated volatility once again to where you have to say to yourself, OK, is there stress in the system? But they also don't want to see the market get too far ahead of itself. Yeah, for sure. That's been that has been clear. Let's get to EA earnings. They are just out. Steve Kovac has the numbers. Hey, Steve. Yeah, there, Mike. So it's a miss here. Revenue coming in at one point seven five billion versus one point eight billion dollars expected. EPS one dollar seven cents. But that is not comparable.

And I do also want to point out something. Mobile growth is falling pretty significantly. Mobile gaming growth, that is. It's up 27 year on year. But last quarter is up 48%. And just remember what Apple told us last week in their earnings report, Mike, that they saw their app store sales go down a lot because of mobile gaming. So expect to see a lot more of this from the gaming companies. Meanwhile, guidance for the current quarter, the holiday quarter is pretty light compared to expectations. Q3 revenue expected up to $2.52 billion versus $2.6 billion expected. Full-year fiscal revenue up to $7.85 billion guiding versus $7.97 billion expected. And by the way, foreign exchange is a problem here. They're issuing guidance of $200 million headwind for the fiscal year from foreign

exchange alone. And EPS is not comparable, though, for the full year guidance. Mike, back to you. All right, Steve, we see the shares reacting down a little more than 3% at the first reflex. Airbnb earnings also out. Deer Jabosa has those numbers. Heidi. Hey, Mike. In first reaction, shares are down now 5%. They popped originally. But let me give you the numbers. It's a beat on the top and bottom lines. Guidance was in line. EPS coming in at $1.79 versus $1.47. Expected revenue at $2.9 billion versus $2.84 billion. So that's a slight beat. Let's call it in line gross booking value. Also better than expected. ADR, that's average daily rate, up 5% year over year, but 12% X currency. So that's a 7% percentage point headwind. Solid balance sheet here.

Nearly a billion dollars in free cash flow. $1.2 billion in net income. Let me run you through the guidance because this may be what is hitting shares that are down 8% now. Did come in line in terms of that guidance. This company guided for between $1.8 billion and $1.88 billion. They said they were expecting $1.85 billion in line. Keep in mind, though, that their Q4 of last year was right in between Delta and Omicron in terms of the pandemic viruses. So there was a bigger boost last

year that the company is expecting to come down to slightly in the fourth quarter of this year. Mike, we're going to continue to dig into this and figure out why the stock is now down nearly 10%. Back over to you. Yeah, clearly, yeah, now down almost more than 9%. Dee, thank you. Certainly people leaning in the direction of feeling

as if the bookings were going to be a little bit stronger. Some of the third-party indications might have been pointing in that direction of feeling as if the bookings were going to be a little bit stronger. Some of the third party indications might have been pointing in that direction. Meanwhile, don't miss Airbnb CEO on mad money tonight. He will talk all about what's to come for that company. Let's now bring in Marcy McGregor of Bank of America Private Bank and Victoria Green of G Squared Private Wealth to talk a little bit more about the numbers and the earnings and how they're coming in. Victoria, I wonder how you feel as if the market is set up ahead of the Fed tomorrow. This is the seventh meeting in the six meetings we've had this year. The market rallied in three of them in the subsequent days. It fell in three of them. They've tightened it every one

of the last few. So I'm not sure there's a lot of a cheat sheet to get from that. But what would you expect to hear and how the market might take it? It's going to be 75. I think we'd all fall out of our chairs if it wasn't 75 tomorrow. But I think we're looking for a little bit of guidance potentially. And everybody's hinting for a pivot, a pirouette, a pause, whatever P word you want to put there. The market is going to be leaning into that to see if some of the Fed speak in the last couple of weeks about potentially having to slow the pace so that we're all about December. I feel like this is almost like earnings season. 75 is expected.

That's going to hit. But what's the forward guidance going to be? And it's going to be data dependent. Right now, swaps are pricing in about 60 basis points, so leaning more towards 50. But I think it's all about what's to come and what is the pace of the next hikes. We're still seeing turmoil rate around five. So again, I don't think there's a about what's to come and what is the pace of the next hikes. We're still seeing terminal rate around five. So, again, I don't think there's a lot of surprises under the hood. I think it's a checkmark. And now we're going to look forward to more jobs data. You know, we saw some ISM info, not terrible, still an expansion, but 9.9% lower than in September and really, really flirting with contraction.

Obviously, jolts. We got 1.9 jobs for people looking for jobs. And that's just not a great number for the Fed. It's still a tight job market. So I think they're still between a rock and a hard place. They're going to have to hike. Nobody likes it. Everybody wants them to stop.

But it's like they can't. It's like a car crash in slow motion. They just can't stop hiking. Yeah, right. And Marcy, you know, in reality, if you're a central banker and inflation is running three or four times your target rate, there's almost no other way to behave, presumably, except to stay hawkish and make sure people don't get too comfortable that you're going to declare victory very soon. What does it mean from your perspective for an investor trying to figure out if if you want to add or subtract from risk right now? Yeah, you know, I think Powell is going

to have to keep going. Right. This Joltz number this morning was the last thing he wanted to see, probably. But I think if he wants to leave room open for a pause early next year, and I do think we're in this stage where we'll see kind of a step down in the size of rate hikes. If he wants to leave room for a pause, which I think he does, he should probably stop talking about it to give himself the flexibility so financial conditions don't ease in advance of the Fed pausing. So I actually think this relief rally, this bear market rally, has a little bit more to go. I think we're entering some really nice seasonals with the midterm election.

But to flip the script, I think you need peak Fed, peak rates, peak dollar, and earnings expectations for 23 to come way down. Yeah, and that's a process that maybe has only just begun. Joe, if you want to just hit Airbnb very quickly. It's an interesting stock, right? This is a late 2020 new listing that had its boom. It definitely kind of fell on the downside of the pandemic beneficiaries. And now it's sort of riding this travel resurgence.

Results not quite up to par. How would you treat it? Well, I think both in the case of what we heard from Electronic Arts and from Airbnb, there's a significant impact from a rising dollar. And that's been the consistent theme throughout earnings season. I think that will be continuing. The pandemic tailwind, that's gone. You know, the benefit that we saw from a lot of cross-border travel at the end of the summer, that's now gone.

The guidance, which was weak here, that's what you have to look towards. You're seeing a lot of hotel inventory coming back online. That offers competition to the Airbnb model. So unfortunately for Airbnb, I think the better days are behind them. Yeah, it's interesting because it's happening before they've really started to become profitable on a bottom line basis in a big way. I mean, it's clearly the situation where people have expected the model to start to accelerate from here. And it hasn't quite, although, Marcy,

I wonder what you think about just in general, this area of services spending, consumers still having the accumulated excess savings, and this idea that there are buffers in the economy looking into 2023, whether it's because of pent up demand for travel and other services or because they're spending less on the goods we binged on, that it can mitigate the economic impact of what the Fed's up to. So I do think the consumer still has a bit of a runway. We've seen the savings rate come,

obviously, way down from those high levels of 2020, but even way below historical averages, the consumer is starting to eat away at their savings. The good news is balances and checking, you know, deposit balances are still higher. We still see higher income households specifically spending on services, on entertainment and leisure, but lower income households are starting to chip away at that savings. I would argue, based on the data we see internally, this runway probably could last until next summer, but it's going to be diminished depending on how high inflation, you know, or how persistent inflation continues to be. So I do think the consumer is fatigued. We're seeing it in goods purchases. I do think there's a fatigued. We're seeing it in goods purchases.

I do think there's a little more runway for entertainment spending. But that savings buffer is starting to get chipped away at. Marcy, I think you think that it makes sense to actually own high quality bonds here. Does that mean you think that yields perhaps have peaked because we're going to see some deceleration in those parts of the economy? We've been adding to bonds, high quality bonds, treasuries we went neutral on recently because I think the rate risk now is two sided. If you look back in history, what you actually see is the yield on the 10 year tends to peak before you get a peak in the Fed funds rate, on average by about two months. So our view is, you know, where the Fed is going is probably more important than this path there. I do think you can get a Fed pausing after the March meeting

with a terminal rate, you know, maybe 475 to 5 percent. That tells me the 10-year is in a peaking process, barring a big surprise in inflation. So I see the risk as being two-sided now. So we're adding to treasuries. We're extending duration. And I think there will be more opportunity to add to treasuries because I think that does position us for the very real and rising risk of a recession in the first half of next year. Victoria, you've been kind of on this mantra of just just buy boring right so own stuff that's not

necessarily making big promises whether you have some financial stability that has included energy I know at what point would you look for a chance to diverge away from that and and look for some things that have a little more leverage in them to either an uptick in the cycle or or rekindle growth story sure I think it's still a little bit too early. I agree with Marshall. We're still in a bear market rally. The downtrend's intact. And our thesis is you could see technical rally through year end, but another Q1 pullback. So because we see that and we see we're still in a bear market, we do want to focus on quality and fundamentals. These are the companies that are performing well at reasonable valuations. And especially now where you're seeing the mega caps

are finally vulnerable and starting to fall a little bit. You want to have companies that have cash flow. They don't trade at obscene valuations. They're lower duration. So we're kind of avoiding the growth in tech. It's too early in the cycle still. You're in a hiking cycle. You have a strong US dollar. Neither of those two trends are ending. So because of those reasons, I want to focus on quality and value. And I think the value trade may stick a little bit longer at some point. Yes, growth is going to flip around and start performing again. But you need those macro headwinds to ease. And I think this is similar to what we saw this summer when

we had a nice, nice rally. We've had multiple like three or four times the markets moved up 8 percent or more than in this bear market. And again, I don't want to chase into this. I want to collect my dividends, be boring, have sustainable cash flows, be focused more on the U.S. than I want to be chasing future profits and future growth. I want people making money now. Joe, it's true that we've had a bunch of these failed rallies that ultimately led to lower lows. But on a point-to-point basis, the market has had no net downside since mid-June, right? You're above those levels. So as much as it seemed correct to stay bearish, it was almost as if, you know, you had the gratification in the first six months of this downturn on an index level.

And since then, it's been a struggle on both sides. So I'll be brief because AMD is out. And that's an example of why you want to be defensive in the market. But everyone keeps saying value growth. I just still see the market as wanting defensive position. Yeah. Defensive in terms of the types of stocks that would work as opposed to lower expectations. Yes.

And we will get to those AMD numbers at this point. Do you not see the fact that the market has not made new lows in itself as something that speaks in its favor? Or is that one of those like, look, we'll be lucky if we just ended this year? Well, I think it takes away the thesis that cash was the right place to be. And that was being, you know, that was a popular communication just several weeks ago. It was all about being cash, being cash. Now there's opportunities in each and every asset class. We're talking about taxable fixed income. The value has been restored there. We're talking about equities, opportunities in energy, industrials, places that are unfamiliar to

investors in the last several years. That is true. Energy is a very interesting one in the sense that you and I have talked, Joe, about how it's overweighted massively in the momentum index. I was looking at the S&P pure growth index. It's about double the overall S&P weight in energy there. It's been way outperforming. The stocks have outperforming oil and gas, the commodities. Is that of concern or does that tell you that's where the leadership and the growth are? No, it tells you where the opportunity is as an investor. Just think about yesterday, the idea was floated about a windfall tax, right? And energy equities basically shrugged that off. Why?

Because the understanding is that the shareholder is being prioritized right now. And as long as you are retaining and growing dividends and you've got strong capital allocation strategy and, oh, by the way, your revenue growth is in triple digits, that's a sector that you cannot reduce the overweight allocation that is currently being maintained. Yeah. Marcy, you say you thought this rally in general may have a little farther to go. Is it hinging much on the sort of seasonal cadences that we hear so much about and I end up talking so much about about midterm election years and the way those years tend to end and be strong after you get through the election? Yeah, I know. I think this rally started on sentiment and positioning was almost a mirror image from what we saw that teed up the early summer rally.

So I wasn't really surprised when we got this relief rally. I do think the next stage of it gets a boost from seasonality. Now, that does favor value over growth. And I do think, you know, with the October that we've had, it tees up a strong fourth quarter. I would say resistance is around 4,100. That's an important level to watch to see if we can break through. I'm not ready to give the all-clear sign, though. I do still think this is a bear market rally. A lot of this has been about positioning. I think tech last week is a great example of that. These were really crowded over old names,

and the big question is, where do they go? Where does this money flow? I would look at cybersecurity as an opportunity. You know, we're going to get a bunch of big name earnings coming up soon there. I think if they can, you know, have a beat and slightly raise guidance, this is going to be a beneficiary. And then while I still like energy and I do still think it's market leadership, we're not talking as much about utilities. I think you have a bit of a buying opportunity there. There's so much visibility because of the Inflation Reduction Act on earnings growth, dividend growth there.

So I do think a lot of this is seasonality, but not ready to give that all clear. I would stay on guard and really balance again until we see that earnings reset. Did want to get specific a little bit here on AMD's results. It was 67 cents a share, adjusted earnings per share, 68 percent a cent was the forecast. And revenues did have a slight miss, 5.57 billion in the past quarter, 5.62 billion was the forecast. But you do see the stock rallying a little bit here, up 3 percent, Joe. Is this a better than feared story? I think a lot of

negativity has been priced into the stock, that's for sure. Margins, slight miss on margins here. Guidance kind of not so hot. They did pre-announce, of course. We should mention. Exactly. Exactly. So I think, you know, you're getting to a place for the entire semiconductor industry. And we witnessed that last week with Texas Instruments, where you have to say to yourself, OK, is all the negative news now priced in? This was really the first industry to fall pretty hard. It's probably coming out of it collectively at this point. And I think I said yesterday, I think you have to have an idiosyncratic view on the semis and really try to identify these single opportunities. Right. As opposed to just buying the whole bunch. Got it. We'll have to leave it there. All Joe, Marcy, Victoria, thank you all very much. Appreciate it. Let's now get to our Twitter question of the day. We want to know, will the

Fed pivot after tomorrow's decision? You can head to at CNBC Overtime on Twitter to vote. We'll share the results later in the hour. Now, we are just getting started here in overtime. Up next, your Fed playbook. RBC's Laurie Calvisina joins me here at Post 9 with her Fed forecast and where she's seeing opportunity in the market right now. And it's been a busy afternoon for earnings. Top chip analyst Stacey Raskin standing by with instant analysis of AMD results. We're live from the New York Stock Exchange. Overtime, we'll be right back.

Welcome back. Caesars earnings are out. Contessa Brewer has those numbers. Hey, Contessa. Hey there, Mike. Caesars revenue beats coming in at $2.89 billion versus estimates of $2.82 billion. Earnings beat at $0.24 a share versus the estimated $0.14 adjusted. Regional casinos outperforming for the third quarter. Las Vegas profits coming in a little light. We'll listen on the call for an explanation there. Digital outperforming, losing $38 million when the street was expecting a loss of $94 million. That will no doubt be the focus of the earnings call. The CEO has a track record of giving some context around the current environment. We want to hear about football and, of course, whether Mattress Max's big bet on the Astros will cost Caesars in its path toward profitability. You can see the stock there has turned negative. It had popped when earnings first came out, Mike.

All right, Contessa, thank you very much. Stocks ending lower on the day to start the new month of trading. My next guest says small caps may be the best place to put your money right now as companies continue to grapple with a stronger dollar. Joining me now here at Post 9 is Lori Calvisina, RBC's head of U.S. equity strategy. Lori, good to see you. Thanks for having me. So small caps, is it mostly a currency play? Are there other things going on? They have actually shown some outperformance recently. Yeah, you know, look, they've been on a holding pattern all year. They're starting to break out. The currency is obviously a big consideration. You've got more than a third of your revenues in S&P 500 coming from international sources, but only about 21 percent for the Russell. So

there's a big gap there. But I think, frankly, Mike, a lot of this is there was a dismal 2021 in small cap stocks. They already priced in a lot of whatever is coming at us economically. And I think a lot of investors recognize that at this point. Yeah, it definitely was pretty stark, the difference between, you know, small cap valuations and the S&P, which is still the valuation, at least still so elevated by those mega cap growth stocks. Broadly speaking, what do you think the market is positioned for here going into the Fed tomorrow? I mean, you know, I'm actually happy the market's down a little bit today. I mean, I never like to see a big tape going into a Fed day. But look, I think

that the dovish narrative is kind of creeping back under the surface. People don't want to say it too loudly. I talked to plenty of clients who are looking for the idea, trying to build models, showing the CPI is moderating and the Fed can back off. So I know that work is still being done. Our rate strategy team thinks they may be setting up to tee up sort of a step down. We'll see how the market reacts if that indeed is what we get. But I do think there's a dovish undercurrent just based on the rhetoric we've seen lately. Well, I mean, they've been characterizing this project as front loading rate hikes, front loading the tightening efforts all year. Yeah. And so at some point you front loaded them. Right. I mean, I think it's interesting to think about it as as how far things have come since March when they

first began liftoff. I think so. And look, I think there are a lot of people who have agreed with that strategy. I think what's been so hard about the Fed and markets this year is equity investors do want inflation to be fought. So there has been some sympathy for that approach in certain circles. There has obviously been worry about the pain. But we are coming down on the end of this year. People are very eager to start looking ahead to 2023. And so I think there's some hope in the air. Do you think that there's the capacity of investors to look all the way across the valley,

so to speak, of whatever is going to be hitting the economy? I think so. I mean, a lot, you know, we talked about small caps. Even my large cap clients who normally, you know, their eyes sort of glaze over when I want to talk about small caps because it's not what they do. Even they've been willing to listen to me talk about how all the risks from a recession are basically priced into small cap at this point, because everybody is looking for things that have been de-risked, whether it's a sector, a stock, a size segment. People are having those conversations. And they've been having them for a few months, frankly.

Within the market or within the small cap indexes, what does seem to make sense here? I mean, financials or, you know, other cyclicals? So, look, I think in small cap, it is largely the cyclical plays. Things like energy, financials, consumer discretionary all look very, very cheap. If you look at small cap consumer discretionary stocks on our valuation model they're at typical troughs financials also look very cheap in large cap but they look just as cheap if not a bit cheaper in small cap and you have less international exposure there as well if you're looking at something like the banks so I think there are a lot of

choices you know I talk a lot about industrials these days particularly with small cap investors they're not super cheap but they are generally viewed as high quality and benefiting from the reshoring theme. So people are starting to get very excited about the fundamental narrative there as well. Is there anything to be done in pockets of technology, whether it's within or outside of the FANG type stocks? So look, I think that technology, if you look in the large cap space, and we're talking not so much the internets, but kind of the traditional semi-software services, that's a reasonably valued sector. I think in small cap it gets a little bit dicier because, first of all, it's just hard to measure valuation.

You have so many companies that are loss makers. I would say in tech, stick with the higher quality names, not necessarily the fangs, but some of the kind of more boring software type names. Yeah, a little more kind of a throwback type theme. Yeah, and think about companies that a throwback type theme. Yeah, and think about companies that are helping you battle whatever, you know, next crisis is coming, whether that's been inflation or the trade war or now a slowing economy. All right, Lori, great to catch up with you. Thanks for having me. Thank you. All right, time for a CNBC News Update. Now with Shepard Smith. Hi, Shep. Hi, Mike. Thanks from the news on CNBC. Here's what's happening.

Two police officers shot this afternoon while attempting to serve a warrant in a residential neighborhood in Newark, New Jersey. Our local NBC station News 4 New York reports one suspect fired a long gun from an elevated position, possibly a window or a rooftop. One officer said to be shot in the neck, the other in the leg. Both rushed to a hospital and no word on either of their conditions. Happened now about two and a half hours or so ago. The suspect right now reportedly surrounded but not yet in custody. SWAT teams, the feds on scene, the area in lockdown. And the man accused of attacking the House Speaker Nancy Pelosi's husband

is out of the hospital and in jail. He's due in court shortly to face state charges that include attempted murder and assault. Tonight, family members of murdered Parkland High School students speak for the first time directly to the killer in court. And we're live in Nevada with election news one week out from the midterms on the news, right after Jim Cramer, 7 Eastern, CNBC. Mike, back to you. Thank you, Chef.

Up next, chairs of AMD moving higher after reporting just a few minutes ago. We'll have instant reaction to the numbers from top chip analyst Stacey Raskin after this break. Over time, we'll be right back. Welcome back to Overtime. Let's get another check on AMD. You see shares just a bit higher despite a top and bottom line miss and weaker than expected guidance. Let's bring in Bernstein Senior Analyst Stacey Rask on for his reaction to the results. And Stacey, obviously the company had previewed a relatively weak quarter.

How did the results come in relative to what you were looking for? Yeah, so the quarter was kind of in line. They pretty much told us where the quarter was coming in, both on the overall financials as well as the segments themselves. The guide was up for debate. So we didn't know how long the PC weakness, both in terms of the market as well as the inventory correction that's going on, was going to continue. And I think more importantly, there's a lot of uncertainty about what they were going to see about data center, and particularly in the wake of Intel's report, where Intel had called for

the market to decline in Q4. This is probably why the stock is up now. The guide itself is quite weak, but it seems likely that it's isolated to PCs and probably continuing on that inventory flush. The company suggests that both data center as well as embedded are actually going to grow sequentially as well as year over year, but importantly sequentially in Q4. I think that's what people want. They want to know that any weakness that's going on is strictly PC related because we all know that market's not great right now. Data center seems to be holding in. That's probably why the stock's up. And is that relative relief in data center from what AMD

said? Is it specific to this company or is that something that we can extrapolate? I mean, clearly it's specific to AMD versus Intel. I mean, Intel's data center business, I mean, they actually beat the quarter because of PCs, surprisingly. Their data center results were horrendous, and they sort of suggested they were going to get worse into Q4. They suggested that the market, the TAM, was going to decline sequentially into Q4, and presumably Intel is still losing share in Q4. So their data center business trajectory was not set up very well. AMD's looks quite a bit better. That is the more important thing.

Not to discount PCs. PCs are important. It's large and it's got a fairly sizable haircut that AMD's taking right now. But the reason people are owning the stock is for data center. And data at least for now for AMD looks decent. It looks quite a bit better than what's going on with Intel. I mean, the stock, obviously it had a very rough run,

but it's just a massive ramp off that mid 2000 level. It came right down to it or in the high 50s. Now it's bounced from here. Valuation has obviously moderated quite a bit, if you can believe the earnings.

How do you expect this to trade into next year? Yeah, so let's see where the earnings settle out next year. We're right now around $4 and they're guiding below us in Q4. But, you know, it's probably hard to get numbers next year below maybe like mid threes even. And the stocks hit like maybe 17 times on a number like that. It's pretty attractive as long as you still believe in that longer-term growth story, which I think is still there. The issues that AMD's having right now, they're not structural, right? They're still taking share. Their product portfolio is really, really good. The issues at the markets that they're in, particularly PCs, the market

sucks right now. That won't be true forever, hopefully. And the reason the markets that people own the stock for, at least AMD's position within those markets seems to be good. Yeah. And what about things like on the gaming side, whether for AMD or elsewhere, gaming purely, you know, speaking or gaming as it relates to crypto. Yeah. So crypto hopefully is done. And by the way, hopefully we never, ever have to worry about a crypto cycle ever again. Now for AMD, the GPUs, which I think is what you're talking about, are actually a very small part of their revenue. It's less than 10 percent of their revenue anyways. It doesn't really matter that much. Most of their

gaming segment is actually game consoles. Demand for those are still pretty strong. They've been very strong this year. The company has been suggesting that consoles can continue to grow next year. We'll see if they change their tune on that at all in this call. But in terms of the crypto worries and the graphics cards, that's a small piece of the revenue. Now, they actually have an event. They've got new products in that market coming out. I think it's on November 3rd they're going to be announcing new products. They actually have a data center event on November 10th that they're going to do. So we've got new product announcements coming across multiple segments for them. All right. New product announcements. And of course, as you said,

the call. We'll listen for additional callers. Stacey, thanks very much. You bet. My pleasure. All right. Up next, we're breaking down Airbnb's numbers. That stock lower on its report. The company's conference call already underway. We'll hear from an analyst who has just hopped off that call to give us his first quick take. Don't forget, you can catch us on the go by following the Closing Bell podcast on your favorite podcast app. Overtime, we'll be right back. Welcome back to Overtime. Airbnb conference call just getting underway.

The stock tumbling right now, although down less than it was, down off less than 3%. Oppenheimer senior analyst Jed Kelly hopping off the conference call to join us right now for some quick reaction. Jed, appreciate you taking a minute here. What was the initial slight disappointment here? It seemed as if people were leaning toward perhaps a better quarter based on some of the tea leaves out there. Yeah, I think that's what happened. A lot of the third party data that the buy side uses, particularly AirDNA, was pointing to about a 5 to 7 percent revenue beat. Numbers actually came in line with where the sell side was. So I think that threw

some people off. And then they obviously guided to moderate the decelerating growth for next quarter. Now, the stocks bounce back here after going below 100. I think that some of that has to do is they did guide to a pretty strong profitability for 4Q and travel demand remains relatively strong. The tone of the conference call is pretty positive. So the execution remains really strong for this company. Yeah, obviously, currency, like everyone, it's a bit of a headwind. There was some talk and maybe some evidence in some of the hotel results that maybe hotels might be winning back a little bit of share? Is that something to keep an eye out for just longer term? You're starting to see the share normalize now.

That was definitely the case in the second and third quarter. I think that the share trends that we saw, the hotels definitely did better in 22. I think the alternative accommodations, they were obviously COVID winners in 2021. But the hotel and that share is starting to normalize into next year. So I think you're going to see in terms of lodging share, alternative accommodations versus hotels, those percentages are going to look pretty similar to what we saw in 2019. And just how do you think about Airbnb in terms of the valuation? Obviously, the stock has traded a whole lot higher when it was

a whole lot less profitable. So it's normalizing at some level, but it's still looking like a 50 times number in terms of earnings or, you know, 40 plus on cash flow. Yeah, and that remains the tricky thing. And that's why we're still market perform, right? Like if you kind of look back to 0809 right when it was price line at the time they were growing room nights 50 60 percent and that was a stock that traded down to like 10 times even though so there's just a lot of multiple compression risk for airbnb if we head into a recession this is your you know your what you call right a great company but not so great of a stock right here right now, given the valuation.

Executing flawlessly, it's just the valuation is still rich, especially if we do head into a recession in 23. Do you get pushback on that analogy? I mean, just because is Airbnb directly comparable to one of those booking sites? At least to this point, people have treated Airbnb as something of a more unique asset. Well, this was back in 08, 09, right? Booking.com was growing 60 percent. So it's right. Like there's not as much pushback. Right. This was we're still growing. Right. So you had better growth. No, you don't get as much pushback. I think if you look at the short, short interest for Airbnb relative to Expedia booking, it's higher.

So I think investors are still kind of scared about any multiple compression we would see in recession. I mean, Airbnb is the most unique asset in travel. There's no Google risk. They have unique supply. That's why they are getting a premium. Yeah, no Google risk is is a is a good point. And then the other piece of it is at least, you know, its fans will say that the way people have changed their behaviors are such that, you know, work from home allows you to go squat somewhere in somebody else's home for extended periods of time. And it creates a different balance of demand. Yeah, I mean, I would say on the longer term stays, I mean, that they guided, I think they called out 20% in the shareholder letter. That's remained pretty consistent.

I think where they do benefit, it's on the margin, right? It's people that can now leave on a Thursday and stay till a Tuesday or Wednesday when before pre-COVID they had to stay on a Friday. They would have to leave on a Friday and come back on a Sunday night. So you are getting a little more extra one or two days on your trip. But sort of the longer term stays that we're seeing, that is a percentage of nights has remained relatively consistent. All right. Jed, really appreciate you taking a minute for us. Thanks very much. Thanks, Mike. All right. And don't miss Airbnb CEO on Mad Money. That's tonight at 6 p.m. Coming up, we're tracking some other big stock moves in overtime. Christina Parks and Nevelos is standing by with all of them. Hey, Christina.

Yeah. Well, Mike, it looks like we're snacking a little bit more. And that's why the maker of Oreo saw a strong third quarter and another tech company announcing a hiring pause. I'll have those details next. We're tracking the biggest movers in the OT. Christina Partsenevelos has them for us. Hey, Christina. Well, let's start with the maker of TurboTax and Credit Karma. Intuit seeing shares move higher, up over almost 3% after reaffirming operating income and earnings per share guidance for the full year 2023.

Management says they're bullish on small businesses and tax business as well. Both of those categories make up 86 percent of their revenue just last year alone. So the stock, though, is also reacting positively to news that Intuit will pause hiring at Credit Karma, citing revenue headwinds. Oreo maker Mondelez seeing shares up over, look at that, almost four percent right now. After raising its full-year revenue and earnings outlook, the company's third quarter benefited from the resilience in the snacking categories and, of course, higher prices as well. And while you're snacking, how about some swiping?

Match Group stock soaring right now in the overtime, up over 12%. The company owns popular dating apps like Tinder, Hinge, and The League. Investors rewarding match for beating estimates on earnings and revenue. The current quarter revenue coming in below what analysts were hoping for. Despite that, the stock up double digits. Mike. Yeah, match been a big underperformer, down 70 percent, getting some relief there. Christina, thank you very much.

Thanks. After the break, we're counting down to Robin Hood results. The three key themes every investor needs to watch. That is ahead. And coming up on Fast Money, Wells Fargo's Mike Schumacher says tomorrow's Fed decision isn't the story. What he says investors need to be watching instead. That's at 5. Overtime is back after this.

Welcome back to Overtime. Robinhood set to report results after the bell tomorrow. Kate Rooney here with a look at what to watch. Hi, Kate. Hey, Mike. That's right. Robinhood is pretty closely tied to the broader markets and retail traders, specifically based on some real-time data, the recent downturn,

and what we saw out of the major brokerage names. Wall Street is expecting slower trading activity. That's still where Robinhood makes a bulk of its revenue. The company has also set the bar pretty low based on its prior earnings reports. J&P Securities' Devin Ryan is expecting a modest improvement, at least from the second quarter, driven by options volumes. And as Dan Dolev of Mizzou told me, analysts are now focused more on the metrics that are within Robinhood's controls, mostly cost-cutting. The company already laid off about 23% of its workforce. Analysts are looking for more signs of cost discipline in its guidance.

Also watch for margin expansion and any commentary on growth outside of just trading. Rising rates should be a tailwind for Robinhood's revenue with net interest income. And finally, account growth, MAUs or monthly active users. Those still tend to be pretty tied to the markets, but watch for any churn or essentially people leaving the platform. Mike, back to you. Yeah, Kate, it's interesting. And looking at some of the other results, such as at Charles Schwab, the giant in the industry, all the talk is about investors finding the highest yield on their cash and moving money around. And there's this novelty effect out there and the idea that you can get, you know,

4% to 5% safe yield out there. I wonder if the Robinhood customer is seeking something like that, if Robinhood is going to have anything out there to try to invite that kind of activity outside of just trading. Yeah, that has become a competitive play for the brokerage firms in a lot of the fintechs. SoFi has sort of moved in that direction, too, and talked about that on earnings this morning, the idea that offering higher rates on checking and savings actually helped account growth. Robinhood launched about a three percent yield on its what is essentially a savings account or a cash account. And that's a way that the

fintechs are really looking to compete, even if it's a loss leader. If they lose money on that in the near term, it's a way to sort of entice people to get on the platform. They are looking now to diversify and move away from just trading. This company really was built in a zero rate environment. We saw what happened during the meme stock era that really helped Robinhood. We're here about a year and a half later, and things are looking extremely different. The company is now trying to pivot and look more like sort of a money center bank than just a brokerage firm. So we'll see if they're able to accomplish that. And a big part of that is going to be cost-cutting and really the discipline that Wall Street's looking for,

not spending on growth, trying to pull back a little bit and paint a picture of where this company is actually going. Yeah, it's a story that's really washing over really all kinds of tech, fintech or not. Still a $10.5 billion market cap on Robinhood. Kate, thank you very much for the setup. Thanks, Mike. Last call to weigh in on our Twitter question. Head to at CNBC Overtime to vote, and we'll bring you the results right after this break. Overtime is back in two minutes. Let's get the results. Over our Twitter question, we asked, will the Fed pivot after tomorrow's decision?

The majority saying no. More than three-quarters of you saying no. There is no pivot. That's however you want to define it, whether that means just a pause in rates or a step down in the pace of tightening. A 75 basis point hike fully expected and fully priced into the markets going in. You have the S&P up about 10 percent in three weeks, still down 20 percent from its all time high. A lot of folks think December is the real question. We'll hear the Powell comments in the press conference to get a better light on that. That does it for overtime.

Fast Money begins now.