Closing Bell - Closing Bell Overtime: Affirm CEO On Consumer Spending; Rivian CEO On Challenges 11/7/24

Episode Date: November 7, 2024

The S&P 500 and Nasdaq closed at record levels after the Fed cut by 25 basis points. Hightower's Stephanie Link and Jefferies' David Zervos break down what it means for investors. Earnings from Airbnb, Expedia, Block, Pinterest, Rivian, DraftKings, Affirm and Cloudflare. Affirm CEO Max Levchin talks about the latest results, latest trends on consumer growing and its growing number of merchant partners. Rivian CEO RJ Scaringe on why the company is seeing larger losses per car in than a year ago and what's ahead.

All right, that's the end of regulation. CACI International ringing the closing bell at the New York Stock Exchange. And Becta Corp doing the honors at the NASDAQ. Record closes again for the S&P 500 and the NASDAQ as the Fed cuts rates by a quarter point. The post-election rally continues to gain steam. We're watching the Dow and where that settles right now because it is on the cusp of a close. Maybe not. We'll see. As well, that is the scorecard on Wall Street.

But the action is just getting started. Welcome to Closing Bell Overtime. I'm Morgan Brennan. John Ford is off today. Well, coming up this hour, we have a great lineup to help break down the Fed decision and the cross currents in the market, including David Zervos from Jeffries, Hightower's Stephanie Link, former Fed economist Vincent Reinhart, and Evercore ISI's Julian Emanuel. Plus, it's another big afternoon of earnings. We're

headlined by Affirm, Airbnb, Block, Rivian, and DraftKings, but there are many more. We'll have all the numbers and interviews with the CEOs of Rivian and Affirm before their analyst calls. Let's get straight to the action, though. Hightower Chief Investment Strategist Stephanie Link and Jefferies Chief Market Strategist David Zervos, both Stephanie and David are CNBC contributors. And it's great to have you both here to kick off this hour. David, I'm going to start with you. You're on set with me. Obviously, the big news of the day is the Fed cutting by 25 basis points. But after a year, several years where it's really been the Fed has been the biggest mover of the markets, not the case. We are still talking about animal spirits with the 49th record close for the S&P since the start of the year.

Absolutely. I think it definitely goes down as one of the most boring Fed meetings we've had in a long time, which can be good news for the markets. And the markets did take it that way. There were some nuances, I think in the Q&A, there was a lot of confidence about inflation. Jay just felt very confident that it was housing services that was keeping it a little elevated in core and that that was coming down. He talked about it rolling off. Do you think that was warranted or do you think that was also just steering clear of policy and politics? No, I think I think it's warranted. He's you know, he's always careful to say, Morgan, you know, i don't want to declare victory too early that's a big thing for him but you know in his analysis it's just you detected the confidence was probably

never stronger uh and just reiterating how they're in a good place i also felt like on the employment side you know he said we really don't want to move any further up in the employment rate we feel like we're at the right place we don't want to give up any more ground to weakness. So I think at the margin, the bond market interpreted that a little bit dovishly. We saw bond yields come down a little bit. And frankly, I think the most amazing thing over the last two or three days, you know, take the election and the Fed together, the 10-year note really hasn't moved maybe four basis points, five basis points.

If you would have asked the compendium of investors that I speak to on a regular basis, you know, what they would have thought on a Trump win for bond yields, I think most of them were at least at 20 basis points higher for 10 years and some maybe even higher than that. So the bond market has really held in much better. And I think that's helping equities. I think equities are seeing that and going, aha, we don't have to worry about the bonds dragging us down with too much of a higher yield. It's such a key point. Steph, I want to get your thoughts on the cut we did get from the Fed and the commentary from Powell, because it was a it was a boring press conference for the Fed chair. But that was despite the fact that journalists were lobbying election and fiscal

policy question bombs at him, and he was ducking and diving and intercepting them left and right, case in point. Take a listen. Some of the president's elect's advisers have suggested that you should resign. If he asked you to leave, would you go? No. Can you follow up on his— Do you think that legally you're not required to leave? No. This is a key point, right, because despite all the

attempted, I guess, jawboning or politicization that's out there, the rhetoric that's out there around what Fed policy and monetary policy is going to look like under a Trump administration and whether the president-elect is going to have a hand in determining any of that, we talk about something like trade or tariffs. And a lot of the power around that actually sits with the president and the executive branch. When you're talking about monetary policy, a lot of the power sits with Congress, which was a key part of the messaging from Chair Powell as he was getting these questions today. So how does that set us up looking to monetary policy to 2025?

I mean, I think that was the most entertaining part of the press conference when he said no really sharply, right? So look, I think he's just trying to concentrate on what he can control. And in terms of the job and should he step down if the president asks, you know, if it's legally he can stay on, he's going to stay on and he's going to finish the job. And quite frankly, he's done a great job in terms of getting us to this,

whatever we're calling it, soft landing or just a nice economy growing at two and a half, three percent with lower inflation. Sure, it's not where they want it to be, but it's certainly making progress. I thought his commentary about looking at the three month, the six month and the 12 month numbers in terms of PCE, the three month is almost close to two. So that's what he's looking at versus the 12 month annualized, which was at, in terms of core, which was at about 2.7. So, and he's just focusing on the fundamentals

and we're gonna continue to be data dependent, unfortunately, and you get two inflation reports, one job report between now and the next meeting. So we'll have more of an idea. I think you're at something like 65% chance that they are going to cut in December, but we'll have to wait and see. I think he's very, I think he sounds very measured. And again, like kind of right down the middle, kind of boring, but that's okay. I think that the markets like boring. And oh, by the way, I would say one last

thing. We can, we have like two out of the three main events this week we've gotten through. We've gotten through the election, check. We've gotten through the Fed meeting. Check. Now we've got to get through China tomorrow in terms of do they announce more stimulus. But it's been a heck of a week and the market's hanging in there in a big way. All right. Well, Airbnb earnings are out and Deirdre Bosa has those numbers for us. Hi, Dee. Hey, Morgan, those shares are popping up nearly 12 percent. It was a little volatile at first. Shares were initially down as much as 5%, but turning that around very quickly.

It is a miss on the bottom line. EPS coming in a cent short, $2.13 versus $2.14. It is a beat on the top line. Revenue at $3.73 billion versus $3.72 billion. We'll call that in line. Gross booking values, nights and experiences, EBITDA for the quarter, all above street expectations. This is key outlook. Q4 revenue, it's midpoint from the company, $2.42 billion. That is right in line with the street's estimate.

This is probably what is powering the stock higher. Also some commentary from the company, encouraged by a better outlook in demand. The company is saying that some of the weakness that they saw earlier in the year has normalized that really spooked investors last quarter. And Airbnb has been an underperformer all year. So making up for some lost ground here. Shares still up well over 10 percent. Back to you. Deirdre Bosa, thank you. Expedia earnings, as we stick with travel here, are out. And Seema Modi has those numbers. Seema. Hey, Morgan. Expedia's third quarter results are out. And while earnings per share of $6.13 came in 9 cents above street estimates, room nights of 97.4 million above the forecast of 96.08 million, revenue did come in a little light at $4.06 billion. Estimate was for $4.11.

CFO Julie Whalen is stepping down as chief financial officer. She will also leave the board of Expedia. This is the first leadership change under the new CEO, Aryan Gorin, who became CEO of the online travel giant earlier this year. On the call, we will look for comments from Gorin on the topic of M&A following rumors of an Uber deal and whether she is, in fact, looking for strategic opportunities for the company. We are watching shares move higher in overtime by over 6 percent. Morgan. All right. Seema Modi, thank you. Rivian results are out. Phil LeBeau has those numbers. Phil. Morgan, this is a miss on the top and bottom line for Rivian, the company losing 99 cents a share in the third quarter, seven cents worse than the street was expecting.

Revenue coming in at 874 million, shy of the 990 million that analysts were expecting. Loss per vehicle, this is not good. It's trending in the wrong direction. In the third quarter, Rivian lost $39,130 per vehicle. That is almost $9,000 worse than what the loss was in the third quarter of last year. Gross profit, negative $392 million versus negative $477 million in the third quarter of last year. Net loss of $1.1 billion compared to a net loss of $1. six billion Q3 of last year. Liquidity stands at eight point one billion. Compare that with the end of the second quarter when it stood at nine point one seven billion. Then there's the question of guidance. And this

is what's going to perhaps put some pressure on shares of Rivian. The company now expects an adjusted EBITDA loss of between two point eight two five and two point eight seven five billion dollars. The previous guidance from the company was for a loss for the full year of $2.7 billion. It is affirming its CapEx guide for the full year of spending $1.2 billion. Also on track for positive gross profit in the fourth quarter. That's something they have been saying for some time. They are on track for that, according to Rivian, and they've affirmed their delivery numbers of 47 to 49,000 vehicles, production as well between 50,000 and 52,000 vehicles for the full year. Lots to discuss with Rivian founder and CEO R.J. Scaringe right here on the floor of the Rivian final assembly plant

in Normal, Illinois. That's coming up in just a few minutes. But again, Morgan, this is a miss on the top and bottom line for Rivian. Back to you. Can't wait to hear what he has to say. Shares are fractionally higher right now. Phil, thank you. We've got Pinterest earnings out, and Julia Borsten has those numbers. Hi, Julia. Morgan, Pinterest beating on the top and bottom lines, reporting adjusted earnings per share of 40 cents. That's six cents more than estimates, while revenues of $898 million. That is just a hair $3 million ahead of estimates. Now, monthly active users, $537 million, $4 million more than anticipated. And fourth quarter revenue, the company guiding to a midpoint, a range with a midpoint of $1.35 billion. That's just a hair light of expectations. Bill Reddy saying in the release,

quote, our AI investments are driving results by powering better personalized experiences and greater performance for advertisers. But I need to just flag the fact that the stock is now down nearly 12 percent. And we believe this is likely on the operating expense guidance. The company is saying it expects fourth quarter non-gap operating expenses to be in the range of $495 million to $510 million. That represents 11% to 14% growth year over year. And also, Morgan, after we saw Q3 beat, especially on the bottom line, the question is why there isn't stronger guidance for Q4. But it really seems to be the expenses weighing on that stock right now. Yeah, AI-related expenses and investments. We've seen what that's done across the tech space. Julia, thank you. Block and Affirm earnings are out.

Mackenzie Segalos has the numbers on both for us. Mackenzie. Yeah, Morgan, we're seeing mixed results for Block, setting shares down more than 12 percent. Adjusted earnings coming in at 88 cents, which was a slight beat on the 87 cent estimate. Revenue coming in light at 5.98 billion. The street was expecting 6.24 billion dollars here. Now, I spoke with CFO Amrita Ahuja a short time ago. She says that the sell side orients more to gross profit than to revenue. She pointed to the company's 19 percent gross profit growth and record quarterly profitability. Now, a key metric that the street was watching out for, gross payment volume. That was a miss coming in at $62.4 billion versus a street estimate of $64.3 billion. But the bigger picture here is that the company is

overcoming shortfalls in GPV with tighter cost controls and improving cost structure, which is buoying profits and gross profits. As for guidance, the company says it expects strong gross profit growth in 2025 of at least 15 percent. Now, Affirm shares also moving lower this hour, about 4 percent down, after reporting a beat on both the top and bottom line. The company posting a 31 cent per share loss versus the 4 cents less than what analysts were projecting here. Revenue coming in ahead of estimates at six hundred and ninety eight million versus the six hundred and sixty four million dollars it was expected. Gross merchandise volume, which really helps gauge the total value of transactions, accelerated 35 percent from a year ago, beating expectations. Partnerships with Apple,

Amazon and Shopify are helping to drive up its top line, though it's really those large-ticket interest-bearing purchases that set them apart from the BNPL pack, which is why you're seeing the company continue to take market share. Now, looking forward, next quarter's revenue and GMV guidance is roughly in line with street expectations. However, a firm says it won't achieve GAAP profitability for another three quarters. That stock, which is up 104 percent since August, currently trading more than 7 percent lower this hour. Back to you, Morgan. All right, Mackenzie, thank you. Doing double duty. Well, coming up, a firm CEO and founder, Max Levchin, will break down those results with us in a first on CNBC interview before he dials

into the analyst call. So stay tuned for that. Steph, I'm going to go to you because we just had a parade of results. You can really sort of pick your name here. But we've heard quite a few different types of industries report just now and quite a bit of commentary. Yeah, I think the travel company is really very interesting because expectations were very, very low. Expedia, I think, was better than Airbnb, but Airbnb, the expectations were really, really low. Expedia, though, if you look at some of the numbers, bookings were better at 7%. B2C was up 3%. That was a two-point acceleration. B2B up 19%. That was also better than expecting. And lodging book up 8 percent. Really solid. It trades at half the multiple of bookings holding. So at eight point five times EBITDA versus 15 times. And so I think you could probably see some catch up. Airbnb, you know, everybody was nervous about the booking and the lead times as well as margins because they're aggressively investing. So the guidance in the midpoint of the range, very encouraging. Block, I mean, they've got a lot to do, to fix. I love the gross profit numbers and the 19% figure that I heard, a little bit light, volumes missed, and then that's offset by operational efficiencies, because that's what everybody cares about on the cost front. So I think we're going to get more detail on the call.

But, you know, you can't miss. And I think what we're all waiting for, for the company anyway, is really more card activity and that growth, as well as the cash apps and seeing acceleration overall. So you're not seeing it yet. So I think we have to get through some more details. But those are the three that kind of stand out to me. All right. David, I want to get your thoughts on where you invest right now, because we have the election overhang has been removed. You now have a market that's digesting what's likely to be a red wave here as well. You've got a Fed that

just cut again and is making its way data dependent towards neutral, whatever that ultimately is going to look like. You've got seasonality and you have earnings. So I think the story that's developing for me is that the red sweep, which is not guaranteed yet but looks very likely, is giving some bond investors confidence. As I said in our earlier segment, I think people were worried about deficit spending and just a runaway fiscal story, getting the bond market into a tizzy and that feeding back to equities.

We've seen bonds really stable post-election, post-Fed. I think the Fed gave us a pretty at-the-margin dovish outlook, but stable outlook. I kind of like the whole story that we're going to get a little bit more fiscal parsimony, a little bit more of a Congress that doesn't spend as much under the red wave as maybe a divided government would have, because divided means they all have to get a piece of pork. If you have one side, and especially the Republican side,

which is typically a cost-cutting If you have one side, and especially the Republican side, which is typically a cost-cutting side, wants smaller government, I think the market might rally around that a little bit. Elon Musk's speech was very important on that in terms of saying he could get rid of $2 trillion. I don't think he can, but, you know, he can definitely have a shot at it. He's certainly the one guy you might, at least the markets will like to hear that he's the guy thinking about that after we saw what happened with twitter uh slash x yeah i i feel like that story is the big developing story i'm getting very positive i've been positive on my risk parity trades have been positive on equities i'm getting even more positive i like the way everything's going into the end of the year i'm looking at stephanie's christmas tree i'm looking at your Christmassy outfit today. And I'm just I'm thinking Christmas rally. I'm just getting excited about it. There you go.

All right. David Servos and Stephanie Link, thanks for kicking off the hour with me. We got a record close for the Nasdaq, a record close for the S&P. It looks like we are not finishing at a new record for the Dow, basically unchanged, but slightly lower. Now let's turn to senior markets commentator Mike Santoli for a closer look at the rally and some parts of the market that are playing catch up. Mike. Yeah, Morgan, playing catch up, maybe anticipated potentially to catch up further. Here's a look at the high quality component of the S&P 500 compared to high beta, which is the more volatile, somewhat lower quality, more cyclical parts of the market, faster moving stocks, those that are less stable. You see

this premium that opened up in favor of quality for a while. That's definitely consistent with things like mega cap tech leadership. But that's not the entire story here. Obviously, just people wanted in a time of maybe macro flux to kind of hew toward more stable companies. So now you see this little bit of a of a catch up move closing that gap. This idea of a sort of a higher volatility bull market is interesting. A higher metabolism economy might be filtered through that kind of a lens. Now, when it comes to value stocks, long suffering value investors are yet again saying that the policy mix we can anticipate under the newly elected regime could, in fact, finally revive value relative to growth,

more cyclical, more financial stocks working, things like that. I wanted to point this out that it's been said before and it's been tried before. And that was basically after the 2016 election. You did get a massive rotation into value and out of growth. And then it sort of fizzled. And that doesn't mean that it fizzled, meaning those stocks went down that much. It just means that growth just sort of grabbed the baton in a microcosm. That's what happened yesterday and today. Today was all the year to date winners of the Nasdaq 100 that carried the indexes after yesterday's value. So watch the relationship.

Obviously, we're at deeper depths right here. Obviously, value stocks are even cheaper relative to the market than they have been in recent years. But it's a dynamic we can continue to watch, Morgan. Right. And we will. Mike, we'll see a little bit later this hour. Thank you. Let's turn back to Rivian. Shares are moving between gains and losses after a miss on the top and bottom lines. The loss per vehicle was nearly $40,000 per car. That's versus about $30,000 per car in the same quarter a year ago. Joining us now in an exclusive interview is Rivian founder and CEO RJ Scaringe, along with our own Phil LeBeau. Phil. Thank you, Morgan. RJ, good to be down here in normal Illinois. Look, Morgan set it up there.

You guys had a wider than expected loss in the third quarter. You've guided to a wider than expected loss for the year. You're trending in the wrong direction in terms of loss per vehicle. What happened? Yeah, I mean, this is our core focus is on driving towards profitability. We for the year you're trending in the wrong direction in terms of loss per vehicle what happened yeah i mean this is uh our core focus is on driving towards profitability we talked about our objective of getting to a positive gross margin q4 um you know q3 is really a hard quarter to see through a lot of the noise we just made a big change over to our our second generation of our r1 vehicle and so there's a lot of costs associated with changing out roughly half of the bill of materials as measured by cost and so as we brought on new suppliers there's expenses associated with that. We also had a supply

chain shortage as part of this ramp up and that really hurt us in terms of our overall output for the quarter which affected us from in terms of fixed cost absorption across all the different vehicles. But we remain optimistic around overall performance and looking at Q4, we've continued to guide towards positive gross margin. How do you get there? How do you get to positive gross profit in Q4 after the losses we've seen? Yeah. I mean, one of the things when you've got so many different changes, we've talked about how do you sort of decipher that and look through the noise to see what you know what's the real signal the thing i'd call out is if we look at q4 of this year so this quarter relative to q1 of this year and look at the difference in our material cost for the vehicle we're 20 percent lower in q4 than

we are in q1 and that sort of helps you see through some of the noise so we've made real progress in terms of the overall material cost structure on the vehicles and of course, of course, we're continuing to drive efficiency improvements into the plant. We're continuing to drive progress in terms of the quality of the plant and the hours per unit. RJ, it's great to have you on the show. I'm going to ask you the policy question because we just came through this election. We know President-elect Trump on the campaign trail has been very vocal about scaling back the IRA subsidies to the extent that he can. But the flip side of that is he also is one of the EV pioneers. Tesla's Elon Musk in the mix with the administration.

So what do you expect to happen where the EV investing environment and those subsidies are concerned? Yeah, I mean, as we think about developing our future products and even our existing products, the most important thing we can do is make sure that the vehicles themselves are really exciting, they have great features, the performance, the capabilities, the value proposition is really strong. And so, as we look forward, you know, we're excited to work with the new administration. But really, our focus is making sure the vehicles really compel customers to make the switch from internal combustion into electrification. RJ, you are going to still haven't closed your joint venture with Volkswagen, worth up to $5 billion. Do you have the capital right now to get to R2 production in 2026? Yeah, we've said before, you know, for us,

the joint venture is something we're really excited about. We've got a really great relationship we've built, you know, across the various levels within Volkswagen, but importantly between myself and the CEO of Volkswagen Group as well. And so that relationship we're excited to see come together in the fourth quarter and be able to announce that. But with that relationship in place, plus the $6.7 billion of cash we have on hand today, that funds us not just the launch of R2 here in Normal, but it funds the build of the R2 platform, which underpins both R2 and R3 in our Georgia facility and takes us to positive free cash flow. Thank you, RJ. Morgan, I'll send it back to you. All right. RJ Scringe, thank you. And to our Phil LeBeau, thank you. Love a good live shot from a factory floor. Well, DraftKings earnings are out and Contessa Brewer has those

numbers. Contessa. Hi there, Morgan. Consensus revenue is coming in at $1.1 billion. So that basically is in line with expectations and expectations of loss per share. The loss came in at 60 cents versus the streets expectation of 42 cents per share. It looks to me like the EBITDA loss, 58.5 million against the streets expectation of a loss of 71.1 million. So that came in better than expected. And monthly unique players came in better than expected, too. They're reaffirming guidance for this year, for next year, rather, for 2025. But they cut guidance for EBITDA and for revenue for this year. This may be the reason why. Penn Entertainment CEO Jay Snowden talked on

his earnings call today about the fact that there's been five weeks of bad luck where football is concerned. And it looks like it took its toll on the house. The parlays were really paying out for the customers. We'll have to wait and see if Jason Robbins actually talks about that when they have their earnings call tomorrow. He's on Mad Money tonight, by the way. All right. Contessa, thank you. Yeah, well, still ahead, Evercore ISI's Julian Emanuel just putting out a bold mid-year 2025 price target for the S&P 500. He will join us with that number and why he says there's a, quote, animal spirits revival taking place in the market. And after the break, former Fed economist Vincent Reinhart weighs in on the Fed decision and reads the tea leaves from Powell's commentary.

Over time, we'll be right back. Welcome back. Cloudflare earnings are out and the stock is sinking. It's at about 10 percent right now. That's despite a beat on earnings by two cents at 20 cents per share X items. Revenue were also ahead of estimates at four hundred30 million, but fourth quarter revenue guidance was below estimates. So tomorrow, we're going to learn more about this. Don't miss Overtime's exclusive interview with Cloudflare CEO Matthew Prince. That kicks off at 4 p.m. Eastern. Meantime, record closes across the board as the Fed announced this afternoon that it is cutting rates by another 25 basis points. Joining us now is Vincent Reinhart. He is chief economist at Dreyfus & Mellon and a former Fed economist. And it's great to have you on. Thanks.

Thanks for having me. Your takeaway from the Fed decision and the Powell presser today, it seems like he was very determined not to make news, including not commenting on the future trajectory of rate cuts and what that path to neutral looks like? As for the first thing, we learned that Chair Powell's not self-destructive. There's no reason to talk for him to talk about the election. He will already his institution will be under pressure from politicians in the months to come. He doesn't have to add to it. So he stayed in his own lane,

which was economic policymaking. And he's happy in his lane right now. He's upbeat on economic activity, not that concerned about inflation, and was really in a position to think about when to dial back monetary policy easing. Not immediately, but sometime next year. I mean, he did talk up the dual mandate as well. And he made comments about the state of the labor market and the fact that it's not as that it's basically less tight than it was pre-pandemic. And I just wonder how much to make of that, given the fact that labor data can be a lagging indicator and it can move very quickly in different directions. So a couple parts of that, and you identified the important

part at the beginning. His characterization of the labor market back at his Jackson Hole speech, got a lot of attention, was they didn't want the market to get worse from where it was then. And in an answer to a question today, he said, well, we wouldn't want it to get much worse. He actually softened the take a little bit. And part of it is, you're right, economic data are always variable, always volatile, and it's just getting harder and harder to sample. And the Bureau of Labor Statistics has a really hard, hard time. Employment situation is measured with a lot of uncertainty. And we've had strikes. We've had storms. They have to smooth through this information to get the underlying trend. But they're upbeat about the underlying trend. David Zervos made the point that we've basically seen a round trip in 10-year treasury yields

from the reaction to the election to over the last couple of days to now the digestion of those results as we get them in today's trading session. And I wonder what you make about what the bond market is signaling. Powell certainly is not willing to play ball on the possibilities around fiscal policy and how that could potentially feed back into monetary policy. But when you start talking about changes to immigration, when you start talking about changes to trade and application of potential tariffs, when you start talking about changes to the tax code and lowering those or making those more permanent, how does that potentially feed back to the monetary piece of this? OK, so there's three parts about what's been moving, moving long term yields over the last

week in particular. One is getting realistic, understanding that that premium should be higher, that that the market economy works at a higher base rate. Second, we learned a little bit about monetary policy today. The Fed is not on a one-way ticket to just easing. They will take into account the data, and at some point they will stop easing and certainly slow the pace. What was the key word Powell said? Patient. Patient means not every meeting, And that decision is coming soon. But the big thing was about governmental policy, fiscal policy. We're going to have big budget deficits. We're going to be adding to debt. We are going to probably do things that are somewhat intrusive and expensive, like potentially tariffs.

And so there's lots of reasons to be worried about the longer term willingness of investors to continue and continue and continue to add to Treasury debt. Devil's in the details. We'll see how it all plays out come 2025. Vincent Reinhart, thanks for joining me. Thanks for having me. Time for a CNBC News Update with Pippa Stevens. Pippa. Hey, Morgan.

President-elect Trump said he believes his victory was a call to, quote, bring common sense back to the country. Speaking with Meet the Press moderator Kristen Welker, Trump also said one of his priorities upon taking office would be making the border strong and powerful, including carrying out mass deportations. Trump said there was no choice but to carry them out. And Goldman Sachs named a new crop of partners today, 95 in all, the most ever under the leadership of CEO David Solomon. The class of 2024 also includes the largest number of diverse partners

and includes the largest ever number of women promoted, with 26 in total. In a note to staffers, Solomon wrote that this year's promotions reflect growth in Goldman's global banking markets and its asset and wealth management businesses. Morgan, back to you. Pippa Stevens, thank you. After the break, we will talk to Affirmed CEO Max Levchin for his first comments about earnings, and that's before he talks to Wall Street analysts on the call. Stay with us. Welcome back. Shares of Affirmed are falling after reporting results for the first quarter. Joining us now to break down those results is Affirm CEO Max Levchin. Max, it's great to have you back on the show. Welcome. This is a beat and raise quarter for you, and gross merchandise volumes were up 35 percent. Revenue, perhaps even more interestingly, up 41 percent. Walk me through

what you're seeing across the business right now. We're firing an all-pistons. I cannot be happier and prouder of the team. We just really nailed it this quarter. Probably made me more excited to me at the product level. We're touching 20 million active consumers just. We're over 5.1 transactions per user. So every part of the ecosystem we've built is just growing and growing and growing. We're very excited about the future.

We are starting to roll out the Visa Flexible Credential card functionality. So just many things are happening. We just rolled out, I'm back from London. If I look sleep deprived, that's because I was there to launch our expansion across the Atlantic. So many things are going really well.

Excited to deliver a beaten raise and just looking forward to declaring ourselves GAAP operating positive in a couple of quarters. So let's talk a little bit about that expansion too then, because in the U.S. you're continuing to take market share. You are the largest buy now, pay later player in the U.S. What does international enable, especially as you do continue on this path towards profitability? Just more opportunity. Everywhere we go, we see demand for a product. One of the more maybe surprising, unsurprising takeaways from my conversations in London was just how delighted merchants there, not just our merchants in the U.S. we plan to bring with us to U.K.,

but local merchants, pure U.K. players saying, we can't wait for you guys to be as widely available as possible because the need for these longer term, better underwritten, higher quality, consumer-friendly transactions is just not met. And we're excited to bring it there. And then in the US, you're right, we are the largest player. We accelerated. We used to be about 32%, we estimate, of the total pure play the NPLs face. We're now 34%. And we're more than half the revenue of the entire industry in the U.S.

As you're talking, the stock's turning higher. It's now at 2 percent right now. I know you have these partnerships with Amazon, with Apple, with Shopify that's helping to drive your growth. J.P. Morgan, though, in their most recent analyst note, talks about the fact that a firm is more tied to discretionary spend. I wonder whether that's actually, in fact, true when I do see revenue numbers that are higher than volume numbers. And if so, what you are seeing in terms of the health of the consumer right now. I think Affirm is for everyone. The thing that's kind of amazing about the brand and the customer relationship that we've built is we help folks finance things that are genuinely expensive, multi-thousand dollar.

I'm a big consumer of cycling items and bikes are not cheap and paying for them over 18 months longer is something that we're very good at. And this appeals to folks in any credit range. And then all the way down to a couple of hundred dollars, just splitting it across three months to make it a little bit easier in a cashflow

works for both sides of the credit spectrum. And so for some people, we are a four times a year major outlay, want to plan my expenses carefully. And for others, especially our cardholders, we are two to three times a week. And both, we have a wonderful relationship, helps that we don't charge late fees.

We don't screw our customers. We don't use things like deferred interest. And so the product is broadly appealing. We're now of the kind of scale that major card issuers can brag about. So what will a Trump administration mean for the company, and what do you think it means for the state of the consumer and the state of the buy now, pay later business? I think the trend we are writing is entirely secular. Buy now, pay later, or we think of it as pay later broadly, is about 7%, 7.5% of overall e-commerce. So there is 7 down, 93 to go,

just in e-commerce. And offline is rapidly growing. Half the volume for a card comes from offline. And it's basically a round affair for now, just how small it is, meaning how huge the TAM is. And so I think the secular trend is pretty much independent of whoever's in the White House. But people in red states and blue states and purple states borrow money from us and pay it back with remarkable consistency. And we're excited about that. So I expect very little change in the growth opportunities that we have. Max Levchin of Affirm, thank you for joining me. Thank you for having me.

Well, he announced a 6,000 S&P year-end price target right here on Overtime back in June. It was a street high at the time. Coming up, Evercore ISI's Julian Emanuel is here with an even more bullish call on the market. You're going to want to hear that. But first, Mike Santoli looks at whether retail investor enthusiasm could drive the market even higher. Welcome back. The Nasdaq and S&P 500 closing at record highs again today. Mike Santoli is back with a look at whether retail investors could drive another push higher. Mike.

Yeah, Morgan, what we can say for sure is that retail investor sentiment is beginning this post-election rally period in relatively subdued fashion in terms of bullishness. This is the bulls minus bears in the American Association of Individual Investors weekly survey. You see that spread when it gets excessive. It's up here, you know, 25 percentage point spread. It's about 13. Now, this is before yesterday's rally, before the election result. I guarantee you next week this is going to be shooting higher. So you want to keep an eye on whether that's getting a little bit extended and frothy, along with some other measures of positioning sentiment. I don't think that we're there yet, but that is usually what's going to

start to restrain a rally that gets rolling when the market was already kind of at all time highs and we were not coming from a very bearish place. Now, take a look at the positioning by asset managers in small cap Russell 2000 index futures. This is just a measure of what the big money is expecting out of this group. And this shows you that already, and this, again, is before Tuesday, Wednesday, this was showing a very net long position in Russell 2000 futures by this group, pretty much comparable to where we got to in 2016-17. So, again, it's not a wholly neglected group.

That sector of the market started to participate and outperform a few months ago. So we've got to keep an eye on not just how good the news is and how the market behaves, but whether people were already positioned for it, Morgan. All right. Mike Santoli, thank you. Up next, much more on all of today's After the Bell earnings action as more analyst calls get set to kick off at the top of the hour. Plus, bulls on parade. Evercore ISI's Julian Emanuel is out with another bullish call on the market. Find out just how high he thinks the S&P can go. That's coming up later on Overtime.

Welcome back. Donald Trump's victory and another Fed cut adding fuel to this bull market. Our next guest announced the 6,000 S&P 500 year end price target right here on Overtime back in June. At the time, it was a street high. And today he's even more bullish, just putting out a new forecast for mid-2025 of 6,600 for the SPX. Well, let's bring in Julian Emanuel, Evercore ISI Senior Managing Director. Julian, it's great to have you back on the show. Great to be here. OK, we're closing in on 6,000. 59.73 is where the S&P finished today. So at a time where just a couple of months ago you were so bullish versus everybody else. I wonder what you think about this market now as you do put out this midyear forecast. Well, look, the point in doing this for us is basically to sort of capitalize on the idea that, you know, having run a decisive and uncontested election, when you think about it as a public investor, you've basically spent the time since July worried about politics.

You survived the fourth largest volatility spike of all time in early August. Then you had the seasonal weakness for a spell in September and put that all together. And the public had become somewhat disengaged with stocks. And then lo and behold, you get this election outcome that, you know, regardless of the party, but obviously we have a party that's perceived to be more pro-business and, you know, more pro-deregulation, which is driving the animal spirits and participation from active managers. But now there's every reason for the public to once again engage in stocks in November and December, the most positive time of the year. And we think all of that is likely to carry through into the new year, you know, hence going

to 6600 for the end of June. It's interesting to hear you talk about the public. We just had this conversation with Mike Santoli about retail investor sentiment and activity and whether we're going to see more of that now as the markets do seem to be turbocharged. Animal spirits revival. Is that specifically what propels us to 6600? I just wonder how much actual policy that's going to be meaningful to the market we're going to get in these first couple months of Trump 2.0? So it may not necessarily be the policy itself that drives the market forward, but the perception of an administration that is going to allow M&A to occur—and this is one of the interesting aspects of this bull market—at up 65 percent and just barely over two years old.

That's still very young in terms of age and gain. And you almost always see a, you know, an M&A environment, an IPO environment take shape. We haven't seen it yet, but we here is the catalyst in front of us. So combine that with a public who is still fascinated by AI and the Mag7, and you have a recipe for, you know, what we think is going to be very vigorous gains in the coming months. We're almost through earnings season. We had quite a few of them here in this hour, but we're almost through earnings season. The key beat rates are running below the one in five-year averages. And so I think it raises the question, is the market expensive here? Does that matter? The market is expensive here. We have to be very

upfront about that. But the thing about expensive markets is they tend to last longer and go further than common wisdom. And frankly, the fact that professionals in particular realize that the market is expensive and is causing them to hold back is part of that wall of worry, along with the climb in interest rates, that we think that the market will ultimately climb successfully over the coming months. So what do you buy here? What do you steer clear of? So we think that the playbook that's worked, technology, we like software in particular, and small caps, which love soft landings, certainly happy to see that 25 basis point cut today, are very, very attractive. Do small caps actually now power to a record high?

Because they have still, I realize we're at a three-year high, but they've lagged the broader market. And some of that has also been tied to what we've seen in the bond market. Yeah, no, they haven't. And that's a very good point. But when you look at it, again, in an environment where credit is likely to flow and capital markets and financing is likely to flow and credit spreads have been, you know, really are at their tights. That's an environment where capital markets activity, where small caps tend to be outsized beneficiaries, particularly in areas like biotech, are really going to benefit from the environment. Okay. Julian Emanuel, thanks for joining me. Thank you.

Of Evercore ISI with a 6,600 price target for the S&P for the middle of 2025. Well, we did get a record high in the S&P 500 today. 59.73 is where we finished there. The NASDAQ as well, also a record. The Dow basically finishing unchanged, down about half a point. But we're going to continue to watch this market as we have a number of factors contributing to the rally we've been seeing. That does it for us here at Overtime. Fast money begins right now.