Closing Bell - Closing Bell Overtime: An Exclusive Look at TSMC’s Advanced Chip Factory; Cava Chair Ron Shaich On Restaurant Winners & Losers 12/13/24

Episode Date: December 13, 2024

Today’s show features a market panel with Charlie Bobrinskoy of Ariel Investments and James Demmert of Main Street Research, offering insights on current trends. Warren Pies of 3Fourteen Research shares predictions for 2025 while reflecting on 2024’s key market hits and misses. Ron Shaich, Panera Founder and Cava Board Chair, discusses the restaurant industry and consumer trends.. Charles Schwab’s Joe Mazzola unpacks findings from the latest STAX report and market implications for what retail traders are doing. Plus, an exclusive inside look at TSMC’s advanced chip factory in Arizona, showcasing groundbreaking developments in U.S. semiconductor manufacturing.

Well, that bell marks the end of regulation. CFP Board ringing the closing bell at the New York Stock Exchange. Absinthe Corporation doing the honors at the NASDAQ. And it's a mixed end to a mixed week for the major averages with the Dow extending its losing streak to seven sessions in a row. That's the longest stretch in the red since 2020. And, hey, the S&P decided not to do much anything. Just almost took the day off. That's the scorecard on Wall Street, but winners stay late.

Welcome to Closing Bell Overtime. I'm John Ford. Morgan Brennan is off today. And ahead this hour, 314 Research co-founder Warren Pies lays out his newly released outlook for 2025, including his S&P 500 price target and why he's expecting a growth scare in the first half. Plus, Panera founder and Kava board chair Ron Shaikh tells us the names he's watching in the restaurant space as Kava closes out a stellar year of returns. And shares of Taiwan Semi getting a lift along with other chip names after Broadcom's strong quarter. We got an exclusive look inside Taiwan Semi's brand new chip fab in Arizona with never before seen footage. And we begin with the stock story of the day. That's Broadcom closing sharply higher and eclipsing a trillion dollars in market cap after strong earnings and comments from CEO

Hock Tan about AI-driven demand. Our Seema Modi joins us with more on what drove the stock's huge gains today. Seema. A tremendous day, John, for Broadcom. CEO Hock Tan really gave investors a reason to dream, painting a three-year picture with a potential $60 to $90 billion in AI revenue from current customers in the next three years. That list of customers, by the way, continues to grow with Broadcom confirming three hyperscalers and also disclosing two additional customers that are in advanced development. William Blair, analysts believe these two clients are OpenAI and Apple, which the information first reported is working with Broadcom to develop an artificial intelligence chip. Seen by the street as a long-term competitive threat to NVIDIA's GPUs, worth noting shares of NVIDIA did end lower in today's trade by 2%, while Broadcom soared to new heights, its market cap surpassing $1 trillion for the first time ever. Wells Fargo says this could be a potential long Broadcom short Nvidia pair trade in development following these results. But others we spoke to disagree,

John, pointing to Jensen Wang's upcoming presentation at CES, which in the past has been market moving. That's coming up in January. Bank of America analyst Vivek Arya also noting some of the risks that Broadcom faces. It says the company remains exposed to the shift in investor appetite for AI stocks and that the company has historically been very acquisitive that can potentially enhance volatility in the stock going forward, John. Yeah, they were allowed to buy something. And, you know, as far as we know, I don't think regulators have looked at them as closely as they did at the Qualcomm thing, which might have been for other reasons.

But it's interesting you bring up NVIDIA. NVIDIA closed down almost 6% for the week, but Broadcom was up 25%. It seems like these big names, these large names, figure out ways to stay at the top of the market. They sure do. And on a year-to-date basis, both of these stocks have run up very well, in a very big way uh so far in 2024 and if you look at analyst expectations for next year um you know the expectation is that both of these stocks will do incredibly well 24 analysts today i would point

out upgraded shares of broadcom and raise their price target on these results really defying expectations but as we point out the landscape is becoming more competitive. Yes, NVIDIA being a very dominant player in artificial intelligence chips for training. But I think the question is, as Broadcom really partners with these larger hyperscalers on their in-house chips for inference, what the timeline looks like and how closely we could be to seeing a potential competitor to NVIDIA. And that seems to be what's playing out in today's price action. Well, we'll keep watching it, Seema. Thanks. Now let's turn to the broader market action as we close out the week. Joining me, Charlie Brinskoy of Ariel Investments and James Demert of Main Street Research.

Guys, welcome. Charlie, S&P 500 value index closed yesterday with its ninth consecutive daily loss, longest losing streak on record, I believe. The index, let's see, equal weight S&P up 15 percent year-to-date versus, I think, about 27 for things overall. So it continues to be really rough out there for value investors. Why is it going to get better? Well, I would say our fund is up 20 percent this year. I wouldn't call that really rough. I would just say not as good as the large cap growth tech stocks. So it's been a perfectly good year for value investing, just not nearly as good as as growth investing. And what we like

about this is that we think our names are reasonably priced here. A lot of the names that I talk to you about every time I'm on your show, John, are trading at 14, 15, 16 times, not the 27, 28, 29 times in the large cap tech space. So we think we're getting good returns. Our customers are happy. We would not have predicted a 20% return this year, and we got it. Reasonable valuations, reasonable growth, good growth in our companies, not a bad place to be. Sounds like a tortoise in the hair expectation there. James, you say to buy

any weakness in the market overall, you predict S&P 6150 by year end, but you expect a 10 to 15 percent correction at the beginning of 2025 and that AI stocks and these big stocks are going to do worse and then come back. How do you expect that to work? Especially can the market come back without these big AI names, big names and AI names coming back too? Let's see. I'm not hearing James. Charlie, sorry, let's get your audio fixed. James, not quite hearing you there. Charlie, you expect that healthcare and food stocks,

which have responded negatively to the idea of RFK Jr., you think they're overdone. Which ones in particular do you see opportunity in? Yeah, there are a lot. I'm glad you called this out. We think that he is got some ideas that wouldn't be good for health care and food, but that he's not going to be as successful in getting those changes as the market reaction would have you believe. So a name like Smuckers, which has historically been a high teens multiples, now trading for about 14 times earnings. That's a very attractive name. LabCorp is a name that's been there's going to be more testing done going forward, including on new drug development.

Stock's been hit. LabCorp trading in very reasonable valuation. And then J&J, of course, one of the best health care names. It's been a great strategy to just buy J&J and put it away is now trading at 14 times forward earnings. That's a name that's been a premium to the market for decades and now trading at a discount valuation. So health care and food is a place that we think has been overly scared by the prospect of Mr. Kennedy. Interesting, James, I believe we got you now. So you expect a down 10 to 15 percent in the S&P in Q1, but we end the year 12 to 15 percent higher. How does that work? You know, do you expect mega caps and maybe some of these A.I. names to be as strong at the end of the year as at the beginning? Because if so, they're going to take quite a round trip.

Yeah, I think it is going to be a round trip. You know, it's been very generous for the AI trade because the semis, but we think 2025 is going to be very different. Number one, we're going to have a startling correction, probably pretty deep for those AI companies because they're higher valuations. But we see 2025 is not a Fed driven market or all that cash on sidelines, but the economy and earnings are what drive stocks. And that'll help Charlie's stocks because it's going to broaden. But we think that that big decline might be because the Fed is going to be unable to lower rates in the first quarter. That might be startling.

That might have a good sell-off in the tech stocks. But let's remember one thing. We're early in the AI transformation. And as Broadcom suggested and looked at today with the report, we think there's still lots of legs to AI, but it's going to be second derivative AI companies. So yes, the NVIDIA's Broadcoms do well in 2025, but those second derivative software companies, telecommunications catch up. So what potentially derails your thesis? If tariffs don't go as you expect, rates pause for a while?

What really derails us is the pro-growth deportation of Trump policy sort of igniting inflation again. The Fed comes back to the table to raise rates. I think that really calls a very disruptive market, a very difficult market, or possibly a U.S. credit downgrade. Other than that, we think a normal correction, maybe deeper for tech. And people buy that. If you're not fully invested, you want to wait for that, and you want to buy into that correction in the first quarter. All right. Thank you, James, Charlie. Good to see you.

Happy Friday. Now let's get to CNBC senior markets commentator Mike Santoli for a look at the divergence between cyclicals and tech. Mike? Yeah, John, so far in December become a very split market again. The majority of stocks down, especially cyclical ones and then a handful of the big growth stocks carrying the indexes. Take a look here. This is the Nasdaq 100, of course, mega cap growth proxy, and then the industrial and bank sectors, which, remember, were very strong into the election, after the election, through November, and have given plenty back since right at the turn of the month. So it could just be the market allowing some of the areas of the market that got stretched to cool off a little bit, or we're a little more indecisive about the interplay between the economy and Fed policy.

Now, take a look at the Russell 2000 small cap. It's been, you know, look, long promised revival of this index. There was a great run right after the election as yields were coming down. We thought the Fed had room to cut more. I do it a little more than three years ago because that was the ultimate peak in the Russell 2000 in November of 2021. We're back below that level. So is it a little more than three years ago because that was the ultimate peak in the Russell 2000 in November of 2021. We're back below that level. So is it a ceiling around this 2400 level or is it just going to take time for it to reset and reload? That's one of the questions going into the very back end of this year. Now, finally, take a look at Apple.

It has been one of the stronger large stocks that has been carrying the Nasdaq 100 and the S&P for a while. And there is a tendency of this stock when the market itself is in an uptrend to have a very strong December. These are the turns of the year. So you see 19, 2019, big run in December, 2020, 2021. Now that was a bear market year, 22. You didn't get it. year. You did. And now up about four or five percent month to date. Why is that? I could surmise that basically Apple tends to have these win streaks in the mature end of a rally. It obviously is one of those stocks. It's very easy and obvious to buy going into a new year. And you'll see that sometimes it sets up the stock for a little bit of chop and a pullback in January or the early part of the next year. So in addition to all the other fundamental reasons that it might be moving, that seems to be part of a pattern that's happened the last several years.

And they've got arguably the most expensive long term successful consumer product in a couple of generations. So maybe when people are thinking about that around the holiday season, they're thinking, maybe I should buy some stock with that. It's so interesting you bring up the small caps because I'm thinking about tech now, and there's this expectation the market overall has been top heavy with mega caps for a while, but it seems like they're switching places in who's leading. You get Tesla down while Nvidia's up, and you get Nvidia's down down and suddenly Broadcom's above a trillion. I mean, that's quite an interesting dynamic versus the small caps, right?

It's very interesting for sure. Now, the market, I think the good part of all that is it's a market that somehow finds a way to stay supported and keep moving forward. I'm not saying it's sort of mapped out as a real tactical kind of approach, but the market does tend to sort of have these different stocks grab leadership for a while. NVIDIA has not made any net upside since June. And yet the overall market has continued to progress. You saw Broadcom obviously have that huge move. Some days, in fact, even within semis, it feels as if NVIDIA trades against the rest. It's like NVIDIA is kind of the known quantity, the class of the group, the quality play, and the rest of them maybe have a little bit of catch-up to do on a given day. Ends up being a game of keep away from the Bears, seems like.

Mike Santoro, we'll see you in a bit. Super Micro shares pulling back right now in overtime. Let's get back to Seema Modi to find out what's up. Seema? John, we're watching shares of Super Microro move lower here on a report that Supermicro is in the process of, or at least considering the idea of raising equity and debt from private equity. That's according to a report from Bloomberg that suggests that Evercore could be a part of the process of raising capital for Supermicro, a leader in the artificial intelligence server market,

but a company that has been challenged recently by ongoing concerns or allegations around accounting. That, of course, has challenged the stock and raised also questions about how customers are responding. Are they moving to alternative competitors like Dell and HPE? We are watching Supermicro here down just about 4%. Over time, we've reached out to the company. John, back to you. I wonder what it would say if a player like that does put big money into that. Seema, thanks. Up next, the hits and misses of 2024.

314's Warren Pies joins us with his best and worst market calls of the year and a first look at his just-released S&P target for 2025. And later, restaurant industry titan Ron Shaikh, who founded Panera and now chairs the board of Kava, is going to outline where he's looking for opportunities now in the restaurant space over time. Welcome back. My next guest sees about a 12 percent increase in the S&P 500 by this time next year, but warns it won't be smooth sailing to get there. Joining me now is Warren Pies, co-founder and strategist at 314 Research. Warren, happy Friday.

So a little interesting exchange between our Jim Cramer and President-elect Trump just a couple days ago. Take a listen to this. When President Reagan was here, he talked about putting the bear into hibernation, letting the bull run free. Sound like a good motto? Sounds perfect. I can't do any better than that. That's what we're going to do. OK, 2025, Warren, the market's going to be in a far different place than 40 years ago,

1985, when Reagan said that. The market basically ran for a couple of years after that statement of his into Black Monday. So is Trump's version of Reaganomics, you think, going to work on stocks here? Yeah, thank you for having me. And I do. I think it's going to work. Obviously, there's major differences between the two eras. But the general feeling of having a president in the White House who is keeping tabs on the stock market and would go down and ring the bell, I mean, I do think it's going to work. That was the title of our research report was letting the bull run free, our 2025 outlook. And so, yeah, I don't think it's going to be necessarily be because of Trump, but it's good to have an administration that's not going to get in the stock market's way at the very least.

So why do you think stocks stumble in the first half of 25? Yeah, I mean, we still think that the soft landing is intact. That was our call last year. And I would say, you know, when you zoom out from a big macro perspective, there's always, I'd say, two big risks, inflation or growth. And last year, we were more worried about inflation not coming down fast enough to allow for the Fed to cut. Whereas next year, I think that the bigger risk is growth. You know, I think that we're going to have another growth scare. It's going to emanate from the housing market. That's going to probably be in, I mean, it's really difficult to pinpoint, but late Q1,

early Q2. And that's going to put the spotlight back on the Fed. I think there are a lot of people like your last guest who are worried about inflation and thinking the Fed's about done with cuts. And I think the Fed's going to have to cut more. And there's going to be a little bit of pain in that process. But ultimately, I think the Fed will cut more, more than the consensus expects. And the soft landing continues. We end up with a double digit gain next year. OK, so you didn't think that inflation would come down enough for the Fed to cut. Some would argue

that it didn't and they cut anyway. What's going to change? Yeah, well, I think, number one, on the inflation side, the three big vectors of inflation that infected the economy are all fading. So shelter disinflation, something we've watched for a long time, is going to roll over hard by our calculation early next year. So that's been the big holdup for CPI, something the Fed's been waiting for. So that's going to happen. A lot of people look at the 1970s and see a second wave of inflation. And that required a massive disruption to the oil market. We had 4 million barrels a day go offline into the second wave of the 1970s. This time around, we have OPEC adding back over 2 million barrels over the course of 18 months. So totally different oil market. I don't see any pressure

from oil. And then finally, labor market's weakening. Less than 60% of total industries are growing payrolls at this point in the cycle. And that's honestly a recessionary level. And when you look down at the leading industries, we look at the housing market, for instance, and residential construction payrolls, everything we see is looking like the labor market is weakening. So I don't think there's going to be any inflation from those three areas. If you're wrong about 2025 being up 12%, what's the factor you think that that's going to hinge on? I think it's going to be, so the Fed is trying to re-hawk right now a little bit. I think they're trying to pause and trying to say, let's see what happened with these last few cuts. Again, I think that the growth scare is going to hit very similar to what we saw coming

in the summer of last year, where the Fed chose not to cut in July and then had to do 50 basis points in September to kind of support the market. The big risk is the Fed sits on its hands too long and that maybe they, for some reason, whether it's political pressure and inflation or whatever in the data, and they sit too long and don't cut aggressively enough to bring down longer term rates like mortgage rates. We think you need to see mortgage rates get back down to like six percent. And that's going to take probably 100 basis points of Fed cuts next year to do that. I still think it's going to happen, but it's going to take some aggressive action from the Fed to keep the soft landing going. All right. Just about 10 days before it all starts to play out. And we'll see. Warren Pies, thank you. Yes, sir. Thank you.

Up next, restaurant industry veteran and Kava board chair Ron Shaikh on Kava's blockbuster gains this year and what he's most excited about in the restaurant industry in 2025. And later, cutting down expectations. Schwab just out with a new client survey with a surprising finding about what retail investors think will happen at next week's Fed meeting. We've got the details ahead on Overtime. Welcome back to Overtime. Shares of Kava might have ended the day in the red, but those shares have had a stunning run this year, up 188 percent. Joining us now in an exclusive interview is Kava's chair, Ron Shaikh. Ron, always good to see you. So, John, how are you? I'm doing pretty well. Got a little cold coming on, but I think I'm going to make it. I'm wondering what you think of the outlook for Kava in this healthy category, which you outline as being a high quality in 2025. And yes, I know you believe in the thesis and continue to. You're adding stores

in this environment. Is there anything with the consumer that concerns you at all? I think we're always sensitive to the consumer. What the consumer cares about is value in the context of an experience. What Kava is offering is an extraordinary experience at a reasonable price. And what Kava really is, and I think it's why it's had this great run and why it's got the potential to actually be the next industry defining company in this industry, the next Chipotle, I like to think the next Panera. The reason it has that potential is Mediterranean is a category is powerful. It's the number one diet in America.

Every time a doctor talks to you, he's talking about the Mediterranean diet. And Brett Shulman, our CEO and his team have built an industry quality enterprise that has the potential to dominate this category. We're larger than our nearest competitor by a factor of 5x. And the reality is in the restaurant industry, it's a winner-take-all industry. Think McDonald's and Burger King, Chipotle and Qdoba. Think Panera and Corner Bakery. And so ultimately, this is a powerful expression of Mediterranean. It combines digital, it combines in-store experience, and it ultimately represents an extension into hospitality. OK, so this year, looking at overall restaurant and food trends, casual dining hasn't done well.

Fast food hasn't done well, but actually a stock that's done better than Cava is Brinker International, which has Chili's and Maggiano's Little Italy. That sounds counterintuitive to me, given the overall trends. What do you make of it? Well, I think its CEO and his team did an amazing job in developing a promotion that worked particularly well. People are talking about it. But ultimately, the question for us and for me as a long-term investor, which I am in Kava, is its long-term trend. And I think, you know, for my money, I'm betting on the long-term for Kava. I think it's an extraordinary category and an extraordinary execution of a brand within that category. It will dominate Mediterranean.

If you believe Mediterranean is powerful, then you will believe in Kava. And what this consumer today wants is bold flavors, innovative flavors, they want things that get them excited in a context that feels healthy to them with real hospitality. And that's what Kava is. I know it is a long-term bet, of course, you are the chair.

I believe you did sell some shares, a sizable number lately. You want to put that in context for investors? Sure, I have $600 million of stock in CAFA. Let's be clear. All right. I mean, the reality is I'm bullish. I think obviously we all have to diversify. It's part of my broader portfolio. But that stock has taken a disproportionate percentage of my total portfolio. And in the context of that, my investment vehicle, which is called Act III Holdings, we made a decision to take a little

bit of that off the table. But again, honestly. $600 million does sound like a lot to me. I mean, in my portfolio, that would be a lot. So I guess I can understand. Can you appreciate that, John? I guess I can. Would you say six hundred million is bullish or bearish? I mean, it sounds kind of bullish to me, but I'm just one guy. I mean, I think the market perceived it as bullish because we didn't sell more when we could have. OK, I hear you loud and clear. Last time you were on, we talked about Starbucks and McDonald's. There was a health scare on E. coli at McDonald's having to do with a supplier. With the likes of Kava, how do you prevent that sort of thing from happening, or is it just inevitable? No, well, first, I mean, listen, we're serving millions of customers. But the reality is we're keenly aware of what is the issues within food safety.

We have a very serious team. In some markets, we have dedicated food safety people. We are as committed to food safety as you can be. We're going to do this thing right. We understand that the most valuable commodity we have is the trust of our consumers. Is it harder or easier to retain workers? Well, when you've got a brand that's as good as Kaava, when you've got a management team as good as Brett and our organization, it's relatively easy.

This is a winner-take-all industry. And when you're winning, people want to be a part of it, investors want to be a part of it, customers want to be a part of it. And we have that kind of momentum that's occurring at COP. All right. Ron Shaikh, once again, always good to get your take. John, take good care of yourself. You too. Well, it's time for a CNBC News update with Bertha Coombs. Bertha. Hey, John. Hamas has reportedly agreed to meet two of Israel's key demands for a ceasefire deal in Gaza. Sources tell NBC News that Hamas will allow Israeli military to stay in Gaza temporarily after fighting ends

and hand over a list of hostages, including Americans, who will be released. But a senior Biden administration official tells NBC negotiators are close to a deal, but not there yet. The Supreme Court announced this afternoon it will hear a challenge to California's authority to set its own standards for vehicle emissions. Court will decide whether various businesses, including liquid fuel companies, can sue based on their argument that California's strict rules will lower demand for their products. And the Missouri man imprisoned in Syria after crossing into the country for what he says was a pilgrimage has been flown out, according to U.S. officials who say Travis Timmerman was taken to Jordan on a military helicopter. Timmerman was found after rebels freed thousands of detainees from prisons after toppling the Assad regime. It's been an amazing interview with Richard Engel on NBC News.

Can't imagine what it was like to be in prison like that for years. Indeed, indeed. Bertha Coombs, thank you. When we come back, Treasury yields on the upswing this week, and that could spell trouble for one particular part of the market. We'll explain next. And check out the stocks that hit record intraday highs today. Fox Corporation, O'Reilly Auto, Arista Networks, Broadcom and William Sonoma all on that list. Be right back. Welcome back. Mike Santoli's back for a check on bonds after a sell-off this week. Mike? Yeah, John. Pretty steep actual price drops in Treasury bonds. This is the 20-year, very long-term Treasury ETF, the TLT. It has brought the price down to levels that has acted as support, or at least that zone, over the last several months and even beyond that or so. Obviously, another way of saying that yields are up near the top end of their range. You have the 10s around 4.4 percent, 30-year around 4.6.

So we'll see if buyers do come in here. Of course, we've got corporate yields that are just a bit above 5 percent. So this idea that maybe there's some latent buying interest in debt securities as we get to the end of this year, they've underperformed equities by so much. But we have inflation readings that have been stalled above the Fed's target for a while. We got more evidence of that. The sense out there the Fed may go one quarter point again next week and then maybe be on pause and maybe explicitly say that they're on hold. So all of that is in the mix here. One of the impacts is on the homebuilder stocks,

which have had a bit of a rough run and are sort of challenging their longer-term uptrend here. So this is the home construction ETF now basically back to its 200-day average. It's usually not immediately alarming if it comes down to that 200-day trend line, and that trend line is actually still going up pretty sharply, which this one is. But it's worth noting you've still seen some corporate outlooks from the homebuilders that weren't all that upbeat, some of the analyst actions this week questioning profitability levels and then a real rising level of unsold but completed new homes out there. So a little bit of an overhang to chew through as we look into the new year, John. With the Fed cutting, a lot of people thought that bonds wouldn't be having this kind of trouble. How much hinges on how many hikes after December?

Plenty is going to hinge on just exactly how much downside there might be. I think inflation is what matters and inflation is what's driving Fed policy. So it's a long way of saying unless inflation comes down, it's tough to see a lot of downside in longer term yields. I do think we're going to be sensitive to the path that's laid out in the official Fed outlook next week. That being said, we've already done some selling here in bonds in advance of that. So maybe the setup isn't so bad getting into that meeting. Interesting levels. All right. Mike Santoli, thanks. Up next, Schwab's head of trading and derivatives strategist on whether this week's market pullback is a buying opportunity and the big stocks his

customers are trading right now. Plus, UnitedHealth, one of the big winners in the Dow today, although shares of the health insurance giant are still down about 14% since the murder of UnitedHealthcare CEO Brian Thompson last week. And cue the QR code because that leads into the latest installment of my On the Other Hand newsletter. This week's debate is the support on social media for the man accused of killing Thompson, a sign that we've reached a cultural low. You can scan that code on the screen and join the conversation. Be right back. Welcome back to Overtime.

Charles Schwab just out with a new trader sentiment survey to gauge investor behavior into year end and beyond. Let's bring in Charles Schwab, trading and derivative strategist, Joe Mazzola. Joe, happy Friday. So the election had a big impact on sentiment, but some people were selling at least mega caps into that. What happened? Yeah, no, I think that's a good way to look at it. I think, you know, the bump that we saw post-election really gave clients sentiment. At least that's what they're telling us. Gave a little move to the upside.

We saw kind of the rotation away from maybe some of the high beta names into maybe a little bit more cyclical names. Interesting to see, though, that the sectors that were bought were, you know, health care. Not something you'd normally expect, you know, kind of following that move. But IT continues to be a big buy in terms of some of the names in particular, NVIDIA, Palantir, AMD. So, you know, you did see the AI-related names. But I think interesting on the cell side were some of the names that had nice moves up to the election. And then, of course, big moves after the election, Apple, Disney and Tesla. So here you go. You continue to see Tesla set all time highs.

And it looks like that was something that clients faded a little bit. To what extent do you see clients chasing momentum? Yeah, that's it. You know, that's interesting because this is one of those. What are they saying versus what are they doing kind of things. They're telling us they're really, really bullish from a sentiment standpoint. So we actually asked them attitudinal versus behavioral. And we're hearing from them that they're about as John, is a rotation away from kind of the single stock, idiosyncratic risk, a little bit more into the ETFs and mutual fund space. So clients are kind of moving away from stock picking and moving a little bit more into the indexing and looking for ETFs as a whole.

Okay, on saying versus doing, they're telling you that they're not buying more crypto. Is that true? That's that's a great point. If you look at our top 10 buy list for the month of November, I bet and MicroStrategy were both on that list. So, yeah, you know, and maybe that's it's looking at it in terms of the way the question was asked. Right. Maybe they're not actually buying the spot Bitcoin,

but they are looking for some of the different kind of plays as a way to have that exposure. And John, I would just kind of call out the volumes that you're seeing, not only at the underlying level, but look at the volume explosion and the options for both of those names, MicroStrategy, iBit, and all of those ETFs. You're really starting to see some heavy, heavy trading within those option series. Is crypto maybe a guilty pleasure? Have you

seen enough data in the survey versus what people are doing to be able to say one way or the other? I mean, people feel like they're supposed to say that they don't love it, but they can't help but snap up a little more MicroStrategy. You know, I think that there's a there's a couple stocks that, you know, we consider mega caps that might be falling under that that whole meme stock right now. And, you know, you I think you could make a case that to a certain extent, some of the crypto ETFs are falling into that category where you're starting to see clients trade it because they see that there's opportunity to get in and out and make some money. And that's fine. I mean, you know, we have an investing population, we have a trading population. But the activity that I

see within that, you know, makes me look more so that, you know, these are trades as opposed to underlying positions that people are taking for the long run. Are clients trying to time the market in mega caps? That's interesting. What I would say is that clients are being selective in what they're buying. So as opposed to, and I brought this up earlier when I talked about the net sales. So it wasn't necessarily buying all the Mag7. I mean, they were fairly selective, selling Apple, selling Tesla. And so that's not just buying across the board. What I think they're looking for is they're buying on dips when they get the opportunity and they're selling on rips. And like I said, if you look at what we saw with Apple and Tesla, those are both

stocks that set all-time highs at the end of November into December. So we'll see with some of that momentum wanes. What I would call out is this, John, the breadth that we're seeing is really starting to dissipate a bit. So it's becoming a much more concentrated rally within a few names. And I don't know how long that can sustain, but, you know, there's there's a chance that carries forward through at least the end of the year. All right. Joe Mazzola and Charles Schwab, great insight there. Thank you. Up next, a pioneer in the remote work industry on whether companies looking to save costs could revive the work-from-home movement next year. And later, never-before-seen video of Taiwan Semi's brand-new advanced chip factory in Arizona. You're going to see it only here on CNBC.

And take a look at shares of Western Union moving higher right now in overtime on news of a new $1 billion buyback program. Be right back. Welcome back to overtime. Companies might be rethinking fully remote work, but they're not going back to the old model of everyone piling into company owned offices. Today, let's take time out with a pioneer in the remote work movement, find out why he's talking about growth. Mark Dixon is founder and CEO of International Workplace Group, IWG, stock trades in London, and brands include Regus and Signature. They provide furnished office space, which might remind you of WeWork, but IWG

was first. Dixon grew up in Essex in the UK, dropped out of school at 16 to be an entrepreneur. By the time he was 20, he had a fleet of vans in London selling food. Hamburger, mobile vans selling hamburgers at night. Probably the best business I've ever had, actually. You know, if you look at return on capital, it's a miserable affair because you're working when everyone else is going out. Start at 8 o'clock, finish 5 in the morning. It's good. Super return, hard work. You smell like an onion. Not good for your romantic life at all.

But that got me the capital to do everything else. That got me the base capital. Late night in London back then, those vans were the only thing open. With the capital, he started a bakery, franchised it, then sold it to private equity. With that money, he set up temporary housing for corporate workers in Brussels. Then he realized they needed temporary offices too. The dot-com bust nearly took IWG out, but he reorganized and used that knowledge to weather COVID. Now, Dixon's sites are set on expansion and not just in physical locations, in software.

In the end, we're like McDonald's. So McDonald's in the U.S., as an example, has around about 20, just over 20,000 locations. That's what convenience looks like. So we are, you know, coming up to about 1,000 locations. That's what convenience looks like. So we are, you know, coming up to about 1500 locations. So a long way to go in the US, as an example, but that's the same in every country. So it's about creating those continuing to increase the velocity of growth to create national very useful national platforms, number one. Number two, it's expand the product mix, so we're adding more technology solutions for companies.

I mentioned those earlier. So the timeout takeaway, the office is software. IWG has expanded into setting up employee home offices, making sure they're ergonomically compliant, making sure the experience is consistent across headquarters workers, remote workers, and home workers as well. So as companies look for ways to save on capital costs with interest rates stubbornly high these days, IWG expects solid demand in 2025. Well, up next, an exclusive look inside Taiwan Semiconductor's new Arizona fab, its first advanced chip factory in the U.S.

And because you love Overtime, you want even more of it, you can scan the QR code that's on your screen right now. Follow us on LinkedIn, where we'll post exclusive content. Overtime will be right back. Welcome back to Overtime. Some of the most advanced semiconductors ever are now being built in a brand new Taiwan semiconductor fab in Arizona. CNBC senior digital video producer Katie Tarasov got an exclusive inside look at the factory. We started construction well before the chips that came along, and that's in April of 21. This recently completed 3.5 million square foot building is

Taiwan Semiconductor Manufacturing Company's first Arizona chip fabrication plant, or FAB, making history not only for its enormous size, but because it's by far the most advanced chip FAB on U.S. soil. So pilot production has started in this building. When we were here three years ago, it was steel beams and dirt. What kind of investment has it taken to get to this point? About $20 billion. When we first visited, TSMC was far from a household name. But the chip shortage and AI boom has thrust it into the spotlight. TSMC manufactures some 92% of the world's most advanced chips in everything from NVIDIA GPUs to Apple iPhones. And now, for the first time in history,

TSMC is starting to make those advanced chips here in the U.S. Customers like Apple are starting to make their chips here with two more fabs planned by the end of the decade. The facility over here is our fab two. You can see the steel has been completed. But bringing advanced chip manufacturing to the U.S. has proven difficult.

Volume production, supposed to begin this year, is delayed until 2025. Whether it was permitting, learning how to work with the trades, learning how to work with the unions, local labor laws, lots of learnings that went on. Now we've overcome those. And yes, we're dang near back on the original schedule. What about other fabs in the future? There's space, right? Oh, there's space for more. I don't want to speculate on what the future might bring, but we've got 1100 acres here plus. So there's room for lots of fabs. Katie joins me now. Katie, great piece. So you mentioned there Intel's got its Chandler facility. It's trying to build out for manufacturing not too far from there. You think it matters to TSMC if Intel's foundry dreams materialize? I mean, they're a potential competitor, but sometimes it also helps when you're big and dominant to have competition that you think you can beat.

Sure. I mean, I did ask TSMC about Intel and they told me that they meet weekly. They have a really good relationship. Rick even told me that Intel seems happy with what TSMC is doing, helping them increase their ranks and training on the most advanced nodes. They will be competing for talent because the skills needed to make advanced semiconductors have largely been needed in Asia up to this point, not in the U.S. But the two also have very different business models, right? I mean, Intel designs and makes its own chips. TSMC is a pure play foundry.

That means they only make chips for others, customers like NVIDIA and Apple, like I mentioned. In a lot of ways, they also really can't compare. TSMC has really remained squarely at the top of the pack in advanced chips for decades, whereas Intel, as we know, continues to stumble and fall behind. Lastly, I'll say that Intel is currently the largest recipient of chip stacked funds. They're getting $7.9 billion, whereas TSMC is getting $6.6 billion. And both of those deals were finalized last month. So you've really done great work, not just on this piece, but you also did an up-close look at ASML, which makes the high-end

equipment that you need in these fabs to make the most advanced chips. What strikes you about why these companies are eager to show what they do right now? It used to be that they were secretive and they wouldn't let you within a mile of these places. Yeah, I mean, I think a lot of it comes down to the chip shortage. You know, it came to a head during the pandemic when we saw how much of a risk it was to have all of our supply of advanced chips overseas.

Like I said, 92% in Taiwan. And these companies decided that it was time to pursue coming to the U.S. And here we are. Fifty two billion dollar act, you know, bipartisan bill that is now getting doled out. Yeah, it's really amazing. It's like a different kind of gold rush going on here. Everything we're talking about from Apple's iPhones to Nvidia's GPUs. Now, Broadcom is in that trillion dollar plus market cap category. They need access to this kind of manufacturing in order to thrive. And there are big geopolitical questions about what might happen in Taiwan. So,

great to get that inside look. Appreciate it. Well, that's going to do it for overtime.