Closing Bell - Closing Bell Overtime: Debating the Rally 11/8/22

Episode Date: November 8, 2022

It was another up day for stocks amid questions about how long this move can continue. Virtus’ Joe Terranova gives his take. Plus, Fundstat’s Mark Newton is breaking down the key levels to watch ahead of CPI. And, some big drama brewing in the crypto space. Bryn Talkington of Requisite Capital weighs in.

All right. Welcome to Overtime, everybody. I'm Scott Watney. You just heard the bells. We're just getting started from Post 9 here at the New York Stock Exchange. Disney earnings, they are imminent. So important on a number of levels, from the state of the economy to consumer spending to the streaming wars and advertising at all points in between. We'll get to our report in a moment. That report hits the tape and see how the stock reacts to it. In the meantime, let's do our talk of the tape. Another update for stocks. There have been questions about how long this move can continue.

Let's ask Joe Terranova. He is Virtus Investment Partners' chief market strategist right here with me on set. Also a CNBC contributor. So we've got to wait a few minutes for Disney. We'll be on top of that. You sold out of that stock not that long ago, pretty recently. Why did you do that? Well, I grew impatient with the stock. I had bought the stock in early September,

bought it up at around $1.15, unfortunately. Saw the stock decline down to $1.01. I'm going to be very impatient right now. I think the fundamental story of Disney is a good one, but I don't want to sit there and wait. Scott, I'd rather be in Freeport-McMoran. I'd rather be in Cortiva. I'd rather be in Albemarle. I'd rather be in a lotort-McMoran. I'd rather be in Cortiva. I'd rather be in Albemarle. I'd rather be in a lot of these material names that are up 25, 30 percent on the quarter. I'm trying to create alpha. I think you have to do that in this environment. You have to be active. You just don't want to be that exposed to more macro issues, the consumer. Because it's not like the companies you mentioned don't have macro concerns if the economy slows globally. But those companies had momentum and momentum has never been as important to right now trading and

investing than in the prior two years. You're talking about stocks. You talk about Disney. We all know the story is good. We know Dan Loeb's there. Dan's going to get it done. You and I both know that. But how long is it going to take? And you have to be. But I mean, he's not the one deciding whether, you know, Disney Plus becomes profitable or not. Right. They've got to add a certain number of subs. The street's impatient about the profitability. CEO has talked more about the need to be profitable rather than the addition of, you know, X number of subs. Dan has the conversation going in the right direction, though. He's got a little bit of a presence on the board. He's got them talking about monetizing ESPN.

We're hearing about the potential for a sports betting app. But collectively, it just brings me back to this environment. You can't be a passive investor anymore. Those days are over. You can't buy the index. You have to be active. And if you're going to be active, a lot of the stories, which are great stories. OK, those stories are not going to evolve very quickly. And I'm going to be impatient with that.

This story of Disney and the stock is is interesting in and of itself for where the market is and where stocks like this have been. This stock is having its best month since December of 2020. It's in the midst of the worst year that it's had since 1974. So it speaks to where stocks have gone in the last month, the rally that we've seen. This is a stock that's down 35% year to date. In its longer term support zone, 90 to 95, that's where you've bought the stock on the decline. That's where the realization, the value is. But it's still trading in mid 30s from a valuation standpoint. I can make an argument if you want streaming, you might as well go over to Netflix. So let's just spin it forward to the market itself as we

wait, which we think is going to be about 90 seconds or so before we actually get the numbers and the commentary that all of you are obviously waiting for. This is a midterm March hire. And then we got a gridlock rally, gridlock rally, gridlock rally. But let's remember, it's 2022. So what can go wrong will go wrong. Middle of the day, you had the crypto news that shook market sentiment really, Scott, more than anything else. Market kind of shook it off. Overall, you need good behavior from the two year treasury. And you also need the tax loss selling and mega caps. You need that to abate. I'm glad you mentioned all of that. I mean, the dollar weakening today, rates coming down over the last few days, obviously a boost for stocks. The tax loss selling is interesting, is what Gunlock and I talked about out in Denver, which he said is one of the principal risks between now and the end of the year.

You've made the point as it relates to mega caps, which you just mentioned, that the market can't do well without them. Midday today, you came in here up on the balcony and you said, don't tell me that mega caps don't matter. You looked at the internal direction of the market on an intraday basis to suggest that they matter as much as they always have. There's other leadership lately, but in the bigger picture, they are what they are. Statistically, you can't get away from it. Just think about yesterday, the recovery that we witnessed in Apple concurrent with the market recovering towards the end of the day. It's almost as if when you ask the football coach heading into the locker room for the second half, what do you need to do to win in the second half? Well, guess what we need to do?

We need the treasury, the treasury market to participate. We need them to behave well. And we need the mega caps not to go up, but just to stop going down. You mentioned, you know, this Bitcoin thing midday and what's happened with cryptos today. And it's certainly a considerable story. There is more to that story right now. Breaking news related to Coinbase and Kate Rooney, who's been covering this situation, has more for us. Kate. Hey there, Scott. Coinbase commenting on this FTX situation and its liquidity position, saying that Coinbase has, quote, very little exposure to FTX and no exposure to its FTT token. This is from a blog post from the CFO, Alicia Ha, saying they thought it important to give some clarity around these challenges and reiterate how Coinbase's business is different.

They say Coinbase and their customers are not in any direct danger of liquidity or credit risk. She says in the blog post here, regardless of whether FTX or the FTX and Binance transaction completes, we have very little exposure to FTX and again, no exposure to that token FTT. She says we have $15 million worth of deposits on FTX, no exposure to Alameda Research and no loans to FTX. She also says here is a publicly traded company. They look to be transparent, strong balance sheet. It was hitting Coinbase's stock earlier. It looks like it's up a bit here after hours, but trying to shore up investors and add some confidence to a pretty shaky crypto market here. Back to you, Scott. All right. All right. We're going to talk to you in just a bit more on that story of the day. Kate

Rooney, thank you very much for that. The story of the moment, of course, is Disney. The earnings are out. Steve Kovac has that. See the stock ticking a little bit lower in terms of subs. Looks pretty decent, at least ahead of expectations. But you know better than me because you're looking at the whole thing here. Yeah, that's right, Scott. So it is a miss on the top and bottom lines for Disney. EPS coming in at $0.30 versus $0.55 expected on an adjusted basis. Revenue also a miss, $20.15 billion versus the $21.24 billion the street was looking for. Now, like you said, Disney Plus subscribers, they did beat $164.2 million versus the $160.45 million they were looking for.

But some weakness here on ARPU, or average revenue per user for Disney Plus, that came in lower than expected, Scott. $3.91 versus $4.24 expected by the street. And then the DTC segment has a worse than expected loss as well. $ point four seven billion loss there. Disney blaming no access to those premiere movies where you pay a one time thirty dollar fee to see the movie that's currently running in theaters. So they're saying compared to a year ago, those losses look a little worse. But that's where we're at right now. So top and bottom line, miss. But streaming numbers a little strong, Scott. Yeah. All right. Steve Kovac, thank you. You come back with us in a second. You want to comment here?

Streaming costs rise, right? Ad spending softens. We've heard that so far. That's the macro environment. That's the impact on Disney. That's why the stock's lower. I mentioned it in the commentary that we had before, you know, as losses are widening in the DTC and the streaming business, you know, JPEG has been trying to tell investors, let's try and focus more on the profitability of that business rather than the net number of subscribers that everybody has always fixated on when you talk about any of these services. And it looks to me as though they're not yet close to the point of where they can tell that story. Let's wait for the conference call because there's one thing I want to know. And is what was the impact of Hurricane Ian, Disney World closing? Parks were strong, though.

But you're going to need the parks to be really strong because that's what's going to fund the streaming costs. It's going to be that park's capital. So let's see if there was any impact on Hurricane Ian. Yeah, they're coming off a record quarter for the park. So maybe something hard to live up to, but we'll see. Let's widen the conversation. Bring in Nicole Webb of Wealth Enhancement Group and Malcolm Etheridge of CIC. Well, it's good to have you both with us. Nicole, you're a long-term holder of Disney. What's your reaction here to the quarter? Actually, we expected misses this quarter so to the comments you were just making about ian we did think there was going to be

an impact there we also think the share price is already reflective of the macro environment the hurdles that disney is up against we expected a big spend what we are watching for and again a point you just hit on is what is the true definition of a subscriber for Disney? They put a lot of incentives out there, discounted costs for users. So again, we too are focusing not so much on the users, but again, kind of the revenue per head. We are bullish on the expansion of that DTC platform. They opened in 60 plus countries across the UAE, the Middle East, Africa over the last quarter. So while the spend is going to be high,

we do anticipate just kind of a long-term return here for Disney. And obviously if we were a buyer today at 35% down year to date roughly with kind of a depressed market for DTC. I mean, we like Disney as a whole. Right. But how patient do you feel? Maybe it's impatient.

Do you feel in finding out more about a quicker path to profitability in the direct to consumer business relative to the spend that you're talking about? And we're witnessing here. Yeah. And I think you're spot on, and it has to be within the mandate you're looking for. So to the conversation about the impatience of Disney over X period of time versus this forward trajectory, what we do like is the stable cash flow, the revenue the multi-faceted landscape we do believe in the long-term vision of the direct-to-consumer platforms we do think that there is going to be profitability on the far side of the current spend we don't focus as much or as holistically on the parks revenue we do like you know it was one of the largest IPs in the business. Just the breadth of that consumer landscape of the company itself, their ability

to pass through pricing power. They just have a lot of what we're looking for in terms of long-term positioning. I got you. Malcolm, you don't own it. Why not? Well, I'm not all that bullish on the streaming category as a whole, especially video streaming, especially as we get ready to turn the corner on what could be a recessionary time next year if the majority of economists who look at this and say we'll at least get a mild recession in Q1 are accurate. One of the first things you're going to do is cut all of your streaming subscriptions, which means that that revenue per user is going to flatten even more. And I think that maybe for Disney, it's not as much of a catastrophe simply because Disney is a little bit stickier as the parent of a tiny little person who loves to watch the same movie over and over. I can tell you as a parent,

you'd continue to pay that fee if that's the thing that it takes to make them happy. But some of the other ones like Discovery or Paramount Plus, those are the first ones to go at a place where all of a sudden the cost, that $10 per month, $15 per month, whatever it is, really does start to add up. And that definitely is going to happen if we, in fact, are headed into recession. Now, we'll get back to the conversation in just a moment. Kate Rooney is going to come back with us right now because the firm earnings are out as well. And the stock is getting hit pretty hard. Kate, what do we see here? Yeah, Scott. So it was a slight beat on revenue, wider than expected loss for the fiscal first quarter, but a miss here on guidance. They

also mentioned lower payments volume based on Peloton, but we'll get you some of the numbers here. Top line, $362 million on revenue. That was up 34% year over year. That was a beat. It looks like EPS, this is a gap loss, a three cent miss at 86 cents on Q2 and full year EPS guidance and revenue guidance. So it looks like it was a miss lower than what Wall Street was expecting. I do want to read you this part about Peloton. It says we reduced our internal forecast for GMV. That's gross merchandise volume associated with Peloton. It says that part of the business accounted for less than two percent of growth or GMV here. But Outlook is looking lower based on that. And then also interest rates, a benchmark interest rates rising.

They say that puts pressure on their funding costs. And also one of the reasons they are having that lower guidance here. Shares down more than 17 percent after hours. GMB, though, for the quarter was a beat. Four point four billion dollars. And that was up 62 percent year over year. But that lower guidance appears to be weighing in the stock, Scott. After hours, back to you. All right, Kate. We'll talk to you again in just a moment, again, covering all things crypto today and Affirm for us. Come back on if you find something new for us. What do you think about this as you were listening to Kate Rooney?

I think that for the last year I've been using the term long-duration asset, and I get that look sometimes for you, But that's exactly what this is. This is the classic example. The stock's down 90 percent in the last year. You heard what Kate said. They need rates to stabilize. They're funding all of their costs in the debt market. Scott, they just canceled a 350 million dollar debt sale because the investors, the spread, the yield that they wanted was way too wide. It wasn't beneficial to the company. So you have an environment where now the consumer is navigating away from products towards services. That's not going to benefit a firm at all. This is your classic long duration asset. Here's your L recovery. Remember that this is going to

be an L recovery. I wouldn't go near the stock. I mean, maybe it's your classic. I mean, Malcolm, you used to own it, I think. Maybe it's your classic bull market raging economy stock. And when things get a little more uncertain, this one gets a little more uncertain. Yeah. I think the theme has just moved away from them. Right. Buy now, pay later is something that got really attractive during covid. People were doing a ton of online shopping it's the only reason I want to Peloton for example. But I think that the trend has just

moved away from them. In the sense that they had to get tighter and more stringent on who actually got an approval. And now they actually have to get. A little bit more transparent now that they're public on. Which- where their

customer set falls between the subprime versus prime credit scoring sector and all that kind of stuff. And I think that makes a firm and all of the buy now pay later is not just a firm. I think it makes them less attractive as an investment just because we're not in the high tide raises all boats economy anymore. And folks aren't at home spending the way that they were. Yeah. Let's just note as well, Disney continues to slide after that report's now down some 7%. Oh, by the way, Max Levchin is going to be on with Kramer at 6 o'clock. He's, of course, the CEO of a firm. So you don't want to miss that. But back to Disney as we watch that

stock slide following earnings. A little more color for you as we think about the, you know, the spend on the streaming business, the lack of profitability that the company says it expects the DTC operating losses to narrow going forward and that Disney Plus will still achieve profitability in fiscal 2024. They do couch it, though, assuming this is their words, assuming we do not see a meaningful shift in the economic climate, which, Joe, everybody figures. Well, most figure we're going to see a shift in the economic climate. It's just a matter of how deep that shift is. Gets interesting down here. This is, you know, 92 80 right now on the print.

This is the long term support area between 90 to 95, but I'll tell you. You want to buy it back here? No, I want to buy Netflix before I want to buy Disney. I really do. I think the valuation is cheaper, and guess what? Netflix has the momentum for the very first time. Josh Brown has done a great job on the show talking about that. We also heard in terms of one of the metrics that was closely watched,

the revenue per users higher at Netflix relative to to Disney. If we if we bring it back to the overall market, Nicole, you hear these earnings, earnings season, not fantastic, not the blow up in many respects that that some had been forecasting either. Does this make you even more cautious on where the market is now or not? Yes. You know, I would say that this relief rally of sorts comes a bit ahead of what I would have predicted. I had anticipated around mid or early December we would see some type of rally through the end of the year, just simply on the strength of the U.S. dollar, where it came down to commodity prices that are kind of funneling their way through in a transparent way. The strength of the consumer, these expectations

that holiday might be better than we had thought at the beginning, or beginning of fourth quarter, end of third quarter. And so this pop up here, it seems a bit short lived. At some point we have to better price in where the Fed is going and what data they are searching for. So whether that means interest rates go to a higher place than we had priced in and then we hold there. And I think this holding pattern is going to be a bit more painful

in terms of the pressure it puts on growth uh and then where we trade within the parameters of trading the expectations um and eventually that has to get priced all the way through it it seems like seems like we still are operating in this the fed has so many levers they can pull to apologize to Wall Street if they do something that hurts us too much. And people don't want to miss out on that engineering. And I just I just think it's being a little bit unrealistic right now. Malcolm, I feel like the last time we spoke, you had gotten incrementally more positive on the market. What does that mean for where you stand today? Yeah, I am similar in thought to Joe T, where he was making the point that the only way,

I'll put words in his mouth and say the only way we get a meaningful rally here is for the mega cap tech trend to stop working against us, even if it doesn't take off to the races from here. I think that realistically, the market is turning more positive faster than the economy is turning more positive. We're discounting most of the bad news. I thought Q3 earning season was going to be treacherous, to say the least. And it's been pretty mild. And the market has responded in kind, saying, you know, we hear the bad news, but we just want to go higher. And so I think to your point, Scott, you've heard me get a little bit more optimistic over the last couple of weeks because we do know for a fact that historically the stock market tends to move positive or negative faster than the economy does. And in this case, I think we

might be seeing the recovery happen right before our eyes. And then we'll start to see the metrics from an economic perspective six months from now or so that we can look back and say, oh, yeah, there it was. There was our March of 2009, for example. I got you. Enjoyed the conversation, everybody. Thank you, Nicole and Malcolm. Of course, thank you, Joey. You're going to be back in just a little bit up here with us again. Let's get to our Twitter question of the day now here in overtime. We want to know what is the best way to play streaming right now? Is it Disney, which just reported, as you saw, stock down near 7 percent? Netflix, Roku, Spotify, which do you like? Head to at CNBC Overtime on Twitter and cast your vote. We're going to share the results a little bit later in the show, which we're just getting started here in overtime. We're going to bring you the headlines from Disney's conference

call as soon as we have them. That's less than 10 minutes away. First, though, betting on a near term balance. Top technician Mark Newton of Fundstrat is here with the key levels you need to be watching. What could be in store for stocks as we head into the end of the week at CPI looming, of course, we're live from the New York Stock Exchange. Overtime is right back. We're back in overtime, stocks ending higher for a second straight for a second day this week. My next guest expecting a big market decline in the weeks ahead says the S&P could retest October lows. Joining me now is Fundstrat's Mark Newton.

Welcome back. So you don't think this can last much further? Yeah, we'll have to wait and see, Scott. I mean, there has been quite a few negatives that we've seen just in the last week that concern me. We can speak about those one by one or whenever you'd like. I think we inquiring minds want to know. Don't leave us hanging. The market obviously has been a lot stronger when you take a look at the broader market than the actual S&P. And the deterioration of technology is a particular concern, given that that's still the number one sector within the S&P. Tech has moved down to almost near two-year lows versus

the S&P in equal weighted terms. So that's really a difficult sector right now. And we've seen breaks of uptrends since October. Things have rolled over a little bit. So I also have concerns that volatility is starting to pick up a little bit, cross-asset volatility, whereas the implied vol is still quite cheap. So we see the VIX near 23. We look at the volatility in crypto and really these violent swings we're seeing in equities. I don't think that's healthy. Third is that we haven't really seen yields roll over yet. And that's really a key piece of the puzzle before we can expect a meaningful rebound. You know, bottom line, a lot of the cycles I study suggest the next couple of weeks we are still in a window of volatility.

I don't want to say I've completely given up on the chance for markets to rally, but we need to get up above late October highs, which really means a move immediately above 3911. And conversely, under 3700 certainly opens things up to further volatility on the downside. Why do you use the word immediately? I mean, what does that mean? We put it into, what is that, daily terms? When does that have to happen? We have the CPI on Thursday. We're at 3828. We need to get above 3911 to confirm that we can continue to move higher. By when? Yeah, there's two key parts of this puzzle. One is that we've had about a three-day bounce in futures and we're right near very key sort of what I call downtrend line resistance. So we need to get above that. And the fact that we've rallied up here, if we stall now or start to turn down, that could be problematic.

And the second, as you mentioned, we have CPI coming up on Thursday. So the market has attempted to stabilize, but yet we're still trending lower. And we have a lot of uncertainty, not only with regards to CPI, but even with regards to the election as to whether there'll be a clear cut winner. And if there's any sort of indecision that drags on for a couple of weeks and or a poor CPI number, both of those could be a real negative. And so I have real issues with regards to technology in the short run. We need to see things stabilize right away. And a lot of my work, when I look at stocks like Microsoft or Alphabet, you know, just it's very, very difficult to put in a load just yet. And there's quite a

few stocks that are still in poor shape. The other one that I know you're focused quite heavily on is Tesla. Can we show what those shares are doing? Because you say that we're in the midst of what you consider to be a technical negative, that this stock, which is at 191, could go down to 165, if not barely above 100 bucks. That undoubtedly, I would imagine, is a negative for the market at large. It's a big call. It's not based on fundamentals whatsoever, although we know that, you know, the takeover of Twitter, that could cause some near-term issues with regards to having too many irons in the fire, potentially. You know, I'm looking specifically at the fact that Tesla

is breaking down to the lowest level in nearly 17 months. So we're undercutting, you know, what I call the neckline of almost a two-year head and shoulders pattern. So these still tend to be quite effective. And a lot of my cycles that I study suggest that Tesla likely sells off specifically between late December and March to May. So I think the downside for me is, you know, 165 to be safe. And in an extreme case, it could hit 109. And so that, you know, obviously big decline, much bigger than many people would think possible given recent trading history. But, you know, the stock has been abnormally weak over the last couple of months. Momentum certainly rolling over. Now we're seeing the price really confirm this recent breakdown. So this stock is certainly,

in my view, something to be avoided in the short run. All right. That would be a stunner, no doubt. I appreciate it, Mark. Thank you. That's Mark Newton, Fundstrat's technician. Up next, the crypto crunch, a controversial deal between Binance and Sam Bankman Freed's FTX announced today. Crypto and crypto stocks certainly in focus. Are they safe? Are they safe for you to invest in today? We'll discuss that next. All right, we're back in overtime.

It's time for a CNBC News Update now with Contessa Brewer. Hi, Contessa. Hi there, Scott. Here's what's happening right now. The Federal Cybersecurity Agency is talking to election officials in Arizona's Maricopa County about issues with vote counting machines. An official with the agency says none of the reported election issues so far are legitimate threats to the election's integrity. The National Hurricane Center is expanding storm watches as Tropical Storm Nicole is strengthening. Florida's Brevard County is recommending some residents evacuate, and the order includes people living on barrier islands and in low-lying areas.

Nicole is expected to hit Florida's east coast as a hurricane before weakening and then swinging north into Georgia and the Carolinas. The person, or maybe people, who bought the $2 billion Powerball ticket, well, he, she, they are not the only ones who scored a big prize today. The convenience store that sold the ticket also got a hefty payout. This is the owner of Joe's Service Center celebrating the one million dollar bonus he received. The owner of the actual winning ticket has not yet come forward. But, you know, Scott, what, it's been like seven hours since they actually drew the balls. I mean, come on. No wonder he's got to get his later later than expected to. Right. So had to wait overnight to find out who the winner. I think the person who sold it should get more

than a million bucks, though. A million. I'm with you. See, we'll see if we can fix that. All right. Contessa, thank you. That's Contessa Brewer. Bitcoin. Don't pay him in Bitcoin. Falling sharply today on word that one of the largest and best known crypto exchanges, FTX, will be acquired by rival Binance after an apparent liquidity crunch. That deal raising all sorts of questions after a drama filled couple of days involving those two companies. Our crypto ace, Kate Rooney, following the money for us. She's back with us here in overtime and trying to figure out how we got here after it was 24 hours ago when SBF, that's what they call them, he tweeted FTX is fine, assets are fine. Apparently not. And then fast forward,

yeah, Scott, this outcome came to as a surprise to a lot of crypto investors. There is a lot going on here, but Binance is planning to buy FTX.com. So that's the international side of Sam Bankman Freed's crypto empire. It's separate from FTX US. And the deal hasn't closed yet. Binance's CEO is saying they're still doing due diligence. He says this was sparked by a liquidity crunch at FTX, which you could argue in part was also sparked by the Binance CEO himself and his recent tweets. These two are competitors. They're rivals. The CEOs have been sparring on Twitter. But Binance was also an early investor in FTX. It sold its equity in FTX's last round. And as part of that payout, it got a cryptocurrency called FTT that is created by and closely tied to

FTX. The Binance CEO, Changpeng Zhao, also known as CZ, tweeting that the company was divesting all of its holdings in that cryptocurrency, driving FTT's price down more than 70 percent today. SBF, as he's also known, Sam Beckman-Fried responding in a tweet saying a competitor is trying to go after us with false rumors. Assets are fine, as he said at the time. Scott, this combination, for one, creates a massive global exchange. These are the two largest players on the global market. And then FTX and Sam Bankman-Fried have really played a role as the industry backstop. It calls into question what happens to the rest of Bankman-Fried's crypto investments,

including his crypto quant firm, Alameda. Back to you. All right. Okay, Rooney, thank you. Let's bring now requisite capital management's Bryn Talkington on the news line. Joe Terranova is back sitting next to me. So, Bryn, I mean, you own Coinbase. I think you still own it, which is down 10% plus on this news.

How are you thinking about this today? Yeah, well, I i mean it's pretty incredible what's happening i mean you know first first first and foremost i've talked about you know coinbase which definitely still own coinbase is down in sympathy obviously because this is not an acquisition traditionally obviously this is under stress and i think it's very fluid situation but i think that this is what's happened when you have a good old-fashioned bank run. And, you know, unlike the banks that are backed up by the Federal Reserve, and I've said this before, there is no Federal Reserve in the crypto markets. And so when you have, you know, CZ come out on 24 hours ago and say he's going to unload the equivalent of $2 billion of FTT, well,

all of a sudden, people start to panic, and then that feeds on itself. And so, you know, I looked at FTX a second ago. I think it was at $4. It was at $24 hours ago. And so this is definitely a stress situation in this space. But I think it goes to the point of Coinbase remains the only regulated, publicly traded, you know, crypto exchange. And I think you're going to continue to see Coinbase actually benefit from this because FTX US and Binance US are actually

really small businesses because they don't have that regulatory framework. Calls into question, Joe, does it not the fragility of this whole marketplace to Bryn's point, lack of regulations, this whole, you know, wild west sort of landscape that it feels like at times? Well, I think it absolutely pulls forward the potential that there will be bipartisan legislation for regulation to be enacted upon the industry. And this is a calling that that's exactly what you need. You need the watchdog. You need the regulation. You need that in the industry. You don't have central clearing. You don't have the presence of traditional banks. And now you have a crypto player bailing out another crypto player. OK, ultimately,

who was bailing out everybody else? So is it a game of musical chairs when you're down to the last crypto player? Well, it feels that way. But who bails? Do you reach a moment where a traditional player comes in and bails out someone in crypto? I'm not sure that's exactly what unfolds.

So to get ahead of that, I think regulation's the most important thing. You need the legislation. Bryn, maybe you need some adults in the room. I don't know. You know, I'm thinking back. It's obviously not the same thing. But what was it more than a year ago? It feels like we're talking about Robin Hood and the issues that it had from a liquidity standpoint. You have people who are reasonably new to the whole exchange operation. Maybe we need some adults in the room. Well, I think it's, I mean,

these are some really smart people that, and this is a new technology, but I think it goes back to, in the Great Depression, there was no regulation. That's why people lost all their money. And I think

to kind of continue with what Joe was talking about, what's frustrating is there's bills. There has been bills floating around Congress around stable coins. And, you know, Brian Armstrong is part of that group. There's a lot of most people, senior people in crypto want that. But really what you have is you still have, from what I understand, the CFTC and the SEC arguing over who gets to regulate it. And right now the SEC is just coming and doing regulation by enforcement. And so that, to me, you're going to continue to see in these private companies,

very different than publicly traded companies that have totally different standards, you're going to continue to see these things occur until you get a framework that's a level playing field for everybody. Because once again, Binance and FTX, their businesses in the U.S. are really small relative to Coinbase. Their business is mostly overseas because the regulatory framework is totally different. Real quick, Jo. Real quick. Brynn, do you think this leads to capitulation in Bitcoin itself? No, I mean, I don't. I't I don't think it's a fluid situation. I don't. I think that I think you still need that regulatory framework to come in because I still think that people are

still reeling from the Voyager, the Terraluna issues. And until you have that framework, you know, more players are coming out. I will say Bitcoin is still standing, right? Ethereum is still standing. And so I think you continue to go back to kind of like that Michael Saylor narrative that just buy Bitcoin. But we'll see. I mean, I like, I own Bitcoin, but I think Coinbase, in terms of the rails and what BlackRock and Google, you're going to continue to see those institutions going to a place where they can trust. And to me, Coinbase is still the best player in town in the U.S. Bryn, appreciate it as always.

Bryn Talkington joining us on the news line there. Joe Terranova back with us as well right here on set. Thank you. And I'll see you again soon. Coming up, the midterms in your money. Our next guest says the election will be one of the biggest market drivers this week. Maybe it already has. What it might mean for your portfolio. We'll talk next and let's get another check on shares of

Disney. Conference call about 10 minutes in right now. Stocks still down about 6 percent. We're listening. We'll bring you all the highlights as we get them over time. Right back. Could the midterms be the catalyst stocks need to punch even higher? Our next guest says that's part of the equation for why she says we should have a strong end of the year. Joining us now, Courtney Garcia Payne, Capital Management Senior Wealth Advisor, is back here. It's good to see you. I mean, I feel like we kind of already had a lot of this midterm move going into the actual vote, no? Some of it, yes. But you tend to have really strong data looking at years with midterm elections.

So when you look at the end of October through the end of the year, you tend to have about an average 7 percent rate of return. Next year looks even better. That year after a midterm election, you tend to have an average about 15 percent rate of return in the markets. But coming off a year like now where markets are already down 20 to 30 percent, that setup likely looks better. And obviously, there's a first time for everything. It doesn't mean anything definitively, but I do think some of that data is on your side. I mean, I do sort of call into question any sort of historical metric. I mean, then tell me, well, how many times in an election year when the Fed is raising rates the way they are, when inflation is at a 40-year high, does the market still go up, right? I mean, there are a lot of different variables going on, right, that don't really have history on your side. Yeah, and it's a fair point. Yeah, you cannot invest solely off of that one piece of data. I think the bigger thing that we're going to see

on Thursday are the CPI numbers that are coming out, because realistically, it's inflation that is the most important driver of the markets this year and is going to continue to be. I don't think this report specifically is going to be the driver because at this point, we're already expecting the Fed to raise at least 50, probably 75 basis points in December. But any sort of indication that inflation may come down is going to be a positive for the markets. And so it's going to be those inflation reports that's going to be key later this year. I don't know if you had a chance to hear the conversation I had a little while ago with Mark Newton, the technician at Fundstrat, who's sort of, you know, I think he's worried about the breakdown in tech, in big tech, Tesla included in that, and that the market's going to have a hard time finding any

footing if that breakdown continues. And it's been significant and it's been sort of prolonged, too. It has. There's been a huge rotation in the stock markets this year. So if you take a look at, for example, like I looked at the Vanguard Value ETF. So those are your companies like your Johnson & Johnson, your Exxons, your UnitedHealths. That's down about 5% beginning of the year, whereas your Vanguard Growth Company,

so those are your Amazons, your Microsofts, your Apples of the world, down over 33% beginning of the year. So when you look at the overall markets, it is very specifically your tech. That's where your layoffs are happening. That's where the largest loss returns beginning of the year. So when you look at the overall markets, it is very specifically your tech. That's where your layoffs are happening. That's where the largest loss returns are happening this year. And honestly, that very well may continue as you look forward,

which is why you do not want to be overexposed to those categories. But I don't know if they're going to continue to be the drivers that they have been over the last decade. And it doesn't mean the markets as a whole are going to continue to perform poorly. Energy, health care, still the place you want to be? Absolutely. Yeah. I don't want to kind of beat a dead horse. I know we've talked about this. Everybody's talking about it. Right. I mean, I've said before, well, it sounds so crowded. Everybody is there. But I mean, if it's the place to be, then be.

And the valuations still look attractive there. That really hasn't changed. And we do talk about you're saying, well, midterm elections. I mean, it's just a data point that's happened in history. But what the markets do like to see is gridlock, right, and not a lot happening, which is why they like, theoretically, Republican seats getting taken right now. Things like your large health care companies or large oil companies, those are some of those things that have become political topics, which is why gridlock in the midterms could actually be a positive catalyst for those companies. All right, it's good to see you, as always. Thanks for having me. That's Courtney Garcia joining us right here at Post 9. Don't forget, by the way, tune in to tonight's CNBC Election Night special.

We're breaking down how the results could impact your money. We have a great lineup, including Scott Miner, Dan Niles, former Fed vice chair Roger Ferguson, and many more. Business is, in fact, on the ballot today, 7 o'clock Eastern time. Coming up, we're tracking some big stock movers in overtime, as always. Christina Partsenevelos, as always, is doing that for us. Christina. We've got an EV maker that posted a record quarterly production, but shares are falling in the OT.

And Sweetgreen, worried about its future outlook, even though they just launched some desserts. That's next. We're tracking the biggest movers in overtime. Christina Partsenevelos back with that. Christina. Thank you, Scott. Let's start with shares of Sweetgreen right now,

plunging in the OT after a bigger-than-expected earnings loss. While missing on revenues, you can see the share price is down over 8% right now. The company guiding lower for the full year. Sweetgreen anticipates coming in just at the lower end of their prior range. They did, though, launch a brand new dessert, Rice Krispie Treat, today. Biotech firm Novavax moving higher in OT on an earnings miss. Although beating on revenues, the company updated its full year guidance to about $2 billion. That's lower than what the street anticipated because of weaker demand for COVID vaccines.

And that's because people are just growing a little bit more relaxed about the pandemic. And then last but not least, EV market or maker, Lucid, seeing its shares fall over 2.5% right now as it posts a bigger than expected loss. And sales that fell short of estimates. This is the company posted record quarterly production of 2,282 cars. That's more than triple Q2. But as we can see, shares are down pretty much, what is it, 64%? Yeah, even moving, 68% year-to-date.

Scott, back over to you. All right, Christina, thank you. Shares of Disney, let's take another look. As we head back to Steve Kovach, he's been listening to the company's conference calls. About 21 minutes in or so. What are we learning here for a stock that's down some 6%, 7%? Yeah, it's down about 6.5% now, Scott.

I just got off the call where CEO Bob Chapek was talking about those increased losses in the direct-to-consumer business and what they're going to do to bring those down. He called it peak DTC operating losses and laid out three key points here that he's going to use to bring those down. He called it peak DTC operating losses and laid out three key points here that he's going to use to bring those down. First of all, the price increase for Disney Plus. We already knew that's coming in a month from today. Lower marketing spend for Disney Plus, so fewer commercials and ads getting you to sign up. And then a better content release schedule. He really talked about, Scott, about the cadence of releases and all the big brands and IP they've been able to put out in succession, like Marvel She-Hulk and the new Andor Star Wars show and so

forth. By putting those out one after another, they're able to keep people subscribed and signing up. So those are the three things they're doing to get past losses and costs are going on. I'll be back with more if they have it. Yeah. And you let us know. All right. That's Steve Kovac. Thanks very much for that. Santoli's last word is coming up next. We'll find out what he's watching heading into tomorrow's trading session. To the results of our Twitter question, we asked you what is the best way to play streaming right now.

The majority of you saying Netflix, nearly 58% over Disney, which just reported and is sliding. And up next, it's Santoli's last word. OT, right back. Mike Santoli is here for his last word. You want to talk Disney? Yeah. You know, this little disappointment after the close did bring the stock to a really interesting spot.

All right. Right in the low 90s. You look at a 10-year chart of Disney. We are. Several times since early 2015, it's kind of found some support. Obviously, the COVID crash got a little bit under there. You've also been at this level a couple of times this year, too. So basically, it's where people have stepped up. It's a totally different story than it was at the peak. At the peak, and it never

made sense, by the way, to me at the time, it was being valued as if it was just a Netflix proxy back when Netflix was trading at twice its current share price in early 2021. Now it's a little more reasonable, rational. We're talking about, you know, 18 times forward earnings, if you believe it. They're in the 2023 fiscal year right now. They're saying direct-to-consumer perhaps gets profitable in the next one, 2024. Assuming you don't have any sort of greater economic upset. It's not an easy path because this is a different company. There's no dividend anymore, right? There used to be. They had like six billion in free cash flow in 2019. It was one billion in the latest fiscal year. It's really a company that's investing a ton. And you have the macro worries about linear TV and

advertising and theme parks. So it's not a clean story, but it's definitely interesting. And it's it's really infused with a lot less of the streaming kind of hope and pixie dust as it was a year and a half ago. I didn't realize it until you pull up this tenure. You can draw a straight line from 26 from 16. Yes. Right. From 16 there to 22. Early 2015 is when it first reached this price. So what'd you have in there? You had, they bought the Fox assets for $50 billion. They levered up the balance sheet. So financially, it's a different entity right now. But I do think you can make the case that they might be under earning because of what they're plowing into direct to consumer. So that's the, that's

the bullish call, but it's interesting that it no longer really has those fans who feel as if, you know, they're right there with Netflix and it's a no brainer. Yeah, I appreciate it. We will see you tomorrow. Let me remind you as well. On Thursday, we have a big interview coming up in overtime. It's Carl Icahn. He's going to be right here. We have lots to talk about, obviously, in the market and some other things, too. Hope you'll join me then. I'll see you back here tomorrow.