Closing Bell - Closing Bell Overtime: IAC CEO On Potentially Spinning Off Angi and M&A Opportunities; Insulet CEO On Strong Pump Demand and Expanding In The Type 2 Diabetes Market 11/11/24

Episode Date: November 11, 2024

The Dow closed above 44,000 and the S&P 500 closed above 6,000 for the first time as stocks extend their bullish run since the election. Bespoke’s Paul Hickey and Envestnet’s Dana D’Auria break down what could be ahead through year-end. Apollo Global’s Torsten Slok on the Fed’s next move. Insulet CEO Jim Hollingshead on the company seeing strong demand for its insulin pump. IAC CEO Joey Levin on the company’s decision to explore spinning off its ownership in Angi—and what he might do with the cash. 

Well, that bell marks the end of regulation. The United States Marine Corps ringing the closing bell at the New York Stock Exchange to honor Veterans Day. Thank you to all who have served. Fresh Pet doing the honors at the NASDAQ. And another record day on Wall Street as the Dow closes above 44K for the first time. The S&P 500 looks like it might close above 6K for the first time. Looks like it did, but we'll let it settle out.

Ending the day, regardless, in uncharted territory. That is the scorecard on Wall Street, but winners stay late. Welcome to Closing Bell Overtime. I'm John Fort with Morgan Brennan. Yes, happy Veterans Day. The small cap Russell 2000 keeps surging as well, and it was a big outperformer on Wall Street today. So do stocks still have room to run after hitting all of these new highs?

Well, Apollo's Torsten Slocke is here with a market warning. Why? He says investors are currently pricing in too many Fed rate cuts. Plus, we will break down a pair of big earnings from Live Nation and media and entertainment giant IAC. And then IAC CEO Joey Levin is going to discuss those results in an exclusive interview. But first, let's break down today's action with bespoke co-founder Paul Hickey and InvestNet co-chief investment officer Dana Daria. Good to see both of you. Paul, you say markets in motion tend to stay in motion unless acted upon by an outside force. So the election doesn't change too much for you. But what do you view as most important forces to watch?

I mean, there's a possible energy impact from Ukraine and Middle East policy shifts, also possible China market impacts from trade policy. So what should we watch for? Yeah, I mean, I think as we see we start to see President-elect Trump's cabinet start to materialize, that will help to shed some light on what to expect going forward. But again, to your point, the impact of elections, make no mistake, I think the election results will keep the barriers to the market, lower the amount of speed bumps in the road. But election results can tend to be overstated.

You know, you look at the last 16 years, we've had some very good market returns. Under Obama, annualized returns of the S&P 500 were 16.3%. Trump's first term, annualized returns, 16.3%. And under Biden, 14%. So we've had three very different presidents and we've had very similar market returns. But going forward, I think this AI bull market where we've seen the broadening out since the summer is likely to continue. And hence the point it's Newton's first law of motion bull market at this point. Indeed. And indeed, it looks like we did get that above 6000 close in the S&P 500 positive on the Nasdaq as well.

Dana, I kept hearing a week plus ago that one party or the other getting a sweeping win across the presidency and Congress would be bad for equities. But that's what the Republicans got. Equities have responded very positively. So what do Republicans have to do or not do to keep this momentum going? Well, I think part of what you might be thinking about in terms of why equities would benefit from not a sweep is just maybe a little bit more fiscal responsibility. You know, one party or another, whichever party it be, can't sort of sweep and institute all of its intended plans. And so, you know, there's fiscal questions there. And to the extent that we are now moving into an era where we're going to have the tax cuts from 2017 extended, there

doesn't appear to be in the Republican Party, obviously, sort of the old guard view that, you know, you have to kind of reduce spending as much, although notwithstanding, you know, the promise to kind of cut a lot of government. But, you know, to the extent that tax cuts kind of come into place, tariffs are higher as we're being told to expect, you might have more inflationary concerns. I think Republicans, if they want to continue the great market, you know, they're going to pay attention to what inflation could do. I think really what they've said so far is being looked at as very pro-business. I think you're seeing that reflected

obviously enormously in the markets. And so the big kind of flying the ointment is going to be, well, OK, you know, stocks are now getting priced with this expectation of a really low regulatory environment, great pro-business tax policy, you know, regulatory, et cetera. You know, what does that do to inflation? OK, Paul, we've been talking about it since the election, animal spirits. You break it down with the equity markets as beefs. I like this. Breath, economy, earnings, Fed, and seasonality. What are these telling us, and what does it mean for this move higher in equities? Yeah, so Arby's has the meats.

This market has the beefs. And so you have the breadth and the broadening out of this rally, which has been very impressive since the summer. You have the economy, which even before, you know, the data has been showing improvement in the actual levels and relative to expectations. So the market has to catch up with what the economy has been doing. And that creates more of a positive backdrop for earnings. But on the economy aspect, you tended to see over the months leading up to this election, you saw several management on conference calls talking about waiting to see what happens. So we're going to see this improved confidence on the part of consumers, which we already started to see in October. And then you're going to see this sigh of relief that the election is behind us

and we can just start moving forward with company plans. And so I think that's going to spur some activity. So that helps earnings. And then you have the Fed, which is conducive to the market. Sure, we may not get the aggressive rate cuts that we were expecting two months ago, but you don't necessarily need that. You just need the Fed to be a tailwind rather than a headwind. And this is what we've

seen on a global basis. We've seen central banks around the world over the last three months, there's been a net of 46 rate cuts. So it's not just the Fed that's cutting rates, we're cutting rates all over the world. And this pace of accommodation, the pace that we're central banks have been cutting rates. We saw it coming out of covid and we saw it coming out of the financial crisis. So it's a very positive backdrop there. And the seasonality, which we all know about. All right. Well, guys, hang tight because we've got our first earnings report. I see results are out. And Julia Borsten has those numbers. Julia.

Morgan, IAC reporting results and announcing that it's considering spinning off its 85% ownership stake in Angie. Now, whenever the company has said in the past that it's considering something, it has happened. So we can consider that big news there. Now, IAC's revenues of $939 million are ahead of estimates of $922 million, while IAC's loss of $2.93 per share was much larger than the projected loss of $0.22 per share. That gap due to a big investment loss in MGM, but the company's operating profits of $107 million beat estimates of $91 million. In terms of IAC's different divisions, Angie's revenue of $297 million was $2 million ahead of estimates, with operating earnings coming in ahead of estimates as well.

Dot-dash Meredith revenue, $440 million, $8 million ahead of estimates. The company also announcing that it's starting next quarter. It will report Care.com as a separate segment. It's currently included in its emerging and other bucket. We will be talking about all of this and more with IAC CEO Joey Levin. That's coming up in an exclusive interview at 4.40 p.m. Eastern. And we'll get more details on Angie in their release. Back over to you.

All right. Can't wait for that. Julia Boorstin, thank you. Dana, I'm going to go to you because we've seen this catch-up trade in small caps. Russell 2000 today finishing up more than 1.5%. It's the only one of the major averages that hasn't reached a new record high, although it is at a multi-year high. Morgan Stanley actually came out with a note over the weekend basically saying they're a little more cautious here. Do you think you buy in at these levels or do you hold off as well, especially if you do see a higher interest rate environment?

Well, I do think you buy in. I mean, I think small caps stand to benefit from a few different things. One, you know, to the extent they're not as sensitive to imports, a deregulatory structure probably helps small caps that struggle to, you know, kind of pay for those types of costs in general. So I think there's more tailwinds for small caps than there are headwinds. And I also think small caps have generally been a good bet when it comes to an inflationary environment. So to the extent that, yes, that may mean higher for longer. But, you know, I think small caps have been kind of wrestling with that for a while. All right. Dana, Paul, thanks to you both. We got some more earnings now. Live Nation is out. Julia Borsten

back with that. Julia. Live Nation beating on the bottom line with $1.66 in earnings per share, ahead of estimates of $1.59, while revenue of $7.65 billion is below the $7.75 billion estimated. Now, this is the company's first earnings beat in four quarters and its first revenue miss since May of 2022. Concert revenues and ticketing revenues both fell short of expectations, but this earnings beat, despite that revenue miss, reflected the fact that stadium attendance was down, but arena and amphitheater attendance grew. Now, the amphitheater fan is more profitable per fan for the company. The company is saying that demand continues to be robust, with the number of tickets sold globally in September and October up 20 percent year over year. And they say that the leading indicators point to more growth in 2025, with a growing concerts pipeline in large venues, stadiums, arenas and amphitheaters of double digits from this point in 2023 with sponsorship commitments pacing up double digits.

There are sure to be some questions on the call about what this new administration means for the DOJ lawsuit against Live Nation. But for now, shares are up nearly 7 percent. Morgan, back over to you. OK, Julia Boorstin, thank you. Let's turn to what's become another Trump trade. Bitcoin hitting an all time high today as traders and continue to anticipate positive news for the space during a Trump presidency. Well, let's get to Mike Santoli with more in today's market dashboard. Mike. Yeah, Morgan keeps actually scaling new heights

here as we as we speak. It was like up 8 percent a minute ago, now close to 10 percent on the day, however you want to measure the start of the day. But here's the five year chart. We spent a lot of time recently sort of hanging around the old record highs. You see that acted as a sort of a virtual ceiling for a while as the as the Bitcoin based. This is, by the way, almost exactly three years ago, right around the same time as the small caps peaked and the Nasdaq peaked in November of 2021. That was the last peak here. So what you can see is a very assertive breakout of that long term sideways range. But what you also see is look at the previous times you got one of these vertical accelerations. It's getting a little disorderly. Who knows how far it can carry on? But usually any stock or any asset on very high volume upward speculation like

this at some point, it's going to have reached a sort of a crescendo point. However, look on a three year basis from that prior peak where Bitcoin sits relative to some other assets that are arguably pretty connected to it. It just caught up today with the Nasdaq 100's move over that period of time. That's the NDX. You see gold has been outperforming over that span. Of course, anything longer than three years and Bitcoin is far, far ahead of almost all of this. And then Tesla, very similar angle to Bitcoin, as you see right there, also has gone vertical. So a lot of these things have really just been sort of churning around a similar level since that November 2021 risk peak

and trying to regain some of that, even if, frankly, nobody can fully articulate the specifics of why it's going to happen except broader adoption, Morgan. Yeah, Tesla had another crazy day today, finishing up 9 percent. To your point, I actually want to go back to the gold piece of this, because we really saw a reigniting of that trade. We saw a number of record highs throughout the year, and now that's coming off, and that's actually falling a little bit. Why? Yeah, my interpretation of that is that gold is much more of a beneficiary of fears of some kind of generalized crisis some kind of generalized uncertainty whether it was related to the election or geopolitics as opposed to

purestora value or Whatever you think Bitcoin is at this point and they've started going in opposite directions really as soon as you got election resolution So that would argue that maybe when that goes away, gold recognizes who knows that real real yields are higher and usually that matters. But I'm a little hesitant, actually, to decide on the why when it comes to these things, because gold sort of shifts in its influences and rationales as time goes on. It just sort of is out there. It's sort of an eye of the beholder asset. Yeah. We've also seen a stronger dollar to Mike Santoli.

Thank you. We're going to see a little bit later this hour. Shares of MicroStrategy also popping today, along with Bitcoin. And after news, it bought about two billion dollars worth of Bitcoin between October 31st and November 10th. You can see those shares finished up more than 25 percent. We're going to talk about that on Thursday when we speak exclusively to MicroStrategy executive chairman and co-founder Michael Saylor. That's a big move. Big move. Well, up next, Apollo's chief economist, Torsten Slocke, on why the market is pricing in too many rate cuts and why he sees a rebound of economic growth on the horizon. Plus, Insulet's CEO and his company's strong insulin pump sales last quarter and his reaction to Apple reportedly testing an app to help manage blood sugar. Overtime is back in two. Welcome back. It was another record close for the S&P 500. It's 51st, actually, of the year,

and a record close for the Dow, which closed above 44,000 for the first time ever. The market was able to extend its rally thanks to the election and a quarter point rate cut from the Fed last week. But is the market pricing in too many future rate cuts? Well, joining us now is Torsten Slak, chief economist at Apollo Global Management. Torsten, it's great to have you back on the show. Let's start right there because we've seen this rekindling of the animal spirits. I think back to earlier this year, it might have been March, as early as March in the year, and you said, hey, the Fed may not cut at all this year. We know that was wrong.

They've cut 75 basis points. But your thesis behind it was that we could see a no-landing scenario. How do you see the economy now? Well, I do see the economy still is very strong. If you look at the incoming data for retail sales has been very strong. The incoming data for durable goods has been really strong. GDP in the third quarter was 2.8. The benefit estimate for fourth quarter GDP is 2.5. Remember, as usual, GDP has to be more than the long run growth of 2 percent. So the backdrop really is very strong growth still in the economy. And now

with the tailwinds coming from potentially lower tax cuts, some deregulation, we might get something on tariffs. We might get something on immigration. But broadly speaking, at this point, it looks like the tailwinds to the U.S. economic outlook continue to be very strong. How many of those tailwinds are structural? And if you end up seeing fewer rate cuts in this environment, is that because of stronger growth or is it because of the possibility of inflation picking up its head a little more meaningfully again? Yeah, this is very important, Morgan, because if you think about it, the Fed started raising interest rates in March of 2022. And we really never for the last two and a half years saw the

economy slow down in response to the Fed raising rates. So now the Fed is actually cutting rates. They've just cut a bit, 75 basis points, but it's enough to even before the election trigger a significant rally in the stock market, significant tightening in credit spreads, IG, high yield loan spreads have been tightening to record lows as we speak. All those tailwinds combined with the CHIPS Act, the Inflation Reduction Act, the Infrastructure Act, and also, of course, the tailwind from the data center boom, the AI boom. I mean, that's just a lot of things that are powering the economy along. So that's why if we now add to that the probability that we may get some tax cuts, Trump has been talking about a 15 percent tax rate for

domestic manufacturers. All that, again, continues to argue for the economy still doing well. And you're right that the upside risk with that is potentially some higher move up in inflation. But it still remains to be seen where we're going on the inflation front. But for now, it's very clear that the growth outlook continues to be very solid. Torsten, with this talk about rates, are you counting on a Fed that will operate as it has in recent years without obvious influence from the president? I mean, some expect incoming President Trump wants more influence there, and we know he likes low rates. Well, I think the Fed, we got an answer that was very clear

from Jay Powell last week. I think the Fed will continue to focus on the dual mandate. And the dual mandate, of course, is inflation at 2% and full employment. So with a near-term outlook of relatively strong growth and potentially even a near-term outlook of a quite significant number for non-farm payrolls for November. Remember, the survey week for non-farm payrolls is the week of the 12th which happens to be tomorrow so that means that this week is the week when the bls will measure what is job growth in the month of november and given we're just after the election given the boom we're seeing in risky assets the stock market in credit markets capital markets doing well both with issuance of course in particular for ig but for credit looking well also ipo and and M&A activity also looking broadly better.

That could potentially be a tailwind for creating quite a jump in nonfarm payrolls for the month of November, in particular, combined with the reversal of the weather and strike effects that we had in October. Well, another policy question, though. We've got one party and an incoming president with an amount of power I don't recall seeing in my lifetime, including a Supreme Court that has shown an inclination to let executive power run. So we were just talking about this with Dana Diario. Do you think that that means tax cuts without the pay-fors? And what would that mean for inflation? Well, there has been several scorings of both the Harris plan and, of course, more importantly now, the Trump plan from

both the Committee for Responsible Federal Budget. It's also been scored by the Penn-Warden budget model. It's also been scored by the Tax Foundation. And all these three independent scorers, they have found that we should be looking at more treasury supply coming over the next several years. In other words, it is not fully paid for, at least according to those types of scoring that we've seen there. So that's why treasury markets, we have seen that steepening of the yield curve now for quite some time that I think we should expect to continue because long rates are not only moving higher because of Fed expectations changing, but long rates are also moving higher because the term premium is moving higher. In other words, because there are some renewed fears about potentially fiscal sustainability becoming a factor for long-term interest rates. So,

yes, short-term interest rates will stay higher for longer and long-term interest rates will probably also stay higher for longer, which means that private credit, spread product and credit more generally should continue to do well and give yields that are significantly higher than we had for the period from 2008 to 2022. All right. Buckle up. Here we go. Torsten Slak, thank you. Well, up next, the CEO of insulin pump maker Insulet on how weight loss drugs like Ozempic are impacting his business or not. And later, IAC just reporting earnings and saying it is considering spinning off Angie. IAC CEO Joey Levin will join us exclusively before tomorrow morning's call with analysts.

We'll be right back. Welcome back to Overtime. Shares of Insulet, the company that makes a wireless wearable insulin pump, popping since beating earnings estimates on Friday. The company boosting its annual revenue growth forecast to 20 to 21 percent growth from 16 to 19. And recently announced the app for its flagship Omnipod product is now available for the iPhone. Joining us right here on set is Jim Hollingshead, the CEO of Insulet. Jim, great to have you here.

Great to be with you, John. Thanks. So Insulet was one of the medical device companies that sold off in the GLP-1 hype last year. Stocks more than doubled off its lows last October. You talked about GLP-1s on the call. People who are using your product might be on GLP-1s trying to control their levels. What's the longer term impact you think of those drugs on your total addressable market? Yeah, GLP-1s we said all along are great drugs. They've actually been indicated for use in the type 2 diabetes space since 2017. So they're great drugs, but they don't actually impact our business opportunity. First, they're not really used at all in type 1 diabetes, which has been our core market where we're the market leader. And we've just now,

we're very excited because we just got indication for use in the type 2 space. But GLP-1s are great for people because they assist in glycemic control. They help people control their blood sugars, but they don't cure type 2 diabetes. And they have a duration of effect. You know, some people tend to stay on GLP-1s maybe for only a few months, but they'll delay progression of type 2. People almost always end up needing insulin therapy if they live with type 2 diabetes over many years. And that's where we really play is for people with type 2. We just got the label extension, people in type 2 diabetes who use

insulin, which is about 6 million people in the U.S. It's a very large market and they'll still need, they'll still benefit from Omnipod 5, which is what we just demonstrated with our clinical trial. Just had a big election. I'm sure everybody knows that. And now we're all trying to figure out policy shifts and economic, even company implications. When it comes to policy, particularly when it comes to insurance, what are the most important things for your business? Well, the most important thing for us, and we work very hard to make Omnipod therapy as affordable and accessible as possible. And so if you are using Omnipod 5, and this is our flagship product right here, if you're using Omnipod 5, you're picking it up in the pharmacy,

and you're in the pharmacy benefit. And so you have a monthly co-pay, which is a fantastic convenience for our customers, but you're also using insulin. And one of the big policy moves that we've seen over the last couple of years is lowering insulin costs, and there's more discussion about lowering insulin prices for people in the U.S. market. That's a huge benefit to our customers. It's also a huge benefit to us because the more affordable the overall therapy, the better for our business. What are you expecting in terms of regulatory environment from a Trump administration coming in? Because I think there's a sort of sense in the market that it's deregulation, but I'm not sure,

especially when you talk about something like health care, that that's the right way to frame it. It might be a rethinking of the regulations. Well, we'll all have to. I don't want to speculate on what we'll see out of the Trump administration. We'll all have to wait and see what happens. But we think we have a very robust position.

You know, so type 2 and type 1 diabetes, both as chronic conditions, people need care. I think there'll be an increasing focus on chronic health care. It would have happened, I think, with either administration. And I think that we have a very robust position because if people need insulin, people need insulin. And that's going to happen on an ongoing basis. And we're there to help. And this device, it's so small.

And as you just mentioned, the opportunity in type two diabetes. How quickly do you expect to see market uptake within that market, not only here in the U.S., but also internationally? We're very bullish on uptake in type 2. So if I can just take a second so the viewers can see. This is our flagship product, the Omnipod 5. This is a wearable, disposable, tubeless patch pump. You fill this with insulin. You wear it on your arm.

You wear it on your stomach. And it it on your stomach and it automatically doses your insulin over a three-day period. When we launched this in August of 2022 in the US market it rapidly overtook all of our competitors, became by far the most popular pump for for type 1 people living with type 1 diabetes in the US. We've actually had a lot of off-label prescriptions for this product in type 2 all along the way. So now that we have the label, we expect to have very good adoption. Last quarter in Q3, we had 25% of our new patient starts were type 2 patients, and we actually saw a noticeable lift. We got the label at the end of August, and in September, we saw a noticeable lift. So we expect to see type 2 ramp very effectively. So you got this iOS app.

Yes. What is the impact of the smartphone on patients' engagement with using something like the Omnipod and their understanding of what it's doing? So the Omnipod 5 has always been controlled through a smartphone app, but we provide in our starter kit a locked down cell phone. iOS, the iPhone app, has been our most requested feature the entire time we've been on market. And so what it does is it puts all of the control. This is the entire system right here with a CGM. This is the entire system. It puts all the control in your therapy in your hand. The iOS app that we just launched jumped right to the top of the leaderboard in the iPhone, in the app store, in Apple app store when we launched it. You can see all of your data here.

You can have full control over the pod. And it means that people use their therapy more effectively. And so it makes it a much simpler experience, which is our goal. And it means they will treat themselves more effectively. It's going to be a big customer satisfier, and we think it will drive improved care. Jim Hollingshead of Insulet. Thanks for joining us here on set. Thank you very much. Great to be with you. Good to have you. Well, it's time now for a CNBC News Update with Kate Rooney. Hi, Kate. Hi, Morgan.

President-elect Donald Trump named former New York Representative Lee Zeldin to run the Environmental Protection Agency. In a post on X just moments ago, the former four-term House Republican from Long Island said he would work to, quote, restore U.S. energy dominance. Meanwhile, Spirit Airlines plane was hit by gunfire today while it was approaching the airport in Haiti's capital. The airline said while none of the passengers were hurt, a flight attendant had what they call the minor injuries. The plane was diverted to the Dominican Republic, where it was taken out of commission. Spirit said it had suspended flights to Haiti with JetBlue and American Airlines following suit. And Venom, the last dance,

won the box office for a third straight week, collecting another $16.2 million in ticket sales domestically. The Marvel blockbuster has not faced a lot of competition this fall and easily fended off the debut of A24's horror thriller, heretic, and feel-good holiday movie, The Best Christmas Pageant Ever. Guys, back to you. All right, Kate Rooney, thank you. Up next, Mike Santoli is back. He's looking at whether the market is starting to look expensive and what that could mean for future returns following this big post-election rally. And AbbVie, one of the worst performers in the S&P 500 today, after a pair of disappointing phase two studies of its experimental schizophrenia drug. That news helping shares of Bristol-Myers, which makes a schizophrenia treatment that was approved

in September. We'll be right back. Welcome back. Mike Santoli returns with a closer look at the market's current valuation. Mike? Yes, John. Of course, as measured by the S&P 500 forward price earnings multiple, we're above 22.5 again. We spent a little bit of time at or above this level around the pandemic, post-pandemic kind of market ramp. That's when earnings were somewhat depressed. Last time we were here, 23 years ago, about October, November of 2000, rather. And this was on the way down from tech bubble heights even higher than that. And this also is when earnings were crashing. We were

entering a recession. So there are differences and there are plausible arguments for why we can sustain a somewhat higher than average valuation. Obviously, higher quality, big companies, less cyclical, more profitable on balance. But it's worth noting the S&P was dead money for the five and 10 years after that point, John. So I guess we need E then to rescue that chart, right? The earnings would have to surge to a level where that justifies the price. Exactly. And sometimes that's what the market is actually previewing is a sort of acceleration in earnings. Maybe they're somewhat understated or, as I say before, maybe there's just a higher resting level of valuation because of passive ownership,

because basically people realize that ultimately the equity market has sort of bailed out investors, even if they bought at the wrong time. But look, it's worth keeping in mind, even as sort of a background atmospheric condition for this major rally we have going on right now. Morgan. All right. Mike Santoli. Thank you. Well, I see just announcing earnings and that is exploring a spinoff of its major stake in Angie. Up next, CEO Joey Levin on what that move could mean for investors. And Bitcoin keeps heading higher, hitting 88K for the first time just moments ago. We'll be right back. Welcome back to Overtime.

Shares of media and Internet conglomerate IAC are higher right now, despite posting a wider than expected loss. The company did beat analyst estimates on revenue. The company also announcing it is now considering a sale of its ownership stake in Angie to its shareholders, the online marketplace for finding home improvement specialists. IAC spun out Angie into its own public company in October of 2017 and currently owns about 85 percent of it. Angie's shares initially popped about 10 percent on the news but are now trading lower. So joining us now in an exclusive interview is Joey Levin, CEO of IAC, with our own Julia Borsten. Julia. Morgan, thank you. And Joey, thanks so much for joining us on the heels of your big news about

Angie, as well as your earnings report. Let's start with the Angie news. Why are you deciding to spin off that 85 percent of the company that you own and why now? Angie's in great shape right now. We've spent the last couple of years really improving the customer experience, expanding profit. I think profit adjusted EBITDA two and a half X or so over the last couple of years. Customer experience up meaningfully, customer retention up meaningfully, net promoter scores up meaningfully. Business is now in a position where we think it's healthy enough to be on its own. And we're really slimming down IAC and trying to focus on doing a few things well. And Angie's in a position where it's capable of standing on its own and having its own currency.

I think not impossible. There's some consolidation in that category. And Angie can do really well on its own. Tell us a little bit more about this strategy of slimming down IEC and what could come next. You say in your letter to shareholders that you're looking at new opportunities to deploy capital. And also there might be other opportunities to spin things off. What are you looking at right now? Where do you expect to put that capital to use? Yeah, we're looking at, we always look at a wide range of things. But the bar for us on new acquisitions is very high, always has been.

I think that when we look at the market right now, we've generally seen things at a level where they're willing to transact. It's pretty expensive for us. And when we see that environment, we try and build cash. And that's a little bit more of the mode that we're in right now. But we're very actively always looking and seeing if those opportunities arise in any market opportunities can happen. But it has been generally on the more expensive side where people want to transact lately. Joey, it's Morgan. And when I hear you talking about building cash in this environment, it reminds me a little bit of Warren Buffett and what's going on over Berkshire Hathaway, especially as we do see public equity markets at record highs again today. I am curious,

though, what you make of the M&A landscape more broadly, especially as we do go into 2025 and we do have a new administration that's going to take the helm in January. I expect this will be a big year for M&A generally, whether for us, I'm not sure, but for M&A generally, I think it will. Certainly, loosening up the regulatory environment is a factor. But also, I think people have sort of, last five years, probably enormous volatility from going into 2019, then COVID, then coming back up with rates, now then coming back down as rates came up. I think there's actually a little bit of stability. People have been at a stable place for a while. And I think when that happens, the regulatory

environment supports it. I think that's a recipe for real transactions and the kind of transactions that can help drive real efficiency in businesses. Joey, it's John Ford. Great to have you. So question about AI. I know you've had the open AI relationship that's been talked about, but when you have so many brands that touch so many different customers, you've got a lot of data. How do you end up using AI in a way that accelerates your business overall and the individual businesses? Yeah, I mean, I can give you a bunch of great examples, but one is just using conversational interfaces is, I think, enormously valuable for our businesses. A business like Angie, which is about to launch a product, I think, at the end of this month, where we find out more

about the user's job, what they want to get done in their home by using a conversational or offering a conversational user interface. Same thing in one of our nursing businesses where people are nurses are trying to find jobs. They can interact with an AI that's available 24-7, generally more empathetic, generally more knowledgeable, and has been a great tool we've experimented with with a few clients. But also, one of our biggest businesses, Dot Dash Meredith, we've now been able to take the performance data that we have on our relatively small section of the internet, which is the content that we own, and been able to map that, again, using partnering with OpenAI, map that on the rest of the internet to show the performance that we drive

on our own sites, on other sites that operate similarly. That kind of scale is just remarkable. And DotDash Meredith did do a deal with OpenAI. But I want to dig a little bit more into those DotDash Meredith revenues in that business, because that's going to be really core to what I see is once you complete this Angie spinout. What are you seeing there in terms of advertising trends and just sort of overall competing in this in this very crowded space of the digital ad market? Yeah, we're really proud of Dash Meredith's third quarter, 16 percent digital ad revenue year over year. That's that's, when you look at the rest of the market, I think standout performance, certainly for publishers, but really almost for anyone

collecting advertising dollars, digital advertising dollars. I think we don't collect political ads, and so we weren't a beneficiary of that in October. And I think that took a little bit of attention away from the kind of content that we have. And advertisers were a little hesitant around the election. We'll see what happens coming out of that. I think now that there's certainty and stability, I think hopefully advertisers come back to spending for the rest of the quarter. Consumer seems healthy from from the data points that we can see. So hopefully advertisers spend into that. And you mentioned political advertising, but also the opportunity for M&A now. Is there anything else about this new political environment with the new administration that is changing your outlook

to your business? No, not really. I think what we want is calmness, stability, and that's easy to, that's a good environment for building businesses. And hopefully we have that now that the election's over and everyone's moving forward with a new leader. All right. Joey Levin of IAC and our own Julia Boorstin. Thank you both. Thank you. With shares of IAC up more than 1% right now, will retail earnings kick off tomorrow

in Home Depot reports? Coming up, a top analyst weighs in on whether that stock can keep outperforming the Dow following its results. And Cigna shares surging after announcing it will not pursue a merger with rival health insurer Humana ending on and off talks that began about a year ago.

We'll be right back. Up next, an analyst with a buy rating on Home Depot tells us what he's expecting when the company kicks off earnings from the big retailers. That's tomorrow morning. And make sure to join the CNBC Delivering Alpha Investor Summit in New York on Wednesday. That's featuring some of the biggest names on Wall Street. Scan that QR code right there, right now to register. Welcome back to Overtime. Some key earnings on the calendar tomorrow, including a read on the consumer when big box retailer Home Depot reports before the bell.

We'll also get results from Kava, Spotify, Tyson Foods, Instacart and much more. But joining us now is Mizzou host senior analyst David Bellinger. He has a buy rating on Home Depot. David, I mean, this really sets the stage for some of the other big box retailers to report. What are you expecting from Home Depot tomorrow? And given the fact that this is a name that's been hit pretty hard, call it, earlier this year as a turnaround in the cards. Hey, Morgan, thanks for having me on. So we're expecting a good update at Home Depot tomorrow.

We're still looking for same-store sales in the U.S., down about 3%. That'll be a sequential improvement from last quarter. But this quarter is going to be all about the exit rate. And what I mean by that is the end of the quarter will trend better than the beginning. So there's a couple of pieces to this. We've had the hurricane impact, that'll certainly help. But we've also had some pretty warm temperatures versus the prior year period. And I think that's gonna extend the season for Home Depot, talking about outdoor projects,

exterior painting, power equipment, things of that nature. So if we do get this better exit rate out of Home Depot tomorrow, that would be very important because it will give us more confidence of the turn that's coming in 2025. If you have same-store sales up low single digits in next year's full fiscal year, that'll be a big, big positive for this name. Has Home Depot been ceding market share to Lowe's? I don't think so. Both companies are pretty big. They control a huge portion of the market, upwards of 40 plus percent. There's puts and takes where Lowe's does better in the DIY categories, but Home Depot has done

much better in the pro. But I don't think they're necessarily head to head here. And it's not as simply a zero sum game between the two. They've been rolling up a lot of share versus the smaller peers in the space. David, the combination of a higher-rate environment where it looks like the rates are going to stay a bit higher for a while and a credit-stretched consumer does what to Home Depot? Yeah, it's an interesting setup. So the higher rates have definitely frozen the housing market, right? You haven't had that existing home sales turnover that's added a lot of juice to sales

like you've had in the past. But what it does, at least going forward, that could shift more spending into the renovation and remodel piece of the market. So we're potentially setting ourselves up for what I've been telling investors is sort of like a Goldilocks period here for home improvement. People don't want to move. They don't want to give up their low mortgage rate. But maybe you do a major renovation. Maybe it's a kitchen renovation. Maybe it's something larger scale. But you could blend into a higher rate. But it's something a lot more digestible if you get a HELOC or some other form of financing. So I think we might have more of this consumer staying in place.

But I see that as actually a very good positive for Home Depot and Lowe's. And that's not just a 2025 factor. That could be a multi-year factor that helps both of these guys move up in unison. Now, does that depend on how many renovations tend to be renovate to sell versus renovate to stay? It could, it could, but I see that 3% mortgage rate, that's flipped to be a key asset of a homeowner. Nobody wants to give that up, especially when you've got mortgage rates touching 7%. If they come in, you get closer to 6%, maybe 5% in a best-case scenario. That could spur some actual consumers

moving. But if you're staying put and you engage in that large-scale renovation, that's really where Home Depot and Lowe's have played. And that's a major driver. You have the massive home price appreciation. Homeowners are sitting on You have the massive home price appreciation. Homeowners are sitting on basically a mountain of home equity here. That gives them the confidence to go and make these larger scale renovations. Okay, so you have an outperform on Home Depot. Is that the name, just looking through your coverage universe, is that the name you should buy into right now?

Or is there something else you like better here? I actually like Lowe's better. So Lowe's, in our view, it's also got some self-help element to it where you could have more upside, more torque in Lowe's in a recovery scenario. So that's the name we like most. But also, if you have tariffs coming through, right, we're looking for subsectors that have a lot of pricing power, a lot of inelasticity. Home Improvement's definitely one, but the auto parts retail segment, that's one where you've got massive pricing power.

We like O'Reilly Auto Parts best and also AutoZone in there. And then more of a mid-cap name is Valvoline and auto services, oil change business. So that's sort of our setup here, But Home Depot and Lowe's are towards the top of that list. All right. David Bellinger, thank you. We'll look forward to seeing what Home Depot has in store. Morgan, speaking of stores, but digital, we get Spotify earnings tomorrow. That's an interesting one to me because the stock has done so well recently. We also get advanced auto parts, a different kind of store in an environment where people are having to keep their cars longer. But that stock has done really poorly, at least,

though, we might get some indication about demand and that kind of read into the consumer. Yeah. And I also think when you have names like Kava reporting to something to watch is some of these restaurant stocks that have done particularly well and that have continued to grow their consumer base, even as maybe more of the value focused fast food restaurant chains have not have struggled. So that'll be an interesting one to watch from that standpoint. In general, we've got a huge week. Right. You've got stocks at record highs. The S&P finishing above six thousand six thousand one to be exact today. But we still have CPI. We have retail sales. You have everything that's going on in Washington, including a vote on who's going to replace McConnell to lead Senate and then earnings as well.

Yeah. Speaking of, again, earnings, Disney on Thursday also one to watch because, you know, while music streaming's been going well for Spotify, that's a tough business in video. Disney Plus, Bob Iger still working on that over there. And we mentioned S&P record high, Dow record high. Looks like NASDAQ eked out a record, too, and the Russell 2000 up 1.5% here. Of course, the bond market was closed. We want to send our gratitude to all the veterans on this Veterans Day. Well, that does it for us here at Overtime. Fast money starts now.