Closing Bell - Closing Bell Overtime: Intel CEO Out—What's Next? Plus Mohamed El-Erian On The Data The Market Is Watching Most Closely 12/2/24

Episode Date: December 2, 2024

The S&P 500 notched its 54th record close of the year as markets get ready for a busy week of data and earnings. Allianz Chief Economic Advisor Mohamed El-Erian breaks down what will be most important for investors. Intel CEO Pat Gelsinger retired from his position; Jon takes a look at the winding road of his tenure and Moor Insights & Strategy's Patrick Moorhead shares what happens next. Klaviyo CEO Andrew Bialecki kicks off Cloud Week with a look at what social strategies are most effective for Cyber Monday.  

That's the end of regulation. The Blue Shirt Group ringing the closing bell at the New York Stock Exchange. Blackbaud doing the honors at the Nasdaq. We've got record closes for the S&P 500 and the Nasdaq as the final month of the year begins. That is the scorecard in Wall Street. But the action is just getting started. Welcome to Closing Bell Overtime. I'm Morgan Brennan with John Ford. Yeah, the Nasdaq, the real standout here, having its best day in nearly a month. But the Dow sitting out the market rally is now down for the second time in three sessions. Meantime, Intel taking investors on a wild ride today. Shares getting an early pop after announcing CEO Pat Gelsinger has resigned, has retired amid the chipmaker's ongoing struggles.

But it gave back those gains throughout the day. Coming up, a top technology analyst on why replacing Gelsinger won't be a quick fix for the stock. Plus, Allianz chief economic advisor Mohamed El-Aryan on how President-elect Trump's tariff threats, including a new one over the dollar, could impact the currency markets, stocks and the economy. But let's get to today's market action with Citi head of U.S. equity strategy, Scott Cronert, and Vital Knowledge founder, Adam Crisafulli. Great to have you both here. Scott, I'm going to start with you because we did just have record close for the S&P and for the NASDAQ here. Russell 2000 flirting with a new record close, although we didn't get that here, it looks like.

And just in the last couple of weeks, strategists seem to be getting very bullish about their S&P 500 price target for 2025. You're not necessarily one of them. When I look at your base case of 5800 with the S&P finishing right around 6047 as we settle here. Walk me through it. Why is this your expectation looking to 2025? And what does that mean for some of these different dynamics that could pull on stocks? Very good question, Morgan. So that target was set mid-year and the market obviously has run through us. Our base case for 2025 has been that $5,800 level. We've used $6,400 as a bull case for next year. In either event, what you're talking about is limited upside based on what we know now. And I think the starting point for this is

a very extended valuation setup where you look at whether it's trailing PE for the S&P, 4 PE for the S&P, or other related metrics. You're looking at, in many cases, the highest percentile valuation in the past 20 years. So the hurdle that's being set now in terms of what that implies for future growth expectations is quite high. Bottom line, while constructive on U.S. equities, no change in our underlying view that we think fundamentals are in very good shape. We just have to allow that a lot is being paid for already. Adam, I want to get your thoughts on the market here because tech really carried this first trading day of December today.

We have seen this rotation here out of small caps, out of the Dow, out of cyclicals. Is this a situation where maybe you're just seeing some shifts by investors as we finish up the year? Or are there really genuinely concerns here in the market, especially as we are talking about a Trump administration and what some of those policies could actually bring for 2025? Things like, for example, tariffs. Yeah, so I definitely agree that valuations are very stretched and that's obviously a big headwind. And then I think if you look into the opening months of 2025, there does seem to be a gap between the reality of Trump 2.0 and some of the policies that are going to be passed or not be passed, paraphrased, et cetera, and then the reality of it. So there's a very positive narrative, but the reality could be a little bit messier.

But in the near term, you have a very favorable macro setup as far as this data and the Fed are concerned. Just today, you had a very bullish manufacturing ISM with healthy growth indications and a big pullback in the inflation piece of it. And then just less than an hour ago, you had Fed Waller come out and give a very kind of Goldilocks type of a speech where he acknowledged the healthy growth trends and then also said that we still have inflation that's moving towards a 2% target. So he's kind of inclined to cut again in December and then continue easing further into next year. So you have a decent earnings growth, inflation, monetary policy set up in the near term, favorable year and seasonality. But you definitely do have valuations that are very rich. And then you also have, like I said, I think, you know, a disconnect between reality and some of the hope

around politics in Q1 of next year. So, Scott, what do you do as an investor if you look at this market, say, look at the S&P, you think it's fairly, if not fully valued, and you think back to 2000 when things peaked for a while and then there were seven years in the wilderness before we got back near those levels where it had been. Where do you put new money to work and what do you do with the money that you've already made? Okay, well, the way we're talking about it has been fairly consistent. We think that the small mid-cap setup is much easier than large cap right now. You're not dealing with the same degree of extended valuation circumstance. The earnings growth gap between small and large

should begin to narrow next year after a couple of years of flatlining for small cap. So we think you can move down to down cap. But the bigger story here, John, is that we think that there's still plenty of stock specific opportunity under the index surface. And along those same lines, we still think there are plenty of sector and industry group trading opportunities. So the way we've been talking about it is almost from a pair trade perspective. We've been overweight financials against health care, overweight consumer discretionary versus industrials as examples of this. So our point here is that index level is something that we all pay attention to. But under the surface, the fact is the majority of S&P 500 stocks have not

outperformed. And in many cases, there are very good solid businesses that potentially benefit longer term from the Trump policy platform that still has basically a pro-business bias to it. Okay. Scott Croner and Adam Christofoui, thank you for kicking off the hour with us. Now let's turn to Senior Markets Commentator Mike Santoli for a look at where stocks could be headed as we kick off the last trading month of the year. Mike. Yeah, Morgan. And based on historical tendencies, this is what it looks like between the end of October through January in terms of the median performance of the S&P 500. That's this orange line right here. This is basically where we are right now. And this is the current

path of the 2024 bull rally. So obviously, in magnitude of gains, we are ahead of the of the norm since 1950. And this, by the way, is from Strategas. And what you sometimes see here is in the first part of January, a little bit of a flatlining or churning sideways. Maybe the gains aren't that aggressive. And then, of course, between the Christmas holiday and the new year, you do have a very strong pattern of going higher. That, by the way, is the true Santa Claus rally. The final five days of one year, the first two trading days of the ensuing year. That's the period that people are always talking about with the strong upside bias. And then maybe,

you know, some digestion into January. Obviously, much variation around this norm. But it's something that, you know, all else being equal, this is what people have in their expectation set going into this month. Morgan. All right. Mike Santoli, thank you. We'll be watching. We have some sad news to bring you. Art Cashin, a longtime floor trader and a friend and frequent guest of CNBC, has died at the age of 83. Art was one of the most widely read and widely respected voices on Wall Street. Bob Pisani has more. In the intensely competitive and often vicious world of stock market commentary, Art Cashin was that rarest of all creatures, a man respected by all, bulls and bears, liberals and conservatives alike. He was born in Jersey City, New Jersey in 1941 and began his business

career when he was 17 years old and still in high school. So what you need is comfortable shoes for your work day. In 1964, at age 23, he became one of the youngest members of the New York Stock Exchange. Years later, he would proudly point to the book he signed the day he became a member, a book that contained the signatures of other notables like J.P. Morgan, John D. Rockefeller, Arthur D. Cashin, Jr., December 30, 1964. Cashin was head of floor trading for Payne-Weber, then UBS, and was a regular commentator on CNBC for more than 25 years. But he was best known as a market historian, a teller of stories,

and a regular at the many watering holes around the New York Stock Exchange. Part of his charm was his refusal to adopt many of the conveniences of the modern world. He refused to learn how to use a computer. His notes were handwritten and then sent to his assistant. His desk was piled high with papers he had accumulated over many years. He refused to buy a smartphone. He refused to use credit cards and paid for everything with cash.

You pay by credit card. People know where you went to drink, how much you drank, and what you were drinking. So if you want to keep the anonymity in there, you pay cash. But Cashin is perhaps best remembered for his skill as a storyteller about the markets.

I have been fortunate enough over the years to be able to look at very complicated situations or problems and be able to reduce them to understandable items by using a story or a parable or something. His daily market commentary, Cashin's comments, ran continuously for over 40 years and was widely read on Wall Street. It invariably began with a history lesson that was applied to the stock market. Sue sends you a big kiss. Hold on. I wish you had delivered it personally, Sue. Among his many friends, Cashin will perhaps be best remembered for his modesty.

He seemed genuinely puzzled about his popularity. People have an interest in Arthur Cashin. I can't fully understand why. Typically, he demurred when the Washington Post ran a long profile of his career, calling him Wall Street's version of Walter Cronkite. Well, I think I owe an apology to Walter Cronkite, but that's all right. One, two, three.

Wait till the sun shines, Nellie, As the clouds go drifting by. We will be happy, Nellie, May he rest in peace. He was more than five decades at the Stock Exchange. He was very much a port in the storm. Markets would be in mayhem. Art would come. He'd sit with us at Post 9 on the floor of the New York Stock Exchange, and he would trot out one of those history lessons

and sort of give the context to our viewers and to investors to understand what was going on and what you could potentially point to from times in the past to better understand the markets and how to react. He was incredible. Not sure there will ever be another. I only spent about six years based there at the Stock Exchange. But we talk a lot about data. We talk a lot about the numbers.

But I think it'll be a long time before artificial intelligence achieves anything like the wisdom of an art cash, and maybe never. And he had incredible tie collection too he would trot out ties for all the different themes all the different holidays as well and he'd always step over to post nine on the trading floor to share whatever tie he had for whatever holiday it was to yeah well miss was fun may he rest in peace what a loss over time I'll be back right right back. Welcome back to Overtime. Zscaler earnings

are out and Kate Rogers has the numbers. Hi, Kate. Hey, Morgan. Yeah, this was a strong quarter for the cloud security company. EPS beat 77 cents adjusted. That's better than the 63 cents estimated. Revenues also beat 628 million for the quarter, better than the 606 million estimated. The company reporting deferred revenues, 1.78 billion versus the 1.79 billion estimated. Billings, 516.7 million, higher than the 502.5 million estimated. The stock moving lower likely on the guidance here, which is good, but perhaps not as strong as the street was looking for. Q2 EPS, $0.68 to $0.69 versus $0.69 estimated, sees Q2 revenues in a range of $633 million to $635 million. The estimate was $634 million. Full-year EPS range, $2.94, $2.99 versus the $2.90 estimated. And full year revenues,

$2.62 billion versus the $2.61 billion estimated. The company also saying it reached a new scalability milestone this quarter, surpassing half a trillion daily transactions. But as you can see, the stock is lower by around 8% now, guys. Back over to you. All right. Okay, Rogers, thank you. Looks like shares are down about 8%. We have a news alert on GM, and Phil LeBeau has the details. Hi, Phil. Hi, Morgan. Take a look at shares of General Motors ticking a little bit higher after the company announcing that it will be selling its half of a battery plant that is being built in Lansing, Michigan, just outside Lansing, Michigan. That plant, which GM was building along with LG Energy Solutions, GM will now sell its stake in that plant. It's going to be about a billion dollars, though they're not putting an exact

dollar amount on this. It will open next year. Why is GM doing it? Well, it's comfortable with the capacity that it currently has with two battery plants, one in Spring Hill, Tennessee, the other one in Lordstown, Ohio. That will supply the battery cells that GM needs right now for its EV plans for the foreseeable future. One other note, General Motors and LG Energy Solutions are expanding their partnership in terms of developing new cell technology. But the real headline here and the reason the stock move up, moving up a little bit, is that GM is going to be selling its half of a new battery plant that is being built just outside Lansing, Michigan. Guys, back to you. All right, Phil LeBeau, thank you. Now, Pat Gelsinger is out as CEO of Intel, effective yesterday as the company struggles

to execute a turnaround strategy that hinges on catching up in both designing and manufacturing AI chips. Gelsinger's exit leaves big questions about what's next for Intel, a company that dominated the PC and dot-com eras in the 90s and early 2000s, but stumbled in mobile and AI. Gelsinger had grown up at the company, joining as a teenager and learning from the founders. He rose to become Chief Technology Officer before he left 15 years ago and he returned in 2021 with an ambitious and interconnected plan to restore Intel's chip design and manufacturing leadership after missteps. These are interlocking and I get that but are they dominoes? Right if if one piece of this doesn't work out the way you plan do you end up with another one of those bottlenecks like you had with design and manufacturing that you saw when you came in? You know, there's always some risk on these things, but we are doing a huge amount of risk management.

And as I said on the earnings call, Intel and our process technology names, Intel 7, Intel 4, Intel 3, Intel 20A, and Intel 18A all are on or ahead of schedule. A year and a half later, though, Intel had hit stormy seas with the stock at about 30 bucks a share. Investors began growing impatient for competitive products that might boost revenues and improve manufacturing margins. We expect 23 and 24 to be depressed. Nice improvement in 25 and really getting to that model in 26. Things have grown more challenging for Intel as the AI revolution gained steam. Ironically, the very trend that has fueled Intel's struggles, the market's hunger for the most advanced chips to power artificial intelligence, also raises the question of what will happen to Intel's expensive chip manufacturing strategy. It's the only American company that makes advanced chips on American soil out of the shadow of China. One region of the world is well over half of leading as semiconductors today. And in fact,

it's one site in Taiwan in the world. And to me, that's the epitome of not resilient. So we still need those chips. Let's talk about it. And what's next for Intel in the industry? Bring in Patrick Moorhead, more insights with strategy CEO. Pat, the timing, a little bit of a surprise, but it's never completely shocking when a company whose stock is under this sort of pressure changes out the CEO. What are the big questions that you still have at this point?

Yes, the big question is why, right? I mean, if you look at the timing and the optics of how this went down, the bringing it in, backdating last day, him not serving as some sort of advisor, this went down very quickly. And what I would like to know, and I think investors should be asking, is why, right? Was it the board wanted to sell part of the company off and Pat didn't want to agree? Did the board want to split the company officially, even though they were putting in different types of rules to be able to manage it?

But it wouldn't be a separate company. Did they lose a big customer market share? Did a product push out? So I'm less interested in the intrigue of it and more about the what happened. And I'd like to see the company very quickly communicate what is going on. Yeah. I don't know what happened, but I know over the years of my conversations with Pat, since he returned, he was very clear that his relationship with the board, as long as the strategy was the strategy, he was in place. But as soon as there was any disagreement about what the strategy was going to be, it sounded like he planned to not be there. So, Pat, let's talk about the manufacturing piece of the business and the foundry business specifically.

That's the big money-losing piece. But at the same time, it's hard to imagine what would happen to all of this domestic chip manufacturing leading edge if Intel isn't doing it anymore. So what needs to be figured out there? What role, if any, does the industry, does the government have? Yeah, so first of all, the Intel foundry business also supports the Intel design company. And I do believe that they have an incremental approach where even if Intel doesn't get, I would say, a large customer like Apple and Qualcomm, it can be profitable. With that said, 18A did get four or five very large customers. It's not an anchor tenant like an Apple or Qualcomm.

So I feel pretty good about that in the future, but particularly in 2026. What I don't see happening is anything, I'll call it catastrophic, where it gets shut down or retargeted. That just wouldn't make sense. U.S. government would allow that to happen, particularly with all the U.S. Department of Defense business that it does with Intel, all the critical infrastructure done through Intel. But that still doesn't make it a healthy boundary that can compete with the likes of TSMC yet. And there will be significant investment required to get it to that point. So the fact that the stock popped initially on the news this morning and then finished the day actually lower, how much does this speak to how much of a challenge this is going to be

to whomever takes over as the next CEO of the company? Any thoughts on who could potentially continue to execute on this turnaround? Yeah. So first of all, I was super surprised that the stock went up. I believe the strategy is good. I think Pat was the right person to lead this. And I think it sunk in, which was who next? And there's a couple of people that hopefully the Intel board is looking at. ADIs, Greg Bryant, Dell's Jeff Clark, Marvell's Chris Koopmans, Broadcom's Charlie Kowalsk, Apple, Johnny Cerugy, maybe even Coherence, Jim Anderson. There's a lot of people out there who they should be talking to. And the reason that I didn't put the co-CEOs in there is it didn't seem like they were going to consider them as the go-forward CEOs. Okay.

Pat Moorhead, always great to get your insight. Appreciate it. Thanks. Well, it's a big week ahead for economic data. The highlight will be the November jobs report, which is out on Friday. And it comes ahead of next week's Fed meeting. This on top of President-elect Trump's latest threat to impose 100 percent tariffs on the BRICS countries, which include Brazil, Russia, India, China and South Africa, unless they commit to supporting the U.S. dollar. Well, joining us now is Allianz chief economic adviser Mohamed El-Aryan.

And Mohamed, it's great to have you back in the show. And we do not have a dearth of content to dig into here and implications for the economy and for the markets. I do want to start with what we're seeing globally, because not only is there a lot on the geopolitical front, but there's a lot on the political front, too, whether you look at what's going on in Brazil last week and some of the big moves there, whether you see what's happening with the euro. And a lot of this is manifesting in the currency markets. We see what's going on with the euro and issues in France today, the BRICS we just mentioned and the threats around tariffs and this idea of moving

away from dollar dominance. How important is it for investors, particularly American investors, that tend to be a little more domestic focused, perhaps, to open the aperture and pay a little more attention to some of these global cross-currents? It's important, but not important enough to lose focus on the U.S. In the vast majority of the states of the world, which includes massive economic dispersion, which includes geopolitics, which includes uncertain politics, the U.S. outperforms. It outperforms economically, and it will continue to attract significant capital from the rest of the world. So while it is a very uncertain outlook, the one thing that is certain is that the U.S.

outperforms. What is not clear is at what level of growth and what level of inflation. Those are the two issues that are in play. But in relative terms, I call it the good, the bad and the ugly of the global economy. The good is the U.S., the bad is China and the ugly is Europe. So in light of that, the fact that you have had the dollar strengthened since the election last month against a number of currencies, how notable is that, especially at a time of year where seasonally you seem to see the dollar weaken against other currencies? Yeah, but this is not like other years. It's a very understandable move. One, I think people have realized that the U.S. will cut interest rates less than Europe.

Two, people have realized that the direction of flows is to the U.S. and is to the U.S. in a big way. And third, don't short U.S. economic exceptionalism. The U.S. has unleashed many of its existing growth engines, and it has invested the most in future growth engines. So for me, whether it is flows, whether it's economic prospects or interest rate differentials, they all favor the dollar right now. So, Mohamed, if China's bad and Europe is ugly already, how do you expect them to respond, those markets in early 25, to the early rattlings of a President Trump? So it really depends the balance in the U.S. between, on the one hand, deregulation, and on the other hand, the combination of tariffs, migration curbs, and fiscal spending. That's the balance. You know, I'm of the school

that when push comes to shove, other countries are going to understand that they need to preemptively negotiate with the incoming administration, that it is in most other countries' longer-term interest to find a proper place of negotiation. The one exception is China. I think U.S. and China tension will continue and tariffs will go up vis-a-vis China. But I suspect that the rest of the world can preemptively give something to the U.S. Sounds good.

Mohamed El-Aryan, it's great to have you on. And of course, we get so much U.S. economic data this week as well for us to watch, including the jobs report. So we will continue to watch it. Up next, a top analyst reacts to Zscaler's results and tells us what he wants to hear from management when the call begins in just a few minutes. And later, we are kicking off Cloud Week on Overtime with the CEO of marketing automation platform Klaviyo. Find out how AI is impacting the holiday shopping season and his business.

We'll be right back. Welcome back. New York Fed President John Williams making some headlines. Steve Leisman has them. Steve. Yeah, John, our third Fed Speaker of the Day, New York Fed President John Williams, says monetary policy remains in restrictive territory, and he expects it will be appropriate to continue to move to a more neutral policy stance over time. He doesn't give us a time

or a month or anything like that, but he says the Fed's job now is to ensure that risks remain in balance, saying that right now the risks to the upside on inflation and to the downside on unemployment are in balance. The path to policy, however, will depend on the data and decisions will be made meeting by meeting. Since the Fed is within striking distance of its 2% inflation goal, the economy is in a good shape and GDP continues to be strong. He does expect 2.5% GDP growth this year. Labor force and productivity growth, or higher than normal for both, have allowed the economy to expand at a higher pace. And he's confident inflation is on the way to 2%, but says it will take some time.

Here are the reasons he is confident. One, he says he expects disinflation in housing. So we've seen some of it. More of it, he says he expects disinflation in housing. So we've seen some of it. More of it, he says, is to come. Consumer seasons are increasingly pushing back against businesses raising prices and inflation expectations are well anchored, along with this growth in labor supply you've had while labor demand has eased. So, John, he isn't telling us like Waller did earlier that he is leaning towards a December cut. But reading these comments,

you get the feeling that if employment is something that's not a concern on Friday and jolts is something that shows still easy job market and the inflation numbers before the next meeting come in in line, that Williams could be convinced for that rate cut in December. All right. Increasingly feels like we're leaning towards a hawkish cut, potentially. Steve Wiesman, thank you. Good way to put it. Thanks. Zscaler shares are sinking in overtime despite reporting a beat on the top and bottom lines. Joining us now is Evercore ISI enterprise software analyst Peter Levine. He has a buy rating on the stock. Peter, it's great to have you on. I want to start with the fact that company did beat on some of the key metrics for the quarter,

including it looks like billings came in stronger than expected for fiscal Q1. But perhaps the guidance for the current quarter and for the full year may be a little light, at least versus some of the whisper expectations that have been down there. Is that how you see it? Yeah, that's how I see it. It was a pretty strong Q1. But to your point, I think the guide for Billings, which is a future indicator of growth, I think for the full year didn't move much versus where I think expectations wanted them to see. So, Peter, as I look at a chart of CrowdStrike versus Zscaler, the gap between them was opening up, CrowdStrike running ahead until, of course, mid-July when CrowdStrike had that outage. It narrowed. Now it's opened back up again. Is this a matter of CrowdStrike just being that much better? Is it a matter of

Zscaler being conservative here with a guide? What do you think's going on? You know, it is their fiscal one cue, so I would assume they are being a little conservative. But, you know, year to date, to your point, Zscaler has underperformed the market. It's down 5 percent. CrowdStrike's up 23. Palo Alto's up 15. You know, for Zscaler, they are going through a go-to-market change, right? So there is new leadership there. So sometimes it does create some disruption to the sales cycle. And then plus, there's also the beta round platform versus the product. You know, they do have a suite of products,

but it's built organically. So it does take a little longer to scale. And then second would be just the competitive landscape for their cloud networking product. It's becoming a lot more competitive. So I would assume sales cycles will take longer. Zscaler still has a great product. They own the enterprise market,

but it's not as easy as it was for them to win where it was, call it two, three years ago. Okay. Peter, thank you for joining us. Shke say z scale are down about six percent right now we have a news alert on honeywell the company announcing it has signed a strategic agreement with bombardier honeywell's ceo saying the partnership will open up opportunities to quote advance next generation technologies in avionics and engines honeywell says the partnership will bring 17 billion dollars of value to the company but honeywell also updating its 2024 full-year guidance, citing the required investments associated with this Bombardier agreement. Shares are down here in overtime as it looks like revenue

and EPS guidance were both trimmed, both versus previous guidance stated by the company and what the street was expecting. Shares are down about 3% right now. Well, time for a CNBC News update now with Kate Rogers. Kate. Hi, John. The United States announced another $725 million in military assistance to Ukraine today. The State Department says the package will include stinger missiles, counter-drone systems, and anti-personnel mines. The Biden administration is scrambling to deliver all congressionally approved funding for Ukraine before President-elect Trump takes office. The Israeli military said today it hit dozens of targets in Lebanon in a defensive warning strike, but cautioned it is still obligated to fulfill the terms of the ceasefire with Hezbollah.

The strikes came after the Iran-backed military group accused Israel of violating a ceasefire agreement and fired its own missiles on an Israeli military position in a disputed border area. And Maryland Representative Jamie Raskin told his colleagues today he will challenge New York Representative Jerry Nadler for the top Democratic spot on the powerful Judiciary Committee. Nadler has held the job since 2019, and Raskin served as Democrats' lead prosecutor in the Trump impeachment trial following the January 6th insurrection. Back over to you, John. Okay, thanks. We have a news alert on Microchip. Seema Modi has that. Seema. John, Microchip is lowering its revenue guidance for December 2024,

due in part to slowing demand. The CE also says with inventory levels remaining high, it's shutting down its Tempe, Arizona wafer fabrication facility as it doubles down on its factories in Oregon and Colorado. That will amount to some job cuts of around 500 employees. This is a company that manufactures very important microchips and analog integrated circuits that are used in everything from smartphones to appliances. So perhaps an interesting read for the broader industry, which shares down about 3.4 percent in overtime, John. All right, Seema, thank you. Up next, Mike Santoli breaks down a chart suggesting the bull market rally shows no signs of slowing down.

Be right back. Welcome back. Let's bring back Mike Santoli for his dashboard. Mike. Yeah, John, taking a look at these baskets maintained by Deutsche Bank that are supposed to mirror different phases of an economic cycle, in particular, the late cycle stock sector basket, as well as the end cycle. I find it interesting here that we actually had, as we remember, a bit of a growth scare in the latter part of the summer. That was when this end cycle portfolio really had a little bit of a surge. It's probably going to be more defensive and commodity based type companies that might perform in that. And then what I find also fascinating is this convergence here where you have end cycle falling and then the late cycle basket actually increasing to close that gap. And it suggests, at least by this measure,

that one of the conclusions of a lot of investors, which is that the combination of Fed rate cuts into a soft landing economy, maybe the policy mix coming from the new Trump administration might lengthen this economic expansion. And the thing about these cycles is it can stay late for a long time. So late doesn't mean almost over until we get toward the end. Morgan. Well, markets don't die of old age. We hear it all the time.

That's exactly right. Mike Santoli, thank you. We have a news alert on Joby Aviation. Phil LeBeau has the details. Phil. Morgan, take a look at shares of Joby down a little bit after the announcement that the company's CFO will be leaving the company to pursue an opportunity with another unnamed company. This is a move that he says is for the general welfare of his family, that he wants to move to a different location in the country. So he will be leaving the company. Jobin Bavere, the CEO, will take some of those duties for the time being until a permanent CFO is named. But again, shares of Joby a little bit under pressure.

But also keep in mind, guys, this is a stock that has moved fairly substantially over the last couple of weeks, actually the last three weeks. So it's not a surprise that any news at all, any news at all, is going to make the stock move a little bit. A lot of retail investors in this name. Philip O, thank you. Up next, we will get some early insight into how the holiday shopping season is shaping up when we are joined by the CEO of Marketing Automation Platform, Blake Clavio, as Overtime's Cloud Week kicks off. Stay with us. Welcome back to Overtime. Today is Cyber Monday. It also marks the start of Cloud Week here time, last year, I should say, about how loyalty was such an important trend, even over discounts. What are you seeing so far in this

stretch of Black Friday, Cyber Monday, Cyber Week, and how loyalty and really the use of AI is affecting the results that businesses are getting? Yeah. Thanks for having us, John. As usually, loyalty was another big trend this year. Almost half of the purchasers across Klaviyo were, the consumers were repeat buyers. That trend continued. You know, on Black Friday, we're still analyzing all the data from the week. We've got a couple hours to go in Cyber Monday. We had over 10,000 businesses set their all-time record for sales on Black Friday this year, which is awesome.

And, you know, across the Klaviyo platform, we delivered more than 5 billion messages across email, text messaging, mobile notifications. And that generated over $3 billion in sales for all of our customers. So that's also another record. We're really proud of that. And it shows the value of these direct relationships between brands, you know, retailers and the end consumer. Where does social media fit in the mix? And what kinds of companies, what kinds of strategies are providing the best results in bringing that data together and managing to reach those customers? Yeah, folks are combining, you know, social media, you know, both the posting they're doing there with this kind of direct-to-consumer messaging.

And one of the big spikes we saw this year is not only were people buying based on messaging, but also they were getting closer to brands. We saw an almost threefold increase in the number of customer preferences that were saved, data points. And then folks were using that. You mentioned artificial intelligence. The other trend that we saw was folks really were trusting Klaviyo, Klaviyo AI, to help them optimize their messaging this year. You know, a lot of merchants, retailers, you know, they feel the time pressure. They have to generate campaigns in a matter of minutes. They were using Klaviyo AI to generate content and then also use that to optimize some of their campaigns.

You know, target copy and imagery to specific groups, all using our AI tools. Andrew, it's good to have you on. We had Ryan Peterson of Flexport on last week. And one of the things he highlighted is the fact that so much of the holiday shopping season, particularly from the lens of shipping, that we've seen this pull forward in terms of promotional activity and sales offerings and Black Friday events much earlier than we've seen this pull forward in terms of promotional activity and sales offerings and Black Friday events much earlier than we've seen in the past. And I'm wondering if you've seen that too, and if so, how it speaks to what is perhaps elongated shopping season this time around. Yeah, we definitely see some of that. People start messaging and marketing sooner,

especially when a lot of shoppers on Black Friday, Cyber Monday over the holiday season, they're folks that already know your brand. An interesting thing that we saw related to discounting was actually smaller discounts in the range of 10%, 20% perform better than deeper discounts. So we attribute that to a lot of consumers looking and waiting for the brands they love to offer them a discount and incentive. And then a lot of brands were using that touchpoint as an opportunity to offer an incentive tied to, you know, maybe a mobile app download or signing up for a loyalty program, a way to strengthen their relationship with that consumer. So interestingly, consumers weren't as focused on the biggest discounts. It was more on the, you know, the businesses that they were

really waiting for that, you know, offer from. You reported earnings the day after the election. What have you seen since the election, especially as we have these conversations here on CNBC about animal spirits and we keep having these conversations about the uncertainty that consumers were feeling ahead of the election? Yeah, you know, business for us continues to be good. And I think that's because businesses want to build relationships directly with consumers. And what we've seen so far from Black Friday and the weekend is consumers are willing to spend. They're out there finding the brands they love and products they love and, you know, doubling down on their existing relationships.

What are you seeing in mobile? You know, we're seeing more brands use a multi-channel strategy. So another, you know, thing we noted this year was businesses that were using more than one channel on Klaviyo, whether it's email or text messaging or mobile, they generated 20% more revenue on Black Friday. So I think the era of omnichannel and multi-channel marketing, especially when it comes to, you know, these direct channels with consumers, that's very much in full swing now. All right. Andrew, thanks. Andrew Bailiecki from Klaviyo. Well, Cloud Week

rolls along tomorrow on Overtime, and we speak exclusively with Pure Storage's CEO, Charlie Giancarlo, after his company's earnings. Well, Salesforce has been one of the top DAO performers this year. Coming up, the key numbers that need to be on your radar ahead of that earnings report, which will happen right here on Overtime tomorrow. Got a news alert on Elon Musk. Phil LeBeau back again with details. Phil.

This is a big ruling from the Delaware Chancellery Court, John. They are once again rejecting the $5.6 billion pay package for Tesla CEO Elon Musk. The court also ruling that Tesla must pay $345 million in fees to the plaintiff's attorneys in issuing this ruling. The judge says that the defense, the attorneys for Mr. Musk denying their request says their unprecedented theories go against multiple strains of subtle law. So again, the court once again rejecting Elon Musk's $5.6 billion pay package with Tesla. Guys, send it back to you. All right, Philip O., thank you. Shares of Tesla down about 1% right now.

Salesforce headlining a huge hour of tech earnings tomorrow on overtime. Up next, the key numbers you need to watch for when the Dow component reports those results. Welcome back. Tomorrow on Overtime, we'll get a whirlwind of tech earnings. Salesforce, Box, Marvel, Technology, Okta, and Pure Storage. Seema Modi looks at the key numbers to watch for Salesforce's results. Seema. Well, Morgan, we were talking to analysts at Morgan Stanley, and they remain overweight, the stock,

but they're cautious going into the report, given the 30-plus percent run we've seen in Salesforce over the past month on this excitement growing around its AI agent. These are agents that can analyze information and respond to customers real time. But investors now want to know if that excitement has translated into sales and bigger contracts. Another big key question for CEO Mark Benioff, who was supportive of Trump and critical of Harris in the run up to the election, is how he sees the M&A landscape changing once Trump is in the White House. Keep in mind, Salesforce has grown its market cap in the past 10 years due in part to acquisitions of smaller software and cloud

providers. The average price target on the stock is just over $350. It's currently trading at $331. Guys. All right. Sima Modi, thank you. There's a lot for us to watch, but also we get retailer earnings this week, too. So we'll also get insight into the consumer, whether it's the dollar stores, Ulta, Kroger, Lululemon, as well as the holiday shopping season continues to especially that as they as they talk about the guy. We've got a lot of news this hour. A lot of that's always nice. But the Elon Musk stuff, I mean, Musk not popular with government officials from Delaware. We'll see what happens to all of that.

Obviously, unprecedented pay package. So one that's being watched very closely. We've seen the bond yields back up, dollar strength. And yet record highs for the S&P and the Nasdaq. Does that continue? We're on pace for our second straight year of the S&P gaining more than 20 percent. Can that continue as we look to 2025? Yeah.

Well, tomorrow will be a day closer to finding out. Yeah, we get Jolt's data too. That does it for us here at Overtime. Fast money starts now.