Closing Bell - Closing Bell Overtime: Keith Rabois On 2024 Election, Chamber of Commerce CEO On Business On The Ballot; Super Micro Troubles 11/05/24

Episode Date: November 5, 2024

Keith Rabois, early investor in Affirm, Stripe, DoorDash and others, on why he is supporting Trump in the election—and why he changed his stance as a former Never Trumper. Chamber of Commerce CEO Suzanne Clark talks the business issues on the ballot and what is most important to the CEOs she represents. Plus, Lumen CEO Kate Johnson on her company's new deal with Google Cloud and why Big Tech is partnering with Lumen for building AI networks. Plus, investors sour on Super Micro's latest earnings. 

Well, that's the end of regulation. Genco Shipping and Trading Ring. We're closing about the New York Stock Exchange. Oriental Rise Holding Limited doing the honors at the Nasdaq. Stocks rallying with major averages, keeping up their tradition of gains on a presidential election day. We've got three hours until the first polls close, just one hour to go until we start getting the initial exit polling data. That is the scorecard on Wall Street, but the action's just getting started. Welcome to Closing Bell Overtime. I'm Morgan Brennan. John Ford is off today. We'll be all over the election this hour with the issues that matter most to your money. Coming up, outspoken venture capitalist Keith Raboy joins us with his closing thoughts on the race and the impact on tech and investing.

Plus, Chamber of Commerce CEO Suzanne Clark will be with us to talk about the business issues on the ballot from taxes and tariffs to AI regulation. And it's not just election season. It's still also earning season. We've got some key reports coming this hour, including Supermicro, Devon Energy, Microchip and AI darling, recent AI darling, Lumen. As we await those earnings, though, let's bring in unlimited CEO Bob Elliott and Vital Knowledge founder Adam Crisafulli. Guys, great to have you here, especially as we do have large gains for all of the major averages. Bob, I'm going to start with you. How much hinges on this election now and the various outcomes we could see in coming days? Well, I think we're going to see a lot of market volatility coming through with this election, given the divergences in the policy stances from both candidates. I think the really interesting question is whether the conventional

wisdom that a Republican victory and sweep will be beneficial for stocks, given their policy position. Some of the indications today with bonds, bond yields coming down a little bit and stocks rallying at the same time, suggests that maybe people think that split government with a Harris administration might actually be better for the economy and stocks than the conventional wisdom. Yeah, I've been hearing that and this whole idea of sell bonds, that's part of the so-called Trump trade as it's being perceived. Adam, I want to get your thoughts on this, especially as we do see a stock market that is arguably priced to perfection here. And we have seen some, a lot of the volatility tied to the election actually in the bond market. No, I think the election is going to influence markets in two key ways. You know, I think

directly bonds care much more, I think, than equities as to how things shake out. Just given that as it pertains to the economy, the policy differences are most dramatic on fiscal policy. And so, like you just said, you know, the quote unquote Trump trade, if you were to see a red wave, the fiscal implications of that would be very negative in that it would drive yields higher. And so if you do see a split, a Harris split with Harris winning and the Republicans controlling at least the Senate, I think you'll see a big relief rally in bonds, which will then translate into gains in equities, coupled with just getting the election out of the way. We've heard from a lot of companies over the last several weeks on earnings calls about how election uncertainty has played a role in kind of softening demand in certain categories of products over the last several weeks. And so just getting out of the way, having any result known will be a relief for the market for risk tenement. And if we do see a split outcome, ideally Harris in the White House, that I think would then help spark a relief rally in bonds, which could translate into equity gains.

And of course, we're in a week where we're talking about the future of fiscal policy, but also the future of monetary policy. We'll get into that in just a moment because we have our first earnings report out. It's Lumen Technologies and the fiber and telecom company reporting an adjusted loss of 13 cents per share. So this was a bit worse than estimates of 9 cents per share loss. Revenue of $3.22 billion. That was essentially in line. Q3 adjusted EBITDA, $899 million. That was light.

Broadband subscribers, 2.6 million. That was largely in line with estimates3 adjusted EBITDA, $899 million. That was light. Broadband subscribers, $2.6 million. That was largely in line with estimates on Faxit. Here's the full year 2024 outlook, though, for the company. That's increasing free cash flow to $1.2 to $1.4 billion. That's up from previous guidance of $1 to $1.2 billion. Other metrics, including adjusted EBITDA, those were reaffirmed. Lumen Technologies is positioning itself to provide connectivity to data centers and for this AI infrastructure build-out. Stock has been seeing big moves this year due to that, particularly over the summer. Lumen announcing just earlier today it's partnering with Google Cloud to build digital twins, support other AI efforts, adding to a growing list of partnerships that also includes Amazon, Microsoft, and Meta.

We're going to have more on Lumen's quarter and the outlook for AI in just a few moments when CEO Kate Johnson joins me before the company's earnings call. And you can see those shares of Lumen are jumping right now. Last I checked up six percent here in overtime, presumably because of that free cash flow guide coming up as well, which is what happened in the last quarter, too. Bob, I'm going to come back to you because this has been the other piece of the story. You saw it in the markets today, the secular growth story. That is AI. You've seen it in semiconductors and some of the results that continue to be bifurcated. You saw it with Palantir. You're seeing it here with Lumen. You saw it with

Cummins as well today. Does that continue regardless of election outcomes? Well, I think there's a pretty good foundation in terms of the AI trade continuing to generate pretty good free cash flow and earnings that we're seeing. And this earnings quarter has really confirmed that those AI-focused companies can continue to generate profits. And given the role that that's playing, not just in the specific names, but in the broader economy, that's supportive to the overall earnings picture. The question is, for the economy, is whether that's able to branch out beyond just the AI names, the MAG-7, and we start to get a lift in earnings more broadly, because that's really what the market is pricing in, is not just the high flyers, the AI names, the Mag7. They need to see earnings growth

from the rest of the economy. That's what's expected. That's what's priced in. But given the strength of the economy, remember, a strong services PMI print, we continue to get strong data across the economy. That certainly seems very possible given the strength that we're seeing in the underlying economy. Yeah, and Russell 2000 finished today up 1.7 percent, third day in a row of gains, despite what we've seen in other averages.. Yeah, and Russell 2000 finished today up 1.7%, third day in a row of gains, despite what we've seen in other averages. We have a news alert on Apple. Steve Kovach has these details for us.

Steve. Hey, Morgan, this is coming out of a Bloomberg report saying Apple is going to face a fine in Europe under the Digital Markets Act. We have not confirmed this report, but Apple is declining to comment. This is that big law that went into full effect in Europe earlier this year that kind of gate or regulates how Apple can run of this law, including blocking app developers from

including language that would steer them away to make payments outside of the App Store. They also said some of the extra fees that Apple added under this law in order to sort of make up the fees they were already charging may also be in violation. So those are some of the things that are on table. And keep in mind, this is a really meaty law, Morgan, that they can find up to 10 percent of the annual revenue of Apple. And just to put that in context, Apple just finished finished reporting its fiscal year. Three hundred ninety one billion dollars. So do the math there. That is a huge fine potentially for Apple on this. Again, we don't know when this is going to happen, but it sounds like the EU, according to this report, would want to do it by the end of the year, Morgan. OK, Steve Kovach, thank you. Shares of Apple trading flat right now.

Adam, want to get your thoughts as we do go into election night here. And then, of course, you've got a Fed later this week. We've got stimulus coming out of China. Earnings continues. What's going to matter the most? And when you look at the positions in the market, what is potentially the most offsizing and could create the biggest risk if we do see some surprises here? I think on yields. So I think, you know, yields would be the real tell as to how equities will trade going forward. And that will depend on, you know, the various permutations that we see tonight with the House, Senate and White House. If we do see a split outcome, which, you know, again, it's very, very close race, but it seems to be the most likely scenario that will likely trigger a relief rally in bonds and yields would drop. And then you kind of refocus back on the present macro landscapes. Politics aside, it's relatively healthy.

As you mentioned, you have decent earnings, relative resilient growth. The disinflationary process continues. We're getting rate cuts for most of the world's central banks. And then China is providing an extra dose of stimulus, both fiscal and monetary. And so in the near term, you have a relatively decent macro setup heading into a positive seasonal period of the year in the final month and a half of 2024. So, you know, I think if we do get a split outcome and you get the relief of the election being out of the way, you know, the backdrop is decent into the end of the year. All right. Gentlemen, we're going to leave the conversation there. Bob Elliott and Adam

Crisafulli, thanks for kicking off the hour with me with all the major averages up more than 1% on this election day. Now let's bring in Mike Santoli. He's here at CNBC headquarters. He's got a closer look at the market setup heading into the final moments of the 2024 election. Mike. Yeah, Morgan. And some of the intermarket stuff actually kind of fun. The S&P 500 relative to gold over five years.

Look at that. They basically landed in roughly the same place right here. Gold is a shapeshifter in terms of what it responds to. Obviously, it's been rising to records here, even as real yields have been going up. The dollar's been pretty strong. Obviously, inflation has come down. But, of course, we have easy financial conditions.

There's a lot of diversification of reserves among central banks, maybe some global unease. But, you know, it's not always the case that they move together here. I would point out in particular kind of here when gold kind of lost its bed in the vicinity of the 2020 election. Of course, that was also when we got covid vaccines coming through. So a lot of a break in uncertainty there. And then in terms of the big movers within the equity market, take a look at Supermicro, which we're of course going to hear from very soon, as well as NVIDIA. And XSD is just the equal weighted semiconductor index. And this is only over the last year.

And you can see immediately SMCI was anointed as kind of the next core play on the investment theme. And, of course, because of all of its issues and regulatory static has come crashing down. But I also think this points out how the average semiconductor stock is up 30 percent on a one year basis. That's basically where the S&P 500 is as well. And it's really been NVIDIA and Broadcom that have been kind of enlivening the sector as opposed to the average semi stock. Morgan. Yeah, these are really interesting charts. I'm going to ask you. I'm going to step back and ask you a broader election related question here. And that is how closely should investors be watching the currency

markets, given the fact that a lot of the positioning we're seeing tied to the so-called Trump trade, the so-called Harris trade, as they're being reported on, really lie there? Yes. I mean, obviously, it's one of the more sensitive areas that's going to respond, along with Treasury yields, as Adam was saying. I mean, strong dollar has been an element of the Trump policy mix that people would anticipate, whether it's tariffs and just sort of general kind of expansionary, reflationary type policy set. So that's one of the things you'd want to look at. But, man, there's so many head fakes in the market on election day, election night, that I would also caution against people-interpreting what the market does and say that that has any predictive value, really, in the short term. Yeah, and VIX has come off, too,

coming into today as well. So that's been interesting. Mike, we'll see you later this hour. Thank you. Well, after the break, Kozla Ventures Managing Director Keith Raboy joins us with his thoughts on the surge of venture capital voices backing both presidential campaigns. And later, the CEO of Lumen, which just reported results, breaks down the quarter ahead of the earnings call. They got that stuck up around 300 percent this year after riding a wave of AI optimism. Overtime is back in two. Well, welcome back. We've got Devon Energy earnings out. Pippa Stevens has the numbers. Pippa. Hey, Morgan. A top and bottom line beat here for Devon, EPS of 110 adjusted. That beat

by a penny. Revenues of $4.02 billion ahead of the $3.74 billion that Wall Street was looking for. The company said that oil production during the quarter stood at 335,000 barrels per day. That was slightly ahead of estimates. Now, during the quarter stood at 335,000 barrels per day. That was slightly ahead of estimates. Now, during the quarter, Devin also closed its acquisition of Grayson Mill Energy's Williston Basin assets, and the company called the transaction a major milestone, saying that it increases their operating scale and strengthens their outlook for the fourth quarter and beyond. Shares up now about 2 percent. Morgan? All right. Pippa Stevens, thank you. The first polls begin closing in just under three hours and we expect to get exit polling data

starting in less than one hour at 5 p.m. Eastern. It's been an election marked by razor thin polling margins and some big money voices backing both campaigns. Well, joining me now, Coastal Ventures Managing Director Keith Reboy. He is supporting former President Trump. His high profile early investments include Affirm, DoorDash and Stripe. Keith, it's great to have you back on the show. Welcome. Pleasure to be with you. So I'm going to ask you, I'm going to start by asking the same question I asked Bradley Tusk yesterday, and that is, it seems like there is a lot of support, a lot of publicity, a lot of money flowing from the tech titans and the venture investors, high profile and venture investors, including yourself,

into this presidential election cycle? Is it more than we've seen in the past? And if so, what does it signify about how much hinges on this election outcome? I do think it's more than 10, 15, 20 years ago. I think many people in tech really weren't interested in politics. But as someone else has said, politics is interested in us. So it sort of forced tech people to get involved in regulatory policy, in political elections, because nobody allows tech to sort of innovate with unfettered freedom. But historically, Silicon Valley people wanted to be left alone. That's why they were on the West Coast. And a lot of people in politics kind of didn't notice. And that's why innovation was fueled and flexible. But that's changed the last 5, 10, 15 years. So we don't really have a choice anymore. Okay. So as somebody who historically has not supported Trump, you are supporting Trump in this election cycle.

What changed your mind? What was it about policies or the man or something else that brought you to the table here? The most important driver was October 7th. You know, when these atrocities happened in Israel, it was threatened. People were murdered, raped, and the current administration did nothing about it. The current administration didn't protect Jewish students on campus. Antisemitism is accounting for hate crimes left and right. There's basically been a Charlottesville rally on every major campus in the United States. And this administration completely ignores what even meet with Jewish students. So as somebody

who grew up Jewish, who went to the Holocaust Museum with my parents and my grandparents, it's just unacceptable to allow Jewish people to be threatened in the United States today. And so that alone made me change my opinion. Then once I got to meet President Trump, I think there's a caricature in the media about him. And maybe there's a caricature in the media about us all. But there is about him. And I saw the reality distortion that the mainstream legacy media was applying. And I realized there's a lot of very good things about him, even though I did not support him in 2016, in fact, was opposed to him in 16, 2020 and earlier in the primaries. So in terms of the policies that matter most in this election, I mean, you just talked about Israel and you talked about the support on the

geopolitical stage. But from a tech standpoint, an AI standpoint, an investing or business standpoint, what matters most? Well, to normal people, the economy, the lack of jobs, as we saw the worst job report in like decades. You know, for example, when President Trump ran for reelection in 2020, the media highlighted that he only created 460,000 jobs in his last quarter. And that was considered a major disappointment. This administration had 12,000 jobs. Basically, the only jobs that are created in the United States these days are by the government, which is awful. And so I think if you're a normal person, you have to care about inflation and jobs in the future of the economy. Obviously, wealthy people in tech are going to be

fine. But I do have friends, family who are normal people, and I care about that. Secondly, immigration threatens everybody. Everybody is at risk with open borders, risk for terrorism, risk for murders. And we need to stop that. It's an insane policy that this administration has consciously decided to open our borders to basically the worst people in the world. The polls have been historically wrong for a number of election cycles now, or inaccurate or iffy, depending on which one you're looking at in the data, etc. You know, we just talked, we opened up this conversation talking about the fact that the initial data, the initial exit polling data is going to start at the top of the next hour. We

also know that typically tends to be inaccurate or can create head fakes. But what's new about this election cycle, arguably to me, is the fact that you have prediction markets in a bigger, much more meaningful way. And we've seen that have an impact on financial markets, too, coming into tonight. I just want to get your thoughts on the role that's playing and whether that's a role that continues to grow and expand, especially since there have been calls about manipulation and liquidity and the distortions we've seen there? Yeah, I think the future of prediction markets is quite exciting. And in four years, there'll be enough liquidity that they're very valid barometers of what's going on and what's not going on. This year, I think the liquidity is a little below where you want to see it. So, for example, I don't really look at the prediction markets.

I think they're too influenced by some individual trades right now. But given another 5, 10, 20x liquidity, I think it'll be the reason McRiles is very real. I look at things like, for example, Bitcoin trading or Coinbase's stock price, which are very liquid instruments. And, you know, they have very strong perspectives in the crypto world about what's going to happen under a Trump administration versus, you know, if she's elected. And so I look at those because there is liquidity there. But I think that they're probably too illiquid to really over rotate on the latest odds, latest probabilities moving. Keith, our boy. Great to have you on. Thanks for joining me.

Pleasure to be with you. We've got super micro earnings out and Seema Modi has the numbers. Seema. Morgan, these are preliminary first quarter results and Q2 guidance. Let's start with the guidance because that seems to be what is moving the stock here in overtime. It sees its second quarter adjusted EPS of 56 to 65 cents, which is well below the Wall Street estimate of 83 cents. So a big ouch there. Revenue for the second quarter it sees in the range of $5.5 billion to $6.1 billion, that to below Wall Street forecast of $6.86 billion. If we look at sort of the range that is providing for the first quarter, earnings of $0.75 to $0.76, that's sort of in line with what Wall Street was predicting. Revenues of $5.9 to $6 versus the 6.45 billion dollar estimate. So clearly numbers here

not looking great for Supermicro as it deals with these regulatory concerns. And on that, Morgan, following a three-month investigation, the company says, which was led by an independent counsel, the committee's investigation to date has found that the audit committee has acted independently and that there's no evidence of fraud or misconduct. The company also adds that at this time, it remains unable to predict when the company's 10K will be filed. We'll have more on this story as we watch shares fall here by around 8% in overtime. Of course, the larger story here is it's down about 70% from its recent high hit back in March. Morgan. So what is going to matter more on the conference call than for this name?

Is it going to be the actual fundamentals of this company or is it going to be the fact that we still don't have any timeline on that 10K? And obviously there's a lot of controversy and financial question marks that have been swirling in part, I think, causing that 70 percent drop from the highs. Absolutely. Since those accounting allegations were surfaced by Hindenburg Research back in August, we've seen the stock move lower. And of course, there's been reports of a DOJ probe. So I think investors want clarity on the call tonight at 5 p.m. Eastern Morgan. Has the company been able to secure a new auditor since Ernst & Young pulled out as the company's auditor?

And how are these regulatory concerns and accounting concerns impacting the company's ability to fulfill new orders? Now, just looking at the second quarter guidance, well below what Wall Street is expecting. So how much is that tied to these accounting concerns? And also the risks of a potential delisting. If the company is not able to secure an auditor and meet the compliance requirements of the NASDAQ by November 16th, there are concerns that the company will have to delist. A lot coming up in that hour.

Yeah, and of course, all the family ties across businesses that are connected to Supermicro as well. It's quite the web to untangle. Seema Modi, thank you. We have much more on the election ahead, including a conversation with Chamber of Commerce CEO Suzanne Clark on the biggest issues at stake for business. And be sure to keep it on CNBC all night for in-depth analysis of the election with the biggest thought leaders

on Wall Street and beyond. We've got that special coverage kicking off at 7 p.m. Eastern. And after the break, the CEO of Lumen Technologies, which has surged 300 percent this year as an AI play, breakdown earnings results and a new partnership with Google as those shares now turn lower by 7 percent. Welcome back. Shares of Lumen Technology is turning lower after an initial pop in overtime after reporting earnings and increasing the free cash flow guidance for the full year. The company also announcing a new partnership with Google Cloud earlier today. I spoke with Lumen CEO Kate Johnson in an exclusive interview today,

and I asked her about the quarter and the company's ongoing AI-driven transformation. The big story is that big tech is choosing Lumen to build out the trusted network, to be the trusted network for AI. They're asking us to expand the internet at large to support growth in AI. And networks of yesterday, they just aren't fast enough. They're not big enough. They're not smart enough. They're not secure enough. And Lumen is fixing all of that. And that's what we're talking about today. Okay. So talk to me about what that means in terms of deal flow. This morning, you announced a deal with Google Cloud. What does that bring to the table? So all three clouds now have come to the table to go long in partnerships with us. It's super exciting business, eight and a half billion dollars worth of deals just in the past two earning cycles to ask us to partner with them to build out network to support their ambitions.

So last time you and I sat down, it was after your last earnings and you had disclosed $5 billion in signed deals, another $7 billion potentially in the pipeline. Since then, we've seen a number of press releases go out with you disclosing some of those customers and some of these deals and partnerships. So where do you stand in that with that pipeline now? How much new deal flow have you seen since then? So more than three billion new deal flow since we talked last time. The first five providing ample liquidity to fund our transformation. So we're self-funding now. This next tranche of deals, the $3 billion, provides us enough cash to start to de-lever the company.

So we're investing in the future, redefining what networking looks like, not just for these hyperscalers, but for enterprises as well. They need to be able to consume network services in a fundamentally different way. They want it to be easy, quick, secure, effortless. And that's what we're building. So we just had Palantir report earnings and AI is driving such strong growth at that company. And what's notable about it is it's software, it's the application layer. And so it starts to, I guess, raise questions about how quickly we now start to see adoption in this next phase beyond the infrastructure build out. What are you seeing? So we think there are three phases. The first phase are the big software companies,

whether it's social platforms, the hyperscalers, cloud companies. They're all building and training AI models. They're seeing the data flows, and they're recognizing that the network's just not sufficient. It's a race for bandwidth. And again, they're coming to Lumen to say, help us expand the networks, but also help us make it easier to consume. And the second phase, we're starting to see, you know, little signals from the enterprises as well. They're starting to consume those AI models. They're using them and they're saying, wow, we need to upgrade our networks too. And so we're seeing

increases in demand for our higher capacity services from those enterprises. Phase one, the hyperscalers building out the infrastructure. Phase two, enterprises using the higher capacity services. We think there's a third phase on the horizon, which is when AI starts talking to AI and the data volume we think will go up parabolicly. What do election outcomes mean for this entire conversation? Look, we're a publicly traded company. Either outcome of today's election, we're prepared for. We think about tariffs. We think about taxes. We think about regulations.

I think what we want most is to ensure that we can continue to be fast and agile. And those are the outcomes that we're preparing for and staying close to it. Does the AI secular growth story continue no matter what the election brings? So I think the AI story is a multi-decade story. I mean, we're a critical infrastructure and these deals and partnerships that we have with the hyperscalers are multi-decade in nature. So yeah, this is a long game for sure. Anything short term is simply that. Lumen is very much a company in the midst of a major transformation. Its legacy business provides voice, broadband, other services to businesses and residential customers. That has been on the decline.

AI is now providing this new opportunity and realization for its fiber networks. As Johnson, the CEO, is building out and creating a digital layer on top of those networks and, quote unquote, cloudifying fiber. So it's one to watch and speaks to the massive moves we've seen in the stock as investors have clinged to that AI infrastructure transformation story. You can see shares of Lumen are down one and a half percent right now. Well, microchip earnings are out. And Seema Modi has those numbers. Seema. Quarterly numbers here, 46 cents adjusted, Morgan, on revenues of $1.16 billion. Not comparable

because numbers were positively impacted by a $13.3 million legal sentiment. A weak third quarter guidance. That's perhaps why shares are moving by as much as 5% lower in overtime. CEO Ganesh Murthy says it's navigating through an inventory correction that's occurring in the midst of macro weakness accentuated by heightened weakness in Europe. And he calls out two industries specifically, industrial and automotive, Morgan. We've heard this before. Yes, we have. Thank you. Well, it's time now for a CNBC News update with Pippa Stevens. Pippa.

Hey, Morgan. In a briefing today, the Cybersecurity and Infrastructure Security Agency said most of the issues at polling places today were, quote, largely expected, including as ballot printing errors and technical glitches. The agency also noted it was not tracking any significant incidents nationwide that would impact election security. Meanwhile, the FBI said the bomb threats at polling places in several states tracking any significant incidents nationwide that would impact election security. Meanwhile, the FBI said the bomb threats at polling places in several states came from Russian email domains, but the threats were determined to be non-credible.

While the agency did not identify which states received the threats, Georgia's Secretary of State said earlier today the state received several that came from Russia. And Rudy Giuliani showed up outside former President Donald Trump's polling place in Florida. In a car, he was told to surrender to two election workers he defamed. A judge ordered Rudy Giuliani to appear in court Thursday after he missed a deadline to turn over his possessions in his $148 million defamation judgment, which includes the 1980 Mercedes-Benz previously owned by actress Lauren Bacall. Morgan? Pippa Stevens, thank you.

Up next, much more on Supermicro's earnings sell-off. Mike Santoli gives us his take on that disappointing guidance. And later, Chamber of Commerce CEO Suzanne Clark on what she says is the single most important business issue the next administration will face on day one. We have an earnings alert on Exact Sciences and Julia Borson has the details. Hi, Julia. Shares of Exact Sciences' maker of cancer screening tests are plummeting, now down 28 percent after the company reported a revenue miss and cut its full year guidance. The company's loss of 21 cents per share was right in line with expectations, revenue of $709 million, short of estimates of $718 million. The company also cut its guidance for full year revenue as well as full year adjusted earnings.

And you see shares now still down around 28 percent. Morgan. All right, Julia. Thank you. Huge move. Well, let's get another check on Supermicro because that stock is falling as well after giving soft guidance. Mike Santoli joins us now with his take. Shares are down 9 percent, which is on top of all the other big moves lower we've seen in recent weeks.

Exactly. Down some 75 percent off its highs. Now, the company said, of course, the actual revenue and the guidance somewhat of a shortfall versus estimates, that's not the big story. They did say the internal investigation is no signs of fraud by the border management, but it's kind of a triage operation from here, right? You have to file that overdue 10K. You have to obviously avoid delisting by

the NASDAQ. And then, you know, secondarily to that is, remember it went into the S&P 500 like two quarters ago, SMCI did. And if it doesn't, if it stays in there, fine. If it doesn't, I don't know, 15, 17 percent of the stock is held by the index fund. So there's a lot to get through. That being said, I think for me, for an investor, as you look at what's real in terms of the revenue and the earnings power, because right now, estimates are three bucks for this fiscal year in earnings, four bucks next year. It's a $25 stock right now. It would not trade here if anybody thinks those earnings are close to being what the real business is producing. You can argue saying that with a number of these companies that I realize Supermicro, very specific story. We're talking about accounting issues and other possible

conflicts of interest, et cetera. But I look at Lumen up 300 percent this year. I mean, you look at Palantir, which has been a huge high flyer this year as well. There's a number of them. I'm not putting them all in the same bucket as Supermicro, but I am pointing them to say that investors have been very excited about anything that seems to be levered to this broader AI build-out story. No, exactly. And there was a scarcity of ways to play the theme outside of NVIDIA and a couple of other semis. And so people grabbed at what looked like it was basically catching that same tailwind. Obviously, Supermicro, different story. And a lot of the allegations around it have been about revenue recognition or related party transactions, which means you still don't necessarily have clarity on how much of the sales run rate is sustainable and genuine. So that, to me, is the big overhang.

Meantime, NVIDIA market cap higher than Apple's now. Yeah, exactly. I mean, it was maybe just a matter of time, but we'll see if that can hold. You know, Apple keeps buying in its shares, so we don't even know right now if Apple's market cap is as high as its last reported share count. All right. I'll leave it to you to give us the context. Mike, thank you. Up next, U.S. Chamber of Commerce CEO Suzanne Clark on how tax policy and regulations could impact businesses,

depending on who wins the race for the White House and Congress, too. Don't miss all-night coverage of the election right here on CNBC, featuring some of the biggest names on Wall Street. It all starts at 7 p.m. Eastern, live from the New York Stock Exchange. Stay with us. Welcome back. Palantir powering the S&P 500 hires today after the company's AI traction across both commercial and government. Customers propelled earnings results. CEO Alex Karp telling me yesterday he expects adoption to continue no matter the election outcome. Now, for the defense sector, more broadly, spending tends to be bipartisan. Heightened geopolitical risk provides support. And China is seen as the pacing threat that will continue regardless of the election outcome. That said, analysts presenting a Harris administration as the consensus best case scenario for investors. Why? Well, it's expected she would continue current policy, which includes supplementals. And if you

get a Republican Senate as well, well, that could spur even higher defense spending, since Senator Roger Wicker, who's an ultra hawk on the defense side, would become chairman of the Senate Armed Services Committee. Jeffries writes the biggest difference between Trump and Harris is support for U.S. allies, that there's elevated risk to ongoing supplementals under a Trump administration and broader uncertainty with regard to alliances. Capital Alpha partners also noting the role of Elon Musk in a Trump administration could be a wild card for large U.S. primes and federal defense services, especially if he is in fact tasked with slashing government spending. Defense could be on the table there.

Cowan, though, is betting on, quote, two bedrock assumptions, that DOD-based defense spending will not be cut under any scenario and that global defense spending will continue to increase due to geopolitical risk. And the defense industry is just one piece of the puzzle for investors. Business issues like taxes, tariffs, the deficit regulation, those are all front and center and on top of mind for voters. So joining us now is U.S. Chamber of Commerce CEO Suzanne Clark. Suzanne, it's great to have you back on the show. Hi, Morgan. There's so much for us to talk about, but I'm going to start with policy issue number one,

because there is an actual deadline for something to get done, and that is tax policy. What needs to happen in this next year, regardless of who wins the White House and who wins the Congress? Great question. It's our number one priority, and it's our number one priority because, as you said, we've got this looming tax cliff, right?

Our main priority is preserving the pro-growth tax provisions from 2017, and our main concern is that fully 60% of the House of Representatives won't have been here when it happened in 2017. It means a lot of education on our part. You know, it's kind of easy to understand the impact of an individual rate cut, but it's harder to understand the impact that the corporate rate, that things like R&D, expensing, tax credits, et etc. have on small and large businesses and their ability to create jobs, raise wages, and be innovative.

And so that falls to us. And we've got a coalition of 600 people meeting on Friday to look at the new government and figure out the best way to start educating policymakers. So a coalition of 600, what are you hearing from your constituents about what they would like to see in terms of that tax policy? You know, the number one thing that we hear is how to make sure we're focused on pro-growth policies. That's the corporate rate.

That's the pass-through rate. And it's things that really help capital investment, like the R&D spending. So we hear the same things. And then the trick will be to hold together as a coalition and to make sure that all these new members of Congress understand what's at stake. Trade and tariffs very much on the ballot here. And although we talk about sort of the big tariff rhetoric that's coming out of the Trump campaign, tariffs are something that have happened under the last two administrations and are expected, at least to a certain extent, I realize the devil's in the details, are expected to exist potentially no matter who wins the White House. How does that play out? Look, it's a broad topic, right? And if you look at trade generally, we haven't heard much

from either campaign about how they think about opening markets. Forty million American jobs depend on trade. We hear from small businesses and farmers every day that want more markets to trade into. So number one, we want trade to be a broader agenda item and are hoping that we can get the next president to focus on it because you're right, we haven't seen a great trade agenda in a couple of administrations. To your point on tariffs, look, tariffs are fine as a narrow tool if you've got a dumping problem or a narrow national security you've got a dumping problem or a narrow national security interest that you're trying to protect. But as many of your guests all

day today have been saying, a tariff is really a tax on the American consumer at a time when they're screaming about prices and inflation. Broad-based tariffs are bad for the American economy and maybe worse, they're bad for American manufacturers. Fully 50 percent of our imports are inputs into manufacturing. So think about how uncompetitive that makes an American manufacturer against a foreign competitor. As we have this broader conversation, slow growth is something that you're pointing out when I look through my notes, too, which I think is pretty interesting because so far the economic data has been relatively strong, relatively resilient. We saw it today with ISM services data and certainly all the chatter among economists that we're seeing a soft landing or possibly even no landing. So how much now hinges on policy

looking to 2025 and beyond when you are having these conversations with CEOs and businesses about a slowing growth environment? I think you're right. Look, if we're looking at 2.8 percent in the last quarter, that's the envy of the world in a lot of ways, and that's good. But we're more worried about the long-term projections that say that growth is going to normalize closer to 2 percent. That's dangerous. It's dangerous for the American family, for the American business, and even for our own national security. What we worry about in terms of growth policy

is everything from trade, as we talked about earlier. We're worried about AI. I think we don't talk enough about the promise of AI, and we have a lot of fear-mongering, so we worry about a heavy-handed approach. We worry about a heavy-handed approach and regulatory environment more broadly. What can we do to stimulate American innovation, which is the best in the world, instead of fear-mongering and being afraid of it

and regulating it to death? So these inputs that could make our great economy stay strong for a long time shouldn't be taken for granted. And frankly, we're not hearing enough from elected officials about what they're going to do to get America growing for the long term. All right. We just scratched the surface. Suzanne Clark, so much to talk about. Appreciate your time today. Thank you.

Thanks for having me. Up next, all of the after hours earnings actions that you need to know about as we await Super Micro's analyst call at the top of the hour. And check out shares of Celanese as the worst performer in the S&P 500, the chemical materials company missing Wall Street's earnings estimates and slashing its dividend by 95 percent because of weakening demand in its auto and industrial businesses. Welcome back. Let's check on our overtime movers. Super micro shares. Those are tanking. Second quarter earnings and revenue guidance coming in well below expectations. Microchip is lower after gross margin guidance came in below estimates. Those shares are down 4 percent. And we'll just get another check on exact sciences. Falling off a cliff after missing on revenue and cutting its

full year earnings and revenue guidance. Those shares are down 28 percent. Well, up next, why housing affordability in three swing states could play a big role in who wins the White House. And don't forget, you can catch us on the go by following the Closing Bell Overtime podcast on your favorite podcast app. We'll be right back. Welcome back to Overtime. Housing affordability could play a big role in today's presidential election. Since owning is no longer cheaper than renting in most of the country, that's a big change from just four years ago. Diana Olech has the details. Hi, Diana. Hey, Morgan. And we know it mattered to at least 40 percent of early voters who said housing affordability influenced their choice. That, according to a new report from Redfin, a larger share of Harris than Trump voters said it was a factor.

So let's look at how affordability has changed in the last four years. First, as you talked about that own versus rent equation. In November 2020, it was cheaper to own than to rent a home in the vast majority of the country. That just flips on its head today. Home ownership is now much more expensive due to the sharp increase in home prices fueled by the pandemic and all its initial record low mortgage rates and sudden migration. Home prices now about 45 percent higher than they were in 2020, according to S&P K. Schiller. Rents also rose during that period, but they've been coming down recently due to that oversupply of apartments. Now let's go to the battlegrounds. The share of income needed to own a home today has at least doubled since 2020 in four out of the seven. Arizona has seen the smallest change. Now, these are the three states

where it is least affordable to own a home, and Georgia's not far behind. On the rent side of that, North Carolina saw the biggest jump in the rent burden, while Nevada's rent burden actually came down. Both Harris and Trump agree housing costs are too high. Harris has proposed building three million new housing units with an expansion of the existing tax and new credits for builders. She's also called for a home buyer tax credit, as well as rent caps. Now, Trump is less specific, but he has called for opening more federal lands for housing and cutting back regulations to make home building easier. Trump has also said he'll lower mortgage rates. But Morgan, as you know,

presidents don't set interest rates. We know. And of course, we get a Fed policy meeting later this week. So that'll be another thing to watch in an already busy week. Diana, what's interesting to me, too, is that you have a number of key ballot initiatives that are also being voted on today and policies like rent control, homelessness, policing as well. It all speaks to, again, this broader housing dynamic and shortage that we're seeing in the country. So I guess it raises the question, how quickly can either candidate or any policy actually fix the dynamic that we do see, the mismatch between supply and demand? Well, a lot of it, of course, is going to depend on congress and what we see the outcome of the election is in congress because a lot of these measures would

have to be passed by congress especially the tax relief but as you say you know all these ballot measures are out there because housing affordability is so key to all americans really we're seeing as we showed you those numbers that that share of income that's needed for either rental housing or homeownership is just so much higher than it is not just four years ago, but historically. And that's why they're looking for change. All right. Diana Olick, thank you. It's really interesting. We'll see how all of this plays out. And of course, major averages having an up day, as we've seen in the last five presidential elections with all the major

averages up more than 1%. Exit poll data starts to come out now. That's going to do it for us here at Overtime. But fast money begins right now.