Closing Bell - Closing Bell Overtime: Michael Saylor On Bitcoin's Rise; Emerging Markets Under Trump 11/14/24

Episode Date: November 14, 2024

The second straight down day for markets as the post-election rally breather extended into Wednesday. Charles Schwab Asset Mangement CIO Omar Aguilar and Evans May Wealth's Brooke May break down the market action. Calamos Investment Management co-CIO Nick Niziolek on how to invest in emerging markets under the second Trump administration. Microstrategy's Michael Saylor on bitcoin's surge, his stock's run and what's ahead for crypto.

Well, that bell marks the end of regulation. Cinemark ringing the closing bell at the New York Stock Exchange. The Global Semiconductor Alliance doing the honors at the NASDAQ. And stocks broadly pulling back today, especially in the last hour, with nearly every S&P 500 sector lower. Small caps falling more than 1%, as Fed Chair Powell says the Fed doesn't need to be in a hurry to cut rates. That's the scorecard on Wall Street.

But winners stay late. Welcome to Closing Bell Overtime. I'm John Ford with Morgan Brennan. Well, coming up on today's show, a can't-miss interview with Bitcoin evangelist and MicroStrategy co-founder Michael Saylor, whose stock has skyrocketed since the election as Bitcoin scales new heights. Plus, we are following the latest stock moves from Wall Street's biggest investors as 13F filings roll in this hour.

We're going to bring you those breaking headlines as we get them. And we will get earnings from $150 billion chip equipment supplier Applied Materials. That's due out in just moments. Well, let's get to our market panel. Schwab Asset Management CEO and CIO Omar Aguilar and Evans May Wealth Managing Partner Brooke May. Guys, good afternoon. Omar, Fed Chair Powell today emphasizing that the Fed doesn't need to be in a hurry to cut rates. The market immediately went to the day's lows and closed near there. You're already saying a December pause might be reasonable. I think Steve Leisman was just telling us it went from, let's see, the likelihood of a cut in December went from 75 to 61 percent. Does anything in the chair's comments shift anything for you?

Definitely, Hakeesh, and I'm not surprised in terms of the level of confidence that the Fed has, you know, going into this. I think, you know, the results of where we are now has provided the Fed with even more options and more time. You know, we have been discussing this a long time ago that usually the Fed, you know, tends to take the elevator when they raise rates and take the escalator when they reduce rates. And this is a clear example that just by looking at the combination of potential policy implementation on the new administration,

the potential that may have in terms of growth and inflation, and also the data that we just received today, you know, clearly, you know, lowers the odds of a cut. You know, we we are still looking and this is the key component to it on what would the Fed think about the neutral and the terminal rate? You know, the market seems to be moving in that 375 to 4 percent. You know, clearly, that's the path that I think the Fed has wanted to go. And I think, you know, taking it slow is certainly the message that we got from Jerome Powell today.

Well, hold tight, folks. Applied materials, results are out. Initial move is lower by about 2%. Steve Kovach has the numbers. Steve? Yeah, John, and that's despite beats here in the top and bottom lines. We're looking at a beat on earnings,

$2.32 adjusted. Street wanted $2.32 adjusted. Street wanted $2.19 adjusted. Revenues just slightly above estimates here at $7.05 billion. Street was looking for $6.95 billion. We see shares off about 4% here. We'll dig into what the guidance and so forth looks like, but that's what we have for now, guys. Up, looks like it's down about 4%. Oh, down, sorry. Yeah, yeah. Okay. Just to make sure we're looking at the same chart. Down a little 4%, sorry. We'll figure that out, Steve. Thanks. Thanks. Brooke May, your take on these results so far, it looks like, you know, not a big beat on the top line, but the bottom line was what the street was looking for. I guess the

guidance is important here, the overall environment. Yeah, right now you look and they're down 27 percent from their high in July. And so clearly there's pressure that's being applied to the stock. And when we look at their competitors who, you know, Lam Research and Teradyne, they both beat on revenue growth. However, their stock performance was mixed. So right now, with the pressure that the stock is under, we think that there's a lot of uncertainty. When we look at the House Select Committee sending out letters to Applied Materials and their competitors last week, wanting to know who their customers are and what their sales volume is, there's a lot of uncertainty in what's going to come in the way of tariffs and the way of exports.

So we're going to keep an eye on it. And right now, we wouldn't add to the position. OK, Omar, I want to get your thoughts on the fact that we're seeing a lot of push-pull in the market here. And yes, in the last hour of trading, you saw the major averages all move lower. And perhaps some of that has to do with options expirations for SPX and NDX as well. But in general, there's a lot of tailwinds in this market, whether it's seasonality, whether it's the FOMO and animal spirits associated with the Trump administration taking the helm in January, whether it is earnings that, for the most part, have held up resilient economic data. On the flip side, also some concerns about future Trump policies, a Fed that maybe is not going to cut as quickly as everybody was assuming even just a couple of weeks ago,

and dollar strength and also valuation. So in light of that, where do you invest in this market? Where do you find opportunities? Yeah, we have been, you know, very clear with our clients here at Schwab that, you know, at the end, you know, this particular moment should not change, you know, your long-term, you know, investment objectives and should not change the way you position your portfolio. But it does provide opportunities to reassess, you know, where your exposures are today. You know, we know that, you know, over time,

you know, we have, you know, created exposures and a lot of the things that we have, whether it's a large cap or whether it's domestic versus international, growth versus value, this is a great opportunity to just rebalance the strategies and reassess where the risk might be. Specifically, when you think about risky assets, you know, what we know for sure is that, you know, with any changes in policies going forward, we're potentially going to have a slower rate of rate cuts. And what that means is that we went

from, you know, asking and looking for opportunities to extend duration in fixed income to basically now stay flat to our duration, because we think that there is a probability that yields will actually go higher as opposed to lower, given what the prospects are or economic growth and what the prospects are on inflation. With respect to equities, clearly, you know, broadening of the market, I think we saw, you know, what happened after the election in terms of small cap performance, in terms of cyclical performance. Again, this is a great opportunity to just reallocate between growth and value in areas that we normally see in the early part of the business cycle. So rebalance,

you know, going towards cyclicals, towards the early part of the cycle and be a little more neutral, a little more, you know, risk control in terms of your fixed income allocations. Brooke, I'm going to ask you the same question, especially as we do see the 10-year Treasury yields move higher and we do have an S&P 500 that's trading at more than 22 times right now. Yeah. You know, right now, we're not surprised that the market is trading at elevated levels. And if you can go back to 1996, Greenspan used the word irrational exuberance. And the next four years, the market moved higher, 20% or more each year. So we think that we're in an environment with a lot of optimism. And when we've got low unemployment, deregulation on the horizon, potentially a lower corporate tax rate, the economy growing at two and a half to 3%,

and a tremendous amount of cash on the sidelines. We think that that could all push the market higher. And we are we've raised our price target to six thousand and we wouldn't be surprised if we raise it higher going into next year. OK, we'll be looking for that. Brooke May, Omar Aguilar, thanks for kicking off the hour with us. Well, now let's bring in Mike Santoli for a look at what else is falling on this down day for stocks. Mike. Yeah, Morgan, looking at a couple of intermarket relationships and how they had dramatic moves following the election and maybe show some signs of retracing a little bit. So this is the ETF that tracks the S&P completion index.

That's everything in the stock market aside from the S&P 500. And then, of course, comparing it to the S&P completion index, that's everything in the stock market aside from the S&P 500. And then, of course, comparing it to the S&P 500 itself. You see that that broader and somewhat lower quality index had lagged for a while. And then you see it just shoot higher. So that's a risk appetite play. That's a short covering play. That's a reflation type play. And all of the things that we expected that might come along with this anticipated policy mix gets quickly reflected in stock prices. And then they sort of retrace a little bit.

That's the mode we've been in all this week. I've been calling that a button hook pattern where you just sprint down the sideline and then curl back. Question is how far back you have to come in there. So if you think that high quality is still the place to go, this market's giving you a chance to reload on that trade. Or maybe it's going to be kind of giddy times ahead. And that's the VXF. Take a look here at gold versus the dollar as well. Pretty stark reactions here right after that decisive election result. You see gold coming hard down. And this is, of course, just a six month chart. So it's been in a very strong uptrend. It's just kind of correcting a little bit. And then the dollar index accelerates higher, as, of course, we're also getting some of those expected rate cuts pulled out of market pricing.

Earlier today, it showed signs that these might be kind of these moves might be tiring out. You did have the dollar hitting some resistance and you had gold have a bid. And then you had the Powell comments and it sort of just essentially accentuated that trend. So on a six month basis, coming from different directions, they come to the same spot. That is a great chart right there. And you do have to wonder whether it stays that way if you see tensions flare between the U.S. and China, where you have countries like China that have been stockpiling gold and shifting away from dollars and U.S. treasuries in the process. That said, the other trade that seems to be so hot right now, Mike, and I want to get your thoughts on it, has been this idea that the euro is going to fall to parity

with the dollar. Yeah, I mean, it's a corollary to what's going on in terms of kind of U.S. dominance in general. And, you know, whether it's monetary policy, fiscal stimulus, or just being a destination of capital, I am alert to the idea that maybe the consensus has gotten a little crowded on bearishness on the euro. In fact, I saw some numbers today, even though the European economy is not doing great, their economic surprise index is actually perked up a little bit. So it's hard to know whether, in fact, it's going to be a straight line back toward parity, as some people are betting right now. All right. Mike Santoli, thank you. See you in just a little bit. Now we've got breaking news on the Trump transition. Eamon Jabbers has the details. Eamon. John, that's right. We've got a post now from Donald

Trump Jr. on social media saying that Robert F. Kennedy Jr. will be the next secretary of health and human services. The post from Donald Trump Jr. says promises made, promises kept, and features a number of pictures of himself with RFK Jr. RFK Jr., clearly a vaccine skeptic, somebody who's been accused of being a conspiracy theorist, someone who's very skeptical of modern medical science in general, skeptical of fluoride in the water, saying that it causes health damages to children, will now be in charge of HHS, which has a $1.6 trillion budget. It oversees the Food and Drug Administration. It oversees the National Institutes of Health, Medicare and Medicaid.

Most of that budget is what they call mandatory spending in Washington for Medicare and Medicaid recipients. So a massive, massive organization now, according to Donald Trump Jr., to be overseen by Robert F. Kennedy Jr. John, back over to you. All right. Eamon Jabbers, thank you. Well, we're just getting started here on Overtime. Up next, more on today's earnings action when we get an analyst's first take on results from Applied Materials, as those shares are down about two and a half percent on a Q1 revenue top line guidance miss. And later, MicroStrategy co-founder and executive chairman Michael Saylor on the massive jump for Bitcoin and other cryptocurrencies since the election. What he's expecting for the space during the

second Trump administration. Overtime is back in two. Welcome back. Shares of Applied Materials are pulling back in overtime. Despite beating on the top and bottom lines, Q1 revenue guidance came in a bit light. So let's bring in Morningstar analyst William Kerwin. Great to have you on. Shares are down about 4% right now. Is this what's leading to the pressure that we're seeing in the initial response to this report? It looks like it. It looks like guidance might have been a little bit light for the market on the January quarter to come, but really we like these results. We think this shows continued positive momentum for applied materials, demand for chip equipment more broadly. So we think the sell-off is modest. Maybe guidance was a little bit light, but overall, we think the print looks good on first blush.

Okay. Read-through here. Do we have one yet in terms of how AI is propelling demand for the company? Well, we think AI is propelling demand for applied materials, but really their customer base is a lot broader than that. AI is a big driver currently. It's getting a lot of the airtime, but they're exposed to the entire semiconductor industry. So whether that's leading edge chips for AI, whether that's memory, which is both in AI and outside of it, or what we call lagging edge chips for automotive and industrial applications, we think everything's pointing green for applied materials right now. Well, lots of questions about what an incoming Trump administration will do with China policy. How much exposure does applied materials have based on that? So we think their normal mix into China for revenue is about 30 percent. Now, this has been

high over the past four quarters, we think because Chinese customers have been overordering in the worry of facing tighter sanctions in the future. So this has been trending towards even close to half of sales over the past four quarters. We think that'll tick back down to that normal level. But ultimately, that 30% exposure we don't see at massive risk. A lot of those are for lagging edge applications, like for auto chips, for industrial chips. They're not selling into AI or advanced applications here, but 30% is the headline number. We don't see it at massive risk. So is that pull forward priced in? Because it sounds like whether there's a surprising move

from the Trump administration on China policy or not, there could be a slowdown in applied material sales if the Chinese buyers have gone ahead and bought early. We think it is priced in. It's certainly priced into our valuation at $193 a share. Really, the mix is difficult to parse out here because applied materials is going to be growing in these other markets. So the way that we see this happening is China revenue is not necessarily going steeply down, maybe coming down a little bit, but more than offset by the growth in the United States, in Europe, in other portions of the world. So higher growth in other regions will lead that mix to come down, but we don't think it'll look like a sharp drop-off. All right. We'll have to watch the call on that one.

William Kerwin, thank you. Well, the 13F for David Tepper's Appaloosa is out. Our Leslie Picker has details. Leslie. Hey, John. Yeah, I look at this 13F, and I just see a lot of selling across the board. Adobe, that position slashed by 44%. FedEx, down by 32%. Meta also down by about a third. Microsoft slashed by 18%, selling a bit of Alibaba, Alphabet, Amazon, Baidu, Chesapeake, Energy Transfer, EQT, Micron, and more selling out of Boeing. You kind of get the picture here,

but there were actually some sizable additions as well. PDD Holdings nearly tripling exposure there and JD.com up by 69%. And Appaloosa's stake in Lyft doubled to about $200 million during the quarter. And the firm bought new smallish for the firm stakes in Las Vegas Sands and Wynn. Now, a reminder, guys, these are as of the end of September. They may have changed in the six weeks since. But again, a snapshot from Apple, who says 13F filing that crossed moments ago. Interesting, especially because Adobe, for one, just moved above its late September levels over the last few days. Leslie Picker, thank you. We'll look forward to more from the 13Fs. Well, emerging markets have significantly underperformed the S&P 500 since Election Day as investors weigh the impact of

tariffs. Up next, the chief investment officer of global investment firm Kalamos, which has $40 billion under management, is going to outline one part of the world that could stand to benefit. And later, Bitcoin pausing its furious rally today, but it's still up nearly 30 percent since Election Day. Major Bitcoin holder Micro Strategy is up even more. We will talk to Micro Strategy co-founder and executive chairman Michael Saylor about what a Trump Leslie Picker for those details. Leslie. Domino's Pizza, worth about half a million dollars, or sorry, a billion dollars at the end of the quarter, worth about $549 million, buying 1.3 million shares in Domino's. You can see those shares up about 7.6% in after-hours trading, as well as a new stake in Pool, that one a bit

smaller, worth about $152 million, 404,000 shares there, but that also getting a boost there up about 5.5% on this revolution. Also in Berkshire's 13F filing, a disclosure selling out 96.5%, almost the entire stake in Ulta Beauty, now holding about $9 million worth of those shares. So kind of an interesting three kind of stock disclosure here. We're still reviewing the rest of the filing. We'll let you know if there are any headlines, but wanted to bring you those movers. And just a reminder, of course, these are as of the end of September. May have changed in the six weeks since, but certainly getting a reaction in the markets today, guys. All right, Leslie Picker, thank you.

So let's bring in Mike Santoli for reaction here. Mike, we got makeup out, pools and pizza in. Pools in particular to me, because this is a name that's been pretty hard hit this year, feels like an indirect play on housing and real estate. Well, for sure. And in that respect, it fits in with a lot of other assets that Berkshire Hathaway already owns and has owned. I mean, Clayton Homes, Benjamin Moore, the Sheetrock Company, lots of construction and housing related. So there's a little bit of a linkage, not to say it's really synergistic, but they know the space remains to be seen if that means it's going to be

a bigger bet. It's relatively small in the context of the old Berkshire portfolio. Domino's is pretty interesting, obviously a very high quality, durable consumer brand. That's the sort of thing on a staples level that Berkshire has focused on. The stock is off of its highs in terms of valuation. Again, half a billion dollars, not huge in the context of Berkshire, but not trivial relative to the size of Domino's, which I think is like a 15, $16 billion market cap. Yeah, I wonder, would you look at that as a consumer call or just sort of unique to how good Domino's has been operationally, given that the stock since mid-year really hasn't performed well? I would view it as just opportunistic and, you know, essentially because of the quality of the business,

it might have been on the radar for a while because you never know who the decision makers are necessarily behind any of these buys or sells, whether it is Warren Buffett himself or some of the investment heads. But nonetheless, I don't think they're playing, you know, the earnings revision cycle or this particular phase of consumer spending. It's much more about, you know, owning a piece of a business that they think can be around for a very long time. All right. Mike Santoli, thanks to you in just a bit. Well, global stocks have been sitting out the rally since President-elect Trump's victory last week as his America First agenda has sparked fears that tariffs will hit emerging markets. Joining us now is Colombo's co-CIO, Nick Nizilek. Colombo's is a global investment firm with nearly $40 billion under management. Nick, given what we're facing

from the looks, at least, of an incoming Trump administration, is China pessimism overdone or about right? You know, I'd say compared to where we were eight years ago, you know, we're in a much different position. So obviously, as you mentioned, we're in this transition period. It remains to be seen exactly what is put in place. But that being said, we've already seen several China hardliners in prominent roles. So, you know, but that being said, comparing to where we were eight years ago, I would say that the skepticism around what President Trump will actually do and what this administration will do around China is a lot less than it was back then. I think the consensus is that we will see

more tariffs, but we'll see a tougher stance. And therefore, that's already kind of somewhat priced in the market. I'd also say compared to eight years ago, supply chains have already begun to reorient. So we've seen this front shoring, we've seen this near shoring initiative. And as a result, supply chains are a lot more flexible. China GDP is less than 3% exposed to U.S. exports now, so less significant than it was before. And sentiment is a much different place, right? So eight years ago, we had China stimulus that was really leading markets to 52-week highs. Today, it's the exact opposite. China equity market's sitting at 52-week lows, sentiment at what looks like all-time lows. So I'd say given the current expectations,

the current sentiment, I think the risk is actually to the upside. If the worst case scenarios don't bake in, we could see a risk out rally here. So maybe the answer is none of the above, but for the folks playing at home, looking at ETFs in emerging markets, for example, is it more China versus India or China versus U.S.? So would a China ETF be an India market hedge or an S&P hedge? I think you hit it on the head. It's definitely more a China versus India at this point in time. We definitely have seen capital flowing into India quite strongly over the last four to five years. At the same time, we've seen it flowing out of China. And as we look forward, I think you're going to continue to see that kind of relationship hold up where as China does better, maybe some capital

moves out of India and vice versa for short term moves. But when I think about the long term, I think there's opportunities in both markets. And I think that, you know, we could see a situation again in the coming years where we get more clarity around tariffs, more clarity around U.S.-China relations. And that's an opportunity for both markets to really see better days ahead. It seems to me one of the biggest wild cards here is Mexico, because you have USMCA. Mexico has surpassed China as the U.S.'s largest trading partner, as we have seen this deglobalization, supply chain diversification. India, too, I realize. But Mexico is also the neighbor to the South and the one that

President-elect Trump has basically said, we're going to start closing some of these trade loopholes so players like China can't start dumping their products in through Mexico and bringing them in through the so-called backdoor. So I wonder whether you think that's investable, especially as you do see quite a few moves tied to the so-called Trump trade around the peso. Yeah, no, I would agree with you. I think Mexico is a greater risk during this term of this administration than it was over the last period. I think they have been a great beneficiary of this reshoring and friendshoring initiative. And I think some of those loopholes may be closed. And so that is a market that we're definitely more cautious on.

Whereas on the flip side, what we see in India, what we see in this kind of made-in-India phenomenon, I think we're much more confident with the outlook there and kind of the upside in that market. How much does all of this hinge on a dollar that doesn't continue to strengthen? I think a weak dollar is definitely beneficial to emerging markets. But that being said, it's not the only factor. So it's the reluctantly strong dollar or the resiliently strong dollar has been an impediment for EM returns and overseas market returns. And we would definitely favor a weaker dollar environment for that. But that being said, you know, there's other factors as well. And that could be the relative valuation opportunities we see there, the stronger earnings growth that we're starting to see in some of these

areas, and that ultimately, emerging markets can do well in a more benign dollar environment as well. Okay, Nick, thank you. We just took a trip around the world. Well, Pershing Square's 13F is out, and let's get back to Leslie Picker for those details. Hi, Morgan. Yes, Bill Ackman's firm, Pershing Square, building positions, two new positions from last quarter, building throughout this most recent quarter. One of those is Brookfield. Last quarter had about a $285 million stake. That has since been boosted. Of course, the shares have moved, too. But now that stake is worth about $1.7 billion as of the end of the quarter, as of the end of September. In addition to that, Pershing Square boosting its stake in Nike by

about 436% to hold about $1.4 billion in Nike by the end of the quarter. So some interesting moves, clearly building on some stakes that were acquired during the second quarter of the year. But you can see those shares up about 0.4 percent each in after hours trading, guys. All right, Leslie, thank you. Well, now let's get a CNBC News update with Kate Rogers. Kate. Hi, John. Sources tell NBC News the U.S. ambassador to Lebanon submitted today a draft proposal for a truce with Israel. No word on what is in that proposal. And the U.S. embassy in Beirut has yet to respond. The U.S. has been trying to broker a ceasefire deal between Israel and Hezbollah since Israel stepped up its air and ground operations in September following

clashes at the border. The FBI arrested a Houston man on charges of attempting to provide support to a terrorist organization. According to the FBI, the suspect told agents he offered his home to ISIS operatives as a, quote, safe sanctuary and wanted to commit a 9-11 style attack on the U.S. If convicted, he faces up to 20 years in federal prison. And the CDC and the World Health Organization warning today global cases of measles have surged 20 percent in 2023 to an estimated 10.3 million. The health organization said of the more than 107,000 people who died of the disease, most were young children. They warned that the decline in vaccinations is due to either

a lack of access or misinformation about vaccine safety. Back over to you, John. Ties back into the appointments news or nominations that we got earlier this hour. Kate Rogers, thank you. Well, up next, just how much waste can be cut out of the government. Mike Santoli has a look at two measures of federal spending and where Elon Musk might look for cuts. And check out Palantir moving higher right now after the company announced it will transfer the listing of its Class A shares to the Nasdaq from the New York Stock Exchange. That is starting November 26th. The company says it anticipates meeting the eligibility requirements to join the Nasdaq 100 index. Shares are up almost 4%. We'll be right back.

Welcome back to Overtime. Mike Santoli returns with a look at government spending and employment as an incoming Trump administration looks for cuts. Mike? Yeah, John. And of course, everybody knows that the federal deficit relative to the size of the economy has been trending in a pretty extreme direction, mostly due to the pandemic. And before this, you see, of course, the global financial crisis as well. A lot of that is mandatory spending related to an aging population. Then you have on top of it the Inflation Reduction Act, Spending Chips Act, other programs and lower tax rates that keep revenues from making up the difference. So we're tracking in this between six and seven percent of GDP in terms of the federal

deficit right now. You can grow faster and maybe mitigate that a little bit. And really, we're not that far from levels where it was kind of prevailing in the mid 80s before you had a tax reform and a booming economy that got this back toward balance. And then if you want to talk about employment, I think there's this kind of glib sense out there that there's just this vast army of federal employees and it's really not doing a whole lot. The bureaucracy is overgrown. Well, this is federal civilian workforce relative to all employees in the United States,

relative to total nonfarm payrolls. This goes back some 60 years. And we're kind of bumping along the bottom end of the range. Why? Of course, the private sector grows much faster than employment in the federal government does. Also, state and local government employ six to seven times more than the federal government. The federal civilian workforce, 60% of it is Veterans Affairs, Defense Department, and Homeland Security.

So the idea that it's really easy to make big cuts just based on personnel, probably not that easy, John. Yeah, and there really isn't that much easy to cut outside of entitlements, which we know aren't easy, and social safety net. And when you've got control of both houses of Congress and the presidency you know the tendency is to spend not to cut that has been the tendency now that being said of course there are lots of contractors and their employees are not counted in this and in fact the defense stocks were down like 3% today as a lot of this got into the air and other government contractors also so it's not

just that you know we're only looking at the stuff we can't actually make a dent in. There's a general sense out there that you can knit around the edges of it. But again, the idea that somehow it's just easy to lop off a big pile of headcount and you solve the problem is a bit tough. Yeah, there's a lot you can do on the government contracting side. And case in point, as you just mentioned, defense, but also health care and other areas potentially within the federal government. So we'll see how all of this shakes out. Mike Santoli, thank you. Bitcoin up nearly 30 percent since the election, but it's pulling back from yesterday's record levels. Up next, MicroStrategy co-founder and

executive chairman Michael Saylor on how far crypto can rally under the incoming Trump administration. And check out shares of WIN, one of the big winners in the S&P 500 today. Billionaire investor Tillman Fertitta revealing he has now a nearly 10% stake in that casino operator after acquiring a 6% stake two years ago. And cue the QR code because that leads in nicely to the latest installment of my On the Other Hand newsletter. This week's debate, is the boom in legalized online sports gambling a good thing for the country? You can scan that QR code on your screen to join the conversation. Be right back.

Third Point's 13F is out, and Leslie Picker has the details. Leslie. Hey, Morgan. Yeah, this 13F looking a bit like there's been some rotation by Third Point out of big tech and into some kind of broader economy names. The firm dissolved a $360 million stake in Alphabet. Class A shares cut Meta in half, saw a 45% decrease in Microsoft, 28% decrease in Amazon, and also dissolved Uber and Verizon during the quarter. And then there was a new $4 million share position in Brookfield. There was a new 1.5 million share position in CVS Health and a new 1.5 million share position in Hawaiian Electric and a 71% increase

in Live Nation. So kind of diverse bucket of companies that they're putting capital to work in while dissolving out of a bit of that big tech bucket in their portfolio. Again, these are positions as of the end of the third quarter, end of September. They may have changed in the six weeks since. Guys? Okay, Leslie Picker, thank you. Well, Bitcoin pulling back today, but it's on a massive run since the election, topping $93,000 yesterday. That was a record high. That has lifted Bitcoin and adjacent stocks as well, including MicroStrategy, which revealed it bought more than 27,000 Bitcoins over the past two weeks. Shares of MicroStrategy hit an all-time high yesterday as well. Joining us now in an exclusive interview is Michael Saylor, co-founder and executive chairman at MicroStrategy. He is

joining us from the Cantor Crypto Digital Assets and AI Infrastructure Conference in Miami. Michael, it's great to have you on the show. Yeah, thanks for hosting me, Morgan. So I'm going to start right there. The torrid run we've seen in Bitcoin, is this all just anticipation about what a Trump administration is going to mean for it? You know, the red wave is probably the biggest thing that's happened in the past four years for Bitcoin. It's incredibly auspicious for Bitcoin and for

the entire crypto industry. But we're also getting a lot of very constructive support from Wall Street. BlackRock has been a very, very strong voice articulating the Bitcoin value proposition. And of course, MicroStrategy on October 30th announced that we were going to raise $42 billion to buy Bitcoin. And that's the same as saying we're going to buy every Bitcoin mine for the next three years at $85,000 or more Bitcoin. So there's a lot of bullish things going on in the market right now. And I do want to get to that audacious $42 billion fundraising plan of yours. But first, there's a lot of regulation and regulatory aspects that are in focus with the Trump administration coming into play. SEC chairman, for example, a lot of

expectations that Gary Gensler is going to step aside. And I realize Bitcoin itself is governed as a commodity, unlike other cryptocurrencies. But when you're talking about the ETFs and when you're talking about the cryptocurrency exchanges and when you're talking about the cryptocurrency exchanges and when you're talking about companies like yours, MicroStrategy, which is publicly traded, it is SEC. So how important is that appointment going to be? And who would you like to see at the helm? Well, I think whoever chairs the SEC has probably the most pivotal role in the entire digital assets industry. I think this is incredibly bullish for digital assets. It's very good for the crypto industry. We're going to see a lot more pro-Bitcoin policies. We're going to see a digital assets framework. We're going to see an end to the war

on crypto. We're going to see a lot of pro-Bitcoin, sorry, pro-business policies. And I think that clearly the SEC will be a big part of it. So it's above my pay grade to have an opinion on who it's going to be. But I think it's pretty clear the House, the Senate, the White House, they're all very pro-crypto. So I expect they will have a very supportive head of the SEC. Michael, as well as you've done buying Bitcoin, I'm not sure anything is really above your pay grade at this point, which leads you to the question, what do you think is the biggest threat to Bitcoin's price staying above 60K? What potentially causes another dive below 30K? Yeah, I don't think it's going to 60K. It's not going to 30K. I think it's going to go up from here. I'm planning the 100K party, and I'm thinking it's probably going to be New Year's

Eve at my house. So I would be surprised if we don't go through 100K in November or December. So then what's the biggest threat to it going lower, even if it doesn't get that low? I think the biggest uncertainty in the industry was November 5th. And would you have a blue wave? Would you have a red wave? Or would you have a split Congress? And would you have any dispute about the future of crypto assets and Bitcoin? I think that was settled by the people very decidedly on November 5th. And I don't really see any threats in the near-term horizon. A strategic Bitcoin reserve, how likely is it that that is actually established?

And why would that be a good thing when you're talking about a decentralized asset now being stockpiled by a centralized government? Well, that's being sponsored by Senator Lummis from Wyoming, and she understands the value of the frontier. The United States was built by purchasing Manhattan. Then we purchased the Louisiana Territory. Then we purchased California and acquired Texas. And then we bought Alaska. The next great frontier is cyberspace.

And the obvious thing to do is to own cyberspace, buy the future. And so I think it's a great idea. I think it will happen. And I think it's important to the United States because it cements the United States' control over the future World Reserve Capital Network. Senator Lummis' bill will offset $16 trillion of our debt, according to my models right now. So I think it's economically wise, it's technically wise. And again, Bitcoin is manifest destiny for the United States. So with your most recent acquisition of 27,200 Bitcoins, it looks like you now, based on my calculations, own about 1% of the Bitcoin supply. You just talked about this $42 billion fundraising plan. This

would be a record-breaking plan. Half of it in at-the-market equity offerings and half of it in new debt securities. How will you carry this out and why is now the time to go to market with something like this? Well, all of our investors tell me they want me to buy more Bitcoin. They want me to raise capital to buy Bitcoin. And their number one concern was, are you going to stop issuing equity to buy Bitcoin? And so we were actually addressing their concerns. We did raise $2 billion to buy 27,000 Bitcoin just in the first 10 days of November. So we're moving fairly aggressively on it. I think our exact rate will be a function of the capital markets. But right now, they've

been very enthusiastic. So our plan is to three years, but it's possible we'll do it much before then. Okay. Michael Saylor of MicroStrategy. Great to have you on. Thank you. Thank you, Morgan. Now we've got a news alert on Elon Musk. Eamon Jabbers has the details. Eamon? John, this is coming from The New York Times, just posted in the past couple of moments, reporting that Elon Musk met in New York on Monday with the Iranian ambassador to the United Nations

in a session that is described as attempting to defuse tensions between the United States and Iran. The New York Times now sourcing this to Iranian officials, saying the Iranians said the meeting between Mr. Musk and Ambassador Amir Saeed Irvani lasted more than an hour and was held at a secret location. The Iranians, who spoke to the New York Times under the condition of anonymity, said the meeting was positive and described it as good news. So this raises the question now, John, of Elon Musk being

involved in more than just the future Trump administration's efforts to cut federal spending. Obviously, that announcement made official earlier in the week, but also conducting international diplomacy now on his own and not really clear yet just how much authorization he had from the Trump team or from the existing Biden administration to conduct these meetings with the Iranians, but in an effort apparently to lower tensions between the United States and Iran. This represents a significant expansion of what we know about Elon Musk's role in this Trump transition. John, back over to you. Well, Elon Musk is known to expanding things for sure.

Eamon Javers, thank you. Well, up next, top cybersecurity executives on the types of cyber attacks corporate leaders need to prepare for in 2025. We'll be right back. A new presidential administration in 2025 will bring fresh eyes to the cybersecurity challenges our nation faces. And that was one of the topics I tackled with members of CNBC's Technology Executive Council in a new series, Tech Talks. Fortinet Chief Security Strategist Derek Manke said businesses will need clear rules for how to respond to attacks globally because those attacks emerge quickly. I mean, we have everything from SEC reporting requirements where businesses need to be able to report events within 72 hours. We're also seeing now SIRSIA, which is a critical infrastructure reporting requirement in the U.S. for late 2025.

Meanwhile, attackers are moving very fast. The last report we did when we looked at the last half of last year, when a new exploit came out, attackers were capitalizing on that in less than five days. So that's the window we need to be able to respond to. BitSight co-founder and chief innovation officer Stephen Boyer pointed out that nation states are already trying to infiltrate our critical infrastructure. And Darktrace Chief Strategy and AI Officer Nicole Egan underscored the roles of the war in Ukraine and the tension around Taiwan. The FBI director has specifically called out China's cyber aggression. He called it they are wreaking

havoc and that this is a cyber onslaught. These are systems that could cause real harm to American citizens and our communities. We get to see this. We get to observe that many of these systems are vulnerable. We do have examples of this that can have business impact as well. Back in 2017, there was an attack called NotPetya that was originally targeted in Ukraine, but then spread to businesses across the globe and caused about 10 billion in estimated damages. We have what you mentioned, the Russian invasion of Ukraine, and also the instability in the Taiwan Strait. So, I think those are going to continue. I think something that

we might not have thought as much about yet is if tariffs do go in place and maybe even restrictions as to where some certain suppliers might be, what are business leaders doing to look at their end-to-end supply chain? And anytime you change something in your supply chain, you change your attack surface, right? And you increase potentially your risk. No shortages of challenges or changes, Morgan, for the new administration and for business leaders to face coming up next year. We'll be watching it all. Well, our consumers showing any signs of cutting back on their spending. Up next, what Wall Street is expecting from tomorrow's October retail sales report. Stay with us.

We have a breaking news on the Trump transition. President-elect Trump just posting on Truth Social that he is nominating former SEC chair and current CNBC contributor Jay Clayton to be the U.S. attorney for the Southern District of New York, writing in the post that Clayton is a, quote, highly respected business leader, counsel and public servant. John, we've also got vaccine makers falling on the RFK Jr. HHS nomination. Yeah. And we've also got applied materials near session lows after guidance that missed expectations. Retail sales tomorrow morning. That's going to do it for us here at Overtime.