Closing Bell - Closing Bell Overtime: Regulatory Risks for Tech, Holiday Shopping & NYC Congestion Pricing 11/29/24

Episode Date: November 29, 2024

The Dow and S&P 500 set record closes on this holiday-shortened trading day. Meantime, it was the best month of the year for the Dow. G Squared's Victoria Greene and HSBC's Jose Rasco break down what's ahead for investors. Wedbush's Dan Ives on Microsoft's prospects amid a potential federal investigation. Axon CEO Rick Smith on his stock's wild run higher. Flexport CEO Ryan Petersen on the headwinds retailers are facing into year-end. Brown Harris Stevens CEO Bess Freedman talks the luxury market since the election.

Well, that's the end of regulation. CIBC World Markets Corps ringing the closing bell at the New York Stock Exchange and QMMM Holdings Limited doing the honors at the NASDAQ. Record closes for the Dow and the S&P 500 on this holiday-shortened trading day as we wrap up November. And we kick off the final sprint into year end. We had the best month of our stocks in a year. That's the scorecard on Wall Street, but the action is just getting started. Welcome to Closing Bell Overtime. I'm Morgan Brennan. John Fort is off today. Well, coming up on today's show, we've got a big hour for you. Stealth AI play that's up more than 40% since the election. It's up nearly 150% this year. We've got the CEO of Taser and body cam maker Axon, which is at a record high today.

Come join us with a look at what's driving the stock's explosive growth. Plus, noted tech analyst Dan Ives will be with us to talk about the FTC's new investigation of Microsoft and why he thinks it's more bark than bite. Plus, Flexport's Ryan Peterson will tell us why he says this could be the most difficult holiday season businesses have had to deal with since the pandemic. But let's get straight to the market action as we wrap up

November trading. It's the best month for the S&P 500 and the Dow in a year. Joining us now is G Squared private wealth CIO and CNBC contributor Victoria Green and HSBC private banking and wealth CIO of the Americas, Jose Rasco. It's great to have you both here on this Black Friday. Victoria, I'm going to kick things off with you as we do finish November on a very high note here with record closes for the S&P and the Dow, but also the Russell 2000, the small caps flirting with a new record close. It doesn't look like we're getting it as stocks settle here, but it does perhaps speak to how broad this market rally has become. Yeah, it's been phenomenal. And the small caps actually led here in November up about 9% to 10%.

But it was such a broad rally. You saw the Dow, Nasdaq, Russell 1000 value, Russell 1000 growth, S&P all up between 5% and 7%. That's why we love U.S., U.S. large caps, U.S. small caps, U.S. mid caps. And what lagged this month? It was international emerging markets. And we keep advocating that you need to be overweight, extremely overweight, these U.S. stocks. We see December playing out, same song, different verse. Rally continues. You guys at CNBC just put out a great research piece from Ned Davis saying that, hey, 75% of the time, December is up when the year is up over 20%, and it's usually up about 2 percent. So we're in rally mode and it's phenomenal that it's broadening out and encompassing so many more stocks, sectors and indices. It does seem like the path of least resistance is higher, Jose. And of course,

we do have seasonality working right now. You have the fact that Black Friday, I'll just say today as a trading day in general, tends to be pretty strong on low volumes. You start to look to December for the Santa rally. You're already thinking about 2025 and specifically for investment priorities for early next year. What are they and why? Jose? Yeah, no, I'm here. You froze there for a second. Sorry. Yeah. Looking ahead. Yeah. Sorry. Yeah. Looking ahead to 2025. Morgan, I hope you can hear me. I just got a thing that my connection was unstable, which is great. Hopefully the market is more stable than my internet connection. Look, we're looking at good earnings next year. If you

look at what's happened over the last 30 days, values outperformed growth. And I think that's important because we're going to see the MAG-7 begin to slow. And in terms of earnings as we go forward for the next year, and then what I call the forgotten 493, we're going to see earnings begin to pick up. And they're going to go from about 5% in the fourth quarter of this year to 15 percent next year. So we're pretty optimistic this is going to be a broader market rally than most people think. Victoria, I mean, you have pretty lofty expectations for 2025. It looks like 7K to 7,200 on the S&P.

What takes us there? And I ask that as I look at the bond market right now. And we've seen the complete unwind of one of the most notable Trump trades, which has been treasuries and yields that have moved higher. We've got a 10-year yield now touching its lowest since October 30th, so pre-election. Sure. Those both are great. Yields coming down, dollar coming down. Those are actually really good positives for stocks. Look, the reason I'm so lofty in the next year is I've been advocating that we're partying like it's 1995, right? We're 95 through 99. We had five years and you saw multiple years up over 20%. I see this continuing next year because we are still seeing profit expansion. We're still seeing growth in margins.

We have transformative technology and AI, which will continue to help margins expand, which is great for shareholders of these stocks. So we don't think this rally is going to end. Bull markets don't end from old age. Bull markets don't die because the PE gets extended. None of those things matter right now. It's a momentum rally, and we're seeing more and more growth in earnings. And so until one of those things changes, so either we have a policy error, we have inflation reaccelerate extremely rapidly, we have the labor market deteriorate. Yes, there's risk out there. But base case, highest probability is we see this rally continue and you want to be a part of it.

Don't be sitting around waiting for the pullback. If you were waiting all year, you didn't get your chance and you might be sitting out waiting all next year as well. Jose, we've seen a lot of chatter. We've heard a lot of chatter about U.S. exceptionalism in the markets right now. Is that the right way to play this or do you think a little differently, especially as we're trying to weigh some of the policy possibilities of the incoming Trump administration? You know, we just put out our quarterly and the U.S. is our number one overweight because, you know, if you look at the potential, for me, the most important piece is the potential for deregulation and therefore lower energy prices. While you're lowering the cost of energy or lowering the cost of capital from the Fed, that's very accretive to earnings and couldn't agree more. It's very positive for the markets, especially financials.

You look at the consumer should stay very healthy in our mind and the tech market should continue. So to boom along, as was mentioned. One of the most important things, Morgan, as we go forward here is that that opportunity to see the market expand and broaden. And we think that's going to help continue to drive earnings. And remember, a lot of the earnings assumptions that were just talked about didn't really include what's going to happen in terms of lower tax rates as we go into next year. So we remain very bullish on U.S. equities. And while we like bonds, you want to lock them in, we're more neutral there. We think the real upside for next year is definitely on the U.S. equity side. OK, Jose Rasco and Victoria Green, thank you both for kicking off the hour with me on this holiday shortened trading day with all the major averages finishing the month higher.

The S&P up by five and three quarters of one percent. The Dow, which closed at another record today, up seven and a half percent. And the Russell 2000, even though it missed a new record close, basically flirting with that level and finishing up 11 percent on the month as we see some of these smaller stocks play catch up. Well, let's get the setup for December with Senior Markets Commentator Mike Santoli. Mike. Yeah, so Morgan, more than 90% of the way through the year, market obviously has a pretty good head of steam up, and it has broadened out, right? And if enough people ask and plead for something like they did in the first half of this year

for the market to rotate away from mega cap, it has done so. So here's the mid cap 400 400 S&P 500 mid cap. That's companies between, broadly speaking, call it five and 20 billion in market cap. It is now right on par with what the S&P 500 has delivered. If you go back farther, of course, S&P is still ahead. But it is interesting that mid caps have been a little bit of a sweet spot, often characterized as sort of bigger, higher quality versions of small cap. In fact, take a look at the mid cap relative to the Russell 2000

over the course of the last five years. Now, Russell 2000 today just again flirted with that all-time high, which was set just over three years ago, November of 2021. But you see, as of, I don't know, eight, nine months ago, the mid cap has been making new highs above that similar level. So clearly there's action outside of the very largest cap. Another way to look at the broadening of this market away from growth tech is semiconductors versus transports. This is year to date. And you see really dramatic boom and sort of relative bust on the semi side.

But the transports have kind of plotted along. And again, they're struggling, too, on a multi-year basis. But they've actually kind of gotten some traction here in an outperforming semis in different ways seen as bellwethers of parts of the economy and market, Morgan. I'm glad you brought that up because transports also had a very strong month. It looks like we were up about 8.5% almost on the month for transports. And you compare that to the NASDAQ 100, which was probably the worst performer of the month of the major averages. We track up only a little over 5% here, which just sort of gives us an idea of how strong November was. The mid-caps, though, I want to go back to that.

Because when you do see these broadening out in bull markets, and we've talked about how concentrated it was earlier in the year, does it tend to be, I don't know, a waterfall effect where you start to see that broadening out happen across non-tech, then to mid-cap, then to small cap? Or is it really just that mid-caps have something very special and unique going on right now? Yeah, it's an interesting question, Morgan. In fact, I was struggling to figure out if there is a kind of typical cadence to those things. You know, small cap often really puts in a huge performance at the beginning and then toward the end of a cycle when everything's been trashed and they're kind of coming to life again. Or

as things get a little bit, you know, maybe the economy getting a little bit overheated, as long as the Fed's not too tight. I think mid caps do really have that profitability because they are screened for profitability, a little bit more scale, probably a bit more domestic focused than the S&P 500. So that's been a benefit as it has been for transports as well. And a final piece of it is, you know, if as everybody now expects, it's going to be a more active mergers and acquisitions environment next year, mid caps are the kind of companies that are going to get bought. Now, small cap too, but I do think that the mid-cap range is somewhat interesting in terms of targets for that deal making. Okay. We'll continue to watch it. Mike, thank you. We'll see you a little bit later this hour. Let's turn now to retail because we're focused on the consumer, especially now more than ever

in these final weeks. Consumer discretionary sector leading the S&P 500 today, closing higher by more than 1%, with strong gains for retailers as Black Friday officially kicks off the holiday shopping season. Courtney Reagan is at New Jersey's Garden State Plaza Mall with a closer look at brick and mortar's biggest day of the year. I always love when we get these types of reports from you on Black Friday, Court. It's good to see you there. It's good to be here. It's an annual tradition. It's not Black Friday unless I'm at a mall, of course, whether I'm reporting or shopping, actually. I used to do this all the time when I was a kid. But anyways, Walmart shares are trading at all-time highs here today. Maybe it's a Santa Claus rally. Tapestry, too, is trading at highs not seen since January of 2013.

But Morgan, I gotta tell you, we just got some brand new real time, real transaction spending data from Pfizer. And it's showing us so far that sales are up 2.5% at brick and mortar retailers between midnight and 12 p.m. today, Black Friday. Online sales, interestingly, down 12% over those same 12 hours compared to last Black Friday. It's a

possible signal, I think, that predictions about today's in-store traffic are right and that shoppers want to be in stores on a Black Friday. They shopped a lot online yesterday. They might do some more tonight, of course, and in the coming days. But shoppers are out here building materials, interestingly enough, and general merchandise stores are leading the way for brick and mortar sales growth right now. Now, retail next predicts a slain increase in store traffic here today on Black Friday over last year even though traffic at stores for the year to date is down about three percent and Adobe says that Thanksgiving Day online sales grew almost nine percent to 6.1 billion dollars. Nearly 11 billion dollars expected to be spent online today with a growth rate of 10%.

So that's the highest growth rate expected of these Cyber 5 days. And if you're shopping for stocks, our CNBC data screen ran a retail stock screen for us for Thanksgiving week and found that since 2019, Burlington Stores is up an average of 10.5%. This does exclude today here, whereas Gap Inc. is the weakest over that same time period, down an average of 10.5%. This does exclude today here, whereas Gap Inc. is the weakest over that same time period, down an average of 4.4%. And then you've got the broader retail ETF, the XRT. That falls an average of 0.3% on Thanksgiving week, whereas the S&P 500 is down just slightly more at 0.4%. So we'll give you some ideas if you're shopping for stocks here in the coming days. Morgan. It's really fascinating because last month UPS basically tempered its holiday season, its peak shipping season forecast and basically said that they think it's going to be

a little bit softer in part because more consumers are going to be doing more spending physically in stores. So when I hear this Pfizer data from you and what we're seeing here at places like malls where you are right now, perhaps maybe it speaks to that. But Courtney, I'm also wondering if we sort of already have a sense of who winners and losers are going to be. I know a lot of folks have been pointing to Walmart, for example, with its raised guidance as one of those names or Abercrombie & Fitch continues to be hot. Some of these brands that are doing really well, even as others maybe haven't so far through this earnings season. Yeah, I think it's sort of impossible to know when it comes to this weekend who's going to be a winner but i think that's right if you look at some of the guidance

that they gave us for the holiday quarter some of the retailers actually many of them had quite strong third quarter quarters but then when they're looking at the holiday that's when you really kind of saw the commentary diverge where where Walmart was pretty positive. And Nordstrom, even though they put up a nice quarter, they said, actually, we've seen a slowdown recently. And so that gave them a reason to give sort of a tepid guidance. So I think you really have to be careful. You've got to listen to the details. You've got to listen to what the executives say and the tone at which they're delivering this to try to determine winners and losers. I'll tell you at least here, very anecdotal, but the only line I really saw this morning was outside Lululemon,

which is interesting, Morgan, because they don't typically do big Black Friday sales. There are some items I looked online that are on sale, but it's certainly not splashed across the whole store like you see in some other locations. Athleisure, we keep talking about about it and it keeps growing in popularity. Court, great to see you. Courtney Reagan, thank you. Good to see you, Morgan. When we come back, a slew of tech headlines giving investors plenty to chew over the Thanksgiving holiday, including a new FTC investigation of Microsoft.

That's a suit against Google from Canada as well in Australia's social media ban. Up next, tech analyst Dan Ives weighs in on those moves and how they could impact shareholders. And later, Axon, it's been one of the hottest post-election trades with the Taser body cam and drone maker stock climbing 50% this month. Axon CEO joins us to weigh in on what's driving those big returns. Overtime's back in two. Welcome back. A wave of regulatory headlines hitting tech giants worldwide over the last couple of days. The FTC opening a new antitrust probe into Microsoft, looking at whether the company is violating rules in areas like software licensing, cloud computing, and more. Meantime, Canada is suing Alphabet's Google over alleged anti-competitive conduct in online advertising.

That's after the U.S. Justice Department said last week the company should sell its Chrome business. And Australia is moving forward with a law banning children under the age of 16 from using social media platforms, including X, Meta, and more. Joining us now, Wedbush Securities Head of Technology Research, Dan Ives. Dan, it's great to have you here on set. Great to be here. There's never a dearth of information in the tech sector for us to talk about, but I do want to start with a Microsoft piece of this, because we always talk about whether the market feels like this is 1999, poised for 2000,

and here we are talking about Microsoft up for regulatory review. That sure feels like 99-2000. Look, if Khan was staying, that would be a different situation. I think the view of us and the view of many on the street is that Khan's days at the FTC are numbered. I think you ultimately get a more, we'll call it even-keeled, business-friendly sort of chair of the FTC in there. And we just think Barks worse than a bite when it comes to Microsoft. Microsoft went through that battle in the 90s versus, you know, DOJ and U.S.

government ultimately won it. And look, you're definitely seeing the strong get stronger in terms of big tech. And as much as this is really going to be a UFC battle that continues to really play out between big tech. But I just think when it's all said and done, the noise is going to be more than the reality, not just for Microsoft, but I think even when it comes to Google and others. How much is going to hinge, though, on the Trump administration, the picks for DOJ, antitrust and FTC? Because there are a number of names floated for each of those positions. And not all of them are, I would say, rah-rah, let tech go wild. Some of them are much more focused on antitrust and I'll call it maybe potentially a

similar approach to what we've seen in the last couple of years. Yeah, I think on DOJ, you definitely get someone probably in between. I mean, look, Vance is obviously anti-tech, so you're going to definitely have someone that's a little on the aggressive side toward tech. But I think the big issue is on FTC. Because Khan, for big tech, it has been a nightmare in terms of Khan at the FTC. Her being gone, which we believe is ultimately will be the next step when it comes to January, that's bullish for tech. I think, look, a big reason when Trump came in, when you think about Khan out at the FTC, that's bullish for big tech.

I think less regulations. And then who's at the table right next to Trump It's musk and I think that's gonna also play a big role Unofficially in terms of some of these picks and where this all goes, but I continue to think in terms of this AI revolution It is 10 p.m. At that party that goes to 4 a.m And I don't see any of these appointments that's changing that party or that party closes early. I think we have a tech bull market that goes well into 2025, 2026. And I think a lot of this sort of noise that we see here, more opportunities to own these

names rather than time to get nervous. Do you buy Tesla here then, given the rally we've seen, the torrid rally we've seen this month? I think get the popcorn out because I believe Tesla is a stock that could ultimately double from here over the next 18 months. It's been obviously a parabolic move, but as me and you have talked about, autonomous itself, we think it's worth a trillion dollars. So when you think today, I view Tesla as the most undervalued AI name in the market. It is not ridiculous. It might almost be conservative to think, could this be a $500, $600 stock? As the autonomous ultimately plays out, I think the margin story is definitely stabilized here. And I think investors, look, the haters continue to hate it. They hate it at $50, they'll hate it

here. But I think we sit here and this will be sort of a golden star in terms of when you look at the market in 2025 in terms of what we see for Tesla, I believe $2 trillion on the horizon. Okay, I'm going to ask you a twofer here, and that is Alphabet and the fact that we do seem to be exporting antitrust concerns to other countries like Canada now. Does that continue for Alphabet? What does that mean for the future of Alphabet? Also, we just had Apple hit another record high today. What does that tell us? Yeah, so Alphabet, I think better chance of me playing in the NBA than Alphabet ultimately getting broken up. Now, I do think, look, in terms of Crum and some of the noise where you see in Australia, you know, that's definitely a concern. But this is going to continue to be there. But that's not changing the story in terms of Alphabet.

I think 30 to 48 hours in terms of overhang right now, just from a, you know, what I'll call antitrust or just regulatory. And then you look at that cloud story now starting to play out, say the Waymo piece as well. That's why we're bullish on Alphabet. In terms of Apple, I think we're looking at a $4 trillion mark cap. I think this is going to be, they will continue to be the surprise in tech. I think iPhone 16 ultimately surprises because the AI revolution ultimately will come through Cupertino when it

comes on the consumer side. And that's why Cook and Cupertino continue to be top of that mountain, Mount Rushmore, along with names like, you know, Palantir, Messi of AI. Yeah, we didn't even get to Palantir. That's been on a hot, hot run, one of the best performers in the S&P. You'll have to come back and talk to us about that. In the meantime, great to have you here on set, Dan Ives. Well, up next, the CEO of Axon joins us to talk about drones, body cams, AI. What's driving the push to record highs for the stock? Plus, shipping and logistics expert and Flexport CEO Ryan Peterson tells us why this could be the most difficult holiday season retailers have had to deal with since the pandemic. Overtime.

We'll be right back. the pandemic. Overtime, we'll be right back. Welcome back to Overtime. Shares of Axon Enterprise, which makes tasers, body cameras, and has made some investments in drones, hitting an all-time high today. The stock has soared since the election, as Wall Street expects the company to benefit from a second Trump presidency. It's the fifth best S&P 500 performer this year. Joining me now is Axon CEO and founder Rick Smith. Rick,

it's great to have you back on the show. Welcome. Thanks. Awesome to be here, Morgan. So a lot to get to, but the first thing I want to get to is the fact that it does seem like, looking to 2025, a new administration coming into the helm, Axon is in a great potential position. You do make body cams, you make tasers, you have this AI-powered software that can help write police reports to then be reviewed. You've been making these investments into drones. So I would call you maybe an emerging defense tech player on that front, too. What are you anticipating from a Trump administration? What does that mean for policies when we do think about things like refunding the police and securing the border and more focus on safety?

So we certainly think, you know, some of those additional funds will be helpful for the business. But one thing we've learned long term is if we focus on building long term value, our business is pretty sustainable regardless of what's happening politically. And as you know, we've grown from the company just made tasers to now the world leader in body cameras, in-car cameras, extensive use of drones and counter drone. We bought the world leader in counter drone. And so if you think about that as an information network, our ability to apply artificial intelligence on top of all these sensor nodes is just creating incredible opportunities for us to solve important

problems. And with that comes a ton of value. And I do want to get into the AI specific piece of this. But first, drones have been a big talking point this week. You had Elon Musk take to X to show video of drone footage and basically smack talk the F-35, which was made by Lockheed Martin, but sort of speaking to how drone technology is so key to the future. As you mentioned, you bought D-Drone, you've partnered with Skydio, which is the biggest manufacturer of drones here in the U.S. How big, whether it's domestically or internationally, how big is that opportunity to stand up and deploy these drone and counter drone technologies right now? It's an enormous opportunity. I think counter drone, you know, given what's happening in Ukraine and what we're seeing in the Middle East, the ability to track drones and to be able to interdict them is going to be key for public safety around the world, not just military.

We've got to be able to protect our cities and our stadiums. And we acquired D-Drone, the world leader in that space. We also acquired a company called Sky Hero that's one of the leading companies in indoor tactical drones. So we're betting big on drones and robotics to go do the dangerous sort of jobs where it's not safe to send people in. And as I mentioned, you are something of a stealth AI play, and that is part of what's powered your stock this year. So how are you deploying that? What are you seeing in terms of application possibilities? And how much is that powering the revenue growth that we are seeing at the company? So body cameras started a few years ago, something that would record a

police incident, and you might use it tomorrow or the next day to go back and review what happened. But now our connected cameras are connected all the time. So we have eyes and ears on the chest of every officer connected to the most powerful cloud software available in the world. And we're able to apply artificial intelligence. So basically, we've become the artificial intelligence node on every police officer's chest. And we've started with just our first capability, which is to help them write their police reports. And that alone is cutting about a quarter of their shift from bureaucratic tasks so they can be out doing more police work. And that's just the first of about 10 major AI services we'll launch over the next year. And so, of course, it is Black Friday. We are

talking about retail, state of the consumer, etc. What I find particularly interesting as I look at my notes here is the fact that you do see this business opportunity to provide protection and increase safety in the private sector as well among different industries, including retail. Walk me through that. Yeah, so there's about 800,000 police officers in the United States and there's over 2 million private security people. And so if you think about every enterprise has got to think about the safety of their patrons and they need to be able to coordinate with their local police department. And because we've created this network of cloud software and sensors that connects people and police officers to their agency. We can now connect, you know, retailers, casinos, healthcare organizations,

anywhere where people are gathering and they want to be safe. We can now help their private security people collaborate and coordinate with police to make sure everybody's safe on big days like Black Friday. Rick Smith of Axon, great to have you on. Thanks for joining me. Thank you. It's time now for a CNBC News Update with Pippa Stevens. Pippa. Hey Morgan, Syrian rebels say they have breached the country's second largest city of Aleppo. The insurgents, led by an Islamist militant group, say they entered the city after launching a shock offensive on Wednesday. Meanwhile, the Kremlin, which backs the Assad regime, told Syrian authorities to act quickly to regain control. Almost 11,000 cartons of organic eggs sold at Costco have been recalled over possible salmonella concerns. The FDA said the distributor found the cartons were packaged

with eggs that were not meant for stores. The recall affects the cartons sold in 25 locations in five states under the wholesaler's private Kirkland label beginning on November 22nd. So far, no illnesses linked to the eggs have been reported. And following a last-minute 23-20 loss to the Detroit Lions yesterday, multiple outlets report the Chicago Bears fired head coach Matt Eberflus today. The move comes after he said he was expecting to coach against the 49ers next week. Bears offensive coordinator Thomas Brown will reportedly take over as the interim head coach. Morgan, back to you. Pippa Stevens, thank you.

Well, still to come, the Trump bump for luxury real estate. The CEO of broker Brown Harris Stevens joins us with a look at parts of the country seeing a post-election real estate pop. And one thing that could happen next year to seriously juice the housing market. Up next, bonds coming back from the brink. Mike Santoli looks at the pullback in yields just as they were approaching a potentially concerning level. Stay with us. Welcome back. Bond yields pulling back as we wrap up November

after a whoosh higher earlier in the month. Let's get back to Mike Santoli with a closer look at that part of the market. Mike. Yeah, Morgan, yields pulling back means bond prices firming up a little bit. That's what's going on with long term treasuries. This is the TLT ETF that measures that part of the treasury curve. Find it interesting to look at a two year because you have, first of all, this series of higher lows as we've had these sell-offs and bonds, and then they've managed to find buyers at progressively higher levels.

That means yields have not gone back to their highs from last year. But it is still challenging this 200-day average, which is sloping lower. So it tells you that the trend in bond prices for now looks to be lower or maybe sticky around these levels but there is a chance if these break above the prices break above that we could be in this more comfortable zone for yields now the better tone in

the bond market in terms of buying is also coincided with break even inflation expectations embedded in the bond market this is the market based anticipation of inflation rates over the next five years has pulled back from what would have been worrisome levels had they kept going higher. That's around the 2.5% inflation level. So here we are again, just like the U.S. dollar goes up to this range where it could have been a little bit scary for stocks as a financial tightening gauge, and now it pulled back.

So, so far, again, in a little bit more of a benign setup, Morgan. Yeah, maybe a little more fuel to the fire for this upcoming Santa rally. Mike Santoli, thank you. Have a great weekend. All right. Up next, the CEO of supply chain and logistics company Flexport on why this could be the roughest holiday season for retailers since the pandemic. And as we head to break, here's a check on the month's biggest winners

in the S&P 500, led by Palantir and Exxon. Welcome back to Overtime. Retailers are facing a number of potential headwinds this holiday season, including a shortened shopping period, President-elect Trump's proposed tariffs and the lingering inventory impact from the port strike in October, as well as a January 15th deadline for a new deal with East Coast port workers. Well, our next guest says this is likely the most challenging year-end for businesses since the onset of COVID. Well, joining us now is Flexport founder and CEO Ryan Peterson. Ryan, it's great to have you back on the show. Yeah, thanks for having me. Happy late Thanksgiving. So I want to start right there. Why is this such a challenging period? What are

you watching the most closely? Well, it's an interesting moment because Thanksgiving is a little bit later this year. Of course, today's Black Friday, biggest shopping day of the year, and Monday, Cyber Monday. Usually that happens earlier in the year with Thanksgiving being so late into November this year. So for one, you've got a much shortened holiday shopping season. Brands responded by launching their sales earlier. So we're actually seeing a big lift in year-over-year sales over the last week because folks pulled their sales forward, which is unusual. I think the reason that this is so challenging is not so much like how sales are going to go right now. I think actually all the signals look pretty bullish for today's Black Friday and through the end of the year. It's really about the stress on supply chain that's

coming up and these logistics managers, supply chains inside of companies having to keep this in the back of their mind that we may have new tariffs coming down the pipeline. This port strike is a big deal. January 15th being the deadline, just five days before the inauguration, whether or not they get that resolved. If we don't, you're going to see a lot of chaos on the East Coast as those ships get stuck waiting offshore with everybody's goods. And I'm glad you brought up this looming port strike deadline, because it's my sense, at least publicly, I haven't heard anything from the Trump administration taking a position on this

on whether they would step in to try and negotiate or whether the Biden administration is going to step in and try to negotiate, or they're just going to let workers and the ports figure it out themselves. So do you have an expectation about how that could play out? It's a really big open question. So what we did see was back in October during the height of the campaign, Trump did put out a statement saying, really taking the union side in the negotiation. But of course, he's also brought on Elon Musk as one of his major advisors. And Elon's been very anti, well, not necessarily anti-union, although you might be able to say that, but really anti this union stance on automation.

Elon obviously is a big supporter of robotics and automation and that it would apply to the ports too. So I think at this point, it's sort of a question of who does Donald Trump listen to as he takes office? And even beforehand, right? This negotiation needs to happen before he's even in office. But it's who does he listen to? Is it which branch of thinking does he subscribe to at this point? Are we going to see a big inventory build? Are shippers and retailers and others trying to get as much in as they can ahead of this deadline for the port strike and ahead of anticipation that you could start to see higher tariffs on goods coming from China?

The interesting thing, well, you have it ahead of the port strike is one thing. All science intuition would tell you, yeah, you got to get your goods in before that hits. We don't see it in the data. I think companies have largely anticipated that port strike back in October and did pull a lot of inventory in earlier and have also shifted supply chains to flow through the West Coast instead of the East. So we saw that earlier in the year and that trend continues. We haven't really seen a big change ahead of January 15th. As for the tariffs, yes, every time there's a tariff, people race to get goods in.

It's a little unclear exactly what timing of the tariffs will be, as well as which countries they will apply to. Of course, we saw last week Trump announcing that he would put tariffs on Canada and Mexico. But it was also a good example of, well, using tariffs for political goals, not necessarily economic ones, that he was really talking about illegal immigration and fentanyl and other drugs flowing through the borders and sort of using the tariffs as a mechanism to put pressure on these countries to stop other issues. So that's probably worrisome for a lot of brands who are saying, well, it's not even about economics. It's about something else that's totally outside their control.

And it does seem like conversations with leaders in Canada and Mexico have been, at least based on what's been reported in the last couple of days, pretty constructive around some of these dynamics with immigration versus tariffs. So how are you counseling shippers that you're working with right now? And as you do handle all of this real-time data through this lens of transportation and logistics and goods moving across the globe, what is it telling you about the state of the U.S. economy, the global economy, and how we're poised for 2025? Yeah, I mean, the brands we work with, and we're one of the largest freight forwarders and logistics companies in the world now, and the brands we work with are actually doing pretty well.

Like I said, 13% growth year over year for the same store. You might call it same store, same customers growing their delivery volume. So that looks pretty healthy. What we've also seen is a shift that's gone on for over a decade of moving production out of China into other parts of the world. We ship goods to and from 147 countries year to date. So we're ready to help people with that readjustment. Largely what we're trying to do is help companies be agile. That is the key word in logistics is be ready for whatever uncertainty and even chaos that the world throws at you.

And you've got to be whoever's best at responding to that change will have a competitive advantage. So that's what we're trying to do is help these companies with great technology, people, expertise to make it happen. Okay. Ryan Peterson, great to have you on. Founder and CEO of Flexport. Thank you. Thank you. Up next, why an upstart defense company best known for attack drones and unmanned submarines is betting that the future of fighting is in space. Plus, Bess Friedman, the CEO of luxury real estate broker Brown Harris Stevens, on how President-elect Trump's tax and tariff policies could impact the housing market. Stay with us.

Earlier, we discussed Axon, second best performer in the S&P this month, to only Palantir. Both companies focused on AI, security, defense tech. Similar story for C3 AI, Big Bear AI. Also, commercial space stocks, including Rocket Lab, which is up 140% plus this month. Planet Labs, Redwire, and space ETFs like Procure's UFO and ARK's ARKX ETF. Those are all soaring post-election. Why? Well, companies taking a commercial approach to working with the government and adopting new business models that shift risk

from the taxpayer back to corporate balance sheets. Now, that enables the government to be one of many customers. What's called dual-use technology in some cases. These are the kinds of businesses expected to do well under an incoming Trump administration, especially in light of Doge, with so many investors and entrepreneurs tied to defense tech and space involved with the administration. Now, take Andral Industries, which Vice President-elect Vance actually invested in. The $14 billion upstart is best known for attack drones, robot submarines, unmanned fighter jets, but it's also been forging further into another domain, space. Now we're seeing all of these small businesses, medium sized businesses who are working in the commercial space sector, who don't really have the ability to transact with the US government

and may not even understand the full set of mission needs that the US government has. And so we can operate as someone who can bring together and convene this set of companies. We're calling it the team of super friends who could come in and bring together an offering that is complete for the U.S. Space Force. Now, super friends that already include other venture-backed darlings like Apex and Impulse Space, which was founded by SpaceX employee number one. Last week, Andrel won a $100 million program of record contract to upgrade the Space Force's Space Surveillance Network. Andrel's senior vice president of engineering, Gokul Submaranian,

says the company already has a payload on orbit, it's developing its own spacecraft, and is launching what is essentially edge computing at the edge of Earth. Most spacecraft have less computation ability than your iPhone. They don't have the ability to run AI. They don't have the ability to run all sorts of processing. So we're taking modern-day GPUs, right, the foundational hardware that's necessary

to run AI processing, and we're getting that ready for the space environment. We're hardening it for the space environment. And speaking of Doge, Musk and Ramaswamy to meet with Republican congressional leadership next week. So keep an eye on that and keep an eye on this sector. But for more on my discussion with Andrews Submarinian about space and about defense tech, check out Manifest Space. That's available wherever you get your podcast. You can scan that QR code right there on your screen for the full conversation. Well, the housing market has been getting a bit of a post-election Trump bump in some markets.

Up next, the CEO of luxury real estate broker Brown Harris Stevens tells us what she's seeing from her high net worth clients. Welcome back to Overtime. Some real estate markets have been seeing a Trump bump in prices since the presidential election earlier this month. Joining us now to discuss whether that can last is Brown Harris Stevens, CEO of Best Freedmen. Best, it's great to have you on. Let's start right there because we've had some real estate executives on in the past week or so who have said they've seen animal spirits ignite in the housing market post-election. Is that what you're seeing? I mean, I love that description.

Nice to see you, by the way. I think, yes, we've seen a pickup, but a lot of that has more to do with the fact that there's less uncertainty now that the election is over. Typically, after an election, we usually see an increase because people know who the incoming president's going to be. And so that's a good thing. But we still have what I call the troubling trifecta in housing, which are higher rates, mortgage rates, higher prices, and a lack of supply. So as much as I'd like to ride this wave of happiness, we have real issues in the housing market. And I'm hoping that we'll get better in 2025 if mortgage rates will come down a little bit and we get buyers and sellers back in the market, because that's been a real challenge as of late.

OK, how much of that is going to hinge on Fed policy and rate cuts continuing versus a Trump administration coming in and maybe looking at housing policy a little bit differently, especially with with taxes on the table? Look, obviously, whatever the Fed does is important and that could help. And look, there's only so much that the Fed can do because most regulation is overseen by state and local. So like in New York, it's not so easy to convert an office building into residential. There's a lot of bureaucratic red tape. So I'd love to cut a lot of regulation and start to build some housing, but it's not as easy as you say. But look, I'm rooting for a win.

I'd like to see a lot more supply in the market, a lot of positive people getting into the market. The average buyer, first-time homebuyer today is almost 40 versus 10 years ago, they were 28 years old. And so there's a slowdown in that promise of the American dream of buying a home. And we need to get back to that because it's super important for people, everyday people to be able to buy a home. And we need, I hope that we can do that with this new administration. So I just mentioned tax policy. We know we have these SALT caps in places like New York, New Jersey, where I'm sitting right now, other parts of the country where

you have a high property tax situation. You have lawmakers. I'll just start by saying the House has a very slim majority, particularly in the first 90 days. And you have lawmakers, including Republican lawmakers like Congressman Lawler in New York, who is saying they want to see that cap removed. How likely is it that that happens? If it does happen, what does it do in some of those markets like New York to, I guess, increase the inventory, increase the activity? I think there's a good possibility that it happens. It expires in 2025 anyway. And it was sort of a punitive measure. And we want to get people who want to be a part of these places, who want to live here, who don't move to lower tax places.

So I think it's a good probability and it will increase people coming here, buying here in New Jersey, New York, all those things. So you never know what will happen. You know, I always say history is the study of surprises. So I don't like to be too sure about anything, but I'm hopeful that it will. We need to have this new we need to see change. We're seeing some changes to broker fees both across the country, but then also in New York. You've got this fair act that was just passed by the city council. You got congestion pricing kicking in in New York City, too, in January. How meaningful are these to the activity we are seeing in places like New York where we've had a rebound?

Yeah, I mean, look, two things. The congestion pricing, I hope it doesn't penalize the everyday people who are coming from New Jersey who need to drive their trucks in and have their supplies. They can't take public transportation. We'll have to see how it impacts the city. I hope it raises money that we need. The jury's out on congestion pricing. But for the FAIR Act, you know, I think it was deeply irresponsible legislation. Mayor Adams has spoken out about this. I think what's going to happen is that for the long-term, rents are going to go up. And I think the super left progressive city council needs to start collaborating more with people and understand the impact of this irresponsible legislation. It's a horrible

thing in an environment where the rental market is already very high. They do not understand what they're doing. And I've spoken to them. I've testified there. It's deeply frustrating. Beth Friedman, thank you. It's good to have you on. CEO of Brown Harris Stevens. We had record closes for the Dow and the S&P. Russell 2000 was the best performer of the month.

That does it for us here at Overtime.