Closing Bell - Closing Bell Overtime: Rocket Lab CEO On Meteoric Growth Of Business, Space Policy Under Trump; Ibotta CEO On Earnings and Consumer 11/13/24

Episode Date: November 13, 2024

The post-election breather extended to its second day in a row as stocks lost steam in the final hour of trade. CFRA's Keith Snyder breaks down Cisco earnings. Greenlight's David Einhorn gives a new industrial pick he likes. Ibotta CEO Bryan Leach on the company's third results as a public company, how the consumer is faring and what the company plans to do if inflation returns to growth in 2025. Rocket Lab stock shot up more than 25% today; CEO Peter Beck talks the growth of the business, the company's plans under Trump 2.0 and how it is positioned relative to SpaceX. 

That's the end of regulation. JLL ringing the closing bell at the New York Stock Exchange and the premier lacrosse league doing the honors at the Nasdaq. The major averages pairing earlier gains closing near the flatline. It was really mixed session today as investors weigh the new read on inflation and the latest moves from President-elect Trump. That's the scorecard on Wall Street, but the action is just getting started. Welcome to Closing Bell Overtime. I'm Morgan Brennan. John Ford is off today. Well, coming up this hour, Greenlight Capital's David Einhorn takes the stage at delivering alpha. We will take you there for his comments. Plus, earnings are rolling in this hour from Cisco, recent IPO Ibotta, Sonos, and Beezer Homes. We will bring you those numbers and an exclusive interview with Ibotta's CEO before he talks

to Wall Street analysts on the earnings call. But let's kick off with Innovator ETF's head of research and investment strategy, Tim Urbanowicz. Tim, it's great to have you on the show. We did have a mixed session. The Nasdaq and Russell 2000 finishing the day lower. The Nasdaq just above the flat line day lower. The Nasdaq just above the flat line, 59.85, it looks like, where we're settling out. And the Dow also fractionally higher here. Given the rally we've seen in stocks over the past, call it, week, what do you like here?

Well, Morgan, you know, what we're encouraging our clients to focus on are these election results. I think we're going to continue to be an election-driven market here. And specifically, we want to focus on these policies that we think have the best chance of actually being implemented right away. So we think immigration, we think tariffs on China, regulatory rollback. Those are the ones that are likely going in right out of the gates. And focus less on some of the things that might be more challenging to pass, where you're going to need to get the votes in Congress, i.e. the tax cuts on the corporate side as well as the individual side. And Morgan, when we take a step back, I think from a macro perspective, we see this as a boon

for the economy overall. We see market breadth improving, stronger dollar, higher interest rates and continued dominance of the U.S. versus the rest of the world. But we also want to be cautious on the micro level of some of these stocks that might be impacted by the tariffs, specifically on China. I think of an Apple, something like five below, where they rely heavily on those imports. That's going to hurt the value proposition. And on the flip side, we want to lean into some of these names that are going to benefit from the regulatory rollback. So we think specifically of financials and regional banks should be very well positioned. Same thing as oil and gas companies like ExxonMobil, very well positioned given the policies that are very likely to be enacted right out of the gates. Okay. I want to bring Mike Santoli into this conversation as well. Mike,

how much are equities now taking their cue from the bond market, especially since we saw a CPI report that was largely in line with expectations? And we've continued to get Fed speak. We got Powell tomorrow. But ahead of that, I would say a little more caution, perhaps, in some of the officials that we have heard from. Yeah, there is caution. I think there's obviously you sort of don't want to over-anticipate the policy implications,

but you can just simply look at how the bond market is repriced. CPI was OK. I think if it was really a downside surprise to inflation, you might have had a better bid in treasuries as it was. We got steadiness. So, yeah, the equity market is trying to figure out at what level of real interest rates, you know, becomes a little bit of a pinch on equity valuations. We're not really there, especially when you can sort of becomes a little bit of a pinch on equity valuations. We're not really there, especially when you can sort of have a little bit of the blessing of anticipated policy help that's going to allow people maybe to keep the market on a little bit of a longer leash. But I do think that in the short term, when you have parts of the market that got really overheated

in a hurry, you definitely might use the bond market as an excuse to just back off a little bit. OK, we've got our first earnings report and we're going to get to that right now. Ibotta third quarter results, the company beating on earnings at 51 cents per share. This versus estimates a 35 cents revenue also coming in ahead of expectations at ninety eight point six million dollars. That was versus ninety four point one million dollars expected by the street. That was up 16% versus last year. The company projecting fourth quarter revenue of between $100 and $106 million. It's a bit shy of estimates of $110 million.

You can see shares are down about 4% right now, but we will be joined by CEO Brian Leach to discuss those results before he dials in to the analyst call that's coming up in just a few moments. And Tim, I'm going to go right there with you because you just touched on some of the retail stocks and consumer names. It really feels like, particularly in this hour of earnings, that the focus is going to be on the latest around AI and the latest around consumer. We just got that first read on the consumer, if you will, through Ibotta. Yeah, Ibotta is an interesting one here, Morgan. And I think we probably go a little bit against the consensus here. I don't think there's an analyst on the street that has a price target lower than where the stock's trading right now. It's encouraging to see

the growth. But what I struggle with long term with this stock is really what's any different from this being very close to Groupon and some of the struggles that they had. Yeah, it's a digital version. But, you know, what's the consumer retention look like for the companies that are spending money with them? What's the barriers to entry look like? So I think we're a little bit less optimistic there than the consensus is overall. And then when we look at the market as a whole, I think we're looking for signs that really justify some of the pops that we've seen here recently, specifically in small caps. Right now, we have small caps that have completely disconnected from earnings expectations. We saw the 27th best ever move in the Russell 2000 the day after the election, and earnings

expectations have actually come down since. So we need to see those earnings expectations start to follow suit and come up a little bit. We want to see small business confidence increase. We want to see PMIs increasing. If we see those fall into place, I think that gives us a lot more confidence that this rally in small caps can be sustained. OK, a little caution there from you, Tim. We do have Cisco results out as well. We're going through those. We'll bring them to you in just a moment. In the meantime, Mike Santoli, how much does Cisco matter here, both in terms of the AI read we're going to get, but also given the macro environment, what it has to say about enterprise tech and spending by other companies on things that are not AI related? Yeah, it is a pretty good read on just sort of the general run rate of hardware demand, networking demand.

The stock has had an incredible run, actually, very recently. So, you know, for Cisco, I think it's relatively high stakes. The market is trying to give it some credit for having exposure to some of the faster growing parts AI related. And so we'll see if that gets redeemed in the actual numbers. Now, it's always been, or at least for years, it's been a very cheap stock. So even though it's had this huge run, it does not look on its face expensive. And by the way, also not particularly loved by the street. It's still a lot of skepticism out there. So, you know, I think

into that mix, you have to, you know, sort of figure out what's going to matter in the near term versus how it's positioned longer term. It's been a slow growth story for a bit. OK, well, speaking of those earnings from Cisco are out and Kate Rooney has the numbers for us. Hi, Kate. OK, we're going to get back to Kate in just a moment. In the meantime, we're going to get over to Delivering Alpha, where David Einhorn is taking the stage. Being here, this is going to be a great conversation. I want to start because we haven't heard from you since the election last week, and I want to get a sense of your view of the world, how the world order, how the market order has shifted over the course of the last week. Sure. I mean, I think the election, it was certainly surprising

to me. I thought it was going to be a very close election and we would maybe still be arguing now about like who won it. And I think it's a very good break for the whole country that at least we have a decisive winner and that we can get on with things and begin to figure out where to go from here. So I think in a lot of ways, this was a very good outcome just in terms of political stability compared to kind of what I was worried about maybe a week or so ago. What does it mean for your portfolio? Have you reallocated anything based on those decisive results? Yeah, we have increased our bets on inflation. I think that we're going to have another inflection up inflation. I think that what the policy mix that is being proposed, I think it is inflationary.

And I think that we'll see more of that over the next few years. And this is important because I just want our audience to remember that you had this inflation call back in May of 2020, where you said, and this was, of course, in the depths of the pandemic, where you said a country that consumes much more than it produces, financed by ongoing money creation, will have more money chasing fewer goods and services. Once the initial shock wears off and the recovery begins, the inflation will begin to show up. And at this time, CPI was 0.1% annually. And then, of course, it shot up a few months later. Do you think this administration has the policy mechanisms to deal with inflation this time around?

Well, I don't think we'll have the inflation, the same kind or the same amount that we did before. It felt much more open ended then. When I say that I think there'll be more inflation, like if people are expecting maybe two and a half percent inflation next year, I think there'll be more inflation, like if people are expecting maybe 2.5% inflation next year, I think it'll more likely to be 3.5% to 4.5% or something like that. I don't really see what the mechanism is right away to make it go back up to 7% or 8% or 9% such as that. But, I mean, it seems to me that we're going to have an expansionary policy. They want to cut a lot of taxes. I think one of the speakers just before was going through the amounts. It doesn't really matter particularly which ones it is. And I think we have a pretty

strong economy on top of that. We have relatively full employment. We have wage growth. I think the immigration policy that they're going to put in place is going to be inflationary for costs and for labor and stuff like that. And so I think we'll have a bunch of inflation. What they're able to do or choose to do about that, I don't know. I mean, there's an argument for tolerating it. And they may prefer to just try to run the economy as hot as possible and live with the inflation. I don't really know what they will do. What do you think that means for Fed independence and the Fed's potential

to continue its rate-cutting cycle? Well, I don't know about the independence issue. I mean, the Fed is independent, or they say they're independent. But their two policy prerogatives are inflation and full employment. But at the end of the day, they have one overwhelming responsibility, which is to make sure that the treasury market functions properly. And so if you have a situation

where you have pretty full employment and you have pretty high inflation, you'll have very high nominal GDP, and then it can become questionable, like exactly what has to happen to make sure that the treasury market functions appropriately. And so at some point, that becomes the primary responsibility that the Fed has to take into account. And it's called fiscal dominance when the Fed is actually responsible for the fiscal policy. And we're probably somewhere near a

transition where that actually becomes the case. Do you think the bond markets are- Well, that is David Einhorn of Greenlight Capital on stage at the Delivering Alpha conference with our own Leslie Picker talking about fiscal dominance and the fact that his firm is making increased bets on inflation. We're going to continue to monitor that interview and bring you headlines as we get them. But let's get back over to Mike Santoli for his reaction on what we just heard from Einhorn. Mike, I go back to the jelly doughnuts thesis that he's put out there over the better part of, I don't know, call it a decade, 12 years. I wonder whether we hear more on that again here, given his comments about what the next administration could mean.

Sure. I mean, look, if you go back long enough, there were a lot of calls that either zero interest rate policy was going to stoke inflation or fiscal deficits were going to do so. It didn't happen until you had the extreme stresses and extreme fiscal response to the pandemic. And now we have a situation where working off an above target base of inflation, where does it go? I do think that he's articulating some of the concerns that are in the air around even the optimism around the policy measures. If you look at the market based measure of inflation, let's say the five year forward inflation rate since the election, it has ticked higher from like two point three percent annualized to like two point

four to not a huge move, but one component of this move higher in Treasury yields has been a modest uptick in inflation expectations. I don't think we have enough evidence to go on to say that it's for sure, but, you know, that's a hedge fund manager's job to use the probabilities and try to make bets accordingly. Of course, you do have a 10-year Treasury at, what, 4.45 percent, which some folks have pointed to as a technical level to be watching there. We mentioned it before we dipped in on Einhorn, but Cisco earnings are out. We're going to go back to Kate Rooney now for those numbers. Kate. Hey, Morgan. So it was a beat across the board for Cisco in the quarter. The stock is down, or it's actually turned slightly higher here after hours, jumping around

a little bit. But I'll start with those numbers. EPS, this is the adjusted number, $0.91. It was a $0.04 beat for the quarter. That non-gap EPS number did decrease 18% year-over-year, but it was a beat. That was on revenue of $13.84 billion, stronger than expected, and a decrease as well, 6% year-over-year. Guidance also looking strong at the midpoint. It was better than expected both, it looks like, on full year andover-year. Guidance also looking strong at the midpoint was better than expected, both it looks like on full year and for the upcoming quarter here. We've got a quote here

from Chuck Robbins. The chair and CEO of Cisco says customers are investing in critical infrastructure to prepare for AI. And with the breadth of the portfolio, they're uniquely positioned, he says, to capitalize on it. He says they're focused on solid execution and operating discipline while making strategic investments to drive innovation and growth. That's been a big part of the AI story. Last thing here, product orders up 20% from a year ago and gross margins for Cisco above 65%. Stocks slightly lower here, but I said this heading into the print, expectations were quite high.

Stocks up about 30% since the last report, Morgan. OK, Kate Rooney, thank you. Well, don't miss Jim Cramer's exclusive interview with Cisco CEO Chuck Robbins. That's coming up at 6 p.m. Eastern on Mad Money. After the break, recent IPO Ibotta is pulling back sharply after fourth quarter guidance missed the mark. The company's CEO will give us his first comments on the results and his read on the consumer before he talks to analysts on the conference call and Rocket Lab. It was one of the biggest winners on Wall Street today, blasting higher after revenue jumped 55 percent versus last year. We will hear from CEO and founder Peter Beck in an exclusive interview.

That's all coming up on Overtime. We'll be right back. Welcome back to Overtime. Shares of Ibotta are falling right now. Investors keying in on Q4 revenue guidance that came in a bit light of analyst estimates. Shares are down about 15 percent. Joining us in exclusive interview before the analyst call is Ibotta CEO Brian Leach. Brian, it's great to have you on. Welcome. Thanks for having me, Morgan. It's a pleasure. So that is exactly where I want to start with you, and that is the guidance which came in

shy of expectations. Why and how does it speak to what you're seeing within the business, but also what you're seeing in terms of the consumer? Yeah, look, first of all, we had fantastic performance in the third quarter. We beat substantially on both the top and the bottom line. We were really pleased with the reacceleration of our business in the second half of the third quarter. And in fact, I think that's related to our outlook for the fourth quarter in the sense that what we're hearing from our consumer packaged goods clients is just that they need time to reallocate more dollars to invest in our network. We've grown 62% year over year in terms of the investment amount the CPG community has put into our platform.

We've exceeded expectations in terms of what we had planned for in terms of redeemer growth. It's now more than 15 million redeemers on our platform. That's up over 60% year over year. And so we kind of outkicked our coverage a little bit in terms of the available supply of offers. We have just a ravenous demand for our product. Consumers want to save money in this environment, which is stubborn inflation and rising costs of groceries. And so as people are gobbling up all of the offers that we have as fast as we're putting them on our network, we're looking forward to the resetting and rolling over of the annual budgets at our clients. And we think that you'll see a substantial

reacceleration of our business in the coming year. That's really interesting. It sounds like if you're going to have a challenge, it's probably a good one to have. So in light of that, and analysts have talked about the fact that Ibotta is arguably one of the few companies out there, internet companies out there that is a beneficiary of persistent inflation. We did get CPI earlier today, came in line with expectations, but it speaks to how sticky it still is. We just heard from David Einhorn at Delivering Alpha, who says he thinks an incoming Trump administration could mean inflation sort of reaccelerating again here.

What are you anticipating and what does that mean in terms of that future business for Ibotta? It's certainly possible. You know, there are contemplated tariffs and things that may increase the cost of consumer goods. You know, we know that no matter what the environment, people are always looking to save money on non-discretionary purchase items, things they have to buy every single week. And that's what we do. That's our bread and butter. We have seen a doubling of our business outside of grocery.

So what we call our general merchandise business, those might be harder hit by some of the tariffs. I could imagine that. That would mean all the more reason why people would be looking for savings opportunities all across our network. Recall that this is not Groupon, right? We run a network. We power Walmart's loyalty program. We power Dollar General's loyalty program. We just

announced Instacarto will be coming online later this year. So we're a much more diversified network of places where people can find our savings. And we think that in all those different contexts, saving money will continue to be super relevant under the Trump administration. And of course, you do work with Walmart. Walmart has also been a stakeholder in your company. How much more room is there to run in terms of that partnership? Well, we're just in the early innings still. I mean, we are we are very, very underpenetrated there. The issue is not is there room to grow at Walmart? We just need more supply of offers. I mean, we are the single most efficient way for a consumer packaged goods company to drive an incremental sale. We're one of the only ways you can measure whether or not you've actually

delivered an incremental sale in near real time. That's really extraordinary. And as that message gets out there, what you're going to see is even with our existing Walmart audience, a real increase in the usage rates just as people take up those offers. I also think we have many, many multiples of growth, turns of growth left at places like Walmart. Plus, we're really optimistic about bringing on new publishers like Instacart next year and hopefully others that we'll announce in the future. So we're bullish on the continued demand side of our business. Our focus is really on matching that ravenous demand with adequate offer supply.

You just mentioned Instacart next year. What does integration and scaling of that partnership entail? Well, we're already in the testing phase, in the pilot phase. We've gone quite a distance in terms of signing, announcing, and piloting that. We expect that by the end of this year, that will be live. That's $30 billion of additional purchasing power. It's roughly two thirds the size of Walmart in terms of the online grocery business. This is an upgrade to the capabilities that brands have and how they promote their products. So we believe it could be a really material contribution to our business in the coming years. It takes time to ramp. There are capabilities that ramp over time in the first roughly 180 days of the year, we think those

will fully ramp. We're excited about launching things like beer, wine, and spirits offers, which are currently a smaller part of our business, but which can become a bigger part. So we're certainly optimistic about what 25 holds for us with our existing publishers continuing to expand their programs. You know, keeping in mind 62% year over year growth. Just this last year, we see a lot more growth in our current publishers and then adding in companies like Instacart will certainly be a tailwind.

Okay, Brian Leach of Ibotta. Thank you so much for joining me. Thank you, Morgan. Have a great day. You too. Shares of Ibotta are down about 14% right now, but still ahead. Much more on today's after hours action. We will break down Cisco's quarter and what to expect from the earnings call there. That's going to kick off in just a few moments. And later, Psalm rule creator Claudia Psalm discusses how today's inflation report could impact the December Fed decision.

And what she's expecting from a Trump 2.0 economy. Overtime is back in two. Welcome back. David Einhorn just revealing his latest stock pick at Delivering Alpha, and it's a name overtime viewers will know, CNH Industrial. Einhorn saying he thinks it can double in the next year. Einhorn noting previously there was a boom in agricultural equipment and then a bit of a bust. He says the equipment ages and will need to be replaced. And you can see shares of CNH are popping on that disclosure right now in overtime, up almost 6%. Well, it's a different story for Cisco shares. Those are volatile here in overtime after beating earnings estimates moments ago.

So let's bring in CFRA research analyst Keith Snyder. Keith, it's great to have you on. You have a whole recommendation on the stock. I just your your initial takeaways from the results we just got and what it says about the transition this company is in the midst of? Yes. I mean, what it, you know, obviously at first glance, it would appear that all their plans are moving forward, you know, as we would expect them to. So, you know, the revenue did decline, but that was, you know, to be expected based on their guidance. And the areas of strength, you know, security especially, doubling, I mean, that's with the Splunk acquisition, that's a critical area for Cisco

moving forward. I mean, it's doubled in size even over the last few years. And so as it becomes a larger part of the company's overall revenue, we're looking to growth in that segment more and more. The equipment revenue, we did expect declines and that's what did end up happening. It's going to be very interesting to hear a commentary around the demand environment there. It looks like product orders were up a fairly healthy amount. And so we're really curious to see where that strength was. Enterprise spending has been quite strong over the last few quarters.

Service providers haven't really been spending as they deal with inventory or excess inventory that they have to work through. But, you know, based on commentary from competitors that reported, you know, about a month ago, it hasn't shown, it hasn't actually recovered yet, but at least it's showing signs of hope. And so we're, you know, Cisco's earnings, given they're a month after everybody's else, they're incredibly valuable, not only as a bellwether, but because we get another month of data from them. So what's more important here then? Is it that recovery of enterprise networking demand, or is it this transition to software, which is aided by Splunk? I mean, software is definitely what the company is kind of banking its future on.

But software sales are also tied with hardware. Typically, you sell the two together. And so you can't really have a weak area in network spending and have a really, really strong software market. And so we're really hoping to see those two recover together. And that's where that commentary on product orders is really going to be important for us to hear just based on what they're seeing, where the demand is coming from. And if enterprises continue to spend at these levels, a service provider or recovery is going to simply add on to that. And so just the trends we're seeing, it's going to be very interesting to see what they say. How much of a tailwind is AI?

AI right now is, we're in very, very early innings of AI. You know, Arista is really the only company who's actually called out a specific number. And they've said AI is going to contribute $750 million of revenue to that company next year. And, you know, that's on 8 billion total revenues. So, you know, right now we're still in very early deployments. We're in trial networks. The really big deployments aren't going to be until, you know, probably the end of next year. And so while positioning for AI is really critical right now, you know, the companies need to be part of these test programs. The actual spend is, you know, consequential to their overall,

you know, revenue profile. Okay overall, you know, revenue profile. OK. Kate Snyder, thank you. Thank you. Shares of Cisco are down fractionally right now. Don't miss the CEO of Cisco coming up tonight, though, on Mad Money. That starts at 6 p.m. Eastern. Well, it's time now for a CNBC News update with Kate Rogers.

Hi, Kate. Hi, Morgan. President-elect Trump has named former Congresswoman Tulsi Gabbard to be director of national intelligence. Gabbard, a former congresswoman from Hawaii, left the Democratic Party in 2020. As the director of national intelligence, she will oversee 18 spy agencies. Ted Olson, the former U.S. solicitor general who served two Republican presidents, died today. The law firm Gibson, Dunn, where Olson worked since 1965, made the announcement on its website. No cause of death was given. Olson was instrumental in

some of the biggest cases in recent decades, including a win on behalf of President Bush in the 2000 Florida recount, and he argued in defense of same-sex couples' right to marry. Ted Olson was 84. And a new study suggests blockbuster weight loss and diabetes drugs Ozempic and Wegovy could lower alcohol addiction. Research published in the Journal of the American Medical Association found people who took GLP-1 drugs had fewer hospitalizations for alcohol-related issues. According to government stats, more than 28 million adults in the U.S. suffer from alcohol addiction. Morgan, back over to you. All right. Kate Rogers, thank you.

The financial sector has been a major winner following President-elect Trump's victory. As investors hope for a lighter touch on regulation, but have those stocks moved too far too fast? Mike Santoli checks the charts. That's next. And later, the CEO of Rocket Lab, which jumped nearly 30 percent today and is up 240 percent on the year, explains what Elon Musk's role in the Trump and entertainment industry right now at Delivering Alpha. We're showing you that on your screen right now. We're going to bring you those headlights a little bit later on overtime. In the meantime, two more earnings reports just crossing.

Sonos reporting a loss per share of 44 cents on a revenue of $255 million. We're not comparing those two estimates due to thin coverage. You can see shares are up fractionally right now. And Beezer Homes is surging after reporting earnings per share of $1.69 and revenue of $806 million. Again, we're not comparing those due to thin analyst coverage. But the company did say October sales grew more than 30 percent versus last year. That's despite higher mortgage rates. You can see those shares are popping. They're up more than 12.5 percent here in overtime. Well, let's bring back Mike Santoli for a look at the hype around financial

stocks that got a boost from Trump's presidential election win and whether the excitement has gone too far. Mike. Yeah, maybe in the short term, Morgan, one of the clearest responses out of the election was obviously financials, in particular capital markets related stocks just going vertical. So here's Blackstone and Goldman Sachs. Very similar pattern. They were already in nice uptrends before we got the election result and then step function higher. We're kind of sitting there in the last couple of days. But of course, this is the sell side and the buy side. The middleman Goldman Sachs have a lot of deal flow and then ultimately perhaps the buyer and ultimate

seller of assets. That would be Blackstone. Now, look at valuation first for Goldman Sachs price to book value. That's pretty much how you value a securities firm typically. And what you've seen is this huge run into a post-global financial crisis high for Goldman Sachs' price to book value. You have to go back to before the 07, 08 period to show when you were trading at more than twice book value. And right here, it's, you know, obviously it's above one and a half times. And, you know, the returns that Goldman is able to put up in the recent environment have been about half or less what it was able to do back when it could employ more leverage. And obviously had much more active roles in proprietary trading and things like that. So the question is, are regulations going to change enough on the capital side? And then you're going to get a massive flow of M&A and IPOs. That's clearly what the market is expecting here.

And that's very lucrative business for Goldman Sachs. We'll see if it can justify where the stock has gotten to. And then Blackstone, somewhat similar story, just valuing it on price to earnings on a forward basis. Blackstone came public like 07, right before the global financial crisis. So right in here, what you're seeing is depressed earnings inflating the P.E. And here you have the P.E. going well above 30 and eclipsing where it was in the 2021. Very, very active dealmaking period when you had a little bit of a mini asset bubble there in SPACs and whatnot. So, again, we front loaded a lot of the benefits. We'll see if it pays off, Morgan. We will see if it pays off. In the meantime, I do wonder, though, especially on the M&A side, it's important to remember that some of

the biggest, most high profile antitrust suits and cases that have been brought forth by the Biden administration actually started under the last Trump administration. And I do wonder whether everybody is thinking that it's going to be widespread deregulation and maybe that's not the way to be thinking about it. Yeah, it's a huge question about whether, in fact, there's going to be a much more across the board, you know, forgiving policy on antitrust. But I do think you can make the case, and I think the market is trying to tack in this direction, that simply CEO confidence, you know, clarity on a new set of policies might unleash a little bit of a pent up demand for deals, even in the absence of of those that might test regulatory boundaries.

So, you know, I guess you could you could sort of have it validated in that way. But you're absolutely right. I mean, in terms of big mega horizontal mergers in various industries, it's unclear if that's going to be greenlit. All right. We'll see what 2025 brings. Mike Santoli, thank you. Rocket Lab rocketing higher after a narrower than expected loss and better than expected sales guidance. Up next, the company's CEO on the stock surge and why investors are starting to really embrace the space industry. And Instacart failing to deliver for investors after a weak fourth quarter forecast overshadowed and earnings beat. Stay with us. Welcome back. Shares of Rocket Lab lifting off today, up as much as 50 percent during the trading session.

Some of that perhaps due to short covering. But the commercial space startup did post better than expected third quarter results here on Overtime yesterday. CEO and founder Peter Beck telling me exclusively, he's seeing momentum across all of the businesses, with a backlog for the small Electron rocket at just over a billion dollars, the new, more powerful Neutron rocket that's on track to fly next year, and the space systems business,

which makes satellites and other spacecraft. We don't talk about this one as much, but that's really propelling sales. Launch is super important. It's literally the keys to space. But, you know, a space systems group is what enables us to build, you know, the infrastructure in orbit. So, you know, we supply components to a tremendous number of projects around the industry. But, you know, if you look across the Space Systems Group right now, we have over 40 spacecraft in backlog, you know, ranging from missions to Mars through to telecommunications and national security missions. So, yeah, that part of the business continues to go from strength to strength. But I think it's always important to remind everybody that, you know, the end goal here is to build an end-to-end space company.

So what do you think a second Trump administration is going to mean for space policy? I think it's good. I mean, you know, the administration has a very strong focus on space and national defense. And when space does well, Rocket Lab does well. So we're very happy about that. And of course, there's an even stronger focus on highly efficient contracting and highly efficient outcomes

for taxpayers' dollars in the space domain. So that's where Rocket Lab excels as well. I mean, if you look at our historical kind of government missions, they've always been at price points and timelines that I think this administration will find very attractive. SpaceX has dominated the launch market largely. You now have Elon Musk in the mix with the administration. What do you think that potentially means? I think it'll even sharper focus on those two things, a sharper focus on space and a sharper focus on efficiency, which, yeah, that's great for us.

Well, Rocket Lab stock has surged. It's up more than 350 percent in six months. And I asked Beck if investor sentiment has shifted when it comes to the space sector. Yeah, I think so. I mean, look, SpaceX is the largest space company in the world. And I think people are starting to understand that Rocket Lab is looking like it's going to come in as the number two. And, you know, if you look at the, you know, SpaceX's valuation, it's something like over $200 billion. Rocket Lab is 5% of that or under 5% of that. And as those two companies start to look more and more similar, it's not surprising that the valuation gap starts to decrease over time. And we've seen a flurry of Wall Street analysts notes talking about that

just today. For the entire exclusive conversation with Rocket Lab's Peter Beck, check out Manifest Space. You can scan that QR code right on your screen. It's available wherever you get your podcasts. Well, coming up, David Einhorn just saying at Delivering Alpha that he's worried about another bout of inflation on the horizon. Economist Claudia Somm weighs in on that potential risk for investors. That's next. And check out Bitcoin briefly hitting a record above $93,000 before giving back some of those games.

The cryptocurrency is now up nearly 30% since last week's election. We will discuss much more about the outlook for Bitcoin under President-elect Trump tomorrow in an exclusive interview with MicroStrategy Executive Chairman and Co-Founder Michael Saylor. You don't want to miss that. The Dow and S&P 500 closed higher after this morning's inflation report for October was in line with expectations. But just moments ago at delivering Alpha, hedge fund investor David Einhorn said inflation risks are not yet off the table. We have increased our bets on inflation. I think that we're going to have another inflection up inflation. I think that what the policy mix that is being proposed, I think it is inflationary. And I think that that we'll see more of that over the next few years.

Well, joining us now is Claudia Somm from New Century Advisors. She is also a former economist at the Federal Reserve. Claudia, it's great to have you back on the show. Great to be back. I want to get your response to that. The Einhorn comments just now, especially in light of the CPI report we saw this morning. So after the past four and a half years, if anybody's still holding out hope for smooth sailing, I mean, I've got news for you, right? Like this is this is a bumpy ride. And absolutely there. We should be attentive to risks of inflation coming back.

If there are big policy changes, then we are going to have to step back, analyze them in their details and really think about what the numbers look like. But what's really important is not to lose sight of, we have come out of an extremely disruptive, high inflation period. And while we're not all the way to the finish line, we have made an immense amount of progress. And it really does push the conversation about, when inflation rears its ugly head, what do policymakers do? So I'll start right there. What do policymakers do?

Because it does seem like the market is pricing in another cut come December, and maybe perhaps the data we got this morning reinforces that. But we have heard from a number of Fed officials, including I think four of them today, who sound a bit more cautious about maybe not December, but what 2025 looks like and ultimately what neutral rate looks like. Well, being cautious is part of the job description of getting to be a central banker, right? Like you don't want people in there who don't take inflation risk seriously. And at the same time, we can't live in the fear of the unknown, right? We've had some positive things going for the economy. We've had a lot of growth, and a lot of that growth looks like it's higher productivity. It's more labor supply. It are factors that aren't inflationary. As long as

we can keep up with the demand, bring on the demand, right? Like, it is not a problem. What's a problem is when we, you know, get out ahead of ourselves and the supply either pulls back or just can't keep up. So I think there's every reason to be cautious. The Federal Reserve largely is a risk management institution, right? And so they're paying attention to the risks, and they're also going to follow the data. I thought it was quite remarkable for Chair Powell very clearly to say over the near term, which the Fed thinks that was kind of the next six months, the next nine months, the election is not an event. Right. They're looking at the data. We're still trying to work out through what's already happened over the past several years in terms of inflation.

So I thought that was pretty remarkable. They're not letting the risk take over their thinking right now, but they are aware of it. So what what are you seeing since you do do so much economic modeling around this? What are you seeing in terms of the labor market, especially since after the last Fed decision, Chair Powell was pretty clear in saying that he sees a labor market that is now, I guess, a bit looser or not as tight as it was pre-pandemic. If we could freeze frame on the labor market right now, it would be pretty good. It's not good enough. Like the hiring rate is too low. It is very it is much more difficult to get a job than it is to keep a job right now. And that's a problem in terms of the talent that we're putting on the sidelines because they're not getting jobs.

So there are some issues in this labor market. But by and large, if we could keep in this place, that'd be really good. That would be really close to a full employment type economy. And yet the problem, and the Fed has become very attentive to this, the problem is things have been softening and they've kept softening after the point where really the inflation risks have gone to the side, like the wage growth. Yes, it's elevated, but productivity is aggravated. and so that's this kind of we don't we don't want to lose much more ground and frankly the fed and the tools that we have

if things really start to slide in the labor market it's hard to stop that slide and that's what they're trying to get ahead of and that's absolutely appropriate particularly because inflation has come back down so much closer to target they have a dual mandate but they got to pay attention to the side of the mandate that's having some trouble or looks like it might have some trouble around the corner. OK, we'll have to see. Claudia Somm, thank you. Thank you. Up next, much more from Delivering Alpha, where a top investor is discussing making money in the media industry. 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.

Ben Affleck and Redbird Capital's Jerry Cardinal just making headlines at Delivering Alpha. Leslie Picker joins us with the highlights. Hi, Leslie. Hey, Morgan. Yes, that conversation is ongoing. An interesting aspect of that conversation was this idea of creating an incentive kind of bonus structure for Hollywood. Affleck says this structure gives those who work in entertainment, talent, crew, directors, more of a stake in a movie or TV show's success.

The extent to which talent, people, creators are meaningful and necessary to the process of taking your investment and creating return. So you've got to, what we've sought to do is realign those incentives and say, listen, we're going to sit you effectively side by side with us. And we're going to give you more latitude and more breadth of control. Because my belief is that creatively you hire somebody who's excellent you want to avail yourselves of their instincts they're excellent and they're successful for a reason not so they can sit here and I can tell them what to do so that they can be empowered to do their best and then you want to incent them so that they care

about promoting the movie so that they care about working on them. And in that spirit of more efficiency in the business model in Hollywood, Cardinal also addressed the concept of AI. He said everybody is scared of AI, but he actually thinks AI is a tool in the toolbox where you'll make more original content for half the cost. And the key is really rejuvenating intellectual property. Morgan. Yeah, similar commentary there, a sentiment there to what we've heard from James Cameron on the show in recent months. Leslie, you just got off stage with Einhorn as well. Great job there. In general, from the Delivering Alpha conference, is there a big key takeaway so far? Yeah, I think most of the investors in the room are just pleased by the certainty of the results of the election last week.

And that has created, you know, a roadmap for people to kind of determine where to go from here. That was something Einhorn addressed. He said he was worried that there would be some instability. We wouldn't know the results of the election. And therefore, you know, now he has certainty and can proceed forward. OK, Leslie Picker, great stuff. Thanks for joining us. PPI and Powell tomorrow,

that's gonna do it for us here at Overtime. Fast Money starts now.