Closing Bell - Closing Bell Overtime: Signs of a Growth Slowdown 12/20/24

Episode Date: December 20, 2024

From the open to the close, “Closing Bell” and “Closing Bell: Overtime” have you covered. From what’s driving market moves to how investors are reacting, Scott Wapner, Jon Fortt, Morgan Brennan and Michael Santoli guide listeners through each trading session and bring to you some of the biggest names in business.

That bell marks the end of regulation, the sled ringing the closing bell at the New York Stock Exchange, YSX Tech doing the honors at the NASDAQ, and stocks jumping, yields pulling back as new data and Fed commentary ease some concerns about inflation in the path of rate cuts, though the major averages closed well off the highs. That's the scorecard on Wall Street, but winners stay late. Welcome to Closing Bell Overtime. I'm John Fort with Morgan Brennan. We have a big show coming your way. Commerce Secretary Gina Raimondo joins us with her warning about a potential government shutdown. Plus, the latest on new CHIPS Act grants and reports about a crackdown on NVIDIA. Plus, former Boston Fed President Eric Rosengren, who said he would have voted against a rate cut at this week's Fed meeting, weighs in on the latest messaging from the Fed and this wild week of policy speculation. Let's get straight now, though, to the market and this rally to end the week, which started after a cooler than expected

inflation read, but really took off after Chicago Fed President Austin Goolsbee told Squawk on the street this morning that rates could sure come down more. Take a listen. They think that the ultimate rate is around 3% with inflation of 2%, a real rate of 1%. We're still above that, so I still think it's meaningfully restrictive, and that's why I say over the next 12 to 18 months, if conditions keep on the way that they have over the last 18 months,

I think rates come down a fair bit more. Right. Exciting. Joining us now is Paulson Perspectives author Jim Paulson and Unlimited CEO and CIO Bob Elliott. Guys, happy Friday. Jim, even with all of this done, you think a noticeable growth slowdown is coming in the beginning of 2025, which will cause an S&P correction, drop of at least 10 percent. Then you think the market covers. So if you're at home, do you sell anything now or just buy big dips? I don't think you bet. I think, you know, forecasting short term corrections, John, is always really perilous. And I wouldn't advise doing that. I wouldn't raise a lot of cash. What I would advise that maybe investors do is defensive sectors have just gotten really beat up.

They're down on a relative basis dramatically. You know, the utilities, the consumer staples, pharma, S&P high, high dividend, high quality, those kind of names you can look at and maybe sell out some of the cyclical stars a little bit or lighten up on something like consumer discretionary or some financials that have done really well and just move the portfolio. It's still invested, but move it a little towards more defensive posture because we haven't had a correction since October of 2023. And while everyone feels that things are good now because the Fed's easing, most other things are tightening. You know, as soon as the Fed started easing, bond yields have gone up almost a full percentage point on the 10-year. The dollar in real terms has soared, which is a really contractionary force on industrial production and commodity prices.

Money growth is only 3%, John, year on year. Nominal GDP is 5. And whenever money growth is less than nominal GDP, real growth slows dramatically, up more than a percent over the next year, at least since 1960. So I think we're going to have a re-spike of recession fears again.

And then we're going to get a more dramatic downward move in the rate structure, which will bring a rally in the second half. Okay, Bob, what do you say for 25? You're continuing to preach risk management diversification, even though it's not as exciting as some of the other options. Well, I think that the biggest thing as we enter into 2025 is it's time to curb your enthusiasm about this economy. I mean, we've seen real GDP prints above 3%. We see priced in earnings expectations growth in 25 and the stock market of 17.5%. And now we basically are having an interest rate curve that's pricing in no more or very few, you know, essentially one cut from the Fed.

You put that together, basically, the U.S. economy has to perform at perfection in order to meet all that series of expectations. And when you look at what's going on sort of cross asset, that dynamic really favors at this point bonds and gold to some extent relative to stocks, where basically any sign of a growth slowdown, you're probably likely to see some amount of rally in the twos, a little bit of a rally on the long end, and stocks coming under pressure early in 25. I'm hearing a fair bit of caution from both of you right now, at least over the coming months. But Jim, you put out a really interesting note, some really interesting research post-election a couple of weeks ago, where you took a look at what happens to the

stock market when there is a pullback in public sector spending and activity versus an increase in private sector. And that is very much the narrative. I mean, I realize lots of question marks on how we get there and all the policy lift that has to happen to get there. But that is very much the narrative alongside an incoming Trump administration. How does that factor in here? Well, I think it does, Morgan. And you know what, Bob and I are both talking about is maybe a correction here in the first half of the year sometime. But I don't think, from my perspective at least, I think this bull market's got a ways to go yet. I really do.

And I think bull markets that last correct along the way, refresh, if you will. And I think that's all we're talking about. Because to your point, we've got some really marvelous things in the background. I think that the technology run we've had in this country is already paying dividends. It's one of the reasons that we're growing at 3% real GDP when job creation is only about 1% or by the household numbers flat. It's because we've created so many new innovative tools that's allowing us to grow even with slow labor growth in the economy. That's a wonderful result for a prolonged bull market event. On top of that, to your point, we've got an agenda ahead that looks more at boosting private sector activities and reducing public sector activities.

And man, that has been a winner, not only for economic performance historically, but also for the stock market. If we get into a real economy-driven, private sector-driven economy with a shrinking public sector supporting that, I think this bull is long from over. So you can't get too cute worried about a correction, a 10%, 15% correction. it will mean nothing if this bull continues, particularly if it continues on the back of the technology dominance of the United States and on the back of sector growth. All right. So, Bob, you've been talking a lot, including on X, where you've been pretty spicy about this. You've been talking a lot about this over easy trade. So even though we had a Fed that cut very hawkish commentary, yes,

we just played Goolsbee, but even some of the other officials we've heard from in the past call it 24 hours have tilted a little more hawkish looking to 2025 in part because of policy uncertainty on the fiscal side and into anticipation about what that could mean for inflation. So what to you feels like the market is currently over easy? And if that trade is done, where do you go now? Yeah, I think the over easy trade, you know, really basically called the last three months almost perfectly. And at this point, that trade is largely run, I think, in part because what's happened is we've sort of repriced an expectation that the Fed is going to be very tight at this point. Right. With only roughly one cut priced in in 2025. And that, I think, is reflective of the fact that at this point, you know, analyst expectations for U.S. growth in 25 are, you know, two and a half percent real growth, maybe as high as three.

Those are all very, very high expectations relative to an economy that is facing higher rates on the long end. You know, long end rates at four and a half and higher, we've seen a couple of times in the last few years start to drag on the economy both directly through, you know, higher mortgage rates, but also through financial asset prices. And so we probably can't take at this high's continuation without getting some slowdown that's going to disappoint expectations. Makes sense. Bob, Jim, have a great weekend. Thanks for joining us. We've got some breaking news on the Qualcomm ARM trial over a licensing dispute between the company. Seema Modi has that. Seema.

John and Morgan, the Qualcomm and AMD legal dispute that this trial started back on Monday. And the jury is said now to be deliberating over whether there was, in fact, a breach in the licensing agreement between these two semiconductor companies. Some headlines emerging from Reuters, they're reporting that the U.S. jury finds Qualcomm did not breach Nuvia's license agreement with Arm Holdings, which is what Arm was accusing Qualcomm of. The U.S. jury also finding Qualcomm's custom CPUs are licensed under its deal with Arm. I'm told by a source in the room who I've just been texting with that these deliberations are said to be ongoing. So we'll be looking for more headlines and what comes out of this trial. Again, it began Monday and the jury started to come together yesterday. We'll see if we can get something by the end of the day.

But in the meantime, we are watching shares of Qualcomm move higher as these headlines emerge by 2.5% in overtime. John and Morgan. Seema, thank you. Morgan, this looks like potentially a huge win for Qualcomm. Qualcomm had the most to lose here in the sense that the architectural license, Snapdragon, their strategy is very much grounded in that. But then at the same time, ARM is really trying to make the case that their IP,

they're trying to own it more, make more money off of it. This is going to dent their chances of being able to make that case more broadly as folks like Apple do more of their own thing. The jury seems to be saying that the Nuvia and Qualcomm innovations weren't so dependent on ARM, at least from a legal standpoint, which we'll see what the implications are there. Yeah, you've been following this one very closely. And to your point, Qualcomm shares are now up 2 percent and Arm is down about 2 percent on this outcome.

Well, now let's turn to senior markets commentator Mike Santoli. He's tracking the market's wild action this week. And, Mike, it has been wild. Yeah, it has, Morgan, especially below the surface. But even the S&P 500 had a more dramatic move this week, a 3 percent down day almost on Wednesday. It looks still on the orderly side on a year-to-date basis. What did happen was the index went down and checked right back to the election day levels and back toward those

October highs. It seems more like a little bit of a reset or rebasing. Let's test to see if those levels are trustworthy, although in the beginning of December, I was pointing out why 6,100 on the S&P was widely considered a potential upside destination, technically speaking, for a variety of reasons. We basically just about got there and then have backed off. A lot of people are going to view that as a potential upside ceiling until proven otherwise. Take a look here, though, at the action in the S&P in 2018 into 2019, because there were a little stirrings of familiarity with this idea of a steep December sell-off, which happened in 2018, also being accompanied by Fed rhetoric that was perceived

to be too hawkish for the economy and the market to handle. And you did have an instance where that December seasonal strength did not really show up until the final couple of days. That was a real selling crescendo culminating around Christmas Eve. Now, I would say a big difference here. We've been going down in 2018 since early October. So it was definitely a more mature sell off and a deeper one almost got to 20 percent. So that's one big difference. And also the Fed was tightening into that as opposed to just removing potential rate cuts. But worth keeping in mind, you don't always get a strong and calm December. Finally, stocks versus bonds on a quarter-to-date basis. One of the things that happened in the end of 2018, that sell-off,

was there was a huge rebalancing back into equities by a lot of these sort of target-date funds. You do have some spread here where bonds have really, that's a bond market, totally underperformed on a quarter-to-date basis. So that's not necessarily going to be net benefit to stocks if we do get some rebalancing. But the moves here aren't as dramatic necessarily to be too decisive going into year-end, Morgan. Mike, I love that you just put into context what we saw with the market with the last shutdown from 2018 to 2019. Really great stuff. We're going to see you later this hour.

Makes this past week look a little bit less scary probably. A hundred percent. We're going to see you later this hour. Makes this past week look a little bit less scary, probably. A hundred percent. Yeah. All right. Well, we're going to stick with the shutdown. And just a reminder here on some key dates that you need to remember. The new Congress meets exactly two weeks from today, January 3rd. You've got a new president starting January 20th. So let's turn now to Emily Wilkins in Washington for the latest on where things stand ahead of that midnight deadline. Emily, the part that I keep thinking about is with a January 3rd new Congress coming in, could we just go from potentially a shutdown if we don't get a CR to an actual budget, which is several months overdue already?

Morgan, I mean, that is a great question. If you remember, though, trying to put together the fiscal 2025 spending, it does usually take a while to come together. There were a lot of lawmakers that were hoping that was going to be the bill they were working on now instead of continuing 2024. But look, we just saw Republicans meet in the House. We saw them come out with a lot of optimism. Speaker Mike Johnson just flat out said they'd be able to avoid a shutdown or at least a long shutdown. Take a listen to what he said. We have a unified Republican conference. There is a unanimous agreement in the room that we need to move forward. I will not telegraph to you the specific details of that yet because I've got a couple of things I got to wrap up in a few moments

upstairs, but I expect that we will be proceeding forward. We will not have a government shutdown and we will meet our obligations for our farmers who need aid, for the disaster victims all over the country and for making sure that military and essential services and everyone who relies upon the federal government for a paycheck is paid over the holidays. I'll give you the more details here in just a few moments. So a lot of obviously momentum and confidence there from the speaker. The details, as we understand them, is that it's going to be one bill passed in an expedited vote. So they'll need Democratic support. And that will include funding the government at 2024 levels from now until March 25th. It will include that hundred billion dollars in disaster aid for areas hit by hurricanes.

And it will include assistance for farmers. However, like so much of this process, it has been hurry up and wait. We haven't heard anything else from the speaker. We haven't heard any additional details. We don't even know when or if the House is going to vote. And we don't know if Democrats are going to be going along with Republicans if they decide not to. This planned vote that they've talked about might not be able to actually pass. And even if the House does get its job done, then you have the Senate, and that does take a while over there.

Meanwhile, it seems like Elon Musk has begun tweeting again. Initially, it seemed like Republicans were going to take a slightly different course of action, where they were going to vote on each piece that I just described one at a time instead of all together. And we just had Musk tweet in a question, is this going to be a Republican bill or a Democrat bill? So it seemed like there was a lot of optimism just a short time ago. I think now there are lots of questions about why it's taking so long and what's going to happen next. But if anything, it does seem like we're headed for at least a short shutdown that could be into the weekend. I think the question is, does it go much longer than that? Morgan, John? Emily, thanks. A lot of characters in this story

and hours to go. Well, after the break, we'll talk to Eric Rosengren, the former head of the Boston Fed, about the comments from Austin Goolsbee that pushed the market higher today. And if he thinks it's the right message. Don't miss our exclusive conversation with Commerce Secretary Gina Raimondo with her take on the possible shutdown and what could happen to CHIPS Act funding when the Trump administration takes over. Overtime. Stocks rallying today as the PCE price index came in lower than expected. And after Chicago Fed President Austin Goolsbee told CNBC that rates could fall further next year.

Well, joining us now is former Boston Fed President Eric Rosengren, who said before this week's Fed meeting on the show that if he were still at the Fed, he would be voting against a cut. It's great to have you back on to bookend the week here. And we did get that hawkish cut. The market certainly reacted strongly to it in a negative fashion on Wednesday and even into Thursday. What do you think now, especially given the fact that whether it was Fed Chair Powell or a number of other officials, maybe ex-Goolsby in the last 24 hours, there's been a lot of talk about concern about a reigniting of inflation, possibly tied to fiscal policies, which we don't

actually know what those are going to look like. Yeah, I think that's the big challenge right now is we really don't know what the fiscal policies will be. We do know there's a lot of talk about immigration tax cuts and tariffs, all of which directionally potentially could be inflationary. But we don't know the magnitude. We don't have any details. And some of them may be negotiating comments that may not happen at all. So I think there is an unusual amount of policy uncertainty. Usually monetary policy doesn't spend too much time worrying about fiscal policy because it tends to be slow moving. But a lot of the things that could be coming up shortly after the inauguration could be done by executive order. So I think in the next month or two,

we'll start getting a little more clarity on what policies could occur and whether or not they really have much of an inflationary impact. What do you think about financial conditions right now? Are they too easy? Well, the stock market, even though it went down quite a bit after the Fed meeting,

is still relatively high by historical standards. Obviously, Bitcoin, some of the other measures of kind of speculative desires to see prices go up are still fully valued. So I don't think it's particularly restrictive given the conditions that we have in financial markets right now. So, Eric, given that, do you think markets are responding reasonably to a what the Fed is doing, but maybe more important or just as important what a Trump administration is likely to do with policy? People might start reacting to likelihood before the policies actually start to affect the data. So I think we've seen some of that just with the Fed announcement. So it wasn't a particular surprise that it was a hawkish cut.

And I think what was a little bit of a surprise was the summary of economic projections only had two cuts for next year. And I think some of the language at the press conference indicated that at least some people were taking into account potential fiscal actions that could be inflationary. So I think it just elevated the concerns that if there are inflationary policies on the fiscal side, that monetary policy will have to react to that. So we'll see if they actually come to fruition or not. But I do think that if we get a set of fiscal actions that end up being inflationary, it will make it very difficult for the Federal Reserve to cut particularly as much as the markets were expecting prior to the last FOMC meeting. Eric Rosengren, great to have you on. Thank you.

Thank you. When we come back, Commerce Secretary Gina Raimondo joins us with her thoughts on the potential government shutdown, the future of the CHIPS Act, and reports about a crackdown on NVIDIA chips in China. That's next. Welcome back. Earlier today, I sat down exclusively with Commerce Secretary Gina Raimondo for a wide-ranging interview that started with the prospect of a partial government shutdown come midnight and what that would mean for her department.

It's so unfortunate and I think embarrassing that we're in this position there's no need for it i hope congress can get its act together this weekend and and pass a bipartisan uh uh resolution so we can keep the government open that being said uh we're preparing you know it will be disruptive it will slow us down. People will get hurt. I'm focusing on the national security aspects of our job, prioritizing what must get done, and we'll do our best, Morgan. But to me, it's just so heartless.

What this means is that I will have people here at the Commerce Department working and not getting paid, not getting a paycheck the week before Christmas. You're gonna have federal employees working through Christmas at airports, military members working through Christmas without getting paid. You know, forget about politics. That's just mean-spirited. It's wrongheaded. It makes, it weakens America and I just hope that Congress can prevent that. So what do you see as the national security aspects? And I ask that knowing that just earlier today you've put three more CHIPS Act awards or announcements of those awards out,

Samsung, Texas Instruments and Amcor. Yes. You know, I have to say, on a happier note, it's pretty incredible all of the national security work that the team here at the Commerce Department has done in the past couple of years. I remember, Morgan, talking to you a couple of years ago, there was no CHIPS team at the Commerce Department. There was, the CHIPS Act had just been passed. And today, we have a couple hundred people working. We've made 30 grants to some of the best companies in the world, Texas Instruments, TSMC, Samsung, et cetera. We're on our way to being the only country in the world that designs, manufactures, and packages leading-edge semiconductors in our country. We've invested more than 90 percent of the money that Congress gave us, and that makes America stronger. It makes us less reliant on other countries for the semiconductors that we need

to run our businesses, run the military, and be a leader in AI. You just said 90%. Do you expect to be to 100% come January? Very, very close. As you said earlier, I hope we keep the government open. I hope everybody can keep working. But we'd like to be almost done, just about done. Is there any possibility, because we've heard some rhetoric out there, that perhaps some of these big tentpole policies, including this one from this current administration, that there may be, with a new administration, a new Congress coming in, some attempts to pull back or scale back some of the funding that's gone out.

Is that something that could actually happen? Or is once these grants and once these funds awarded, that's it? You know, look, anything can happen. Theoretically, it would be incredibly unlikely for a few reasons. You know, we've made we've made legally binding commitments to these companies. So these companies can and should expect that the U.S. government will make good on its promises and the contracts. But also, the CHIPS Act is still very popular with Democrats and Republicans on Capitol Hill. I was on Capitol Hill earlier this week briefing members of Congress, Republicans and Democrats, both very interested in it.

It's a national security initiative. It was passed bipartisan. It remains bipartisan. By the way, you know, the initiative began in the Trump administration. My predecessor, Wilbur Ross, worked with Trump's secretary of state to try to attract TSMC to America. So I'm really not very worried about that. It's the right thing to do for America, and I expect that it will continue. I also asked the secretary whether reports are true that the Commerce Department has asked NVIDIA to look into how its products ended up in China over the past year,

and if so, how big of a concern it is? Anytime we have any evidence of companies, Chinese companies or any companies, trying to circumvent our controls, it's a concern. It's absolutely a concern. You know, the Chinese are determined to get our technology. We're ahead of them and they want what we have. I'm just as determined to deny them that technology. So we're constantly talking to industry, NVIDIA, but all companies. I have to say, one of the things I'm really proud of, Morgan, is since I've been in this job, I'm constantly engaging with industry. So we have the ground truth what's really going on out there and so yes we're doing that all the time we don't have any particular thread with Nvidia right now but what we're always talking to companies what are you seeing on the ground how could China be you know setting up you know

fake companies or shell companies or PO boxes to get our chips and doing an end run around our regulations so that we can tighten the loopholes, we can be more effective. While it's, quote, never ending relentless competition, Secretary Raimondo says there is no question the administration has been effective in countering China's efforts to get key technology, pointing to recent export controls on chip making equipment done alongside the Dutch and Japanese, for example. We also discussed AI and the fact that the role of commerce has evolved and expanded to include more policy at the intersection of technology and national security. Now, in light of that, I asked what her message is for her successor, nominee and Cantor Fitzgerald CEO Howard Letnick. I have reached out to him.

I've told him I'll do whatever I can to help him be successful. I predict it'll be the best job he's ever had. He's a very successful person already, but the Commerce Department is a special place. It's at the center of national security, the center of AI, chips, technology, the center of trade and working with our allies.

And they're incredible people who work here. You know, 50,000 employees all over the world doing great work on behalf of our great country. So, you know, my advice is continue. We have we have made the Commerce Department under President Biden's leadership, you know, more muscular, more robust place, more active in national security and tech policy. You know, stay there. Engage fully. As for what's next, Secretary Raimondo says right now she's focused on finishing this job, calling it an honor of a lifetime. And though not saying yes, also not ruling out when I asked her a future run for president. The entire 17-minute interview is on CNBC.com. Take a listen

or take a watch. All right. Great stuff at an important time. Well, time for a CNBC News update with Seema Modi. Seema. John, German officials say at least one person is dead and at least 60 more were injured after a car drove into a Christmas market in eastern Germany today in a suspected deliberate attack. That's according to local German officials who say the driver was arrested and believed to be from Saudi Arabia. Meantime, the White House had, quote, impermissible under influence, undue influence

over a national security review of its nearly $15 billion deal to acquire U.S. steel. That's according to Nippon Steel. Now, in a letter to the Committee on Foreign Investment in the United States, Nippon Steel threatened to sue if the deal is blocked. The committee, which reviews foreign acquisitions for potential national security risks, has until Monday to make a decision to the deal. And over a two-day period, doctors at The Ohio State University Wexner Medical Center saved the lives of 10 organ recipients in a synchronized 20-person transplant. According to the hospital, five kidney donor and five kidney recipient surgeries were performed each day, and it is considered one of the largest ever living kidney donor transplant chains completed in one week.

Pretty incredible. John? Wow, Seema, thanks. Well, up next, Mercer's U.S. Chief Investment Officer on where she sees the biggest risks and potential rewards in 2025. Be right back. Welcome back. Stocks ending the week with a major rally, but the Dow and S&P could close out December with their worst performance since April. Joining us now is Olalo Agonga. She is the U.S. Chief Investment Officer at Mercer. Olalo, great to have you back here on set. So for 2025, you think U.S. stocks do pretty well,

but not as well as Japan? Yeah, I mean, look, right now we've seen just even the equity flows for November. What is it, $140 billion in U.S. stocks is the highest that we've seen in 20 years, right? So $350 billion just year to date. With the incoming administration, there's a lot of enthusiasm for the U.S. market. It's clearly an America first type of agenda that we've seen.

Personally, from a tactical asset allocation perspective, we are somewhat neutral. But we've been looking for opportunities that we can invest in for prolonged periods of times, more themes, thematic opportunities that can persist through some of the noise that we're seeing. So a couple of examples, AI, of course, we've seen that happen, but AI driving productivity growth. So natural language processing, perhaps machine learning. So partnering with processing, perhaps machine learning, so partnering with private equity companies in a deal environment that's conducive for that to be able to invest. The other aspect that we've been looking at as well, another theme, it's more called the security of everything. So whether it's

cybersecurity, in this geopolitical environment, anything that can protect supply chains, so investing in those types of companies. But again, it's more prolonged. At what point do the Trump administration's policies cease being noise, right, and start being something that you can really invest based on and find real advantage? How do you figure out when that moment is? They will have to come in and we have to see what can actually get enacted. The number one thing that's been a big focus is the tariffs, right? So potential 60 percent on China, 10 percent on a

number of other places. We've seen the market performance with China. Even we've seen the one year rates dip below 1 percent, right? Like that we haven't seen in an incredibly long time. So tariffs is one, but then that also has bigger implications of potential inflation, right? Like that, we haven't seen in an incredibly long time. So tariffs is one, but then that also has bigger implications of potential inflation, right? So 2025, we're expecting significantly more rate cuts now. If we see the median dot plot, it's like two, maybe, right? So 50 basis points. But if all of these things can be enacted, it's the fallouts from tariffs. And what does that mean? Interesting. I mean, you just mentioned that you're tactic tactically neutral. Why and how much and how much of the policy noise, you know, does that hinge on and would change that that neutralness? So

tactically neutral because of the uncertainty. And I mean, debt ceiling aside. So talk about uncertainty. So what we've done is just taken a little bit of a step back to see, okay, if a 25 basis point rate cut that we've just seen, you know, potential 50 basis point by the end of 2025, what other opportunities could we have? One would assume in an environment where rates are going lower, it would mean that we would start looking longer out in the curve, maybe looking for more

fixed income opportunities there. We're not seeing it. Our clients aren't seeing it. In the longer part of the curve, it's still more the corporate pension defined benefit plans, and those are hedging liabilities. So those opportunities haven't opened up quite yet, despite the fact that rates are going lower. So that's where we're waiting to see how things just really filter in. Great to get your inside look. Alali, thanks. Thank you. Alali Aganga from Mercer.

We got more breaking news on the continuing resolution out of Washington. Emily Wilkins, back with that. Emily. Hey, John. Well, I said it was hurry up and wait, and I think we're in hurry up mode again. We now have the bill text for the third attempt to make sure that the government continues to be funded after midnight tonight. The House is expected to be voting basically around five, sometime between five and five thirty. And what members decided to do, the Republican members, they decided that this

should be a vote done as quickly as possible. They're using an expedited process that allows them to quickly vote and get this bill to the Senate if it passes. But it does need Democratic support to pass. And we know that not every Republican will be voting for this bill. A thing to definitely keep an eye out for here is how many Republicans vote yes. Remember, one of the underlying stories of all this has been the support behind Speaker Mike Johnson. Remember, he has to win that gavel back at the start of the next Congress. And there are some members who are unhappy with him at this point.

I know at least one member, Congressman Thomas Massey, who I spoke with today, he says he's not planning on voting for this. He still has concerns about Johnson. But at the same point, there is a lot of hope that now that the debt limit is removed from this bill, it can get the support from some other Republicans who voted no last night, as well as Democrats. And of course, once that is done, if it passes, it will now be up to the Senate to complete it, see if they can do so before midnight or whether we might have a slight shutdown going into the weekend. Guys, a busy Friday night.

Emily Wilkins, thank you for bringing us the latest. Up next, Mike Santoli breaks down what history says today. Today's big inflation reading could mean for the Fed and the market. Welcome back. The PCE Price Index inflation reading for November came in lower than estimates, but it's still higher than the Fed's 2 percent target. Mike Santoli is back to explain how today's reading could predict the Fed's next move. Mike. Yeah, it's a bit open ended, John. Why investors are a little bit uneasy with this recent stall out in PCE inflation, both at headline and core levels. On the far end there, you see how in recent months, just curled higher just a little bit. What I wanted to point out with a very long-term chart going back to 1990

is that these absolute levels are really not that remarkable, that we've kind of been able to coexist with them with relatively stable interest rates. It did not mean, if you got one of these little bumps, that it was the new leg higher for inflation. In fact, back here in the 90s, when the Fed had a very, very aggressive 1994 tightening campaign, took its foot off the break going into 95, only did three rate cuts. The Fed just did three rate cuts. Then it went on hold for this entire period or much of that period in there, just tweaking things around the edges. So there is precedent for stable but slightly

still downtrending inflation. So I would say, you know, the reminder today from Chicago Fed President Austin Goolsbee, we're not at target, but it doesn't mean we're not headed there. And at least for now, leaving wide open the idea that the Fed could nudge rates lower in the context of a decent economy. Morgan. All right. Mike Santoli, thank you. Have a great weekend. Up next, the AI opportunity for fintech. The CEO of one startup on how AI is making investing for retirement simpler and less intimidating. Stay with us. Welcome back. Investors who were disciplined about staying in the market probably did well in 2024, with the S&P 500 up 25% so far. Today, John takes time out with a CEO whose company

helps small business employees save for retirement. Yeah, Kevin Buskey is CEO of Guideline, which specializes in 401ks for small business employees. The approach is high-tech, low-fees, software-guided. I met Kevin in 2017 when he was a little more than a year into founding the company. He told me how his experience as a co-founder of startup TaskRabbit helped him see the need for a better 401k. TaskRabbit had offered workers a 401k early on, but only a third of people signed up. People wanted to do their 401k savings plan. They wanted to invest, they just didn't know how. It was really the broken process. If you've ever signed up for 401k, there's an enrollment meeting,

people come to your office, slide you a brochure, tell you to pick some stocks some mutual funds on the right side you got to pick a percentage and hopefully it adds up to a hundred percent and that's your investment essentially your thesis and that's what you're going into seven years later guideline has passed 130 million dollars in annualized recurring revenue and Kevin tells me fewer than 1% of small business customers voluntarily leave Guideline. He says he's adding between 13,000 and 16,000 new businesses a year, and the surging stock market has employees eager to sign up. When you're successful at investing in the stock market, you want to do more and more, and that's really important. We manage $17 billion in the market now,

and we do a lot of contributions, a couple hundred million dollars every couple of weeks, just in employee contributions. Our growth has also been coming from new additive payroll partnerships. We just signed up with Deal as they entered the U.S. payroll market. We have a new partnership with Paycor and Paylocity and JustWorks as well. And that's bringing a lot more business to Guideline, where traditionally we had much larger partners like Intuit or Augusto. And Rippling is on our platform as well, and they're growing incredibly fast. So we're getting a lot of new business from there. About 60% of all of our business comes in through a payroll partnership or payroll channel.

So the time at takeaway, use AI to simplify. A guideline has always used what it calls a suitability algorithm in its onboarding process to learn employee risk tolerance and long-term goals. The purpose is to solve the problem Kevin Buskey identified before he even started the company. Financial complexity was intimidating people out of investing. That suggests the AI opportunity for fintech in 2025 and beyond isn't just in acting like humans, but also in asking good questions that make investing more approachable. Morgan. Super interesting. Well, up next, why this week's SpaceX launch of two new broadband satellites is so important for the future of space-based communications. Earlier this week, SpaceX launched its third rocket in less than 24 hours.

This is a mission conducted for one of its oldest launch customers, Luxembourg-based SES. In an interview that started with a fueled Falcon 9 rocket on the pad and ended with a successful launch of SES's two new broadband satellites, I asked SES CEO Adel Al-Saleh why this mission is so significant. Our first six satellites, which are in orbit already for this Empower constellation, had some technical issues.

So they were running at subcapacity, if you will, for the last several months, right, since April when we put them in operations. These two satellites are fully healthy. We fixed a technical issue with Boeing that we worked on tirelessly for the last few months. So they will increase the capacity of the Constellation significantly, more than 30% boost in that capacity. The satellites comprise the Constellation for the O3B Empower Communications

Service, which SES is building out for governments and for commercial customers like cruise ships and airlines. Boeing makes the satellites, and despite issues with earlier spacecrafts, Al-Saleh says he's got, quote, a lot of confidence in Boeing since the satellites are the most advanced in the market. Now, speaking of, as SpaceX's Starlink service proliferates, he does say the market is very competitive. That pricing is still irrational. A former telecom exec before taking the helm at SES last January, Al Saleh, sees connectivity expanding. I see our industry, the satellite industry, slowly converging with the terrestrial networks. And direct-to-device or direct-to-sell is a good example, right? We will

work very closely with the mobile operators to augment their services and provide this additional capability. It's happening today, Morgan. So if you look at where do telcos use satellite capability is in the areas where it's very hard to build fiber, when the areas where mobile networks are just not reaching the populations. And there are plenty of them in the United States and certainly plenty of them in Latin America and Asia. Europe is a little bit more advanced in terms of fiber penetration. But that's the areas where telcos use us in order to provide the backhaul or the trunking, if you will, for their capabilities. So some similar insights on where the industry is headed to what we heard from direct to sell player Global Star on overtime just last week.

I suspect SES will have some news around direct to sell in the new year as well. For more of my discussion with SES's Adele Alsaleh, scan the QR code on your screen or download Manifest Space wherever you get your podcasts. Yeah, interesting stuff. Also, I just moments ago got a statement from Qualcomm on the Qualcomm ARM jury verdict. It might still be deliberating over one point, but Qualcomm says, We are pleased with today's decision. The jury has vindicated Qualcomm's right to innovate and affirmed that all the Qualcomm products at issue in the case are protected by Qualcomm's contract with ARM. We will continue to develop performance-leading, world-class products that benefit consumers worldwide with our incredible Orion Arm-compliant custom CPUs.

It's been a busy Friday. We're also keeping an eye on D.C. where you have this continuing resolution vote in the House expected next month. Fast money will be all over that. A market rally today, although a down week for the major averages. That's going to do it for us here at Overtime, though. With that, Fast Money starts now.