Closing Bell - Closing Bell Overtime: Stocks Surge after Powell’s Speech 11/30/22

Episode Date: November 30, 2022

Fed Chair Jay Powell’s speech sent stocks higher today – so will his comments help markets move even higher into the end of the year? Ritholtz Wealth Management’s Josh Brown gives his expert take. Plus, instant reaction to Salesforce numbers.

All right, Sarah, thank you very much. Yeah, they're lighting the tree here today. That's why there is a big crowd and the market was lit. That's for sure. Welcome to Overtime. I'm Scott Walkman. You just heard the bells. We're just getting started from post night right here at the New York Stock Exchange. Two big earnings reports are imminent. Salesforce and Snowflake, two stocks that have gotten beaten up pretty good this year. So will these reports turn the tide? We will find out the minute they cross, give you all of the analysis, as always, that you need. We're also going to react, of course, to Fed Chair Jay Powell's speech today, which did set this market on fire. The Dow closing better than 700 points higher. It's our talk of the tape. Whether those remarks will give stocks, which certainly liked that appearance, the chance to move even higher now into the end of the year. Let's ask Josh Brown. He is the CEO and co-founder of Ritholtz Wealth Management, also a CNBC contributor.

It's good to see you. Your reaction to the market's reaction to Powell. I would say if it's going to happen, it makes perfect sense for it to happen now from a seasonal perspective. This is like the best five-month run for the market. Always begins in November. I know we talked about this a few times on the show. This is the moment for it to actually take shape.

There's a lot of things going on here that make these seasonals more believable than a lot of other trader rules of thumb, which are not believable. And one of those things is career risk. A lot of people got the markets right this year, by which I mean they weren't heavily invested in growth. They weren't heavily invested in the big index names that have struggled.

They played value. They played dividend. And they look way better than the benchmarks. But now all of a sudden, with a move like what we're seeing here and Fed risk coming off the table, you're going to see the index strike back, so to speak. And you're going to see a lot of people maybe get caught off sides here at a time where they really can't afford to. So it's going to be very interesting to see if there's follow through tomorrow, the next day from the Apples, the Amazons. And if there is, I suspect you're going to see even more chasing than what you're seeing on the tape right now. Interesting. I mean, tech, you could make the point, I think, Josh, was the most at risk today to a more hawkish Powell. Didn't get that. And that's one of the

key reasons why the Nasdaq just exploded to the upside here. Yeah, well, listen, that's the that is the epicenter of of what what the Fed has been doing with monetary policy. That is that kind of long duration, cash flows far out into the future, growth rates that you really have to bet on lasting for a long time to get paid back at the multiples people are paying. That's where we really saw the harshest expression of that idea all year. But then as that idea starts to fade away,

look at Apple up four and a half, Google up five, Amazon up four. The ARK names, they're up seven, eight, 9%, the ones that I'm looking at right now. Semiconductor stocks, and these are big market cap technology stocks, 7%, 6% for Qualcomm, 5% for AMD. These things are exactly what you would expect to see if it's possible.

We've seen the peak in rates. We've certainly seen the peak in acceleration of inflation. If we've actually seen the peak in rates and we've actually seen the Fed's tough talk at its worst, these stocks could remain bid through December. It's a good point you make and a point that Leisman made with Sarah just a short time ago, that maybe this is the market saying that this is it. This is as bad as it's going to get, right? You've got 494 is the yield, 4.94% for May of 2023 in terms of a Fed funds rate. So maybe this is exactly what you said. The market trying to sense that this is going to be it. Now, that's anyone's guess, because it's not like the Fed chair today said, oh, we're all done.

He didn't. He just made the point that it's OK to moderate and maybe moderate next month is fine, too. He's going to go out of his way. They're going to go out of their way in the speeches going forward. I know we're in a quiet period. They're going to go out of their way in the speeches going forward to emphasize the longer part. Like, OK, we might moderate, but we're not we're not taking our foot off the brake and we're not going to let this thing reaccelerate. Like that's going to be what we're going to have to get used to hearing. But more data is going their way. That Kay Schiller number, that's the third consecutive month of nationally home prices declining.

We haven't seen that since 2009, like during the height of the financial crisis. Then you look at private payrolls. Companies added, private companies added 127,000 positions for the month. That's a huge drop. October was 239,000. And the estimate was 190,000. So we missed the estimate.

Huge drop off from the prior month. And keep in mind, seasonally speaking, this is when you would expect to see people adding workers, not not taking them away. So all of these things have to be adding up to a Fed that says, OK, we've done a lot. It doesn't mean we're finished. But do we have to continue to talk about 75 basis points every time we step to the podium? The market is saying, no, you don't. And I think there's a lot of conviction out there behind that. So we're watching Salesforce, which, by the way, just is out.

I see shares down 5%. Frank Holland, our reporter, is going through that. He's going to pop on momentarily and give you all the details, exactly what you need to know for a stock that's already had a really tough year. It's the second worst performer in the Dow Jones Industrial Average year to date. Intel, and you know the kind of story that they've had to tell of late. Intel's the only one that's beaten it to the downside. So Frank's going through it. He's going to pop on momentarily. But Josh, you know, I wonder if part of this today is the market feeling a little

comforted from Powell in the sense that he said, quote, I don't want to over-tighten because cutting rates is not what we want to do soon. I mean, he's hearing, he has to be hearing the messages of the economy is slowing. We're worried they're going to do too much. The yield curve is inverted by the largest amount in some 40 years. It's the kind of concerns that turned Marko Kalanovic of J.P. Morgan more bearish than he's been in an awfully long time. And a new note out today saying that you're looking at it, further market and economic weakness may occur as a result of central bank overtightening. Maybe this was paying homage by the Fed chair to that kind of concern as well.

Well, you have to remember that when we talk about the Fed, it's not an algorithm. It's people. And it's a chairman's board. So it's really one person. And one person's life experience brings along a lot of biases and a lot of things that maybe had gone wrong before that they're not eager to repeat. And if you just go back to 2018, over-tightening is exactly what the Fed did. We had the Trump trade war, which was a disaster, and the Fed continuing to tighten, and not only tighten, but every chance it got,

make statements like, we're nowhere near neutral, or we've got a ways to go, over and over and over again. And at a certain point, it became too much for the market. We were got a ways to go, over and over and over again. And at a certain point, it became too much for the market. We were in a stock market crash. ISMs turned lower, PMIs turned lower. All the leading economic data was saying this is too much. And then finally, Christmas Eve, the pivot. By June of the following year, we were already cutting rates again. And by the fall of 2019, they were intervening in the overnight repo market. So this is a Fed that has lived through that in very recent history. I don't think Jay Powell wants to have to come out in February and say, hey, we're cutting

again. Like, I don't think any Fed chair wants that, but he actually did it. And I think it's important for us to remember this is a person with memories, with feelings, with experience. So it's very hard for me to believe that they're going to want to repeat that. Hey, let me just jump in if I could go to Frank Holland, who is ready now. You see shares of Salesforce are down 5%. I do see a pretty interesting management maneuver there as well, Frank, which I know you're going to get into. Absolutely, Scott. We're going to actually start off with that.

Co-CEO Brett Taylor says he's going to step down as co-CEO, effective January 31st of next year. Within a release, he says he's grateful for six fantastic years at Salesforce, but after a lot of reflection, he's decided to return to his entrepreneurial roots. Salesforce has never been more relevant to customers. His statement continues to go on when it gets to the numbers as well. Beats on the top and the bottom line.

Profit about 19 cents above estimates. Another key metric here was remaining performance obligation. That was a strong beat there. Remaining performance obligation at 20.9 billion compared to the estimate of 21 point, excuse me, got that backwards actually, a miss on remaining performing obligation. Got kind of tied up about this management change.

Forward guidance also light when it comes to revenue, but a pretty strong beat when it came to EPS guidance going forward. You see the stock declining right now, again, with co-CEO Brett Taylor deciding to step down as co-CEO effective January 31st of next year. We're going to continue to look through this report, Scott, and get back over to you. You think, Frank, that the majority of the stock move we're seeing here is because of Benioff's wingman deciding to leave? Because on the surface, you have a pretty decent earnings report. And frankly, the guidance was pretty good, too. There's been some urgency, you know, around, you know know what is future business going to look like

and in a kind of environment that we're going into whether the top line is going to be impacted more dramatically moving forward because of that said environment is it your sense that this stock move is related to Mr. Taylor well not just that I was talking to analysts earlier today and I was earlier today looking at the remaining performance obligation estimates when it comes to Salesforce. And again, it came in below the estimate of $21.07 billion. It came in at $20.9 billion. That's a metric that kind of gives you insight. It's a proxy for the pipeline and demand going forward.

It's work that's been invoiced but not yet done yet. So to see that number decline, and not only decline sequentially, but a decline year over year, that could be a sign of softening in the business. Mark Benioff's commented several times that he believes that business isn't necessarily soft, but it's just taking a lot longer to close deals. We heard something very similar from Nikesh Arora from Palo Alto Networks. And then just yesterday from George Kurtz from CrowdStrike saying something else, something very similar. He's saying it took 11% longer to close deals for them. So this remaining performance obligation number could be a sign of softening business.

It could be the narrative that we've heard Mark Benioff and others say. It's just taking longer to close deals. But certainly having Brett Taylor leave the company is a very big deal for this company. He and Mark Benioff, they seem very simpatico. I was actually at Dreamforce in San Francisco. They seem very much on the same page. Brett Taylor had a great rapport with not only the Salesforce community at Dreamforce, but investors and analysts. A lot of people talking to him, not at the same level as Mark Benioff. Mark Benioff, obviously a rock star in the Wall Street

when it comes to business, but certainly a lot of people interested in engaging with him. And he's been a very big part of this business, according to everybody at Salesforce I've spoken to. Yeah, that's great insight, Frank. And I appreciate that. As I was reading from an analyst today, maybe the quote unquote urgency around projects has changed a bit as people just become a little more cautious. And maybe that's showing up here. Our Frank Holland, there's going to be back momentarily, too, with Snowflake, which we're waiting on. Speaking of another stock that's had a tough run of it, Benioff himself, Mark Benioff, is going to be on with Jim. So he's going to give you the whole story on what this management is going to look like moving forward and what the business certainly is projecting in the months ahead as well.

So we'll look forward to that interview with Jim and Mr. Benioff. Let's bring in our panel now. Malcolm Etheridge of CIC Wealth, Jessica Inskip of Options Play. Josh, of course, is still with us. Malcolm, you first. All clear from the Fed chair today for a move into the end of the year? I would certainly say so. I think that Powell definitely stepped. It's not lost on me that Powell stepped in on the day that we got this ADP payrolls data that sort of confirmed that we got what the Fed was looking for, right? Hiring slowed down some. The number is still positive, but hiring slowed down.

And that's the very definition of what a soft landing is, right? So the question now is whether that trend can persist. Can we see some slight declines across the broader economy without it coming to a screeching halt? And you marry that against Powell basically tipping his hat to say, I'm with you guys, the consensus that's been out there that 50 basis points is what you're going to get in December. He tipped his hat to that. Anything hinting at the word pause in December pretty much means, I think to your point, Scott, that we're off to the races from

there. And I'm not going to be surprised if we do actually get it. I'm to be clear, I'm not predicting any sort of a tear your face off rally into the future to quote my friend Josh there. But I will say that I definitely think the last couple of weeks are going to be really great for the markets if, in fact, we get similar language to that out of Powell in mid-December. We do. We do, Jessica, though, have to deal with the reality of what's coming. It's sort of the Mike Wilson view of regardless of what you think is between now and the end of the year, the real issues start to take hold next year where earnings are not nearly as good as people think they're going to hold up to be and that the consumer, which is still strong, is not going to be nearly as strong once you make the turn into the end of the year. There's Wilson there

projecting maybe 3000 you go down to on the S&P 500 before you get a pivot and a great buying opportunity in stocks. How do you feel about that? I feel that is very, very aggressive. I agree with Malcolm. You know, We're certainly finding our cruising altitude, if you will, in regard to interest rate hikes. But I feel that is rather, rather aggressive. And we want to focus on the consumer and that imbalance of the labor market. And so, yes, even though there are declines in savings rates and increases on credit card balances, there is still a red hot labor market. So there's still an income stream and there's still consumer spending. We heard that throughout

all Black Friday, through all those sales, and that does translate into earnings and perhaps surprises. So as long as there is still an income stream for consumers, I think that's important to pay attention to. And I want to have extra attention to the labor market, really in all reality of the overall market and deciding if we are utilizing that seasonality and are going to see a strong December. But I think that it's more of a cruising altitude. We moved right above the 200 daily moving average today. And I haven't heard anybody talk about that yet, which is 40, 50. We haven't done that since March of this year. That's a very significant moment.

So are we going to hold that? And that's where I'm wondering the strength of this rally. Just like Josh said, just like Malcolm said, what's it going to look like tomorrow? That's really important to me. The good news is tomorrow's going to come and we're going to have a chance to find out. We're going to find out right now what Snowflake delivered. Frank Holland is back with us with those numbers. We take a look at a stock that's getting hit pretty

good, Frank. Yeah, absolutely, Scott. Shares down double digits right now. Beats on the top and the bottom line. Profit about seven cents above estimates. The real issue here is the forward product guidance. Pretty light here. Forward guidance of $535 million to $540 million versus the estimate of $553.4 million. Another thing you want to look at here, very similar to Salesforce, is their remaining performance obligation came in at $3 billion with 66% year-over-year growth. However, that was still under the estimate of $3.06 billion. Again, this is a metric of future revenues, and it also can be a proxy for demand. When you see that number go down or not quite meet estimates,

that's a sign that the demand and the pipeline for Snowflake isn't quite meeting what analysts are expecting. Still looking through the number, it beat on customers. The customer number of 7,292 was above estimates, however, so some encouraging signs of this report, but again, that forward product guidance, very light here for Snowflake.

Shares down about 13% right now. Back over to you. All right. Yep. Appreciate that, Frank. Thank you. And the other Frank, Frank Slootman, the CEO of Snowflake, is also going to be on with Jim Kramer. He's got a great lineup tonight.

Don't miss that. Again, Benioff and Slootman right after they deliver. And their stocks are slipping a bit here right after those reports in overtime. Let me show you as well. The TikTok CEO is taking the stage as we speak. There he is at the deal book conference in New York City. As if Andrew Ross Sorkin and company hasn't had a great day already. ready. We are listening into this and we are going to bring you the headlines as soon as we get them for a company that has really been a political hot potato. And we're going to see what comes out of that conversation there. If there's anything that we need to bring you on what he

says about what the future he thinks is for his company, regulatory in this country and otherwise. So we look forward to that as well. Back to our conversation. So, Josh Brown, I believe you used to own Snowflake. I'm curious your reaction to what we see here in the stock for one that's already gotten hit some 50 plus percent year to date. No, I've never I've never traded Snowflake. So Snowflake's got a very inconsistent record on earnings days, and it's relatively short history as a public company. It's had eight earnings calls before this one. This one was nine.

Of those eight, four of them have had negative reactions. Four have had positive reactions. The setup going into the call today was not great. The stock was 10% below its 50-day moving average, 18% below its 200-day. It's already down 63% in the past year. And obviously, today makes that even worse. And I think what we're hearing from Snowflake is so similar to what we've heard from CrowdStrike, which I do own, from Salesforce, which just reported, what you're finding is in enterprise technology, deals are closing slower. It's not that the demand isn't there. It's that everyone is a little bit more cautious about their P&L this quarter,

given all of the uncertainty out there. And there doesn't seem to be as much of an urgency or a rush on the part of customers to put all these seats on if you're selling, for example, enterprise tech or to put all this capacity on in the case of Snowflake for data. So I think that that's really what's going on. It's not the end of the world. Actually, it's just normal. We're not accustomed to it. In 2020 and 2021, the ferocity with which companies added technology, added services, added software, added cloud, that was the aberration. What we're seeing now is just things calming down. Unfortunately, it's happening to companies that are trading 30 times enterprise value.

So what looks like normal, oh, it's only a 50 percent growth rate rather than 52 percent expected. Right. That sounds insane that anybody would be upset with that. These stocks were priced as though they could double and triple their businesses every two years. And obviously that's really hard to do. So I think the share prices are adjusting to the environment. I wanted to get you on CrowdStrike. You did mention it. Obviously, the stock has taken a big tumble after the earnings about 24 hours ago here in overtime. And just to bring our viewers up to date, because he was sitting to my left yesterday, Joe Terranova has sold it now, as he suggested he would, at $117.50.

So pretty much where we are now. That's Terranova texting me that he just sold it. Josh, I learned a little while ago that you actually bought more on this dip. Yeah. Yeah, I added to my position by 50%. And if it dips further, I'll have ended up doubling my position. I'm actually lowering my average cost, which was, I think, $138. I bought it in the pre-market this morning. Very, very cheap. Lower than where it is right now. The stock is 8% off an all-time low.

It has an RSI of 27. The way I was taught, you're not selling stocks that you like at a 27 RSI. That's about as washed out as a stock can get. So I went through the report. I listened to the call on the quarter app, all of the things that I do with my long-term positions. Everything I heard was incredible. The only negative here that people seized on was what I just talked about. It's really hard to close as much business as you want to in the quarter that you want to close it. I don't think that means anything for the long-term trajectory of this business. The growth rate is incredible and the execution is incredible. So I'm very happy for the buying opportunity that came along today. Jessica,

are we at a point where we're going to be able to say that tech has bottomed or is in a pretty imminent place of doing so? You look at stocks that have gotten hit a lot. People like Josh say enough is enough. I'm a longer term investor. I think now is as good an opportunity as any to get in. If we do, in fact, think that the Fed is close to the end, that must take away some of the pressure on the Nasdaq specifically. Absolutely. I think we're relatively close. And that goes, again, back to the labor market. We saw the highest layoffs within tech, and that's an opportunity to restructure. That's going to trickle down into the labor market because of the high wages that those people in tech make. And so if we have the opportunity to restructure,

I'm calling it the great resignation has shifted to the great restructure with this shifting out of tech, in which case management can come in. And if we have good management and focuses on innovation, because that's not dead. Apple's not going away. Microsoft's not going away. They are going to focus on the right things. And I think they

had the ability to readjust, recalibrate, in which case we'll see translate over. Now, do I think that's within the next quarter or so? Could we test the bottom? Absolutely. However, I don't think we're going to make a new bottom in tech. Yeah. I'm looking at Apple here. Seven bucks today, near 5%. Malcolm, what's your view on tech here? I'll give the last answer to you. Yeah, I actually hope that the thesis Josh was setting up there is actually not the case, which is that enterprise spending on tech has slowed down in a meaningful way. And if it has, that it doesn't persist for very long into 2023.

I think that that actually could be a very bad story bubbling underneath the surface that right now we're focused on power, we're focused on interest rates, we're focused on the fact that that bodes well for mega cap tech. But if enterprise spending has slowed down in a meaningful way and persists for a very long time, I'm talking a year or more, that actually could mean significantly more than the consumer actually slowing down their spending and dwindling down their savings and so forth. We expect to see a slowdown in advertising when the economy gets tough or recession is looming and those sorts of things. But if we see enterprise spending on tech actually slow down,

specifically in the cloud space, too, with the names we're talking about today, that actually could spell a bigger problem in tech that's underneath the surface that's actually getting covered up right now by the fact that a broad rally means we have to include tech in that because it's 20 plus percent of the uh the s&p yeah all right we're gonna leave it there you guys are great and helpful i appreciate that very much thank you malcolm jessica josh of course we'll see you again soon let's get to our Twitter question of the day. Did Fed chair Powell just give the all clear for a year end rally? You can head to at CNBC Overtime on Twitter to cast your vote.

We'll give you those results a little later on in the hour. We're just getting started, though, here in overtime. Up next, much more on today's Powell pop. Stocks soaring as the Fed chair signals smaller rate hikes are on the way. We'll get instant reaction to that news from Miller Values. John Spallanzani, he's right here at Post 9 Next. We are monitoring, as I said, TikTok CEO. He's live at this very moment with our very own Andrew Ross Sorkin.

That's at the DealBook conference. We're going to break in with any big headlines we get there. Overtime live from the New York Stock Exchange. Back in two minutes. All right, we're back in overtime. Stock soaring today as Fed chair Jerome Powell signals smaller rate hikes are coming. Is this the green light for more gains to close out the year? Joining us now, John Spallanzani.

He is portfolio manager at Miller Value Partners. It's nice to see you. It's been a while. Nice seeing you. Good to have you here at Post 9, too. That's a central question. Did he just clear us for takeoff? I think he cleared us for takeoff off of Bullard, right? So Bullard said 5% to 7%. Oh, right, to the moon and beyond was Bullard. Exactly. So he calmed things down. Obviously, it's month end, a lot of rebalancing, some window dressing, coupled with the fact that, you know, obviously it's green all around here. The VIX down to 20. TENS are $3.68. We have oil is up $2. So it's almost like a

Goldilocks day, right? We have the tree lining, everything, everybody's happy. We needed this, whatever your interpretation is, clearly the market was somewhat comforted by the message that we can moderate the pace and we could come as early as December. Yeah, it's definitely going to be 50, I think, personally. And this might be 50, might be 25. I think it was a much more nuanced message. So he actually gave the bulls and also the market some type of thing to hang their hat on going into year end, where they're not just going to raise rates like using the Taylor rule from 20 years ago up to 5%. What he did was he actually validated the move in the yield curve. So if they do another 50, that brings us to four and a quarter.

The twos are about four and a quarter, but the tens are 360. So the curve is already inverted. So for them to just willy-nilly say, we're going to just keep on hiking forever, despite the fact that- But that's been one of the fears in the market, is that they're sort of tone deaf and that they're going to do what they do and come hell or high water to what happens to the stock market. Exactly. And he changed that today. He did. I think he did. Yeah. Yes. Because he said the terminal rate may be higher, but it may be lower, which really is a huge change. Right. May 23. Right. May 23, as Leisman pointed out, you go to four point nine four percent. So maybe that's, you know, as Steve put it, this is it. This is as bad as it's going to be and what the economy and for rates. And once you get over four percent, I've said it for a while, things break really fast. We saw that in the UK. Things broke fast over there. We saw it

in crypto, you know, FTX blowing up. We were seeing it in housing where year over year changes in housing, especially in San Francisco and the hot markets are down 30 percent year over year. You know, obviously the PCE and the inflation CPI reports matter a lot. Hopefully, we'll get some more, some better data going forward. But, again, it's the way, it's the pattern. And I think the pattern now means that we're data dependent and we're just not going to hike for the sake of hiking. What about the idea that no matter what happens over the next four or five weeks, that reality hits home next next year? Earnings get hit much, much worse than people think. Right. It's like Mike Wilson.

You've heard the perspective and I've brought him up multiple times today for obvious reasons. He's been right a lot. The question is, is he too negative moving forward. Can we still engineer, as even the Fed chair was suggesting today, a plausible path for a soft-ish landing, even though he himself admits history is not exactly on his side? It's not easy to do. But Powell also said that he doesn't want to crush the job market. He doesn't want to crush the people at the low end just to get inflation down. So I think that's another nuanced statement where he's going to do as much as he can, but he's not going to overtighten. The fear is obviously right now it's overtightening and pushing us into a deep recession, which he said today he does not want to do. So that's not their aim. In terms of earnings, hey, 200, you know, S&P earnings times 20, that's 4,000. That's right where we are. You know, we've had these lower lows and higher lows. So we need to get above forty one fifty really to have everybody go crazy.

The question, though, is can you just can you justify the 20? Right. It's not you. First, you've got to justify the 200. And then you've got to justify that you can put a 20 multiple on that. But the market, you know, the Nasdaq is down 30% year to date, taking out today's nice, beautiful 450 basis point move. So the market was anticipating that things were to get worse before they got better, which they obviously did. But, you know, I think we can, we can have a kick save, as the capitals like to say.

I know Powell might have a kick save going into next year, but it's not going to be easy. All right. I like you giving my team some props. Your team needs a little help, too. Both of us are not doing so well. Golly's a be easy. All right. I'd like you to give my team some props. Your team needs a little help, too. Both of us need a little help. Good to see you. Thank you for being here. That's John Spallanzani again, Miller Value, joining us here at Post 9. It's time for a CNBC News Update with Christina Partsenevalos.

Christina? Hi, Scott. Here's your CNBC News Update at this hour. A House committee is now in possession of six years of former President Donald Trump's tax returns. The Treasury Department is saying they have complied with a court order and turned over the records to the House Ways and Means Committee. Democrats in Congress have been battling in court for years to receive the closely guarded details of the former president's financial picture. The chairman on the January 6th committee said the panel's final report will also include transcripts of interviews conducted during the investigation. Representative Benny Thompson said he expects the committee's long-awaited report to be released before the Christmas holiday. Thompson did not say whose interviews would be provided or specify the number of transcripts that would be released.

And the French baguette has been deemed an item of intangible cultural heritage by the UN. UNESCO recognizing the method and tradition of the bread as a daily ritual for the French people. The United States has no parts of its culture on the growing list of heritage items from around the world. What's up with that? J'ai aucune idée. They better get with the program for us. Christina, thank you. I'll see you a little bit later.

Thank you. That's Christina Parts in Nevelos. Up next, we're digging in on the Salesforce quarter. That stock lower after reporting just a few moments ago. Star analyst Dan Ives joining us with his instant reaction. That's next. And don't go anywhere. Sam Bankman-Fried is set to speak with Andrew Ross Sorkin at the Dealbook Conference.

And we're going to take you there live as soon as that begins. Overtime is right back. Let's take another look at Salesforce. Those shares are falling in overtime after slightly weaker than expected revenue guidance. The company also announcing the upcoming departure of co-CEO Brett Taylor. For instant reaction to those results, let's bring in star Wedbush analyst Dan Ives here on set. It's good to see you. You sat down and said, and I quote, Brett Taylor leaving is a shock. You think that's what this stock move is about? I think stock's down because he's leaving. Because ultimately, I mean, when he came in, even as co-CEO, it was viewed strategically,

was really going to be a big piece. Obviously, Benioff continues to be there. You look at M&A, that Slack deal, that was a big part in terms of, you know, Brett. And I think that's really why the stock's down. I think if you look at fundamentals and overall billings and what we saw, I think overall, better than feared. I think it's really Brett leaving that's a shock. I mean, I obviously give Mr. Taylor a tremendous amount of respect, but a 6%, 6.5% decline because the co-CEO is leaving? I mean, it's not like Benioff's leaving. Well, in my view, Benioff's the reason that Salesforce continues to be that sort of stalwart. I think overall, it's a knee-jerk reaction.

If I look at overall billings, revenue, and even when you take out FX, I still view it better than feared. And when you compare it to, let's say, CrowdStrike and some of the other numbers we saw, I think it will be a relief. But I think when you look at Brett Lee, I think there would be questions about M&A. What's the M&A strategy going forward? There's obviously a lot of activism potentially in Salesforce. What does that mean about margins? Those would be questions in the call. Would you want them to do more M&A in this environment? Activism potentially in Salesforce. What does that mean about margins? Those would be questions in the call.

Would you want them to do more M&A in this environment? For us, we want to see two things. I'd want to see them continue to expand margins. I think ultimately that's really been lackluster since the Slack deal. But from an M&A perspective, I believe it's the time for them to get more acquisitive. Same thing that's my view on Microsoft as well as Oracle, because now will be the time they could further bulk up their product wings. What about an expected lag, let's say, in closing deals, just as the environment deteriorates as it's expected to do? Isn't that almost a formality? Yeah, but I think we're seeing that. We're seeing elongated sales cycles, obviously extreme, what we saw in CrowdStrike yesterday. But I do think cloud is holding up better than expected in terms of this

environment. Now, if you look, of course, off quarters, everyone looks at Salesforce as the key barometer. Scott, I believe the way this is going to be digested is that things are holding up, at least from a cloud perspective, better than feared. But for Salesforce now, it's about, what about that company in Redmond? Because obviously competition more and more, that's becoming a UFC battle between Microsoft and Salesforce. Does the crowd quarter give you pause at all on Palo Alto,

which you have sat in that exact seat and called a table pounder on this show? And granted, Palo Alto is down on the year, but it's not down nearly as much as some of the other players in that space are. But how does that impact your thinking on that one? I view Palo as a double table pounder because of what we saw in CrowdStrike, because I think it shows share gains more and more from an install based perspective. It's what Palo Alto has been doing. We just had a phenomenal quarter. And I

think in cybersecurity, you're going to have winners and losers. I think obviously got over their skis in terms of CrowdStrike. But I look at names like Palo Alto, Checkpoint, Tenable, CyberArk. You know, those continue to be names that stick out here. Hey, what about Apple before I let you go? There's obviously a lot of concern about what supply is going to be, how dramatically it's going to be hit. Some suggest 15 to 20 million units less than otherwise anticipated prior. The stock was, you know, looking like it was heading back to a pretty key technical level, maybe have a 130 something to it. Obviously gets

a big rally today. How should we be thinking about that now? Well, it's a train wreck in terms of what we're seeing in the supply chain. We've talked about it. I mean, clock struck midnight finally for Apple in terms of what we saw in China. I think it took everyone by surprise. But I do think investors are looking to demand. Right now, demand is potentially four to one over supply. That's why it's a demand thesis in terms of iPhone. That continues to hold in. That's why Vue is more moving from the December quarter to March, rather than that that demand is essentially lost. But no doubt, this is a wake-up call, potentially the straw of the boat

to kind of move back for Apple in terms of the China growth. Is $200, that's your price target? $200. Is that realistic? I believe the reason it's holding. I don't mean five years from now or two years from now. I mean, whatever your time frame is. What is that, a 12-month time frame? Yeah, I think we sit here in less than a year from now. It's a $200 stock because, in my view, that the demand thesis, as we're seeing play out today, holds in. And I think that's why this is supply driven. That's why the stocks rebounded in terms of what we're seeing at Cupertino. And you see any risk whatsoever to

the fight with Musk? Well, I think, you know, and we'll see ultimately where this leads to. I think it's not ultimately what you want to see from either Apple or Musk or Twitter's perspective or Tesla. So you'd like them to play nice in the sandbox because the last thing you want is Musk to just get louder and louder within the beltway regulatory. That's not what Apple needs right now, especially when they're fighting those massive supply chain issues in China. Good stuff, Dan Ives. Thank you very much. All right. As a reminder, once again, don't miss Salesforce CEO Mark Benioff. He's going to be on with Jim six o'clock Eastern on Mad Money. Look forward to that interview. Up next, we're talking TikTok. The company CEO just finished his interview at the Dealbook Conference in New York. We're going to bring

you all of those headlines next. All right, we're back in overtime. The TikTok CEO making some headlines at the Dealbook Conference in New York. Our Julia Borson following that joins us now. Julia. Well, Scott, the interview kicked off with questions about concerns about TikTok's Chinese ownership, potential for censorship and manipulation, among other things. TikTok CEO showed Chu saying that they take these concerns seriously and they are working with engineers. They also are focused on what they call Project Texas to move all the data they have into a third party cloud infrastructure managed by Oracle. Here's what he said about their negotiations with the Treasury's Committee for Foreign Investment in the U.S., or CFIUS.

Well, the FBI director, through his team, through CFIUS, has access to the discussions and the plans that we are building to solve and address this problem. And I'm very confident that this will address the concerns that he has raised. Now, for us, you know, no foreign government has asked us for U.S. user data before. Really, to heaven. And if they did, we would say no. When asked about the metaverse, Chu saying it's too early to tell. He says the technology is fascinating, but where we are in terms of the adoption curve is so early. That was his commentary on meta. Now, as for Twitter, he said he is on Twitter. He said

Elon Musk is a wonderful entrepreneur, but it is too early to tell. They are paying a lot of attention to see how things play out under Musk. He did say that platforms do need to invest in trust and safety, which is another topic he was pressed on. Scott. All right, Julia. Thank you. That's Julia Borsten. Don't go anywhere, by the way. Another reminder, Sam Bankman-Fried set to speak with Andrew at the Dealbook conference, and we're going to take you there live as soon as that conversation begins. First, though, we're tracking some big moves. And over time, Christina Partsenevelos is standing by, of course, with that. Christina? Well, we've got a promise from two completely different companies.

Retailer 5 Below promising consumers will continue to spend this holiday season. And Okta predicting a profit this upcoming quarter. quarter. Of all those details and more next. We're back and we're tracking the biggest movers in overtime. Christina Parts and Avalos is back with us. Let's start with shares of Five Below moving much higher after raising its full year 2022 guidance, along with an over $30 million beat on the top line. You can see shares are climbing almost 9% higher. Ticket and transactions improved throughout the quarter, even though other retailers like Macy's and Home Depot warned of things slowing down as the quarter progressed.

Five below stock, though, is down 15% year to date, including, see my drawing skills are not the greatest. But let's move on to shares of cloud company Okta, surging right now on a big revenue and earnings beat. But what is even more impressive to investors is that the company expects to turn a profit of $0.09 to $0.10 a share in Q4, while estimates called for a loss. And the shares are almost 14% higher. Well, let's talk about the last but not least positive mover today. This is PVH up 9%. This is a company that owns Tommy Hilfiger and Calvin Klein brands.

It's moving higher after beating estimates for both earnings and revenue. It said pricing power, okay, higher prices helped drive the quarter. It's also extended some licenses for Calvin Klein and Tommy Hilfiger, which could be helping shares despite these lackluster results. Year-to-date basis, this stock is down minus 37%. There you go. I can draw, including the earnings bump that we got this evening. Back over to you, Scott.

All right, Christina. Thank you so much. Christina Partsinello still ahead. Santoli's last word. We'll get his take on today's Fed-fueled rally. And we are just moments away from a can't miss interview with former FTX CEO Sam Bankman Freed. He is set to speak with Andrew Ross Sorkin at the Dealbook Conference. And we, of course, are going to take you there live the very moment that gets underway. We're back right

after this. All right, we're back here in overtime and we're still waiting for Sam Bankman Freed, that interview with Andrew Ross Sorkin at the Dealbook conference. We are going to take you there the very moment that that gets underway. Let's do the results of our Twitter question of the day while we wait for that. We asked you if you think Fed Chair Jerome Powell gave the all-clear for a year-end rally, the majority of you saying yes. Well, near 67 percent. Maybe it's easy to say that after you just had a big rally today. Mike Santoli is here for his last word. What do you make of what happens?

I don't believe in true all clears, but things are lining up reasonably well. Now, first of all, the premise for any sustainable bottom and a year end rally was peak Fed, peak Fed hawkishness, peak inflation and this idea that we've had this reset year and you can kind of moderate the Fed tightening along the way. And meanwhile, the underlying pace of economic activity remains OK. So soft dish landing is not dead as a premise, according to the Fed chair. That's kind of all he admits. History is not on his side. It's not. And if you look at the history of what the Treasury yield curve is saying and the leading economic indicators, you have to be aware that there is a relatively healthy probability of recession coming up. The issue is, do we have the tactical

fuel that's now rebuilding up for just a rally because of the way people are positioned into year end? You crossed above the 200 day average of being below it for seven months. Typically, that causes further upside, not a failure. We'll see if it happens. I mean, is part of the takeaway today that he took the, you know, the Bullard bazooka off the table of thinking that we're going up to 7%? What he did is he declined to attack the market for loosening up financial conditions. He had done that twice before where he wants to kind of push the market back on its heels. He didn't do that. And, yes, he shied away from the buller position. He defined

prudent risk management as perhaps going slower with the pace of rate hikes and just holding them there for a while. Whereas before his risk management profile was we have to jack rates pretty high and just choke off inflation. So there was a change, subtle change in orientation, not a totally new message. I want to just remind people, even though they can obviously see it on our screen, if you're looking at it, that we are awaiting Sam Bankman-Fried at the Dealbook Conference with Andrew Ross Sorkin. And we're going to take you there live the moment that conversation begins. But our conversation will continue and it's going to continue to push forward to the jobs report on Friday, which is kind of that next big moment. Let's see

what's happening in the labor market. Without a doubt. How much the labor market has to soften up to satisfy the Fed that it's going to start to help the inflation picture? It remains a big question. I do think he took a little bit of the teeth out of the jobs report in the sense that he's not hypersensitive to the stated inflation rate. He's not really thinking that we're going to see near-term results on the job front. So I think it matters a lot. But what also matters is we're going to enter the Fed blackout period before the next meeting, which is December 13th, 14th. So you're going to be free for 10 days or so of further Fed messaging.

And so this will be, in a sense, the last word before we get into it.