Closing Bell - Closing Bell Overtime: Stocks Surge on CPI 11/10/22

Episode Date: November 10, 2022

The Dow closed up 1,200 points and the Nasdaq saw a pop of more than 7% following this morning’s crucial CPI number. Carl Icahn gives his first reaction to Wall Street’s big day – and explains why he stands by his bearish outlook. Plus, Guggenheim’s Scott Minerd gives his exclusive take on stocks, crypto and more. And, Wedbush took Tesla off of its best ideas list. The analyst behind that call – Dan Ives – explains why.

Welcome to Overtime. I'm Scott Wapner. You just heard the bells. We're just getting started with a very big program today. Coming up a little bit later, Guggenheim, Scott Minard will join me on whether today's better than expected inflation report means this massive rally we saw today can keep going. And that is, of course, our talk of the tape, the best day for stocks in more than two years. So is it a game changer for your money and this market? Let's ask the legendary investor, Carl Icahn. He joins me now in a CNBC exclusive interview. Carl, welcome to Overtime. It's great to see you today. Good to see you, Scott. So what is your reaction to this incredible rally that we saw today on that better than expected inflation report? Well, you know, I've been bearish for a year and a half or two years, but we keep our portfolio hedged. So it doesn't mean a lot from the net worth of our portfolio.

I pee too much, but I am still very or quite bearish on what is going to happen. A rally like this is, of course, very dramatic, to say the least, very dramatic. But you have them all the time in a bear market, and I still think we're in a bear market. You have these rallies because it's almost like a commodity. There's only a certain percentage that actually trade it or make that final move in it. So if you take the population of stockholders, there's only a small percentage that trade like this or move it. When the market goes down, you have a short interest build up. And then when you have any news, it suddenly propels us. So I do think it's certainly dramatic and maybe exciting, but I don't really think it changes my opinion on the basic problems that we have.

Why are you so negative on the market? Whenever you have higher interests that have moved as they have here, and they really have moved quite a bit,% yield, close to a 5% yield for relatively short-term treasuries, you are going to have a recession. And I think you do have a recession already. I mean, if you looked at the earnings of a lot of these companies, they're pretty bad. And I think a lot of these companies are cheap, by the way. And I think a lot of money will be made if you own certain of these, I like to say the Graham and Dart type companies, not so much the high tech companies.

If you own them, they're dirt cheap and eventually you'll make money. But I think there's a way to go down because I don't think inflation is going away to begin with, not for the near term. And I think you're going to have more of a recession, more of an earning decrease. That's basically why I think to begin with, I do think you're going to have more wage inflation. A lot of people don't want to work. It just comes to it. You have people now, the youth. I mean, you just saw that you just saw this election where a lot of Democrats won, where you didn't think they were going to win. And I didn't think that a lot of them would win. But what you do have is a lot of, quote, the youth, they say in quotes, the youth, vote.

And when you think about it, if you don't have to work and you've been geared to that, you're going to have wage inflation because by definition, people get older, they retire, and you have to fill that in. So you have that situation here. So you've got wage inflation. You certainly have housing now going down. You have the net worth of the median household in this country. The net worth of the median household is maybe $100,000.

And even that is in question. Even the households that do have a net worth of more than that, their housing is going down and the market has gone down for it. So you have all that put together. You have higher debt at companies too, because you take a lot of these companies have borrowed money over the years and bought back stock. They still do it. They still do it. They still do it. I think that's dangerous because now

they're encumbered with the debt they have to pay on the money they borrowed to buy back stock. So I just think there's a lot of things that have to happen to turn this economy around, to get us out of the recession. And you don't you don't think that, you know, I had the Wharton professor, Jeremy Siegel, on Halftime today who said that inflation was basically over. That was his direct quote today. He thinks it's going to collapse from here, that it's already rolling over. The Fed's looking at the wrong data. You disagree with that call by him?

Well, I didn't hear him, so it's hard for me to discuss exactly what he said. I've heard him before. I mean, I don't know what to say about what he said, so I don't want to address. Well, I mean, he said inflation is basically over. You have just made the case to us that you think it's far from over. Yeah, I do. So I do. Yeah, by definition, I disagree with him, I guess. I mean, I didn't hear what he said. I mean, but I didn't hear his reasoning for why it's over. So how can I address it? But do you think that so you think the Fed is going to have to stay on a more aggressive path for longer than than people think? Is that sort of the crux of why you, in part, are as negative as you are on the stock market?

Well, that's part of it. I think that you also have the recession that you're in already. You have bad earnings that you're in already. When you have high interest rates, which you have right now, when you have that, you pay a price for it. But this country, I mean, we're paying a price for the way money was so cheap for all these years. So you had money that was very cheap. Start with that. You could borrow very cheaply so you can spend it. By definition, when you can spend money, when interest rates are low, by definition, you're going to get a fairly good economy. You're going to. So you have that going for you, but you pay the price for it. And right now that money is not available. Do you think the Fed's done a good job in if they were, you know, most people suggest that the Fed was late to the game, but to this point, they've done a lot. Do you think the Fed's done a good job to this point?

I think I think that the Fed did what they had to do. They had to raise interest rates. And I think they came late to the game to raise the interest rates. But I don't think the inflation is over. I think inflation is very, look, I look through the 70s. You know, it took years and years and years to get it over with. You can't wave a magic wand to get the inflation over with. I mean, today, for instance, I don't even know what is so exciting. I mean, so interest rates actually are up month to month,

two or three percent. So I tell you, we thought maybe there would be a five or six, and they're only up two or three. So everybody goes crazy and starts buying stock. But the reason that's happened is you have huge short, you have a certain group of traders that trade and you get this frenzy where they either go short or they go long. But I'd like somebody to tell me because interest rates went up two or three percent, inflation is over. I mean, I disagree with that. So what do you think that the Fed should do, let's say, in the next meeting? Because that's going to determine in large part whether this rally that we saw today can continue in any sort of magnitude, even if you are more bearish long term.

One can think that stocks can rally between now and the end of the year. Should they raise how many basis points at the next meeting in your estimation? Yeah, I mean, look, I think I've been bearish for a couple of years, but as I say, my portfolio, when we look for these hidden jewels in companies, and we're activists in those companies, and it's worked really well. I think our record is up 2,000 percent. If you invested with us, you're up 2,000 percent. So I think the paradigm works well. I don't think anybody else is up 2,000% if you invest in their portfolio. So what I do sort of works as being an activist.

And I really will make the predictions. But I told you a year or two ago that this market is definitely too high. I think, if you ask me, I will make a prediction about what you said. I don't like to do it, but I think that the Fed has to keep raising. And if it doesn't, if it doesn't, then it's going to be worse for the future anyway. They have to cure this inflation. Like in the 70s, you couldn't get rid of inflation. Inflation, terrible thing. Once you have it, it's not like something that you just take a magic pill and get rid of it. And that's so I think that is definitely.

Well, what did you ask me again, whether whether inflation will. Well, I mean, what what you think? I ask you what you think the Fed's going to have to continue to do. But you answered the question. You said you think they have to continue to raise. You think they need to be aggressive. You also mentioned that you are hedged and you've been negative. What does your positioning really look like today? How are you hedged? Are you what are you what are you short? Give me an idea. I'll make it simple. The shorts are the S, the standard and poor index. What are you short? Give me an idea. I'll make it simple.

The shorts are the standard and poor index, for the most part. But I do have shorts in particular industries, too. I mean, you know, so we do short certain stocks that we don't like. But basically, the S&P made up of the tech stocks. And I think the tech stocks are too high for the most part. I think you have a company. And over the years, you go and, you know, you get sold a bill of goods by these tech guys about you need this and you need that. It's almost like you can fly to the moon. They give you so much stuff.

And a lot of it doesn't work. I tell you, you know, we have the luxury in a way. We're on boards and we see these companies. And a lot of them are killed by all this technology that you put in. And now I'm not saying technology is not great. And you need technology. The world is better off for it. And it's great having these things.

But I tell you, it's like if you have a house, you know, and an electrician comes in, he's a good sales guy and he gives you lighting and he tells you, oh, I can dim the lights and I can make this and I can give you that scene and this scene. And it never works. I mean, in the old days, you put the light on. It's the same thing here. So I really think that eventually a lot of these tech stocks are good. Think they're too high. I think that with high interest rates, they will not be able to make an impressive value. They're just not worth what they're selling for. What kind of tech stocks are you talking about specifically? Are you talking about some of the largest ones, the Apples, the Microsofts,

the Amazons, the Metas, those kinds of stocks? I tell you, I'm short the S&P. So the S&P got a lot of tech stocks. But I'm short in general against my longs. I mean, we have a lot of longs. We've got a lot of shorts. So I believe I make money down and upside. Sometimes I'm wrong. Sometimes the stocks I'm short go up and down. But over the years, the paradigm works. We get on some of these boards, these companies, you clean them up. But now, if you're asking me, sometimes I'm less hedged, sometimes I'm more hedged. I'm basically pretty even now, short and long. Usually I'm more long than short, but I'm not now.

Do you think better opportunities exist in bonds versus stocks? Have you bought any treasuries? Yeah, you know, we have a lot of cash around, too. IEP has, we keep a lot of cash on the side, so we're not borrowing against our portfolio. And that cash is now, in fact, the last few days, we usually just keep it on the side and leave it, you leave it with the brokers. But we have about $5 billion in cash. So lately, I've been buying some of these treasuries. It's sort of amazing once you get paid for it, right? So you get, we got over, or you put it in certain areas, we got 5%.

So we have that. Then, you know, I have a few stocks I like a lot that, that, you know, I think are going to be good. So that's about it. I mean, at one point, your biggest short position was betting against commercial real estate. Do you still have that? Or have you taken that off? Yeah, no, I'm still, I'm still in that with these malls. I think that those CBXs, I mean, it's almost like 08. There's a lot of skullduggery in it, a lot of manipulation. And we're going after some of those services, those special services. We're going after them or whatever.

And, yeah. I mean, you are looking for opportunity, though, on the long side. Right. I mean, you just said it yourself and there's a new stock that you added to your portfolio recently, or at least you disclosed it recently. That being Crown Holdings about a week ago or right about eight and a half percent stake. Am I right? Yeah. Like we think there's special benefits in that. I mean, it's sort of in an area that is growing, even in even in a recession. You know, plastics are moving away and they're growing at three, four or five percent. I mean, they're not it's not. It's not my favorite company, but it's really good because I think they've, a lot of these companies shouldn't diversify. They diversified into other companies. So their multiple is not as good as their

competitor ball. However, I think they will grow. We intend to try to be on board of the company. We think they may, you know, we don't micromanage, but we don't like to see some of this diversification they've done. And so we may have a proxy type with them. We don't know. And then my. What stock do you like the best? What do you like the best that you own right now? Best stock you have is what?

I think is undervalued. I own 70 percent of it, but it's gotten pretty big, is a refinery, which is CBI. CBI? Yeah, CBI. I mean, it'll take a couple of minutes, but it's, I think, very undervalued. I think some of these are overlooked, these refineries, because what happened in 2005 was there was this RFS, which was just basically we wanted to be energy independent,

wanted ethanol to be blended. So the government went and passed this law that refineries had to blend ethanol. But what happened was, I don't think they meant to have this happen, but the government has used that and literally forced a lot of small refineries out of the business. We had refineries that were, one of them benefited from one thing in that law, in the RFS. In the RFS, they had something where you had an exemption for hardship, meaning that if you were a small refinery like we were, it's not that small, I mean, the refinery is pretty big, but still small enough that we could not we had hardship from this ruling

because we couldn't blend. Because if you're a merchant refinery and you have to go up a pipeline, the pipeline doesn't want you to blend it first. They don't want to take it in the pipeline, the ethanol. They just didn't want the ethanol in the pipeline. So the refineries went along and got these exemptions. In the last few years, the EPA, because the EPA hates anything with fossil fuel, obviously, this is what I think has caused its gasoline to go up so high. About seven, eight refineries were forced out of business.

We stayed in business, and it cost us money. I mean, we had to put money in because we kept our refineries up to snuff. And now the refineries went out of business. And what's sort of amazing is that this country, which, say, produces nine million barrels a day of gasoline, that went down 1.5 million, which is 16%. Now, 1% or 2% moves gasoline prices. Gasoline in this country is down 1.5 million barrels a day, and that production of gasoline from fossil fuels is not going up again. So usually if you have a business where you make widgets, where you make whatever you

make, if they start making profits, which refineries have now done, let me just regress a little bit. The refineries we have were costing me a lot of money to keep them up, but we kept them up. A lot of refineries said, the hell with it. We're not going to do it. The government hates you. So this gasoline production has gone down 1.5 million barrels a day in this country

because the EPA has refused to allow the hardship exemptions. OK, that's one of the major reasons. Therefore, diesel fuel has now gone up like crazy. So, for instance, the crack spread, the diesel fuel, I'll just make it simple. It's gone up about 30, 40 percent. OK, but hey, the refinery's paid the price for that. Guys like us put in hundreds of million dollars. Right now, you're making that kind of money. And our refineries, by the way, we also own a fertilizer company called UAN. And the fertilizer company is also good, because now you have a need for

food, you have a need for gasoline, you have a need for food you have a need for gasoline you have a need for diesel and ironically one of the great needs you have for diesel is you have something called bucker fuel that was really the dregs of fuel a lot of sulfur in it and it needs to be blended with diesel and the new rulings came out saying you have to blend it so there is a demand for diesel and diesel has gone up. The crack spread, you call it, has gone up four times. So the jewel here, the jewel of this,

the jewel that you see in this company, even though it's gone up a lot, is that you have this ability to make diesel. And the diesel we make, by the way, we're near what you call the Anadarko Basin. So our yield, so when we take oil, we get 60, 65% of diesel.

So we are earning all this money from it. I got you. Look, I don't have that much time left. And in the time I do. So that one I I think, is good. And Crown Cork is good. There are a lot of ones I'm in that I can't talk about, Scott, because of the fact that we're on the boards

and we're doing certain things that we can't talk about. I understand. I want to talk to you about Twitter, because I think it came to light recently that you made a pretty big bet on the outcome of Elon Musk's bid. Five hundred million dollar stake you bought, I think, in the 30s, from what I understand, betting that he was going to have to go through with his deal. So it was an arb play, obviously. Tell me more. Tell me more. Why did you do that? Was it just plain and simple, an arb play for you? Yeah, generally don't do it. But in that one, I felt that it's an example of

how I feel about corporate governance in the country. I mean, I'm asking if you own the Striga restaurants or you've inherited it, would you let the major, indeed, the manager of each restaurant you have decide who could come and eat at the restaurant? I mean, what I felt Twitter was doing was a complete violation of the First Amendment. So I and a lot of people called me about it and wanted me to do something about it as an activist. So I was gearing up and looking at it and thinking, you know, stock went down a little bit. So I was starting to buy stock and I felt I would try to get on the board of it because it was I just feel it's look, I'm not I'm not going to be here and saying who can say something. Can people say nasty things? But I am saying that the manager of a company should not be allowed to decide who the hell should talk and who should. And then I was really happy that Musk came along because, I mean,

I think he stood for the same damn thing. And I felt this is a perfect one for him. I mean, he's a lot richer than I am. And he, I'm not complaining, but he's a lot richer. And I felt that he was the perfect guy for doing it. And he didn't need the money. I mean, you know, you look at it. If anybody spent the time to look at his balance sheet, I mean, say, you know, can I get the money? Can I get the money? That was in my mind, complete bull.

If he wanted to do it, there was no problem in him getting it. And so therefore, did you ever consider trying to go in on that deal with him or be part of the funding of that as he was looking? Hey, nobody ever called me to go in. I don't think he needed anybody's money. I might have done it if you call me. I might have put a billion dollars in it because I really thought he was doing it at the right price. I mean, the stock went down in the 30s and then we bought we bought it in the 30s. So we made a lot of money with it. I really don't know him. I just listen to the stuff he says. I think the guy's a brilliant guy.

I mean, some of the stuff I might disagree with, but I felt there was never a chance. This is a perfect thing if you feel the way I feel about it, the way a lot of people feel about it, these guys have no right to say, hey, look, if a guy gets on and he starts talking real trash, you kick him off. But not because somebody says something that disagrees with your politics. I got you. Let me ask you this last question, because I think it's the story of the moment. Certainly one of them. What we're witnessing with crypto, the fallout from FTX, Sam Bankman Freed. What is your take as an observer of what's going on? And do you have any greater concerns of spillover into other asset classes in the market? Yeah, look, I think it could spill over.

I never bought any crypto, so I'm no expert on it. It could spill over. This is only one of the dangers you have in our economy. If you look around, you have this whole thing going on in the Ukraine. You have a number of things that we've sort of ignored that are problems. But I'll go back to what I said, but your major problem is inflation. I mean, the major problem less is a war. I got you. But you ever seen anything like this where you have somebody who, you know, this company basically implodes overnight, an extraordinarily rich guy as Sam Bankman Freed still is, but certainly was to a much greater degree.

I'm just wondering what you make of that kind of stuff. What kind of stuff? Just the whole thing? The whole implosion of FTX. I mean, you had one of the largest players in the crypto market implode overnight. And now serious questions about whether that is a viable asset class in and of itself moving forward. Well, look, I think I'm a smart guy. You know, we've got one of the best records in the world. I'm not patting myself on the back. I tried to figure out the crypto and why it was valuable. I did. I spent a lot of time on it, or some time on it. I could never understand crypto.

I could not understand what it really had to offer. Now, maybe I just missed it. So I never bought any crypto. And in fact, I might have shorted it once or twice. So you're asking me about something that I never understood the value of. But it's like a lot of things. I mean, there are a lot of companies you can't understand the value of, but I never

could figure out. No, I think that's your answer. I mean, I think your answer tells me the whole story about what you think. I'm saying to you that if you look at crypto, you look at Ethereum, you look at these companies, there's really, absolutely, the corporate governance is bad enough that you can vote people out,

you can go in if you think they're doing something wrong. I tried to figure out, I asked people, what do you do if you don't like the way this is being managed? You don't like, well, it's voted on. You know, the people can vote on it. I said, well, who brings the vote about?

Well, there's no rules. There's no vote on it. I said, well, who brings the vote about? Well, there's no rules. There's no laws. It's a lawless area as far as I was concerned. There was no accountability at all. And I looked. It's true of a lot of companies. But if you looked at Ether, you looked at some of these, there was no accountability that I could see.

I still don't see it. But in fairness, I'm no expert on it. It may well be that there really is stuff there. But I just looked at it and decided it's not for me. A lot of guys brought me stuff about it. And so, therefore, I never had anything to do with it. But I'm not surprised that this happened because there really is no, as far as I'm concerned, no rules, no laws. It's like the Wild West.

However, I'm not even saying it's no good. No, I understand what you're saying. I understand exactly what you're saying. I'm going to leave it there, Carl. I appreciate your time so very much. It's good to catch up with you again. And certainly good to do it over Zoom as well. It's nice to see you. We'll see you soon. Figured out how to do it. I'm not a techie, but now I got it figured out.

It's better than the phone. No doubt. All right. All right. You take care. That's Carl Icahn joining us today. Let's get to our Twitter question of the day. We want to know, would you invest in crypto right now? You can head to at CNBC Overtime on Twitter. Cast your vote. We'll share the results coming up later on in the hour. We're just getting started. We have another big interview coming up. Guggenheim, Scott Minard, his exclusive first reaction to today's CPI report, what he thinks about this move in the market today, what it could mean heading into the end of the year. We're back in OT after this. All right, we're back.

Our next guest tweeted just a short time ago that stocks can continue to move higher. Scott Minard, Guggenheim Partners Global CIO. He joins us now in a CNBC exclusive interview. I appreciate you joining us, especially on this kind of day in the market, following what Icon said. And I don't know if you had a chance to listen to the interview or not, Scott,

he's still negative on the market. He's not sure what the big party is about today. What are your thoughts? Well, you know, Scott, I've been talking about the fact that the seasonals are really good. A commentary I wrote on October the 6th basically, you know, encouraged people to stop market timing and get invested because from a value standpoint, everything is basically looking cheap. And we're in a time of the year where we should expect to see upside surprises. And, you know, it's no surprise that inflation is slowing. The forward numbers have shown that they're slowing.

And so, you know, given the valuations have been so strong, I was expecting we should get a bear market rally. And maybe yesterday it was a big deal to say I thought we'd get to 4,100 on the S&P. Today it looks like, you know, we're almost there. So I do think we're going to continue to rally into the beginning of the year. And then, you know, we'll get a chance to take a fresh look at things. Wow. So, I mean, are you does that suggest that you've come off your view that stocks have a 20 percent drawdown from here? I believe one that you articulated as recently as a couple nights ago during our election night special? Well, I think we're, you know, I think the bear market is still solidly intact.

You know, I see this as, you know, a relief rally. You know, I always have to fight myself, Scott. You know, my career on Wall Street was I was a trader. Now, you know, I tell people I'm an investor. And so, you know, when you see, you know, the condition that we were in just a month ago or so, it was pretty obvious to me that being underinvested was not a good idea. So I'm still of the opinion, look, I always say I like for the data to talk to me rather than for me to try to predict the data. But so far, I would just ride the seasonals here. Things are still fairly well-valued, and inflation is coming down. And I think we are prone to more downside surprises surprises on inflation which would be good

or uh... bond mark the mark bond market and so you know i would say you know i would stay fully invested at this point if i encourage people a month or so ago to do it and uh... just let the data tell us if if this is the can the bear market will continue you know our thing for really at a turning point? Have you increased your exposure to stocks recently, then?

Yes, we have. And we especially increased our exposure to high yield and to longer-dated credit investment-grade securities. And if you look at the ETFs today, like HYG and LQD, they had a phenomenally good day, much better than Treasuries did. And, you know, Treasuries had a phenomenally good day. So, you know, we continue to be overweight credit. We continue, you know, we're going to hold our existing positions. I mean, one of our largest positions, Scott, is in, you know, S5 Home, the home builders, which had another phenomenal day. So, you know, one of the things I'll say, though, is, you know, I do tend to be early. I tend to be early to sell, and I tend to be early to buy.

But I'm also aware of all the research that shows that investors miss the best days in the market because they're trying to market time. And there are lots of studies that show that if you look at the S&P 500 and you haven't been invested, you know, that a lot of the return occurs in a very few number of the days, and you're likely to miss them if you try to time the market rather than just look at values. And you said you think this can last into the beginning of the year. Yeah, and that would line up with, you know i told andrew and joe uh tonight to go uh you know uh history shows us in a post-election period uh that you know we should see high single digit or double digit low double digit returns for the six months following the election

um you know that's usually better with divided government. And again, I think that that will continue into the first quarter. And like I say, at that point, we'll have more economic data to look at and see if the fundamentals really are improving, because most of what we're doing here, I think, is rallying off of a deep, technically oversold position. And in addition to that, shorts that were caught by surprise by what news we got this morning. Do you think today changes the game for the Fed in December? I want to read you something that Rick Reeder had tweeted, of course, of BlackRock. Well, comforting today's data is far from the finish line for the Fed,

and it will be a true marathon to see inflation close to target. But in terms of what happens in December, which, by the way, we get a CPI read the day before the decision, which is interesting in and of itself, do you think today changes what happens next meeting? I don't think this is enough. We've been saying we thought the Fed was going to downshift to 50 basis points even before the last meeting. And I think that the rhetoric we heard out of the Fed president today lined up with that. So, you know, we do think we'll get a downshift to 50 basis points. But again, you know, what would be more interesting to me, Scott, is to see if we got another weak

CPI number next month, you know, how would the Fed react to that? I think it would take something really weak for them to basically pause at this point or even consider discussing a pivot. Interesting. Before I let you go, what do you make? You've seen a lot of markets, Scott. What do you make of this situation going on right now with FTX and crypto? Any concerns that you have of broader spillover, as I discussed with Carl Icahn? I'd love your thoughts on all of that sure uh... moving on wednesday night

you know we were discussing or though and i said i think we're yet to see another shoe drop and you're sure enough we got that uh... me uh... you know scott you know every crisis that we've had when the Fed tightens come to us out of the dark. And when you consider that the crypto market just a year ago had a total market cap of $3 trillion, and as of yesterday it was down to $800 billion, wiping out over $2 trillion of value.

You've got to believe that there are some, you know, people who've taken massive losses where it's yet to be revealed. So I think this has the potential to turn into something systemic. And I'm really watching it very closely, and we're trying to analyze, you know, where we think all of this risk lives, because a lot of it is in the opaque shadow banking system. And we see what happened with FTX out of the blue, and we see what the impact of that was on things like Bitcoin, which wasn't part of the FPX business model. But I think there's a forced liquidation going on. And when you're in a forced liquidation, you can be surprised by all

kinds of negative things. Yeah, we're still looking for the fallout to where else it might show up. Scott, I appreciate your time so very much. Thank you. We'll talk to you again soon. Great to talk to you, Scott. Yeah, you as well. That's Scott Minard, Guggenheim Partners Global CIO, joining us there. It's time now for a CNBC News update with Bertha Coombs. Bertha? Hey, Scott. Here's what's happening at this hour.

NBC News can project that Republican Chris Kobach has won the election for attorney general in Kansas. Kobach has openly questioned the 2020 election results and believes there was voter fraud. He was also involved in a lawsuit asking the Supreme Court to intervene during the 2020 election. As the state's AG, he will have the power to prosecute voter fraud. Kovacs is one of the few 2020 election deniers to find success thus far in the midterms. Federal officials in New Jersey have charged an 18-year-old man with the anti-Semitic threats that prompted statewide warnings at synagogues. Officials say the man shared a post around the first of the month with language about, quote, an attack on Jews.

The charge carries a maximum penalty of five years in prison. And conspiracy theorist Alex Jones has been ordered by a Connecticut judge to pay an additional $473 million in damages to families for promoting false theories about the Sandy Hook shooting. This new judgment is in addition to damages from his October trial. Jones owes a total of nearly $1.5 billion at this point. Scott? All right, Bertha Coombs, thank you very much for that.

Up next, trouble ahead for Tesla, the stock tracking for its worst year on record. Now, Wedbush is taking Tesla off its best ideas list. The person who did that, star analyst Dan Ives, joins us next. Tesla shared rally today with the overall market still tracking, though, for the worst year on record. Our next guest believes there could still be a tough few months ahead for investors in the wake of Elon Musk's purchase of Twitter. Dan Ives, the star analyst at Wedbush, did it now. It's good to see you. In your note today, you said, quote, Musk has managed to do what the bears have unsuccessfully tried for years, crush Tesla stock by his own doing in what we view as a purely painful, dark situation. Is this situation irreparably damaged?

Well, Scott, that's our concern. I think we're starting to get into brand issues here for Tesla because of this black eye from Musk and the train wreck situation with Twitter that many thought would have ended when ultimately the deal went on, it's actually gotten worse. And I think that besides just the selling of stock really almost you and Tesla like his own ATM. This, in my opinion, is really caused what's a disaster situation. That's why we took it off the best ideas list. I understand. I mean, but taking taking it just off of a best ideas list, but reiterating it at outperform. Man, I don't know. That feels kind of lame. I mean, if you feel the way you do, why wouldn't you downgrade it? What statement are you really making by simply taking it off

a best ideas list, Dan? Yeah, it's a fair point, Scott. For me, it's the long-term story. The story over the next 12 months continues to be there for Tesla in terms of what I could believe in 2023 from an EV demand story, even in China, that we'll see a rebound. So the long-term thesis for Tesla remains bullish. Our concern in the near term, this next three to six months, it's a fork in the road situation because if Musk continues down this path, I think it's going to go down a dark, dark path,

which I think there's brand deterioration that could happen with Tesla. Musk is the brand of Tesla. I mean, what would happen for you to for you to downgrade it? What would you have to see? Yeah, if we start to see in our checks a significant change in demand, not just in the U.S., but even international because of some of the things going on, just the broader economic slowdown. But you combine that with what I believe a big part of the premium, the multiple, it's Musk. I mean, it's no different than the way

Jobs and Cook, they understood. They were the brand of Apple and they still are. If we start to see deterioration from a demand perspective for Tesla, then I believe that that would be an ominous sign going forward. And my issue here is that Musk, from an attention perspective, from a PR perspective, it's black eyes after black eyes. And that's been a major issue on Tesla stock. And again, the selling of stock is the boy that cried wolf again and again. OK, so what what happens if the Twitter situation deteriorates in some way?

There's word right now, according to The New York Times, that he is holding a, quote, quote unquote emergency all staff meeting as we speak. There's also word of some more key departures from fairly critical areas of that business. Yeah, look, I think Twitter in all essence is a money pit. And I think this is going to get a lot worse before it gets better. And to that point, the fear is that does he have to sell more stock or get more outside funding just given what's happening with Twitter? And that's our point. At this point, you need a separation where others ultimately are really focused on Twitter. He starts to focus more back on the Tesla story at a time that they need him more than ever, just given what happened in terms of the 3Q delivery number.

And that's why this is going to be – it's a moment of truth for Musk in terms of how he handles it. But but in our opinion, as a huge supporter of Tesla for many years and Musk, I mean, this has really gotten to a point where the albatross has really now started to significantly impact Tesla stock. And it's obviously a painful situation, I think, still ahead. OK, Dan, I appreciate your time very much. We'll talk to you soon. Dan Ives, Wedbush joining us there. Coming up, we're tracking some big stock moves in overtime.

Christina Partinello standing by, as always, with that. Christina. Well, we have the sports and entertainment conglomerate behind UFC fighting. Saw revenue fall for the quarter, but shares are climbing. And legal Zoom shares are up almost 20%. I'll break down the moves right after this break. We're tracking the biggest movers in overtime. Christina Partsenevelos is here with that.

Christina. Hi, Scott. So the conglomerate behind premier mixed martial arts, UFC, and fashion media company, IMG, is seeing its shares rise right now. Up over 5% in the OT. Endeavor Group posted weaker than expected revenue. And full year guidance lower than Wall Street expected. Part of that decline was certain media rights deals or rights deals don't occur annually, like the Ryder Cup and UEFA Euro Championships,

but the stock is climbing right now. Shares of LegalZoom are, you'd think I'd say Zoom, but no, soaring 19% right now. It helps customers make a will or a trust online without using a lawyer. And posted higher sales and a lower than expected loss for Q3. The company also raising its full year guidance. Subscription revenue is up 25% year over year. And they're the companies that specialize in the e-signatures. Everything's going digital, including your will. Gotcha.

Christina, thanks. All right, up next, Santoli's last word. We'll get his reaction to Icon and Minard and their market calls next. Twitter question results, we asked you, would you own crypto right now? The majority of you saying no way. Sixty eight percent said that. Santoli's last word right back after this. All right, Santoli's here for his last word. All right. So we got Icon big picture negative. Right. Put the balloons away. And they got minored near term positive, even though he is not exactly Mr. Positive.

Big, big picture. Yeah. Look, I think obviously there's no all clear that gets sounded on a day like today, even though things moved in a positive direction. And the magnitude of the gains in stocks and the declines in bonds just showed you how people were leaning hard for a bad outcome. That's all it really tells you. The textbook from here does suggest that seasonal tailwinds can kick in. You still do have this, you know, baseline, very defensive posture a lot of investors have and the year end dynamics where maybe it'll come into play that you have some upside risk. I think all that fits pretty well together. I'm not hearing a lot of people saying the bear market is over. The history of 5 percent up days in the S&P, it happens either when the market's coming right off of a crash or in the mid to later stages of a high pressure bear market type backdrop.

So that fits into where we are right here. I think longer term, 12 months. It's tough to stay incrementally negative if the market refuses to give some of these gains back in a hurry. I think at this point people would take a six week reprieve from the stuff that we've been dealing with for so many months now. It becomes a harder call if we're two or three hundred S&P points up from here back to where we were as we peaked out in August of this year. That's when it starts to seem like, you know, maybe the market's making it tougher to stay negative. Yeah. Appreciate it. I'll see you tomorrow.