Closing Bell - Closing Bell: Rally or Re-Test Into Year End? 11/6/23

Episode Date: November 6, 2023

Has the set-up for stocks improved enough to support a rally into the end of the year? iCapital’s Anastasia Amoroso gives her expert market take. Plus, Billionaire Investor Marc Lasry breaks down his forecast for the Fed, rates and where he is seeing opportunity right now. And, we drill down on all the key themes and metrics to watch when NXP reports after the bell.

Welcome to Closing Bell. I'm Scott Wobner, live from Post 9 here at the New York Stock Exchange. We have a big exclusive interview coming up this hour. Billionaire investor Mark Lasry with us in just a bit. We'll talk the markets, of course, and also his new sports fund as he looks for new investment opportunities. In the meantime, this make or break hour begins with the bullcase for stocks and why some argue the rally in the year end could be just getting started. Here's your scorecard with 60 minutes to go in regulation. We're taking a much needed and probably deserved breather after putting in the best week of the year. Small caps leading declines today, and that's after a solid five-day stretch. There's your scorecard as it looks right now. You see the Russell giving back about one and a quarter percent.

Muted gains elsewhere. Yields, though, they're bouncing a bit today following their rapid decline last week. There's the 10-year, 466. takes us to our talk of the tape, the setup for stocks and whether it has improved enough to support a rally into the end of the year. Let's ask Anastasia Amoroso, iCapital's chief investment strategist here with me at Post9. Welcome back. Good to see you, Scott. That is the central question after that unbelievable week we just had. Does that mean our chances of a year-end rally have now improved? I think they have. I think they're back on. And you look, over the last couple of weeks or couple of months, I should say, we had a lot to worry about. And specifically, we're worried about what the Fed is going to do about the upward movement rates

across the curve. We're worried about the Treasury and what the borrowing estimates are going to be and just how much coupon issues we're going to have. But we put a lot of those worries to rest last week. And when I come into this week, what I think the slate is now clear for is seasonality. And seasonality is the strongest in November. It's the strongest in December. And something like 75 percent of the time, stocks do rally in November, December. Now you say, well, what about the 30 percent that it doesn't happen? And what I'll say to that is, what is the catalyst today? And I think the catalyst today still is the economy that has not fallen apart. And maybe there's a recession in the cards at some point in 2024, but it's not today.

All right. Marco Kolodovic, J.P. Morgan, right, puts a note out shortly before our show in which he says, quote, falling bond yields and Dovis Central Bank meetings are being interpreted by equity markets as a positive in the near term however we believe that equities will soon revert back to an unattractive risk reward as the fed is set to remain higher for longer valuations are rich earnings expectations remain too optimistic pricing power waning profit margins at risk and a slowdown in top line growth is set to continue those are reasonably valid. What's your response to that? I think that is likely to be the story of 2024. I mean, I do actually, Scott, share now the concern that 2023 was a soft landing year and everything sort of worked out perfectly. But in 2024, if rates do remain at current levels that I think Marco is right, it is going to be a lot harder for companies to, for example, to repay their debts, to pay the interest rate that's now five and a half percent. It's going to be more difficult whether you have leverage loans, whether

you have fixed rate debt that you need to refinance. And so as that plays out throughout 2024, that's likely to be the case. But what I want to do today is decouple the trading view versus what I want to position, how I want to position my portfolios for 2024. And so that's why today I still think, you know, we bounce off from current levels still given the seasonality, given the buybacks. But if we do get the bounce back, perhaps you use that to your advantage and you start positioning more conservatively for 2024. It's interesting how you break it down because it I like the way you say that it's you know, this was the soft landing. Right. Right. People thought we'd be in a recession already because of the move from the Fed and how quickly and how much they raised interest rates. But

we're going to pay the piper for all of that. It's just going to be pushed off further and further. So is that a get while the getting's good over the next couple of months and then all bets are off? Yeah, I mean, our crystal ball is becoming murkier. And I do think it's maybe a story of the next couple of months. I mean, Scott, we looked at, again, I mean, our crystal ball is becoming murkier. And I do think it's maybe a story of the next couple of months. I mean, Scott, we looked at, again, you know, the size of the debt piles that need to be refinanced in 2024, whether it's the government, whether it's the corporates, whether it's the banks, you know, all of that is going to have to come to be refinanced. And so to me, you know, in order to say we now have an all clear on stocks at this time to go

all in, we have to have a Fed pivot. We have to have the Fed say that we are going to cut rates sometime in 2024 and or we're going to potentially slow down quantitative easing. If you don't get that, then I think it is going to be harder and harder. And the risks of the recession, they've been pushed off, but they've not been canceled. And I would say the longer rates stay at these elevated levels, the more those risks build. That's just how things work. Why does the Fed have to be so explicit in saying, all right, we're going to cut rates if we already think that their next move is a cut? Why do they have to come out and say our next move is a next cut? Well, that's the thing that's challenging for markets. They're not going to come out and say that. That's what the markets want them to do.

And if they did that, then that's when you would buy the dip. But we already assume we assume right now the next move is a cut. Right. They're done hiking. Yeah. But we also assumed that we're going to cut by 100 basis points in 2024 and that we had to reprice that assumption. But what I worry about, Scott, is that I think the markets are going to force the Fed's hand. And what I mean by that is we're likely going to see higher charge offs, higher delinquencies, higher bankruptcies. And once there's enough evidence, so to speak, you know, the markets are going to be lower, but the Fed finally is going to move on that. But again, that point is not today. That point is sometime most likely in 2024.

Yeah. What takes us then to the rally to the end of the year? Is it what got us here in the first place, mega cap tech, or do we have a broadening of the rally? You know, last week we had a really huge bounce in small caps, for example. Now they're giving 1.25% back today. So where do I want to place my bets over the next six weeks? Let's take it short term, six weeks. I am still in the mega cap tech camp, and the reason is, you know, everybody's sold tech

because we're worried about bond yields. But from my perspective, you know, maybe there's some sort of valuation impact. But big tech is where people have the most conviction right now on being able to ride out whatever growth slowdown we're going to have in 2024. And that's what the price action has suggested. I mean, every time somebody sells tech, somebody else steps in and buys it. Because if you look at the valuations that went from 20 times multiple to 24, if you look at average earnings growth for the mega cap tech over the next year or so, it's about 16%.

So it's better than the S&P. So why would I want to bother with small caps where you have financial exposure, we have leverage exposure? You go to where you have the highest conviction trade, which is tech. All right. Let's bring in Nicole Webb now of Wealth Enhancement Group, also here with us at Post 9. Welcome back. Hi.

Market has this right yes or no you know we find ourselves in i'm going to agree with most of what's been said thus far there is a strong case for a bull story the duration of it in question but there's no doubt that interest rate stability creates a platform or a catalyst for market confidence. So the trickle down all the way through into small caps through last week, to us, it's a little bit early for that. Yes, we believe that valuations in small cap look favorable, but are we ready? No. In the next six-week time frame that you just brought up, yes, megatech remains the place of most confidence. When the bears bring up to us the story of the debt, the debt, the issue of the debt,

we look and say, OK, if we have interest rates below five, we have oil below 100, we have some stability from a rate perspective, then the lever left to pull to offset debt is growth. And what has been the craze this year, the catalyst for where we've seen these 10 names just take off, it's been AI. And what does AI lend to across all sectors? Productivity. Productivity numbers have not recharged yet. And we're still very much of the camp that this could be the roaring 20s of productivity. We're just a couple of years away from that. So you're not as concerned about the deficit as some others are, even as they suggest the charts, so to speak, of the cost of funding

the deficit are, I think, in Stan Druckenmiller's words, scary, right? He was on the network last week. He's not the only one that has that view. And rates may not be at 5%, but they're still not that far away either. Absolutely. And I think there's a couple of things going on here. So when you think about yields today, they have to be high enough that people are willing to take the 10-year and stick to the duration of it. If they can come down some, it's cheaper to service our debt. If we think about it in the simplest way,

there's only three ways to offset government debt, inflation, taxation, and growth. And there is the opportunity for growth. That has been the energy behind the market this year. It depends if you think we are, as some bears would suggest, we're late cycle. Yes. So that, you know, it's like a fly in the ointment of that view. Yep. Do you think we're late cycle or not? You must not.

I would tend to say no. I think this is think we have to look towards a different playbook. And there's curiosity within our firm around to what extent can you really say the Fed is battling the reacceleration of inflation from the 1970s when the thing we're talking about often, certainly in the first part of this year and then again in the last month, has been the contraction in M2. And so they're not identical. And the volume of money, of course, could be part of that conversation. But I think to just hold tight into the bear camp going into 2024 could not prove right. Okay. Do you think, Anastasia, that earnings are where they should be, estimates are, for 24? Are they too elevated?

I think they're okay for now. And I say that because this economy is not going to fall apart over the next couple of months. And for example, if you look at 2024 estimates, I think they went from 12% to 11%. And maybe that seems fair. But I do think there's a lot more going on when you look at the micro. And for example, when I look at the earnings revisions, we went through a period of time in the third quarter where earnings revisions, the upwards ones, were outpaced in the negative earnings revisions. But guess what? We flip right back and the negative earnings revisions are once out, once again, taking hold. Isn't that a problem? Like, I don't know, Pazani, Bob Pazani had a piece last week where something like 60 percent of the companies that had reported up to a certain period

of last week had earnings revisions that were down. Is that that's not a problem well I think that's again a concern going into twenty twenty four you know I think what the market is going to focus on right now is it could the consumption story and for

example when you look at it's not gonna be a Taylor Swift summer again. In the fourth quarter but if I look at the real the real time real world consumption. Today it is still tracking a little bit slower than it was this time last year. But it's still on a pretty decent pace.

So I do, Scott, think that at some point, as there is going to be more concerns about the economy, that 11%, 12% earnings growth number for next year, that does have to come down. But does it have to come down this quarter? But you say avoid discretionary, though you're painting a scenario in which the consumer is still strong enough to keep those types of stocks doing well. No, no, because I mean, there's the top line. Right. And I do think the consumer can sort of drive the top line for some of these corporations. But at the same time, if you look at leverage ratios for some of the consumer staples companies, for example, a consumer discretionary, they're going to have to pay more, whether it's on their floating rate debt or fixed rate debt. If you look at oil prices, yes, they've retraced a little bit,

but they're still elevated versus where we started the year. So that's the consumption tax that's also weighing on the consumer. And then you know that a lot of the consumption was financed by credit cards. People are paying 21% on those credit card balances if they're carrying them. So I do think the consumer story doesn't fall apart, but it does get weaker. What's your take on the consumer? Certainly the consumer is weakening and there's, we knew that the, that this money would make its way through the system. The money being money that was, you know, brought into the system during

COVID. Where I think we have to be careful in stepping too far away, and again, plays more into kind of this positive outlook for 2024, or at least the opportunity for it, is these companies haven't been rewarded in 2023. So again, we talk so generally about the market, and at the same time, we know the market, the S&P 500, has really been driven by the top 10 names. So when we go back, at some point point we have to revise our thinking to say,

if today this is trading at its 5-year, 10-year, 1 standard deviation away from that mean, then if it hits just the lowest level of earnings potential, there's opportunity set there. And so when we think about estimates for 2024, and we think about a Fed that perhaps has the opportunity to be more nimble, meaning if they were late to fight inflation, are they early to say this is different and start to loosen to see what the experience of that re-acceleration of inflation is? And so, again, I just don't want to get too one-sided in our positioning for the year ahead without remaining kind of at least leaving some opportunity on the table for it to be positive. What I've heard the last couple of weeks is that there's never been, some have used this phrase, there's never been a more attractive time for

the 60-40 portfolio. That bonds are attractive, stocks are attractive. Can you make a credible case that stocks are as good of value right now as bonds? How would you assess that? Well, I can't make the case that bonds are a good value. And I think, you know, bonds may be a good value in the front end of the curve, especially if the Fed is going to start to cut interest rates. But I'm not so sure that bonds are a great value in the back end of the curve, especially if the Fed is going to start to cut interest rates. But I'm not so sure that bonds are a great value in the back end of the curve. You know, why would bonds rally from here is because if growth fell apart and we went into a recession, again, that's not imminent.

But what you have pushing against that is that you have quantitative tightening and the Fed not buying at the same time where we're still issuing a record amount of coupons. So that to me suggests that, you know, that you might have push and pull in the long end of the curve and bonds are not necessarily going to rally. So I'm not in the camp of the 40% just sort of in a great state. From the stock perspective, it depends on what stocks. And I also can't say that we're at an absolute, you know, just go all into risk in stocks because valuations have pulled back, but there's sort of five, 10-year averages. I do think there's pockets where you can get a stock at attractive price to earnings

ratio adjusted for growth. I do want to look into those pockets. Those pockets, I think, are in artificial intelligence. Those pockets are in mega caps. So as I think about portfolio construction for next year, I think money markets still have a big role to play. I think short duration fixed income has a role to play, High quality, profitable tech stocks. But the other thing, Scott, I would say to complement the 60-40 is private credit. Private credit is yielding close to 12 percent. It is floating rate. It doesn't have duration exposure. And over the last 17 years, only one of those years was negative in 2008. So I think that's a great place to be to complement that 60-40. See, Anastasia paints this picture of this competition

that still exists, Nicole, whether it's cash, it's in the short end of the treasury curve, and then mega cap. What that leaves out are the still deemed to be too risky because of the cyclical nature of a lot of those stocks, the S&P 493. When is there a credible case made that those are the ones you now want to move into? Like you want to move out of cash. Bonds aren't so attractive anymore. Mega caps are exhausted and that's where all the flows have gone. But now it's time to play for the other side of whatever level of slowdown we get in the economy.

And I think this is where I would say that the 60-40 does have a lot of opportunity. In the last 20 years, we haven't had a moment in time like this one where you have as many opportunities for income. So whether you seek investment in the private credit market, we're very much aligned contextually there, or the opportunity in the 493 other companies. This is certainly a stock picker's market. And then at the same time, you can be earning money on your short duration money. And for some people where it makes sense for them and their risk profile, they gobbled up the 10-year at 5%. So again, it's just an opportunity set across asset classes that we haven't seen really in the last decade. And so when you think about construction of portfolio today, I believe for myself, the advisors at our firm,

we have more options for the optionality of how to position yourself going forward, more as investors than as a trader. What about alternatives, right? Where we last saw each other was out in Beverly Hills at the CASE conference. Anastasia talks about private credit. Some have suggested, well, 60-40 isn't necessarily right to be 60-40. Have a smaller allocation to one and then have an upped allocation from what's, you know, you could say some people have zero to maybe 20% alternatives. Yeah, and I think fundamentally this is where we see most of our clients slightly detached from the private market in terms of a lack of awareness that we actually have less publicly traded companies today

and the notion that there are three times as many public or private companies available for investment and that lack of mark-to-market liquidity, again, all very valuable, again, as options available to more people in this moment in time that just haven't been readily available previously. Real quick. Scott, I think this is a return to the old normal regime of higher rates, and we can count on the 40 to diversify the 60. So I think alternatives can be that new toolkit that investors need in

this regime. All right, guys, thanks so much. Great talking with both of you, Anastasia and Nicole. All right, let's get to our question of the day. We want to know, following the best week of the year for stocks, are you more optimistic now about the chances for a year-end rally? It's simple, yes or no. Head to at CNBC closing bell on X to vote. We have the results coming up a little later on in the hour. In the meantime, a check on some top stocks to watch as we head into the close. Christina Partsenevelos is back with us today. Hey, Christina. Hi. Well, I want to start with Dish Network.

It's having its worst day ever in trading at its lowest level since 1998 after a huge miss on earnings. The company says its CEO is going to have to step down or will step down and be replaced by Echo Star CEO ahead of their planned merger. Speaking, and I should say the stock is down 35% for Dish. Echo Star is also firmly lower after the satellite giant posted a sharp revenue decline. You can see Echo Star down about 32%. Both Dish and Echo Star reported declining subscriber numbers. And DA Davidson is upgrading booking holdings to buy. Travel demand remains robust, and analysts like booking's third quarter results and want to take advantage of the stock's lackluster performance in October. Shares are up 4%. Scott?

All right. We'll see you in just a bit. Christina, thank you. We are just getting started here, and we have a big interview coming up. Exclusive billionaire investor Mark Lassery joins us right here at Post 9. Tell us what he's forecasting for the markets, where he's finding new opportunities as well. We are live from the New York Stock Exchange, and you're watching Closing Bell on CNBC. All right, we're seeing a bit of a comeback in the stock market today. We're off session lows.

That's after the major averages notched their best week of the year last week. Let's bring in now Mark Lazzari, co-founder, chairman, and CEO of Avenue Capital Group. Welcome back. Thank you. I feel like it's been a while since we've discussed the markets. And here we are. I mean, do you think the Fed's done? Have we come to the end of this long and winding road? I think we are. I think if they raise its max another quarter point, I mean, I think you're pretty much at the end. And now we're all going to wait and see how the economy does. It's funny, if you talk to anybody, they'll tell you things aren't that great. But if you look at the numbers, the numbers are telling you things are much better. So it's kind of odd. Well, I mean, the people you hang out with, you know, they generally think,

you know, the things aren't that great. But, you know, they're still putting money to work. Yes, they are. In various places, which we'll get to you. I mean, do you think you think we've seen a peak in interest rates or no? I do. I actually do. I'd be surprised if the Fed keeps on raising. They only will if they see that the economy is still growing at four percent. I think everybody was shocked that it was the fact that the Fed didn't raise because of that actually is really interesting. So that means they're seeing that things are a little bit slowing down. If you're growing at 1% or 2%, that's fine. Then you're not worried. You don't need to keep raising rates. If somebody said this feels kind of like Goldilocks, which you heard after the employment report, how would you respond to that? It's like, OK, the Fed's kind of done. Economy's hanging in there. Labor market's cooling a little bit.

Unemployment rate ticks up a tenth. Does it sound like that or is that is that too far fetched to suggest? I think people believe that. I don't disagree with you. My view is that because of where things are, it's going to take a while for the economy to slow down. As it does, I think you're going to have to find the Fed lowering rates to get things going again. But it's fine. If you're flat, up one, down one, it's fine. What the Fed doesn't want is us growing at 4%.

How would you assess the job that Jay Powell did or is still doing? Right. They're not he's not standing there declaring victory. But if I would have told you 18 months ago, Fed's going to hike by more than 500 basis points in 18 months. And we're going to be talking about the kind of growth in the economy that we still have. You would have said what? You're crazy? Yeah. I would have asked, you know, where are we, what institution are we putting you in? Yeah. Because that wouldn't have made any sense. Well, does it make sense to you now how we've remained as strong as we have in the face of all that?

I'm surprised. I mean, I know what I know is we're lending money at like 10 to 15 percent. Still? Yeah. People are having a hard time borrowing. So there are issues within the economy. If you're a good company, you've got no issues. But if you've got a problem here or there, nobody wants to lend. So that's why they're coming to firms like us here and in Europe. So there's issues. And the question is, is that going to get worse

or will it sort of stay there? I'll be surprised if it doesn't get worse. I hope it stays where it is, as we all do. I've run into a lot of people lately who are in that business. It's one of the hottest areas, private credit, direct lending. Do you see that as well, that more firms and people you know who are, you know, competitors in some respects to what you do are doing that? I do. But the reason for that is because there's so much demand. Nobody's coming in and whoever's coming in is able to lend money. I mean, what we're finding is you've got more and more people who need money and less banks who actually are lending. So that's sort of is you've got more and more people who need money and less banks who actually are lending. So that's sort of why you've got this opportunity.

The market abhors the vacuum. So we're all stepping in. And that's the issue is banks should be doing this, but they're not. Yeah. What's your assessment of the of the banking system right now? I mean, you know, you point, you know, regional banks have been probably the most acute point of concern since Silicon Valley Bank. That seems to be where a lot of the concern about real estate lies and refinancing and the like. What's your assessment there? Look, I think there's massive issues. There are. The problem is and the way you solve those issues is you just keep extending. So those banks are not selling those loans because the market price for those loans

is a lot lower and they'd have to take a bigger hit. So in essence, what they're doing is they're just going to keep extending. And that's how you sort of push the problem off. But if you had to mark to market, like we all do, you'd have a problem. And the Fed doesn't want that problem. So therefore, they'll let the banks keep doing what they're doing. What do you do? You keep pushing it off in hopes that rates come down and the economy stays strong enough? You hope that rates, as rates come down, right, and that as the economy will start picking back up, if you can push it off for two or three years, you should be okay. But that's what happened in 2008.

2008, 2009, if banks had been forced to sell, they were going to go below their capital requirements. The Fed didn't force them to sell, and banks kept pushing it off. And then the economy and lower rates saved them. That's sort of everybody's hoping the same thing is going to happen again. You think people are making too much of of an apocalypse that's coming in real estate and commercial real estate or no? I mean, you've heard that for the last six months at least. I think they are just simply because there's no event that's going to force a bank to sell other than the Fed. And the Fed's not doing that. So if you're not being forced to sell, you're fine. Like, look at your house. If I said to you, your house is

worth a certain amount. If I said you've got to sell it within 24 hours, you're going to lose money on whatever it's worth because you don't have the time to do it. If I said you have two years, then you have the luxury of time. You can wait. You can listen to offers. That's what's happening on a global scale because none of the money center banks are forcing the regional banks to sell those loans. Are we on sort of like, you know, like an hourglass that's now turned upside down? And the Fed starts raising a very big hourglass. And the economy stayed, as we said, stronger than I think anybody suggested. But is it just a matter of time before the sand goes all the way out?

Or do we get a chance to turn it over? Do you think we're going to have a recession ultimately in 2024 or no? I think we will. But I think a recession, remember, is just two down quarters. That's the only thing that's going to force the Fed to lower rates. If you don't have that, rates stay where they are. And the problem is rates where they are today is causing issues for consumers and it's causing issues for companies. It's literally to buy a house, it costs you twice as much as it did a year ago because rates have doubled in a year. and it's causing issues for companies. It's literally, to buy a house,

it costs you twice as much as it did a year ago because rates have doubled in a year. So people can't afford that, so it's causing some problems, and that's sort of why you'll have a recession, whether it's a year from now or not. What about corporate bonds? We talk a lot about direct lending. It's been incredibly lucrative for you for the last however many years that we've really been having these conversations.

I saw a story, Double Line Capital, you know, Jeffrey Gundlach, making its most aggressive bet on high quality corporates in years, wagering that the highest yield since the global financial crisis will offset risks posed by a slowdown. What do you think of that? It's interesting. I mean, the question is, is he getting paid enough for that risk? You must think he is. Right. That's exactly it. He's thinking, I'm getting paid X and the default rate is going to be a lot lower, so I should do that trade. I get that. Maybe you're thinking like triple Bs are lower.

Right. Not exactly. We're not talking about A-rated bonds. No, he shouldn't be. And then the question is, is he leveraging that? And if he is, that's sort of how he's generating those returns. We sort of look at it the same way, but we're not leveraging it. But we think we're getting paid 10 to 15, and the risk of default is so small because of where we are in the capital structure. He's going to do it with public bonds. I'll bet you he's going to leverage that a little bit. But he's also thinking, look, the economy's going to be fine. It'll be flat.

We're not going to have a recession, or if we do, it's very mild. So I'm getting paid a lot for that risk. See, I was going to ask you what the default rate is on the direct lending you're doing, but you just said you're so high up on the structure that that's not a concern at all. Not right now. I mean, for us, the default rate is going to be like half of one percent or one percent. You're getting paid way too much for the default rate to be there. All right. We're going to take a quick break. Don't go anywhere. Because when we come back, we will speak more with Mark Lazzari about his new sports fund. Talk about the investments he's making when we come back from closing bell.

We're back. Mark Lazzari of Avenue Capital is still with us. Recently launched a new sports investment fund, working with some of the biggest names across all of sports. Why a sports fund? I think there's a lot of opportunities there. I think it's going to be in new leagues, new teams. My view of it was that the NBA and other leagues will keep on growing, but I think they'll grow sort of where they had over the last 20 years, around sort of 10% a year.

That's great, but I think you'll have opportunities in sort of newer leagues where you can grow at multiples of that. You mean the days of pulling a Lazzari with buying into the bucks where you did and selling it for like seven or eight times or over? I think it's really hard to do that over the next 10 years. I think the team's going to be worth more.

I'd be surprised if it's worth seven times. Interesting. How big is the target for the size of the fund, can you say? Yeah, I think we've got a cap of $2.5 billion. Okay. And how far are you along that road? So I think we'll have a first closing in about a month, and then we'll continue to do that. But we've already committed to buy a number of franchises or teams in the last month. So we've been really busy. Yeah. Speaking of,

you bought a TGL team, San Francisco, right? Yes, we did. Steph Curry, Clay Thompson, Iguodala. Yeah, Andre's on it. It's so funny because on halftime today, we spoke with Rory McIlroy, Tom Werner, who have the Boston team. And here's what Rory said, and we'll get your reaction to it. We're trying to bring the game of golf into the 21st century. You know, I think a lot of people will connect with the fact that we're playing indoors.

It'll look nothing like traditional golf. It'll look more like an NBA game, hopefully. What do you think of that? I mean, what's the attraction for this league to you? So, look, I think what they're trying to do, and obviously I'm a believer because I ended up buying one of the teams. Can I ask you what you pay? Can you say that?

I can say it was less than $100 million. Okay. Is that fair? That's fair enough. Was it between $90 and $100? No, no, but I'll say it was less than $100. Okay. Well, at least you gave me a fall part.

It was more than $25, and it was less than $100. All right. Well, that's more than Werner was willing to tell me. So I appreciate that. All right. The attraction of it. The attraction is really simple. What we're trying to do is make golf available for people to watch over two hours. Do it in prime time. Do it where it's virtual. So you're going to see the players hitting the ball right away, and then they step up. So you're not wasting, I shouldn't say wasting time, you're not watching people walk, right? I think one of the problems that people have with golf, unless you're a huge golf fan, is it takes too long. So what we're trying to do is have a league

where everything's going to happen within two hours, and I think that's what's going to hopefully appeal to people. And we'll see, right? That's the bet. I think you're going to find that people's attention span is actually shorter, so they're going to want to be involved in something like this. We have all the best golfers. Rory is in it, Tiger's in it, a number of other golfers.

So I think it's got the possibility of being something huge. Steph is obviously prolific and a great golfer in his own right. How'd you get him? How'd this happen? We've been friends for a while. I think he's, it's exactly what you said. He loves golf. It's something that for him made a lot of sense. I'd love to tell you that it's really Steph and I are on the golf course playing all the time. You know, he's scratch and I'm probably 100. So I don't think it's that enjoyable. But I think part of it, it's something that he's interested in.

Also, he also believes that this league will be something that's different and appeal to more people. I looked at the list of athletes you have, and they're really a cross section and globally to Harry Kane, right? Global football star Candice Parker, fabulous basketball player in her own right. Do these athletes put up their own money to be a part of this fund? And what sort of return on investment can they expect over time, do you think? Well, hopefully we'll make, you know, the goal on any fund is to make two times what you've invested, right? So the question is, is that over three years, five years, or 10 years, you'd like it to be in the smallest amount of time period. I think for the people who are part of it, they'll be putting in some of their money and

they'll be involved in helping us find new deals. Lauren Holiday actually has been great because she's been helping us on women's soccer and we've been involved in that. Candace actually has been great because she's been helping us on women's soccer. And we've been involved in that. Candice Parker has been helping us on things we're trying to do on the WNBA. So everybody is getting involved in different things. Harry Kane has been helping us on teams that we're looking at, football teams for America, soccer teams, but football teams in Europe. So it's actually been extremely interesting and fun so far.

So you're still involved in pickleball, right? I asked the guys this afternoon the same type of question, but all of these second and third tier, as you would call them, sports, and the still fixed number of eyeballs that everybody is going after, and the confidence that you must have that there are enough eyeballs that can watch Pickle or Padel or whatever and this? Right. So I think part of it is the more engagement you have of people, the more they're going to want to watch and be a part of it.

So it's not are we taking people away from the NBA or the NFL. Really what you're doing is are you going to be able to get more people to watch these sports. And what I always say is one simple thing and we've never talked about this. So do you ever watch the Olympics? Of course. Okay. Do you ever watch curling? On NBC by the way. All right on NBC. Do you watch curling? Yeah. All right. Why? The reason you're watching Curling, there's 250 other channels. So the reason you're watching Curling is because you're watching the best in the world compete. That's why you're watching it. It's different.

And you find it interesting. People will watch, whether it's Padel, whether it's Pickleball, whether it's TGL. It's getting more people involved because the one thing people love is sports. And they want to be part of it. And our job is to get them more engaged. If we do that, then they're going to watch it. You said at the outset when I asked you about pulling a Lazzari, you know, the incredible trade that you made, if you want to call it a trade, incredible investment that you made in the box. Is this all a sign that we won't see you be a part of the big four leagues anymore? Would you be an investor in a group in one of the four major sports again? Did you scratch that itch

and now it's time for this? How are you assessing that? I think a lot of that is going to be a question of price, right? So there's always going to be opportunities. I love the NBA. I think Adam Silver has done a phenomenal job and I think they were great partners. Would I like to get back involved? Yes, but it's going to depend on a team. It's going to depend on price. So I think there's huge opportunities in sports. i'm not worried that i'll be able to

find them and i think we'll do it through our fund but if you did it would probably be nba it sounds like you're saying no i think it'll be nba nhl baseball yeah football i mean michael strahan's helping us with that i think i think we will have the ability to do any of these and it's really going to end up being a question of price. Can you still get into the NBA celebrity basketball game at the All-Star weekend? That's going to be up to Adam. I can go to the game where I'll be able to play. Yeah, that was a decent jump shot. I saw that. That'll be hard. All right. Thanks for being back.

Thank you. Always a pleasure. Yeah, pleasure's ours. That's Mark Lazzari of Avenue joining us here exclusively. Up next, we're tracking the biggest movers as we head into the close. Christina Partsinello standing by once again with that. Christina? You know what? We have lower food away from home volume. It's driving one stock down. And an analyst says Paramount is losing out by not putting up its business for sale. I'll explain all that next. All right, less than 15 from the bell. Let's get to Christina Partsenevelos once again for a look at the stocks she's watching. Christina.

Thanks, Scott. Well, shares of Treehouse Foods down about 10% after week Q3 results and lowered sales guidance driven, what, by slowing consumer spending and the recent sale of its snack bar business. The private label Food Giant also reported declines in co-manufacturing and food away from home volumes. Paramount getting a double downgrade from Bank of America to underperform from buy with a price target of $9.

You can see shares trading at $12.67 right now, down about 8%. They were originally bullish on Paramount on the idea that it was potentially up for sale or there were meaningful parts of it that could potentially be up for sale. The analyst, though, says that they no longer believe that Paramount is serious about selling its assets. Scott? All right, Christina, thank you. Last chance now to weigh in on our question of the day. We asked, following the best week of the year for stocks,

are you more optimistic now about the chances for a year-end rally? You can head to at CNBC Closing Bell on X, the results just after this break. Question of the day results. We asked, following the best week of the year. Are you optimistic more optimistic now about the chances for a year end rally. Majority of you two thirds in fact say yes. Up next and XP reporting results in overtime tonight will bring you a rundown of what to watch for when those earnings hit that much more we take inside the market zone. We're now in the closing bell market zone. CNBC senior markets commentator Mike Santoli

here to break down the crucial moments of this trading day. Plus, Christina Partsinevelos on what to watch out for when NXP reports its earnings in overtime. Mike, coming off the best week of the year, as we said, the only give back today really is the Russell. Yeah. But that's been up so strong over the last week that I guess you're due for something there. You'd call it pretty mild cooling off, profit taking. Russell, we mentioned up seven and a half percent, down a percent and a half today. Now, two stocks are down for everyone that's up today. So you're still seeing that typical uneven type performance. Nothing really to be concerned about in the moment. Do say that it didn't take much for the 10-year yield to go from 450 to 465 today. No real news. Now, there has been a lot of

corporate bond issuance today. Monday after a Fed meeting, off in the case. So $20 billion or so hitting the market. It's been absorbed nicely by the corporate market. On the other hand, it sometimes pressures Treasury. So if that's the the reason we can deal with that range bound treasury yields are probably fine to have equity exposures normalized and maybe have stocks get their feet back under them but uh you know i do think you're in that zone of saying even if you expect a fourth quarter rally how fruitful is it going to be the average fourth quarter return on the s&p is like a four percent gain you You're up, you know, 2% this quarter so far. Who's got more to prove, do you think, the Bulls or the Bears? I mean, you said two stocks down for every stock up today. We're coming off this great week. Bears are still out in force. How would you answer that?

I still say that the Bulls have a little more to prove only because we've been stuck for several months now. That said, no minds were changed by what happened last week. And I don't know if that's good or bad. But it's very clear that if you were bearish going into November, nothing that happened last week changed your mind. I was going to say, oh, contraire, mon frère. I mean, did you see the results of our poll? Two-thirds. Well, yeah.

Exactly. If you're surfing the tape every day, maybe you feel a little bit better right now. But and the first catalyst that people say, what's the catalyst going to be? First catalyst is stocks stop going down every day and it stops seeming like that we're precarious and something in the financial system is going to break. Nothing broke. Right. We went up to five percent, 10 year yields. And we didn't get anything that that made us think that there was some kind of real deeper stress fracture. Earnings slowing down, obviously, but Christina, NXP, it'll be interesting just because of the exposure that this company has specifically to

auto. Yeah, which is why so many investors right now are cautious heading into earnings tonight, given peers like you mentioned. You got Texas Instruments on Semi. Microchip have all guided down post their earnings driven by weakness in EV sales, industrial sales. On Semi, for example, dropped 22% after its earnings came out. But I'm going to take an optimistic tone. There are several reasons to be more optimistic on this name. First, although, like you mentioned, 50% of NXPI revenue is exposed to the auto sector, it lacks the heavy EV exposure, which brought down silicon carbide producer like on Semi. Secondly, NXPI has been under shipping demand to limit and control its inventories, I should say. And then you've got gross margins that have been at or above the high-end target over the last few quarters

in areas like autonomous driving, power and battery management. Lastly, the Internet of Things. That is a segment which should hit about $594 million in sales for this quarter. That's expected to recover. But I just laid out the good. NXP shares, yeah, are on track for a five-day win streak. But when you compare it year-to-date to the SMH ETF, it's down. Look at that.

It's at 15% compared to the 47% jump in SMH. And it's still about 20% off from its most recent 52-week high. We shall see. And we will see you in OT. Christina, thank you very much. Thanks. All right, so, Mike, we've got about a minute left. I'm trying to think of, like, what is out there that's going to influence people now

that earnings are all but done. The Fed meeting is over. CPI, as I'm just checking the date right now, is not even until November 14th. No. And then there's, you know, after that, it's NVIDIA earnings. So you've got a week from tomorrow. You get CPI. Gasoline prices down big in the month. People are actually starting to talk about a negative print for CPI. Weekly claims matters because you're on the brink of the labor market coming back into balance, or is it going to be softening too much for our taste? So all of those things, look, quiet markets, if stocks take the opportunity to try and make incremental headway, people try to get reinvested because they dumped into cash over the course of the last three months. That can be enough for a little while, I would say.

All right, so we're going to have quiet today. We'll see if it's the pause that refreshes, though. As we said, after the best week of the year for stocks last week. There's the bell. We'll be modestly green today. Bulls will take that. I'll see you tomorrow.