Closing Bell - Closing Bell: What’s in Store for Stocks? 11/27/23

Episode Date: November 27, 2023

What could the last month of the year bring for stocks? NewEdge’s Cameron Dawson and Citi Global Wealth’s Kristen Bitterly break down how they are playing the final month of 2023. Plus, “the Dean of Valuation” Aswath Damodaran of the NYU Stern School of Business tells us if he thinks the rally has staying power. And, we break down the stocks seeing the biggest gains this Cyber Monday.

Welcome to Closing Bell. I'm Scott Wapner, live from Post 9 here at the New York Stock Exchange. This make or break hour begins with the final stretch to a great month for stocks. The best in a couple of years, in fact. And the big question now, how long can it last? We'll ask our experts this hour, including NYU's Dean of Valuation, Aswath Damodar. And in the meantime, your scorecard with 60 minutes to go in regulation looks like this. Not too many sectors are in the green today. We do have a few consumer

discretionary looking good after that strong kickoff to the holiday shopping season amazon's one of the standouts there no big surprise there on this cyber monday as well speaking of tech many the mega cap names adding to their already gaudy gains this month microsoft among them that's hitting another new all-time high today nas NASDAQ 100 continuing its own incredible run. There it is, virtually flat, but it's been anything but this month. Yields, well, they're lower, too. We did have a midday bond auction. That went off pretty well. Rick Santelli gave it a B. There's the 10 year, 438. Takes us to our talk of the tape. What the last month of the year could bring for stocks, let's ask Cameron Dawson, chief investment officer for New Edge Wells. She's here with me at Post 9 once again. Nice to see you again. Hope you had

a great Thanksgiving. OK, so we're about to put a great month in the books. What's it mean for where we go from here? We have a lot of momentum, it feels like. Yeah, I mean, I think that a little bit of digestion wouldn't be unsurprising, kind of like what we're seeing today. Markets did get overbought last week when we look at things like RSI's, but we saw breadth improve a lot. Things like 20-day highs, percentage of names trading above their 50-day moving average. That's supportive of further room upside in this market, at least through the end of the year.

And that's kind of where we've been thinking about it in two distinct phases is, yeah, we can rally through the end of the year and then let's take a really sober assessment at the start of the year to set expectations for where we could go in 24. So this is all just what positioning, trying to get ready for, you know, the very end of the year, but we're still not willing to go out on a limb and suggest, hey, we think we can get a soft landing. We think that earnings are going to hold up to the degree that the market thinks

inflation is going to come down. So we should be a little more bullish than maybe we are. It seems like that is what we're now pricing in. If we look at 19 times earnings on earnings growing 12 percent, that's the soft landing. 19 times supported by a Fed, that's a bit easier. 12 percent growth supported by economy that does not have a recession. So positioning really is the key kind of driver here of flipping even more positive, meaning that as people get drawn back into the market,

that's where you could see the market trade up closer to 20 times, which is back near prior peaks in valuations. Feels like, you know, maybe you have a few more bulls than you did a couple of months ago. I mean, a good trend will do that. brian belsky was on the half time earlier today he's bullish uh 5100 base case 5500 bull case here's what he said as to how we can get there listen we see a really rapid drop off in inflation we see earnings just take off and gdp holds in there a little bit better than we thought. And so I think from a 5100K, a 5100 number, that's for our 5500 number, for our 5100 number, which is our base case, inflation rolls over, recession in name only, in name only, not a technical recession, rates stick around 4% for the first half of the year, dip below 4% the second half of the year,

the market broadens out. We're going to be in a market where you should own both growth and value. And in terms of size and style, I like to call it the Jackie Moon market. Own everything. Equal weight everything. Don't be massively over large, don't be massively over small. Own a combination. Now, there's a lot in there that you could pick at if you're not quite as bullish as as Brian is. First and foremost, this rapid drop off in inflation, earnings taking off in his words and GDP holding in there better than we thought. Is he too bullish? If you take the fifty one hundred and break it apart, what you're essentially saying is that by the end of the year, when we look at twenty twenty five earnings, we'll be growing earnings about 10 percent next year, 10 percent again in 2025.

You'd be then at 270 a share-ish. That would be 19 times at 5,100. That's still an expensive multiple, which means that you do need interest rates to come down. You do need inflation to come down in order to get there. Well, that's a big part of how he thinks you're going to get there. Is that, do you think it's far-fetched? I don't think that interest rates will fall as much if the economy remains so robust that would support an earnings output that would be that 10 percent growth each and every year in 24 and 25. So in terms of what else he said, market broadens out, should own both growth and value, own everything and equal weight everything. And I think that saying own everything else, because there's so many names that have been

left behind this year, that if you look at the equal weight index, it's trading at about 15 times. It traded at 18 times back in 2018, 2019. There's opportunity in a lot of parts of this market, which just means that it's more of, and I hate to call it the stock picker's market, but there's more dispersion we're seeing within sectors, meaning that just looking at one sector isn't enough. The breadth has gotten better lately, right? I mean, it's not all been top heavy over this last great stretch. Is that a sign that we're going to have more mean reversion? We're going to get other areas of the market to start performing better?

It's an encouraging sign. And what we'd like to see is better relative performance because the thing that's been troubling is that if you look at both cyclicals and defensives, they're actually still in relative downtrends versus the market, which just means that it still is so tech-heavy. There is still only one horse in town, and it's tech. But, I mean, if you've got the best horse, right, in the race, why don't you just keep riding it? It doesn't mean that other horses can't do well and, you know, make you money.

It just means that the best horse is the best horse. The only risk you run with that is that if that horse is very crowded, if everybody wants to ride that horse. Because that's what happened at the beginning of 2022. Tech was the no-brainer. Of course you won tech. It's where all the growth is. And it was trading at a very expensive multiple and it's very crowded. The opposite happened in 23, cheaper multiple. Nobody wanted to own tech with interest rates going up. Now we're back to a world where everyone wants to own tech. Tech is very expensive. And so I think we have to be very disciplined about

positioning and where things are crowded. if there's a surprise to be had In the new year, where's it going to be in the market? You think what sector surprises us small caps? I think small caps outperforming would catch people flat-footed because the interest rate story is just so very clear Small caps are pinched by higher interest rates the most and the positioning isn't there. You've seen outflows out of small caps They're trading at a discounted valuation versus the market. I think they got so oversold that you could see huge rallies. It doesn't mean they're sustainable, but it definitely catches people flat footed. Well, I mean, if you think that there's going to be a considerable amount of money going into small caps, that's going to bode well for the overall market. No,

it usually is a risk on signal. And so we'd like to see it confirmed by things like high beta outperforming. That's a sign that liquidity is more abundant, that people are clamoring for risk. These are things that are important indicators for a healthy underlying market. Are you figuring that that may actually happen? Or are you just saying out of a basket of what could surprise us, I would put that on the list. Do you actually believe that that could happen? I think that the sustainability is what I still question, because usually you see small caps only outperform on a sustained basis at the beginning of a cycle. And this still feels very late cycle. We're still with low unemployment.

Interest rates are still high. The Fed is still not in full easing mode. This has a late cycle feel to it, which makes me think that a small cap rally, though could be very powerful, could be more short lived than something that's a two year rally. OK, let's bring in Kristen Bitterly now of Citi Global Wealth. It's nice to add you to the conversation. So where do you come down on your views of not so much for the last month of the year, but as we make the turn and we really get some meat on the bone in the new year? Yeah, so I think going into 2024, we have to just kind of do an

outline of what we know is true. Right. So inflation has come down. And when you actually look at the composition of inflation and you take out shelter or owner's equivalent rents, you're at that two percent. So we see a path to two and a half percent by the end of next year. So inflation is going in the right direction. Rates are coming down. We've seen a material change in rates. I mean, you record volatility, obviously, but you're seeing rates go in the right trajectory. Oil has come down as well. Earnings have troughed. And so when you look at that setup in terms of 2024, we do believe that there's opportunities to be invested both on the fixed income side as well as the equity side. I think we're sometimes where some areas where people are getting a little over

their skis, though, is in the overall level of the S&P 500. Because of this catch up trade, because of the composition of the market, you could see flows going into other parts of the market that wouldn't translate into substantial gains in the S&P overall. You sound reasonably bullish, though, based on what you just said in terms of, you know, earnings holding up and soft landing, rates coming down, inflation continuing to come down. That means the Fed's done. So what's there not to be bullish about? That's what I would retort to what you're saying.

I would say the magnitude of bullishness is where I think this conversation gets a little nuanced. So there are some very strong bulls out there just going to the market. I think what we're saying at Citi is that there's opportunities and there's opportunities beyond the Magnificent Seven. And so short term, what are you playing? You're playing momentum into year end, which could be very much concentrated in those winners. But if you're saying longer term that the Fed is done hiking, that you are going to see a loosening of those financial conditions and all of the signs are kind of telling us that that should happen maybe towards the midpoint of next year that we would get our first rate cut.

With that backdrop, putting capital into some of these areas that have lagged, I think is something that makes a lot of sense. But if there's opportunities outside of the MAG-7, where's the money going to come from to go into those areas? Is it coming from cash that's been on the sidelines in money markets, not necessarily from the MAG-7 rotating into these areas? I think you're going to have a lot of things that are going to happen at the end of this year. You're going to have tax loss harvesting just because of the concentration and in that performance. There's a lot of cash on the sidelines as well, right? When you look at the amount of money that has flowed into, whether it's T-bills, money market funds, you're talking

about record volumes there. And a lot of people have been sitting on the sidelines. So in terms of putting capital to work within the market and then saying, where from a valuation perspective do I feel comfortable? Because remember, the MAG7 is trading at 30 times forward earnings. The rest of the market is trading at a 40% discount to that. And you start to look at profitable companies and actually some of the opportunities that are not just today, but longer term in nature, like investing in longevity, investing in digitization, where you have a good valuation story and then a good macro backdrop as well. You're a market historian, right?

I mean, bonds and stocks go up together. They can. Why wouldn't they in a new year if they both look attractive and, in fact, more attractive than cash because rates continue to come down? Yeah, it's very common for bonds and stocks to go up together. And the benefit that you would have from interest rates falling, helping get people off the sidelines back into the market to get invested. The one thing that we would watch is the AAII publishes the percentage allocation to equities. And one of the things that we've seen is that that has gone up. It's not back to 2022 peaks. But if people get drawn back into that market, you see that reach the 2022 peaks,

that's where you'd start to say maybe positioning is fully extended. It's just not there yet, which means we have more room to get people back in. What about the idea of bond supply fears, which have been a principal fear as to why some said, well, rates are going to stay high. All the supply is coming on the market. There's not enough demand for it. Are those exaggerated? Are we finding out now that those are greatly exaggerated? Yeah, I mean, there are a lot of people who still want to buy yields that are above four, four and a half and close to five percent. And I think that there is still this concern that deficits are still very large and that even next year in a strong nominal GDP environment, the deficit to GDP is still going to be about six percent. That is

big for a non-wartime economy. It is substantial. And we do have the update to Treasury issuance in the early part of next year. We'll see if that starts to spook people again. But for now, these auctions are getting taken down. Some are better than others. But the auctions are getting taken down, which means there's appetite. I mean, there was only one really horrible one in the last few weeks, and we all remember it because yields shot up and the market shot down. But, you know, again, I say Rick Santelli gave today's a B. I mean, there is demand out there. There's still a lot of supply. But what about that issue? Have we overblown a

lot of the more dramatic outcome calls? Say, well, commercial real estate is going to blow up and then that's going to cause the major market turmoil that everybody's waiting for. Well, the deficit is going through the roof. So real rates are going to skyrocket and stay there because the supply is coming on the market and there are no buyers. I think you could actually break it down into something much simpler. So when we look at some of these auctions and say what happened with the 10 year, what happened with the two year, five year, it's just kind of who is the natural buyer and where is the demand coming from in terms of what looks attractive in the market. And so if you have right now, you're looking at the rate environment, let's say that you think that the Fed is done,

reinvestment risk becomes a real risk in terms of if you're someone who's been rolling T-bills, then all of a sudden that five-year looks really attractive. And so hanging out, not in like very long duration, but just getting decent yields kind of out four, five, six years in high quality fixed income makes a lot of sense. And I think the auctions kind of give us some of that color. I asked Cameron, you know, the area that could surprise us, she said small caps. What's yours? I would agree with that, actually. I think small caps, when you look at, this is one thing that we noticed a little bit going into year end that could even surprise us. The positioning is just so bearish. So when you look at overall positioning within small caps, it hasn't caught a bid for very good reason.

Well, I mean, it's up 10% in a month, though, the Russells. Yeah, yeah, fair enough. Recently it has, but on a relative basis, like the one area of the market that's still down on the year. And so when you look at what could continue, I think small and mid-cap and finding profitable areas of that is an area where you see expansion. And remember, an area like mid-cap, you have industrials that are making up close to 20% of the mid-cap index, which when you think of spending on infrastructure, a lot of the trends that we're looking at more broadly, all of a sudden you're going to look at earnings and fundamentals again, as opposed to the macro backdrop as to rates really being in the driver's seat. What about energy? We've been on this pretty big losing streak in terms of where crude is, and energy hasn't really done anything this year either after being the outperformer last. What

about now? And it was the consensus overweight going into this year. So we've seen big outflows from energy. That's helpful. We also saw a spike in put buying for crude last week, which might say that that's a kind of capitulative people, you know, pricing and even more downside. One of the good things about energy is that earnings will decline 30% this year. They're set to grow about 3% next year. That's one of the biggest deltas we have in the market.

So maybe if you're looking for a place that's been beat up, that has actually had a lot of outflows, is cheap and has an easy earnings trajectory, that could be an area to look. What do you think? I think on energy as a geopolitical hedge, in terms of just an overall hedge, we have seen the front end of the curve come down substantially. And so when you look at that 20 percent sell off and the fact that oil's now in contango, there is that opportunity for kind of a short-term bounce. But I would say longer term, when you look at the supply, demand, and balance overall, it would be more of an area that we would trade or use as a hedge, not like a core

investment holding. All right, we'll leave it there. Ladies, thanks so much. Appreciate it. Kristen and Cameron joining us here right at Post 9. All right, to check on some top stocks to watch as we head into the close, Steve Kovach is here with us today. For that, Steve. Hey there, Scott. Yeah, Okta is lower as J&P Securities downgrades the stock to market reform. Analysts say the company's cybersecurity breach back in October has, quote, significantly degraded the brand's reputation,

with shares down more than 15% since that breach. Okta is set to report its quarterly results after the bell this Wednesday. And take a look at Domino's. It's higher as TD Cowan hikes its price target to $430, a share from $410. Analysts say they're bullish on the pizza chain's turnaround, and they forecast higher than expected same-store sales in 2024 and 2025. Shares, they're up over 4%. Scott, back to you. Pretty good day there. Yep, Steve, thank you.

We'll see you in just a bit. We're just getting started here on Closing Bell. Up next, class is in session. The Dean of Valuations, Aswath Damodaran of the NYU Stern School of Business. He's back with us. He'll tell us if he thinks the rally has staying power or if he thinks the market has gotten too overvalued.

We are live from the New York Stock Exchange and you're watching Closing Bell on CNBC. Stocks losing some steam after last week's rally. The Dow and the S&P are both slightly lower. See them both there in this final stretch. S&P, though, up nearly 19% so far this year. And now the big question as we head into year end, is there staying power for the rally, or is the market overvalued? Let's bring in the dean of valuation, Aswath Damodaran of NYU Stern School of Business, here to discuss. Welcome back. Thank you for having me. So, you know, we're resilient, if nothing else, and we've had this

incredible run over the month of November. Where has that taken us to? Are we overvalued now? Are we just right? What do you see? I mean, I think at rates at four point four percent, I think we're OK. We're we're if we're overvalued, it's not by much. I think the real test is what happens to the economy and rates coming going forward. I think the consensus seems to have shifted that we're not going to go into recession, that rates are going to come down. And I think that might be setting us up for some bad surprises if that doesn't happen. Oh, that's only because you don't believe the prognosticators. They've been wrong so often in the last three years, they've become almost contraindicated. So when they tell me to cheer up, I check to make sure.

I think the most important thing you said is that 4.4 percent, You don't think we're you know, we're overvalued. So in the in the instance that inflation continues to come down and rates continue to fall, we could have a little bit of expansion of the market multiple under that scenario. Then if the driver is not a much slower economy. I mean, I think that's the key. If rates come down because we somehow find a way to get into a recession anyway, which we've evaded this entire year, then I think we might be looking at trouble. But if rates come down and the economy stays where it is, I think you're right. There's more upside than downside at this point. What sounds reasonable

to you in terms of a number that you would put on the market? I mean, I don't see rates going below 4% significantly unless there's something, you know, there's a serious slowing down of the economy. So the way I price the market right now is, you know, best case scenario or two of the better scenario is at a 4% rate. I think we're looking at perhaps a steadying at this level and rise through at least the first half of next year. But I think I'd watch the earnings and the economy numbers very closely for the next few months. It's tricky, though, because you've had such a bifurcated market that I'm curious as to, you know, how a professor of valuation is able to distinguish between the two without judging one as a whole. It's hard to say the overall market is overvalued based on the performance of seven stocks, which is essentially what you've gotten versus everything else when you would easily make the argument that, well, that may look cheap.

Yeah. And I think that's a saving grace for the market. It's not as if all of the stocks are up 20 percent. Seven stocks have accounted for a big chunk of that rise. To the extent that it's been a flat year for many of these other companies, I don't think necessarily small cap, but outside of those seven, there is room on the upside. And I think that's what you're looking for, is whether there'll be breadth in the market. And these seven stocks can't keep carrying the market, I think, for the next year. We've got to have new players step in and take some of that heat away from these seven stocks.

What do you think of in terms of valuation when you look at small caps, which many make the argument, you know, despite a 10 percent run in the Russell over the last month, you know, are cheap. Do you not see that? I think the problem with small caps is that I think the economy has shifted. I mean, there was a small cap premium for much of the last century with small cap stocks earned a premium of a large cap. The economy has shifted to more winner-take-all. I mean, you look across sectors, you see the biggest players benefiting the expense of smaller players. I mean, it doesn't necessarily mean that small caps are dead for the count,

but I think that it makes it much more difficult for these stocks to mount the kind of rally you saw two or three decades ago, where small cap stocks had a life of their own and essentially were more high growth than mature companies. But you're almost in the same in the same sense, making a case for why these seven largest stocks deserve to have the multiples that they do and arguably even richer ones. And I think in a sense, that's why all through this year, when I've looked at the seven stocks, I've been reluctant to say they're overheated because I think there's a reason why they've taken the lead in this market, because they've shown that their pricing power, they're able to keep things passing through. And I think they will continue to do it. The only

problem is the pricing of these stocks has risen to a point where the market is already building in that expectation that not only will they pass through inflation, but continue to grow. So in a sense, I think the market has taken care of what they've done well, and they might have to beat what they did this year, which is going to be tough to do. They'll have to grow at a rate. I mean, they'll have to raise prices faster than inflation. I don't think anybody can sustainably do that in this economy. Sure. But I mean, NVIDIA is a good example of this, right? The price has gone up. The multiple has come down. And I think the earnings are catching up there. But I think in a sense that pricing you saw at

the start of the year was built on the expectation that earnings will go up. So I think we're giving them a double benefit by saying, OK, the earnings have now gone up, the multiples are down, so let's give them another boost in the price. So I think NVIDIA has run based on what expectations are in terms of earnings. And I think the next phase for NVIDIA will be whether they can keep doing what they've done for the last decade. And it is going to get increasingly difficult to beat those outsized expectations. Do you look at one specific area of the market and that screams to you that it's the most undervalued of anything you look at? You know what? Small tech has been beaten up so badly last year. I mean, you look at stocks like Zoom and Peloton and those stocks are way below where they were two years ago. Now, two years ago, of course, they were all overvalued. But I wouldn't be surprised if you saw, especially the market stays healthy and the economy doesn't go into recession.

Some of those small tech stocks have been left on the wayside trying to make up some ground this coming year. Yeah, we will see. Professor, I appreciate it as always. Thanks so much. Aswath Damodaran joining us from NYU once again. Be well. Up next, we're trading the technicals. Top technician Jeff DeGraff breaks down the charts. He'll tell us where he sees the S&P heading from here and where he sees some serious opportunity right now. Closing bells back right after this. We are back. The S&P and Nasdaq on pace for their largest monthly gain since july of 2022

joining me now to discuss where there could still be some opportunity for investors jeff de graff of renaissance macro research good to see you again um somebody who's been pretty right being bullish but now what we're about to put in an incredible month are we overbought or where do we go well we are overbought or where do we go? Well, we are overbought, Scott. I know it's this business is forever. What have you done for me lately? So I do appreciate that. Look, there's there's seasonality in this tape. Well, I think one of the interesting things that that we've done some work on is, you know, how much does seasonality change if you've got a particularly strong month, like the month of November?

Does that front end load and force more of a mediocre or actually poor month in December? That's actually not the case. Good things tend to happen. So I think you've set the bar and got this momentum machine going. We've got 91% of the S&P above their own 20-day moving average. That's historically pretty good news. It implies that we're probably going to go higher. So I think at this stage, you want to play it for the next probably eight weeks or so, and then we'll see at the beginning of the year. Seasonal election years do tend to be flat the first half, so I

could easily see us up around, call it 4,800 on the upside for the S&P, which is the old high, and then maybe go sideways for extended period of time as we can digest the potential for the election in 2024. So you think calls for 5,000 or, not that it's percentage-wise much over 48 anyway, but up to 5,500, for example, you think those are too optimistic? I think they're very yield dependent. If you're going to tell me that yields can go to

4% and stay there, I don't think they're optimistic. I think if we first have to get through 434 on the 10-year yield to kind of punch through that support level, if we can't do that, then I do think 5,000 is optimistic. And I'll be the first one to say that our call is in jeopardy if we're really not able to punch through those support levels in the 10-year yield. I think the good news around this, though, is what we're seeing out of the BBB spreads and the corporate credit markets is actually a continued contraction in that premium. And that's good news. So it doesn't say or certainly suggest that there's not a recession on the horizon and that the slowdown is probably part of that soft landing scenario or narrative that a lot of people were having a hard time buying into and I think has become more of the consensus now than not.

But your base case is $ 4,800 for 24? Yeah, again, it's going to be yield dependent. But I do think that that's pretty easy, frankly. I think you're going to see the first half, I think, is going to be more challenging. I think we're going to have the resistance levels in, call it February. I think we probably buy some time until the early part of the summer, and then I think we can start to move from there. But that's how I would see it. Again, yield dependent. But so far, I like what we're seeing out of yields. The real yields are high enough to suggest that we should get some contraction there. And that's how we're going to play it. What looks to you like it's ready to break out? I mean, you could have a lot of false signals by virtue of the strength that

we've had this month. I could give you small caps like we've been talking about for the entire program, which are up 10 percent. Now, I don't know to you if that means that they're poised for a breakout, that the chart looks so great. What do you say? Well, that's, you know, that's one of the keys. There's two things that we're watching from a broad index level. One is the MSCI All World Index that's ex-US, right? So, basically, everybody else other than the US. That's still a downtrend. It's probably more of a neutral trend at this point, but we'd like to see that break out. It's above the 200-day moving average. That needs to

get going. So, I think we're still in good shape because that hasn't rolled over. I'd expect that to roll over first. The second is just go to the microcaps. Forget the Russell 2, just go down to the microcaps, which is basically anything under $100 billion. And that one, while it's still ascending, it is overbought, but again, with more of a momentum flare to it than not, there's a lot more work that needs to be done there to even change the trend. So I still think that that sort of dark cloud is over this market. You know, some people call it the breadth divergence. That's still going to be with us. That's not necessarily that negative for the S&P, but certainly that has not changed the stripes as far as we're concerned.

The one thing I think which is important here is that beta has been part of this leadership off the low. And that's an important component. It tends to have a seasonality to it, so that's not unusual to see it. You get the tax loss ceiling, you get a lot of that stuff happening here. It'll be, what do those names do in January? And if those can continue to outperform on a relative basis, that's going to be very good news for 2024. If they stall and they weaken, then I think we're in the same kind of environment, which is a pretty broad trading range that's going to be more challenging for 2024. So as we get into January, I think we're in the same kind of environment, which is a pretty broad trading range that's going to be more challenging for 2024.

So, you know, as we get into January, I think those two components are going to be very important to keep an eye on to determine what the remainder of the year is going to look like. Yeah, forgive me. I didn't mean to cut you off. I was going to say, what about financials, which I'm looking at are green for the year, but only 3 percent of the sectors that are green year to date. They're the worst performing next to materials. Well, look, you need banks. Historically, if you go back and look at the last Fed rate hike of every cycle, what needs to happen for a good outcome for equities? And banks need to start performing.

They've had a decent move off the lows. Again, they look a lot like the microca caps. They haven't really changed their stripes. I think on the bank index, which we watch needs to break out through 90 to really suggest that there's a trend change. But that remains a pretty big question mark in this tape. And I would fully agree with that assessment that you laid out there. Jeff, I appreciate it. We'll see you soon. Jeff DeGrasse. Thank you. Joining us once again on Closing Bell. Up next, we're tracking the biggest movers as we head into the close. Steve Kovach standing by once again with that. Hey, Steve. Hey, Scott. Yeah, Amazon's billion dollar robotics deal is in peril and crypto firm Binance's legal trouble is boosting a publicly

traded rival. We'll tell you what's behind the moves when Closing Bell returns after this. We're about 20 from the bell. Let's get back to Steve Kovach for a look at the stocks he's watching. Hey, Steve. Yeah, let's go to Coinbase. It's higher on the wake of Binance's hefty $4 billion settlement with the Justice Department last week. Coinbase CEO Brian Armstrong telling CNBC he hopes the crypto industry can now turn the page and start a new chapter after its recent scandals.

Today's gains add a strong month for Coinbase, which is set for its biggest monthly gain since January. And iRobot's sinking today as the European Commission says Amazon's proposed deal for the company may restrict competition in the robot vacuum space. Amazon says it will keep working with the commission to address the concerns. iRobot shares down now 19 percent. Scott, back over to you. All right. vacuum space. Amazon says it will keep working with the commission to address the concerns. iRobot shares down now 19 percent. Scott, back over to you. Steve Kovach, thank you very much. Up next, activist action. Elliott Management making a big push to shake things up at one key company. It's not their first rodeo. We'll tell you about the details, what could be at stake for the stock. We'll do it after this break. And later, shares of Roku popping. We'll tell you what's behind that move. That's just ahead. Closing bell right back.

Welcome back. Crown Castle, one of the top performers in the S&P today, is activist investor Elliott is calling for a shakeup at that company. Leslie Picker here with those details. Hey, Les. Hey, Scott. Yeah, we may see how big of a moat there is at Crown Castle. The $50 billion communication infrastructure REIT is on the move today, currently up about 4 percent, thanks to a renewed push by Elliott Management, which is seeking changes at the top, a strategy pivot and improved corporate governance. In a letter to the REIT's directors, Elliott writes, quote, Crown Castle suffers from a profound lack of oversight by the

board, which has contributed to its irresponsible stewardship and flawed financial policy. Shares of Crown Castle down significantly this year, about 21 percent, with Elliott saying it owns about $2 billion worth of the stock. Elliott's main concern involves Crown Castle's fiber business, which the firm says has received too much capital for too little return and should be re-evaluated. Crown Castle says it looks forward to, quote, reviewing Elliott's materials and remains confident in Crown Castle's executive leadership as the company continues to act in the best interest of all shareholders. Elliott says it's prepared and intends to make its case directly to shareholders with the majority slate of alternative directors at the company's 2024 annual meeting, but prefers to work constructively with the board. The window to nominate such directors opens in about six weeks in mid-January. Scott. And not the first time that Elliott has

gone after this company, which is really interesting considering all of the activist cases that they've decided to pursue. Yeah, you're right. There was a lot of fanfare when they first launched a campaign at Crown Castle three years ago in June 2020. At that time, they were calling for a lot of the same changes with regard to potential missed ROI opportunities in that fiber business, potential shakeup of leadership on the board and so forth. And what happened at the time was the company wound up replacing three of its directors and Elliott kind of slid away quietly. And now it's basically popped back up three years later. Very similar laments, although leaving that door open for a potential proxy fight, given that three years ago, nothing really changed, according to Elliott, in terms of what they wanted to fix strategically to really drive up that underperformance that they were highlighting.

Well, we'll see where it goes this time. Leslie Picker, thanks so much. Following the money, as always. Up next, your Cyber Monday movers. We're wrapping up a crucial few days now for the retailers. We'll tell you which names are outperforming today, the ones that are likely to win this holiday season as well. That and much more when we take you inside the Market Zone. All right, we're in the closing bell market zone now.

CNBC Senior Markets Commentator Mike Santoli here to break down these crucial moments of the trading day. Plus, Courtney Reagan on the latest from the retailers this Cyber Monday. Julia Borson is following that rally in Roku shares today. But, Michael, I'll begin with you. We're just taking a – we're digesting after Thanksgiving still. We are. Markets are acting as if it's in a pretty comfortable spot at these levels. Obviously, short term, you can make the case that a four-week sprint higher has gotten it a little bit stretched.

But in general, yields 10-year below 4.4, all the things we were worried about. We had two scares this year, real scares. Obviously, the regional bank crisis and then six months later with the yield melt up. And you needed them to sort of test whether, in fact, you can rebuild confidence in the soft landing scenario. We more or less got there. Feels like, you know, I know you've been talking all day about the strategist outlook for 2024. Nobody's outright fighting the market as much as they were a year ago, because that certainty about a coming recession has definitely been diluted by how the market has behaved. But you know there's another now what moment coming, because you're not going to get liberated from the late cycle,

you know, sensibility out there. So I think you can kind of enjoy it where we are. Seasonals, all the rest of it, kind of carry the day for a little while, even if the week after Thanksgiving sometimes is a little bit of a payback. They've kind of gotten through everything. I mean, the last sort of hurdle of late was NVIDIA earnings. Sure. And, you know, the stock pulled back a little bit, but it was $500. It's $483. Yeah, it's been pretty manageable.

And the other thing I've been watching is the stocks that are outside of pure tech that have been making new highs. And there are a handful of them. The other thing I've been watching is the stocks that are outside of pure tech that have been making new highs. And there are a handful of them. And they're kind of the compounder traditional growth type names like Chipotle, like Visa, like H&R Block, that sort of have this tech-like attributes. Yes, we've seen some broadening in the market, but it hasn't built up enough of a head of steam that the non-growth parts of the tape are working all that. All right. Well, consumer off to a good start. Courtney Reagan, Black Friday was good. I'm assuming that Cyber Monday is in full swing as well.

Yeah, Scott. I mean, we heard from Adobe. They upped their expectations for Cyber Monday today after those stronger than expected results over the weekend online. But I also talked to executives from third-party logistics companies like radial and ship bob and they both say that cyber monday is starting off better than expected here so far and there's a lot of day left to go the i buy retail e-commerce etf that's outperforming the broader market up about three quarters of a percent here today cash back company rakuten they say shopping trips are up four and a half percent on the retailers they support with marketplace sites like Walmart and eBay, for example,

seeing the biggest increase in trips at nearly 54 percent over last Cyber Monday, followed by Home and Garden at nearly 48 percent. Health and Beauty, that's a category that's been called out over and over again as strong today, again, by Shopify, Radio, Retail Next, and others, both in-store and online. Raymond James actually saying Ulta and ELF are among its top picks. ELF shares up nearly 3% today. And American Eagle and its Aerie brand, as well as Abercrombie, all called out as winners by Deutsche Bank in a note from over the weekend. And shares of those companies are higher by about 3% here today with a lot of retail still left.

Scott, Adobe thinks that this cyber week, so Thanksgiving through today, could represent about 17% of all holiday online sales. So a really, really important stretch. And so far, so good. We've got a very long season here this year between Thanksgiving and December because of that early Thanksgiving. Back over to you. Courtney, thank you.

I mean, Mike, so that's another part of the story that remains intact for now. Yeah, it does. I mean, I think you can really broaden it out and say when Americans have the money to spend, they spend it. And they mostly do. So I think the more value orientation, it maybe is a little more of a zero-sum type of game in terms of types of products, and there's more price competition. But I don't think you've seen a lot to say that you see mass consumer fatigue out there. It's much more just fraying around the edges.

And, yeah, it has held up. People are talking a little bit, really kind of microscopically, about this move higher in the unemployment rate and whether, in fact, that has momentum to it. That's an academic argument for now. We'll have to see how the jobs number comes in a couple of weeks. But to me, it's about people have jobs, they have 4% wage growth, and it's making its way back into the economy. And look, a little bit of softening in the labor market is what people are going to say.

See, that's exactly why we think that the story is intact to begin with. Exactly. Well, exactly. It's sort of the feature, not a bug, of what the Fed's been trying to do. Yeah. All right, Julia Borsten, what's up with Roku? Up 9% last I checked.

Yeah, Roku shares surging up nearly 9% going into the close. This is on a firm called Cannonball Research, upgrading the stock to buy and raising its 12-month price target on Roku shares to $116. Now, Cannonball is a smaller research firm, but its note really seems to be driving that stock higher today. The firm making an argument for connected TV spending continuing to grow, estimating a 20% growth in video ad revenue in the fourth quarter for Roku and forecasting 17.5% growth in video ad revenue for Roku next year,

outperforming the rest of its estimates for the rest of the market. Now, Roku shares, we have to note, are now up about 154% this year, though the stock is still way down below Roku's all-time highs back in 2021. Scott? All right, Julia, thank you. You got to comment on what this stock has done. Also, in the context that Julia perfectly lays out of what the stock has done. I mean, it was above 450 at one point, two and a half years ago. And there is, aside from Roku itself and what's going

on there with the business, there is a little bit of an echo boom happening if you look at the 2021 spec stocks like Coinbase and SoFi. So you're getting a little bit of energy back in that area. But Roku also, it seems like now we're coming back around to the rebundling story for streaming and the ad opportunity for streaming. And that's always been the story with Roku from the beginning, from when it was 450 to when it crashed. So I think that makes sense that people are coming back around to it. And the advertising side of it, I always view it more from the advertiser perspective, which is they're at a loss because linear TV is going down.

It's the biggest ad market. There's no single pool of viewership that they can access that well. Something like Roku sort of offers to pull it back together to something addressable again. A couple of commodity-related stories. One we talk about all the time being oil just right at 7575, WTI.

And then one we never talk about, gold, just above $2,000. Gold, I think it has a lot of people excited. The chart folks are interested at this level. It's funny because they sort of graded on a curve. They said, wow, real rates went up and gold didn't go down that much. And so now it's rebuilding and as real rates go lower. What I find interesting is, is it also rallying because rate cut expectations are building? In other words, is it not so disengaged from what the rest of the asset markets are trying to look ahead to,

which is peak Fed, peak yield, peak inflation, all of those things maybe working the other way to the benefit of financial assets and maybe gold is a part of that. Also, it has gotten recharged with the instability in the Middle East and the movement of money elsewhere. And it's going up alongside crypto. We'll touch as many asset classes as we can. You said bonds yields down 10-year, 438. Auctions went off reasonably well today.

Yeah, and that was one of the hazards this week. There's a little bit of supply out there. We're making it through so far. All right, so there you go. There's the bell. A little bit of touch negative across the board,

but just a touch.