Power Lunch - ‘Not Confident’, Best-Selling Drug Ever? 11/9/23

Episode Date: November 9, 2023

Fed Chair Jerome Powell says he and his fellow policymakers are encouraged by the slowing pace of inflation, but are unsure whether they’ve done enough to keep the momentum going. We’ll explore.Plus, could Eli Lilly’s new weight loss injectable become the best-selling drug on the market? That’s what one analyst already said. We’ll discuss with former FDA Commissioner Dr. Scott Gottlieb. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to Power Lunch alongside Kelly Evans. I'm Dominic Chu. And right now, markets are in the red. They weren't so earlier today. But you can see right now the Dow Industrial is down 135 points, roughly one-half of 1%. Similar percentage decline there for the S&P 500, which currently sits at 4363. And the NASDAQ composite index down about 54 points. Again, a similar percentage decline, 13,59595. And Kelly, we're going to get right out to Steve Leesman with some headlines on the Fed. much, Dominic Fed Chairman Jay Powell speaking at an IMF press conference, I'mF research conference, we'll say that, excuse me one second here, he will say that the, if it becomes appropriate to tighten policy, that further, we will not hesitate to do so. The Fed will move carefully, he said, judging risk of over and under tightening. The Fed is making decisions meeting by meeting. In his speech, he would also say we will keep at it until the job is done. Those are words he's used fairly frequently. Inflation, he says, is well above target and the Fed has a long way to go in terms of getting it back to the 2% target. On the economy, he'll say the labor market

remains tight, though supply has improved and demand has eased. He expects growth to moderate in the coming quarters. He does note growth has been strong in the third quarter. He is attentive, he says, to the risks of stronger growth that could undermine the inflation process. Stronger growth, he says, quote, could warrant a response from monetary policy. And while he called policy restrictive, he said the Fed is, quote, not confident, and quote, that the Fed has achieved that sufficiently restrictive rate that he's been using before to say when the Fed has reached the right level of interest rates. Ongoing progress, he says, to the 2 percent target, quote, is not assured. Inflation is being brought down by the end of supply distortions and tighter monetary policy. But he says it's unclear

how much more the Fed will be able to achieve or the economy will achieve in lower inflation from those supply side improvements. And the implication of that, he says, is that it may have to rely more on monetary policy. Too soon to say, he says, if the Fed no longer faces the challenge of zero lower bound, this is more longer term part of the speech. And the Fed will consider when it does its review of its overall strategy, whether the pre-pendemic low interest rates can return or whether we're in a regime of higher rates more permanently. So maybe a little more emphasis, guys, on the possibility of a rate hike in these remarks and the idea that the Fed is not confident that they're on the road to a 2% inflation.

Steve, stay right there with us with the Dow down almost 200 points right now. Let's get more on Powell. The economy, the market impact. We're joined by Michael Farr of Hightower Advisors. He's also a CNBC contributor and Lindsay Piaksa is chief economist with Stiefel. Lindsay, investors can be forgiven for having whiplash because in his speech a couple weeks before the Fed meeting, Powell was pretty hawkish. At the Fed meeting itself, he was seen as being much more doveish. I remember Dave Zervos's note where he was like, I'm blown away by how duffish this is. And now a week later, we have a hawkish pivot once again.

So, you know, markets love to read a lot into these things. but they do matter. And do you, what do you think is really going on here or is the main takeaway? Well, I think the market was misinterpreting what the Fed chairman said during the press conference. I think the chairman really maintained a pretty neutral stance that, look, inflation has come down from peak levels, but we still have quite a ways to go. But he did step up that rhetoric, as Steve just read in that IMF conference or in that IMF commentary. So really undermining the notion that the Fed is.

willing to take further action. Now, they left the possibility of rate hikes on the table, further rate hikes on the table in that November statement. But the market seemed to just completely dismiss that, anticipating the notion of now rate cuts as we look out to the next policy move. But here the chairman was very clear. The economy is solid. If it continues to outperform, if inflation remains above expectations, the Fed is not going to hesitate to take a further policy stance, a firmer policy stance with additional rate hike. or hikes as needed. And Michael Farr, I think this will have long-lasting reverberations for the market, which had been on this wind streak really going back to and through the Fed meeting. And do we

throw that out the window now? Well, you know, two weeks ago, it was an awful week and everybody was down and then stocks were going down. And then the following week, of course, it was Katie Bar the door and everything's great again. So the market has been fairly mercurial, I think short-term emotional, more often here lately than not. I think Jay Powell was probably a bit surprised, and he's in an awfully hard position, but a bit surprised to go through his presser and have such a bullish reaction

to say that maybe we're going to stop and we're going to slow down. And as soon as he indicates, maybe they're getting close to done, stocks go up. And that creates more inflationary pressures and wealth effects that he's trying to fight. Today, a more hawkish tone.

And I think clearly, data dependency has been what they've been trying to get across. So I tend to believe him. And I think this hire for longer is the real theme. So I would listen to Steve and I would listen to Jay Powell. It doesn't look like the threat of another hike is gone for good. Steve, what's interesting about this is we saw the price action for bonds, especially longer-term U.S. treasuries, on the heels of what is being seen as a weaker than expected auction for that 30-year long bond. your no yield kind of shot up there. It backed off a little bit, but it's kind of creeping back up there again.

Do you think the comments from Fed Chair Powell indicate that story that those longer term rates are going to be, perhaps that aid for the Fed in its campaign to slow the economy down without causing a recession? Well, I think it's the higher rates that's giving the Fed paused and hiking again. I think when you look at the reasons why the Fed has not hiked while inflation has gone the words of another Fed governor, sideways to slightly up. I think it's the increase in bond yield. So the Fed is relying upon it. It got more of it today. I don't think that the decline from five to four and a half, say on the 10 year is enough to do away with that additional tightness. It is interesting, though, he says, look, we've had two things have caused us to go,

have helped inflation. The end of the supply side disruptions and monetary policy. We may have gotten what we're going to get from the supply side disruptions, he said, which means you're going to have to rely more on supply side disruptions. I actually don't think the market misinterpreted Powell last week. I think Powell may today be suggesting that maybe he was a bit more dovish. And maybe that's my unwillingness to admit my own mistake, but I thought he was dovish last week. And I think today he's a bit more hawkish.

I think he feels a need perhaps to put that, that, that, that, of another rate hike on the table to keep the market from being too sanguine about the possibility the Fed is done. And then having completed those remarks, I'm just going to take a very quick look. There is a very slight rise, guys, in the probability of rate hikes still remains low. So if he had wanted to get it back on the table, he hasn't completely succeeded, but just a little bit. Say, for example, the possibility of a hike in January has gone from 15% to 20% and maybe some reduction in the probability of a rate cut. come June from 68 to 6. So not a lot there.

The market's not buying it yet. But one of the things that Powell has going for it is data. Next week we get inflation data. And I don't think Powell really has to say very much. If that ends up being an outsized inflation report or one that ends up being higher than the market expects, I think the market will do Powell's bidding for him. Yeah, Lindsay, I was going to say we all kind of know at the end of the day they're data dependent. So it's just, I guess just a question of emphasis.

Is one poor report enough for them to stop and back off or would they keep hiking through that? So it's kind of trying to figure out that reaction function to both the inflation and the jobs data, I would imagine. Well, I think it's going to take more than one data point for the Fed to feel emboldened to continue with rate hikes, but it's also going to take more than one data point to really convince the Fed that they're on a clear trajectory down to 2% in terms of that inflation target. We've made a lot of progress. The imbalance between labor demand and labor supply has begun to close. But there's still quite a ways to go before we can talk about the Fed achieving its dual mandate. And right now, the risk is not that the Fed raises rates too much.

The risk is that the Fed doesn't do enough to ensure that we get back to price stability. So the Fed really should be airing on the side of caution, raising rates potentially above what they might arguably need to do in order to ensure that we get back to that 2% inflation tariff. Michael Farr, put a pin in this, stick a pin in this for us, please. I think that a lot of what the Fed has done is having the right effect, the effect that they want. Inflation is coming down, and we do have a positive real rate now, because the Fed fund's rate is higher than the rate of inflation is a real cost of money. They've got to play a waiting game without giving markets the emotional all clear. And to Steve's point, whether he intended it or whether he was actually dovish,

one way or the other, he's got to keep his foot on the throat of inflation, and he's got to make markets believe that he's willing to tighten again, that money rates are, money's going to stay tighter, and that they're going to go after that 2% rate, whether they actually do or stop at 3, I don't know, but he's got a saber-rattle at the very least. I think he means it if he saw it on the data, though. He's not convinced that inflation's gone away. So, caution, higher cost of money. Stock prices are higher. S&P is high. If the rules buy low, this is not low. So I think you have to be cautious and very judicious and disciplined about your investing when this is going on in the markets, inflation and at the Fed. All right. And we're pretty much at session lows down

a half percent across the board today. Thank you all. Michael Farr, Lindsay Piaksa, and our own Steve Leesman. Quick promo note, a big interview tomorrow on the exchange. Mary Daley, the San Francisco Fed president will join Steve and I. That's around 1 p.m. Eastern time. reaction to that latest commentary from Fed share Jerome Powell. Let's go out to Chicago and our Rick Santelli for the bond report. Rick, did anything stand out to you? And is the market reaction what you would have expected given the auction results today? Listen, I know that Powell's really important and the Fed has a huge mission. They can affect short rates. But today, they were a drop of sand on the seashore compared to the way the markets move after that horrible 30-year auction.

Now, there's all variety of reasons coming to try to explain it. The latest is ICBC, industrial and commercial bank of China, had a ransomware attack. I get it, okay? That may have affected them. Maybe it affected what we call the indirect bids, which were on the weak side. So with the directs, the dealers took twice the amount they normally take. The bid to cover was horrible. It tailed like seven basis points.

Maybe that's one of the reasons, but it certainly doesn't define how high. horrible today's auction was, and the real issue is why. And for that, we're going to go talk to Chem. Chem, how you doing today? All right. So real quickly, we know about ICBC, and I'll ask you as a trader. You watch that auction, okay? Do you think that explains a lot or a little of the auction, a little being one, 10 being in a huge effect? Where would you place that? It's part of the story, right? You can't overweight it, underweight it. The reality is they're hasn't been a lot of demand from the world, generally speaking. So that isn't the whole story, right? There's been a lot of issuance for some time now. We're seeing the effects of it.

The question is why hasn't it had more of an effect? And that really is about the flows and what these guys in here are trading every day. The buyback of Delta's, the structural flows that keep things afloat. It's really been a flows versus macro story push and pull. You know what? What I find fascinating is that so many people put so much emphasis on 112 billion for 3's, 10s, 30s versus 114 built in. When each of the three auctions was basically the smallest, excuse me, the biggest in almost two years, your thoughts? Yeah, look, those flows are relatively large

in the context of 50 billion a day or so moves markets. They matter, but going into the end of the year, there's a lot of structural flows that will support things as you go forward. The question is right now, this weakness that we're seeing, and what should be a positive period, is that a sign to be very careful of, especially as it get to a liquid period at the end of the year. All right, I'm going to ask you a tough question here. Do you think debt, debt, and servicing the debt, which is set to really take off

as current higher rates infiltrate the portfolio of the Fed and the Treasury, is this underestimated is a driving force in interest rates? It's the biggest force and interest rates, if you ask me. You know what? That's it. We stop there, because to me, that is the story of the day, the week, the year, may be. the decade. Dom, back to you. All right, Rick Santelli, thank you very much

from the bond report. By the way, let's go back to Steve Leesman for some more breaking news and headlines coming out, monetary related, Steve. Well, not monetary related, but protest related, Dom. The feed from the IMF conference, pardon me, the feed from the IMF conference

went down. It went to a poster. And the news that we have is that Powell left the stage. These are according to Reuters, headlines that Powell was ushered out after climate protesters shouted, end fossil finance. He left the stage, and now the latest headline is that protesters were ushered out by security at the IMF event, and just that the speech was interrupted.

That's where we're at right now. We've given you the headlines from the speech. We don't know if the Q&A will continue and whether other speakers, including the first deputy director of the IMF, Ken Rogoff, as well as the bank, the governor of the bank of Israel are supposed to be, are on the same panel with Powell there. But this is the second time in I don't know, just a couple weeks that a Powell speech has been interrupted by he was recently at the New York Economic Club. A luncheon there was interrupted by fossil fuel protesters. And Powell was forced to stop giving his speech, guys. All right. Steve Leesman with the latest there.

Thank you very much for that. Coming up on the show, the soon-to-be best-selling drug in the market. That's what one analyst said about Eli Lilly's weight loss drug. We are going to discuss with former FDA Commissioner Dr. Scott Gottlieb. Plus, soft bank hard hit by WeWorks posting a $6.2 billion quarterly loss. We've got more details in our tech check coming up next as well. Welcome back. Shares of Arm Holdings down 6% today and now right around 51 bucks of shares. You can see there the IPO price two months ago.

Through the WeWork bankruptcy, kind of in that place, there and basically what we got is another tough time for Massa Son and SoftBank between We Work and what's happening with Arm Holdings. Let's get out to Deer Drubosa with more on that story for today's tech check. It's been a rough one. Is there any sign here that these storylines could shift in SoftBank's favor or are we in this for a while? There are signs and it's always a little messy to look through SoftBanks quarters because there's just so much. But this one, on the back of arms, successful IPO, it should have been Masayoshi's victory lap. Instead, it was the rise and fall of Wework that continues to haunt the company.

The conglomerate posted a $6.2 billion loss in the last quarter. Humitive losses in WeWork now totaling $14.3 billion, just a staggering amount. Not surprisingly, though, the presentation overnight in Tokyo focused on the good, and it even brought back one of my favorite self-bank slides of all time. Goose 1. The Goose is the Information Revolution. The eggs represent Masa San's successes. There's Alibaba, Yahoo, Japan, soft banks, telco company, Sprint, and the latest one, Arm. So it's clear that Masa San considers Arm a success and part of that legacy. He wasn't on hand himself to deliver the results, but CFO Yoshimitsu Godo focused on the positives. And here's where, you know, the future

trajectory comes into play, Dom, how this could become a better story. But it relies on things like $29 billion of assets in the portfolio that the CFOs said SoftBank may be able to cash in on soon. That's an open question, though. He said companies like TikTok parent bite dance and fanatics that at least from what I'm hearing seem a long way off from an IPO. The slide that you're looking at right now, though, tells you that SoftBank itself is in a more liquid position to go on the offensive, something that they said they were going to do earlier this year and that they reiterated last night. So they're more liquid and Arm plays an increasingly important part in that portfolio. It used to be Alibaba that SoftBank could draw down on its stake to make investments or show better profitability.

Now Arm is going to take that role, but it's not going to be as lucrative, Dom. When they say, Deirdre, that they're potentially going to go back on the offensive, what might that look like? So it's all about artificial intelligence. And Masasan has been talking about this for years. However, it's kind of interesting. We haven't seen him in some of the biggest, you know, generative AI deals and companies, buzzy ones like cohere or character AI and the biggest ones open-air and anthropic. It's really hard for VCs to get into because, of course, they're striking these massive deals

at massive valuations with the mega-caps. So he's been focused, interestingly, on transportation and logistics as a way to lean into artificial intelligence, but like we said, they're going on the offensive. So we'll see what that looks like moving forward. the geopolitical mix has shifted a little bit, too. They got less investment in places like China, more in the Middle East and North America. Dear Drew, thank you. We appreciate it. Dear Joe, Bosa. Bitcoin blasting past the $36,000 mark. We'll get some technical support on where it could be headed next when Power Lunch returns.

All right, check out shares of golf entertainment and equipment maker Top Golf Callaway. They're taking a huge, as you can see. They're down roughly 16%. That's off-session lows, by the way. They were down as much as 19% earlier on, and even more than that in terms of losses and extended trading between yesterday's clothes and this morning's open. Now, it was actually an earnings beat on a slight revenue miss, but the forecast caught investors by surprise. The company cut the full year revenue and profit outlook due in large part to a slowdown at its top golf entertainment venues. The same venue sales actually declined this past quarter. The company attributed that to a slowdown in corporate events and outings at the. those interactive driving range facilities for those who are familiar. Now, I spoke with TopGolf

Callaway CEO Chip Brewer earlier this morning, and he said that they didn't accurately forecast the degree of the cool down in the corporate events business, but that TopGolf is a proven concept and the company overall is much stronger than the stock price decline would indicate. Now, he did acknowledge that the company will be very focused on cost controls in the coming months and that they will reduce their capital expenditures budget by roughly $100 million over the next couple of years. Now, as for the state of the American consumer, Brewer said the world would be crazy not to prepare for a potential consumer slowdown, but that doesn't mean he's predicting a recession.

He says he's not in the economic predicting business. Curious, too, this is an interesting question because some thought was put into whether or not the results in the stock drop in Callaway Top Golf were in. indicative of a top to a pandemic-driven boom in the game of golf. Mondays and Tuesdays and Wednesdays, they're not, you know. People are, T-times are getting booked up solid. What I want to do, if we can show viewers and listeners out there, there's chart since the pandemic over the last four years.

You may recall that this was a stock at the pandemic lows back in March of 2020. That was roughly $4.75. Wow, which was around when they bought top golfing. Look at this. Less than a year later, less than a year, those shapes. shares hit $37 in change. So they made an eight-fold jump in less than a year because of those pandemic tailwinds. Everyone thought golf was a safer, quote-unquote, game to play. It was outside, socially distant. Now, the curious part is whether or not it is a sign of the end of golf or a

topping out. Chip Brewer doesn't think so. And the results, by the way, by their competitor, Calloway's competitor, a Cushnet, which makes Titleist, indicate that the equipment side is still holding up relatively well. It's just the top golf. is the problem? Right, because it's they're not getting as many. In corporate bookings, which are told to be the strength in other areas of the economy. So corporate bookings at Top Golf are a problem, and it sounds like the investors are saying that they were saying

company specific. Right. Tough, tough comps because they were huge over the last year. This year they're cooling off and Brewer basically said we didn't see the cool down coming to the degree with which it did. Interesting. If it will be nice enough in December, maybe we take everyone out to Top Golf. Yes, there we go. There's a couple in Jersey. Maybe we'll get a deal. I had on Power Lund shares of Eli

Lilly down 4%, despite all the excitement around the FDA approval of their weight loss drug now called Zeptide, I think. Anyway, we're going to discuss that and more with Scott Gottlieb. Dr. Scott Gottlieb next. Welcome back to Power Lunch. Shares of Eli Lilly trading lower on the day, a day after the FDA approved its weight loss drug, Zepbound. Now, yesterday we spoke with a pharmaceutical analyst at Guggenheim Partners who has very high hopes for that drug. We think it has a very, very strong shot of being the biggest drug of all time, obviously competing very closely with Novo-Nordisks, Ozympic, and Wigobi as well. It's the talk of pharma these days. Let's bring in Dr. Scott Gottlieb for more reaction on this.

He's a former FDA commissioner. He's also a CNBC contributor. Doctor, thank you very much for joining us here. this is probably the biggest thematic element, trade, thesis, product type that we've seen in pharmaceuticals in years. Is it going to be as big as folks expect it to be? Well, look, I certainly think it's going to be a large category, and I think it's going to have a big public health impact as well for patients who've been struggling with weight, and now you have a safe and effective way to help reduce weight in conjunction with other things that we know can help patients diet and exercise. I think you're going to see competition increased substantially between the two companies now, largely on two domains.

First on price, you're going to see heavy discounting in this category as both companies compete for market share. You're also going to see competition to demonstrate other benefits of the weight loss that's associated with these drugs. Right now, Novo has data showing cardiovascular benefits, reduction in the risk of heart attack and stroke, and patients who have already suffered those events, as well as reduction in risk from heart failure in patients who are obese and go on these. drugs go on their drug Wagovi and lose substantial weight. I think Lilly is going to face competition to undertake some of the same studies. They have them underway, but I think they're going to accelerate the pace of their own research as the companies compete to get other indications on the labels to prove these health benefits of these drugs, which is ultimately going to drive reimbursement.

FDA is unlikely to allow class claims in this instance, so each company is going to have to demonstrate these benefits independently. But when you just look at the list versus net pricing in this category. We've done some analysis at the American Enterprise Institute of Think Tank I work at, and the net prices received by drug makers are 48 to 78% lower than the list prices. The heaviest discounting is in the diabetes indication. So Exemptic, for example, has a list price for about 900. The actual net price after rebates paid by the manufacturers is about 300. With the Govi, the list price is about 1,300. The net price is about 1,000 based on our estimates. You're going to see those prices come down even more as both of these companies compete. Competition is good,

ultimately will help improve access for patients. Speaking of access, doctor, one of the big issues right now facing many of these drugs like Ozempic, Wiggovi, Atmanjaro, and now Zepbao, I mean, this idea that a lot of people are trying to get access to it more demand than supply, and that means that perhaps for some people who really need the drugs for certain things with regard to diabetes are not getting them, is the competitive factor going to, is the competitive effect are going to be one that has to be monitored from a supply standpoint as well? And ultimately, do you want to get more of these drugs on the market just because there's just so little of them to go meet the demand right now? Yeah, look, these are two very experienced companies in the

manufacturing of biologics. I think that they're ultimately going to get their manufacturing up to a scale that's going to meet the demand. I think what has surprised people is the intense demand for these products. But that's also because I think the profile of what you can achieve from a public health standpoint, has also been, there's been a lot of upside surprises from that as well, particularly in the cardiovascular category. I think cardiologists are looking very heavily towards these drugs to help improve the health of their overweight patients who suffer from cardiovascular conditions, and that's driving a lot of utilization, I think, wasn't initially anticipated. Novo has challenges now in terms of supplying the entire market. They've had to throttle

it. They're getting more manufacturing capacity online. Lilly has invested very heavily, anticipating the demand for their product. Right now, I don't think that they're going to be supply constrained. But if, in fact, you see utilization really pick up for their drug as well, perhaps down the road, there could be some supply constraints. But I think ultimately these supply issues are going to get sorted out. These drugs are very lucrative for these manufacturers. They know how to manufacture them.

And I think they're going to get the manufacturing in place to be able to supply this market. Yeah, this says people who are commercially insured with coverage for Zepbound could pay as low as $25 a month, which, you know, is that's wow. And even if they don't have Zepbound specific coverage, it could still pay 550 a month, which would be much more formidable. So, you know, those numbers are going to be, I think, the key to just how much widespread adoption there is. And when you see all the headlines, Dr. Gottlieb about, you know, snack companies and the headwinds crispy cream and the headwinds they could face, I mean, do you think that's a real thing that we could see a fundamental change

in the consumption of Americans in the years that are, you know, ahead? You know, I think that a lot of those estimates really are based on assumptions that people who are overweight are indexing heavily to a lot of these snack foods and that when they go on these drugs, they're going to preferentially avoid those foods. And so I think a lot of the straight line assumptions that have been made are unrealistic. You know, on the margin, you could see a reduction in overall intake if a sizable portion of the population is ultimately on these drugs. I would anticipate that you're not going to get above maybe 7, 8 percent of the population that's ultimately prescribed these drugs. And that assumes that you can continue to demonstrate a lot of additional benefits from the weight loss that accrues with these products, that the safety profile with long-term administration of these higher doses of Glipp 1s continues to look favorable. I don't think you're going to get to 40% of the population, which has been some of the estimates.

Lipitor, if you look at the statins, they've achieved about 20%. Right now, we've penetrated about 1% of the market. So I think there's room to run. But ultimately, I don't think you get to the levels that have. have been put in some of the forecasts. And finally, for those manufacturers who are kind of trying to be the next entrance into this space, maybe to steal some market share away from the incumbents, Pfizer is one of the names that we hear. Maybe they're the furthest along. Can you give us any color on that? Obviously, you're on the board there, so that's why I'm asking,

but also who else is there that might be close? And are these fundamentally different kinds of options or pretty much the same? Yeah, and AstraZeneca had news today that they're getting into the oral glip-1 space as well. You have a lot of companies right now on the venture capital side where I also work. I see a lot of investment right now in products that try to attack different pathways or different elements in the same pathway as the Glipp ones. So I think you're going to see a lot of competition coming on the market with drugs that are either similar or slightly differentiated from these injectable Glipp ones. And ultimately, you can see strategies where patients get started on the higher dose injectable Glipp ones. Maybe that will achieve more greater weight loss in the short term and then get switched to other products to successful.

stay in the weight loss so you don't have to maintain them on these super high doses in perpetuity. True. I think we're going to figure this out and there's going to be different strategies to get used with different patients. That's a very interesting way to maybe spread. Can I call them Glipp ones now? Is that kind of what the cool kids are doing? It certainly rolls easier off the tongue.

Then these brand names that they've come up with. Yeah, I don't know where Zepound came from. I mean, OZempic kind of just rolls off the tongue. Oh, OZempic. You know. That's the world these days. Thank you. Dr. Gottlie.

Dr. Gottlie. Thank you very much for that. Thanks a lot. All right, guys. Coming up on the show, later on in closing bell overtime, rather. We do have Eli Lilly, CEO, David Ricks, coming up to talk a little bit more about these new approvals and what they mean. Again, 4 p.m. Eastern time today in a CNBC exclusive. Kelly, you're not going to want to miss it.

No. Oh, and lacrosse accomplished its goal officially returning to the 2028 Olympics in Los Angeles after decades of obscurity. but will it stick around for 2032 and beyond? We'll ask the head of USA lacrosse next. Power Lunch is back in two with the Dow at session lows down 230. Welcome back to Power Lunch. We are just eight months away from the Summer Olympics in Paris, but the International Olympic Committee is already looking beyond that.

They recently voted to include lacrosse in the 2028 Olympics in Los Angeles. It'll actually be the sixth time lacrosse has been included in the Olympics, but the first time is a medal sport in over a century. Here with more on what that means for the sport is Mark Ricci. He's the CEO of USA lacrosse, 400,000 member organization. We all know it. A lot of our viewers will know your organization well, the governing body. It's great to have you here.

Welcome. Thank you very much for having me. So was lacrosse in the Olympics more than 100 years ago? I'm confused. That would have been, it certainly wasn't an ancient Greece, I don't think. But nevertheless, this is still a big deal for you guys. It really is a big deal. It was in the Olympics in the early 1900s.

And that was men. What is interesting about LA 28, it'll be the first time that the women will be competing in lacrosse as well as the men, you know, in the previous. you know, 100 years, if you will. So it's a great opportunity to get the sport on the biggest stage. Yeah. I mean, visibility-wise, it's huge. I live in Connecticut. It is a state that is known for girls lacrosse. I think four or five of the top 25 ranked teams. You can't diss the boys that way. All I know is I have a daughter who played her first season of youth lacrosse this year as a six-year-old and loved it. And I'm waiting to see how it develops because as a native Californian, when I was growing up,

lacrosse wasn't a thing and now it's so popular. What exactly has been the growth trajectory to make lacrosse now possibly an Olympic sport again? Well, you mentioned Connecticut. Connie was one of the great youth programs in American doing a great job providing growth opportunities for both boys and girls. And so we've been very fortunate to ride a wave

in terms of growth at both the youth and the collegiate as well as high school level. And what is so interesting now is that COVID took its hit on youth sport in America, but the return to play has been so strong. We have more seven-year-olds playing the game than have ever played in our history. And I think that bodes well for the future opportunity for not only youth lacrosse, but the pipeline to high performance. Yeah, college is huge. It's been spreading.

You know, it's not just Mid-Atlantic anymore. We've had a lot of different parts of the country with strong franchises. Where do you see the biggest growth right now? Great point. Our largest growth states are coming from Florida, California, Texas, Ohio, areas west of the Mississippi and in the southeast, where great sport infrastructure and the opportunity to play the game year-round is really provided a boost for us. Yeah, any other big changes looming on the horizon? I mean, there's so many things the sport has been through over the years,

whether women should wear helmets and introducing goggles. And then on the men's side, too, a lot of concussion concerns, especially as that's been more in the forefront of people's minds in the past decade or so. Well, certainly health and safety is a big part of what we provide at USA lacrosse and membership and everything from background checks to ensuring that your son or daughter goes into an environment. that is healthy and safe. But what you're really going to see a big push for us is around youth growth. We've brought together eight leading lacrosse organizations under this banner of L of 828, and our collective objective is to double participation in the game by the end of the decade. Wow.

We have time to talk some jets, or is that? No, I don't know. There's a lot of questions in here. I'll leave that one for another time, Mark. But by the way, is it a permanent part of the Olympics now, or is it depend on how 2028 goes for lacrosse? Well, it certainly starts with L.A. 28. We've got to perform well there, both viewership-wise, as well as attendance, and then we've got a great shot in Brisbane for 2032. Very good. Thanks for joining us. It's fun to learn about it. Check in. Mark Riccio, we appreciate your time today.

Thank you very much. Shares of Microsoft are, meanwhile, hitting an all-time high thanks to optimism from AI. But is it too late to buy into the rally? We'll check those charts and technical support. Welcome back with some breaking news that West Virginia Senator Joe Manchin announcing he will not run for re-election. Aiman Javvers in Washington with more. Amen. Kelly, that's right. This is going to raise some eyebrows over at the White House today.

Joe Manchin issuing a statement just within the past couple of minutes here in which he says he will not run for reelection as a senator from West Virginia. Here's what he says. He says, after months of deliberation and long conversations with my family, I believe in my heart of hearts that I have accomplished what I set out to do for West Virginia. I've made one of the toughest decisions of my life and decided that I will not be running for re-election to the United States Senate. but what I will be doing is traveling the country and speaking out to see if there is interest in creating a movement to mobilize the middle and bring Americans together. Joe Manchin has been sort of openly engaged with the idea of running an independent campaign for president of the United States.

This would seem to leave the door wide open for that, Kelly, potentially throwing the 2024 election cycle upside down if he were to take steps to get in. I can tell you that Manchin and Senator Mitt Romney were on Squawk Box this morning doing sort of an independent centrist kind of a conversation on Squawk Box this morning. I had dinner last night with both Joe Manchin and Mitt Romney, a couple of other senators and a bunch of CEOs at a CNBC CEO dinner here in Washington last night. Manchin was asked by our Sarah Eisen repeatedly whether he was going to run for president. He ducked the question each time Sarah put it to him. But he did joke an awful lot about his ambitions, his thoughts about bringing the country together to the political center.

And he told a joke last night about the difference between Democrats and Republicans saying that the difference between the two parties is that if you put your money on the table, both parties will spend all your money, but Republicans will at least feel bad about it. That's kind of the way he sees both parties. He is very frustrated by this White House. He is very frustrated by the political gridlock in Washington, D.C. He has talked about running an independent campaign for president at some point. Mitt Romney was teasing Manchin.

I can tell you, at dinner last night, repeatedly again and again, about running for president. Romney, in fact, at one point during the course of our dinner last night, sort of mockingly introduced Joe Manchin as the next candidate for president of the United States. So this is sort of an open secret and something that they Josh about behind the scenes. we will see now in the wake of this announcement whether Joe Manchin intends to actually do that or this is the beginning of his long retirement. Fascinating. Amon, thank you so much. Our Amin Jabbers reporting, Dom. All right, well, time now for some technical support looking at some of the movers of the day.

So here to chart those names is Jay Woods, Freedom Capital Markets Chief Global Strategist. Thank you for being in studio with the Telestrator once again. So let's take us through Disney here. Up 7% today after a beat on earnings and subscriber growth, specifically for Disney Plus, and now it's the actor's strike that's coming to an end. We've reached the tentative deal with studios. So is there more upside for this Disney chart? Well, let's talk about Disney. What I have here is a three-year chart because I wanted to put it in perspective. Is there more upside? Oh, there is more upside. Now, will it get there quickly? No,

but we've seen what we have just near term. If we were to show you a year chart, I would have focused on this double bottom here. And what I want to also focus on are gaps. Back in May when they had a negative report. We had a gap lower here, which is kind of hidden by our thicker moving averages on this chart. And now what we have is a gap up on earnings. Gaps are positive, up or down from a technical point of view. They give you levels of interest that you want to pay attention to. So what we're looking at now is this long-term downtrend. It looks like it's starting to reverse, and we're seeing some positive price action. So as someone wants to get into this trade, use today's gap on the opening as a

stop loss because we don't want that to retrace and fill. So we think it's a good opportunity that it's going to run, get back to the gap that we saw in May, around this 92 to 95 level above the 200-day moving average, and it's the step in the right direction. The leadership is there. Mr. Eiger did not come in to, you know, just go sideways for a while. It's starting to turn up, and I think today's the catalyst. All right, so let's move from now to another Dow component here, and that's Microsoft

near an all-time high, open AI-related optimism, artificial intelligence. Is there perhaps a pullback, or is there more upside to come? Well, once again, we back it out. This is a five-year weekly chart of Microsoft. Microsoft is 7% of the S&P 500. It's one of the big ones, them and Apple, make up 14% of the index. You've got to pay attention to it. And what I see from a long-term basis on a weekly chart is a technician's dream.

This little bottom base cup and saucer handle, if you will, you can give it the nice term you want. But what we have had is a heck of a breakout. We had a little fake out here, and now we retested it, and we broke out above. This level is 350. Now I'm putting too many lines. It makes it look a little ugly. But watch the 350 level right in here. If Microsoft pulls back to that, you probably want to be a buyer of it with the stop in play a little lower, just to protect your losses,

because risk management is how you look at this. From a risk management setup, it looks like it wants to go higher. And AI, that's been the story. They're one of the leaders in it. I think it continues to be. the story in 2024. That's how charts can actually teach you a little bit about risk management as well. Put what it's all about, don't. All right now, lastly, Bitcoin, it's been a real headline grabber this month. Optimism around the potential Bitcoin ETF approval really continues to

build here. But Bitcoin, it's a far way off from the record highs that we saw just a few years back. Well, first disclaimer, we do not trade Bitcoin at freedom, but I do follow it as a technician. And, you know, to trade Bitcoin, you're not trading earnings. This, this gap, year wasn't based on earnings, but it did have good news with the spot ETF, so we do follow it. But what we've been seeing is constructive price action and serious levels that when they

break above or break below, it continues that move. And the momentum now is to the upside. So what I've drawn is we go back that 30,000 level, that orange line. I don't really have to cross over it again, but I want to heighten how it looks on the chart. When we broke above it, we

failed to stay above it, and this time we broke above, and we broke above with some strength. So this breakout now above 35,000, you don't have a lot of resistance. There are pockets of, you know, resistance here in the 38,000. But I think this stock, given the momentum, given the news behind it, given Thanksgiving, how every relative is going to come over to the table and say, hey, what do you think of Bitcoin now? The chatter is getting there. The buzzes back. Technically, you have some room to run. I think 44,000 and possibly quickly is where it's going. All right. Jay Woods, freedom capital markets, bringing sense to the charts.

Thank you very much. We appreciate it. Kelly. We'll send things back over to you. Thank you both. Still ahead, skin in the game. America's youngest consumers, I didn't even know the name of this generation. They're taking their skin care very seriously. We're talking about 13-year-olds and why it could be a game changer this holiday season. That's next. Welcome back, everybody. You won't believe the hot holiday item for kids this year. It must be Paw Patrol, Cocoa Melon. No. No, no, no. It's skin care for children as young as seven. This generation. Generation Alpha or A is fueling beauty products. I can't even read this with a straight face. CNBC.com retail reporter Gabrielle Frone Ruch is here with the perfect pair to do.

Because apparently Dom's daughter is part of this judge. So Gabby, please, do tell. I mean, you're right that you can hardly keep a straight face. When I was interviewing parents, I had one dad tell me that he's spending $1,000 a month on his daughter's skincare habit. That's not me, by the way. I had another one whose daughter is seven years old. She watched one TikTok video, and all of a sudden she wants a skincare. routine. She's going to Sephora. This is really widespread across Gen Alpha. And it's going to be a

big boon for retailers this holiday season. What's the cutoff for Gen Alpha? This is who? Born in 2010 and they are not done yet. So 2024 is a cutoff. These are our, this is our kids generation. Here's what I would say. I would say that my daughter is not nearly, first of all, I would never tolerate $1,000 in month skincare products. That's more than I use. But I would say my daughter has various shampoos, various conditioners and sprays and detanglers and creams and lip balms. I mean, I get where this is coming from. I didn't know it was from TikTok or YouTube. Yeah, that's interesting. So influencers really do matter. And I kind of wish my skincare regimen had been better in my youth. So I don't know, maybe I give

them credit. Who benefits from this? Target, Walmart, Ulta, and then all of these brands that are cropping up and that are selling in Target and Walmart. So they're bringing in a lot of these digitally native, smaller brands. They're, you know, ones that are specifically catering to Gen Alpha are propping up as well. So this is going to be a, and also in the long term, you've got to think about it, Gen Alpha is going to be the largest generation in history with the largest spending power in history. So if brands aren't paying attention, they are going to become irrelevant. They fit in stockings quite well, I guess. Gabrielle, I really learned something today. Thank you. All right, thanks for watching. Power Lunch.