Power Lunch - Rates Drop on Easing Inflation, Cooler PCE Data Boosts Markets 12/20/24

Episode Date: December 20, 2024

CNBC’s Tyler Mathisen and Kelly Evans take you through the heart of the business day bringing you the latest developments and instant analysis on the stocks and stories driving the day’s agenda. “Power Lunch” delves into the economy, markets, politics, real estate, media, technology and more. The show sits at the intersection of power and money. “Power Lunch” gives viewers a full plate of CNBC’s award-winning business news coverage, plus a healthy dose of personality from the show’s anchors and the network’s top-notch roster of reporters and digital journalists. 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, everybody. Alongside Kelly Evans, I'm Tyler Matheson. We have a huge rally on Wall Street underway. All the major averages are up about a half of a percent, but still down for the week after Wednesday's huge post-Fed Fed seller. Yeah, a sharp turnaround in fact this afternoon. A big reason for that is the PCE data this morning. That's the Fed's preferred inflation gauge. It was 2.4 higher from last year, up a 10th on the month, a little cooler than expected. and Chicago Fed President Austin Goolsby, who becomes a voter next year, reiterated to Steve Leasman and to the markets that he thinks rates, Tyler, actually, will still go lower. Yeah, no, I think that's right. I think the big shock here, if it was a shock, was the idea that they're only going to do two cuts next year, and every people had been counting on more than that. We'll see.

I mean, the market did amazingly well with rates up a lot higher than they are today, and maybe it will do just fine with rates sort of staying in an equilibrium point. over the next few months. That's why we're keeping an eye on the 10-year yield. Right around 4.5%, the level where a lot of people think it turns from kind of ho-hum for the markets to more of a headwind. Pulling back to around that level today. Meanwhile, adding to the drama is Washington, where we have the government on the brink of a shutdown that could happen at midnight or I guess 12-01. Emily Wilkins is on Capitol Hill with the very latest at this hour. Emily? Hey, Kelly, well, we are right outside the room where House Republicans have been meeting for more than an hour trying to figure out, exactly what their path forward looks like.

They've been discussing a couple different options. They could just simply pass a bill to extend that 2024 funding into March of 2025. Or they're looking at something where they could take the bill from last night, the one that failed on the House floor with 38 Republicans voting no, and actually go ahead and break it down into bite-sized pieces. So one piece for disaster leave, one piece for government funding, one piece for farmers. One thing, though, that does seem to be out of the bill is that proposed two-year increase on the debt limit. I briefly got to chat with Majority Leader Steve Scalise. Listen to what he said.

We're talking about the debt limit too. And of course last night, we put the debt limit on the floor that was voted down. You know, 99% of Democrats voted no. A few of our members voted no, but it didn't pass. But we're still talking about that too. Wouldn't necessarily be in this package. But ultimately, you know, we will bring something to the floor either through a suspension or a rule. and we're making that decision. So let's dig into a little bit more of what Leader Scalise was saying there. We are hearing reports from inside the room that there is discussion, not in this bill, but in a later bill to raise the debt limit by $1.5 trillion,

but then to go ahead and find about another $2.5 trillion in cuts to the federal government, which is, of course, right around that number that Elon Musk and Vivekram Swami said that they'd be trying to cut anyway. But of course, the issue right now is that we are in a time crunch for the government shutdown. We don't have legislation yet. And the fact of the matter is that even if House Republicans come out of here united, we don't know where Democrats stand, we don't know how the Senate looks, and these things simply take time, and it could take a good bit of time to actually get this done.

We could be looking at a weekend shutdown. That doesn't worry too many lawmakers. But there are concerns, I think, on both sides of the aisle right now that we could see a much longer shutdown that could wind up being painful to many Americans. And as well as to the economy, EY was out with a new report today saying that if the government shuts down, that's going to cost the economy around $6 billion per week. Guys? I can't believe I'm about to say this, Emily, but a $1.5 trillion raise to the debt limit doesn't sound all that big, considering the size of the debt, considering the deficit spending that is potentially on the table right now.

Yeah, DC has a way of making some very big numbers look very small, Tyler. I mean, look, I should just asterisk all of this, that these are some early negotiations. The sense that we get from inside the room is that actual constructive dialogue is happening. It's not just Speaker Mike Johnson sitting everyone down and saying this is what we're going to do. It's him sitting everyone down and saying, okay, we have a couple thoughts. Let's go ahead and discuss here, which is, I think, why this meeting is taking as long as it has. But it is also speaking to the fact that President-elect Donald Trump, he's very concerned about this debt limit battle. He wanted to see that done now.

Of course, that doesn't seem like it's going to be possible given the amount of Republican opposition. But at least this is some way to kind of thread that needle, let Trump know that there is a plan, that there is an agreement. Exactly what the final numbers we have, though, remains to be seen. So just very quickly, if the government shuts down, who stops going to work and how would I, as an ordinary citizen feel it? Would I feel it at TSA at the airport? Would I feel it at national parks, for example? So they say that mandatory employees, they will be coming to work. But what we have seen in the past is that sometimes with TSA, with other federal employees, sometimes they don't come into

work because they know they're not getting paid and they don't know when their next paycheck is coming. So yes, holiday travel could be impacted. And there are a lot of other things. It's one of those things where you might not feel it on Monday, you might not feel it on Christmas Day, but if we're getting into early January without a solution, there are going to be all sorts of little ways in which millions of Americans are going to be impacted. Emily Wilkins, thank you very much. Have a great weekend. In spite of all the drama in D.C., the markets are staging a big comeback, thanks to some cooler than expected inflation data. Michael Farr is president and CEO of Farmer in Washington. He's also chief market strategist at High Tower Advisors and a CNBC contributor. Ron Insana,

CNBC senior analyst and commentator as well as CEO of I-Fi-A-I-Y. I-I-I. I feel like Dr. Seuss. I-Fi-A-I. All right, so let's go back to... I wish I had a Susian rejoin. Let's go to the previous story. Do the markets really care whether the government has a shutdown?

We've been through this 15 times. Since 1995, yeah, we've done this. I think to the extent that it clearly... creates a chaotic environment and raises questions about what the incoming administration is going to do from a policy perspective. It may care, but as Kelly was saying at the top of the show, you know, you have the inflation data, the Fed's preferred gauge coming in softer than expected. And that was part and parcel of why the markets fell apart just the other day. Worries that inflation was going to come in higher than expected. Yeah, and the Fed was going to cut less in 2025.

I still think the Fed's going to cut less in 2025. I've kind of changed my view on that. And I think this is a much rockier road ahead for Wall Street after, you know, nearly 60, in total return over two years. You know, we're one overdue for a 10% correction, if not overdue for something else. I feel like I'm going back in the other camp. After the PCE, this might go, hey, that's it. No more inflation.

It's going to be up one-tenth and ho-home. Nothing to see here. We cut a few more times and maybe everything is fine. Although growth is accelerating, not decelerating. The Atlanta Fed has fourth quarter growth at 3.2%. Third quarter was revised upward. We don't know that we're slowing down. And there's still some sticky spots, sadly, on the inflation front.

Some of it doesn't make any sense at all. Some of us paying your financial advisor more because assets are up and so they're drawing greater fees. That's not inflation. Michael, you say we're returning to the old normal. That sounds like a bourbon brand to me. What is it? What does that mean? I think you might need a new bourbon brand if we continue to continue to the old normal again.

I remember some bad nights on a potion called Old Crow. Really bad nights. Oh, yeah, that's rock gut. But it was cheap. And in college, who cares? It was cheap. Yeah. As I recall.

When Wall Street gets surprised, that's the old normal and it's not a good thing. And this week, Wall Street got supplies, of course, by the milder Fed message. And by, I suppose, a consistently dysfunctional message from Congress, we thought that they had the ball across the goal line and no dice. So Wall Street today is telling you that what we really care about is what the Fed does. and we're still going to turn a deaf ear to Washington until they get back in our faces in a bigger way. But the volatility created from the messaging, both from Washington, and I think markets and the Fed had markets reeling this week. As Ron said, we're in an expansionary phase generally that shouldn't be derailed,

but you've got to watch this data, and the Fed has been data dependent, and markets hate it when they're data dependent unless they happen to like the data the Fed's looking at. I'm still thinking about Old Crow, which is just such a great name. So, Michael, tactically, where does this leave you then, right? Are you repositioning? Even on the good old question of kind of stocks versus bonds and what should they comprise of your portfolio? You know, we've got still a really heavily weighted S&P 500 that's just in five, seven names.

We all know what they are, really concentrated. The market's still trading near all-time high multiple. So I think it's really a stock pickers market, real stock pickers market. I was talking to the producers this morning. I like things when they've been put when they've pulled back. So I said, well, Adobe, Adobe's gotten killed. I think that's silly. I don't know why Adobe's gotten killed.

Great gross margins, great free cash flow, great cash on the balance sheet. And it's looked at a smaller one that's pulled back 15% was Valmont, which is one I've liked a long time. I own both the stocks, but I like to buy stuff when it's when it's out of favor and when It's getting pounded down, I think, unreasonably. That's what I think you have to do, Kelly, going forward. Stock by stock, I think this next year is going to be a real stock pickers market. You remember, Ron, when you and I were young pups. No, they don't actually.

No, yeah, well, actually, I don't really either. I actually don't either. But in the late 90s, as Kelly's pointed out, there were several years where we had back-to-back years of 20%. Yeah. 20% games. In the NASDAQ was up 85%. Yeah. So, I mean, you know.

You do not see that. in the cards for next year? Look, I think for the rest of this year, the market will do what the market will do. I think 2025 is going to be far more challenging than anybody currently assumes, given the policy uncertainties. When you take the individual policies that the Trump administration is proposing the incoming Trump administration, you know, at face value, assuming they can do what they say they're going to do, when you look at tariffs, mass deportations, you look at potential for tax cuts, which would increase the size of the deficit, it, and then you look at deregulation, which could be positive for some industries, obviously.

I think the net net is still stagflationary, and I think that puts the Fed in a box. And so we could disaggregate that however you like. But, I mean, when I just look at everything, you know, taken in sum, I don't think it's necessarily conflict between the administration and the Fed? Ultimately, yeah. I mean, if the Fed's going to cut twice, you're going to hear from incoming President Donald Trump that he was favoring Joe Biden on the way out and maybe disadvantaging him on the way in. He can't do anything about it necessarily.

I mean, unless Jay Powell were to leave voluntarily before his term would expire, but he's indicated he has no intention to doing that. So, yeah, you could see President Trump and incoming Treasury Secretary, Scott Bessent, you know, at war, if you will, over policy. But again, I think, you know, the policies, as we understand them from Trump 2.0, net net are stagflationary. You think they're stagflation. I wonder if they're a little bit more, almost more, the economy, let's put this way, it's a good thing the economy is so strong, right? because at the margin, it sounds like it's going to clip the sales a little bit, because certainly anything that would be pro-growth, which is changing the federal government stuff, the tax.

I mean, that's going to be a long, a ways down the road. It's the opposite of the first administration, where they did tax first and then a lot of other things later. This time, I mean, maybe by the end of next year, but it's not going to be the first thing to hit the markets. No, and they're still saying day one, they're going to impose tariffs on many of our trading partners. Day one, they're going to start a mass deportation process.

That is both inflationary and recessionary simultaneously. So that would be the first thing, presumably, that hits, if it all is not challenged. Michael, why don't you tie it off here and react to what Ron's sort of view of a bumpy year at the very least? I think a bumpy year from a lot of it's caused by the messaging. I think I'd issue a bit of a warning to Elon Musk, though I'm not sure he'll listen, but I'm sure he's watching. So Mr. Musk, you right now are in a very difficult position of being more in the headlines than President Trump. And having sat through in Washington, D.C., the last Trump administration, guys who do that are not around too long tread very lightly, Mr. Musk, and watch our economy. The Fed's doing a good job.

Leave them alone, please. And the one thing I find quite ironic is talking about raising the debt ceiling by $1.5 to $2 trillion, but cutting spending by $2 to $2.2.2 trillion. Somehow that just doesn't job. He was not pleased about this. And we don't usually line up on some things. But it is cognitive dissonance at best, I would say. All right, Michael Farrow.

There's not two trillion in there to cut. There's just not two trillion there to cut. Right. Far and farther. Ron and Sana, thank you. Michael Far, thank you. Appreciate it, guys. Thank you.

Coming up, the yield on the tenure, we talked about it. Retreating from yesterday's highs after a lighter than expected PCE rating, we'll get a full look at the latest bond market action when Power Lunch returns. Welcome back. Nice day in the markets with stocks bouncing back of 1.5% gaining back some ground from Wednesday's post-Powel sell-off. Bond yield's also taking a bit of a breather here. They're up at about 4-6 yesterday. We're around 4.5% today. Let's get to Rick Santelli in Chicago for more. Rick, I'm feeling, I'm feeling calm and doveish and happy after the data this morning. Yeah, you know,

I caught your comment earlier and I couldn't agree more. If we look at the monthly data, certainly when we look at the PCE index month over month, it went from two-tenths to one-tenth. Forget expectations, okay? The reality is two-tenths-a-one. one-tenth improvement. And we had two-tenths improvement in the core month-over-month PCE. So those are improvements. But in the year-over-year PCE, we actually went from 2.3 to 2.4, and 2.8 on the year-over-year core, which is sticky. So yes, I can see that there's a glimmer of hope here, but boy, the market really did have a nice reversal. Look at a two-day chart of tens. A, couple of things should jump out at you. A, the left side is higher than the right side.

We broke a nine straight session pattern of 10-year yields surpassing the previous days' tenure yields. And believe me, when that reverses out, we're actually below yesterday's lows. Traders use those to exit trades. So it doesn't surprise me to see the activity we are seeing today. Now, let's look at the seven-month reversal here. You know, we went from mid-May high close and backed down. And yesterday's high was only 11 basis points away from the 470 high-yield close of all at 2024. If you look at the dollar versus the onshore you want, okay, the dollars at a 13-month high.

But this chart goes all the way back to 2007. We are at close to the top of a very significant range. We need to pay attention here. And finally, that dollar index closed yesterday at a 25-month high, and it has reversed, also trading below yesterday's lows. So we want to look and see if we start to regroup, maybe back down to that 103-104 area. Tyler, back to you. Rick, thank you very much. Still ahead.

We're talking trains and trucks. We'll dive into the latest moves on the S&P's Road and Rails Index to see what's driving the downturn. The market navigator is up next. We're discussing navigators. Welcome back to Power Lunch and the markets are up pretty nicely today, one and a half percent. Although the Dow's session high, Dom, was 847 maybe. I mean, we did lose 1,100 points right on that day.

Exactly. We're still trying to dig back out of that hole. Pretty big hole this week. 5927. That's the level in the S&P. That's the 50-day moving average. Is it? Okay. And by the way, just on this point for the month of December, the Santa Claus rally kicks in normally after Christmas. So this is not seasonally yet where we might see the strength. And who knows with the uncertainty around the government and all that. Of course, into the new year as well. So anyway, it's a pretty good move there for sure in treasuries and everything else there. So we'll keep it on what's happening. Ten-year treasury yield, 4.51. team, are we all systems go? I think we should be. We're jellin like Magellan.

Oh, no. Nope, maybe not. We're waiting for our dear captain. Oh, okay. Is he here? He is here. Great. Wonderful. Carter Worth is standing by to talk us through the rails and what, Dom, today? The transports. And the relative performance there.

So Carter Braxton Worth is going to take us through what exactly he's seeing and whether or not this dip-buying mentality that we've gotten used to. And by the way, has been fruitful. for a lot of people. It's been a winning strategy is the way that you should tackle this now. So Carter Braxton, Worth, of Worth Charting, thank you very much for being here with us. Take us through what the thesis is. In your mind, is this a constructive setup for us to feel good about going back into risk assets and continuing to build positions? Right. So, and high team, happy end of year and so forth. So what I wanted to focus on is it's a

macro, it's a macro theme, and it's something that's highly single, not the Dow Jones' transportation index, but what is known as the S&P 1500 supercomposite, and it's dominated by road and rail stocks. So exclusively Union Pacific, Norfolk Southern, CSX, of course you got truckers like J.B. Hunt, Ryder, Landstar, Old Dominion, it goes on and on. Not airlines, that's the key. And we are breaking trend here. That's an important setback.

And it's not just the absolute, it's the relative performance, because that's what Alpha's all about. And so with that, let's look at three relative charts. We might have them here. And what this is is you have a ratio, right? It's one thing divided by another, which depicts a relative performance line. And so this is the supercomposite road and rail index, and its relative performance to the S&P. One could say, well, of course it's underperforming the S&P.

That's got things like Nvidia and Invago. But a peer-to-peer comparison, we'll have a second chart, is looking at the road and rail index to all industrial. So now this part of the industrial sector's relative performance to great names like General Electric and Boeing or Federal Express or Otis Elevator or Ingersoll Rand. And then even more specifically, a final chart, if we look at the road and rail index relative performance to the S&P 500 machinery. So two very cyclical, very economically sensitive. Here again, truckers and trains, for lack of a better designation, road and rail, continue to slip absolute and relative to important areas of the market. I think that's a problem. All right.

So, Carter, if that is a problem, what does that say to you to do in terms of positioning or trading? How exactly would you express a view, given that underperformance of roads and rails, which could be a leading indicator for the rest of not just industrials, but perhaps the market by large as well? Well, that's right. And so I would just treat it as an idiosyncratic circumstance, and these are areas specifically to be underweight. And so obviously the big three rails are the largest weightings in the index truckers are by and large smaller operators. But it says something.

Now one could say yes, but certain rails haul grain, other rails haul cars, you have to get into the weeds. But the theme here is what's important. the poor, absolute and relative performance, I would be underweight or short most of these constituents. And by the way, before we let you go, seasonally, you tend to look at things as well. You know, Kelly had mentioned the Santa Claus rally period. We talk about the seasonality of this time of year.

What exactly do you think the setup is going into the first quarter of next year? Is it still one where we feel constructive? Yeah, so interesting. January has a way of being either further momentum, if you've had a strong year, as all we'll know, and you carry through, or huge reversals, and we've seen that in several years in the past decade. Rarely is a January, a flat kind of thing. And my hunch is you'll see some backing away.

And so buy, seller hold, I would be selling into the end of the year. All right. Maybe not as bullish as other people are. Carter Braxton-Worth. Thank you very much. Happy holidays, sir. You as well. Bye, team.

All right. Tyler, over to you. All right, thanks, guys. The big money in college sports getting bigger. The brand-new 12-team college football players, begins tonight, Indiana, Notre Dame. I will be glued to that game. I'm telling you, I'll be decked out in crimson and cream. But our next guest is focused on Tennessee and Ohio State tomorrow. Ohio State alum, Eddie George. Currently, the head coach of Tennessee State will be here to talk about

the state of college football. That's on Power Lunch coming up. Welcome back to Power Lunch, everybody. Check out Nvidia and Apple shares of both Tech Giants rebounding. After a while week, you see it there on the chart. Our next guest picked those stocks in the 2024 stock draft. currently in second place, trailing only the medalist owes Perlman. Mentalist has an edge in this, let's face it, with less than two months to go. Eddie George, former NFL star running back. Ohio State alum joins us now. Eddie, so much to talk about, including college football.

Your head coaching Tennessee State right now. I wonder what you think of the state of college athletics and the pressures that coaches like you are under. I think of three great coaches who have stepped away. Jay Wright, Tony Bennett at Virginia, and Nick Saban at Alabama, in part at least because they just didn't like, couldn't deal with the way college athletics are going. Yeah, the landscape is definitely changing. It seems like it's changing every hour. You know, you introduce the NIL, you introduce schools being able to pay players directly, you introduce, you know, even the portal.

When I first got into the business four years ago was definitely the portal, it's the hot topic, and now the game, the landscape has changed because of name, image, and likeness. And, you know, you have to embrace it. I think there's opportunity there for our kids to make money, but there has to be guardrails around it. There need to be more parameters and restrictions in terms of when the portal is.

I think there should be one portal window. There's a couple of portal windows, and there needs to be more accountability on the student athlete when they enter the portal. So I think there's still a lot of work to be done. Why aren't those student athletes signed to contracts so that you have to stay, you know, for three years? if you're going to collect your NIL money.

I don't get it. Well, I agree. I definitely agree. There are some things that need to be in place. I'm not sure exactly why. I think we're heading toward that direction. There should be some accountability. If they jump in at a certain period of time,

some of that money should be given back. It should be also tied to their academics because this is still, academics still matters when you go to college. So if you fall below a 2.0 GPA, 2.0 GPA or 2.5, whatever that is, that money should come back to the university. And there should be some stipulations around that because we're just seeing, you know, the Wild Wild West when it comes to transfer portals.

Let me, we can look at a market value of big athletic programs. We've got them up here. But to fund the NIL deals and the recruitment of these athletes, where does that money come from? I assume much of it comes from wealthy donors who are going to give money, I mean, until they don't have money. anymore or until they say, well, I'm giving money, but I'm not getting any return on my investment. The program isn't going anywhere. And so I'm going to stop giving, which leads me to the question of

how does a school like Tennessee State compete against a Tennessee or an Alabama in your backyard? Well, we don't. Yeah. That's the bottom line. We're in a completely different stratosphere when it comes, they're in a completely different stratosphere when it comes to that. You know, Tennessee State, we're at FCS football. We try to mimic and structure some things around that. We try to give some NIL opportunities to our student athletes that filter to us. The coaching, in my opinion, is the same, but the infrastructure is quite different. We have a different set of challenges.

I mean, we're talking about an Ohio State, you know, Gene Smith, who was the architect for so many years as the AD at Ohio State has really done a matchable job of making them, you know, the most valued program in all those college sports. And you have to be in direct alignment with your president, your president, cabinet, your board of trustees all have to be committed towards stretching the envelope when it comes to building revenue streams. Two major factors why Ohio State is in that position. One, a couple years back, they sold alcohol in stadiums.

That generates more revenue. Changing from grass to turf over those years. Now you can not just have, you know, just in a college football games, but you can also have other events that you can get revenue on. So it's just a couple of those examples while they're able to leverage all their assets

so they can then give more money to college athletes and then be able to have the flexibility to do a lot of the power moves that they're generating right now. That is fascinating. Eddie, Nvidia and Apple were your two picks back in the stock draft. If you could, if the transfer window portal were open, would you be making any transfers?

At this point, you're sitting pretty. Oh, yes, Carvada. I think. Who saw that one coming other than, of course, are the guy that's leading it right now. I mean, he should be outlawful. He shouldn't even be in this thing. But anyway, I still stick behind my picks.

I'm a steady eddy. I still believe in Vindia. They have a new chip that just came out, I believe, is on the market for $250. $235. Apple's still going strong. You know, they made some bounce back. But I think, you know, right now, I think he's up, what, 200% or something like that?

I don't know. I think, you know, it's thinking it could be over for me at this point. So I'm stuck with second place. I think O's is taking a knee. I think he's taking a knee, brother. All right. This is ridiculous. Eddie George, thank you so much.

And good luck to Ohio State this weekend. Okay, we need it. Thanks. Let's get back to Washington. to now there's some movement towards a deal on the government shutdown. Emily Wilkins with the latest. Emily? Kelly, the House Republican meeting has broken up, and lawmakers are telling me they do now have a path forward

that they're going to be taking up a spending bill. Soon, perhaps, as a couple of hours from now, that they're hoping can cross the finish line. Speaker Mike Johnson addressed reporters after the meeting. I think we either have a clip of him, or I can sort of just recap that he's saying that there is a lot of unity. We've got Speaker Johnson. We have a unified Republican conference. There is a unanimous agreement in the room that we need to move forward. I will not telegraph to you the

specific details of that yet because I've got a couple of things. I got to wrap up in a few moments upstairs, but I expect that we will be proceeding forward. We will not have a government shut down and we will meet our obligations for our farmers who need aid, for the disaster victims all over the country, and for making sure that military and essential services, and everyone who relies upon the federal government for a paycheck is paid over the holidays. I'll give you the more details here in just a few moments. Well, you won't have to wait a few moments. We do have the details from folks who have left the room.

So this is going to include extending 2024 spending until March of 2025, giving up that new Republican trifecta time to figure things out. It will be including $100 billion of disaster rate for those hit by hurricanes, as well as assistance for farmers who have been in a very difficult spot for the last couple of months. And this has been a huge Republican priority in something they wanted to see done. You also saw a good discussion in the room about the debt limit. Remember that to your extension, that's no longer in there. That's not on the table.

But what they discussed doing was raising the debt limit by $1.5 trillion a couple months, hopefully, into the next Congress. And in addition to that, they would be cutting $2.5 trillion of spending. Now, it remains to be seen exactly how they do it. They say they're going to cut from mandatory programs, but they can't cut from Social Security. under the path that they want to take. But at least we can say that is a problem for another day. In the short term, it looks like if there is a shutdown, it's going to be relatively short and over the weekend. The one big question mark here is how do Democrats feel about this?

Johnson seems pretty confident that they are going to be able to get enough Democratic support on this, that they can pass it under that expedited process, so about 280 votes. But we haven't seen any official communications yet from Democrats on how they feel. And that, guys, is what we will be watching for next. Emily, we really appreciate it. So one vote now. It's an all-or-nothing vote later today, is that right? So it's going to be a vote in the House that is expected, and that one would be all-or-nothing.

And then from there, the Senate is going to have to vote. And, of course, we're keeping a close eye out to hear what their dynamics are. Okay, perfect. Emily, thanks for that update. Emily Wilkins. Let's get over to Sima Modi now for the CNBC News Update. Cima? Kelly, here's a news update at this hour. Volkswagen reaching a labor agreement with a statement.

Union today after three months of tense negotiations under the deal, Europe's largest carmaker, agreeing to keep all of its German factories open and guarantee jobs until 2030. The union also agreed to remove its demand for pay raises until 2031. The White House announcing today cancellation of another $4.3 billion in student debt for almost 55,000 public service workers. It applies to those workers enrolled in the public service loan forgiveness program, which allows for debt forgiveness for people working jobs such as firefighting, nursing, and teaching after they've made 10 years of continual payments. And Netflix continues to push into sports, announcing a deal today

for U.S. streaming rights to the 2027 and 2031 Women's Soccer World Cup. Netflix says coverage will also include original documentaries, including major players and the rapidly growing fan base into sports. Tyler, Kelly, back to you. All right, Seema, thanks very much and still ahead from a change of plans for the Fed to a looming government shutdown. It's been a busy week for stocks. All the major indexes are back in the green today. Still lower week to date. We'll take a look at the names making the biggest moves when Power Lunch returns. We'll be right back. Welcome back. Let's get a quick market check. We're seeing, again, about pretty steady, consistent 1.5% gains across the board, bouncing back, but not entirely from Wednesday's big declines.

We're still down about a percent on the week. All right, shares of Novo Nordisk are on pace for their worst day in more than 20. years, a trial for its next generation obesity treatment fell short of its goal. It helped people lose 23% of their body weight in a study. 25% was the target. Eli Lilly shares getting a bump from that as this new Novo drug has been seen as a fierce competitor for its lilies, Zepbound. I think this is crazy. I mean, the drug still sheds 23% of body weight. The stock's down 17%.

So more to learn here. And what about Mission Produce, soaring or surging about? about 18% today. You might know this company for its avocados. The stock is up after its earnings. Q1, the company expects to sell just as much produce, but expects prices to be 20% higher because of continued strong demand. Love the avocado. Still ahead. Shares of Alibaba down 6% this week. As the brand makes plans to sell its Chinese department store, we'll get the action on that name and others in three-stock lunch next. Welcome back, a fun edition of Power Lunch this coming Monday, stuffing your stockings with stocks.

All hour long, trader strategist and analysts will give you their top picks for 2025. Let us know on social media which names you in particular want to hear about. It'll basically be an entire hour of three stock. It'd be like 30 stock lunch. Well, that's right, which brings us to today's three stockler. Why should we wait until Monday to give the people what they want? One stock we heard about from you was Alibaba. And here with our trades.

Lee Munson, Portfolio, Wellealth Advisors, President and CIO Lee, after a stimulus-fueled run in September, the stock is down more than 20% in the fourth quarter. Your trade on Alibaba? You know, I'm going to stay away. The China macro isn't working. Look at the stimulus. What happened? Why is the stock down? It's made a full round

trip. Bottom line, they're selling off their retail because the competition's too tough in China, and also the macro economy isn't strong enough. Furthermore, now they're saying we're going to pivot. We're going to sell for losses, some of our retail stuff. Now we're going to get into the cloud. You're going to compete Alibaba with, you know, AWS, Azure, Google Cloud. I don't think this is going to work. I think you just keep walking. All right. What about Bob? Oh, what comes after Baba? O'Reilly. Oh, Riley. Oh,

Riley. Obama. It was the favorite moment. Who? We don't talk about it much, but it's a $70 billion market cap. And S&P, componently, are you a buyer? You know, I like Riley. This is the type of company when you hear all these managers saying, hey, next year is going to be about a broader rally, small mid-caps, boring companies. It's like the ghost of Peter Lynch saying, look for boring companies. This company's been on fire for the last 10 years because they've been doing a lot of stock back. Stock buybacks. Here's the deal. O'Reilly isn't just about do-it-yourself people. 50% is professional services selling to, you know, a municipal motor pool or body shops. I like this company. I like this stability. I like how it's, I just think that this, the only, you know,

issue is it's a 27 multiple, but they've got the growth. I love it. Oh, oh, O'Reilly. And our final stock is an upstart. It is called Upstart. Financial Services firm uses AI in the process of underwriting consumer loans and stock hired a day down 15% this week. Volatile one, Lee, what do you think? You know, if I'm going to get involved into the banking and finance sector, which I think's going to have a lot of tail win next year, this is just too much of a leverage version. I'd rather buy a big bank. I don't even want to buy regionals. What Upstart does basically, is they just in between the consumer and lender. They're just an unnecessary middleman.

They say that, you know, they're just approving 90% of everything, but they have to keep 15, 16% of those loans in-house is because that stuff doesn't work. If they lose those top three lenders, there are 70% of who buys those notes. It's game over. I don't like the stock. I think that you and I can just approve 90% of everything

and keep 16% of the bad loans ourselves. All right. Sounds good. Lee Monson. That was a deep tease for what's coming next. Power, don't you be right back. The great Yogi Bear once said when giving directions to his home in coincidentally the same New Jersey town I live in, when you come to a fork in the road, take it. Well, Yogi wasn't crazy.

There was a fork in the road, and you needed to take it, the left one. Well, I've come to a fork in the road. Today's my last broadcast as co-anchor power lunch. I'll still work at CNBC in a variety of capacities for a few more months. Then I'll be free to take a cabinet post. I'm there. Call me. Leaving is not sad, it's trendy.

Neil Cavuto. Couldn't you have waited one more day, Neil? Come on, man. Congratulations to Neil. Hoda Cotby, Chris Wallace, Dan Abrams, Gloria Borgia. Maybe if the Jets are lucky, Aaron Rogers. So much and so many people to be thankful for to CNBC, a great employer, the Power Lunch team, the magicians in hair and makeup, especially Agneshka, who puts the poof in the roof every single day,

to the amazing crew here in Studio B, even though you are mostly on your phones. And you know it, you know it, you are mostly on your phones. These 15 years at power have been terrific, none more so than my time with Kelly. She is the real deal. There is not a phony bone in her body. If there's an ego, I haven't pounded it. You're the best. There's not a bone in yours either, Ty.

I was okay until now. Yeah, right now there's no bone. Just a puddle of goo. I've been able to sit and learn at your feet for all of these years, and I'm so grateful for that. Still see the learning curve and how steepness you will be truly irreplaceable. Thank you. Thank you.

The pleasure here's really been all mine, but you're not getting... My insurance here. You're not getting off that easy either. Before you go, we can't let you leave Ty. Without taking a look back at 27 years of Tyler TV here at CNBC. Oh, watch the hairdoes. This is my 21st anniversary at CNBC. How about that, ladies gentlemen?

That's us. I started out as a writer for Time Incorporated, and what I've found over the years is that talking on television is a heck of a lot easier than writing. Now let's go over to Tyler Matheson to see what's coming up on Power Lunch. Thank you, Tyler.

I'm Tyler Matheson. I hope you'll join us on Power Lunch. I'm Tyler Matheson, broadcasting what program we used to call Power Lunch straight from my home kitchen. Well, you're in the hamper. It is always cooler in every way. The gentleman at security is sound asleep.

I thought it was going to be, do you know who I am moment? I'm Tyler Madison. Good game, my friend. I grew up as a Washington Senators fan. I put myself to sleep as a little boy listening to the broadcasts. That's how I wanted to get into broadcasting. I wanted to be a play-by-play guy. Look where I ended up.

I get to spend my days learning. And that is why I stay, where I stay in journalism. Good evening and welcome to our public television viewers. This is CNBC's high network. This is CNBC's Open Exchange with Tyler Matheson. Welcome to Business Center. My father was a newspaper man back in the 30s and 40s and into the 50s. And so what I've done hasn't fallen all that far from what he spent a lot of his life doing.

The Dow diving 508 points in a single day. Since then, of course, the market has risen virtually nonstop. Today was Thursday Bloody Thursday. Every computer company worth a bit or a bite. 1997 is in the rear view mirror and what a year it was. There are tulips in my little basket. There is not much better than that. I like a little poof on the roof.

Oh, man. Get out of my way here. I want to do this. Sir James, I think you missed something here. Who gives you the best information? Bartlett. You do think we can sell this, right? 100%.

You get one F-bomb a day. I've used mine in the first four minutes. All right, here we go. You're going to be great. I didn't bring my notes. I had no idea ever that I would be a financial journalist. I thought I'd end up going to law school. So it has taught me one thing,

and that is that an awful lot of what happens in your career is by accident. My wife is fond of saying, man plans, God laughs, and that's certainly been true in my life. And they're here now. Joe and Mack, thank you so much for being here, guys. Thanks for having us. And we met on day one. Yes, we did. And we got engaged somewhere around here. Yeah, right around here.

I actually proposed to Joe, my wife, in this building. Let's just say alcohol was involved. She gave me a day. She gave me 24-hour right of rescission. Yes. Well, I have something to give you now. You do? Oh, God. The cooking duties to you know. Oh, great. Thank you. Thank you. Thank you. Here's another one. Hot mitts. I have a recipe book in here for you. My apron. It's all yours. What? You're giving it all up? What is it? I'm done. That's fantastic. You can never pass the bat. Kelly, you're the best.

Hi, you are the best. Why is Mac here when the biggest game, Are you not going to be there tonight? I'm not going to be there tonight, but I'm going to be rooting hard. Oh, my gosh. My boys and be a good time. Indiana. Indiana, go IU. Here on my screen, I don't know what you can see.

It's my son when he played for the Montclair High Mounties in baseball. People always ask who's the baseball player. He is the baseball player. I love you guys. Thank you for the memories of the bathrobe days as well. One of the favorite moments post-COVID. He used to come walking on in the kitchen. But here's everyone here to give you a send off as well.

We all right.