Power Lunch - S&P 500, Nasdaq hit new records after positive jobs data 12/6/24

Episode Date: December 6, 2024

The S&P 500 and Nasdaq rose to fresh intraday highs, after the November jobs report came in slightly better than expected --  but not so hot as to deter the Federal Reserve from cutting rates again later this month. We’ll cover all of the angles for you. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Hi, everybody, and welcome to Power Lunch alongside Kelly Evans. I'm Tyler Mathis. I'm glad you can be with us today. Stocks are mixed this day following the jobs report. 227,000 jobs created unemployment. That rate ticked a little bit higher. Odds of a Fed rate cut in two weeks did move higher after the report. So at least we have one more data point, Kelly, to ponder. And barring the inflation report next week being really hot, it looks like we're on track for that rate cut on December 18th. A judge upholding the TikTok ban, so if bite dance doesn't sell the app by January 19th, a ban could go into effect. But as we know, on January 20th, a new administration takes over. So who knows what the stance will be that?

Who knows what will happen between now and then? A lot could change, but this one is obviously worth following. And it is the end of the era's tour. A year and a half, 149 shows, 22 countries, five continents, It's Taylor Swift's tour will have its last show in Vancouver on Sunday. It's had a huge economic impact wherever she has gone. We're going to talk to the CEO of the hotel chain, which owns Best Western, about the impact that Swift and the Swifties had on their business and the state of travel right now.

That should be very interesting. It's a year and a half. I read once she trained for it by running on the treadmill while singing. How you put on that many performances of that that are so involved in intense. know we're supposed to be talking about the business side here, but on a personal level, how does she do it? And she does concerts that are every bit, as I understand it, as long as a Springsteen concert. Hours, right? A Springsteen concert, hours long. And so as a feat of stamina alone, not to mention the economic impact. Well, we start, however, today with the jobs report for

November payrolls slightly better than expected, but the unemployment rate did tick up just a bit. Let's get some reaction from Gus Foshae. He is chief economist at PNC. Did this, surprise you? In other words, the preceding report, Gus, was notably soggy, probably reflecting saggy the right word, the effect of hurricanes and other storms as well as that Boeing strike. So was this a bounce back or is this sort of what we should probably be expecting as we move into 2025? These kinds of reports. You know, we've seen job growth over the past three months of about 170,000 on average. That's about what the economy can create given growth in the labor force. So when you look

the last three months in context, the week October, but then the rebound in November, I think it's consistent with a job market that is in good shape. Businesses are hiring and wages are going up. So consumers are in good shape as well. Let's talk a little bit about the future of the labor market under a new administration that may be deporting tens of thousands of individuals who are here in an undocumented status. what effect might a crackdown on not only illegal or undocumented immigration, but immigration more broadly have on the labor market?

A lot of the job growth that we have seen since the recovery from the pandemic has come from migrants, immigrants into the labor force. So those people come to the United States. They look for jobs. Given the tight labor market, they're able to find them. And so I think that if we see a crackdown on immigration, if we see deportations, that means slower job growth going forward. We just don't have enough native-born Americans to fill the jobs that we're creating in the U.S.

economy. So immigrants have been a key source of labor force growth for the U.S., and we would see weaker labor force growth, weaker job growth, if we have fewer immigrants coming into the country. So not only a crackdown on those so-called illegal immigrants, but potentially a reduction in the number of immigrants coming to the country legally would have a sort of slowing effect on job growth. That's right. And, you know, before the pandemic, we were seeing job growth, let's say, underlying job growth of 125,000 or 150,000 per month. Now it's closer to 150,000 to 175,000 because of stronger immigration levels. Is that? If there is reduced immigration and it is harder to fill the jobs,

Is that in and of itself potentially inflationary because you'll have to pay more to attract and retain workers? At least in the beginning, I think it would be inflationary. I think you have immigrants who are in jobs that pay, you know, high wages that, I mean, you know, less skilled workers, that's less of a concern. But for skilled workers, we're going to have fewer people in those occupations. Businesses will have to raise their pay in order to attract them. So that does hold the potential to be inflationary. at least, you know, over the first couple of years of that policy. And Gus, I think it's important to highlight that what we're talking about is,

if we get into next year and we start to see a slowdown and the monthly rate of job growth, we may not know per se if that's from a change in immigration, or if that's from an actual slowdown in the labor market. Well, what we can do is we can look at labor force growth. We get that number from the Bureau of Labor Statistics, the labor force participation rate. So that will give us some sense of whether the slowing, and job growth is due to business demand cutting back on labor or a shortage of labor. And also, we might expect to see the unemployment rate actually move lower if we see fewer immigrants coming

into the workforce, and that would put downward pressure on the unemployment rate while putting upward pressure on wages. Yeah. What do you see for the economy next year and specifically for the trajectory of interest rates and how the Fed may process incoming data? What do you, what looking for in terms of rate cuts, for example? Well, we're in a very good place with the U.S. economy right now. We have a solid labor market. Consumer spending growth is good. Household wealth is up, and so that's supporting spending, particularly by

upper-income consumers. I think that we see that the Fed will cut in 2025, but we're looking at a slower pace now than maybe we were a couple of months ago. You know, wage growth in the November jobs report was pretty good. we have seen a little bit higher inflation numbers, and so that may mean that the Fed has a little morally way to hold off on rate cuts, while the economy will still remain strong in order to make sure that inflation gets back to that 2% objective. All right, Gus, thank you so much.

A great, as always to see you. Enjoyed it. Gus Fosha, Chief Economist at PNC. Let's turn to Rick Santelli now for the bond market reaction to the jobs report, which is good news for anyone trying to buy a house right now, Rick. And what do traders think about the odds of a cut? You know, it may be good news. It's still maybe too early to tell.

Let's start with the Fed, okay? Here's a two-day chart of Fed Fund Futures for January next month. And we don't need to get into percentages or numbers or anything. All I want you to look at is that it rallied. It rallied strong right when the data came out. When Fed Fund Futures rally, it means less Fed. So all I'm trying to demonstrate with that chart, we haven't changed.

we're still 70 plus percent for a cut at the December meeting. January is nowhere near. It's probably hovering around 25 percent, and it's at the end of the month. What this tells us is that on a snap view from the market and all its participants, the minute that report hit, it was that it wasn't a hot report, and it's not going to make the Fed proceed in probably any different way. But when it does rally, that is a sign of easing. that is something you want to pay attention to.

Now, if we consider what the big numbers in the report were, as you were just discussing with your guess, average hourly earnings, well, yeah, they were solid. The fours were wild, four tenths on the monthly view, four percent on the year-over-year view. These are good numbers. And if you look at the rate, yes, it ticked up, and that is something to pay attention to,

because there's very little doubt as you look at that chart of the unemployment rate that it has slowly turned. It's now just a question of the intensity and the speed of the increase. Finally, the big story here is how differently two's and tens reacted to this number. If you look at the two year, the two year was a very aggressive drop and it has stayed down. As it sits now, it's down seven basis points on the week, which means probably not much has changed with regard to the Fed based on this report. Not more aggressive, not less aggressive, pretty much as it was before the report.

But if you look at the 10-year, which is basically unchanged on the week, what we garner from that is at 10 o'clock Eastern expectations from the University of Michigan, they were big drop sequentially, much less than expected, and the one-year inflation rate embedded in that survey popped. And I think that that's why it's different, and it's probably giving us an early sign. of what the Fed should pay closest attention to in 2025. The unemployment rate and strong wages pushing up inflation. And I think the reason the expectations was weak

is because we know so little about what the administration really will do versus what they have said they may do. Tyler, Kelly, back to you. Rick, did you see the political breakdown in the sentiment survey, Republicans versus Democrats? I didn't. Now, this is, you know, grain of salt. It looks like, remember for a long, long time, the sentiment in the University of Michigan had lagged

because Republican sentiment in particular was very, very weak. And then we saw a crisscross with inflation expectations where post-election, actually, they improved for Republicans and worsened for Democrats. So it goes to show your point of view as for what you're saying about the uncertainty on what's going to happen next year, seems to depend in large part on the philosophy that you hold. Yeah. You know, the issue with all of that is, is that everything has gotten so political. And the discussion that you just had on immigration,

I was pulling my eyelashes out. I want somebody to give me an accurate number of how many people have come across the border the last four years. And nobody could give an accurate number of that. So all the rest of that discussion without that number is really sort of meaningless. But we know it's a lot, right?

So we know if it lessens that it's going to, we can kind of estimate the impact. We know it's a lot. And how much did that a lot cost versus how much did the jobs that were actually taken by some of those due for the economy? In other words, try to weigh the good outcomes versus the expensive outcomes.

But without knowing that number, you really can't weigh that. So to make a statement that if he impacts immigration and slows it down, it's going to be bad for the economy, I think that is way over the skis on the actual information we know. And I think that goes to the point of all these politics being imprinted on things like surveys to begin with. Rick, as always, thank you. Rick Santelli, appreciate it today. Further ahead on Power Lunch, a new year, but potential. the same problems for TikTok.

U.S. federal courts are expected to rule and whether the platform must abide by the DOJ's ban in January. We have details when Power Lunch returns. Welcome back to Power Lunch. The S&P and the NASDAQ are once again hitting new records after that slightly better than expected jobs report. But also we had the higher unemployment rate. You got the higher odds of a Fed cut that could be bolstering things.

The Dow is still struggling as well. Not only today, but also for the week. Our next guest expects the rally to continue in part to what she's calling the economy that won't quit. Stephanie Link is the chief investment strategist and portfolio manager at Hightower. She's also a CNBC contributor and Steph, it's great to have you here. Even yesterday, we were talking to Mike Novagrats about crypto, and he said, while obviously bullish, he does think that it's looking frothy. And he said the same thing for the S&P 500.

So for those with the, and then I saw, who is it, Mobuson has a paper out again. Everyone's talking about the Buffett indicator. I mean, there's a lot of a lot to worry about if you're worried that we're over our skis here. Well, we always worry. I worry when I don't worry because that means I'm being complacent. But if you look since the election, Cal, the S&P's up 5.5%. And the NASDAX up 6.7%. These are big, big numbers.

But I think it's because it's healthy because we have strong economy, right? 3.3% Atlanta Fed tracker is what the current reading is for this quarter. We're probably going to do about 2.5% for the full year, which is amazing after the 3-4 last year. So you'll have good growth, but I think it's an expectation of more growth coming next year. Maybe it's not an acceleration, but maybe it's just kind of a 2.5% environment that we are in from the Trump administration, because there's a lot of puts and takes. There's a lot we still don't know. But the point being is growth is there, and it's being driven by the very healthiest part of GDP, which is the consumer. And the consumer continues to hang in because even though today's job number were a little mixed,

overall, this week we had pretty decent job numbers, jolts and initial claims and even ADP services versus goods. So there's a lot of moving parts, but jobs are still there. Wages are actually good for the consumer. I know it's hot on inflation, but 4% is a pretty healthy number for the consumer, especially as inflation has come down a bit. So add it all up. And oh, by the way, throw in a better ISM manufacturing number, and that's going to start to contribute in 2025. You have a decent economy, good growth, about 8 to 10 percent. Yes, the market is expensive, but there are a lot of sectors, a lot of specific stocks that are not as expensive at 22 times. And I assume you assume that the Fed is going to continue on its downward trajectory on interest rates, which can only

help equities, I would think. Yeah, yeah, Tyler. I mean, I think it's going to be less than what I think most people were expecting initially. But maybe we get the December cut. Maybe they take a pause for a bit. We see some of the data. Clearly, inflation is stubbornly staying, if you will, at two and a half, three percent. And if that's the case, we're probably going to see a slower Fed cycle. But I don't think that that's alarming because I'd rather take higher growth. And you know, another reason why it shouldn't be alarming is because we went into 2024 with lots of people expecting seven rate cuts this year, six or seven and we sure didn't get that and look at where the stock market is. We've had what two cuts so far. We had one in September and one in a month ago, but otherwise,

but we came into this year expecting a big downward pressure on rates and it didn't materialize. 100%. And that's because growth was better than expected and margins were actually good, right? So we had 8 to 10% earnings growth, which nobody thought we were going to do. And so you know our friend Larry Cudlow taught us this long time ago. Stocks follow profits on the way up and on the way down. Steph, you're talking about, like, listen, Chase, or how do you put it? Let the winners ride, which I think is a nice way of saying for people who are a little nervous about their stocks. Let them ride. Amazon, if your energy transformation, even the financials, you're saying, let it ride. But when it comes to opportunities for 2025, there are some stocks that have not had a great year.

And it makes me nervous when I had to see Target and think, I don't know. Maybe you see something there that we don't. Las Vegas stands, okay, it's up 11 percent this year, Z-scalers, 5%. Why do you think these are going to become better stories in 2025? Well, I think each of these stocks individually have stories in themselves. I think they can see improvement. I think they got oversold. But so Target, it's not for for sure. It is not a traffic problem. They had 2.4% traffic growth. Transactions were the problem. And then they have this one off expense hit because of ports. So yeah, it's management credibility for sure. But I think they can get margins back to 6% from 4-6, that gets you $9, $10 in earnings power.

Las Vegas Sands, it's really about Macau recovering, and it is recovering. We're seeing double-digit GGRR each month. It's about them fixing the renovation problem. So they did renovations all year long. They lost market share. That stops next year. They have a spring analyst day. I think that's the catalyst.

Z-scaler, Kelly, I've never owned Z-scaler, but the stock is really, I think, very attractive given that cybersecurity is such an enormous total addressable market. I think cybersecurity is even bigger than AI, unfortunately. And I think you're going to see the big 10 players continue to gain market share and win. And these guys just beat and raised and the stock fell 7%. So that's why has that one not participated when so many of the others, some of the other security stocks have done pretty well? Yeah, I mean, I think it's the billings numbers that have been underwhelming. But it's the annualized recurring revenue that I care more about. And that's poised to accelerate to $3 to $5 billion in fiscal 2025.

And I think as they do that, that the stock should recover. And again, overall, it's not a demand problem, Tyler. I mean, there's plenty of demand. Right? So anyhow, so I'm just trying to pick away some names that can maybe mean revert. Not my entire portfolio. I love mean reversion. I just love it.

Steph, great to see you, my friend. See you. Stephanie Link. Good to see you. Have a good weekend. You too. Up next, I'm going to do my tree as pretty as hers. I wish we are. Maybe I just invite her over. That's right. I want her to do mine. All right. Up next, Bitcoin breaking 100,000 major milestone there.

But the crypto has a tendency of pulling back after big. But just saying, pulling back. We'll explore some ways to hedge in the market navigator after this break. All right, welcome back to Power Lunch, everybody. Let's give you a quick power check on the markets. you see there, the industrials are off 156 points. Sounds like a lot, but it's only one-third of 1% but back off that 45,000 level hit earlier in the week. The S&P is up one-tenth of one percent at 6,081. NASDAQ pressing in on 20,000. It is up two-thirds of a percent or 121.

Don Chu joins us now for today's market navigator. What we got, Dom? We're going to shift our attention towards crypto, Tyler, because we had that massive six-figure printing crypto prices back above that 100,000 mark, as you can see there. This is all after prices backed off a bit since first crossing that level earlier this week. Now, with interest as high as ever in the cryptocurrency, this is indicative of why you might want to use a more risk-defined way to play Bitcoin prices so you don't expose yourself to as much of the volatility. And maybe options might be the way to do that.

So joining us now is Dennis Davitt, Chief Investment Officer at Millbank, Dartmoor, Portsmouth. Dennis, you have been an options guy we've looked towards in the past for this. Why exactly would you use options to play Bitcoin? And is it using those options on ETFs the most efficient way to do it? Yeah, I mean, had you asked me this question two years ago, I would have stargazed at that point because I would not have known where to go, what exchange should trade these on. But there's just been a sea change with the ETFs being listed and now options on those ETFs. So I've been an options trader my whole life. And there's a real transformation going on right now as Bitcoin.

Bitcoin, the iBits of the world are out there and the options are trading on those, that you can remove a lot of, you get a lot more clarity into what you're buying and selling and who you're buying and selling with. The options being traded on these, the crypto world, I get a lot of grief when I, you know, I'll get more phone calls after this, but the desire to own upside in crypto world far outweighs the desire to own a hedge. And I feel as when I talk to more pension funds and endowments that are looking towards this space, they're more concerned. They're not looking for the 100% annualized return. They're looking for dipping a toe in the space, but how do they do it without blowing up

the allocation? And when you look into the options that are traded on these, you can do things where you sell a three-month up 20% call, and you can finance that by buying it down. I mean, sorry, you can buy it down 10% out of the money put and finance that by selling a 20% out of the money call. That is completely inverted to what we're used to seeing in the equity markets. And that's just a real transformation as we move out of a pure speculative play in Bitcoin, and it moving more into an asset class that people want to own for a longer term and lower the overall volatility. So in three months, you can participate by buying the 51 put and selling

the 68 call. You're in it for three months up 20%. You can annualize. that you're participating in an 80% return for every three months you reset this trade. And the key is you take in a little bit of money to do this trade. So it's kind of like a free insurance policy with great break-even analysis on it. I mean, you'll rarely see a trade like this, maybe in some high-flying tech stocks. Dennis, we're showing the graphic right now of this. What we're showing is a sell of a 68 call, but you're bringing in $3.20, but you're buying, the February 51 put for 350, it says it's a credit spread of 30 cents, but it looks like you're

actually paying out 30 cents. Right. Is that correct? Yeah. It depends on when you take the snapshot of this. So right when the data was sent in earlier, like you said, we just breached, we were trading below $100,000 in Bitcoin. Now we're trading above $100,000. So you'd have to pay a small 30 cent fee here. But had you done the trade earlier today, you would have taken a credit in. I just want to make sure our viewers see that because the graphic that we're showing says it's a net credit of 30 cents. And based upon what we're seeing there, it should be a net debit or a 30 cent outflow for each of these, you know, for each of these moves. And so I just want to make sure that the graphics is eating. So if I do what, what, Dennis, you're telling me to do.

What is my upside profit on my invested dollar and what is my downside risk on that invested dollar? Right. So if you went out and you invested in Bitcoin or you, and you, you, and you, you, you, you're, you, you, you buy the ETF on Bitcoin, you will participate in the gains on that Bitcoin up to 20% between now and February 21st. Above a 20% rally in Bitcoin, you're out of the market. If the cryptocurrency were to collapse, you are completely out of the market down 10%. You won't lose more than 10%.

I see. Plus or minus, whatever, that small premium that you either collected or paid based on the graphic. If I put in $100,000, which would buy me effectively one Bitcoin, my maximum gain on this would be to $120,000. Yep. And my maximum decline would be back down to $90,000 if the currency, if the crypto craters. It's in essence a collar. Yeah. You give away the upside and you. Yes, like a stop loss and a stop gain. By the time it's done. All right. All right. And characteristic. Yeah, I was just going to say, just a final thought here from you on this. Yeah, just characteristically, you could never, it's very, very rare that you can have that kind of tradeoff in any other sort of asset class. You know, in equities, even bonds.

It's more like you have to pay more for the insurance to the downside. All right. Dennis David. Thank you very much. Good to see you. Have a nice weekend, sir. I was lost there in the middle, Dom, but you dug me out of the ditch. Yeah, because I was showing the graphic show that it was a credit.

I was like, no, wait a second. You paid more for this than you took in at least with that price. I have to think hard when it comes to options. I really have to think hard. I know you did this. Those options traders out there are smart guys. I did it very briefly in my career, and it's a tough market for sure. Have a great weekend, my friend.

Cal. Thank you both. After the break, it's the end of the era. Taylor Swift's Ares tour is coming to an end, as are the trickle-down economic benefits. Will hotel stocks miss the perks? That's next. Welcome back to Power Launch. I'm Pippa, Stevens, with your CNBC News Update.

Healthcare company Centine will now conduct its investors. meeting virtually in the aftermath of the shooting of United Healthcare CEO Brian Thompson. It was scheduled to be held next week in New York City. A masked gunman shot and killed Thompson on Wednesday morning in what police are calling a targeted attack as he walked to his own company's Investor Day in Midtown Manhattan. A Pennsylvania coroner's office said today that investigators located the body of a woman who fell into a sinkhole above an abandoned coal mine. The 64-year-old was last seen Monday evening searching for her cat.

Authorities say the sinkhole is estimated to be 30 feet deep. And a federal judge ruled today the U.S. Naval Academy can consider race and admissions. It comes after the Supreme Court's ruling last year that broadly banned affirmative action. The judge in this case ruled military training schools should not be subjected to the same standards and said diversity in critical is critical for mission effectiveness. Tyler, back to you. All right. Thank you very much, Kate. I mean, excuse me, PIPA, excuse me. We are reaching the end of an era.

Tonight, Taylor Swift performing in the first show of the final stop of her era's tour. It's all the way out in Vancouver. Going to be tough for Travis to make it out there. Likely giving another swift lift to the local economy during her stops in London and Stockholm earlier this year, for example. It was such a surge in hotel occupancy and room rates at BWH hotels as Swifties flocked to the shows. Here to break down the Swift dynamics with us is BWH Hotel. CEO Larry Kukulich. Kukulik.

Kukuk, excuse me. Thank you. Pardon me. And BWH is otherwise known as Best Western. Yes, that's what... So what did you see when Taylor came to town? We saw incredible lift in occupancy, and of course, when occupancy does that, so does average daily rate.

And as average daily rate in occupancy went up, of course, our hotels were able to benefit from the success of the era's... Put some numbers on it. Let me just say with... double-digit increases in rate and occupancy. Because you guys are private. We are. We are.

But what I would tell you... I got to ask. Yeah, but I would tell you that it varied, right? London may not have seen as much lift because of the room availability versus a Stockholm, which doesn't have as many rooms. That's tighter supply. So tighter supply was able to, I'll say, benefit more greatly from the Erez Tour. Have you seen a similar phenomenon with other performers, or has it been not as great

as it was with Swift? Swift is exceptional. Miss Swift and the Eros Tour is it's an anomaly. There's not been anything like her. You look at the loyalty, her fan base. It's huge. Right? Absolutely huge.

And then the timing of it coming out of a time when we couldn't travel, that's how I'll refer to it, she launched that tour. I think she postponed an earlier tour when it when it struck and then came out of it with the Ares Tour. And so the timing was absolutely perfect as well. And I'd also note that when you see the people attending a concert or going to her movies,

which is another interesting phenomenon all along. Even for the movies, you see a boost. Absolutely. I mean, some have said it saved AMC. Wow. So when you see that and you look at who's attending, it's parents and children, It's friends. When I see people going to it in the movies, it's always groups of people.

And that's part of the experiential travel. Some call it experience economics as we came out of that dark time. So she was able to leverage, I think, experience economics as well. And then on top of that, you really have the context of Ms. Swift and her global business enterprise. It's not just the concerts. She's re-released albums. She's released a book. She released the movies. It has had a tremendous boost on not just the hospitality industry, but economics at large.

And I would say the psyche of people. The positive nature of it all. To get people out of it. So the cynics, the analyst community, if they were here, would say, Larry, how are you going to comp this? These are going to be tough comps for 2025 or whatever. So in all seriousness, with this incredible, like you said, once almost generation, event behind us now, what drives trends from here? People love to travel. And coming out of that era, that the time period when people couldn't travel, they long for experiences and traveling

together. You've seen it when you travel in the airports and the hotels are doing very well. Don't bet against the hospitality industry is what I would say. But 2026, you've got the World Cup coming. Right. That's coming to North America. So here, Mexico, United States, Canada, they're anticipating 5 million international travelers for that event alone. Is that as big as Swift? Well, you know, it'll be slightly different because for World Cup you'll have longer length of stay.

Mm-hmm. Right? You have international travelers. Three-week period. It's an extended period, but when you're coming internationally and you're going to go to a Miami or an L.A. or New York, you're hosting here as well. they'll stay longer. So Swift may have had a shorter length of stay,

but now look at the length of stay as also a big boost to the hospitality industry. Real quickly, we've heard from other hotel companies the last couple of years, a lot of the infrastructure money, a lot of those kinds of projects, even some of the chip projects have been a big boon for business. I'm not sure if you're in exactly a segment that would benefit from that or maybe out west it's different,

but is that something that you can kind of give us a window on? Yeah, I believe that the infrastructure bill will, in fact, have a positive effect on the hospitality industry, specifically the extended stay segment. Right. And we're very much engaged in. We just launched a brand last year called At Home by Best Western. We see that momentum. I think the number is the third of the hospitality pipeline right now is extended stay hotels.

Wow. So we're looking to, I'll tell you not take advantage of, but be a part of that success story as well. Incredible. And we didn't even get to Coach K. Larry played for Coach K at Army. Army's having the best football season in decades. Beat Navy. That's what next weekend, I think. So I went to Notre Dame for law school.

Last weekend, Army played Notre Dame. It was a tough game in my family. But I'm hopeful that they're going to win the Commander's Cup trophy when they beat Navy. Well, congratulations on the business and on your career and for your service. Thank you. And for the best Western with the pool that we stayed at, in March, which saved us on a road trip. With the kids? Oh, yeah. You got to have a pool. Larry, thanks so much.

Larry, thank you very much. Appreciate your time. Thank you. Federal judge upholding the DOJ's ban on the TikTok talk app here in the U.S., but there are a lot of steps still to come. Before the ban can take full effect, we will get you the full story. And as we head to break, there's still time to join the CNBC Financial Advisor Summit. It is this Tuesday, December 10th. I will be there. Others will be there too. Mark Lazarie, I see. A month. Among them, industry experts will convene to discuss trends, emerging risks, strategies that can help advisors better serve clients. Scan the QR code there that you see on the screen. It's been up there. We're going to let us sit there for just another couple of seconds.

I'm going to stretch or visit CNBC.com slash FA. We'll be right back. See you there. The fate of TikTok in the United States hangs in the balance as a judge today upholds the ban on it scheduled to go into effect on January 19th. Yes, the day before, President Trump begins his second term. Let's get to Julia Borson now to explain exactly what could happen over the next six weeks. Julia? Well, Kelly, the court ruling saying that TikTok's millions of users will need to find alternative media of communication. That burden is attributable, the court saying, to the People's Republic of China's hybrid commercial threat to U.S. national security, not to the U.S. government. But TikTok does plan to appeal, saying, quote, the Supreme Court,

has an established historical record of protecting Americans' rights to free speech, and we expect they will do just that. Going on to say the law was, quote, pushed through based upon inaccurate, flawed and hypothetical information, resulting in outright censorship of the American people, saying the TikTok ban unless stopped will silence the voices of over 170 million Americans. So there are a couple things that could happen now. First, President Biden could grant a 90-day extension if it appears that a vested,

that a divestiture deal is in the works. Second, the Supreme Court could allow the app to keep operating while litigation proceeds or the Supreme Court could rule on this suit before January 19th. And then there's another wildcard. Once President-elect Donald Trump is inaugurated on January 20th, he could choose not to enforce the ban. He did recently vow to protect TikTok. Now, meanwhile, meta-snap and alphabet shares are all higher on this news because of TikTok. Because of TikTok, is banned, they are seen as beneficiaries, potentially gaining TikTok's users, advertisers, and creators that could relocate over to their apps. Kelly?

Correct me on this or inform me, Julia. Has the president-elect's position on this TikTok ban been sort of fluid? Has it moved a bit? Well, remember back in President Trump's first turn, he tried to get TikTok banned. That's what I remember. This was a big initiative of his. Yeah, so that was back in his first turn. So he was anti-Tick-Tock in that first term, but when he was campaigning, he said that his perspective had shifted, and now he wants to protect TikTok.

One thing that's also interesting is that the people that are going to be working for incoming President Trump are really split on this. But it does seem like the most recent thing we've heard from Trump is that he does want to protect this app. I have to say with the 170 million users, it certainly would be an unpopular move to ban it, but we'll have to see how it all plays out. It's hugely, but I had a friend joke she was going to move to China just to use it if they ban it here. It's very, very popular. But, Julia, that said, if it's Chinese ownership of the U.S. unit comes to, and a lot of creators are told this could mean they'd have to sort of divert, divulge their international followings. Like, there could be a lot of ramifications if it gets hived off. Who would be a potential owner here in the U.S.?

Well, there have been a lot of potential companies that have been interested. Remember, this is a company that already has a big partnership with. Oracle. So Oracle is already providing the cloud infrastructure here. And there's a question of whether there could be a consortium of companies, a combination of PE companies. But we would not expect a company like META or any of the social media companies to be at all interested because it would be such a competitive issue that they wouldn't be able to acquire a competitor. But I think it's really whether you would see a consortium of companies, perhaps Oracle, because they already have their relationship, maybe with some PE backing as well.

All right, we'll keep an eye on those shares too. Julia, thanks, Julia Borsden with The Full Story. A quick programming note on Sunday, Kristen Welker, will sit down for an NBC News exclusive interview. Look at that with President-elect Donald Trump, his first network interview since the election. Be sure to tune in this Sunday on NBC. And Alta Beauty, one of the best performers on the S&P 500 today.

After posting a beat and raise in its third quarter, we'll trade it and bring the mascara in three-star. Thank you. Welcome back, everybody. Time for today's three-stock launch here with our trades. Boris Schlossberg, managing director of FX strategy at BK asset management and a CNBC contributor. First up, we got Alta Beauty, one of the best performers on the S&P 500, a beaten raise there, third quarter, fending all fears of growing competition and slowing demand in the makeup and skin care area. Boris, your thoughts on Alta. Yeah, something I'm very familiar with. No, I think Alta. The Volta is obviously a surprise beat.

The market was looking for a 2% decline and they had a 0.6% rise in sales. So that's positive. They got it mildly positive from $11 billion to $11.1. But really, it's just incremental at the edges at this point. The market is pretty saturated. I think the halcyon days of growth are behind it. Having said this, though, the stock clearly found a very, very strong bottom at the 300 level. And it does have a chance now if they continue to have operating improvements,

improvements. If they continue to buy back stock, all of those marginal improvements could definitely push it maybe another 20% higher over the next 12 to 18 months. So it's mildly positive. I think nothing wrong with it, but it's not really a home run at this point, in my opinion. I was surprised that it had that big of a reaction. Still down 12% this year. Let's move to Doc to sign. Another huge mover, Boris, that's up 25% after topping estimates for third quarter earnings and revenue. It's up 27% now, in fact. Year to date, it's up 80%. What do you? you think? Yes. This is a clear winner, and this is the one example where AI is having a major positive impact. One of the things that they've done is they've used AI to help customers

analyze massively large contracts, saving them thousands upon thousands of lawyer hours in doing so. And this really has resonated very well. In addition to which they're also now partnered with this largest European notary, digital notary provider. So they try to become basically an an A to Z solution in terms of document management, trying to become essentially the default choice. And we all know that when something becomes a default choice, it just starts to print money. So to me, DocuSign is about a dip trade all the way through. If you're a little bit of a conservative investor, you may want to consider selling tranches around 90, 95, 85, to just give yourself a better toehold in the stock, because obviously it ran up so much. But overall,

I think it has a really strong chance of doing another 50% higher from here in the next 12 to 18 months. I used it this morning. Thank you. On that. Boris. Let's get to gold now. All-time highs this year, but it's seen a lot of volatility since President Trump's victory on Election Day. Down about 3% since Election Day. When you were, you came on after that and talked positively about gold. Yesterday, the Fed Chair, Chairman Jerome Powell, said gold is in direct competition with Bitcoin, which, as we know, has been soaring to new records. Your thoughts on gold, and I think you think it is going to be a good time for gold? I do. I think it's a misread. by the market of what it means to have President Trump have an effect on gold.

People think that this is a strong dollar trade when President Trump comes to the office. But in fact, historically, President Trump is basically a mercantilist. He believes in lower interest rates, lower currency so that we can have greater exports. All of that bodes very well for gold in the near future. And gold, of course, is acting very much as a sovereign debt hedge. And given the fact that we have these massive trade, massive budget deficits here on the U.S. very, very serious problems, problems I think that could possibly create a collapse in the Eurozone as far as the European economy goes. All of those things, I think, go very well for a position

in gold at this point. Boris, thank you very much. Have a great weekend, sir. Boris Schlossberg. Thank you. And remember, you can always catch three-stock lunch by following our podcast on any platform you listen. Just look for power lunch wherever you go, and we'll be back after this. Before we go, Bank of America is upgrading some consumer stores. stocks today like Dollar General, which is up 3%, all the way to buy from underperform, which is interesting. They're saying the company's back-to-basic strategy is working. Altria also upgraded to a buy, saying priorities of the incoming administration on tariffs

and taxes could be a benefit, but you see the shares are already up 41%, maybe some improvement in finances of lower-income consumers also. And Molson Corse in the group as well, they say 2025 could be better than expected and better than this year. So they have easy comps, and they call TAP, the most attractive option in the consumer Staples universe. You know, one of the things stocks we mentioned earlier today,

I think it was in Stephanie Link's segment was she likes Target. Yes. And it's very interesting to me. I mean, here's a company that has had trouble getting out of its own way in a world where the consumer is pretty doggone healthy.

Of course. And what was interesting is she said, look, their traffic was actually pretty good. So the narrative that people aren't going to Target wasn't the issue per se. It was actually the ticket, what they were buying at the store. And she says they also had to take some

one-off charges for it was going up the ports back then. And so, you know, inventory control. Investing, if you can kind of buy past the conventional narrative is where you can sometimes spot those early turning points. You have to really do your digging when you're buying individual stocks like that. Thanks everybody for watching Power Launch. Have a great weekend. And closing bell starts right now.