Power Lunch - Stocks rise as Wall Street awaits election results 11/05/24

Episode Date: November 5, 2024

Stocks are higher today, as traders await the results from the high-stakes U.S. presidential election. The race between former President Donald Trump and Vice President Kamala Harris is expected to be tight. The results could have a significant effect on where stocks end the year, but investors may want to brace for some near-term choppiness. We’ll tell you all you need to know for you and your money. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Good afternoon, everybody, and welcome to Power Lunch alongside Kelly Evans. I'm Tyler Matheson. Good to be with you. Good to be with everyone here today. Stocks are solidly in the green on this election day, the Dow. The worst performer just shy of a 1% gain. But there you see it moving higher. S&P is higher by 1%. And the NASDAQ, the big winner, they're the biggest gainer. I guess maybe that's a little bit of relief that finally this election is getting done. You know, there's optimism across the board. I keep joking. No one's talking about the ISM service. report, but that was strong this morning. They're not talking about that? How did that get overshadowed by anything? It's not really catching on in the zeitgeist, but it's there. And it was strong. And if you reflect on the past four years, you probably think tech is outperforming everything

else, but energy is the best performing sector during Biden's term. Now, of course, it started weak because the pandemic, but more than half of components during the S&P energy sector have doubled during that time. This was a point that I believe Rich Bernstein made yesterday. If you had gone with the conventional wisdom in election, after election after election, you would most often have been wrong. Completely. And this was an example of that.

Bitcoin jumping today, getting back above 70,000, former President Trump is seen as a pro-crypto person. So as today's move, a sign the crypto community thinks he's going to win or a hopeful flag there, signal there? I don't know. If you look at the chatter within those kind of Twitter. Yes, they think that's what's going on. If you look at the shares of DJT, this is a fun proxy. all afternoon long. They're recently at session highs. They're up a little bit less than 16%. What's curious about all of that is at the same time, big tech is outperforming. That's supposed

to be the Harris trade. So not everything is lining up according to what we've perceived to be the odds. We're going to start with the markets as Wall Street and everyone here awaits the U.S. presidential election results. Investors are also watching the Fed with the big decision on interest rates later this week, I think on Thursday for more on the impact of all this on your money. Let's bring in Jason Trennett, Chairman of Stratigas, a bearer. company and Mike Santoli is our senior markets commentator. Jason, welcome. Let me begin with you. Do you see it as simply as this, that if Mr. Trump wins, it's better for stocks, and if Ms. Harris wins, it's a little harsher for risk assets?

Tyler, I very much do see it that way. And I think it's only because, if only because we've had Donald Trump as president before. It's more of a much known, a better entity, better known quantity than Kamala Harris. And I think some of Vice President Harris's, some of her proposals seem to be, at least in extremists, very much anti-risk, particularly anti-stocks. So, you know, we'll find out, of course,

a lot of this depends on what, Congress looks like. A lot of it depends on events as well. But I very much ascribe to that view that a Trump victory would be very good for stocks, and I think a Harris victory would not be particularly good for risk assets. One of the things you see, Jason, is the biggest theme, no matter who wins, biggest themes in the market is de-globalization. I guess that means the returning to the United States of major manufacturing processes that could help defense, gold, and among other things, I guess, intelligence.

Yeah, listen, I think there's very few things that Republicans, Democrats can agree on, Tyler, these days, but one of the things they can agree on is that China is seen at best as an unreliable trading partner and at worst an enemy, and therefore there's a very strong tendency to want to do more manufacturing closer to where goods are being produced. So these very elaborate supply chains, in my opinion, are going to, are going to be going to be shortened quite a bit, which means higher costs. But I also think that the consensus largely has moved much more towards, really, President Trump's view in 2015 and 2016 on this point. And so downside of that could be a bit more, could cost us a bit more. The good news, of course,

is that you have more secure supply chains for things that we desperately need and could be national security issues. And Mike, if we just zoom out for a minute, obviously the easiest trade of the past 10 years, no matter who the administration has been to own big tech. Sure. To own the big, now they're called hyperscalers. Is there a risk of focusing too much on whether you buy the industrials or don't under this president or that president versus saying, is it still just a sure thing to stick with those kind of secular growth stories?

I would say that those are the stocks that are probably most immune to any real policy swing, as much as it might be a little bit of trying to, you know, nip their ambitious. in terms of regulation. I think really, though, if you ask me, what are the top three things you want to know in terms of how the stock market is going to do from here on now? I don't know if the election result it makes the top three. Right? Just because the underlying trend is what it is. You mentioned the ISEM services number today.

I've been focusing on it. That's when buy yields really started to kick higher when we got that number. It's the largest segment of the U.S. economy, and it seems to be humming. And so, yes, there is a little bit of a buy bonds if Harris wins. because it's going to be a gridlock scenario and it's not going to be kind of a higher metabolism economy. I think that the tough part here is to figure out whether the present conditions are close enough

or too different from, let's say, 2016 to when that sort of deregulatory lower tax medicine that came with the first Trump administration was the absolute welcome thing. We were dealing with undershooting inflation, subpar growth. We had this very, very sluggish, economy and that was the fix right now

we've been trying to restrain nominal GDP growth and so it's a little bit of a different by the way and he's not talking about corporate tax i mean that was the point i guess was making last hour what's in the agenda that would actually deliver a real big short-term boost to stocks or the yeah and it doesn't seem like it yeah who knows it's vibes it's getting it out of the way i mean i think the market's acting today as if it realizes we're gonna have some kind of result at some point not too far away really and there's cap well i don't mean

necessarily tonight but i think the market's acting as if we have the potential to re-risk because we spent a month churning around. The average stock has corrected quite a bit, even though the index is hung in there, and everybody believes November, December is a buy for stocks. Whether it's true or not, people believe it. So I think that's what's going. Also, we treated it like a one-month low in the S&P at the close yesterday. So we're just bouncing to kind of get back toward a neutral spot. Jason, one of the things you have your eye on, I read, is a possible second wave of inflation that could come from higher wage settlements in a couple of the labor disputes that have been going on.

Budget deficits. D, the aforementioned de-globalization, as well as immigration, and I assume you mean here, the mass deportation of undocumented workers. Well, you know, Tyler, on that score, I'm not so sure I mean that, because I think the initial impulse of higher immigration is actually lower inflation. But actually, as those people tend to establish routes, they also start to use. credit. So I'm not particularly sure that this wave of illegal immigration, there's no question that's been positive for inflation, believe it or not, over the last couple of years,

but I'm not so sure it's positive moving forward. And I'm not making a value judgment, you know, one way or the other, but I think those other things that you mentioned, we've been running budget deficits of 7% of GDP roughly for the past four years, despite the fact there were at full employment. That's never been done before when we weren't in war or at or in a recession. De-globalization, decarbonization, all of those things are expensive. And then maybe most importantly, as you mentioned before, is that one of the reasons why you get a second wave of inflation is that the average person, the common man, and we have a statistic called the common man CPI, that tends to lag wages in the first wave.

And so when you see these wage negotiations, what you find is that people not only want to set themselves up for the next four years or six years, depending on whether it's the Longshoremen's Union or Boeing, they want to also get back the wages that they lost, the real wages that they lost over the past four years. And that's why some of these wage negotiations seem to be pretty eye-popping.

And it's one of the reasons why I also think it's in a second wave of inflation is is quite possible if not likely and i would just i would i might just say one thing to with to mike santoli is a good old friend of mine um i don't think we're trying to restrain nominal GDP growth i think we're trying to restrain inflation and um there's a there's a difference between the two i would i would argue but jason we are in a high ngdp has been higher than expected i think that's the the point is that we're not in a kind of pre-20 2016 sluggish growth. Remember secular stagnation? This is the opposite of that. You're talking about sticky inflation, right? We're talking about better than expected. So how would we be setting up for

Trump administration to begin under those preconditions and with debts and deficits where they are? But Kelly, growth doesn't cause inflation. Washington, D.C. causes inflation. So stronger economic growth via higher productivity actually leads to both stronger growth and lower inflation. If you have stronger GDP growth that's almost entirely driven by extra government spending, then higher growth is inflationary. But that's not really what President Trump is going for. That's not what his economic advisors are going for. And so to me, there's a difference.

Mike, you mentioned that you didn't think the election would even be a top three concern for markets right now. Yeah. What would the top three? Well, I mean, I just think in sort of desert island terms, I would want to see how is credit behaving? What are the weekly jobless claims doing? And are earnings growth actually broadening out as we expect right now? I mean, if you look over the last four months, the average stocks vastly outperformed the NASDAQ 100.

Okay, that's part of the overdue catch-up by the average stock. So market's expensive. It's trying to allow fundamentals to grow into those valuations. I think at this point, if credit hangs in there, you allow that process to go on. And if earnings comes through and the forward 12-month estimate kind of bumps up a little bit and time passes, you can move the chains on the bull market and not have to pay the price for, hey, we're buying it at 22 times forward earnings right now. And are they moving up, by the way, as we go through earnings season? For the fourth quarter, not. They're getting trimmed, but that's the common practice.

And we'll see maybe into next year. All right. Jason Turner, thank you very much. Mike Santoli. Thank you as well. And coming up, we have housing on the ballot. four years ago, it was cheaper to own a home than to rent one. Today, that's totally flipped.

We will take a look at housing affordability and its implications. Next. Welcome back to Power Lunge. One of the key economic themes this election has been the cost of things. Food inflation, for instance, housing as well. Those costs have soared in the past four years. Diana Oleg is here with a look at housing affordability in the key swing states, Diana. Well, Kelly, just under 40 percent of early voters actually said housing affordability,

influenced their choice, that according to a new report from Redfin, with a larger share of Harris than Trump voters saying it was a factor. So let's look at how affordability has changed in the last four years. First, the own versus rent equation. In November 2020, it was cheaper to own a home than to rent one in the vast majority of the country. That just flipped on its head today. Home ownership is now much more expensive due to the sharp increase in home prices fueled by the pandemic, with its initial record low mortgage rates and sudden migration. Home prices are now about 45% higher than they were in 2020,

according to S&P K Schiller. Rents also rose during that period, but they've been coming down recently due to the oversupply of apartments. So let's look at the battlegrounds now. The share of income needed to own a home today has at least doubled since 2020 in four out of the seven. Arizona has seen the smallest change. And these are the three states where it is least

affordable to own a home. Georgia, of course, is not far behind. On the rent side of that, North Carolina saw the biggest jump in the rent burden, while Nevada's rent burden actually came down a little. Both Harris and Trump agree housing costs are too high. Harris has proposed building three million new housing units with an expansion of existing builder tax and new credits. She's also called for a home buyer tax credit as well as rent caps. Trump is less specific, but has called for opening more federal lands for housing. and cutting back regulations to make building easier. Trump has also said he'll lower mortgage rates,

but Kelly, as we know, presidents don't set interest rates. But let's go back to, did you say that in Nevada, or did that graphic show, it takes 40% of the typical person's income to afford a house in Nevada, which is a place most people went because it was so affordable. Well, it was affordable until they all went there, and then, of course, the supply comes down. The demand goes up, and the prices go up as well.

And you also have rising interest rates over most of the past two plus years, which seems not to have dented house price appreciation appreciably. Not at all. And we've talked about this a lot, as you know, and that's simply because it's the supply and demand issue. We're not getting enough home construction, which is why the two candidates want to accelerate home construction to ease that burden. But when you simply don't have enough homes for sale and you have this high demand from new generations coming in and wanting home ownership, that keeps prices higher, even if they are higher. there are higher mortgage rates. And of course, we know that the builders have bought down those

mortgage rates to get buyers in the door. So someone buying a newly built home might be getting a 5% rate while someone buying an existing home might be only able to get 7%. All right. Diana, thank you very much. We appreciate it. Diana Olik reporting, still to come the technical take on the 2024 race, which charts look best positioned heading into a new administration. The market navigator is next. Welcome back to Power Lunch, everybody. A quick check on the markets right now. The Dow Industrials, higher by nearly a percent, 368 points at 42,163. S&P, higher by almost exactly 1 percent, and the NASDAQ is the winner in the bunch, up at 1 and a quarter percent, or 225 points, 18,405. Consumer Staples have lagged behind the other sectors over

the past three months, second worst performer, up just about 4 percent, but my next guest thinks it's due for a rebound regardless of who wins the White House. We'll get to that in a moment with Katie Stockton, founder and managing partner at Fairlead strategies. But let's begin with a scene setter, Katie, on how markets have historically performed post-election. You know, generally it has been a positive catalyst for the equity market. Of course, that's dependent on whether it's in a bold market cycle or a bear market cycle, like 2000, 2008.

And now, of course, we are in a bold market cycle. Still, positive long-term momentum has benefited the major indices. However, what we notice is that oftentimes the market would undergo a corrective phase ahead of the actual election day. We have not really had that if we reference the S&P 500. And that would suggest that maybe it's a bit more of a proof point for the market this time around in terms of its reaction. Our anticipation is that we'll get this sort of positive near-term action, but it could just be a knee-jerk that gives way to some corrective price action and to year end. All right, let's move on to that consumer staples area that you want to highlight today. You say that some of these stocks have moved down and that they're showing signs of short-term downside exhaustion.

I kind of feel the same way, actually. I'm suffering short-term downside exhaustion. Why do you think they are positioned for a rebound and which ones? You know, the Staples sector started pulling back in mid-September. So it's had more time to reach that oversold territory, so to speak. and we've noticed that a lot of the constituents of that XLP spider ETF or the staple spider ETF have become oversold near their rising 200-day moving averages.

So look at the charts of Coca-Cola for one, Procter & Gamble, Kimberly Clark, General Mills, all the names that you've heard of. And they're really big heavyweights in the space. So we feel at least that this would be a natural place for a rebound for the sector, which has seen that ABC corrective wave already. and at the same time, the relative performance, which has really suffered, as you mentioned, should rebound in kind, especially if we do see some corrective action ensue for the S&P.

When you see this kind of, well, when you are anticipating this kind of rebound, what would the amplitude of such a rebound typically be, or can you even say that? Well, we can reference resistance levels on the charts to gauge upside potential, but in this case, I would say it's more about time frame. So in terms of the time frame from the indicators that we're using here, we would say weeks, not months. So something that's a bit more short-term in nature as a relief rally for the space. And that relative performance should kick in, especially if we see corrective action. So defensive properties, of course, behind those consumer staple stocks makes them do better in a more tenuous market environment.

Katie, great to see you. Katie Stockton, Fairlead. We appreciate your time today. Thank you. Kelly, back to you. All right, further ahead, as the Biden administration winds down, which sectors had the best run during his presidency? Envidius Rise has helped put tech in focus, but energy is actually the winner. We have more when Power Lunch returns. Welcome back to Power Lunch, everybody. At offices across America today, people are talking about their polling place where the lines were long or maybe shorter or maybe there were no lines at all. Let's get now to a polling place in a key swing state for a look at the scene there. NBC News correspondent Julie Sirkin is live in Pittsburgh.

What's the turnout been like, Julie? And what have you sensed? Well, officials are telling me the turnout is way higher than they expected in some counties around Pennsylvania, including in the Philly area here in Allegheny as well. The turnout has far surpassed the total numbers that they've seen in 2020. I'm at a specific polling site here in the northwest suburbs of Pittsburgh. There have been a steady stream of people going inside. You see them behind me. This polling site is interesting because the bottom floor is houses one district, the top floor, another. The bottom floor, that district actually went to President Biden by just 16 votes in 2020.

The top floor to Trump by 23 points. So just really a handful of votes that could make all the difference in this election. In Allegheny County specifically is a blue island surrounding. by counties that have trended more to the right in recent years. But this county, the officials here say mail-in ballots, the total turnout that they expect, they expect much higher numbers now, again, than in previous elections, even college campuses nearby reporting high turnout there as well. I always try to choose the best candidate possible.

And sometimes change is needed, good or bad, depending on what party you're in. But sometimes change is needed just to shake things up and, you know, keep things honest. So that's just one of the voters that I spoke to here. I have to tell you, after I spoke to him, he voted for Trump, but he did say that he tries to identify which candidate would work best for him based on the election. For example, he's not voting Republican all down ballot in every election. This time around, he voted for McCormick for Senate here, who is a Republican. In past elections, though, he supported Bob Casey.

He just said it's time for a change. He evaluates his candidates that way. I also heard from suburban women. This is a group of people that, of course, we've been watching here. One of them told me she's a lifelong Republican who started voting for Democrats once Trump came on the scene. She said this time around she voted up and down the ballot for Democrats, specifically on the issue of women's health and bodily autonomy. That's something that's important for her. Other voters said their biggest concern is the economy.

Immigration. We heard that all throughout the state. I was in Erie County a couple days ago, Montgomery County, the Philly suburbs a day later. So really getting a full picture of the state. But bottom line here is voters are showing up to the polls and they are casting. their ballots, participating in democracy, perhaps even for some of them, the first time they get to do that. Julia, I've got to say that I'm not sensing, I'm not seeing long lines behind you there. I'm seeing some voters sort of one trickling in and out. And so I guess, you know, I take your word for it, that the turnout is very heavy.

There have been no disruptions that you're aware of, no demonstrations that you're aware of. Certainly, it doesn't appear to be the case at the polling place outside of which you are standing. Yeah, no demonstrations, no protests here, not in any other polling site that I'm aware of in this county. We're keeping a close eye on all of them, but that doesn't mean that's not happening in other parts of Pennsylvania. And that doesn't mean that the county officials are not preparing for legal challenges, something that they've seen, of course, after the 2020 election, and especially in a state like PA, which is critical to Harris and Trump, whoever wins that at this state, many experts say they win the entire gambit. But as far as this polling location, they've actually seen steady lines of people. I mean, right now it is 2.30 in the afternoon, so you're not going to have as many people as you have before work or after work. This morning, a poll worker told my producer, Kate Santillies, that they saw lines of people down the block.

The parking lot was full. And again, we are in the suburbs. We're not even in downtown Pittsburgh, where, of course, the lines are going to be a lot longer at more densely concentrated area, especially with all those college kids around. Excellent point. Julie Serkin, thank you very much. We appreciate your time today. Hang in there. I've got a long day ahead of you, I'm sure, stay warm.

And meantime, Kel. Well, millions of Americans, like you said, continue to cast their ballots, although so many voted early as well, that's what's so interesting about the big turnout today. Investors are bracing for starkly different policies in trade taxes and investment strategies, depending on who becomes our next president. One of our next guest says the sector winders under Harris

will be the opposite under Trump. Joining us is Isaac Boltanski, Director of Policy Research at BTIG, and Tobin Marcus, head of U.S. policy and politics at Wolf. both can convince us and viewers, Isaac, that it actually matters or works to try to bet on the sectors you think will do well under presidents when often the results are quite contrary. Oh, I don't want to have to defend that, Kelly. I don't think that that's something that even Tobin would want to defend. I think that instead, all that we can try to do is provide a little

bit of clarity regarding process. And look, it's an uncomfortable fact, but no one knows who's going to show up to vote and no one knows what someone is going to choose to do with their ballot once they pull the curtain behind them. Instead, I think what we can try to do is talk through that separation of rhetoric and reality, right? And a lot of the things that we've seen from the campaign trail from both candidates are simply highly unlikely if they win the White House because of the composition of Congress and because of competing priorities. So it's gridlock then. I mean, this goes back to David Tepper. appearance on this network a month or two ago when he said he wasn't paying too much attention

to the election because some version of gridlock looked like the most likely answer, and then you can kind of ignore it. You know, look, for my side, I've made this point time and time again with clients, in nine out of the past ten presidential elections, if you look a year later, the stock market is up for an average gain of almost 20 percent. I think that's because the American economy can continue to grow and businesses can continue to grow and expand. And within that, there are going to be acute winners and losers. And we can dig into that because there are certain areas that are going to be better positioned for under a Trump presidency than a Harris presidency. But by and large, the American economy continues to grow and move forward.

We'll come back to your thoughts on which sectors might be favored under each scenario. But first, let's turn to that with Tobin Market. Tobin, what do you say here? You lean slightly toward a Trump victory here. And so what sectors would do best under Trump and which under Harris? So, sure. First all, just to follow in on the question about gridlock, I don't think it's necessarily the case that we're going to have gridlock in Congress.

I think there's been a lot of assumptions that even if Trump wins, they'll be facing a Democratic House. I don't think that's right. If Trump wins, my guess would be that he'll have a red sweep with the House going the same way as the White House. So I do think that there's a big bifurcation of outcomes between a very status quo-oriented set of outcomes under Harris with a Republican Senate or a lot more room for policy movement under Trump with a Republican trifecta. But I certainly agree with Isaac's point that both of those two outcomes are broadly tolerable. I don't think that markets are going to have some huge, you know, sort of market-wide sell-off if either Trump or Harris wins. But I do think that the sectoral implications are very, very different.

You know, if Trump wins, I think financials look like the clearest beneficiary, parts of managed care we think do well. in that scenario, traditional energy, probably a short-term winner. I think that's a more of a sentiment story than some of real fundamental economics behind it. And then risks, I think, for clean energy and tariffs, or for clean energy and tariff-exposed industrial and consumer names. And if Harris wins very much the opposite, you know, those clean energy risks come off, those tariff risks come off, and you don't see necessarily the same benefits in terms of antitrust and deregulation for the financial sector. Isaac, your thoughts? Look, I agree with all of those points.

I'd add a little bit more on the financial side. I think if Trump wins, we're going to be talking very seriously about getting Fannie and Freddie out of conservatorship after 16 years. I think that's a big theme that our folks are continued to focus on. On the Harris victory side, I think, of course, we can make the argument that green energy is going to be a beneficiary. But I would also say that there are areas where I think you're going to see. positive movement no matter who wins. And for example, there, I've been focused on things like manufactured housing. We have a housing supply crisis in this country. And I think no matter who wins, we're going to have a focus on housing, that focus is going to lead to more support for areas

like manufactured housing. So there are even areas that I think are winners under any scenario. Isaac, it always feels like election day is the only day I hear about private prisons in any four-year period. Do tell what has the performance of private prisons actually been like over the past four and eight years? Sure. So private prisons, CXW and Gio, we don't cover either one of those, but those are companies that we follow from the policy side. And they're volatile names, in part because they don't have as much of a wide ownership base, given some of the ESG concerns. But that's one that we've focused on with our clients in part because if Trump does win, I think that we're going to have enhanced border security.

both at the border and internally on the immigration side. And CXW and GEO are two companies that contract with ICE, and I think would be beneficiaries from that side. So that's why we've mentioned those in our Trump basket. They're up today as well in the two to four or five percent, kind of in keeping with the rest of that Trump trade that we're picking up on this afternoon. Tobin, last word to you. And you don't have to like or not like private prisons, by the way.

Sure. I mean, I think that is an area where I would focus on what the congressional constraints are going to be. You know, if we get a red sweep, there will be an opportunity to do some big things on a party line basis in a reconciliation bill. That's how I take care of taxes. I think that's why IRA risks need to be taken somewhat seriously. But there will be a lot of areas where bipartisanship is still required. We saw this with the demands for funding of Trump's wall during his first administration. Generally, year-by-year appropriations do need buy-in for both parties in Congress. So, you know, when it comes to what exactly are the risks in terms of immigration enforcement and mass deportation, I think that's somewhere where Trump's rhetoric is like the doubt case, what he's really able to accomplish. All right. Isaac Boltansky, Tobin Marcus, thank you very much. We appreciate your time today. Have a good remainder of Election Day, 2024.

Speaking of which, CNBC will have a live election coverage all night long with the results as they come in. And reaction from some of the biggest names in business, it all starts at 7 p.m. Eastern from the New York Stock Exchange. We'll have live coverage in the overnight hours as results pour in. Plus, we'll be watching Asian and European markets and futures. Then Squawk Box starts early at 5 a.m. tomorrow. Be sure to stay with us all night long. All righty, let's go to Pippa Stevens now for a CNBC news update. Hey, Pippa.

Hey, Tyler. Elon Musk will reportedly spend election night alongside former president Donald Trump. The New York Times reports the Tesla CEO plans to be at Mar-Lago tonight and will be among a small group watching the returns with Trump. Musk officially endorsed Trump back in July and has donated millions to his campaign. Capitol Police arrested a man today who brought a torch and flare gun to the building's visitor's center. They say he was stopped during screening and smelled like fuel. The visitor's center is closed for tours for the day as police investigate. And Amazon says it received regulatory approval today to begin flying a smaller, quieter version of its delivery drone.

Amazon first unveiled the MK30 in November. 2022. The approval includes permission to fly the drone over longer distances and beyond the visual sight line of pilots. The company is planning to ramp up the air deliveries in a city west of Phoenix. Tyler. I guess Pippa, if you show up at a federal site smelling of fuel, you're probably not going to get in. Yes, I think that is a fair bet. All right, Pip Stevens, thank you very much. Shares of Estera Lab, surging nearly 40% on blowout third quarter results, including a revenue gain of more than 200% year over year. The company makes chip-based connectivity products and counts NVIDIA among its clients. We'll highlight some more big movers of the day when power lunch returns.

Welcome back, lots of earnings and headline movers. Time now for a power check. First up, the card issuing platform Marquetta delivering a wider loss than expected. the stock falling nearly 40%. Deutsche Bank, Wells Fargo, UBS, all downgrading the stock on the report. Former High Flyer now under a $4 equity. Meanwhile, Palantir is absolutely surging, up 23% today on strong fourth quarter results. The company citing unrelenting AI demand, strong government contracts as well.

Mizuho analysts said the report showed very good upside, but valuation shouldn't be totally irrelevant. Tyler, this stock has tripled this year. Look at that. And now cryptocurrencies arising as investors. race for the election. Bitcoin reclaiming the $70,000 mark, just a little bit below it right now. Many view a Harris win as a threat to crypto. Trump, on the other hand, is seen by many as a good force for the industry. Elsewhere, Nintendo profits plunged 69%. They cut forecasts for sales of the switch. Demand for that seven-year-old flagship console is beginning to fade, and the shares

are showing it year-to-date. They're only up 4%. And finally, Morgan Stanley reiterating live nation as overweight, saying it remains the preferred exposure to strong consumer demand for live events and concerts. So LiveMation is up a little bit, year-to-date, up by 25%. And as stocks rise today, bond yields have been up being as well. The bond markets are waiting for the election for the Fed meeting for economic data out this morning that we also got. Let's check in with Rick Santelli. What do you think is the key driver here today, Rick? Well, you know, let's start right at the beginning. The trade balance. was a bit bigger, it was a deficit, that's not good news.

But whether it was S&P Global PMIs or the ISM PMIs, all regard to the service sector, were all above 50. What I really concentrated on was the services headline from the ISM group. At 56, that was the best since July of 22. So I would say that that is probably one of the key drivers. And as you look at an intradate chart, you can really see that big rocket chip upward and yield at 10 o'clock. yield at 10 o'clock Eastern when this data was released.

Now, if you look a little past that, you could see right around 1 o'clock Eastern, rates started to come down. That's because we had a very successful 10-year note auction. And I gave it a B as a boy in terms of demand. Tomorrow, we definitely finish up with $25 billion and 30-year bonds. We're hovering near the highest yield since early July. And one thing to note, supply around the globe is something to pay attention to. a very weak auction in the UK for their tens.

Put a lot of upward pressure here as well, Kelly, on interest rates. Back to you. A popery. Rick, thank you very much, Rick Santelli. There's still time to nominate a 2025 CNBC changemaker. The list recognizing women who transform business and philanthropy to apply or nominate a leader, go to CNBC.com slash changemakers or scan that QR code. You have until November 11th.

And we'll be right back. Welcome back and take a look at the performance of tech stocks, which have soared over the past two years while President Biden has been in office. I'm sorry, over the past four years, I should say. Energy has actually outperformed, though, up 109% during that period of time. Pippa Stevens here to break down what it means, Pippa. Yeah, so it's pretty surprising because oil and gas stocks actually did not do well under Trump, and then they were the top sector under President Biden more than doubling. And so, you know, it is a reminder that whoever is in the White House does not actually come. control the price of oil or the drilling activities. But it is still notable, and there are a few

key reasons why energy stocks have done so well under President Biden. The first is that they were coming off a very low base. Remember back in April of 2020, WTI turned negative for the first time on record. And then we started to see an uptick and growth coming out of the pandemic, which did boost demand for oil and petroleum products. Then as you see there, we also had Russia's invasion of Ukraine back in February of 2022, which sent prices, oil prices above $130. And then And then together with the war in the Middle East, it has kind of highlighted the importance of energy security. And then finally, these companies have really just created new business models. As Rob Thummel over at Tortus told me, they've now focused on returning money to shareholders, paying down debt, not growing at all costs.

And so now their dividends and their buybacks are starting to look very attractive. Now, the top performers, we have a full screen here, is actually Target Resources in the last four years. It's up 100. It's 400. Sorry, 462%. also marathon oil and marathon petroleum as well. There you see it. Also, Diamondback, ExxonMobil, some other names more than doubling. How have they done it when oil prices for the past, what? Year plus?

Year plus have been flat to down. Yeah, well, I mean, they've been smart about where they're growing. And so they're focused on their lowest cost production. They've also done a lot of things. I mean, these companies are so high tech in terms of their subsurface knowledge. figuring out how to get the most oil out of the ground for the lowest amount spent. Think about, you know, Exxon's acquisition of pioneer natural resources. With all of that continuous acreage, they can now drill four-mile laterals.

And so you're spending a lot less up front. And also, you know, they've figured out kind of what is the sweet spot in terms of where's our break-even, where can we support our dividends and buybacks. And because they have so much free cash flow now, they can cover that. And so it's a whole new value proposition. But people have said to the energy industry, you know, be careful. you wish for. You might want a president who has more liberal drilling rules, for instance. But if the price of the commodity falls as a result and the stocks are down as well, I mean,

this goes back to the shale boom. It was tremendous for kind of the existence of the crude commodity, but very, very bad for the companies. Yeah. And I think, you know, Exxon's Darren Woods told us earlier this week that he's not sure how drill baby drill translates into policy. Right. Exactly. We're into stock price performance. Pippa thanks. All righty. Still ahead. More ways to trade the election, no matter who wins, a special election-themed. Three-stock lunch is nice. Welcome back. It's time for a special Election Day edition of, you guessed it, three-stock lunch. Here with the trades and to do our honors, Michael Farr, High Tower Advisors, Chief Market Strategist,

a CNBC contribute and a D.C. resident or worker, right, Michael? I'm a D.C. native. A native. A fifth generation grew up in Washington. Yeah, and I went to high school about three blocks from the Capitol at Gonzaga College High School with the Jesuits down there. They tried to beat some sense into me over the years. I just wanted to lay that background as we welcome you here to close us out for the day. So let's move on to some of the trades that you think could be relevant as the votes come in. We've just talked about Chevron. Pippa Stevens just told us about energy stocks outperforming the past four years.

So which energy name you think would be a buy or a sell under the next administration? Why are you a buyer of Chevron? You know, I listened, and I thought that was a really good report. and I really like Tyler's question, too, about, geez, with the price of the commodity dropping, how have they made money? And Chevron has a lot of resources, and they have a lot of fields, and they have gas, and they have all. And they're only really, they haven't done very well this year, 13 times earnings with a four and a quarter percent dividend. If we get into a period of a revived kind of expansion, economy's been doing okay, energy prices tend to drift higher. So as things aren't cooling down in the Middle East, I think energy prices are probably due to perform pretty well.

For the longer term, let's go next four years. They've got a great balance sheet of Chevron. And if you're getting paid 4.5% in the dividend to wait while a commodity and diversifier for your portfolio does well, I think it makes sense. Well, let's move on, Michael, shall we, to Apple, Bank of America out with a new note today, reiterating its buy rating on that stock, despite the potential for new tariffs on imports from China under a potential Trump administration. Your trade on Apple and your outlook on technology more broadly, Michael. You know, again, I was listening to Mike Santelli. I was listening to Jason Trener.

Great. I love Jason Trener, by the way. And the idea that these huge mega-cap tech companies are going to continue to ride the wave, they're a little bit bulletproof. I don't think we've begun to really understand the full productivity from AI. I think that Apple was the one I was asked to talk about today is one that I own. I would add to it. But this is not really a trade.

This is a long-term kind of a core portfolio for me. I own it. We own it in firm portfolios. Up 16% year-to-date. Okay, trailed the index or the S&P right now. 11% grower. And again, 3.3 trillion. I think those tech continue to do well.

You know, but I think everything's off if we get a big red wave or blue wave. I know we've got to talk about another stock. Oh, yes, a couple more. Let's talk about Tesla because I'm curious if you're a seller of this one because of the election or just because, you know, of being Michael Far, but it's still in the green today. Even as we're seeing some strange behavior with shares of DJT, we'll get to that in a second. Tell me what you think about Tesla and Musk. I have to own by the numbers.

I go to my discipline because I can't be emotional. and it bothers me when I see Elon Musk as emotionally is. But look, this has an $816 billion market capitalization, Tesla. If you take Ford, GM, and Stalantis together, that's $141 billion in market cap. It dwarfs them. They sell $1.8 million versus $15 million cars for the other manufacturers. I don't see how you justify this price, this market cap and continued growth. You buy it today?

You think it's going higher? Why? I don't get it. So no. Sell it. Sell it, he says. Michael Farr. Thank you for joining us today. High Tower Advisors, Chief Market Strategist. And Tyler, we should mention, circle back to shares of DJT. What a story. They have been halted. Halted briefly for volatility. They were heading towards session highs. Then they gave those gains up, turned negative and by 4%.

That's the last print we see. I'm going to like the cardiogram there. Thanks for watching, Power Lone.