♪ ♪ ♪ welcome to power lunch everybody, alongside steve liesman, i am kelly evans. the dow making a record high today as the rally rolls on following the fed decision. mark it seemed to be acting as if the fed has thread the needle, steve, you would know better than anyone. controlling inflation and engineering staff landing. can stocks rally on until next year? >> plus we are going to look at on rent prices on real estate. and if we have hit peak rates,

but the market unfreeze? donna peoples joins us. >> first let's get a look at the market. and that tao hit the negative, that is gone positive 30 points or, so while the s&p is certainly to the red and the nasdaq down after those monster moves yesterday. >> let's look at the tenure now. we are down below 4% still, yes we are. 393. we had a little bump this morning, brought it back up towards four with the better retail sales. we will talk about that in a minute. and of course to share some intel, the company sets its ground in the chips for a.i. battles. we start with the record market rally following the fed decision. the major average is on pace for the six positive day in the row. and i guess we have to wonder, is the optimism going to continue into the new year, and what that could mean for the fed going forward. jason -- and glynn meade and bill -- chief economist at the milk institute. bill, thank you for joining us this morning. what about the fed, was it the

pivot that we all think it was, and was it too soon and too much? >> will steve, as you, know this was quite a pivot that surprised a lot of us picking that the fed was gonna be focusing still on inflation, and i think that the message from jerome powell is that he's pretty convinced that inflation is on a downward path and there's enough there they can shift from inflation bias to a more balanced dual objective then focus about the real economy. but i think that one reason for that is that the fed is always laser focused on what is happening for interest rates real interest rates have gotten quite high. if you look at the five-year majority, which is where most loans and borrowing is occurring, it's well over 2%, and as you know, in normal times, that real interest rate for that maturity is somewhere between three quarters and 1% and one and a half percent. and so i think we are well above that, and the fed i think is very concerned that they may be maintaining too long into tight and that may put a downward spin on the economy. and he said as much, we're not

putting rate cuts on the table, and by announcing, it it has dropped dramatically. and that is exactly what he is hoping to do. let the market do the work of lowering that real rate back to the more normalized levels, and then he can wait for when you can actually move it. >> jason, what is the probability of a concern that you may have that the markets have gone too far with this. powell did not promise a rose garden or a rate cut in march, but the market seems to be acting that way. if you look at the probabilities, it is up to near 80% or 90% for a rate cut in march, but he did not say march. >> yeah. i have to, admit i feel a little bit like the grinch sitting outside of who ville right now. i tend to agreed with what bill said, and they've taken rates really high to a point where it is damaging to the economy. they need to pull it back in, but there is such a distance to come in at this point in time, and i suspect that they're going to be looking over their

shoulders all along the way, saying that if we take it too far here in terms of cuts, we make another arthur burns like moment? that will be setting the back of their head. our suspicion is that there is a lot of pressure on the economy from higher rates and from tighter monetary policy conditions who have not found a way in, and they just cannot unwind fast enough truthfully in order to get where they want to get. they are trying to thread a needle here. this is difficult, in the markets are basically saying, you know what, it's done, we're good from here. >> jason, there is something that you're saying that i'm pondering. i feel like this is a very steve liesman thing to ponder. we've seen rates fall substantially, yes, that's supporting those. but to have a ten-year, call it 4%, call it three and a half if you want, is that still the cost of capital that you think companies will be comfortable with or choke on? >> they're going to feel a lot more comfortable about four than they are about five, but by our estimation, look, we are

near zero. i one point in time, where half percent on the ten-year. we're now adjusting to an environment of 3%. plus we think fair value in the short term is somewhere in the three, three and a half range. for longer, term somewhere around four. this is a big difference, and economies have not really -- the economy has not made a way to filter it through. we are still sitting on a lot of debt at lower rates that is going to be rolling off over the next couple of years that needs to be refinanced. >> i wear a little, bit kelly, that the market is acting like money is free again. it's not free, again and it's not going to be free again. but bill, i think there was a lot of pent-up demand, or that the idea that the fed could hike again, which now looks to be off the table, with something that held back investment in the equity market. there were a lot of people, bill, you are pretty happy for a few minutes there they were clipping treasury coupons and collecting four, 5% in money market funds. maybe they are not so happy today. when you think they ought to be

doing? are they still investing in treasuries? i guess as a risk asset, if you're trying to make quick money, it was a good thing, but maybe for the long term, it's a different story. >> as you see what's happening the market today, there is a lot of portfolio readjustment, right? people are saying, wow i need to do something with my money rather than sitting back and clipping coupons, and i think that is worth a lot of market rally. but now you see the market itself is rotating. it's rotating from one side to another, that magnificent 7 surge that we had is not being brought into other cyclical companies, and i think that is something that the fed really is less concerned with, as you know, the fed is really concerned with what happen in the big picture. the big picture right now is that the companies that we were worried about with financing, are they going to choke on this high cost of capital? well if the expected inflation rate is still slightly above 2%, and the pricing in the bond market shows that it's around two or two and a quarter percent, then at three and a half to 4%, the long term interest rates, that is a good

number for them to do financing with. one of the things -- the place that we will choke on these rates will be the government. because the government has to pay a very high interest rate, and that is where the bird is going to be. the government is going to suck in money that really should be going to -- >> jason, i think most days are not days to do any change in your portfolio. i think very few news thanks come along that really matter that much. i think yesterday might have been one of those days, and i'm just wondering how you are thinking about portfolios differently today. my take was that powell did what i thought he was going to do in january. he did it yesterday. so i thought that there was time. that time has gone away, and i'm wondering if you think there things and adjustment the people ought to be making because of those events yesterday? >> look, i tend to agree with you. we quite often like to keep our -- on the shoulder in terms of portfolios. quite often, it does not make sense to make shifts, but then sometimes the markets present

you with opportunities and do a little bit more. this is one of those where it just feels like the market has gotten a little bit ahead of itself, and even if you are looking in your portfolio back in time here, if you are positioned well about three months ago and you looked your portfolio today, the likelihood is that it is not positioned the way that you want to be today because of the magnitude of movement. that provides an opportunity to bring you back online, and that, from our perspective, is getting a little bit more concerned with a portfolios in recognition that the market seems to be just a hair ahead of itself at the minimum. >> quick question, i love your strategy involves bonds, but when you do after this move? >> 5%, i think bonds were pretty good deal that point in time. we're actually saying, unlike the equity market that was overvalued, bonds are actually undervalued. a 4%, we think that they're actually reasonably fairly valued. we have been pushing out a little bit on the yield curve and we kind of pause that a little bit and we're sitting at a pretty neutral duration exposure right now, because we think bonds properly reflect

the expectations for interest rates that are sitting out there. no one's expectations change, that map will change, but for right now, they are basically in line with fair value. >> bill, real quick, we have to go. when does the fed cut and by how much next year? >> if the market continues to lower long term rates, if they can delay, and i'm guessing that the delay until somewhere around mid year when they can actually do a large cut and be done with it before the elections. >> and how much next year? >> i'm guessing that they have to lower rates by about a percentage point. >> thanks guys, jason pride and william lee. >> that's how you do these training sessions. senior yield below -- low three 90 for the first time since august. rick santelli in chicago with more. dallas, what is the buzz, rick? what is a remake of this? what does everyone make of this? >> i think that the buzz is that the fed being done in the party began, and then the fed

pushing yesterday the notion that maybe they are not done, but by the end of the press conference, it certainly seems as though all of my sources had a major change of heart and were definitely and that fomo camp. it's all about fomo. so if you look at it today chart of twos and tends, you can see that right as the meeting was being announced, the statement was being announced at two eastern, what we saw was a drop of significant larger proportions on the short maturity in the two year versus the ten year. so you dropped about 30 basis points on the two, you talked about 23 basis points and of ten. why is that important? because if the short maturities are leading the way, the last guest says that he believes that danielle's will be closer to four and a four and a quarter percent. that would make sense if you interpolate where the two year is going to go with a fed that is going to ease nearly 100 basis points if that actually happens. you look at twos and tens

unanalyzed basis, and i always use the 30th of december. right now, twos are under that for 43 close. ten years are just a bit over it. they close at three 88, and the dollar index? they close at 10 3:52 on the 30th of december, which means that on the year that it's down a smidge less than 2%, but get this. on the week thus far, it is down over 2%. so what is going on? there is a lot of fomo and a lot of things that have to work out picture perfect with regard to the fed, but doves rule, so baby, the fomo is on the right course. steve? >> rick, i want to follow up on this, because you and i talk to different people. i talk more the managers, and you talk to the traders, and we can debate into cut out about who is smarter. i have a lot of respect obviously for the guys that you talk to. everybody that i talked to over the course of this year has in short duration relative to the index, and that is part of the whole fomo thing, and i think

even today, they are short duration relative to the index, which if you want to translate that into english, it means that they did not own enough tenure, 20, year and 30 year paper. is that still the case, rick? and does it create potentially more gains to come on the other end of the curve? >> you are right on it. i think an easier way to look at it is the yield curve tends. and of course we're looking at selling the twos and buying that tens. that trade is reversing, and i think that a good chunk of the phenomenal quick drop from a one touch of 5% to under 4% was driven by the liquidation that you are alluding to. but i think that is almost done. as a matter of fact, i think many traders are starting to go the other way. -- on the santa claus equity side is almost wagging the dog on the treasury side. >> we have to come back to, this rick, because the trade is equivalent to rocky road ice

cream being a flavor of the month. everybody is in it. it's not quite paid off yet, but people are still in it. we will come back. >> one more thing, real quick. one more thing, steve. the other thing people talking about on the floor is the most recent group of governors that are put on the fomc committee are doves, and elizabeth warren side of the equation, yes, they basically powell is going to continue to get outvoted, and the politics is going to win. maybe not politics directly tied to the fed, but it is an election year, and there are many in congress who do not want to see rates up at current fed levels. >> that is another discussion. the board for next year and whether or not how it was leading, and i'm hearing a little bit of both on both sides. thank you very much, rick. one more piece of economic news this morning. retail sales beating expectations today coming in at 0.3. we're looking for a negative number, but look at retail x auto and gas. it was even stronger, 0.5 6%,

that the consumer gradually exaggerated. but i want to point, out it's very close to the cnbc in art f -- affinity solutions. we are that data on monday, october, it came in at 0.08, it was also within two tenths of the government's number, which was revised down closer to our number, and you can see that the governments point 77 -- we were 0.7, seven government came in at zero point 56. when i was going to be that close. the gaps could be wider than others, especially because our data should in that closer to the revised census data because it's not estimated data. but it's a good start for retail data that we are really proud of. >> liesman, i don't know if you got diverse embarked last hour, but he was talking about some of his steadfast baroness, he doesn't even believe the government data half the time. so is another data point they can at least tell us what is going on. >> it's going to flatter the -- reports. >> important to note. and by the way, tomorrow morning's squawk box, 8:30 a.m., you and --

>> john williams. just to be clear, this was planned six months of advance. they are not ruling out john williams as some kind of emergency redirect on yesterday. we plan these things. we have done it for many years. john this down with us at the end of the year. >> it does not mean that if he wants to seize the opportunity -- >> to redirect? or otherwise give us more information? you are correct. >> looking forward to that. >> coming up, wall street salt right alternative. nikki haley and support as a pro business alternative to trump. what is your economic policy? plus, a real state power player. we speak to don peebles about the state of commercial real estate, and the dow is up 59.

welcome back. wall street always wants what's best for wall street. that goes for everything, especially the presidential election, as someone says gridlock is good, others say, could nikki nikki haley is good for investors? mj evers is here to explore that option. amen? >> wall street is in the middle of a major through an often nikki haley, and it's really easy to understand why that is. as a gop presidential candidate, the former south carolina governor offers a mix of traditional republican tax and spending policies that wall street journal loves. kelly rolled out her economic plan back in september, pledging to eliminate the federal gas tax and offer

permanent small business tax relief. she would eliminate the state and local tax deduction, which could cause some banks though tour supporters in the northeast were taxpayers benefit the most from that provision. she also says that she would cut income tax rates. nikki haley criticizes both joe biden and donald trump for when you have the federal deficit and says that she would link federal spending to a percentage of the overall u.s. economy. she would also eliminate biden's green energy subsidies and says she would withhold congress is pay if it fails to pass the budget, although it is a little bit hard to see how she would get congress itself to go along with that one. haley also says that she would cut resignations by requiring congressional approval for any federal role with an economic impact of $100 million or more. now a least critics say that although she denounces corporate welfare now on the campaign trail, as governor, she lavish subsidies and tax cuts on companies such as boeing, although, in bmw in a effort to bring them to south

carolina. and simply offering more goodies to lower jobs away from georgia does nothing to move the needle on jobs nationwide and could cause workers pay cuts while placing a burden on taxpayers. back over to. you >> eamon, tell us how nikki haley is stacking up against the polls say with former president trump and against president biden. >> well, look what is interesting is that she's actually pulling better against joe biden than donald trump's, but everybody in this field is getting absolutely creamed on the republican side by donald trump. don't trump is running away with this in these very early polls, and we should, say these polls are very early. we are while now before any meaningful contests actually happen. all of these candidates, including nikki haley, have a lot of duty to do to get the sails out of the hole that they are in. but republicans who are looking for electability and a candidate might look at nikki haley because i had taken

against joe biden, she pulls better and most of the polls that i've seen. >> we're not that far. we're a month from iowa. eamon sounds like he has what i have, by the way. >> i had to. >> it's going around. it somehow got down to the d.c. bureau. >> go ahead, steve. >> eamon i was at a dinner with a bunch of executives and they were all really excited about nikki haley. i just wonder the extent to which this is a sort of either elite wall street, maybe a least washington phenomenon that is not, does not have a presence or staying power at the grassroots level on the republicans? >> yeah, look. you look at the people on our air who are endorsing nikki haley, it's people like jamie diamond who is a democrat saying the democrats on wall street should earn money. you see that the billionaires other endorsing nikki haley. the question is whether that can translate into real support among people who actually vote in the caucus in the primaries

coming up in 24. so far, we have not seen any evidence of that in the polls, and one of the big questions here is, are all of these candidates were money at some trump right now on the republican side sort of therefore the, in case of emergency, break glass moment. where if donald trump's legal troubles get the better of him, and he has to drop out of the race for one reason or another, they then become viable candidates. looking at the polling now, they are really not viable now, but this is a situation that we just have not seen before with a candidate running at the top of the field facing the scale of -- legal jeopardy trump. does >> do me a favor, eamon, but i mean email about how she pays for roads by getting rid of the gas tax. we will get to that one next. eamon, thank you very much. after the break, a post covid moderna. moderna? what is the future of the drugmaker for vaccines. we will talk about that next if cageth pnui n t atronciation right!

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development. >> yeah steve, moderna and mark are saying that they're expensive experimental vaccine to cut the risk of recurrence of death for melatonin by 49% after three years. this vaccine is tailor made for each person to recognize attack their cancer. the idea here is that by combining the vaccine with a powerful council drug keytruda that will keep the cancer coming back after it's been surgically removed. these results are the latest updates from the face to study and they're even better than what is been previously shared. now moderna thinks that regulators might be open to improving the combination based on this data but analysts are not convinced that is possible. i reached out to merck. they're starting much more conservative, saying they focus on the phase three trials that recently got underway. so you will have to see exactly how possible that is. >> a little bit of a company split there. maybe moderna just has more to lose, or obviously less robust of a pipeline. the shares are up almost -- on the news day. >> yeah, and it's interesting,

because like we saw yesterday with pfizer, investors are so focused on what is next for these covid heroes. they sought such highs over the past year, and especially for a company like moderna. any piece of -- can really move this stop. so when a person move today is really not all that uncommon for modern of these days. >> how quickly in a normal track with this come to market if the phase three trials are coming out. well >> the moderna ceo -- was on squawk box this morning, and they said that the normal timeline if they waited for the phase three trial would be about 2028, but they are thinking that if they can get to the market sooner, more like 2025, and that's a pretty big different, three years. >> that's a huge improvement on outcomes for a disease that, i know i've lost some people to that disease, and it would be really quite remarkable if it was developed. thank, you angelica. >> angelica peebles. let's get to contestableness

for the cnbc update. contessa? -- -- the large scale grounded asian to a more targeted operation in the near future. international pressure is of course mounting right now for israel to do more to protect civilians and gaza. the jury in really giuliani's civil defamation trial is deliberating right now. they will decide how much the former new york city mayor and donald trump ally will have to pay in damages for two election workers, the mother and daughter at the center of the case are seeking at least $24 million each. they say that they suffered reputational damage when giuliani beastly falsely claimed they committed fraud in the 2020 election. a spokesperson for the late emmy award winning actor andre row or confirmed today that he died of lung cancer just a few

months after being diagnosed. he was best known for his roles on nbc's homicide, life on the street, and brooklyn 19. he died monday. he was 61 years old. >> speaking of the deadliness of these diseases, contessa, thank you very much contestable. where as we head to break, let's get a quick power check, with solar edge up 15% today on a boost most likely with the fed moving forward in a lower rate environment. on the negative side, arthur jay gallagher down 7%. the insurance broker having it's worth drop since april of 2022. power lunch will be right back. i could use a little help. yeah, there's a lot of risk out there. huh ♪♪ hey, is this thing hard to learn? nah, it's easy. huh. you know, i think i'm going to ride it home. good thing you chose u.s. bank to manage and grow your money. with our 24/7 support at least you're not taking chances with your finances. yeah, i think i'm gonna need a chair.

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lunch. 2023 is been a tough year for commercial real estate office in particular, as high interest rates and credit hit sectors. seeing the biggest data with castle data showing half of workers are still being remote, and my next guest expects this trend to continue next, year causing lenders to sell properties at steep discounts. joining us for more in an exclusive interview is don peebles, billionaire real estate developer, ceo and share of the peebles court. don, it's great to have you here, not least because your team goes against the tone of markets ever since the fed

meeting yesterday. >> yeah, i mean, look, i'm optimistic in the long run, but i think right now what has happened is that interest rates aren't affecting this. it's how people. work people of change how they work. they're working remotely. if you look at the best pay new york city, it is a 60% occupancy rate in office space, and that is on tuesday. that is the best yet, but overall on average, it's average about 50%. >> i find wednesday personally is the hardest navigate out there on the roads. i think so bad that you are a buyer yet? >> not yet. what's happening right now is that equity and -- that has been wiped out, and all the properties are on the way back to the lenders, and the lenders, the senior lenders are going to be in pretty decent shape because they never levered up. they did loans at 60%, 65% loan value, and so therefore i think that they will be okay, and so they will rush to share these assets out. i think what's going to happen

now, and we're seeing more and more, we just saw this on a property from san francisco the other day. you can see much more of that, in the lenders are going to sell those assets. that happened in 2024 and throughout 2024, that will be the commercial real estate story, is more and more assets are given back to the lenders. >> don, how was your stuff? >> well look, we are a development firm, and so normally we develop and we sell, rarely hold, and so we are doing well. we see opportunities. we're now in the buying zone. i mean, we are an opportunistic company, and so we look for opportunities when the markets not functioning well, and we are actually raising capital now for a new investment vehicle, which will be a by commercial office building in the hardest cities that are also under supplied in housing. if you look at new york city, if you look at san francisco, if you look at los angeles, they're all really underserved in terms of housing. and so there is some conversion

opportunities that we see as well, and i think also there is going to be a change in how people go to work, and there will be more of a deferred workforce. so you have dispersed office in employment centers which will be where people want to live. >> so you stayed away from this stuff in the crazy low cap years. that makes you smarter than most people out there on this, because people were going crazy for the stuff, getting down these kept rates to places where if there was a 1% interest rate, it didn't work, let alone 5%. so here's my question. what discount is enough for you? i remember when my mother was shopping in mexico and the guy said $100 for the ring, she said $1. what are you saying? >> i'm saying, look, first of all, i don't think that i am smarter. i was probably greedy, i just can't wait to see how we could make a lot of money buying at 3%, 4% cap rates in the zero rate environment. and so i think that when we see

office buildings drop 40%, 50% of what they sold for or what their values were, 2019, 2018, that is where we are looking, and we are looking for -- some buildings are permanently destroyed. they need to be demolished. and so we will look at some of those, but our focus is going to be at those 50% discount areas. land is going to down significantly as well, because there's not going to be as many alternative uses, and so we're beginning to buy land as well. >> but is this conversion story a bit of a, i don't recall, it a bubble mines or so to speak? everybody talking about conversion. i have to think that it is hugely capital intensive, hugely debt intensive, and the payoff may or may not be there. >> yeah, you know, it is almost like fools gold. there are some buildings, and i would say -- we are trying to figure this out in our company now, but i think we feel that around 20% of the commercial office inventory as a whole has

potential to make a good conversion. and then a little bit less than that in terms of a very efficient and cost-effective conversion. and so it will be a solution for some of these buildings, but many of these buildings will need to be demolished and rebuilt, and so i don't think that that is a panacea to solve the commercial real estate prices that we are going to see next year. >> i'm just trying to make sense. the white books behind, you you are always on the forefront of trends, don! now you have to think, they like ghost books there. so let me say, so you mentioned this a while ago, but the feds latest beige book survey was somewhat downbeat about how a lot of the regional economies are doing lately, and you are also in a lot of different cities, and once you've been quite positive about, outside of new york and washington in d.c.. do you see any slow down or change in that taking place? how would you describe some of these markets. everything from charlotte to some of the other places we've talked about, florida obviously

has been very ballast bearish, raleigh, richmond, nashville? >> the question by the way. by the, way another trendsetter with wallpaper. >> it's wallpaper. >> it's not even, books it's wallpaper, but 3d wallpaper. so she thinks ahead and has great trans. >> let's get her on sometimes. >> she is great. >> she's a very talented designer. and of course a wonderful life. but on the trend side, i think that all cities are not the same. new york city is going to have difficult years ahead. it is a employment center for the financial services industry and other major industries. those industries are being dispersed now. so what we are going to see now it's cities like miami. i mean, we want to build several office buildings in miami because miami is severely underserved when it comes to office spaces. that is one of the things that will slow miami's growth down is the lack of office space to

place employees who want to move to miami when companies want to move here. you look at west palm beach. i think steve ross is doing a great job making west palm beach america's hottest small town. jeff green is doing a massive misused development there, and so there's going to be a lot of new development in west palm for commercial office space in apartments, which will attract companies and workers. goldman sachs is already moving 3 to 400 employees there as well. you are going to see charlotte, north carolina continue have wind in its sails because affordability of living is becoming an emerging life science environment, and you've got it as the second largest banking center. so i think they're going to do well. i mean, texas, dallas, fort worth, austin still going to be very strong, and houston is going to continue to pick up some steam the places where people want to live and where there business-friendly, that is where you are going to see

the growth i, mean there are too many options now for companies, and to many options for developers to go to places where they make it incredibly difficult. i, mean los angeles, california 's and absurdly difficult place to do business and to build buildings. that is why they have a shortage of housing, and one of the highest runoffs ever but any city in the country. >> don, i have to ask you a first question, because my life is difficult when i come across systemic risk. i need to ask you what my years going to be like next year. i hope we don't have a lot of time, but i have to ask, you is that going to be a meltdown, or is this system address in the system from -- incapable of refinancing and walking away and the pressure on the banking system, where do you think that the market finds its way through it? >> i think the market finds its way through it. i think that those that are interest rate driven, the problems that they are having right now, like apartment buildings that are fundamentally sound, an incredible step and to help solve the problem. the mark is going to be very

efficient. private credit is going to be a very big deal in 2024. i think that the office building crises are not as much driven by interest rates, because just fundamentals. covid changed the fundamentals in cities. i, mean there is no reason to be in new york city, they observe amounts of property taxes, have to pay your employees absurd amounts of money, and they can barely make a living when they're all -- there are alternatives. so new york what to reinvent itself, which it can and will and has done in the past, but i do not see the risk as being a systemic risk. i think the market will work its way through this and the banks are not over leveraging. i think that is a very important thing. these loans are 52 -- percent. >> don, i'm not gonna cancellations next year. thank you for joining, us don peebles. >> appreciate. it >> coming up, shares of adobe falling in 2024. we will get the key details ahead on tech check when power lunch returns.

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nvidia is the clear leader in ships for a.i., and amd making its case as well. today we're learning about intel's hopes in this space. kristina partsinevelos talking to the ceo at guilty or. kristina? >> thanks, steve. it's about being first to market with a.i. pcs, and those are the ones that you're seeing right behind me. intel promises to sell about 100 million units by 2025. i caught up with a ceo patrick gelsinger for a 11 this morning, and he is adamant that the apc chip with revitalize the pc market, especially as company start to refresh the cycles next year. for those who don't, know an a.i. pc runs and i applications like microsoft copilot, locally on the laptop. without necessarily the use of cloud so deals with the battery life, et cetera. but gelsinger did admit to me that it will quote, take a couple of years to dry that shift.

so does the market really care about a.i. pcs right now? let's take a look at entails stop. we did see it initially jump when the embargo was lifted around 10 am eastern this morning when intel was already shipping a ipc chip, a central processing unit, a product they hope will help them stop losing market share to amd. and then lastly, 80s, let's say, to their hotly anticipated chip that you're seeing on the screen. it is an a.i. chip used for training large language models, which competes with amd nvidia. but on stage, gelsinger only showed the a.i. chip. didn't have any financial updates only for the news on it. so investors took that as a lack of news around the a.i. chip when they sold the stock off, which is only up 1.5%. earlier today it was up 5%. and so the takeaway though from my conversation with gelsinger is that this is a volume game. get the product, whether it be pca, or the new central processing unit, out to mark it as quickly as possible so that they can capitalize on you

because branding and get there before the competition. >> christina, thanks very much. christina, complicated story. she explained over phrases and there. >> exactly, indeed, kristina partsinevelos. meanwhile, shares of adobe are shrinks -- and let's get dirigibles on what this tells us about tech in 2024 for today's tech track. deirdre? >> not everything is risk, there might be some signs of stress building in certain areas of tech. adobe -- two -- in the early season. it's important because they have more information for their outlooks, but early on in the early season, and the both cases, they disappointed. let me run through adobe first. all of the stuff that investors could worry about was wrapped up in this one report. a disappointing outlook, lower than expected a.i. regulatory scrutiny, and its position was announced more than a year ago, and that is still making its way through the doj, and now there is a separate investigation from the ftc. this is really part of a

broader story that we've been telling over the last few months. a more aggressive, more nimble group of regulators that are only ramping up scrutiny attack. then there is oracle shares, down more than 10% this week. its earnings point to slowing sequential growth and its cloud business, and that raises some questions about a software comeback but some analysts nbc's have really started to talk about. it was also a reality check coming after -- raises from other smaller names, and a reminder that the club story, it is not and the clear yet. remember back to google, that was a few months ago, now where we have missed estimates on its cloud business, and amazon, which provided some hope of bottoming, of a.w.s. growth, but it could not explicitly say that it was the bottom. and so the cloud growth is weak, guys, that could signal weaker in a price spending an economic uncertainty. that, said these moves, they are contained. they are not really impacting the broader software and cloud universe, yet at least the story for now of course protect is that rates and lower yields

help the rotation into high growth speculative names. we talked about that yesterday. mega caps, the taking a bit of a breather. so i'm just saying guys, adobe and oracle, they could be something to keep an eye on, not to spoil the party, but just to say that we are not all in the clear, perhaps. >> no, we're not. deirdre, thank you. deirdre bosa, we appreciated. and the debate was an interesting contrast. still ahead, goldilocks meets the federal reserve in three stop lunch. we will trade a name to see if it starts -- one if it in a name that is just right no matter how 2024 plays out and power luh ba itwncis (sfx: stone wheel crafting) ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf

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welcome back. time for three stock lunch. one stock is the what you want to own it they start cutting next year. one if affiliate rates here for a while and one to own the matter what the fed does. here is the founder and president of jewel financial. no santa. we do see a stocking. let's get to it starting with

cleveland cliffs. up about 4% today. 20% on the year. this is the one you want to own if they start cutting early next year. is that right? >> that's right. come into the economic classroom for this. if there cutting their increasing the money supply in devaluing the doctor. look to the materials. that's why areas are gangbusters today. cleveland-cliffs is our name. we have forward estimates of $1.64, which is 12 times forward earnings. that growth would be 40% so it's super cheap. date is $650 million in free cash flow. the stock is going higher from here. >> the next one is crowdstrike up nearly 140% this year. you say this is one to own if the fed leaves rates here for a while you've got to make a good case to make me buy a stock up 140%.

>> i think it's going higher. this is hard because it's hard to find an area of the market that's not correlated to interest rates or inflation. we go into the cybersecurity area and our favorite here is crowdstrike not only up 140 year but up $170 off a low. i don't think you chase it at the game plan is we will see a pullback in things that have been super hot as we see rotation into names like cleveland-clips pick this is a company that is obviously turning profitable and selling at a high multiple, but we do not believe the forward growth is factored in. strong balance sheet with $3 billion in cash. give it a pullback to the 230, 235 range and then this is a stock you can add if the fed especially stays put. >> speaking of ignoring them entire you think amd is a stock to own to just ignore them.

you shrug your shoulders and go about your business. it's already doubled this year. you think it keeps going? >> i do. and today is more of that rotation we see. knee-jerk reaction trying to get into names that have been beaten up. this is a name we feel is not pricing and. fundamentals not pricing in yet. the new a.i. chip you guys were talking about. 40 times forward it's rich but those earnings estimates are projected to be growing at about 40%. if you do factor in the a.i. chip growth, this stock becomes pretty cheap. no dead. 's billion dollars in cash? still 20% off highs and we think it's going there early in the year. >> out of the gate and off to the races. thank you. >> probably true that it will have spyware and software and adware and all that security stuff whatever the fed does with interest rates. more "power lunch" coming

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welcome back. 1:45 left in the show and we will squeeze those headlights and starting with the drama at disney. nominating its own ceo to the board pick the latest salvo in its proxy fight against the company. disney defended its current

board saying it's experienced, diverse and highly qualified and went on to say that governance will review the nominations and provide their own recommendations to the board. a study from the pew research center found a third of u.s. teenagers say they almost constantly use at least one of the top apps on social media including your tub, tiktok and instagram. i think you could probably go up the gate scale on that to something like twitter and facebook. >> i think this decade is about kids pushback among social media. >> are you pushing back? >> was the pushback? >> were already starting with the stop touching mommy's phone. >> we have a role where no cell phones for the kids until they are 11. >> this year's corporate holiday parties are likely to be in a break room then a ballroom. companies battle inflation rates

in the state of events and are responding by taking a low-key approach to holiday and other celebration and some people have party fatigue. >> 55% say they will skip the holiday company party. >> did you go to the one? >> reporter: was there a party? >> it's here and it's now and it's happening. take you for joining us. >> see you tomorrow. >> "closing bell" starts right now. welcome to "closing bell". i'm scott wapner. make or break our begins with the dow record high and whether the s&p is next to make history following the fed pitted. will ask our experts how far stocks can run. in the meantime your scorecard was 60 minutes to go in regulation looks like this. stocks picking up where they left off following chair powell's presser. energy financials among the best sectors. investors looking outside of mega tech. looking at the russell 200