yields are coming down and there's opportunity there. >> i've got 20 seconds. you got a super bowl pick? >> lemar jackson, one of the hardest individuals in the world to stop. healy lamar ackson, let's go, ltimore ravens. there's your super bowl pick. i'll see you on "closing bell." we're green across the board. 75oints r the w. see yoin a b. ♪ ♪ thank you very much, scott. i will respectfully disagree with brandon copeland and go with my niners for the super bowl champion. i'm dominic chu, in for kelly evans today on "the exchange." rate cuts are coming and coming fast. that's been the theme out there on wall street so far this week, and quite sometime. but one of our next guests sees it differently. he doesn't see any rate cut until the fourth quarter of next year. he sees a significant slowdown ahead for the economy, and given what we just heard from fedex, could he be right?

he's here to make the case coming up. the office sector has been hit harder by higher rates, but it's also been given a rare opportunity. he joins us with what he means by that and now to take advantage of it. and positioning for the new year, our market guest is looking for opportunities. she tells us where and what she's buying with those themes. but first, we begin with the markets right now, which are just about near their session highs right now. at some point today, we did see the dow hit a record intraday high level. the s&p 500 and the nasdaq both hit one-year plus high levels. currently, you can see the dow industrials up about 0.2 of 1%. the s&p 500 up roughly the same amount. and a 1/3 gain for the nasdaq. as for the ten-year yield, it's still below 4%. at one point today, got to 3.87%. currently 3.892%. if you look at it in terms of

rates, it's one way professionals do. but if you look at it in terms of price appreciation that coincides with the rate move lower that we have seen, take a look at the tlt. this is the longer term treasury bond etf. if you look at that chart and that last half of that chart from the lows that we saw back in october, to what you see today, that move higher for a u.s. government bond fund is up 21% just since october 23rd. so what you are talking about when rates go from say 5% to 3.89% is a 20% return on some long-term u.s. government bonds, stock-like returns for the equity markets translated into bonds. and check out what's happening with fedex. it's down about 11%. it's been holding near that level since the opening bell. this on disappointing quarterly numbers from earnings and

profits. he lowered their revenue guidance for the full year. they see at least some demand slowdown. could that be an economic bellwether type theme we see later on? new data today throwing cold water on expectations or aggressive rate cuts next year. consumer confidence is surging in december with the expectations index, which measures consumers' shorter term outlook for income, labor market conditions. it's soring to 85.6%, a level we haven't seen since july. existing home sales also rose unexpectedly, rebounding from five straight months of declines. so our next guest says the economy still has momentum and doesn't expect any rate cuts until the fourth quarter of next year. joining us now is steven stanley, the chief u.s. economist over at u.s. capital markets. and reporter ste liesm is with us, as well. i often do, we have two steves, so i'll try to keep it

as plain and clear as possible. steve liesman, can you please lay out the general story for us with regard to the rate picture that we are seeing, and some of the late-breaking commentary from certain fed officials about what the outlook for the economy is? >> sure enough, dom. so there's two different tales of the market here, or the outlook for ferates. the first one is the one the fed gave us, which is an average of three rate cuts next year. none of it promised, all of it an average forecast, where they're going to look at things as they go along. the other one, thoug is the one in the market. this is really quite dra mattek. take a look here at the futures market outlook. you can see that they have six rate cuts built in. you know the story, give them an inch, they'll take a mile. give them a rate cut and they will take six. almost every meeting, maybe one doesn't, has a rate cut. there's the probabilities right there.

the other chart we have has the futures market priced each meetg, or just about after each meeting. there it is. we go all the way down, count it up, dom, 3.85. we have harker on the tape saying he doesn't think the fed is going to cut soon but the fed is -- i want to hear steve's idea, because i have some disagreements and some agreements. so i'm interested in his outlook. >> that's perfect. steven stanley, some of the commentsrom harker with regard to the state of the u.s.conomy and expectations for fedate policy next year, is there a scenario where we do see more of a market slowdown in the u.s. economy in the coming year, contrary to the data that we have seen so far in the last several nths? >> certainly it's possible. i think the consumer is going to

cool off over the course of 2024, but as you mentioned, i feel like the economy has a good amount of momentum currently. we had a 5% gdp quarter in q3, and it looks like q4 is shaping up healthy, as well. so i think the economy will do okay next year, but it's going toe losing steam as the year progresses. once the economy gets to a slow rate of growth, it takes a lot less to knock it over. so if there's shock thatits the economy at some point next ye at a point where growth was already pretty weak, there is your recession scenario. >> so steven, i'm going to hold you up right there, because we're going to throw it out there to rick santelli in chicag because 20-year bonds are up for auction. and rick is tracking the action from out there. we're curious, because this is where the rubber meets the road. we're reporting a price tag on all of these growth and macro expectations. what happened with the auction? >> it was not a pretty auction,

dom. but we want to putn asterisks on two issues. very volatile, meaning prices s were running up and yields were falling. the last 20 minutes rather aggressily. the second thing is, individual auctionswhether they go great or horrible,oesn't affect the markets on a day-to-day basis. it's more of a macro issue. on this one, d as in dog. 13 billion reopened 20s adding to an issue we opened for the first offing one month ago. so it's a 19-year, 11-month security. the yield on those is 4.213%. at was much higher than the one ise market. but just to tell you, in the last five minutes of the one-issumarket, it went down to 4.19. very volatile. it made this auction almost impossible to turn out well, but it tailed. the bid to cover was the lowest

since march of '23. the direct bidders was the only upside to this auction. best since september. not that long ago. the dealers, and this is what really give it the negative gre along with pricing, dom. the dealers took almost 13% of the auction, the most they have taken of a 20-year since october of '22. you e the intraday chart. that shouldn't be your only metric to gauge an auction, but yields are moving up, price moving down. this is basically on pace, or it wa for the lowest yield close going back aut five months to the end of july. we want to continue to monitor all easury securities and securities in europe. many securities around the globe are moving into the same patterns, because their central banks and inflationary outlooks are similar, even though they're not exactly matching up, they do rhyme. this is a one-off auction, and

we are not going to see other auctions until we come back for dom, back to you. >> rick, if i can follow up with regard to the demand mentioned o take down a much larger chunk of the offering than on average. we have seen rates come down marketedly on the longer end of the yield kucurve. is there sense right now that the rates have now got on the a point where, because there's been smuch bidding up, that maybe they just aren't as attrtive right now? >> you know, the argent seems to be, depending on whh part of the curve you are looking at. when it comes to a two-yr note at 4.40, many traders think there's some room to run there. when they look at longer data treary issues, like a 30-year below 4%, they believe en-year

long-dated treasury yields are too low, and the opportunity t get long doesn't seem to mak financial sense. it's more of a yield kufcurve perspective, dom. >> thank you very much for that. let's get back to steven snley and steve liesman. you heard the grade he gave. i wonder if you can translate for us the action that you have seen with regard to the u.s. government bond market face-to-face vis-a-v with what you are seeing right now with the onomic pictu and forecast that you have. is it safe to say the markets are very aggressive with regard to first half of the year interest rate cuts given what we have seen so far from data and the bond marke >> yeah, i totally agree with that. as steve laid out, the markets are assuming a very quick turn with easing coming as soon as march. it's interesting, though. if you look at the financial markets if their totality, we've had a huge rally in treasues.

but at the same time, risk marks have done very well. the stock market has done very well. risk spreads are narrowing. so it feels like the financial markets are nearly euphoric. they are expecting the perfect world which the economy does okay, but the d is still cutting rates aggressively. >> steven, there's also one other point here, as well. what we have seen in equity markets over the course ofhe last several weeks is this massive move higher, this catchup trade, if you will, in small cap u.s. equities. arguably some of the more rate sensitive parts of t economy, because they tend not to do as well when the broader economic story isot as good. when there's so much optimism in a part of the market that is so susceptible to the macro narrative in the u.s. economy. >> again, it's telling you that the rally in interest rates isn't so much because investors think 're going to get a recession. what this is really hinging on,

i think, is a ntinuation of the steep moderation that we have sn in inflation over the next few months. you know, i n't want to be the party pooper here, but i'm skeptical that inflation is going to come down as fast as it has over the past few months. so something has to giveeither on the rate side or the risk maet side. >> steve liesman, we'll give you the final word here. what is the most important thing on your radar in the next three to four weekfor the u.s. economic calendar, and/or microeconomic company calendar? >> three things i'm watching for. the first is inflation, the second is inflation, and the third is ilation. those are the three things that will determine whether or not steven stanley is ght and this trajectory of lower inflation continues. it's not just one month's worth of data. we get a big number on friday, but we have to watch several months worth of data. this is where i disagree a little bit with this idea that

if we have several months, say j january, february, march. march is a stretch for the fed to cut. but say april comes in with a define numr, the fed could shave a quarter point off of it. the other thing that is interesting to me is this -- one of the things that was unremarked in powell's press conference was this pivot that had to do with his outlook on how inflation comes down. he has, for a very long time, called f the need for the onomy to run below potential to bring inflation down. i thought he backed off during the press conference. the idea that we can have low inflation in part because of supply chain restoration, whatever else is going on or the fed adding to that with its restrictiveness, that means th -- that's where the brilliant steven stanley would be wrong, that woe could have

stronger growth and low inflatn at the same time. and you wouldn't necessarily have to haveomething give. i know that that's in part a leap of faith. it's aut like saying to somebody to a pilot that hey, at a thousand feet or 500 feet, cut the engines and you'll land. the idea that there is no sacrifice between high inflation and lower growth is mething that most economists, en any economist would tell you is wrong, but it may be that this time it seems to be what we have had so far. i'm kind of hopeful that's what we have next year. >> a conversation rages on. steven stanley, thank you very much steve liesman, as well. we'll see you guys soon. now to the office space indust, which has been hit hard by a trifec of higher rates, also remote work and tighter lending standards, as well. but our next guest says the sector has been given a rare opportunity, and he's bullish on three names in particular fr here. let's bring in alexander

goldfarb, senior reits analyst at piper sandler. thank you very much. you have been listening to the conversati we just had about the rates picture and the economic -- these macro side of things. the office story has been hit for fundamentally good reasons, because there are so many things that are head winds right now. but when can you call a bottom, and why have you done soow? >> first, thank you for having me on. i always enjoy listening to economis. you certainly get a lot of different views. here at piper sandler, we're not necessarily calling a bottom in terms that everything is fine in office land. quite the contrary. we're trying to articulate that just like the malls went through a transition over the past decade, gravitatintoward the top tier versus all other malls, the same is happening in office. so when you look in new york today for example, one

vanderbilt, if you try to lease spe, you better show up with more than $200 in your pocket, because rent there is exceed $200 a foot. by contrast, if you have a cheap building on 2nd avenue, your life is really tough these days, because no one wants to be there. so what's happening is, park avenue right now is one of the hottest -- is probably the hottest submarket today, given the grand central proximity. rents are going up. we were talking with the owners of 280 park, a joint venture, they have no more space there. that was a building just a few months ago that a lot of people were thinking we were going to have debt issues. now althat space has bee occupied. my point is that people need to understand that office will survive, but the top tier will survive. the lesser assets, thas where the issues are, and why we are bullish on names like hudson pacific and newmark, which is a commercial broke they are's

benefitted from this whole need for real estate to restructure itself. >> alexander, you're talking about a niche narrative right now, because all of those places that you referred to occupy maybe 30 square blocks of new york city re estate, a the land lonrds, tenants that go along with tt story. is it just those particular reits that have a heavy office space presence in midtown manhattan, and how does that tran translate into the underperformance the rest of the country, and which will lag the most compared to the top picks you just laid out? >> simon property group, they only own 120 malls, and their portfolio is only 220s s -- the are over a thousand malls in the country. you know, a fraction of that, a

minority of that that truly matter. office is no different. so you talk about, you know, a limited market. manhattan is a 400 million square foot market. probably 150 million is where people focus on. when you look at what's happening to new york, proximity to commuting, amenities in the building, and ability for the land lord to not only pay for the upkeep and modernization and improvements of tenant space, but also to pay the brokers on time. so it consolidates it down. what that does is it drives leverage to the landlords. so when you hear people like s.l. green, they have a leasing pipeline of 1.2 million square feet, one of the largest they have ever had. but you hear stories of buildings struggling and possibly going back to the lenders. but they just recently sold a nearly vacant building for $1100 a foot, that blew out the market. no one was expecting it. so yes, we're talking about a

minority of buildings, but those are the buildings that truly matter. >> all right. the reit outlook on the office side of things from alexander goldfarb. thank you very much. see you soon, sir. coming up, the fx side china large cap etf is trading at the lowest level sense last november. but our next guest sees value in the wreckage, and she has one under the radar china play that she's bullish on from here. she tells us why, which one, and the story, next. plus, jerald holt says health care return also be harder to come by in the new year, but three names he has that are better positioned than the rest of the group. as we head to break, let's check the markets overall. the markets are modestly higher, just about 0.1 of 1% for the dow industrials. what we did hit in the last couple of hours was a record intraday high for the dow,

one-year highs for the s&p 500 and nasdaq. "the exchange" is ck aft this. you can't buy great conversations or moments that matter, but you can invest in them. at t. rowe price ourtrategic investing approach can help you build the future you imagine. t. rowe price, invest with confidence.

welcome back to "the exchan." china tradwith the etf, that ticker fxi, falling to the lowest level sense november of 2022. on pace for a third consutive

down year. meanwhile, the shanghai com coosite is down 6% for the second straight year. despite those numbers, our next guest bullish on china, and says it's the only brit spot in the investing landscape as we see it now. joining me now is gina sanchez, a cnbc contributor. always beat to have you here. let's talk about the reasons why china has been an underperformer, why investors have soured on it so much for good reason, i think, overall, given the narrative that we have seen south of communist china and the economy there. but why is it that people should feel good about a china story given the fact that we have seen so much gativity out there and may stilsee it in the future? >> so the big challenge with china was that they had such severe policies throughout covid, keeping them in lockdown far longer than the rest of the world. and so while, you know, the u.s.

experienced its reopening somewhere in 2021 and 2022, you know, china was still solidly locked down, expected to reopen. but that expectation was never met. so now we're starting to see the beginnings of china reopening after the rest of the world has gotten back to normal. we have seen interest rates rise throughout the world, and in fact, looking at the rest of the world slowing, while china is in the process of reopening. what we know about the reopening is there's always a boom. there's a tremendous amount of pent up demand, pent up travel, pent up purchases that will all begin to hitthe chinese economy. so while the economy has been lagging, there's a lot to look forward to while the rest of the world is slowing. >> how exactly, then, does an investor play that particular theme outside of just say using an etf that tracks the broader chinese large-cap markets? >> well, look, there are adrs that you can look at if you don't want to trade directly in

china. some of those are names you know really well, ali baba. this is the biggest consumer name. one of the names that's interesting to us right now is auto home. auto home is china's, you know, basically online presence for car purchases. auto purchases, china as an auto purchaser over the last decade, went from being at the bottom of the top ten to the top of the top ten by a massive margin. china's consumption of automobiles has continued, and not surprisingly, as its economy is starting to reopen, this is one of those purchases that's coming around and, you know, in september we saw that they hit the highest level that they hit in history. i think that's going to continue for a little bit of time. you know, this is just one of those spaces that's interesting. >> what if investors do not want to dip their toes in that china trade so far, even though it's

of your opinion that it's the best and only real trade out there right now? are there other stock picks that you seem to think will outperform in 2024? >> yeah, absolutely. you know, i found the conversation you just had about -- you asked ten economists what will happen and you get ten different answers. i have my own view, obviously. we actually think that interest rates are going to stay higher than are priced into the markets, because the markets are so optimistic right now about rate cuts. we think that investing in companies that can survive, you know, that can survive higher rates, that have less sensitivity to the market but also can withstand quite frankly higher yield competition. one is abvie. this is a company that basically was spun out with one single blockbuster, humira. that company has managed to diversify its growth, you know,

trajectory across many different areas, neuroscience, botox, aesthetics. they are really putting forward some massive growth, and their dividend yield right now is 4.1%, which will compete against any bond right now. and with the growth that's expected and the growth of their yield that they have had of the last decade, you know, this is an interesting one that's worth holding. >> okay. abvie, you mentioned the autos trade there. anything else on your radar with regard to where you can find some value for next year? >> absolutely. something that just has no correlation to growth, interest rates, we think the genomics news was interesting. if you look at that space, there's a lot of ways to play it. crisper is the biggest name, the name we are interested in. this is something that, you know, just got with vertex

pharmaceuticals, just got the nod to treat sickle cell apeople -- anemia. it's an affliction that has almost no treatment possibilities. so this has the potential to change the world. they have also oncology potential, they have potential to treat lupus, really difficult to treat drugs and getting fda approval. this has been a huge investment for decades. it's starting to come to the fore, as something that has block buster potential. so, you know, we think that this kind of a name is something that really doesn't matter what happens in the economy, these, you know, these drugs are going to be hugely beneficial and in demand. >> all right. gina sanchez with the stock list as crisper therapeutics, abvie and auto home, as well. thank you very much. happy holidays. coming up, three more names on deck with results out. you see them right there. our trader is a buyer of two of

the thames that you see on your screen. one for a very specific reason. earnings exchange is coming your way leather on the show. as we head to break, bitcoin prices up more than 4% so far, hitting a 20-month high earlier today. you can see 43,999, just see of 44,000. on some continued optimism that the s.e.c. will approve a bitcoin etf in the not so distant future. hexcng iba it around $44,000. "t ehae"s ckn two minutes. yber threats each year. that rate is increasing as more and more businesses move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit, we must expand as well. we need to rethink... next level moments, need the next level network. [speaker continues in the background] the network with 24/7 built-in security.

chip? at&t business. (fisher investments) it's easy to think that all money managers are pret much the same, but at fisher investments we're clearly different. (other money manager) differenhow? you sell high commission investment products, right? (fisher investments) nope. fisher avoids them. (other money manager) well, you must earn commissions on trades. (fisher investments) never at fisher investments. (other money manager) ok, then you probably sneak in some hidden and layered fees. (fisher investments) no. we structure our fees so we do better when clients do better. that might be why most of our clients come from other money managers. at fisher investments, we're clearly different.

you can't buy great conversations or moments that matter, but you can invest in them. at t. rowe price our strategic investing approach can help you build the future you imagine. t. rowe price, invest with confidence.

welcome back to "the exchange," everybody. i'm tyler mathisen. here's your cnbc news update. the venezuelan government plans to release up to 36 people, including several americans today, in ex-change for the release of an ally of president m modero from u.s. custody. the secretary of state was asked about it this morning and said he hoped to have some good news later toda joe biden today weighed in after the colorado supreme court decided to remove former president trump from the 2024 llot in the state for the primary there, while he declined to talk specifically about the court's decision of whether trump should be removed from the ballot, he said it w "self-evident that the former president supported the january 6th insurrection." and the electric scooter company

bird just filed for bankruptcy. operation while it restructures. it says its european and cadian businesses are not affected by the bankptcy. i rode those scooters all around oslo. >> i want one for christmas, but i don't think we're tting one. >> we'll take ca othat. > comi up, 202has been a great yearorli lil and novo. a ugh go of it.mes havhad we'ltell you where one strategist sees the opportunity, coming up next.

welcome back to "the exchange." obesity drugmakees are soaring this year, but it's a different story for other big pharma names like j&j and pfizer. next year's presidential election could position pharma as a punching bag for both parties. anjelica peebles has that story.

>> good afternoon, dom. you should expect to hear a lot about drug prices in 2024. 2/3 of voters are saying it's a very important issue for candidates to talk about, according to a recent poll from the kaiser family foundation. the biden campaign is talking about the "inflation reduction act," which remember biden signed last year. that lets medicare negotiate prices of some drugs. but only 1/3 of voters say they're aware of the policy. so expect biden to talk much more about that. and republican nominees don't look any friendlier to pharma. former president trump pushed policies like paying prices here to what other countries pay. despite the noise, though, presidential election years haven't been as bad for biopharma stocks as you might thin we found no significance performance in non-election years. that's not to say trump accusing

these companies of gtingwa fr murder won't move the stocks. >> tnk youery much. our next guest says that the electicombined witthe health care recoverye have seen this ye, means finding bargains in 2024 will be a tough task. but he narrowed down four names he likes in pharmaceuticals and biotech. joining us now is jared holts. thank you very much for being here with us. this is a story about stock picking because health care is so much now about a narrative on obesity versus everything else. just how hard is it to pick stocks in an environment like this, when all the attention seems to be on those glp ones? >> hey, dom, thanks for having me. yeah, this year is certainly been marked by the narrative, and i think it will continue into 2024.

we're still, you know, in the midst of big product launches, a lot of clinical trials that will show the benefits of these drugs over time. and how it influences, you know, underlying health for the patients that are taking them. but yeah, this has been a very tricky year in health care. the sector is at 25% underperformer to the market. and, you know, as of a couple months ago, you know, you had a lot of straglers. i think the issue coming into the beginning of this coming year is that a lot of the sector has bounced on this rally that we have seen more broadly. that's why it's very difficult to kind of predict single stocks going forward, because you had a very pronounced bounceback, yet there's been underperformance. so i think it's somewhat confounding. >> so with that broader confounding backdrop from a macro basis on health care, what then have you narrowed it down to, and why with regard to the

relative value shopping list? >> well, honestly, i don't love a lot coming out of the last couple of months. you know, this sector has performed, again, below the market. but you have seen medical device stocks rally, you have seen life sciences rally, you have see back to slightly positive lows year-to-date. and pharma, as you alluded to earlier in the program, i think obviously has a lot of issues, from arowth dynamic, and obviously with thelection coming up, i agree with some of the points earlier. it may not be so bad, but the noise factor alone probably makes it untenable for a lotf investors. so i'm trying to find stocks that i think are kind of in a, you know, more potentially obvious valuation sep. merck seems like a good stock to me. i think abvie and merck versus some of the obesity names.

if you have to diversify out of these big winners, makes sense. and large tech bio, i think the street ifairly neutral to negative on because of prior missteps, at least there's a story line there that if they can turn it around makes sense for the street to own. >> all right, jare one last point here. ifhere has been so much attention paid towards obesity drs that are kind of like the artificial intelligence to technology, it's obesity to health care, what's the next big trend that you see that is not obesity for 2024 and beyond? >> i think a couple things. i think one, just going back to alzheimer's disease. we are at the precipice of this potentiallbecoming a real market. we have been looking for drugs that are efficacious, and we have a couple, although will have some hurdles in the way of broader adoption perhaps. i go back to alzheimer's disease

as one. i think broader gene therapy class i think is very interesting. but there are so many players, it's very difficult to predict who the winners are going to be, and there's so much innovation happening that when you find one company that you think has a solution, there's a better solution from another, you kw, either public or private playe those are the two areas that are interesting to consider outside of obesity. >> jared, just a couple seconds before we let you go. any pick for who wins the afc? >> oh, lord. it's tough to pick with my own team. i guess i'll go with kansas city. >> all right. browns fan. thank you very much. we'll see you soon. coming up, disney is ming a big bet on the popularity of 2016 ease zootopia in china.

eunice yoon is live on the ground in shanghai. >> reporter: thanks so much, dom. well, disney has i first and only zootopia themed attction, exclusive to china. expansion, next.ghai dney

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welcome back to "the exchange." disney is expaing its shanghai park for theecond time in five years, opening its new "zootopia"themed land to the public today. y eunice, what are we seeing in shanghai? >> reporter: the first expansion was "toy story" and thousand this is for "zootopia." visitors were dressed up as some of their favorite characters, which is china's highest grossing imported animated

feature. the attraction is unique to china. just to give you a sense of how somef the very top echelon y, poweat disney was here for the grand remony, including ceo bob iger, as well as the parks chief josh damaro. d damara said that 13 million visirs havbeen here so far as part of the company's overarching $60 billion investment plan over ten years. the park is expected to op a third hotehere. w, disney's investment runs counter to the trend that we are seeing of souring investment -- of foreign investor sentiment, and i asked damaro ectly why they would be openg this land amid this tense relationship between the u.s. and china. and he said e company just is really fused right now on the

business. really, dom, it's been interesting to talking to so ny visitors. people are excited about the details,eeling proud that this is in china. al, i think in terms of the money, pple are telling us that they're spending sometimes $430 just today. so it really gives you a sense that despite all the geopolitical tensions, that the average chinese, or at least many of them, are still very much like american culture, american companies and what they have to offer. >> eunice yoon from shanghai disney land with "zootopia," go inside and get warm. we'll see you later on. coming up, paychecks has only missed on the bottom line once in 20 quarters. and carnival shares have more than doubled this year. but with 11% short interest,

could see see a squeeze in the future. we'll have the story and the trade on all three in earnings exchange coming aerhiupft ts.

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welcome ck in time for ernie's exchange. today, we're taking paychecks, also car max and carnival cruise lines. here with our trades is cnbc contributor, founder and ceo of kkm financial in his festive red blazer. jeff, thanks o much for being here. let's start off with paychecks. shares about 15% since its last report where beat expectations and raised its full year guidance. the upgraded paychecks saying it held strong in the face of industry headwinds, but still warn rising unemployment levels and the tenuous health of small businesses. >> i know that does speak to the apprehension. i want to be a soft seller here, if you own it, you take profits. it's only 8.5% of the all-time high. trade at $1.29 has the ability to come lower to $1.15. i hope to buy at that level. if you look at adp, which is twice the market cap on a three

year perspective. they are the same. however, there are opportunities and dislocations, you have opportunity to get in. so i want to buy this lower, along the stock right now, you have to be protective utilizing calls or flat out selling stock here at this level. >> that's a consumer strength economy play. you say sell paychecks on that software basis. let's talk about carmax. another consumerrish play. shares are up 3% this week. cut earnings estimates. saying it expects weak used car sales and an income miss from carmax's financing unit. not to mention, competition is set to ramp up as amazon will allow car sales on its platform next year, jeff. >> i'm going to look through the other lens. this is 11%. i want to be a buyer here. it is somewhat expensi on a forward pe. traded 26 times. but there's momentum. technically, it has taken over the average.

there's more room to run. the one thing we learned if a stochas momentum, you don't want to be on the wrong side of that trade. >> sell paychecks, buy carmax. and finally let's talk about another consumer focused name, which is carnival. shares are up 131% this year as the post pandemic recovery in cruise lines continues. analysts are expecting recd booking demand and lower fuel prices to keep the positive momentum going. noting $2 billion debt is maturing next year with another $2illion coming due in 2025. so what's the take on carnival? is a lot of the optimism priced in? >> if you cue modest mouse float, carnival has the ability. i think they have done a great job of tackling they debt. it's 40% off the all-time high. there's more room to run and

when you think about cruises, pele are getting surprisingly more aggressive in their travel schedule. i just found out, well i guess santa claus will be telling me shortly, we're going on a cruise in 2024. first-time cruiser myself. i think people are looking to find different experiences. that's where they can participate. this stock, if you look at from where itas, to norwegian cruise lines, you have to be considerate. this chart from 2021 to 2022 to 2023 has been quite a roller coaster, dom. >> so, those are the calls that are on pchecks, carmax, and carnival corp. if i turn your attention, it's e time of year when we look forward to 2024 and the things that we could see. i wonder what ur take is on the meltup that we've seen in the markets overall? and this idea that there is just no concern about where the equity markets are going. i'm looking at my screen at a

volatility index. it's at 12 and change right now. the lowest point it's been over the last five years is an 11 handle. what gives why is there no concern in the equity markets right now? >> i think there's two lenses to look through when you talk about vics. when you have an understanding of where it's coming from, and you look about 12 weeks ago, it was up or 22. here, the low reading leve i don't think it is complacey, it's an option reading mechanism that will allow the next 30 days of expected volatility to be dampened. you have seen rates relent, if you recall. i had a very lonely view about two months ago that the ten- year note would come back to 4%. here it is. you are seeing the fruits of that rate relenting. i thk the market continues to move higher. are we stealing some of the returns from 2024 right now? i think the answer may be yes. i don't think we'll see

2024linear. the fed flinched and went into their pivot. i think you'll find 2024 things the ai undercurrent, actually put a piece out today on options talking about how tesla will continue to move higher. i think there's a lot of different things. it will be a stock picker's market. we saw such sector dispurse in 20. that will carry over. rates will drive the boat. th bond leadership is what i look for again in 2024. >> all right, jeff with the outlooon 2024. thank you very much. we'll see you soon, sir. >> happy holidays, pal. >> thank you. and you, too. we have a quick news alert on toyota. the automaker is recalling 1 million vehicles over a sensor that could result in the air bags not deploying as designed. shares of toyota are down a percent or so in trading today. right now, the dow is up 31 points. that's flat on the session so

far. that does it for us here on the exchange. power lunch is coming up next. america's most beloved billionaire has been crowned the only one of six with a we rin e five favoriteatg. por lunch continues after this commercl. we'll see you tomorrow.

> good aernoon and wcome, evybody power lun. alongside morgan brennan. coming up, t dow shooting r a ten-day win streakespite a major earnings miss fromedex last evening. thisally has yet to end or at least pause eventually, doesn't it? it has to do that, right, morgan >> santa claus rally is almost here officially. plus, we have the cracked beer boom that maybe over, but they are popur and draining

profits.