for qualified education expenses. starting january 1st, the savings can be put toward retirement if not needed for school. that is a big game changer. i have a son going to college next year so i will be using my 529 for the historic purpose of college expenses. >> probably worth it in the long run. i would be glad to tell people about this. i always knew there was a way to do this but this makes it more accessible. >> thank you for watching. i am off tomorrow. happy new year everyone! thank you for joining us. >> closing bell starts right now. >> welcome to closing bell. i am in for scott wapner. this make or break hour, we get to the stocks drifting before a soft landing and a new record high to the key market benchmark. the s&p 500 a fraction of a percentage away from completing a two year-round trip to the january 2022 peak. that is at about 47.97. that would be a new record high. since that point in january of 2022, the fed has jacked the

policy rate more than five percentage points. constant recession bets have come up. recent months, and narrow market leadership has given way to a convincingly broad rally. that brings us to the talk of the take. is this approachable time has a chance for investors to cash in, breakeven or confirmation that a young bull market has gathered steam into 2024? let's ask warren pies. it is great to have you here. how are you doing? >> i'm good. thank you for having me. >> sure thing. the story for this year, we could have said it a year ago but it was, can inflation go down more quickly than the economy loses steam? that has happened to this point. we have seem to have seen a fed pivot rhetorically and if not in reality. where does that leave you in terms of what we should expect at least in the first part of next year? >> i think that we try to be driven at the 314 research.

the data points are in a bullish direction. it is hard to deny that at this point in time. you end up with a few broad axioms that we live by. don't fight the fed. the fed has stepped aside. and if you remember, we talked earlier this year. one of the problems with fighting the tape back then is the tape signals are not as good when the fed is in your way. now the path, you can trust to the tape more. so we are seeing a broadening rally. even though there is a lot of bullishness in the market, it feels that way when i ook at it objectively by the data, economists are still kind of on the fence on the recession next year and strategists are far from bullish meaning at this point in time, the average strategist target for 2024 your end is less than 1% gain on the s&p 500. i think this sets up for this big bullish chase. we upgraded equities in november with the idea that everyone will be behind the eight ball and they need to catch up and i think that is

what is happening right now. >> it does seem as if a lot of those things you mentioned, plus just the run of macro data and what has happened to bond yields has really turned the burden of proof back over to people who think the economy is in some serious trouble in the near term. how do you think the market trades with respect to what the fed might do and exactly how the numbers have to come in and the data has to come in, in order to get the fed continuing to i guess be more of a tailwind than a headwind? >> i think you have to go back and study history a little bit. unfortunately, soft landings are the base case but they are relatively rare. the one take away that i see when i study history of soft landings is that the market rallies aggressively in anticipation of the first fed rate cut. that is a little different than the heartland case. the average case sees a 10% return in the market and the six months leading into the first fed cut.

i think that will hold this time around. i think that points to a kind of crazy sounding target that we put out there a little while ago. 5200 by may 1st. that is and we expect the first cuts. it sounds crazy but i think that keeps the pressure on the strategists who have yet to increase targets and we have this kind of perfect storm, perfect bullish storm in the first part of the year. the other thing i would say is i think every strategist is looking at last year after getting burned on recession predictions and they want to get back to normal. and normal is 8% return. they go through and check the boxes and they think the presidential election cycle says that we have a first strong second half and i think you can put that on its head and say we have a strong first half and then a weak second half next year as everyone has to catch up who is behind the eight ball. >> it is interesting that you characterize the 5200 s&p target as of may of next year. sounding crazy.

i think for a lot of people, it probably does, given where, i think people, their mental accounting for the market as. that would be 400 points are 8% on top of where we treated in january of 2022. if you look over a longer span, it is not exactly as if the market is really racing ahead of itself. >> especially when you think of the fact that the s&p has lagged even more and i think that is where you will see the performance in the cycle. like the playbook says, and i think when you zoom out a little bit, it is not as bullish. new all-time highs which is where we are on the doorstep of now, they are bullish as well. if you go back and say, new all- time highs after year of drought, your looking at a 15%, 16% return in the next 52 weeks. it is a bullish event for an all-time high. the worst case we have is 2007

and the market was down almost 9% following that. that is the only one we have going back to 1950. when you zoom out, you consider new all-time highs and you consider how under invested everyone is given the money market flow we have seen and it is easy to construct a bullish case in each one next year. >> you mentioned the tendency of the market to rally into the first anticipated rate cut. we did have a survey question from the timing of a potential first fed rate cut. if the federal reserve cuts rates in 2024, in which quarter is it most likely to happen? we basically had 54% saying the 2nd quarter looks like the most likely. that gets toward the may timeframe and some thinking maybe not quite one out of five thinking it could happen in the 1st quarter and then sort of similar amount in the 3rd quarter thereafter. i guess the question i would have is, how sensitive is your market crawled to the timing

and magnitude of those cuts? i think there is a real commonly heard refrain right now which is that the market is going crazy pricing and six rate cuts next year whereas to me, it is not really the expectation of most people out there that we will get. not necessarily individuals. >> i totally agree with you. i think that is what is happening. you have seen the market, the futures market be a little more bullish. that has provided some potential areas of volatility. i think when you look at the inflation data, that is what you go back to. inflation will either confirm the signals of the future market or deny it. i think the runway for this inflation is pretty strong going into i would say the next nine months. i say gets a little less clear from nine months out. but the next nine months, i

think we will be in good shape on the disinflation front. and i think there is a lot of under invested managers out there that have to catch up. just as pivot in general. just the fact that going from not even talking about cuts, too yes, we are going to cut and it is just a matter of when. that is a change. that was a major event in the market has a hard time digesting that all at once. i think that is what you are seeing this nonstop drip of higher prices. it is telling us there are a lot of people that have gotten stuck utside this rally. >> the market does seem to trade that way. people don't yet necessarily feel as if they are exposed enough. let's bring in joe with burtis investment partners and nicole webb. of course a cbc contributor.

joe, your take on this rosy scenario. if you look at a lot of historical scenarios, it is tough to quibble with too much. i guess leaving us to ask, what could append this nice picture? >> a backup. i think that is the single thing you want to watch for. you will have a backup and yields at some point in q1 and i think that is probably healthy for the market. i think the correction right now would really reveal underneath the market, the desires of people to reenter the established bullish position of equity. i actually would like a bit of a pull back. this just feels to me like using history as a guide, 94, 95, 96. that is what it feels like. like you went through the end skate -- the inflation scare of 94 and the rate hiking cycle. the 95 middle the year, you began to cut rates. and off to the races. i think it is a bullish set up as suggested, for 2024. >> i have been using 1995 as a

beacon as well for the ideal soft landing scenario. the pushback on that is that inflation never got to be much of a problem and 93. the market was not as expensive in 1994 as it is cosmetically right now. i think there is another element which is tough to get your hands around which is, in 1995, people were not standing around and saying, 1995 was a great year. how do you read these patterns and expectations? >> i think the first thing we have to we mean into thinking of 2024 is the set up. there is so much discussion right now on when and what about march? the end of the day, we need to focus on why. why is the fed cutting rates? if what we are seeing is growth going sideways, we are seeing disinflation leading to real rates becoming

overly restrictive. therefore, the fed has to surgically pull back. now you have bonds and stocks that are correlated which we all know textbook and periods of hyperinflation, they become correlated. the question is when they be breaking apart or when we believe that risk on is more valuable than believing rate cuts help the bond investments. i think this is where you start to see the restoration of mentality coming into play in january and february where if the fed really does look like it is on track to cut in march, the short end of the curb starts to contract and money markets are not paying as well and now it is not about a selloff in tech. it is about, we see the technology advancements. we see what you did in 2023 can be continued the broadening of the market? we can say maybe we are in earlier cycle then we thought in 2023. that is the question around positioning going into q1. >> it was mentioned that it does seem as if it is well consensus that you should emphasize the stuff that has

not gone up quite as much. so the 493 is a shorthand way of saying the rest of the market. they had a partial catch up move. it is -- is it as simple as that? >> i think what has worked really well in the last several years is the beginning of the year has provided you the clue that you needed to solve the mystery of the year. if you think back to last year, very early, we establish, it will be the mega caps that will lead the market higher. you could even go back to 2018 coming up of a really strong 2017. the early part of 2018, you had the indication that 2018 will look like 2017. i like to always look at money flow. just go back to 94 for a second. remember 94? everything went down. that is a similar set up to what you had in 2022. everything went down. i think the early stages of 24, seeing where the money flow is,

will be so incredibly important in understanding what the market will do. and i think that mike, yes, the broadening out of the rally is going to be the first place that i think capital will look to allocate to words. >> warren, when you think about what we need to see or what we need to check off as this idea that the economy is still going to be able to be okay, we look at what oil is doing. maybe it is supply driven and it is good news for the economy at least domestically. you see what the yields are doing. and i guess there is a limit to what you would see long term real -- see the yields collapse until it suggests perhaps a scarier message. how much leeway do you think the economy has to get toward kind of a slower muddle through type of environment if that is what we are headed for and still have the markets behave okay? >> i think the backup in yields is self reinforcing and

that way. when yields fall, we have seen mortgage rates drop by over 100 basis points. to me, housing is the epicenter of the economy. if you are going to have a slow down or re- acceleration, you have to look to housing. i think the move back in yields is reinvigorating housing with that structural supply and that is where rates have done the most damage. i think you actually get some relief on the economy and some acceleration at the same time and the disinflation is kind of baked in. i think that is what you have this perfect storm where the economy can re- accelerate but the inflation that it will stay tame. i like the analogy of 1995. i think every cycle is different. when you look at it historically, there have been two times only where we have seen the s&p make all-time highs while the fed is on pause. 1995, and 2007. i think the soft landing and more toward the 1995 outcome is what we are looking at. >> start outcomes after that.

but you have to pick one. it does seem as if 95 has a fighting chance at this point. where in the markets specifically? you mentioned the ai theme. that has been one of the things that was somewhat idiosyncratic and it wasn't about the macro and it enabled the market to kind of change the subject for a while. what about looking into next year? will it be that? would be old economy? >> i think it is about productivity. the huge emphasis come what we are listening for going into 2024 is, everything below the surface of ai. where has investment been made? if we start to see this rollover sentiment, ceo sentiment and consumer sentiment, there is a bit of a dislocation. you hear ceos interviewed that their business is doing well but yet their perspective on the broader economy is that it is fragile. if we start to see the rollover as we push the roof session fear deeper deeper into 2024 and maybe it falls off a cliff and maybe we are in the beginning of a new cycle era, then do we have this boom and

productivity? i think that is what you will look for below the surface. that got priced into the mega tech names this year and where does it hit across other margins broadly in the market space? for us, that is exciting. in retrospect, we want to believe that we can look back on the 2020s era and it means a roaring arrows of productivity. >> that would echo the late 90s if you want to keep up the metaphor. and joe, i guess the other question is, what has accounted for the huge bond rally. you mentioned back up yields might be a complicated factor. what has accounted for it at a time when you are also seeing -- i could see the fear and greed index is extreme at 77. investment managers, above 100%. the short-term tactical stuff looks like people have chased to this rally. and the other hand, corporate

spreads are collapsing. >> if you go back to the final days of october, you had a pretty high probability that the treasury secretary, who is going to decide what the size of the quarterly refunding was going to be and by the way, used to be the head of the federal reserve, was going to lean in the direction of not surprising the market. and i think that decision was critical in kind of chasing out the speculative shorts that existed. >> in bonds? >> speculative shorts in bonds, to the degree that as long as we have kept the statistics, they have never been higher then they were in september and october. i think positioning was a critical element of that. i applaud the treasury secretary janet yellen for what she did in her decision and i think subsequent to that, we are beginning to see a little bit of slowing down in the economic numbers consistent with this soft landing and that is the unwind of positioning.

and now the question becomes, how we build positioning up in the other direction where stacks are long treasuries and we need to see a bit of a backup? i would not be surprised if that was the case. >> maybe there are some counter affects. and just in terms of where you might navigate toward, you mentioned quality outside of the magnificent seven. you can look at that and it is these steady businesses. the visa and the mastercard and the costco i guess would fall into that type of basket. what makes that the right quality? >> typically, you look for quality when you are in a late cycle. i think this is a weird cycle. i think there are a lot of people going into this kind of early cycle playbook which is cyclicals and small caps and things like that and maybe that works out. and if our call is right on the market the next five months, it probably will. i don't think it will be a normal cycle.

i would prefer to stick with the late cycle playbook. we have a quality system that returned to 22% this year and less than 1% of the return came from max seven names. i think we are still not late cycle kind of regime and we have not gotten into the early cycle washout that we would need. it is really a risk reward to me and the earnings stability through full cycle and that is what we are looking for to play in going outside. >> how long can we stay late is often the question when we get to one of these phases? it seems like it would be for a little while longer. thank you. we appreciate the conversation today. happy new year. let's send it over to christina for a look at the biggest names moving into the close. >> let's start with pen entertainment. hire and pushing for changes at the casino giant calling it significantly undervalued. the firm home holds roughly 9.6% stake in the stock along with a large batch of swabs and

says that it is in talk with the management including a push for board seats. that is why shares are up 6%. >> northcoast research is quoting wisdom tree to buy with a fundamental target. and despite attractive assets under management, northcoast said wisdom tree's etf portfolio is more balance and never making it resilient to shifting investor strategies. stock is reacting quite dramatically of 6.5%. mike. >> thank you. we are just getting started here on closing bell. next, why is the tech analyst upping his price target on one name that has seen its best year in more than a decade? we will tell you what it is and why he sees more room for that stock to run. live from the new york stock exchange, you are watching closing bell on cnbc.

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dan nieves out with a new note raising his price target on microsoft from $4.25, to 4.50. he is betting artificial intelligence will be the microsoft iphone moment. we have more. good to see you. >> great to be here. >> so 4.50. it would seem not necessarily to be a layup. up 20%. $3.3 trillion market cap at the current share count. 32 times 2025 calendar earnings. how did we get there? >> i think it is conservative. the reason this is the iphone moment from the dell and microsoft is because they add the monetization opportunity, to put some numbers can we are

talking about an incremental 25, 30 or 40 billion per year. some of these, you look at ai and cloud. you could get to the 60-70% evaluation just from that. i believe this is a stock that you had for year and a half and 4 trillion will be there. >> 25 billion plus in revenue by when and through what means? i'm sure that is not just a head for the copilot. >> checks are showing transformational deal flow. in terms of the copilot conversions, i think the big thing is that monetization will happen a lot sooner than factoring in. 25 billion by 2025. i think that is sort of the baseline. the new look to ultimately -- based on the chat, for every $100 of azure of clouds spend, there is an equal of 35-$40 per ai. that is why it is another flex the muscles moment from the dow and redmond because they are

leading this ai arms race. >> the idea of it being an iphone moment, it would seem to me that when the iphone was introduced, people did not have great expectations for it. it was kind of like this thing that was somewhat out of the blue. a lot of skepticism on how big the market would be for it. it feels as though we have a lot of momentum and excitement around microsoft. >> no doubt. i think the difference here is that the iphone moment is from ceos, cios and cto's. what they are seeing on the use cases. use cases are exploded across the board. and i think that is really the most important thing here. that they continue to play checkers in this ai race. of course, amazon, google and others will follow. but the monetization in their own backyard. i still think massively underestimates by the streak which is why we lead 4.50. i think that is just the next step. in our opinion, it is a get out the popcorn moment for

microsoft in terms of where this is going. >> how do you think about the new york times company lawsuit against microsoft and open ai essentially saying that they are using copper red material to train the language models and they obviously want remedies along those lines? >> i think it is not just the new york times what you will see others jumping into this because they want a piece of the pie. that is really what is at stake here. i think that if you look at microsoft, they will defend the turf and this will continue to play through in the courts. but i think the big thing here is that these content providers are trying to figure out how they can monetize this. and ultimately, it just speaks to microsoft and open ai being three or four steps ahead. that is what has happened now. it is all a game of poker being played out. but the top of the mountain is this. >> and the negotiations have been on does have been ongoing to figure out ultimately the arrangement. i want to bring in steve

kovach. he is looking at apple and the growth prospects next year for revenue. >> that is the big question for apple going into next year. how does it finally returned to topline revenue growth? we have been saying all year, four straight quarters in declining sales. this quarter won't be much better. apple is set to expect flat sales for the current december quarter. the most important quarter every year. despite that of course, apple shares are up about 49, 48% so far this year. let's talk about what needs to be done now in order to return to that growth. we have some good news and some bad news that they have to grapple with. let's start with the bad news first. headwinds. and hallway returning to the smart phone game and creating more competition there and another they are making phones again, also the online gaming crackdown from the government there could damage some app store revenue. and just overall, what we have

seen throughout the entire year, a slow post covid economic recovery for the consumer. in the u.s., the apple watch ban is still being worked out despite the reprieve they got yesterday. they will be able to get a couple more weeks of sales at the very least at the beginning of the march quarter starting in the new year. but they still have to work through the legal battle. i want to quickly mention what is going on in the european union with individual market going into full effect over there forcing apple to open its app store and open the payment systems and damaging the margins there. now let's go for the good news. there is a lot to go over. service growth is rick celebrating. the higher-margin software business was up 16% in the september quarter. probably will see similar numbers in the december quarter. good news they are. and some signals also just probably around the pc and phone market that may be demand has bottomed out and we will start seeing growth again especially in the pcs. we talked about the iphone moment for microsoft. it won't be a new iphone moment

for apple. division pro. that headset will be a small launch at the beginning of next year. it will only be available in the u.s. at first and only available in apple stores and won't be a mass-market product at least not yet. >> i guess we could all remember when it seemed as though the watch was kind of trivial and then all of a sudden it seems like they are able to sell it. i look back. there have been periods before when the apple revenue kind of went sideways from 2018 into 2019. and stagnant after the annual level. of course, now it is up to or 400 billion. i wonder if it is just about a reset of demand as you get through these model launches for iphone and then this just does what it does. >> i know it dan is going to say. there is a massive upgrade cycle that is impending as people reach the point where they had their own for 3-5

years. it does ebb and flow. to your point about 2018, 2019, that was largely a china problem too. just having trouble pushing the iphone's in china was part of the problem there too. maybe things turn around this year and the consumer gets stronger in china. >> given the fact that the stock has been able to perform because of other things, basically the buy back in the stability of the company and the fact that it has a great balance sheet, it will buy the company time to maybe get some growth back. >> i think the difference is that this is the golden install of cupertino. 250 million iphones in the window of an upgrade opportunity. as of last night, no demand cuts. that is the important thing because china still, even though despite the headwinds, there is massive growth in china for apple. as this place through, the renaissance of growth in

cupertino, things will come through again in 2024 and in my opinion, this has been probably the most formidable year for cook in terms of improving these areas. >> and had there been any signs that there have been tracks in the apple brand? and how it is regarded by customers? you see the app makers and they want to kind of reduce the power of apple to control what is in and out and the i- message. all of these things that feel like a lot of small attacks on apple's wants impenetrable competitive position. >> i wouldn't call it may be the brand so much but definitely the wall and garden they have built over the last decade plus. and like i mentioned earlier and in my peace now, we have the european union laws coming into effect. you have japan considering similar laws around the app

store. united states is behind on regulating these things. there are multiple lawsuits and cases going through and including the supreme court case that does or case at the supreme court that might be taken up next month between epic games in apple that would resolve a lot of the stuff in the united states. so the cracks are starting to show and it is becoming a more open ecosystem across the platforms. apple is slowly but surely losing some of the control. to dan's point, they have that great lock in. i-messages one lock in but not the only one. and they can keep people upgrading and on their services and keep people downloading apps and that is the positive momentum there. but again, it is not going to be the same apple by this time next year. >> we will see how it plays out. thank you very much. good to see you. next, trends in high places. the carson group's ryan dietrich is back. why he says this year's market momentum will roll into the new year and where he is seeing the

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major averages in the green as the s&p closes in on an all-time high. lay next to guest has been bullish all year and thinks the stage is set for a solid 2024. let's bring in ryan dietrich. great to have you. describe the set up now versus where was a year ago and what are the main things that you think are worth emphasizing in terms of feeding into a potential continuation of this track? >> thank you for having me back and happy new year to all the listeners. a year ago, everyone was bearish. everyone felt one way. now we are looking at a 20% gain. i think there are a lot of ways to talk about those. the carson team, we see no recession. we see wages making highs and

economy making 150-200,000 jobs every month. manufacturing and housing coming back. if you don't have a recession next year, and we didn't this year and we don't think we will next year, there is one way to look at it, mike. who knows. all-time highs today. maybe tomorrow and next week. when you go at least a year without all-time highs with the s&p 500, like we are going to, 14 times going back to 1950, after you make that first all- time high a year later, up 13 out of 14. 15% average return. put a on this. neuheisel bullish. when you go a while without one, it can still be in newmarket next year for investors. >> you mentioned everyone was bearish a year ago. people were not convinced the market low was and from a few months earlier. overwhelming calls for a recession and earnings on the decline. the fed had more to do. don't you feel the attitudes have been reset to a degree this year that maybe the capacity to surprise the upside

is reduced? >> i can't disagree with you. there are still calls. you see what the average strategists is saying. expecting double-digit returns. you look at history gaining 20% and you tend to not gain 20%. the 90s, we saw extreme 20% years. more modest. we think there are low double- digit returns next year for at least the s&p. we like small to mid-caps now. we have like them for a while. we think they are broad in the next age of the bull market next year. mid-cap industrials will be good next year. not all about's tech and it is a good thing for investors. >> one of the broad disclaimers you will hear often about next year is that it is an election year. a lot of times the market is held in check for a while as

things clarify about how the election might play out or who would be involved. what does that mean to you up anything in terms of how we should set expectations? >> that is a great point. the first half of an election year normally is not doing well. but we are hearing this a lot from partners and clients. it is an election year. what does it mean? the last 10 times that we had a first-term president, the election year was higher. we think it will happen again. it is when you have a lame duck president, 1960, 2000 come 1968 when we had trouble. that is one way to look at it. i think it is important to point that out to people. we will have a 10% gain in the final two months of the year unless we really have trouble tomorrow. i don't anticipate that. what does it mean when you are up a lot the last two months of the year? the 1st quarter returns, higher every time up 6% on average and next year, never lower than 20% average. a big end of the your rally is not consistent with the end of

a market and usually means the upper momentum, the slingshot will continue. >> it is interesting. so many people assume your pulling forward returns from the following year and history says not usually the case. great to catch up with you. thank you so much. >> thank you for having meal year. next, tracking the biggest movers. >> next, we have a company in hot water. i will clean all that and more. closing bell is back in two minutes.

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15 minutes until the closing bell. s&p clinging to a small gain. let's get a look at the key stocks to watch. >> let's talk about this oncology testing that is deep in the red up to the court barred the company from making, using or selling a key cancer test in the united states ruling that it infringes on a patent by rival the tara. they said they will appeal the ruling. shares are down a most 18% right now. and boeing is urging airlines to inspect the 737 max airplanes for a possible loose bolt in one of the control systems. the issue has been fixed on the manufacturing side but dina kupfer is encouraging airlines to inspect jets out of an

abundance of caution. shares down about a half of a percentage and the stock is up 36% this year but still down over 40% from the 2019 all-time high just before the 737 max was grounded. mike. >> multi year charts are necessary. still ahead, a reversal of fortune hitting the china stock market as outflows and concerns over the country's economy rise. we will break down what it means for investors looking for international opportunities. a lovable plush toy finds itself in a legal battle with ali baba. details when we return.

squishmallows are suing alibaba. a judge in new york rejected the chinese e-commerce company's request to dismiss the case filed by kelly toys, the maker of the popular plush toys. the suit alleges that the alibaba online platform was used to sell counterfeit squishmallows. kelly toll always is owned by joe's toys, a parent company who is controlled by warren buffett's berkshire. the latest read on the health of housing. we will take a look at which regions fared the best in november and what impact the recent flialng mortgage rates have had on buyers. that and more when we take you inside the market. ♪ when better money habits® content first started coming out, it expanded what i could do for special olympics athletes with developmental needs. thousands of bank of america employees like scott spend countless hours volunteering to teach people how to reach their financial goals. it felt good.

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we are now in the closing bell market zone. we have a look at some key housing data and we are talking chinese investment trends and breaking down the crucial moments of the trading day. diana, pending home sales. what does that tell us about the state of the housing right now? >> we expected a light gain because mortgage rates fell sharply in november but pending sales remained unchanged from october. sales down by 2% from november of last year. this number is based on signed contracts during the month. so he forward-looking in decatur of closed sales but a current look at what buyers are thinking and mortgage rates here are the key. the average rate on a 30 year fixed soared over 8% mid- october and dropped sharply to 7.5 in the first week of november and ended the month

around seven and a quarter. that is why the streak was looking for a small bounce and sales. the realtors did note in the account that while the drop didn't result in any contracts, it did spark a surge in interest according to the lockbox indicator which records showings. the little things on the front door. they actually tell you who is interested. >> that is actually fascinating as a realtime read on things. diana, you mentioned mortgage rates have come down and are moving in the right direction for buyers but there is still a substantial spread between the 10 year treasury yield and the 30 year fixed mortgage rate. obviously, a lot of factors here. what do we expect from that spread? >> the spread has been shrinking and it will depend on economic factors outside of the housing market. what the fed will do next and whether there will be more cuts than expected or less. it depends on the more broad economy to see where the spread goes. we are in the 6.5% range and

some people have been talking about the five. i think you get a five handle on the 30 year fixed and you will see more buyers get into the market. not just buyers but sellers who have been sitting on the fence because they don't want to change from the 3% are 4% rate. >> fives will be considered a good deal. thank you, diana. trends in china. are people throwing in the towel here? >> they are losing faith in chinese equities with foreign purchase dropping to eight your low according to research. that means almost 90% of foreign money invested in the chinese stock market 2023 has moved on to more green pastors. you can blame many things. lower-than-expected demand resulting in deflation or real estate or debt crisis. new gaming regulations, aging population and the list continues. the factors leave investors doubting future growth. even q3 was negative for the first time. we are seeing a rebound in the

k-web which is up over 2.5%. the china large cap and the atf. all of these on the screen and 2.5 or more. if you zoom out and you look at the individual names, you can see massive drops and names are down almost 50% or around 50% year to date. and then you have the widely observed shanghai index which is down roughly over 4% over the year. compare that to the s&p 500 and that is up over 26%. clearly a discrepancy. at one time and unstoppable growth machine, the chinese economy has stuttered. i will use that word, for 2023. investor confidence remains relatively weak going into 2024. even though the second half of the year, you started to see a pickup but it was really those gaming regulations that changed the sentiment in the last month or so. >> thank you so much. as a head into the close,

two and a half minutes. the s&p losing a little bit of ground. in general, within a fraction of a percentage of the all-time highs. it feels as if people have been chasing this rally over the last two months. on the other hand, strategists are not that excited about next year in terms of targets. a lot of the things that you see associated with a really enthusiastic bull market. >> it is interesting talk about no recession and job growth. the problem is that is in the market already in the market as you know is expensive. almost 20 times more forward earnings. 11% earnings growth expectations. that is on the high side. the pain trait is down. we talked about the effects this week. fewer rate cuts than expected might happen. the economy slows down more than expected and earnings slow down more than expected. you see revenue slow down with the recent reports. there is risk in the market right now. with all that said, the santa claus rally, we are not in a new high but we are up .9% in

the last four days. it is right on target. averaging 1.3%. by the way, i was talking about the prospect of a closing historic high the last day of the year which is a rare occurrence. the s&p, it is only happened eight times since 1926. the historic closing high happen on the final day of the year. we will keep an eye on that and see what happens. other than that, i'm excited to have john stoltz from oppenheimer also 50 through 100. we know this has no predictive value whatsoever. a parlay game that we play. we all engage in it and it will be interesting to see what he has to say about it. i added up 19 strategists. 1400 was the average they had. for 2024, the average strategist has 4800 and worth 47.80 now. i call that a lack of enthusiasm with a lot of things having to go right. >> it does feet into the idea

that it is nonsense early on to the races. we will see how it goes. we will be watching the all- time high potential for tomorrow. the dow up. oil, rough day. that will do it. closing bell. a mixed picture for stocks but a record high again for the dell industrials. the s&p hovering near a new record close but not quite making it. it looks like we are about 13 points away here as stocks settle. for the dow, the seventh record high this month. that is just getting started. welcome to closing the overtime. i morgan brennan. coming up, the global playbook. joyce chang will tell us the country where she sees