>> decades. >> '86? >> i thought '76 >> yeah. we keep getting farther and farther. thanks for watching "power lunch. we appreciate your time. >> "closing bell" starts right now. stocks are surging here on wall street, adding to strong gains on the week and the month even in the face of amazon's pullback this is a make or break hour for your money i'm sara eisen there's the dow, up 800 points, the highs to have day. every dow stock is higher at the moment biggest gains, apple adding 72 points unh, microsoft, mcdonald's s&p 500 in a broad rally mode, up 2.4% right now. you have almost every sector higher, except for consumer discretionary, and you can thank amazon for that, which is a big component of that group. etsy falling in sympathy

information technology is your best performing sector right now. it's being led by the semiconductors and a big surge in intel stock off earnings. the nasdaq comp of almost 3%, so a big comeback day for big tech. the nasdaq is higher for the week small caps up 2% it comes in the face of weak earnings, amazon, but also higher treasury yields 10-year back above 4%, the dollar stronger. look at amazon and apple moving in opposite directions on earnings we'll talk more about those moves and where the opportunities are for the stock straight ahead also on show today, we'll talk to british businessman and industry titan sir martin sorrel about elon musk's completed deal for twitter and how changes to content will affect advertisers. "the market dashboard" with mark santoli. the swings are ginormous

>> and more remarkable is you have tremendous declines in some of the biggest market caps settle apple aside, yet the overall tape has had some followthrough buying the hallmark of this month has been the market's ability to rally on bad news. remember, the low intraday was on a bad cpi number october 13th we got through a lot else in terms of poor earnings, clearly housing is cratering and still managing to get up there around this 3,900 level on the s&p 500. it's fairly impressive 11% to 12% climb off that intraday row, october living up to its reputation for upside reversals after a dramatic bottom i'll point out broke this downtrend above the 50-day average. a technical and seasonal basis, there's some reason to think it's in a better position. just for benchmarking's sake, we were about right here when jay powell gave the jackson hole speech that spooked the market

he didn't like that the markets were assuming a friendlier fed the vix was under 22 credit spreads were narrower than they are now. keep that in mind as we head into a fed meeting the kind of market celebration that the fed might want to push back against if it chooses. apple has been pulling the shares of berkshire hathaway around over the last year or so, at least that's the way it looks coincidentally apple, the biggest single position berkshire owns, $144 billion worth of apple shares at this price it's more than 20% of berkshire hathaway's total market cap. also berkshire, interesting combination, value, consumer staples, insurance, transportation, utilities, energy, and of course apple. those are pretty well positioned in the current market moments. we'll see how they go. >> the news today, if you're looking for moderation in inflation, you didn't get it we got an employment cost index, slight deceleration but still

firm above 1%. we got the pce, the fed's preferred measure, showing more than 1% gain. >> yes >> inflation is still here it's still rising. >> yes >> even the university of michigan consumer sentiment showed that consumers expect inflation to rise in the coming year not what the fed wants to see. >> it doesn't. you can really massage the numbers on the pce and say on the last two mos you've seen deceleration, if you annualize where it's been in the past couple quarters. that gets down to a more reasonable level, 4%, 5% no tightening cycle ends until the fed funds rate is above the inflation rate depending on the inflation rate you're looking at, if the fed is getting above 4%, we're not that far away that's somewhat less scary >> we'll talk more about the rally. they've been shrugging off major misses from big tech this week the report card misses on meta,

alp alphabet, but big gains on the week our next guest says the current rally proves there are two stock markets. joining us now is vital knowledge founder, and we have michael santoli with us as well. what do you mean, adam >> well, you have this phenomenon in the last several year where is the outperformance in these large tech companies, so meta, amazon, apple, microsoft, google has caused them to dominate the market. this week up until today but monday through thursday of this week you saw a very sharp divergence between the two indices where the market cap-weighted s&p was held down by mini caps and the regular s&p trading well that's reversing today to an extent, but it's still the case that they're having a period of outperformance now >> what do you think is the big driver does it continue

>> yeah. i mean, i think, you know, this week has been -- the last several weeks have been a roller coaster. for me the most important events in the market, on wednesday, you had bank of canada come out with a dovish less than expected. yesterday the ecb suggested they'll be slowing the pace of tightening for weeks you've had this narrative seep into the market whereby it looked like the central banks that were most aggressive earlier in the year with hiking are now coming to the end stages of that process so everyone assumes that the fed now is going to be the next in line, 75 basis points next week, and it's widely assumed there will be some type of a signal sent by powell that they'll be downshifting to 15 in if september and 25 in meetings thereafter that to me has helped to overcome, you know, big headwinds from large-cap tech earnings, which certainly did disappoint you have earnings estimates -- sorry develop ahead. >> no.

i just want to bring mike in here it does feel like there have been hopes before that the fed is going to downshift on interest rates and every time markets get excited about that, something comes up like inflation is persistently high or powell and everyone else on the fed is still very focused on controlling inflation. >> yep no doubt we've been through the routine before i think you could say right now, well, nothing else, time has moved on they've done more. they will be about 4% on the upper end after next week's meeting on the fed funds rate. that's not far where from projecting where they need to get to even because of where we've come from and gotten to, you could say it's plausible they'll decelerate in their hiking pace. that being said, you need inflation to cooperate a little more before you can get real confident that they're going to be able to step back in a big way. but the other piece of it is even though it seems like the market is up a lot from the lows in a couple weeks, i would argue

the reason the market went down in the first place, the s&p below 3,800 is because you had a lot of fears that the wheels were coming off. what was going on in the uk, the bank of japan intervening, china. all these things seemed as if everything was teetering the credit suisse's insolvent rumors, that have the low. if you look at it that way, we probably shouldn't have gone down as far as we did based on the way the economy is and the fed expectations it's more reasonable we've gotten back to this point. >> or, adam, do you have to pay attention to what big tech is telling us in terms of warning signs? a lot of the problems out there, amazon's forecast, the pricing power of its web services, they're macro in nature and warning signs about the economy could potentially have spillover effect, couldn't they? >> absolutely. you definitely are seeing a slowdown occur companies across the board throughout a lot of issues, not just tech. a lot of them are seeing softening in demand. that will probably extend into 2023

i agree with what mike santoli just said about you have to have the data corporate more than it has been in order to kind of really confirm the fed slowing down for me next week, i'm more interested in the friday jobs report if you got weak numbers, that could help propel the move that we've seen in the las couple weeks without the fed downshifting the you're still printing jobs numbers of 200,000 plus and continue to have inflation where you're seeing a mild deceleration but not necessarily the kind of sharp down tick the fed wants to see, it will be really hard, s&p at 3,900 on a sustainable basis. earnings are moving in one direction. you need a multiple to offset that and that's dependent on yields >> 4% on the 10-year today we've seen it come down a lot. thank you very much, adam. a adam

how will advertisers react to a less moderated version of the twitter platform we'll ask sir martin sorrel after the break. ♪♪ this... is the planning effect. this is how it feels to know you have a wealth plan that covers everything that's important to you. this is what it's like to have a dedicated fidelity advisor looking at your full financial picture. making sure you have the right balance of risk and reward. and helping you plan for future generations. this is "the planning effect" from fidelity.

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to less than 50% they make up more than 90% of twitter's revenue in the second quarter. on the content modification, musk tweeted this afternoon, "twitter will be forming a content moderation council with widely diverse viewpoints, no major content decisions or account reinstatements will happen before that council convenes." joining us now, sir martin sorrel, currently executive chairman of -- you're one of the first people i wanted to ask about elon musk owning twitter do you tell your big clients in advertising to do anything differently? >> good evening, sara. well, the answer to that clients will want to wait and see. you just said the data we have from elon musk early in the bid battle was he was going to quintuple the revenue from about $5 billion to $25 billion.

and advertising would fall from 90% of revenue to 50%. when you do the math, advertising would be about double where it is now that's tough he wants to reduce the dependence on advertising, but in fact he's doubling up twitter is about only 1% of the market the global digital media last year was $450 billion. this year it's about $500 billion. it's growing despite what you see and hear amazon interestingly last night grew its ad revenues or looks like it will from $30 billion to $40 billion. there are bright spots at microsoft, particularly if it snares activision, bright spots at apple so it's not as gloomy a picture as some have painted even google is through last

quarter, the q3, by about 11%. and the prognostication for next year is that digital will grow, the ad revenue platforms will grow by 5% to 10%. but twitter is a relatively small factor about the same size as snap, a bit bigger than pinterest. so that's the interesting thing from musk's point of view. he said he might flirt with subscription revenue as well, which would boost revenues that's one area. his ad revenues. but effectively he's saying he wants to more than double up on ad revenue, and clients are going to be conservative until they see where he lands in moderation on content. you referred to this moderation council, which is similar to the root that meta and facebook have taken. so we have to see -- clients don't like controversy they won't flirt with it we've seen that with kanye west recently, another example of it. i think we have to wait and see

the potential. >> so, kanye west, glad you brought it up, if he reinstates kanye, his buddy, would that be a turnoff for advertisers? >> that would be definitely a turnoff. you've soon that with adidas maybe adidas moved a little too slowly on it, but they got there eventually you've seen manuel urging his clients and contacts to move away so it would be i mean, clients do not want controversy, particularly as we enter -- >> what about president trump? >> -- a tougher -- well, same thing. people are going to be concerned about controversy and concerned about aligning themselves with it as i said, i think we'll just have to wait and see having said that, and you look at the numbers with twitter being roughly the same size as snap, both offer interesting

possibilities if you can get the content moderation piece right and to that point, i mean, elon musk tweeted his major advertisers on twitter yesterday and seemed to be extending an olive branch to advertisers. >> agreed. >> this move on the moderation council seems to indicate to me that he will be moderate in terms of content too >> who does a good job at this does facebook do a -- i mean, in your opinion, an advertiser's opinion. >> facebook is the root of all evil according to stock. every ill with the social media is blamed on facebook. they have made strenuous efforts to increase the number of people that moderate their content. they are obviously concerned about modifications to section 230 and being held responsible for their editorial content.

and that's still out there as something they have to wrestle with but i think they have exercised much more effort in this area to moderate content, to regulate content, and they've been spending an awful lot of money on boosting their editorial content. google the same. so, the big platforms are being faced with this issue, issues around privacy, around brand safety, about political interference -- or interference in political advertising all of these issues have made the platforms much more responsible in the way they're dealing with it. and the regulations of course not just the united states but elsewhere in europe and other parts of the world have put enormous pressure on them to try and moderate their approaches in these areas. so they have actually responded. but there's still issues that they face, and in a way, it's microcosm -- if you look at the relative size, facebook this

year, despite their pressure, meta this year will generate about $115 billion in advertising revenues, google $230 billion this year so the key platforms are much bigger amazon about $30 billion to $40 billion. apple is starting to build a $7 billion or so business in advertising. microsoft will certainly be building its business too. twitter really in respect -- >> there's going to be a lot of competition. >> netflix with advertising models i think what we'll see with twit sr. a sort of netflix-type approach i think we will get subscriptions. i think that will make sense from musk's point of view, and i think it would make sense for him to exercise more moderation on the content side to try and build his ad revenues. the simple fact is that despite what he said in terms of reducing the importance of advertising in an absolute

sense, he has to double the size of his advertising revenues or more >> that's my final question, sir martin do you predict that he will be able to do that? i find -- as journalists, we find twitter very useful when trinidad and tobago and jis zelens -- gisele are breaking up, it's prime. but for an advertiser, will he be able to do it >> as musk said, it is potentially the world's town hall and if, as i said, he can moderate the extreme content or moderate the impact of extreme content and avoid too much controversy, i think he may surprise us. it's never paid to bet against him yet, and it probably won't pay to bet against him in the future but he has to do something as you started to see today and as you saw yesterday with his group of advertisers, today with his moderation council, he

started to recognize the issues that he's had to face as he takes over as ceo of the business, kitchen sink and all >> yeah. doesn't want it to be a hellscape. good news for your clients sir mor tin sorrel, thank you for joining me really good to have you today. >> thank you >> we're looking at about an 800-point rally heading into the close. building on gains for week and the month. 2.3% higher on the s&p 500 everything up except consumer discretionary because of amazon. one more trading day left in october. month since the fordfor its best administration 1976 and its best october ever. coming up, jeff degraaf explains why there could be more upside into year-end. and look at the top searched tickers. amazon in the top spot the big-tech earnings movers are getting a lot of interest, down 7.2% the 10-year is right behind it we are seeing higher yields today. naa e, meta, ther for

fil time, which is toward that deal price we'll be right back.

check out today's self mover, o'reilly auto getting a boost. a look under the hood, a lot of puns so be careful, the auto parts retailer beating profit and revenue estimates thanks to much better than expected same-store sales they crossed the fin left-hander with an va sbra day record every single day this week advanced autozone, genuine parts, all outperforming on the week see, i told you. up next, amazon shares getting pressured, but an analyst says it's a great buying opportunity. he'll make his case next

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stocks are in rally mode, dow up more than 800 points, but amazon is a notable exception, pulling back sharply after weak revenue projections. but one says the stock is still a buy, the issues aren't structural and we still see amazon's profitability and

margins improving in 2023. everyone is so down beat after that forecast, tough talk on the macro economies, slowdown in cloud growth why do you say -- >> yeah, thank you i think the narrative is starting to change ews was slowing but it was bound to happen eventually we saw it happen this quarter. going forward i think it will be less focused on the top find because we know revenue growth will slow and more focus on the bottom line and operating profits. a lot of things to be excited about on the bottom line the e-commerce side hasn't posted a profit in several quarters now we think that is going to change in 2023 and in 2024. we expect amazon's services side of the business, things like aws, advertising, third-party

fulfillment services, those revenue streams to grow next year and that should help margins. amazon is cutting back on capital investments, pausing hiring in certain parts of their business but these are all things that investors want to see right now. investors want to see companies tighten their belts and manage costs in this environment. that's what amazon is doing. they're focussing on what they can control and i think that's a positive and a catalyst for the stock. >> i think jim cramer also sticking with it and likes the story for that earlier in his morning meeting saying expense management is the key here why hasn't it yielded more results? laura martin of needham on tech check says we're not running a not for profit here. the scale is not resulting in profitability. >> yeah. i think it's taking time if you look at how much they've invested over the past two years, an incredible amount of money they've put into their fulfillment network, aws, transportation network, and we're seeing those capital investments pull back. this year amazon is expected to

decrease fulfillment and transportation capex by $10 billion, so it's allow itself to grow into this supply chain network that it obviously overbuilt the supply chain network in the past two years and is allowing itself to grow into this network. i think that bodes well for margins. it won't happen overnight, but a pretty significant margin of improvement in 2023 and even 2024 we're expecting operating margins to nearly double in 2023 compared to 2022 so, again, the story i think is going to be -- the narrative is shifting from the top line to the bottom line. that's a big catalyst for the stock next year. >> what about the top line do we have to be worried about that too a quote from the conference call from the cfo, this is uncharted waters for a lot of consumers' budgets, and amazon increasingly has looked more like a spending picture of americans >> yeah. i mean, i think we all knew that e-commerce demand is slowing

we saw it happen this quarter. for amazon, it's experiencing even slower growth in europe in amazon's perspective, they're in a recession and that's where a lot of the weakness in e-commerce was on the aws side, the slowdown of revenue growth was not necessarily that amazon lost customers in that business, it's more that its existing customers are looking to manage their costs. it's coming to amazon and being like we need lower price, more value options, can you work with us amazon is doing that >> that's what they said >> they're not losing customers to, say, microsoft or google they're still gaining customers. they said yesterday their new customer pipeline is pretty strong so, you know, again, it's all these macro factors that are driving the weaker outlook right now. not so much idiosyncratic risks. i think that's why the shares don't deserve to be down as much as it is today >> you lowered your target from

170 to 152, still a big buy from here thank you for joining me >> thanks, sara. >> the dow on track for its best october ever our next guest explains why bullish seasonality and sentiment is setting investors up for a fear of missing out rally into year end. and listen to "closing bell" on the go by following the podcast. 'rup31ois t dow makes trading easier. with its customizable options chain, easy-to-use tools, and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. power e*trade's easy-to-use tools make complex trading less complicated. custom scans help you find new trading opportunities. while an earnings tool helps you plan your trades and stay on top of the market. so. the new iphone 14 pro. it's amazing. yep, the camera's incredible. and you'll get our best deal. nice. but everyone should get it.

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stocks are staging a rally despite tech's underwhelming earnings reports our next guest says it could have legs saying the market is set up to a fomo rally

jeff degraaf you have been feeling bullish in recent months so a good call for october. do you think it's just getting going? >> you have a couple things going for the market you know, one that's pretty powerful but, you know, it's very simple is the fourth quarter rally effect we even disaggregated that and looked at it when the fed is raising versus cutting or on hold, and it holds true, more powerful for midterm election years. part of what we're seeing the discounting factor on the election so, yeah, i think there's more to it. but i think really the unique part of this, what makes it so powerful, is that sentiment is so bearish, so we have this bearish sentiment, people are essentially offsides in their positioning, and will get this fourth quarter rally and, you know, nobody's had a very good year so they'll look at their portfolios in december and say, man, you know, i need to have some exposure here i think that's one of the real risks for clients here in the fourth quarter

>> so if it's just seasonality and sentiment,does that set us up for another tough year next year >> there's two things we don't have working for us. one is valuation we have 4% on the treasury yield, look at the free cash flow yield, the market, you don't have valuation support it's unique because we have had valuation support for four years every time you've had a bear market, yield can come down. that's not the case here i think that puts a fly in the ointment for 2023. the other is credit. the credit conditions right now are okay they're not terrible but, you know, it wouldn't take much for them to deteriorate those are two things working against equities tactically i don't think that's that important between now and the end of the year but it's something to keep in mind for 2023 and probably what, if we do get back into this bear market and downtrend, i think the culprit will be both credit and the valuation story. >> good week this week in the credit market. tons of issuance, the most since september.

>> the credit markets are open, no doubt yep. >> they're open. we've seen that, especially on relief periods for the equity market what about the yield story you've seen signs of peak in yields >> i think you're right there. real yields, we have the data back to the mid-1980s, you look at real yields where they are today, you know, roughly 175 basis points of real yield that you're getting from a treasury, that historically is in the zone that yields tend to top out. if anything, we would say the value proposition in the market is probably in triple-b corporate versus equities here but, yeah, i think you're in the zone of peak yields, you know, with the concern from the inflation principle, i think we're right there. maybe we get to 4.25 or 4.50, but i don't think it's much more than that. >> that would still be a big jump on the 10-year. >> yeah. the trends are still in place.

i want to be careful with that but the conditions are set up that historically would start to push against yields moving substantially higher at the long end. >> jeff degraaf, thank you renaissance macro. up next, we'll hear from one asset manager who just bought shares of meta following that huge post earnings sell-off. that story and intel and a pair of energy giants rallying on the back of results. we take you inside the market zone with the dow up 836 points. . bill says the coffee is weak today. but since cdw helped us switch to mac, everyone's happier. dan from finance likes getting performance without a big price tag. bibi digs the power of the apple m1 chip. mac is easy to manage, compatible with all our apps and came preconfigured by cdw. now we're even getting compliments. that was bill again, says he loves his new mac. he's right about the coffee.

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we are now in the closing bell market zone commentator mark santoli is here to break down the moments of the trading day. and exxon and chevron and barbara durant who just bought shares of meta broader market, up 800 points on the dow, 2.4% on the s&p, tracking for a strong week and a strong month like where did this rally come from we've had a lot of high-profile big tech earnings misses, except for apple. yields have seen relief and we've seen relief for the dollar as well, but it's going the other way today. what is the best explanation besides seasonality and sentiment? >> well, those two are important because where a lot of rallies come from at a low is in the depths of pair and people expecting incremental bad news, not getting it i think you also had the economic numbers have not been great, but they've not really cooperated with the idea that we

have passed the point of no return into imminent recession that corporate earnings are going to fall apart suddenly because they're more or less come in according to plan. 70% of companies beating, the whole routine is pretty much in place. but i think it's important to consider that the pent-up negativity coming into october is part of what we've got. moderation in yields so it doesn't seem like this really disorderly surge in bond yields. that has given some relief we're in a fed quiet period, maybe that has something to do with it. and the seasonals and the burning off of excessively pessimistic sentiment. i think all that together more or less gets you to where we are, which is a five-week high >> you can spin the numbers however you want >> yeah. >> people are looking for some signs of moderation. if you're looking at the tech sector in particular, it's interesting that the nasdaq is higher by 2.2% even with the heavy market cap-weighted sell-offs, shedding $80 billion

to $150 billion in stock market values this week >> it is remarkable. apple is doing a tremendous amount of work, especially today, accounting for something like a quarter of the overall s&p gain, if it were flat, market would be that much lower. but, no, it's kind of incredible even the amazon move today after the overnight sellselloff, it'sp ten bucks. the thing is these stocks have not been coming off the high they've been punished all year expectations were low. meta is a smaller part of the market in years so it's not as much of a drag putting it all together, it shows you that we've priced in quite a bit before this week >> let's hit energy, because that sector is underperforming the broader market today despite str strong earnings from exxonmobil and chevron.

earlier on cnbc, the ceos of both companies discussed finally seeing profits from investors that were made when energy prices were much lower listen >> you reflect back on the last five to six years, when most in our industry were stepping back. our company was leaning in, investing at a higher rate than our competitors in anticipation of what was to come. as a result of that, when the call came, we answered it, had the volumes. >> we've been investing steadily in growing our production. we hit a record in the permian basin up 15% year to date versus the same period last year. we had our strongest ever production out of our australian liquefied natural gas business the world needs more supply, and we're delivering that. >> it almost sounds like both statements from the ceos, they're gearing up for scrutiny from politicians we answered the call

the world needs more oil we'vestepped up production clearly good numbers for them draw attention >> yeah, exactly president biden saying again today in direct response to darren woods saying that the company is returning money to consumers via its dividend, which prompted biden to tweet, "i can't believe i have to say this but giving profits to shareholders is not the same as bringing prices down for american families. yesterday biden criticized shell's capital return program and earlier this year said that exxon is making more money than god. as you noted in the bites you played, these companies are trying to emphasize that they're growing production and that these are long-term businesses of course the conversation just two years ago was incredibly different. still, it is hard to ignore these bumper profits exxon's profit nearly tripled year over year to a record $19.7 billion, while chevron's was its

best second quarter ever at $11.2 billion in net income. i think on exxon's earnings call, bank of america's energy analyst kind of summarized the whole thing by saying that everyone was happy with these results except perhaps not the administration >> pippa, what are you getting from some of these earnings calls and commentary about where they think the price of oil is going? are they positioning for longer-term higher prices right now? >> we each asked that before and executives are reluctant to give price forecasts. they've emphasized this is a multiyear cycle and investments pay off in the years to come, so they are investing and growing their business no matter where the direction of oil is. however, we have heard from darren woods specifically that he doesn't think a price cap is a good idea for the industry he's criticized some of those

policies that would artificially kind of move the price of oil. so really the party line there is they're investing no matter the environment. >> got it. pippa stevens, thank you intel, the big winner the dow for a change after beating earnings estimates, announcing it will cut up to $10 billion of cost through 2025. but the chipmaker announcing lower than expected full-year guidance, something paul gelsinger discussed. >> there is no good news on the horizon. u.s., europe, asia, all look to have held winds for the foreseeable future so we took down our range for the rest of the year >> is that what the market is celebrating, cost cuts or something else intel is doing to make investors more bull senate judiciary committee. >> gone are the days of unrealistic to optimism pretty much they do like the costcutting there will be a slowdown in the expansion, a few other details they're operating their foundry as a separate business entity,

which means different accounting, they're hoping to be more efficient than that they are operating the actual foundry like a chip factory meaning they'll service customers instead of product lines and lower capex. we didn't get details to specifically what they'll do with each of those points. in the last seven quarters, intel hired 21,000 workers, so head count is going to be an issue. it won't be the to whole part of that $3 billion cost-cutting but something that we'll see over the coming weeks or so but i think the market is celebrating the fact that intel is pulling the cost lever down hard, hard, which is what they wanted to see. but we can't take away from the results. q4 revenue guidance not good, full year, not good. >> the stock also has been weak, mike, down 43% year to date. can you buy this stock with concerns about the poor business, with the pc market set to decline, those sort of issues >> the intel shares have long

discounted a pretty bleak environment, which is why you could have a ceo willing to say it won't get better for a little while. it's been super cheap for a while. should they be cutting the dividend maybe that's a question that investors will have for a while. it seems like not the moment to keep a dividend level with that high a yield there are still a lot of questions, but at some point what investors want is these companies to invest for the next cycle and the one after that intel is absolutely doing that but i don't expect it to be a kind of quick payback on that kind of enthusiasm but it's really taken its pain already. people thought this was going to have some traction in the mid-30s and clearly it didn't. >> kristina partsinevelos, thank you. meta will close out as the worst performer on the s&p 500 this week, most losses coming yesterday after earnings disappointed and the planned spending on the metaverse

rattled investors, but not all our next guest picked up some meta in the sell-off barbara durant joins us. the stock is down 24% this week. it's now down 70% for the year does this get too cheap for you? >> yes, actually, it has the valuatation starting the ye was 23, 24 times, now 13 times of course earnings have come down since then. unfortunately for those of us who also own it, it's the cheapest it's been since late 2015, so it has been quite a drop that i think is when you want to look at these things we were talking about intel and that investors like to see them investing for the future, which is what i believe meta is doing. they have 95 per95% of revenuesm ads and tay hey missed on that the other part that really spooked investors was that even though they were always going to

be spending a lot, like $120 billion in capex and operating expenses, they increased it yet again on the call saying they would spend another $5 billion to $10 billion and no clarity when the magical metaverse would come into reality and start contributing there's a big question in investors' minds is this going to be worth it they want to balance the short-term concerns with the long term. zuckerberg is not. however, what you have to remember, this is the biggest social media platform in the world. it got 3 billion active daily users and engagement increased that's key if that wasn't happening, the story is not so interesting. i think that, plus their balance sheet, $48 billion, free cash flow will be impacted next year, margins will be down last year they were down about 40%, down to mid-20s this year,

stay under pressure next year, but 2024 is when you should start to see all of this start to pay off in terms of revenues, margins coming back. i think that's what you have to look forward to. based on next year's earnings, it is not that attractive, but i think they will rebound. >> i'm parsing your words because you laid out the bull case and the bear case in a way. is your view -- so facebook or meta obviously got knocked for the spending and you called it the magical metaverse. it's not here. investors don't want that kind of spending in this kind of environment, but there are questions about doing that at a time when the core business is weakening, including revenues in this macroeconomic environment is your point that you expect the core business to be fine and for reels to monetize and that works? >> i think you're seeing it. a number of businesses they're trying to monetize

that also has 2 billion daily users. starting to see a big pickup in reels. i think the ad revenue was up 145% quarter over quarter. they're in the early stages of that, so they are gaining traction there i think over the next year you'll see a lot of improvement in the monetization of their different apps it's not just relying on the ad revenue and the existing business as it is. i think it comes down to your view on the macroenvironment, and that is, you know, what we're seeing in a rally the last few weeks. is it because people think once again the fed is about to pivot? and if you do, then the high-tech names like facebook, this will probably be the low. if you have a view we're going into a deep recession, then all bets are off but i don't see the -- i think downside risk is practically zero at this point and you never know when these kind of stocks are to the upside. >> up 1.1% you have to start there. barbara, thank you very much

>> thank you >> under two minutes to go in the trading day. mike, what to do you see in the internal >> good, not great looking at the nyse, a day where the market is up some 2.5%, a little better than 2 to 1. the dow, best month since 1976 look at the tortoise versus the hare story here. the dow makes its performance in tougher markets and underperforms in strong bull markets. that's what's going on today volatility index easing bax, under 26, a lot of stock-by-stock action coming into play. and of course the fed meeting is tomorrow -- next week. can only go down so far. right now it's cooperating with that story of tension release. >> a look at the major averages. we'll close out at the highs of the day, the dow up 830 points or so with nearly every dow stock higher except for dow chemical we're having our best day since october 13th

for week, up almost 6% not too bad. for the month, up 14.5%. remember, one more trading day for the month of october, but we're tracking for our best monthly performance for the dow since 1976 going out strong with the nasdaq up almost 3% and the s&p up 2.5% that does it for me on "closing bell." tune in to "fast money" today at 5:00 p.m. eastern. i'll be there. in the meantime, "overtime" with scott walker >> i'm scott wapner. you heard the big cheers just getting started from post 9 at the new york stock exchange coming up, a big interview you don't want to miss, fed whisperer, nick timiraos of the "wall street journal." he'll tell us what's likely to happen at next week's meeting and december and beyond. the best october ever for the dow and what it migh