good tuesday morning and welcome to another hour of "squawk on the street." i'm sara eisen with mike santoli. northwestern mutual cio on why he's skeptical of the current rally and says to brace for a hard landing. the chairman of ubs warning of growing risk in the credit market. there is an asset bubble forming there. he joins us to explain. plus, we'll get to an upgrade of boeing and why rbc says it still has room to run, despite a 20% hike the past month.

markets have recovered early losses. dow up 114. bond yields declining just a little bit. the market digesting quite a bit of fed speak this morning. fed governor bowman saying she would be willing to support raising the funds rate at a future meeting if inflation progress stalls while fed governor waller says he's encouraged by recent data but not ready to call it a victory. listen to what he had to say. >> i am encouraged by the early signs of moderating economic activity in the fourth quarter based on the data in hand. inflation is still too high. and it is too early to say whether the slowing we're seeing will be sustained. but i am increasingly confident that policy is currently well positioned to slow the economy and get inflation back to 2%. >> the market seeming to take its cue from that idea that the policy is in a good spot. he's not trying to inject any suspense into the fed meeting in two weeks other than anything but a hold and the next move may

be a cut. the market stands and where it has been for a while. >> these two are important. they're governors. which means they get a voice and a vote. waller is seen as more of a leading indicator where the fed is going. certainly it felt that way during the most hawkish points last year when he was up for raising rates. bowman has always been more skeptical that inflation is coming down. she's always been worried about more inflation. that's the push/pull of the market here, which is on the waller side. the fed is feeling good about where it is right now, is looking for a little more deceleration in the economy, which will bring down inflation even further and then look forward to cuts. there's a risk that oil prices firm up again, for instance. there's a lot of geopolitical mess out there that wages stay firm because we have a tight labor market, that housing prices stay hot. by the way, they're record highs

today. and that inflation is not moving enough. >> i think the message will probably become reinforced there's two-sided risks. all the things you mentioned. you've seen the consumer confident number today, underscored that to a fair degree and consumer fatigue and all the rest of it. the big question is can the economy hold together? it's only been several months at these level of market yields, long-term yields. they've come in and it's a matter of whether the fed can thread this needle. >> how are we set up for december, if that's traditionally the strong seasonal month when you're coming off a strong november? >> usually continues to the upside. i think the average is 1.5% gain. it's not a real make or break month but it's tough to fight when you get to the end of the year. that being said, we got up to these levels, up 10% in four weeks. it's a logical place to pause and hover for a little while. of course, you can never rule

out some kind of a pullback, especially in some of the bigger stocks. i don't think we'll get a verdict, as you say. we'll have this debate for a while. the macro story is still -- >> front and center. >> and i think -- i would say it depends on what rates do. volatility has been eliminated in rates and both of those things are helpful. >> they are supportive. i would point out, 4.35 on the ten-year, if it goes below that, it breaks down. that's the august high. about 4.34 was the closing high there. let's take a look -- a a turn to our next guest who is skeptical of this equity rally. joining us, northwestern investment officer brent shutti. brent, great to have you here. so, what's your take on the messages we got out of these fed speakers today, where it sets us

up going into next year? >> i lean more towards bowman. i believe inflation is a real thing. to me what is most important is what happens in the inflation market. to get inflation, sustainably, keyword, to come down from the 4.5% back to 3%, 3.5%. unfortunately historically the only way that's occurred is through job losses and a recession. to me once those start occurring, once you start seeing job losses, typically they continue to compound until you get around 2% rising unemployment rate, which we're kind of getting on the precipice of that point of no return where the unemployment rate is up 0.50%. to me, i think that's where the rubber meets the road. i think, unfortunately, wages, the only way they come down is through job losses, which we'll call that a recession. >> today's consumer confidence labor market measure did show a little bit of an uptick in folks

saying jobs are hard to get. you're seeing signs that the labor market has been loosening up, but you have this other take out there that we have structural tightness, all the demographic reasons. you've had companies that were in labor scarcity and couldn't find people just a couple of years ago. maybe they're going to be slower to lay people off. you know that story. that probably underpins part of the soft landing thesis, but you don't think that's going to hold out? >> no, i don't. you are seeing the labor market weaken. in the last jobs report you saw the number of industries hiring down to 52%, which historically has been that narrowing right before a recession. continuing claims are up, i believe, 24% year-over-year. i don't believe we've seen a rise in continuing claims that high and not have job losses follow or a recession follow. you are seeing a variety of labor market indicators cooling off. i guess the question, and you mentioned the word threading the needle, can the fed exactly land this plane on top of a needle

and have job gains slow down but not have the economy go too far where you actually have job losses? to me with the lags in monetary policy, with all the tightening we've done, i think it's more likely than not they can't land it exactly and you'll have a period of time where you do see job losses and that will put a wet blanket on the market. >> my question is the market impact and what you do if you're feeling a bit more bearish, as you are. a lot of s&p 500 stocks, despite the overall index, are still way off more than 20% from their highs. >> first and foremost, i want people to understand that investing in bonds has no return possibilities now. i think the average retail crowd doesn't believe that because they've had actual losses for the past few years. they don't want to invest in bonds anymore. i would encourage people to look in other things other than cash. so, actually locking in some longer term yields you're right, a lot of parts of the market have discounted some sort of recession already.

small and midcap stocks off 20% from their highs. the average stock in the s&p 500 or the equal weighted stock index trades at 15 times earnings. i don't think it's a dire story for equities. i just think in the near term as macro conditions weaken, you have allocation to fixed income and it's not just cash but bonds out further on the yield curve that will do better as those finer embers of inflation burn out with the recession. >> so 4.35 on the ten-year at this point. you have tight credit spreads, both investment grade and speculative grade credit. you still think that offers a pretty good entry point in terms of longer term returns? >> yes. i would invest in high-quality investment grade income. i don't think you have to reach for yield like you did in the past. there is yield in higher quality instruments. things like the ten-year treasury, investment grade, higher quality investment grade corporate bonds. that's where i would place my

fixed income positions on. >> just real quick, you don't think the heavy treasury supply is something that's going to necessarily be a noneconomic factor that keeps yields higher or raises them from here? >> i think you're looking at a period of time in the future where rates are higher than they were. i don't think we're going back to 2014 to 2020 where policymakers were keeping rates low. in the near term as you see the economy weaken, you will see yields come in a bit. that's where the opportunity in the next three to six months lies is more in fixed income yields a little further out on the interest rate curve. >> greatto catch up with you. thank you very much. >> thank you. so, cnbc is reporting that shein has confidentially filed for a u.s. ipo. the on-demand fashion retailer last valued at $66 billion, could hit public markets as soon as next year. not the only one. reddit, kim kardashian's skims

and rubrik are considering ipos. considering the 2023 performance, is that the best idea? this year's ipo market barely set to surpass 2022, and this have disappointed. arm stock has recovered this month, but more or less flat from the post-ipo bump. instacart has fallen more than 15% and birkenstock has recovered a bit but still fallen from its $46 price offering. remember that one? overall the renaissance ipo etf is down 10% from the peak in july. more than 50% off 2021 all-time highs. not the best setup for ipos. but if we do see this continued interest rate stabilization, we just heard from the city of citi's investment bank, he expected there to be more m&a next year with this kind of environment. that should bode well for ipos. >> we named all the significant ipos of this year.

it's a small sample size. you can't really generalize, except to say the market in general has wanted nothing other than what it perceived as sure thing. that's the magnificent seven and clear winners of those companies, free from balance sheet disruption. ultimately the pipeline of backlog of companies ready to be public builds. and you're going to have acceptance of that. the ipo etf, renaissance, most of those stocks are two years old. there haven't been enough. they aren't ipos anymore. it's fascinating. >> and you have to look category specific, a litmus test for shein might be h&m and zara and both are up significantly. up 50%. it's been a great business so far this year. so, maybe taking their cues from there, too. >> definitely. still to come this hour, why the private credit boom will trigger a new squeeze. the former global head of bank

research joins us. shares of boeing on pace for the best month in a year. can that rally continue? e llndtalk to the analyst behi thca. i would say that we're closer than the average mother daughter. hi mom!

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shares of estee lauder on the move after hsbc initiates this as a buy. price target goes to 180. this is a stock at the same level that first six years ago, really huge fall. interesting report talking about potential management changes as well as maybe down the road, change of ownership. >> isn't the big problem just travel in asia or they're saying it's more -- >> they're saying it was a strategic blunder to overrely on the channel. it's not just travel in asia. it's bulk sales into chinese markets, which are then kind of sold at lower costs and smaller

batches elsewhere. it's sort of an interesting side market they went heavy in. hsbc arguing it damaged the brand to some degree. >> well, it's getting a mini boost today after a tough year. turning now to private credit. the chairman of ubs warning an asset bubble is forming and it needs just one thing to trigger a fiduciary crisis. our next guest has a new op-ed in the financial times titled "a private credit boom will trigger a squeeze." joinings is hugh, former head of banks and global research at morgan stanley. what are you worried about? >> look, the private credit market is growing fast. it's a golden moment. i was arguing there will be a

squeeze on with top players who have really good experience of working out bad credits, got preferential access to credit are going to outperform some new entrants. i think collin, my old boss at morgan stanley, points out there's frothiness in this market. he points out three reasons the big firms should really benefit. one is a lot of the opportunity this year and next year is around the u.s. regional banks deleveraging. it's a great -- it's a very rich opportunity with banks selling good assets close to par at really good terms. you have to be a big firm with speed, with size, which can do that. and second is you're seeing larger ticket sizes and private credit. a $4.8 billion deal this year. new firms can't play in that bucket. thirdly, the big banks who are under a lot of pressure could potentially see as much as a one-third increase in capital required for the wholesale banking businesses, and looking

for partners. they want to go for tried, tested large firms. some smaller firms at the fringes are getting a bit more desperate for loans. >> we're talking about the chairman of ubs, who you said you formerly worked with, morgan stanley. he was speaking at a financial times conference and he said, look, they built up a lot of leverage. event lip when something breaks, it will be a crisis of confidence. the skeptics might say it's because the banks are missing out on all of this lending action and being excluded from private credit. most of it is happening in private equity and in places that are outside the banking system. >> look, i think on the hole this has been a positive trend. we're taking good assets from highly leveraged institutions. on the whole there's less systematic risk. i think secondly a lot of assets are really good assets. it's just bank capital rules. as you've seen over the last 12 months, the funding markets have become tougher as they lost

deposits. they need to sell assets because they're short deposits. still over $100 billion use of fed emergency funding scheme. as they sell those assets, there's some good opportunities for the tried and tested firms who can access those. as you get to the fringes of the market, there's frothiness in the leverage lending market has become much tighter in pricing and that's one of the areas where -- because interest rates have gone up so much, we'll see weaker exposed. i think this is on whole a very positive trend for investors because banks are missing out. in any boom there will be pockets of frothiness. >> hugh, you're talking largely about assets that exist on a balance sheet getting kind of moved elsewhere. it's a secondary market play whereas a lot of opportunity you hear talked about in private credit from people promoting it is origination. they'll go out there and be a hands-on lender, direct lender, and they can manage the

portfolio. very similar pitch to private equities versus public equities. the question is, can it be that easy to get double digit yields when it's strictly just about being nonregulated and having scarcity in capital. it seems we're not reserving as much against those loans and systematically you might be raising risk at the margin. >> there's a couple questions in there. when the headline is too high, you have to work out underwriting. completely agree there can be risks in there. the point i'm trying to make is some of this is the banks are being forced to shed assets. why? because they lost deposits and they need to -- it's like a balloon. they need to throw some weight over the edge to keep afloat. some of this is really good assets, which are being sold at attractive terms. that's slightly different from originating assets. i think the private credit market is very diverse,

distressed, energy, finance, energy market, so on and so forth. it's a much more -- as the market grows it's becoming a broader field. unlike in any part of the market, like the stock market, there's some attractive returns and some unattractive ones. i think it's much more -- it's a much broader field. therefore, if you're smart, you can make good underwriting risks, there are good opportunities. >> hugh, thank you for joining us on the think piece. a new outbreak of respiratory virus in china. the national retail federation just releasing its final holiday shopping numbers following the big five-day shopping bonanza. we'll look at the results and what it tells us about the commitwi tuny thhe head of the nrf straight ahead.

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european markets mixed right now. most markets are in the red. a couple of bright spots in moekt, rolls-royce raising 2024 guidance and easy jet raising dividend for the first time in three years. ubisoft raising $500,000 for bond place, even amid high interest rates. those rates have led to a lending squeeze across the eurozone. the ecb reporting loans to

nonfinancials have contracted for the first time since 2015. we got more hawkish commentary out of ecb, christine lagarde warning the timeline for ending the bond purchase reinvestments could be accelerated, which is a little more hawkish. also the german head of the bundis bank saying rate hikes may not be over. seems like a concerted effort to talk the market back from getting too excited about the ecb being done. >> the dollar backing off under 1.03 on the dollar index. >> i think that spooked people about the bond purchase reinvestment, speeding up the timeline. >> interesting. turning now to china where a respiratory illness is surging in some parts of the country. our eunice yoon has more. >> reporter: children's wards are getting so crowded that parents have been swapping advice online to bring camping

equipment and folding chairs to make the waits more comfortable. er clinics told local media to expect waiting times half a day. sparking fears the country could be dealing with a new pathogen or variant of covid-19. the chinese health authority says it's a mix of known viruses and bacterial infections including one nicknamed walking pneumonia because it's mild and rarely requires hospitalization. the w.h.o. is making similar statements denying the outbreak is an indication of a novel pathogen, instead pushing the idea that china is dealing with most countries dealt with a year or two ago. schools in some cities have suspended classes. businesses have remained opened. the government has held back from tough action we've seen after the covid-19 outbreak and pandemic. instead, advising mask wearing, vaccinations, good ventilation.

authorities warn the situation could get worse over the next few months into the spring. one problem, though, is china has been dealing with the experience of covid and the trauma of the lockdowns so that's kind of undermined the public trust on these national health issues. guys? >> well, they played it down before. >> exactly. >> we all remember very well. >> eunice, how serious are these illnesses? why are people needing to be hospitalized? are they quickly coming out of the hospital? what else do we know about it? typically with flu and rsv and the normal infections, you don't quite see a surge like that, do you? >> you don't have the death rates that we started seeing after the covid-19 outbreak and started hearing stories of a lot of people flooding hospitals. so, it looks as though the cases have been mild, for the most part. it's difficult to say and one of the big problems is the chinese authorities don't necessarily have a lot of credibility,

especially overseas when it comes to being honest about what's going on. the w.h.o. has been pressing china to be more cooperative when it comes to the investigation into the origins of the coronavirus. chinese have been pushing back very hard on that issue. >> they don't have the best track record either, the w.h.o. >> that's true. >> thank you, eunice. good to see you here in the states. we are about two hours into trading. let's go post to post with bob pisani for a look at what is moving. >> i want to emphasize as we end the month of november how important lower interest rates have been for a lot of companies, particularly some financial firms. blackrock had terrific numbers a few weeks ago. they started off in november. they were 600, now 735. big move up. they were in private funds. they own that ishares franchise, largest etf firm in the world.

between the private funds and the etfs, they manage close to $9 trillion. think about what that is, close to $9 trillion. the u.s. budget is about $7 trillion. so, enormous amount of money keeps coming in over the transom just on a regular basis for a company like that. again, lower interest rates really helps them out. speaking of lower rates, there's a lot of bonds being issued in the world. a lot of corporate bonds and government bonds out there. guess who does all the ratings on them? s&p global. they also have a market intelligence business that does all of the indexing. they get paid from the firms going out and trying to mimic or replicate the s&p 500 index. their business has been doing really well recently. they 350 a month ago. now 417. again, another big move up as the bond rating business has been doing very, very well. not a lot of industrials at new highs. one that's been consistently great all throughout the year is

parker hanafin. they do motion and control technology systems. it's really a play on artificial intelligence. a lot can be automated in ways using artificial intelligence and they're a big potential beneficiary of that one. come over here, i want to show you one more that's slightly different business. that is the business of insurance. we know how difficult the property ask catastrophe business has been recently. allstate, the leader in the business, another company doing really well. 124 a month ago. now it's 136. the key story is, yes, while there's been an increase in the amount of storms we've seen in the united states, the billings have gone way up. so, this is not so much necessarily a lower interest rate story, although that does help them a lot. it's the fact they're able to have pricing power, which a lot of companies are finding elusive these days as we close out the fourth quarter. guys, back to you. >> look at how broad this rally is. didn't start out that way.

health care is the only sector red. bob, thank you. time for a news update. bertha coombs has that for us. >> israel is pledging to resume fighting in gaza following the end of the temporary cease-fire. but prime minister benjamin netanyahu's office said today, the government could extend the pause for the release of 50 more prisoners if the truce agreement continues. meanwhile, officials in qatar say hamas is ready to release another 20 hostages within the next 48 hours. the political network largely financed by charles koch says the endorsement for presidential race is backing nikki haley for the job. the super pac has already spent billions bashing donald trump this election cycle, trying to make the case to voters he would lose a general election to president biden. and billionaire businessman and dallas mavericks owner mark

cuban is leaving "shark tank." he told the hosts of the podcast "all the smoke" season 16 will be his last. cuban has been a mainstay on "shark tank" since he joined the show's panel of investors, or sharks, in season three. abc has not confirmed his departure. of course he's very busy trying to shake up the pharmacy benefit space with mark cuban cost plus drugs. >> he's got a lot of stuff going on. thank you very much, bertha. an upgrade of boeing catching the street's attention. the rbc analyst behind that call will join us on the other side of the break. also want to point out here, thanks in part to boeing, we're seeing session highs for stocks. there's the dow up 160 points. boeing adding the most, microsoft, home depot, honeywell, amgen are contributing as well. the s&p 500, its rally is picking up steam. it's up a third of 1% and

breadth, too. most sectors are higher except for health care.

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keeping our eye on micron after the company issued updated guidance. raising guidance and earnings per revenue share, the result of improved supply and demand and improving pricing. the stock is moving lower as operating expenses disappoint with spending expected to be on the high end of guidance range. a bull call today from the desk of rbc catching our attention. the firm taking boeing to outperform, raising its price target on the stock up to $275 from $200. that's about 25 upside from

where it trades today. the stock up 2% this morning. with us now on that favorable setup for boeing into 2024 is the analyst behind that call, rbc's ken herbert. good to have you with us. what's the main elements of your bullishness now on boeing in terms of their production rates and i guess confidence they can get to them? >> thanks. good morning. first it's improved confidence in our view on the supply chain's ability to support what is a very strong demand environment. i think the demand environment continues to surprise us to the upside. when you look at recent order activity out of the dubai air show, in particular for boeing and wide-body aircraft. it's confident they can supply to boeing and execute. the second thing is as we get that better visibility and confidence in the supply chain, we feel the setup into 2024 in particular is as favorable as expectations in our view have become relatively more modest

with a company and cash generation. we like the setup and the ability for better execution. >> i want to get into the makeup of this $275 price target. i was looking back. the only time the stock has traded at or above that level, 2018, 2019, free cash flow at the company was like $11, $13 billion a year. you're talking next year being up to $8.5 billion in 2025. why do you think the stock is going to get that elevated multiple on free cash flow this cycle? >> a couple of things i would point. that's obviously a great question. there's not a lot of other large caps that provide the exposure to the commercial aerospace oe build cycle so there's some scarcity around that. second i would point to growth in free cash flow which is attractive. to your point, the 3.5 to $4 billion this year to $8.5 billion. our 2025 estimate is below consensus, i would even argue, so there could be upside to our numbers. the third point, i think there's

some significant pent-up demand for the stock. i think boeing has been tradeable but not investable for a lot of investors over the last few years as we dealt with supply chain issues and other disruptions. i think as we get better confidence and visibility in the free cash flow growth here, i think you'll see some multiple expansion, in our view, to justify the higher price target just based on the fact it's relatively underowned in our view now compared to other large cap aerospace names. >> is there visibility on demand and deliveries in china? hasn't that been a big problem, the delay on max deliveries there? >> yeah. unfortunately, that's continued to push out. i mean, i don't think there's a lot of china necessarily in our numbers out next year. there's 100 of the legacy aircraft of the 250 that boeing still has in inventory that the vast majority of those still built for china. we expect a lot of those ultimately get remarketed and maybe end up with other airlines. at this point, china -- if and

when china does start to resume deliveries of the max aircraft or accept deliveries, that would be upside from a catalyst standpoint. i think we reached a point where we don't necessarily need to see china come back in a meaningful way to get to the 25 free cash numbers we have in our model anyway. >> how does boeing's defense business fit into this call? i know it's been a little bit of a problem to some degree on a relative basis. >> yeah, certainly. so, we take a more cautious view on their defense business and certainly what's implied in the company's guidance. as you know, they've really struggled to get the profitability and the margin targets within the defense business with a number of development programs. when pricing for suppliers was different pre-pandemic, so we think, you know, you think about their defense business sort of $2 billion of that $10 billion or the free cash, we think it's closer to a 10% contributor.

we discount that. we think if the commercial business works in our view, sentiment on the stock should continue to work because that will continue to be the most important, in our view, for the valuation and the cash generation. now, defense has been a headwind and hopefully it becomes less of a headwind for sentiment. there's clearly some serious wood they need to chop in that business. >> ken, thanks a lot for coming on and running us through that call. ken herbert. >> thanks. have a great day. up next, the top performer on the nasdaq 100, up 17.6%. how can other chinese companies use iss th aa model for success? we'll discuss.

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estimates. deirdre bosa has more in

"techcheck." >> you've been talking about temu taking the american consumer by storm and it's crushing shein on sales and monthly customers. according to bloomberg second measure, temu surpassed on both metrics and continued to pull ahead. which raises a question that bernstein asked in its note today. if you're bullish on temu, do you short shein out of the gate? this morning gave the bulls even more reason to like temu as parent company pinduoduo reported results sending shares nearly 20% higher. the biggest driver would be temu. revenue yearly doubled and expenses and marketing were up 50%. losses were less than feared. it could be a good sign for shein if it's using a similar playbook. both platforms offer steep discounts on already cheap stuff, subsidizing to gain scale, capture the american consumer, which in the past has been a risky strategy. pinduoduo tells us there is, in fact, a path to profitability. bernstein notes that pinduoduo

went from negative 100% to positive 60% margin in china. and figures that temu has already hit break-even in the u.s. on a unit economic basis. so, how? one, slightly higher markups, eventually. two, less discounts as american shoppers become entrenched. another interesting advantage it could use against amazon, lower take rates former chants. now, shein could employ a similar strategy. in the first nine months of the year, pinduoduo, that's temu parent, notched more than $5 billion in net income and had $8 billion in cash and cash equivalence. that's a lot of capital it can use to capture american audience through discounts and marketing. we don't know if shein is profitable or anything about its cash position yet because it's private. an ipo if successful, that would certainly add to its pile and add ammo to compete with temu and capture more customers. one more chart, it looks like the first one but it shows u.s.

monthly customers. shein has dipped over the last few months while temu continues to pull further ahead. it goes back to that question, can you like both or do you need to choose one or another, which will be an interesting question when shein does move forward with that ipo. >> yeah, the comparison is interesting. one thing i can tell you, according to an investor update, is shein claims they are profitable, net profit as of this year. but i wonder about the competitive aspect of it because shein, i think of as more of a retail with its own branded product. i know they're trying to be more marketplace and open it up to third-party sellers. but when it comes to temu eating someone's lunch, isn't it amazon or walmart that are more immediately threaten? >> it's a good question. i think maybe what some analysts might worry about or investors worry about is a potential race to the bottom. if shein and temu are both profitable and they're going to be spending more on marketing campaigns, which is going to benefit meta, pin and snap, do they just sort of continue to do

that sort of like what we saw with an uber and lyft. they subsidized for so long, it was hard to get out of that cycle. you do raise a good point. shein is directed more to clothing where temu is everything from headphones to hoodies at huge discounts. but, you know, when we get that s-1 eventually from shein, i think maybe you can make that comparison a little better. >> right. they do have this nas ent online market idea and they're trying to chase it. >> tiktok, too, big player trying to make inroads with their e-commerce site. >> absolutely. thank you, deirdre. deirdre bosa. after the break, a new cyber monday shopping record, according to adobe. the national retail federation out with new numbers of its own this hour and the president will join us to break them down next.

new numbers on this past holiday weekend, just this hour the nrf, national retail federation, reporting over 200 million people shopped from thanksgiving day through cyber monday, an increase of 4 million from last year and almost 20 million higher than projected. with retail and the american consumer remaining resilient. joining us on that report is national retail federation president and ceo matt shay. talk about how this squares relative to expectations from both retailers and for your organization? >> hi, sara. well, it was a great big number for sure. it was bigger than we expected, which is surprising, but i think it reflects what we've been talking about and has been the

story since the pandemic, the resilience of consumers. they're still out there. they're shopping. they're engaged in commerce. they were out there on black friday, super saturday, again saturday. so i think the numbers we think are reflective of the strength in the consumer economy and consistent, also, with our forecast from early november that we would see 3% to 4% growth during the holiday season. >> i was going to ask if you have any indication of spending. it's good to see more people out shopping and online, but what are they spending? >> i think over time we've seen the bigger shopping numbers have correlated with bigger transactions. they indicated they did do gift purchasing consistent with last year's numbers so very strong. i think it portends we'll see strength through the holiday

season. we only have two of the ten shopping days behind us. there's eight more leading up to the end of the year holidays. there's a lot of room to run. >> matt, i was interested in the in-store shopping numbers that you have, up 3 million to 4 million but on the saturday down by a similar amount. anything you can acontribute t attribute that to or was everyone home washing watching michigan vs. michigan state. >> what we've seen since the pandemic is a dramatic shift over to the online shopping place. there's a spread, 10 million more, 130 plus million are shopping online, about 120

million are in store. that goes back to 2016 or '17 t. spikes in 2020 when most of us couldn't go anywhere so we did much of our shopping online. i think it is driven in part by the promotions, the deals, the opportunity to comparison shop. it's getting more difficult to distinguish what's a purely in-store and a purely online experience and there is so much of the buy online, pick up in store and buy in store and pick up later from the curbside or in-store ship to shhome. it speaks across all channels than anything else combined with the ability to move quickly across the web. >> matt, the american consumer is so resilient, why the disappointing guidance from most

retailers? even the ones that beat on earnings, many of them disappointed when it came to their outlook for the holiday shopping season. >> i think it's an expression of moderation and that very robust above the historic norm, well above trend line participation in commerce that we saw consumers engaged in as we came out of the pandemic is going back to reality. even our forecast for the holiday season is pretty modest. relative to the ten-year period before the pandemic is slightly above trend. condition assumers are feeling some of the head winds, looking for deals particularly on the discretionary side and execute

to have inventory right. that will make it a competitive season and a good opportunity for the good operators but good opportunity for consumers. >> in your data, matt, what are you seeing with goods spending in particular? and is there a sign that maybe it's bottomed? for much of the year all the spending has been focused on services, raundz and concerts and travel. is that turning? >> certainly this time of year it turns because apparel is a top item. electronics, games, books, toys are bigger and represent the kind of consumption that goes on in our 60-day period, november 1 to december 31. and those were top performers over the last weekend, over the five days. they were in the top personal care products, cosmetics, toiletries, fragrance. those were for the first time in

the top five categories. i think consumers will look for the opportunities and deals. they're going to buy on the good side but it will have to be a great opportunity for them and at the right price point at the right time. >> to your point we see if that lasts beyond the holiday season where that hams. matt, thank you. really good to get the updated numbers. matt shay of the nrf. wall street on "sports illustrated" reportedly fake editorial staff. it found several of the celebrated magazine's articles online were generated by ai complete with author bios. "sports illustrated" has opened an internal investigation into the matter and published a statement on x saying, quote, the articles in question were product reviews and licensed content from an external third party company. a number of the e-commerce articles ran on a certain arena website. we monitor our partners and are

in the midst of a review when these allegations were raised. >> it says a lot more about how internet media today aggregates a lot of stuff. it's sort of third party content partners and i guess you have to have a closer eye on it. >> ai can't come for our journalistic jobs. >> not yet. maybe that's what we are right now. >> ai-generated. not a bad rally, mike. >> back to last week's highs. >> that's it for us. now back to scott and "the halftime report." thanks so much. welcome to "the halftime report." i'm scott wapner. front and center this hour, the fate of the rally. our investment committee making new moves in this market as well. we'll go through them. joining me for the hour today josh brown, stephanie link, shannon saccocia and jim lebenthal. we'll check the markets right now. we have a bit of a pickup. the dow good for about 170. there's the s&p 100, the nasdaq with a nice rebound, ten-year note is falling. we'll get into all of that. it's at 4.34