year next year. it's been challenging this year. i know this again is not consensus. everybody's -- >> i hope you are right. this sounds great. it sounds like, you know -- >> everybody has been focused on the mag seven. we have signals last week. this market's ready to go. >> thank you very much. >> thank you. >> thanks for watching "power lunch," everybody. >> "closing bell" starts right now. we are going to pick it up there. welcome to "closing bell." i'm mike santoli. this make or break hour begins with stocks trying to execute an immaculate rotation. the biggest megacap winners. lacking groups such as banks and small caps and the broadening action that so many investors have been waiting and hoping for. the nasdaq 100 basically flat. a bit more strength underneath the equal weighted s&p off about a half a percent today.

we begin with our talk of the tape. economic growth revised higher last quarter this morning alongside prices easing and treasury yields breaking to a three-month low, are we back to pricing in a soft economic landing as the base case? greg and kristina, great to have you here. thanks for coming by. greg, i know you are going to have a leblittle bit to argue he market is seeing things. this last leg higher in stocks, started with the cpi report november 14, kicked us higher, got ten-year treasury yields below 4-6, now under 4-3. it seems as if the fed is done and yet the economy holding up. what's wrong with is that? >> the fed is screaming from the rafters that they are not done to us. so i am going to quibble with that. and i would point to the start of this even earlier. similar to the cpi where the markets started to extrapolate a

data point as a consistent linear series. and we don't have that. so i think started with the job report. and while 150 or 180, however you want to call it, is not august '97, it's also not june's 105 or july's 157. and so to extrapolate that that's a trend and we will have continued further weakening in the jobs market i think is a misnomer. i don't think we can do that when it's jumping around like that. so, too, the cpi. so i think you have seen coordinated effort from the fed to say we are not thinking the way you, market, is thinking. and i think they have some other unforeseen headaches they haven't announced to us yet. >> let's get to that little bit. yesterday the market took heart in christopher waller, fed governor, essentially saying policy is in a good place, maybe if the conditions lined up we will be cutting rates. we wanted to hear what barken had to say today, who is not a

voter but spoke today maybe a little more in tune but, greg. >> there is no particular need to do anything with interest rates if inflation is coming down. if inflation is going to flare up, you want to have the option of doing more on rates. >> there is your you want to have the option, maybe we will have to if inflation doesn't cooperate. it seems as if the markets able to look at the inputs of inflation or now is getting more comfortable with the idea that it's in the trend we want to see? >> right. and the market is. i don't know if the fed is. and i think that that is setting up for a negative surprise. we know that they want to see further weakening. labor market, want to see continued disinflation, the things that they are not telling us they wanted to see is they wanted to see yields in and of themselves continue to rise organically and do some of the tightening for them, see expectations remain anchored and they are slowly becoming unanchored up at 3.2% now and on the short run at 4.5%, which is

much different than the fed's rejected 2%. lastly, when that base effect starts to become more unfavorable as it will continue to do, we won't get as much psychological comfort. the markets won't be able to take as much psychological comfort from that headline number. >> kristina, the bond markets is overshooting with yields down this much or does it make much sense given the data we have? >> it absolutely makes sense. quite frankly, what i think the fed plans to do. as waller said yesterday, we don't need any kind of significant increase in unemployment. the trigger can simply be disinflation continuing. now, i agree, greg, that that last smmile is going to be hard early. but we are getting there, and i think there is pretty significant confidence among fed members. what we heard from tom barken in that quote was we don't want markets it get ahead of themselves, financial conditions to ease, so i will throw in that

spoiler to keep you all guessing. reality is the fed is done and i think we will see cuts beginning in the spring of '24. >> if that's what he wanted, he didn't get it today, right? in terms of what the bond market has done in response to that? >> yes. certainly the fed, there are a number of different numbers that could be rolled out over the course of days that could try to talk down markets. i think that is what is being done, being talked down. >> i am going to use something i was wrong about to disagree with the latter of what you said. i thought -- and as you know, i was in the camp that the consumer was going to fall off a cliff very quickly, very expediently and that didn't. it didn't happen for identifiable reasons. i see it as a death by a thousand cuts over the next, call it, six to eight quarters. without the consumer collapsing i don't know how we get to a scenario where we need rate cuts.

i don't know. >> let me point you to the federal reserve book that kim to out a couple of hours ago. what we saw was that economic activity is slowing. consumers are being more careful, certainly they are spending is slowing. they are becoming more selective. the messaging we got from lot of companies during earnings season. so what we could see as an environment in which they are not fueling any kind of significant inflation. that actually that soft pullback is enough on the part of consumers to help continue that disinflationary process. >> i don't disagree with that. that was the expected outcome. not surprise. i think we truly need a surprise to get to the point where we need rate cuts in the first quarter. >> well, granted. in the first quarter, who knows what the timing might be in terms of rate cuts. it seems the market gets comfort in that period between when the fed is just on hold, tends to be okay. i guess i would ask, regardless what we think is going to happen

unfolding with inflation with fed policy, what is the market set up for here? because we had a situation back in july, arguably, when we again thought soft land something in the bag, positioning got pretty overaggressive, maybe valuations got stretched, weren't ready for a seasonally weak period with yields flying. therefore, we got a correction. we recovered fromthat. where do you think we are now with regard to market priesing? >> we are at a point where i think we are going to see global risk appetite increase from here, as it should, because i think markets have become more certain in that view that the rate height cycle has ended. some stocks certainly are overvalued in this environment, but a lot of areas of this market i would argue are undervalued. and of course we are only talking about the u.s. right now. if we go outside the u.s., there is some screaming buys, and i think that's what we're likely to see. broadening of the market, which started a little bit today, and is likely to continue.

>> greg, in terms of investment tactics given your view, where does it leave you? i mean, look, i mean, you seem to be saying that the economy is going to be a little more resilient than currently expected, therefore, the fed may have to be higher than the market anticipates, but what does that mean for companies? >> right. so i call this position kind of the anti-goldilocks. things as kristina pointed out will continue to slow. and so in that environment i actually think that it will narrow and i think we will concentrate on the places where we can get some relative earnings growth. i have no confidence that we can grow earnings 12% next year. i do have confidence that sectors can grow earnings 12%. financials are looking interesting. one of the performances happened in the last month. i hesitate to be ahead of a provisioning cycle and i think we will see one. but the flattening of the curve and the, obviously, improved noninterest margin environment

makes it interesting particularly with some of the bellwethers recently trading price to book. things powered by secular tailwinds, like cybersecurity, and health care as well. not just the ones with the blockbuster drugs that everyone seems to want, but names like cardinal that can pass on any macro headwinds that they may experience to the consumer. >> you mentioned non-u.s. equities possibly as an opportunity. i mean, if we get into a rate cutting cycle that typically is one place to look. but otherwise, i mean, developed markets outside the u.s. look like they will be more challenged on the growth side as ever. >> i think we have to separate out the economy from markets. we are all going to be facing a slowdown in the first half of '24 in my opinion. i think markets will look past that to a recovery. european stocks look very attractive. also they are more cyclical in

nature. so if you believe that we are going to see a recovery trade, i think european stocks should benefit from that as markets start to discount an economic recovery in the back half of '24. >> it is tricky because you articulate it right there. pretty much everybody expects there is slowing motion, right? i mean, this quarter is not going to be as strong as last quarter in the u.s. or anywhere else by design and because of rates, you know, to their highs in recent months. but yet you are expecting markets to kind of pivot quickly towards looking through that into the next few months? >> yeah, typically we see markets looking at 6 to 12 months. i think very much because there is an understanding that the rate hike cycle has ended. they can look through this downturn and anticipate a recovery that will be at least somewhat boosted by the start of rate cuts. but rate cuts are not necessary i think to see a recovery in the back half. >> greg, in terms of fixed income, i mean, you finally have

a bid in bonds. one of the strongest months we are on track for in bond rueturs for a while, obviously, coming off two terrible years. where does that leave you? a lot of folks getting used to the idea that 5 would be available for a long whale. >> i think it will be available again. i think the fed is right to wait here. i disagree with kristina, although i have much admiration for her. i think they won't do anything in december because they should wait. i would wait. hopefully, the auctions that we have coming up and we know -- at least know about 1.6 trillion, there is probably more than that, hopefully, organically gives some boost to the yield curve. so i think we will see higher yields. that keeps me focused on the short end for now where i can remain somewhat liquid and i am not tied into a yield that doesn't warrant the risk. >> just in case we lacked for further things to worry about,

we have some comments from jamie dimon from this morning and he is speaking in this direction as well. >> my view about the economy is i think there is a higher chance than other people that rates have to go up. there are a lot of things out there which are dangerous and inflationary. be prepared. >> nobody would argue against be prepared, i guess. of course, you know, jamie dimon likes to stakeout that position of being watchful for risk, kristina. where do you think you would tilt in terms of if you had to worry about one big thing, is it the economy weakening more than expected or a flare-up of inflation that gets the fed back in the game. >> i think the economy weakening more than expected because of the long and variable lags of monetary policy. we don't know how much damage has been done by rate hikes thus far that haven't yet shown up in the economic data. so that's what i worry about. that's why i think it is too

pollyannaish to assume a soft landing. we avoid a recession, but there is significant damage. >> bumpy landing, muddle through. we will see if it comes back. christine, a greg, thanks so much. all right. let's get a check on some top stocks to watch as we head into the close. steve. >> okta is lower after that hacker stole information during the company's october cyberattack. shares have fallen 17% since the cybersecurity giant disclosed the hack last month than comes alongside black luster physical year revenue guidance overshadowing strong q3 earns and q4 guidance. crowdstrike hitting the highest level since april of 2022. the company topped analyst expectations in the prior quarter and issued fourth quarter guidance that beat estimates. the shares have more than doubled in 2023, up more than

120% and are tracking for their best day in over a year. mike. >> steve, thanks so much. appreciate it. we are just getting started here. next, the magnificent seven slipping a bit but the group has seen gains of more than 14% the last month. so what could be in store for the mega caps heading into 2024 ? that's just ahead. we are live from the new york stock exchange. you are watching "closing bell" on cnbc. what do you see on the horizon? uncertainty? or opportunity. whatever you see, at pgim we can help you rise to the challenges of today, when active investing and disciplined risk management are needed most. drawing on deep expertise across the world's public and private markets in pursuit of long-term returns... pgim. our investments

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the magnificent 7 stocks are underperforming today despite the s&p tech sector hitting a record high. with the group gaining nearly 100% this year, is the megacap trade set to turn in 2024? joining us at post nine is a shareholder in a number of these names. amy, great to see you. so, obviously, this is a small decline after a big gain in these names and on a two-year basis a lot of them round trip. i'm curious if you think that the market's reasons for piling into these stocks, right, where they seemed insulated from the slowdown fears and yield moves and from technological disruption, if any of that is changing at this point? >> not from what we're seeing. you know, the markets have transitioned into two scenarios. one is the fact that we are in a higher for locker scenario. to that point, companies, larger cap companies are outperforming

smaller cap. the second scenario is essentially the fed is closer to done. and with that point, growth is co coming back. that makes under the rationale of why investors are looking into these names. >> it's interesting. so it's higher for longer was the premise for a while and now yields are rushing lower because maybe it's not as lhigh as long as we thought, right? >> that's probably right. you definitely have a risk-off momentum now. that's, obviously, driving a little bit of the yields moving back down. and i think that could be the way to be starting off into 2024 as well. we are seeing that the markets continues to be as resilient as it has been. labor market conditions continue to be healthy. it's hard to call a recession unless you have labor markets turning it the corner. >> sure. as wamuch as we talk about the g seven or exclude tesla and it's six, however you define it, they are moving on their own fundamentals to a degree.

you can see the outperformance of others. shows you something long-term is happening here. is there anything with nvidia in particular that gives you pause that either it's pulled forward too much demand or become too popular as a stock? >> certainly there is a lot of positive momentum there and we are cautious going into the stock with brand-new money at this point. but we see the longer term mega trend there and the fact that they have guided revenues double from two quarters ago and reported last weekend, surpassed expectations once again. again two great quarters in a row. it pause -- this mega trend of a.i. and such becoming a longer term thing to stay and we are watching that carefully. >> as you do have fresh client money to deploy, where are you more looking at this? >> valuation continues to be a key discipline for us much we don't want to be chasing performance even if there is a longer term trend in play. we are, obviously, very keen on some of these longer term

trends. weapon want to be in places like the nvidias of the world when the timing is right. microsoft, to your point earlier, is another area we have been long-term holders of and would be buying today. they continue to impress from pricing power, free cash flow generations, all the things that check off in this environment and will benefit in our opinion from a.i. in general. >> it is fascinating. everyone is very much easing on the visibility of microsoft, you know, capacity to monetize in a.i. i was ntsoticing earlier it was almost one for one people were paring down microsoft, down 1 for 2% and all other software stocks were up. some of the growthier stuff, smaller cap, maybe lower profit levels currently, seems like it's catching a little bit of a bid. is that something that's interesting or do you think that's just a little phase we are going through? >> we are looking at derivatives of this a.i. trend, obviously, the big seven ads you noted the first places people look.

the second derivatives, companies that are supporting microsoft, companies supporting nvidia, we are very still very mindful of valuation and in general you make a very interesting point that the magnificent 7 makes up about # 0% of this year's rally and outperform. we are paying attention to the other 493. but we are still very selective because valuation and the idea of monetizing off of a.i. in some of these larger trends is still something we are waiting to see. it's not necessarily consistent across the board. >> we have gotten, obviously, plenty of news along that front the past couple of weeks. the openai drama, microsoft seeming like they retained whatever exposure they have to what openai is doing then amazon with its own co-pilot. everybody wanting to convey they are participating here. does it muddle the outlook? do you think at this point we can have multiple potential winners? >> you can absolutely have multiple potential winners.

and there are so many different ways of playing this a.i. trend. i think microsoft, as i mentioned, continues to play it on both spectrums. they are one of the three as we know at cloud computing vendors and also one of the few that have features and services that use a.i. amazon, google, i think they are trying to get in. certainly not as broadcasted, if you would, or widely anticipated as what you have seen with microsoft. but you are starting to see the players come in and it's just a matter of waiting out whether or not they are true to their word. i think it's easy to say a.i. in a press conference. but can you commercialize off of that is what we are watching for. >> and i guess awhere is the revenue going to come from? not so much are they going to be able to grow revenue, but where are they taking it from? are there net losers you have identified just in general in this area that are not going to be as well positioned? >> the way we are seeing it is more so that they can be more productive, if you would, using a.i., not necessarily taking it

away from other players. and that's probably what's driving for us at least innovation, is really what's driving the game for us. and that's a discipline for us, is to look for the innovators in this space and using a.i. to innovate is one of the key, you know, more critical disciplines for us. >> yeah, talking today about a.i., if it didn't exist, they couldn't do any of the designs of their product line. it's working for them. thank you very much. all right. stick being tech, a quick programming note. "the halftime report," 12:00 p.m. noon eastern tomorrow with scott walker. next, iger on the record. the disney ceo taking the stage. we will brg u inyothe biggest headlines after this break. "closing bell" we'll be right back.

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>> well, iger talking about how he is trying to transform disney, including improving movies, so they can meet the higher bar that there is now for getting people out of the house and into theaters. he talked about sake taking espn direct to consumer. >> all we are doing right now as we prepared to bring it in a much more direct to consumer direction, which is to launch it as its own app, is basically looking for partners, talking with prt artners that could enhe the prospects. we are very confident about the prospects of espn as a streaming business. but with the potential partner from the sports side, meaning more consent for from the distribution and technology side, we believe our prospects will be even better as it transitions. >> iger also responded to a question about nelson's activist push and how his demand for a board seat could be received.

>> there is a qualification level that is required to sit on the disney board, and the board will make the -- not me, the board makes the decisions about who is qualified and who isn't to be on the board. and if nelson officially requests a board seat, i am sure they will go through a process to determine whether he should have a role on the board or not. but it's not like we've got, sure, a fm had of empty seats, come on in, join the disney board, have fun, have at it, help us make seek wuls. >> another controversial issue. elon musk. he defended his decision to have disney's brands stop advertising on x saying the association with musk is not necessarily a positive one. guys. >> interesting, julia. of course, in distant pass, disney once considered buying taylor swift before musk owned it. there was a bit of an exchange with andrew about the current succession process, round two

with bob iger back in the role. >> yeah, look, there was a little bit of a joke about how much iger needs to do. iger spoke in his town hall yesterday about how he has been in a fixing mode. now he gets to shift into a building mode. there was a bit of a joking exchange about all of the things on iger's to-do list. he said repeatedly that when his term is up, of course, he had extended his term since he returned, that he was going to be retiring. and andrew pushed him a little bit. you have all these things to do. if you don't finish them, will you say? iger was definitive this is his last round as ceo. a lot to do. the board is taking the succession process very seriously. >> quite sure of that. and i am sure before, too. we will see how it plays out this time. thanks so much. up next, we are counting you down to salesforce's results. seeing serious gains this year. up nearly 75%. so what's at stake whenit

reports in "overtime"? we will discuss that after this break. the s&p 500 just dipping below the flat line as those big cap tech stocks undergo profit taking. we'll be right back.

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shares of salesforce up nearly 3% as they prepare to deliver earnings after the close. brent of jefferies with more on what to expect. i mean, the consensus has been rising for months for this quarter, the current fiscal year, for salesforce. so clearly trends moving in the right direction. where are expectations at? what are you most going to be focused on in the numbers? >> the two focus items, number one, crp, or backlog growth at 11%. they should be able to clear it. and we believe activities picking back up in tech spend. number two, operating margins, 30%. this company has way higher aspirations on march. their peers are high 30s, into the 40s. you look at adobe mid-40s, oracle low-to-mid 40s. all the established peers are way ahead of salesforce. >> this why the activists have been involved because they have been running below cruise

altitude on margin. so we think the continued focus there will give the shares continued lift as long as they continue to show progress on both crp of 11% and 30 plus percent operating margins. >> there is some expectation i suppose they may roll out some more distant guidance, right? are they going to be framing out the next nis cal year? i guess that would incorporate whatever they think they can achieve on margins? >> yeah. again, i think this is in our opinion a double-digit top line story. with 35, 40% margins long term, and then the whole a.i. craze has not hit. so if you look at microsoft and adobe, their a.i. monetization is way ahead of salesforce. we think that will come to them. it hasn't yet hit in a big way, but will hit. and you look at a number of other businesses like slack underperforming. we believe they can begin their

outperformance with new sl leadership. their cloud, there is a tremendous opportunity in front of salesforce. again this is really -- the big stock runs have been driven on margin. now we have to do see again that they can sustain that double-digit ton line. again continue to continue to the margin outside. >> in terms of a.i. and overlaying that into their various products and services, we are seeing some commentary about how their customers are feeling about that and what can be delivered by way of salesforce. how specifically is that going to play out, do you think, for them? >> i think it has a big role in '24, not this year, and it will have a meaningful impact to their business. if you think about using their products today, you're a service representative, the a.i. agent can effectively help understand what is mike looking for, what can i provide to you when you call into a call center, do i need to talk to a rep. when you have a sales engagement, you may be of the

ipo which you are, and you effectively should get special service versus myself. i'm not of the ip. if you think about what happens in terms of a.i. for salesforce overall, there is an incredible opportunity. there is so much data trapped in salesforce and many users of salesforce effectively say that they spend more time feeding salesforce the data versus salesforce giving them the data back. we are users at jefferies and i think a lot of users feel that the system can unlock a lot of that information. so a.i. can make this available to the end auuser so they don't have to dig around for it. that's not the case today. that be the case in '24 and we are bullish they can unlock this. if you are very transparent, we believe microsoft and adobe are way ahead of their a.i. capabilities. they are monetizing in a big way. we think salesforce was lagging a bit but has an opportunity to

catch up. that will be a '24 catch-up, in our opinion. >> valuation-wise in a free cash flow yield basis, salesforce is a good deal cheaper than microsoft. is that something that should converge? i am sure you think microsoft is well positioned, too, but it is much more richly valued. >> that's right. microsoft has the best cycle of anyone in software now, the opportunity to double prices is incredible for microsoft. we believe it will converge. to your point, salesforce trades at a discount on many of the valuation metrics and we think that's why we believe the stock can continue to climb to 275 to 300 based on better execution, unlocking a.i. into next year, potential hopeful reacceleration of revenue growth if the a.i. really kicks, they should be able to price and charge more and could drive even faster than low teen, you know, backlog growth. and then from a margin perspective, they have been the most inefficient large cap

software company across the board. in terms of getting better efficiency, that keeps unlocking shareholder value. the activists aren't going anywhere anytime soon. so we think it's a reasonable setup for salesforce. >> yeah. if it gets back to 300, that's essentially a round trip to the old highs, right? two years ago. thank you very much. appreciate the time. >> thank you. and tune into "overtime" at the top of the hour. they will have salesforce's results. next, the biggest movers as we head into the close. steve is standing by with more. >> yeah, so one of the original meme stocks is soaring today ahead of its earnings report next week. and you can't defeat this one retailer that smashed expectations in its earnings report this moinrng. we will reveal those names when "closing bell" returns after this. s.

♪ 16 minutes until the closing bell. the s&p 500 on modest losses, it's all about rotation out of the megacaps as two stocks up for every one that is down on the day. let's get back to steve for a look at key stocks to watch. >> gamestop is soaring today as the meme stock enjoys a resurgence this week. the stock has seen a huge uptick in trading volume and increase on sites like reddit. it comes ahead of the third quarter earnings report a week from today on december 6. gamestop up roughly 30%, which would be the best week since march. and foot locker is having its

best day since august of 2022 after smashing the earnings estimates on revenue that also came above expectations. the company raise the full year same-store sales outlook and issued earnings guidance above analysts' estimates. they said that customers remain discerning about discretionary pend spending but are willing to pay full price for new and trendy products. shares up over 15% today, mike. >> yeah, shows you how beaten down expectations had gotten with foot locker. thank you. up next, banks outperforming on the day. a top analyst to break down the action in the financials and what it might mean for the sector as we head towards 2024 that and much more when we take you inside the market zone.

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"the closer" market zone. peter is here to break down the crucial moments of the trading day, plus general motors share soaring. phil lebeau has those details. and troy cassidy of rbc capital digs into the rally in bank stocks. peter, the market is getting comfortable with this idea that we have seen peak yields, the fed might be getting out of the way, the economic so far hasn't buckled. earnings on the upturn. risk back on. how do you see the setup? >> you know, i see the setup as very bearish positioning at the end of the october. that was amongst professional

investors, ctas. we ended october with fewer than 20% of s&p stocks above their 50-day moving average and lots of other indicators suggesting that, you know, people were just a bit too bearish. and that usually coils the spring for a rally. we've gotten that. it's fueled by sort of the re-emergence of a goldilocks narrative. what happens oftentimes is when stocks rally, that feeds on justifications for that rally or people create narratives, they craft narratives to fit the rally. and i really think that that's what's happened here. i don't think much has changed. i think the long and variable lags, monetary policy kick in. cert certainlying longer than i thought they would. i don't think the narrative for next year has changed at the all. >> certainly narratives always do hold sway and change and follow price and the rest of it, but what you say suggests two

things. one, is that that excess of bearish positioning into october low may have been an overshoot and therefore the s&p never belonged near 4,100. beyond narrative. the target field to below 43 seems to take pressure off the market and economy as well? >> i agree. there is a feedback mechanism between ten-year yields and equity markets. that's part of the relief. that said, where i think the narrative has gone a little bit awry is the reason why yields have come in. feds funds futures are implying 1.2% cuts for next year, and it's our view that those cuts are coming from expectations for a slowdown, not a soft landing. and so, you know, you have got this circularity to the reasoning that's beginning to embed itself. but the fed history tells us that the fed has rarely, if

ever, orchestrated a soft landing. and i'm just not certain what's changed this time. yes, yields are leading equities, clearly that's helped to support equity risk here. we don't think that's sustainable given the trajectory of fundamentals that we are seeing, especially a lot of the high-frequency data. >> there is no doubt. even a slowdown is compatible with the idea that ultimately you get a softish landing i suppose. it's a matter of whether it gets worse from there. the credit markets seem not to be sniffing any of this out. does that give you comfort? >> i agree with you, they have tightened. markets are sniffing it out. we look in certain structure credit markets in particular where we happen to traffic, we think that a slowdown is being priced in. it's a good risk-adjusted return there. and, you know, when we look at relative value from bonds to equities, for example, we don't

see it. an s&p dividend yield 1.5% versus real ten-year yields well above 2%, it doesn't square. and forward equity returns have been very, very low every single a time you have that sort of dislocation. >> fair enough. i peter, thanks so much. >> thank you. >> gm responding to this accelerated buyback announcement, up 9%. what are the details? >> when you get a buyback you take 17% of the shares and immediately take them off of the market, you are going to get the stock oubouncing higher. we will talk about that. the other piece of news with general motors, new guidance for 2023. they pulled that back during the uaw strike. it's not different before the end of the strike but a little bit of a trim here and there. then the other thing that we heard is that they will be investing less when it comes to

autonomous vehicle subsidiary cruz. we talked about the problems with cruise with their vehicles out in san francisco, for the time being those are suspended. finally, mary barra said on "squawk on the street" we have got to improve our execution. here is mary talking with us. >> there was a lot of challenges this year with labor negotiation, et cetera. those are behind us now. that's what gives us confidence in the business, confidence to do the r and a $10 billion level and we are going to move forward and execute and again move past these, i'll say, bumps in the road in the areas of autonomous and electrification. >> asr stands for accelerated stock repurchase program. $10 billion of that 6.7 billion goes into immediately retiring gm shares, about $6.7 billion worth of shares. again that takes 17% of the float off the street almost immediately. also take a look at shares of

ford. tomorrow there is a barclays analyst conference. we will hear from ford at that conference. don't be surprised if we hear the company like general motors giving us an update on their outlook for '23 to or '24. there will be questions about the outlook and we will hear from ford at that analyst conference. >> phil, one way to interpret the decision to do this accelerated share buyback, is, look, they are telling the market you are pricing four times earnings as it is. you are valuing gm as if there is not much of a growth future if any at all. we will give you the capital back, whoever wants to take the money and go, can go, and we have to prove it to the rest of the investors that there is a next act in terms of growth. >> and that's the big question. what is the next act? look, if you were general motors and didn't put the billions of dollars you allocated into autonomous or evs, they are killing it when it comes to

internal combustion vehicles and would have even more cash they are spitting out. we both know the future of autos is in electrification and they are going to have to make that transition. the question is can they get past the challenges that they have encountered so far and kick it into gear in '24 and '25. >> and actually have a transparency towards some returns in that business. phil, thank you. appreciate it. gerard cassidy, banks up 2% today. up like 14% on a month to date basis. is it all about the bond market rallying and taking some of the balance sheet pressure off? >> i think it's some of that. no doubt about it. certainly at the beginning of the year, of course, many of them, the investors were very concerned about the unrealized bond losses and to your point they reached levels that were very high at the end of the third quarter and now the ten-year is coming in quite dramatically since the start of the fourth quarter. more importantly, mike, it's about credit.

credit trumps interest rates in our opinion, and if we have some sort of slowdown, which it seems likely next year, it's not a hard landing, it's not a recession of the is the 90 level or '08-09, the banks are well positioned today for the fed to stop raising rates and if we get a soft landing combined with a fed being finished, we are looking at a period where the stocks are greatly underowned by the community and you will see some meaningful performance in our view in that environment. >> yeah, i have to see goldman sachs showing hedge funds have rock bottom exposure to financials. but on the credit point, you have seen everybody kind of getting a little bit alarmed about the upturn in consumer delinquencies whether you are talking about consumer loans or credit cards. and right now it looks like normalization, right. you are going back to the delinquency rates of pre-pandemic normal times. but it's hard to know if it's

going to stop there. >> you put your thumb on it, mike. i mean, the normalization trends are underway. we have been talking about them all year. and it really comes down to does normalization lead to deterioration? and then that is equated to, of course, the employment fixture. if the unemployment rate, if next year's rate could reach 6 or 7%, then you are going to see far worse credit losses in the consumer. however, if the unemployment rate tops @4.5%, we have all these labor shortages that we are experiencing today, then it may not be that bad. the other thing, too, remember, the banks have already reserved for many of these losses under those new accounting that came into effect in january of 2020 called cecl. current expected credit losses. they are prepared for this. and i think if the economy is a soft landing or a mild recession and if it's a mild recession think about this for a minute, mike. the fed's going to start cutting

the short end of the curve, a presidential election year, we don't have a bad recession. >> yeah. most likely that would probably happen. now, just in terms of within the group, quickly, you know, what stocks look like they are ripe to benefit from that type of environment most of all? >> the risk on name. this year jpmorgan has been the champ, the west stock, the risk-off stock, underweight the banks but own jpmorgan. we want to go risk on. bank of america certainly is a name people should consider. the regional front fifth third, bankcorp, u.s. bank, pnc. we would steer people to risk on upgs names in the scenario where the fed is finished raising rates and the slowdown in the economy is not a hard wlanding those stocks will do well. >> thank you. >> thank you. all right. 30 seconds until the close. the s&p 500 is now sitting on a slight decline of about 1/8th of

1%. ten-year treasury yield down under 4.3%. the equal weighted s&p up about one-third of 1%. some of those megacap names, microsoft, meta, alphabet, the big winners. year, weighing down the semi. that's it for "closing bell." we send you to "overtime." that is your scorecard on wall street. welcome to closing bell "overtime." >> coming to you today from cnbc's cfo council summit in washington where i spoke with the chairman of the joint chiefs of staff c.q. brown in a very rare interview. his first, in fact, since taking over the role of chairman. his comments on israel, china and ukraine are all coming up. >> and we have a big hour of earnings on the way. headlined by dow component salesforce