life. you need help and then what the burger. >> we had a guest on who thinks the s&p may correct down to 5,000. you agree or disagree? quick? >> i disagree. i think it's 58, 6000. >> that was three stock lunch. >> it was a sugar-free version i think for the most part. all right. thanks for watching "power lunch." everybody. >> "closing bell" starts right now. thank you so much. welcome to "closing bell." i'm live from post nine at the new york stock exchange. this make or break hour begins with stocks over the final stretch. not just today but this year. after this remarkable bull run. we'll ask fundistrate's tom lee, the question what's going to happen when he joins us in a moment. take a look at the scorecard. 60 minutes to go with regulation, have work to do. the major averages mostly negative. nasdaq barely hanging on to the green. the dow is the biggest loser,

down .6. russell 2000 is weak. notable moisturizers nvidia up to -- movers, nvidia up. we're watching auto stocks, too. morgan stanley out of jonas, downgraded the space including moving general motors to under perform. that stock down by 5%. it takes us to the "talk of the tape." how much more can stocks rise? tom lee is fund strat's head of research, cnbc contributor. live at post nine. nice to see you. since the fed did the jumbo cut the market hasn't done much except for last thursday. why? >> you know, i think the fed unleashed us on an easing cycle, and that's going to be positive. we know it's actually historically positive, three months, six months out. what stocks do in the next month is a coin flip. i think that's what we're seeing because there's some repositioning that took place. and we're thinking about the 40 days until the election. >> so does the fact that the election is but 40 days away

sort of ruin the perfect scenario for stocks to get that post fed bump? >> i think it delays it. just because -- in the conferences that i'vebeen speaking to -- speaking at and seeing wealth managers and family offices, a lot don't want to commit capitaled in after election day. -- capital until after election day. they want to get that event behind them. >> you think we're going to have a dash to the finish after election day is out of the way? >> yeah. and that's pretty typical. in fact, in election years the november-december rallies are tremendous. in fact, when markets are up more than 10% in the first half, you also get big rallies november, december. sort of choppy through september. >> you think investors are sold on the idea that the economy is going to make it through, the fed's going to pull this off? is any of what we've witnessed since fed day doubts about the bigger picture? >> so far so good. this friday we get core pce and hopefully that confirms

inflation is no longer on the front burner. i would say one thing i've noticed is that the number of investors and professional money managers that think we're already in a recession is very high. and so i think the evidence just has to be better than expected, and i think those views shift back to soft landing. >> when we've seen recently targets for the s&p, brian belski, the latest to raise the target to the highest on the street. i've asked you about the market lately, you haven't sounded like you would be raising your own target to a degree like that, would you? >> you know, i think there is a lot of upside in the foreseeable future. let's say three, six months out. but for someone to tactically say we need to pen a 6,000 target and then put money to work today, i think it's harder to make that case because valuations aren't on the cheaper end, and we've already had a

fairly sizable move. i'm not saying i'm like bearish now, but to me i'm -- i have more confidence saying three, six months out. things are attractive. things like margin debt. it's decreased in august, meaning investors have been deleveraging. it hasn't gone anywhere for the last four months at a time when markets are rising. >> i guess my point would be it would have been better articulated to just say you don't sound as bullish as you usually are. is that fair? >> you know, yes. i'm bullish into year end, but i'm less confident about how markets behave into election day. and not that i think we're going to have a huge drawdown, if we do have a big drawdown, i'd be buying that dip. but i also don't think we can make new highs and then see the market blast off after election day. so i'd rather sort of say things look a lot better after election day. >> can we make new highs in tech doesn't resume its leadership role in anywhere close to the degree that it had?

>> as long as tech is a market performer -- if tech declines, that's going to be hard for the rest of the s&p 500 to compensate. but what we've seen so far including the days like nvidia and tesla recently is that tech is actually holding its own, but other stocks are starting to show catalysts and signs of life. >> what about the broadening trade? i mean, you look at the russell, your big call, of course. two week date, down more than -- week to date, down more than 1%. hasn't done much. i keep hearing you got to wait until the fed cuts then go into the russell. i don't know. what do you think? >> russell had a big week last week. some profit taking now. i think that there's -- this is what bottoms look like. i don't think bottoms are straight up. i know in 2021 energy was bottoming, and it was also very choppy. but eventually made not only new highs but then basically had a blistering gain in 2020 and the year following. i think that's a multiyear start for the russell.

it feels choppy, but we're still near all-time highs. and there's a big fundamental case to own small caps. >> some have made the case that there are a lot of areas of the market that are overcrowded at the point. so many sectors have gone up a bunch. you look at industrials and utilities and other things that have traded near or at highs. therefore, they find better -- value in bonds. what do you think? >> you know, i think a bond investor is buying a bond for a different reason than buying an equity. because an equity gives you not only inflation protection and benefit from falling yields, but also capital appreciation and positive surprise. bonds rarely give you positive surprise. i think a bond investor should -- someone should have some income with some capital upside there. but there are so many good opportunities. and you know, the fact that china has started to actually perform better and potentially

broken out, that's again a brent signal. that's been a big drag the laugh few years. >> how about that? do you feel like the move that happened in china is a game changer on how we should view what the potential turn in their economy means for the overall markets? i mean could we've see certain stocks get a nice boost. some of the luxury goods companies. lvmp, estee lauder, et cetera. what about the bigger picture? >> you know, it's hard to tell what's a trading rally versus a bottom for china. i spent some time talking to our technical strategist. he thinks this is a bona fide breakout, and it is coming on the heels of not only stimulus but in the face of unrelenting bad news for china. to me a rally on bad news is a sign that maybe the worst is already priced into china, and that means it could rally for a while. >> kevin gordon and max kentner. good to have you with us. kevin, you've heard tom state his case for stocks in the near term. what do you think? >> i largely agree with that.

i think if you're approaching it from a pe versus earnings standpoint how much is left to be squeezed out of the valuation upside, probably not as much given we look pretty stretched, whether you're looking sector by sector or looking at the aggregate market. i think that in terms of the fed reaction, i think it's a little bit -- i know there's a lot of obsession around the cut itself and what it means. but i think you have to sort of take a step back and think about what the fed's looking at being economic data, and ultimately that's what the market looks at. as we continue to go through this churn where more sensitive rates of the economy to respond to what the fed is doing in terms of cutting and hopefully find revival in the next six months versus what's now going on in services and labor if we continue to see softening trends. the latter if that happens probably won't be the most bullish case for the market. >> max, what's your view? >> yeah, look, i think -- i'm still -- in the near term on stocks in particular. and yield stocks in particular. we've been buying the -- the dip

in the last couple of months, and we continue to do so. i think actually there are probably a little bit too much obsession around the u.s. election, but do think one thing that is under appreciated is the earnings trajectory in the very near term. we look at the q3 report, for example, at the s&p, in fact we see earnings expectations from consensus almost flat quarter over quarter on an aggregate basis. it's tech up, utilities up, the sort of normal q3 seasonality. other than that, every other sector is either flat to slightly down. so i do see the risk. the upside risk. that clearly -- people are -- have focusing too much on the noise and not really taking into account still really solid fundamentals. i would agree with what you guys have been talking about before, there is an awful lot of talk still about recession and around severe slowdown. in fact, when we look for example to colleagues, they run

a quarterly emerging markets sentiment survey which came out today where basically expectations around a recession are a major drawdown in dm, developed market activity, is by far the biggest risk that investors see. that more than tripled over the last quarter, that sort -- those kind of recession fears. and following up, when we look at our sent. and positioning indicators, even though we're at an all-time high and high yield spreads and investment grade is sub 90 you're still seeing our sentiment and positioning closer to a buy signal rather than a sell signal. that to me, i don't want to be cautious at that point. >> what about, tom, this idea as max said, there's too much obsession about the election. i think people would say i don't think so. what do you think? >> i think elections are very emotional issues, and i think it does cloud people's willingness to take risk or how they react to information. so i -- i kind of agree with the

idea that the stock market's going to be fine regardless of who wins. but between now and then, it's very difficult for an institutional manager to make a big bet one way or another because the election and it could be a disputed election. >> i mean, you have diametrically different tax policy being discussed by the candidates. so how -- how's it a win either way? >> i think one thing that investors have to be mindful of is unless there's a republican sweep or a democratic sweep, then these are just policy platforms that will have some challenge to actually get put into law. but i think more importantly things like a.i. are really shifting like the axis where all the future growth is coming from, the u.s., and they're not going to be hurt by whoever is president. >> you think that the markets reasonably value? we've had this conversation about the multiple at the market trade and where earnings

expectations are for next year, expected to grow 15%. do you think that's too optimistic? >> valuation, it's in the eye of the beholder. we use valuation more as a sentiment metric or indicator. in a stretched environment it tells me people are willing to pay a stocks -- i think we're stretched given the fixed income environment how much it's shifted the past few years. you still have income in fixed income even with the rolling over of yields. there's a bond relative to stocks, to tom's point, there's an and not an or when it comes to stocks and bond. for earnings itself, the somewhat maybe counterintuitive aspect of earnings growth is as you get further into the earnings cycle and growth accelerates well into double-digit percentage territory, that's consistent with more tepid gains for the market. not an outright decline. not negative gains annualized. the best zone is when you're emerging from an earnings recession and the market is sort

of sniffing that out and catching onto that force. now you've kind of priced it in already, which is what happened at the end of 2023 into the beginning of this year. you're getting to the point where it looks like the market has looked ahead to what has been and what will probably continue to be relatively healthy earnings cycle. >> is -- to that point, a good one and made by others, too, isn't a lot already priced in? >> yeah, but we could see this six months ago, 12 months ago, 18 months ago. to the point in terms of the earnings recovery, one thing is clear when we look at the second quarter. we've actually just regained the levels where we were in 2022. the net income of the s&p 500 outside of the magnificent seven, so those stocks, the broader market that's literally reclaimed the level where we were at the beginning of 2022 in terms. net income. what that tells you is that is still very much lagging versus overall growth and as growth still, you know, probably still

chugs along nicely with an outcast 3% the higher data like weekly activity index, suggesting around 3% gdp growth for q3, all of that should say that we are right now getting out of the worst and bottom of the earnings recession for the broader market, for the four and 93, and there is still quite a bit of a catchup to play for the broader market really. and that also should be helping the broadening story overall. >> earnings expectations, though, for year-on-year growth have been coming down, albeit slightly, max. what about the idea they could come down further thus pressuring the multiple? >> yeah, i'm not particularly bothered by that to be honest. when we look at earnings expectation, let's be honest, full-year expectations, you go into january, they're always high. you always start every year with -- you say, that looks a bit too high. that needs to come down. then they come down in january and february, and they typically

come down. it's not something where, you know, it only happens in like half of the cases. it's most of the cases where january and february, those earnings estimates are cut because people realize they've been a bit too bullish or perhaps put on the 30-year average for earnings or something like that. but the important thing is it doesn't really correlate with returns. if it was correlating with returns, then january and february should be the worst seasonality months and they are not. january and february are far from being the worst seasonality. therefore, i don't really pay an awful lot of attention to that. you could also argue with q4, deli double digit, a lot of that is catchup from these sort of 93 stocks outside of the magnificent seven to match up with gdp from the last couple of quarters. so not particularly. >> you're not worried about

earnings, you're not worried about the election. doesn't sound like you're much worried about anything at all. >> no. not thea all. no. think about this -- if you got for example in a week and a half, if you got the payrolls, you could paint a picture saying if the number, the consensus is give or take 130k, if you get 180k, great, the labor market's in a better shape. the labor market follows other good activity stocks. if you get 50k below maybe you'll get one or two days of stock reaction, but then people will think very quickly, realize that means the probability of the 50 basis point cut. so further 50 basis point cut in november actually increasing and that should be good for valuation. both for a -- for multiples. even there might be quickly jumping in and buying that. >> kevin, what do you think of the sectors that have led quarter to date, which one do you think has the highest

probability or -- that is not going to perform nearly as well going forward? utilities are up 17.5%. real estate's up 17%. industrials up 10.5%, and financials up 9%. >> if i'm going with the bias of our sector model finishes are the highest rated in terms of outperform. leaving that aside, separate what's been going on in sectors like financials or industrials versus what's been going on in some of the more traditional defensives. whether it's utilities or staples. you would argue there's more strength in utilities than staples if you look at breadth metrics. for the defensive trade, i view that more as a catchup because of what happened last year and where both sectors actually broke through bear market lows and were down in the first year of the bull market for the s&p. it's not typically what you see in any bull market, regardless if it follows the recession or if it doesn't. so to me, a lot of what has happened in the price action this year has been just a catchup and sort of investors realizing they probably got a little too aggressive with selling down those names.

if you look at the strength in some of the more cyclical parts of the market, i think it's pretty much consistent with sort of us living through a soft landing and kind of going through it this year. i don't think of it as much of a destination, i think of it as a process. it makes sense to me that financials and to some extent industrials, even materials if the china trade comes back on line, at least hang in there. i'm not sure that that they would completely take over as leaders for the next year or two, but i think it makes sense if the fed is going to stay methodical about the cutting cycle and if you don't go into an outright recession and the bottom doesn't fall out, makes sense to me why those sectors would continue to do well. >> how would you answer that question, tom? >> i mean, i -- i wouldn't really add that much except i think we have to keep in mind the fed is in an easy cycle. the cost of money is falling for business loans, auto loans, credit cards, mortgage rates, that is true stimulus. and i think that that adds to

earnings power in the coming months and coming year. in fact, i think that's why russell earnings will surprise and cyclical earnings will surprise, and i think leadership could change. >> i asked you last week at a ceo council event that we had that you were at about the small cap call that you had made. and you're still not necessarily sticking with the 50% up for small caps, but you still think they could have a huge move because they tend to move quickly. >> that's right. i think what investors have to remember is small caps have been out of favor a long time. and they are known for having explosive rallies that are not abnormal. so last year was a 27% rally over really 20 trading days. i think we could see something very big between now and year end. i was hoping it would be after the fed started the rate easing cycle, but maybe it really has to happen after election day. but are the fundamentals getting stronger for small caps? absolutely. because interest rates are falling, merger activity likely

picks up, and the median pe of a russell 2000 stock is ten times, 10.7 times. that's not demanding, especially if we're trying to be sensitive to devaluation. >> we'll leave it there. everybody thank you so much. kevin, good to see you here. tom, see you again soon. max, we'll talk to you, as well. now to pippa stevens for the biggest names moving into the close. shares of hewlett-packard enterprise are jumping after barclay's upgraded the stock to an overweight rating citing that artificial intelligence servers will give hpe a boost adding it has the lowest valuation among peers despite solid margins and improving free cash flow profile. shares of flutter entertainment ahouse of representativesed a buy back program of $5 million. the fandual parent expects to double its core profit by 2027, boosted by a booming betting market in the u.s. shares up 5%. scott? >> all right. thank you. see you in a little bit. we're just getting started.

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welcome back. meta holding its annual connect event announcing new hardware products and a.i. tools. julia bhas beenat the headquarters in menlo park, california, and join us with the details. jowlia? >> hey, scott. mark zuckerberg announcing new augmented reality and virtual reality innovations and hardware with a.i. at the center of everything. >> meta a.i. is on track to being the most used a.i. assistant in the world by the end of this year. in fact -- [ cheers ] >> it's probably already there.

we're almost at 500 million monthly actives and haven't launched in some of the biggest countries yet. >> zuckerberg announcing a slew of new features for met a.i. across whatsapp, messenger, facebook, and instagram. now users can talk to meta a.i. and have it talk back to you with answers to your questions. and users can pick among celebrity voices including judi dench and aquafina. meta's ray ban glasses are havig live translation and the ability to analyze video and set reminder despite wearing the glasses and talking into them. the company unveiled a new augmented reality prototype which is calling orion. zuckerberg called orion the most advanced glasses the world has ever seen. they weigh about 3.5 ounces. you can see through them and can see holographic displays projected into them. meta also announcing a cheaper quest 3s headset. it's going to cost $299 and ships october 15th with features

from the higher end quest headset that's out now that costs $499. scott, so quite a price cut there. >> thank you so much. joining us is gene munster of deep water asset managements, firm owns meta. good to see you. what's your reaction to what julia told us they did? >> scott, as a meta investor, i'm surprised that the stock has kind of held its gains today. i continue to believe in what this company is doing in terms of infusing a.i. to really drive engagement across the properties, the three-plus billion active daily users. that is the substance. then also some of the -- what the framework that they're on around wearables is important. but the -- the details, the substance of today i think was a little thin. the really -- the part of the most tangible announcement was this 500 million users of meta a.i.

they're basically infusing that into instagram and whatsapp and to certain countries and facebook. so it's a little bit different than like a comparable 200 million daily active number from openai. and then they had the price cut like julia talked about. and so this was more about incremental updates to what their vision is. i want to underscore the real takeaway here is beyond being incremental, there something that is material which is meta is making it clear they believe in a future where smart glasses or they refer to them as a.i. glasses, are going to be hundreds of millions of units. today if you look at quest, it's probably five million units. probably 1% of sales. but they're really putting the stake in the ground. if you look at the stock, it -- it jumped 1% on this news of orion. orion is probably three to five years away from seeing the light of day. and so i think that that really underscores that jump in the

stock is that investors are really want to hear and are glad to hear that meta is putting their foot down, that they see a future in a.i. glasses and wearables. >> do you think that the jump in the stock -- we can see from year to date it's you 60%-plus. do you think all of that is justified? >> i do. i think that if you look at what's happened with their earnings, i mean the stock is up 60%-plus earnings, the multiple has gone up from 19 times the outyear to about 29 times. but earnings during that period are up about 40%, and we still haven't really begun to see the benefit of a.i. and i want to put substance, when we talk in a.i., a lot of times it's like theory, like what is the real tangible piece here. and when it comes to the stock and -- about what earnings are going to be in the future, the

ability for a.i. to drive engagement, to make it easier for creatives to build content, to make the content better targeted at users, that also improve engagement, all that i think is still largely to come. when i think about where the stock can go and think about the earnings power, i think that we should see upside to numbers in '25 as these features become more mainstream with creatives and their base alike. >> how do you feel about alphabet with the firm owns, as well? it's been an underperformer over the last month. it's had a good year like mega caps have this. you have regulatory issues swirling around there. and some others, too. how do you view it here? >> so we still like google, i think when it comes to the regulatory piece, we continue to believe that they're going to successfully navigate this. i think ultimately is that their

search business continue to do exceptionally well in the june quarter. that was a long time ago. the june down there, part of the june quarter up 14%, similar growth rate as the march quarter. so from our perspective is what they're doing in terms of adding generative search to their results and kind of -- layering in gemini, seems to be having the right effect. and ultimately the question comes down to this is will a.i. and regulation really sidetrack the business? and for -- for a.i. to sidetrack the business for example, openai to come out of a product that is going to steal a share away from google search, it really needs to be ten times better. and at this point, the way gemini has been integrated inside of google search, it's openai and what they're going to do in search is not going to be 10x better. we continue to feel good. i mentioned wearables earlier. google, of course, has talked a lot about wearables with their astro project. and so i think that google is still in a great place. it's the oxygen in the internet, and that hasn't changed.

>> i think you're reasonably identified with apple over the years. i know your firm doesn't own it, but you do personally. used to cover it, obviously, in your former existence on the street. there are a lot of notes out today that are calling into question demand about the 16. they're counting on a huge upgrade cycle, right? the stock had a massive move from the developers conference on, right? and now we're hearing doubts about lead times and what real demand is going to be. do you have a sense of what the real story here is ? >> i do. we've done a lot the past couple of months in terms of what this cycle is going to look like. and ultimately i think that iphone is going to probably grow closer to 10 to 15% in fiscal '25, the street now is about 7%. and part of the reason is that -- i don't think the street has

really -- understands how big of an upgrade wave is coming. numbers get thrown out there. i want to make it easy for investors. in 2021 the iphone business was up 39%, had a huge surge obviously because of the pandemic. the average upgrade life is about five years for an iphone. we're going to start to see this mass -- the massive wave coming into an upgrade window. so that alone along with easycomes should employ up-- easy comps should employ up features that are must have. that's the part that is a guess on my part. it's -- what i've seen in the future, i haven't -- feature, i haven't tried them, apple intelligence, no one really has. what i've seen and understand about what they can do, i think it's going to create a wave of a couple year upgrades. ultimately i believe in this company. >> you guys own micron, quickly if you could, earnings are also in overtime. what are your expectations here? >> all about the commentary on

pricing for next quarter leaves the stock in the near term. that really is noise. focus on the long term, about the high-bandwidth memory. they're sold out through the end of 2025. positive commentary on that should be positive for the stock. >> all right. good stuff. good to catch up with you again, thanks for your time today. >> thank you, scott. quick programming note. don't miss meta chief product officer christians chris cox on "overtime" today, 4:00 eastern time. and catch the ceo of micron tomorrow, "squawk on the street" at 9:30 a.m. eastern time. up next, the dean evaluation 'l back. hel tell us how he's navigating the mega caps now, what's over valued and what's not, next.

the tech trade losing a little steam and big tech's performance starting to split, as well. nvidia adding to yesterday's gains. it's back above $3 trillion in market cap as we speak. there's the 2% move today. meta's higher, as we told you, on the heels of its connect conference. apple, amazon, alphabet all down today. joining me to help navigate the tech story with earnings just weeks away now, the dean of valuations, nyu stearns school of business. welcome back. >> hi, escoscott. >> when you look at the multiples of the mag seven, what do you see? >> i see the fact that these are the companies everybody wants to flock to. in the last few months, we've had reminder with each of these

companies about the weakest links. with nvidia it was around the earnings announcement which as you saw how high expectations have been set and what looked like a good earnings report turned out to be a disappointment. with apple we've lived from upgrade to upgrade. up to 16. one measures up to expectation, the next doesn't. with google we're still waiting for the next big business. they still make so much of the money from the search box. so much as these companies have been winners, they also have weak spots. i think in the last few months you see those weak spots sometimes highlighted which explains why on any given day two of them are up and two of them are down. it's the for of the beast. >> -- the nature of the beast. >> are you suggesting let's talk specifically nvidia, apple, alphabet, are you saying they're overvalued currentli? >> i think -- not overvalued or undervalued. if investing is a game of odds, with nvidia the odds are against you because of housewife high a price you pay -- how high a price you pay.

with apple it might be even odds. with alphabet and meta, the odds are still with you because to the extent that these companies can put up something outside the core businesses you're going to get the bonus for that. so rather than think undervalued, overvalued, i think in terms of investing odds. in terms of investing odds i think the worst odds are with nvidia. best odds might be with the companies that have at that moment at least are companies not in the favored group. >> that's interesting that suggest the worst odds are with nvidia. just given what we've heard even -- >> as an investor. as a trader, i reverse the whole thing. all about momentum. it's got nothing to do with fundamentals. it's got nothing to do with, you know, what the business looks like. nvidia is the perfect momentum play in either direction. if you're a trader, i can see why nvidia is going to be where you're going. as an investor, the worst stocks are with nvidia. >> i want to address it as an investment to make because i -- you know, 34 times, it's cheaper

than it has been for certain. secondly, we've heard from jensen wong recently, in the last couple of weeks, about the great demand that the company continues to see. they have by all accounts what many would suggest to be not just a first mover advantage but, in fact, a moat because of their installed base. much like we talk about apple having, how does that all factor in, though? >> let me concede all of those. it's an amazing company going after a big market this it's going on dominate because it has immense moats. but that would mean that you would need $1 trillion in revenues and 70% margins to be delivered ten years from now. reverse engineering from the $3 trillion market cap. so even if you took every word that jensen wong takes as the truth and you build it in, i still have a tough time getting to $3 trillion. this is a company that if you look at the current numbers has immense growth and maintains 70%

operating margins to deliver what you paid already up front as a price. that's what i mean about investing odds being, you know, against you. you price this company to be the most amazing company of all time. where is the upside left? if it's amazing rather than the most amazing company, that's a disappointment. so i think this is something you're going to see the back and forth on in terms of expectations. but the expectations at some point have to get reset. so the company -- >> did you sell any of your own shares? >> i sold half to the extent that i did it a year ago. i might be due for another half to be sold at some point in time. but the last time i valued was after the earnings report. least overvalued it looked since the a.i. boom started. so in a sense, if i were going to sell at -- three months ago, four months ago when it hit 136 would have been the time to do it. i'm watching the price. and you know, if it triggers

enough of an overvaluation, then perhaps it's time to get rid of another half of whatever half i have left. so you know, it's -- that's something i'm open to doing. >> okay. interesting. we'll have a conversation again about that. i want to turn ours now to nike because i know it's been on your mind. you know, they obviously had the leadership change. you don't own the stock, is that right? >> no. >> okay. so how are you thinking about it? because it's far from what some would suggest, i've heard it from many investors on my programs. they certainly don't say it's cheap. >> no, it's not cheap. i think in a sense the reason i'm focused on nike is part of a broader question which is you see some really well-known brand names, companies that have taken for granted as companies that are going to sustain their brand name forever. and this is -- especially the apparel footwear business. lululemon is going through the same troubles, nike is going through troubles. at some point the question is as the business -- has the business

changed in a fundamental way to put brand names which historically held on to their brand names at risk. i think it has. with fast fashion on one hand and fad brand names, brand names that have come in especially among the younger people, taking away the advantage, i think big brand name companies have aging consumers, and as though consumers age out you're going to see more examples like nike play out. they're going to look cheap, and you're going to buy them saying they're going to return to glory and then say what happened. my interest in nike is more what's happening to the value brand names across the board, and where are they under assault? not just from consumer products but in beverages and other businesses where you start to hold on to their value. >> i was thinking of starbucks as you were talking about that. i think you were insinuating or -- at least that that was one -- >> yeah. starbucks is -- they lost their storyline entirely, right? the old coffee shop, people gathered together in nights stores. the online ordering in a sense

broke their own store. it was successful, but it broke their storyline. and until they find a storyline that works, they're going to have trouble with this market. >> interesting. we'll talk again soon. professor, thanks. appreciate it as always. >> thank you. next, track the biggest movers as we head into the close. pippa stevens do that again. >> one a.i. beneficiary is up for a 13th straight day. we've got the name to watch coming up next.

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less than 15 before the closing bell. now to pippa stevens with the closing stocks. >> general motors and ford are slipping as morgan stanley's adam jonas downgrades the stocks. gm to underweight and ford to equal weight. pointing to worsening u.s. consumer credit as well as china's growing car production capacity which is eating into the company's market share. vistra up, more than tripled this year amid increasing power demand to fuel the a.i. boom. vistra is the largest owner. of unregulated generation capacity in the u.s. and the beneficiary of those higher prices. the stock up 209% on the year. scott? >> all right, anyofothk u r that. pippa stevens. ahead, southwest shares slumping as it changes up its service plans to one of the

world's busiest airports. details straight ahead.

next, micron and what to watch for in the market zone next.

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we're in the closing bell "market zone." commentator mike santoli here to break down the crucial moments of this trading day. plus southwest selling off a day before its investor or day. we'll have details. first more on openai. kate, this is quite a development. >> yeah, so a major executive at openai leaving the company. this is mira moradi, the chief technical officer, the cto. she's been with this company for 6.5 years, was briefly the interim ceo, if you remember about a year ago when sam altman was removed from the company briefly. that was back in november, 2023. it comes amid some other recent departures for this company. you had names like john shulman who left for antropic, but i do

want to read a tweet from moradi, "i have something to share after much reflection, i have made the difficult decision to leave openai." she says, it's never an ideal time to step away from a place one cherishes, yet the moment feels right. she says she wants to create time and space to do her own exploration. i will say a lot of the openai founders, early executives, have gone to build other companies. she's not said what she's working on, but they've had no problem raising venture capital mean. i want to read a tweet from sam altman of openai, he feels gratitude toward her for what she's helped build and accomplish. personal gratitude. and sending support during -- for her and her support during hard times. again, a major development from open a.i. here. the latest kind of shakeup on the executive level. scott? >> okay. you let us know what else you learn in the hours ahead. that's kate rooney on that beat for us. phil lebeau on southwest

airlines, you're going to speak with the ceo tomorrow, phil. what are you thinking about today regarding this stock and the activist battle that it's in? >> plenty of turmoil, scott. look, today we found out that one of the components that southwest is going to be talking about, cost cutting, they're going to be cutting back their service in atlanta. not eliminating it, but cutting it back. tomorrow on investor day we'll hear about cost cutting as well as revenue growth initiatives. the proxy fight, that is just heating up. in fact, as you look at shares of southwest, elliott said yesterday it may call for a shareholder meeting as soon as next week, they may call for it. southwest in the process of replacing six directors by the middle of november. and as you mentioned, we'll be talking with bob jordan, ceo of southwest, tomorrow afternoon. you don't want to miss what he has to say after he outlines the cost cutting as well as revenue growth initiatives the company will be undertaking. scott, back to you. >> all right. good stuff. we'll look forward to your

interview. we have 90 second left. we turn to mike santoli. thanks for bearing with us as we had breaking a.i. news, and interesting news. what are your thoughts on this market action? >> on a day when twice as many stocks are down as up and feels a little heavy, i mean it's a win you're down a quarter percent in the s&p. just giving back yesterday's gain. i think the market in the last week has essentially said we have a late side lifeline. yields linking higher, you've been talking about. that i don't think it's bad, it fits with history in terms of what happens after a rate hike. it happens when the fed is deciding to somewhat back off the fight against inflation. and arguably when the economy looks like it has a shot to reaccelerate a little bit. you don't want to see it shoot high too much more from here. it's worth remembering ten year was at 4%, august 2nd july jobs report. that's when we got the growth -- when people stampeded into treasury. we're still operating well within that range between those two undesirable outcomes.

>> got a pce weight. what it feels like. >> even though we've moved beyond the inflation story -- >> you get personal income and spending in the same report for pce. that's go going to matter. >> good points. mike santoli. we'll go ready. dow's auto -- red. dow's a 300-point loser. send it into overtime. [ bell ] >> that means the end of regulation. telecom, argentina closing bell at the new york stock exchange. the nasdaq annual climate week conference doing the honors at the nasdaq. major averages taking a pause from their record rally. closing mostly in the red. small caps and energy faring worst. that's the scorecard on wall street. winners stay late. welcome to "closing bell overtime." micron earnings are moments away as that stock sits around 40% off its june highs. we'll bring you the results as soon