publication indicating this whole thing started with an email that was probably an accident. the former cfo reported lead sent a blank, mail to borla with the starboard representative copied on. something was brewing and bringing it to the spotlight. we still don't know what change starboard is looking for and they're set to meet with borla and the board and other members next wednesday. that stock down almost 3% today and it's down more than 50% from the pandemic peak. >> this is an ongoing story. i know you'll be following it for us. we'll get to it next time. >> incredible detail. >> thanks for watching "power lunch," everybody. >> closing bell starts right now and i'll see you at 5:00. >> yes. welcome to "closing bell" i'm scott wapner live from post 9 at the new york stock exchange. this make or break hour begins with the fate of this rally, stocks are assessing a slower

than once thought fed. what is really at stake here including schwab's liz ann sonders. she'll be here on set in just a bit. first, though, let's show you the scorecard with 60 minutes to go in regulation today and not a big down move for stocks. they are red, though and that's after the latest cpi report showed inflation falling, but at a slower clip. now some slightly hawkish fed speak this afternoon weighing a bit on sentiment and we'll discuss that, too. nvidia is a standout again and traders are betting bullish options into that name into march of next year and pushing up against a new all-time high. in fact, we'll watch it over the last hour and it will take us to the talk of the tape and does the slower fed mean for stocks? let's ask our panel, ed yardeni, cameron dawson and joe terra nova, chief market strategist f and cnbc contributor. >> it's good to have you on set

in person, and it doesn't happen that often. what's the most important thing you're happeninging abo these dn you look at the market? >> the ted is always taking top spot when thinking about the markets and we've been thinking that palantir is way too dovish and the 50 basis point cut and the economy's resilience is doing well and it's not mission accomplished yet on inflation. we still have some stickiness in some areas of that area. so i'm predicting done for the rest of the year. >> none and done for the fed? >> yes. >> wow. bostic, a little bit earlier says he's keeping the door open to skipping a cut in november, but look, let's -- >> he's coming my way. >> you can't wish for the cards you hoped to have in your hand. you play the cards that you're dealt, correct? >> yes. >> we got the 50. the market thinks we'll get a couple more cuts, maybe 25 and 25. so let's play that hand.

is that bullish for stocks? >> well, yes. i think it is bullish for stocks. the fact of the matter was it wasn't too long ago when we were worrying about the fed raising interest rates and then why aren't they lowering interest rate? and now we're saying, okay. more, give us more, but look, in my scenario, rates are pretty comfortable where they are relative to the economy and this notion that the interest rate sensitive areas of the markets and the midcaps and the small caps will make a comeback and i'm questioning that because they do need lower interest rates and i don't know that they'll get what the market is anticipating. so i think what you do is keep playing the s&p 500 and nothing is broadening out for the s&p 500 and the magnificent seven now becomes the 493. >> okay. cameron, how do you see it? >> when it comes to small caps, we do think an agreement with you that they don't necessarily

deserve the benefit of the doubt. the fact that small caps have big earnings growth expected for 2025 of 32%, but remember that at the start of 2024 estimates for this year were for 25%. they're now negative 7%. they're not delivering. estimate revisions are coming down. so unless you see a turn in this earnings forecast it seems like they'll continue to chop. >> it's been that way for a couple of years now that it's been in a coma while s&p 500 earnings have been doing well. >> certainly. we do note that you've seen s&p 500 estimates starting to revise and get lower for 2025 which is probably one of the reasons why the market has been kind of flat for the last few months and shopping around simply because you're not seeing those earnings press higher. >> joseph? >> i think the market is beginning to from a strategic perspective clench up a little bit and it's rightfully so. >> i agree with ed. i think it's a sell the news

movement with the fed announcement and you talked about the fact that you had the low for the 10-year and the 30-year the day before the fed announcement and the announcement peaked right before the announcement came out. i think the market is clenching up and recognizing it wants quality, it calls the mag 7 and it wants to stay up in the equity size class. i don't know, and this comes from a lot of conversations that i've had this week with institutional investors, with hedge funds from being at morgan stanley for a day talking to financial advisors and everyone's treating the election like we'll worry about it when it's time to worry about it. no, we're 25 days away and the election days and this is the first election that i can remember where noen stushl investor is saying i'm putting on this election trade. everyone is saying we'll sit back and wait for the election trades on the other side and it's starting to be late for that. i think that will keep volatility high, and i think it's time to start thinking

about on the other side, where you actually want to be allocated. i know it's difficult because everything's within a margin of error, but sooner or later we're going to have to have that moment of resolution. >> all right. so i want to bring some comments that are so social media, and they are from ricky sandler. eminence capital. he doesn't talk that often about his views on the markets and it is so relevant to what we're talking about now. he posted a little while ago, and i want to bring some of these thoughts to all of you and continue our debate. i'm quoting from his post. the market at the index level is expensive in consensus. the biggest tech umps have a blend of overlapping competition and riding capex and outside of amazon feel uninteresting to me. the macro backdrop is quite favorable with the fed on your side. that's sort of what we're talking about and let's take it at that and then i'll read you more as we continue our debate. that's where people are cutting through all of the noise and

distilling it down to that thought. the macro backdrop is favorable and the economy is good and the fed is on your side. is it good enough? >> it's been good enough until now, but i think from here on, the market will be earnings led instead of valuation led. if it's valuation led, i think we're starting to talk about an actual melt up in the market and we're talking about the buffett ratio being in a record high of 2.8. the price-to-sales ratio, and the p-e ratio for the s&p 500 is 22, roughly. it was 25 back during the tech bubble, and stocks aren't cheap and so i think they are going have to deliver some earnings here and i think you're absolutely right about the caps and everyone thinks they'll deliver and that gets to joe's point about quality and that's about companies that don't disappoint you on the earnings

side. >> ricky goes on to say because this tees up the next level of debate, when you talk about quality and size on the cap space that you want to be buying and hes of the fact that the index is expensive and a lot of it is consensus and he's obviously alluding to mega-cap tech, and then he goes to the backdrop as favorable. he says the combination of those two things means you can and should play offense that have interesting equity stories. i'm neutral on the s&p and believe the mid to large-cap world and quality companies outside the u.s. could materially outperform the s&p over the next one to three years. that's a big statement there when you look at what the backdrop is here and think that maybe there's going to be outperformance in still quality companies, but perhaps outside the united states. what do you think? >> think the mid over small point is really important because mid-cap companies tend to have lower leverage levels, less floating rate debt which means they're less sensitive to where we are in the fed cycle.

they also tend to be higher quality and a bit more earnings sustainability and to your point is that you've seen them trade at bigger disdownscounts to the market and avoiding the smallest, junkier parts of the market and have been unloved in the narrowness that we've seen in the last two years. >> don't go to the six or seven stocks, but stay large. there are enough companies that you can buy according to ricky, at least and obviously others that are attractive. you don't have to just say it's either the mega-caps or the small caps. >> yeah. we're seeing that, clearly, as there's momentum building in other sectors and you're seeing strong performance. we're coming into a critical earnings season where i think what's most important is that ceos and cfos express confidence about the future, express confidence that eps growth which probably in this quarter, if estimates are right, is going to

be the weakest quarter of the four quarters in '24. you want confidence that we'll get back to double-digit earnings growth. to your point, stock, where do you go with that? i think what people fail to real oiz that the largest successor waiting for small caps is health care. all of a sudden, when you to small-cap health care, and we were talking about 20% eps contraction and then you get 20% for healthcare and you get that broadening out. >> what if the fed is right that it's one and done? does that change your calculous for the market? a lot of priced in and a lot is still priced in. if he's right that's a shock, isn't it? >> earnings become that much more important because you're want going to get the kecker from the surprisingly low interest rates. >> some are wondering if it's

too optimistic especially for 2025. >> i'm not optomistic on the economy and i think the earnings will surprise us to the upside and the margins are going higher. joe, do you? >> the the capital strategies are robust reit now, but i agree with you. i think 2025 the estimates are high from where we sit today, i think that to reach those levels you're goinging to have to have a lot of really good conditions come together. >> but see, ed's also -- read between the lines it's that the multiple, the market may be expensive, but that you can justify the multiple not because of declining interest rates and more fed cuts, but because the economy is strong enough and earnings will live up to the hype if not exceed it. >> you do see multiples correlated with earnings, when earnings estimates are going up valuations are going up and people are more confident about the future, but to your point, ed, you're at 22 times and we

peaked in 2020 at 22 1/2 teams and the market still went up because earnings were growing so much which is why in 2025 we have to see those earnings deliver and we would argue on the margin front that there is some risk to current consensus forecast and they're expected to go up 130 basis points to a new record high in a declining or decelerating nominal gdp world with lower inflation. we think that's hard. we're in the surprisingly high -- margin cap because we really think the productivity is making a comeback. this is not a forecast. >> you look over -- >> productivity is, you know, it's not a variable that's often discussed, but it should be because of data. we just had an upward revision in real gdp and the government is talking about maybe a year ago from now lowering the level of employment and that's productivity. >> thank you, technology.

there are two schools of thought. there's ed's why -- first of all, 50 was a mistake. you don't have to do that because the economy is strong. so that's one points of view. the other side is, well, they're cutting and they did 50 because they're just too restrictive relative to where inflation is, right? >> yeah. >> they just don't make sense where rates are. >> that's a interest rate argument the idea that if inflation is coming down and you leave the fed funds rate at 5% then the real rate's going up and i find that almost to be comical. wait a second. you're comparing an overnitrate, a fed funds rate to aier over year inflation rate? who makes the decision based on that? the bond market you can adjust for inflation. i can see that, but this whole real rate argument doesn't make sense to me. to me, you watch what the economy is doing and the economy has no problem with interest rates at these levels. >> so you think rates are up for the right reasons? >> yes. >> because the economy is seeing rates -- >> yeah. >> at some point, is that a

problem for stocks? >> not if earnings make a comeback because you have a decent economy with productivity. >> the entire time the real fed funds rate has been positive, it only went positive in may of 2023. the u.s. economy has grown above trend. so to ed's point, you haven't necessarily seen that be the thing that weighs on economic growth. look at atlanta fed gdp now at 3.2%. it's really hard to point to the evidence to say that because the real rate is this high they have to rapidly move it lower in order to save growth. >> i think that -- and what ed is talking about where you've got the one rate cut and now nothing for 2024, just from the -- >> the way, way, way outlier view. >> the disposition of the fed from my perspective right now, there would have to be something very troubling in the inflation numbers for them to sit on their hands for the rest of the year.

i don't know if a strong, strong economy is good enough for them to just sit back. i think they want to give the market more this year, they're not pricing it off the table and another 25. i can see that for sure. it would have to be something probable trouble for inflation. they're obviously worried about the labor market. >> they are, but i'm not. the reality is the numbers have been strong. i know today's initial unemployment claims data was up there, but a lot of that was because of strikes in the auto industry and some bad weather and the reality is we just had a really strong, want only do we have a strong september number and we had upward divisions and initial claims are around 220,000 and the availability remains quite high and the labor market is doing absolutely fine.

i don't see that there's a problem there. >> let me ask you this, you have a lot of cash sitting on the sidelines and maybe vis-a-vis money marks and where you've been getting a really great yield. the assumption was the fed will start to cut. now the money will come out and it's going to go into stocks, okay? >> now you have, perhaps, higher for longer in rates. why would that money, specially with election risk and other stuff between now and the end of the year, why would it come out? >> i just wrote about that in morning and -- i wrote about it last night, i should say, when the market hit an all-time record high the title was new record highs, and i said i'm not just talking about the stock market. i'm talking about money and money market mutual funds. i mean, we're at a record high with money market mutual funds with inflows still going higher and $6 trillion -- over $6 trillion sitting in the money market mutual fund. so the market has demonstrated that they don't really need that money. i think when they cut the fed funds rate by 50 basis points,

we raised our risks of a meltup from twbt%20% to 30%. then you have to worry about meltdowns. so, yeah, i think if they do it again, i think the stock market would love it, but i don't think it's necessary. >> we've learned, the stock market likes a good sugar high. >> don't we have the meltup? don't we go parabolic if you see the junkier, high beta small cap area of the market perform and they're not. >> they're not. >> so that -- that should give us comfort. >> so that should give us comfort. >> yeah. by the way, is there disportion looking ahead in any of the economic datas and the labor numbers because of the two hurricanes? >> absolutely. doesn't that put the fed in an awkward position because the numbers they're working with really are the numbers? >> right. the numbers are the numbers and they do tend to get revised, too. so you have to put the whole

picture together and the whole picture has been robust for the economy. all things considered, it's hung in there remarkably well in the face of fed tightening and keeping interest rates up, but i think we normalized. these are normal interest rates. we forgot that. we're all still thinking about when interest rates were near zero. we're not going back there. i hope we're not going back there. it wasn't necessary to be there, but now we're in a normal environment and the economy is doing fine. >> i mean, let's just assume that, with all due respect, that the market's right and you're not. >> that happens. >> that they're going to go two more times. >> it happens, sure. >> i think the highest target on the street now is 6100, the goldman over there bumped it to 6,000. >> right. >> that sounds like -- we're pushing on 5800. you know, we keep hitting these new highs. >> that's my latest target and i may have to change that as well. >> 58 is your latest target?

>> yeah. it was 5400 in the beginning of the year and i thought that's crazy and it can't do that and then -- boom, it went right through it. same thing last year. i had a bullish forecast. i have hoof marcoks on my back from the bull running over me. i'm not fast enough. >> there are a lot of people looking over their shoulder, cameron, since this whole bull market started and we have the two-year anniversary of it on saturday wondering what might, could, if go wrong and a lot of stuff has come in the face of this resilient market and it's to ed's point stampeded ahead. the pace of the rally may have slowed in certain instances, but the direction has been clear. >> and it may slow into 2025 and that's not all too much a bad thing. if we see it slow it means you get to grow into these higher multiples which just means that it can sustain rally further which means it can get into the

territory of the meltup on the other side. >> that was a treat. i really enjoyed our conversation, thank you. >> ed yardeni, thank you so much and joe t. let's send it to pippa stevens. >> first solar, after jefferies said they expect a light decrease in earnings. it's challenged by delays in the supply chain and labor shortages. meantime, bank of america reiterating its underperform rating on enphase saying near-term challenges remain and td bankshares are sliding after the company pleaded guilty in a mo money laundering case with the doj and the bank will accept limits on its growth and enter a three-year monitoring program and those shares is are down 5.5%. scott? >> pippa, thank you. that's pippa stevens. we are just getting started on the bell. up next, t. roe's sebastien page

is with us to talk about why he's willing to take on more risk. that sounds like a change. we'll discuss. we are live at the new york stock exchange. you're watching "closing bell" on cnbc. ♪ ♪ honey... but the gains are pumping! the market's closed. futures don't sleep in the after hours, bro. dad, is mommy a “finance bro?” she switched careers to make money for your weddings. ooh! penny stocks are blowing up. sweetie, grab your piggy bank, we're going all in. let me ask you. for your wedding, do you want a gazebo and a river? uh, i don't... what's a gazebo? something that your mother always wanted and never got. or...you could give these different investment options a shot. the right money moves aren't as aggressive as you think. i'm keeping the vest.

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cnbc.com/sports. all right. back to the markets. stocks still in the red following this morning's hotter than expected cpi report. my next guest says he's looking for opportunity to add some risk heading into year end. let's bring back sebastien page of t. rowe price. welcome back. >> thank you, scott. >> does this mean you're becoming more bullish as the year goes into its later stage? >> scott, yes, and i'm listening to your show over the last couple of days and the narrative is most people are comfortable with the fundamentals, but uncomfortable with the valuations. i wish i had a differentiated view, but i'm in that camp the occasion committee is in that camp, so we're looking at the fall with high valuations, but geopolitical risks, some risks of a rate shock or an inflation surprise on the upside. some risks around the election and so what we want to do is

prepare, discuss, at which level we will add to risk assets. we are more likely to add than to subtract over the next few months and right now, as i said last time i was on your show, we're neutral between stocks and bond, fully invested and we'll have a small overweight of half a percent and let's call it neutral, and that's the plan, scott. >> at least it's a half percent overweight. that's more than it was for the multitude of conversations we've had over the last 18 months, i think. you know, the other point, i guess, to be made while the overall market multiple may be expensive to some, it's skewed, though by the biggest market cap stocks in the market. i mean, the index level obviously it looks expensive, but as i was suggesting earlier pointed out by ricky sandler, very well known and successful hedge fund manager, you have to focus on stocks beyond the mega-cap names. you can still stay large, but

all of the action doesn't have to be there. they're too consensus and too expensive. >> yeah. scott, i love that question because we're doing a lot of research on this right now, and i completely agree with you. the '22 price-earnings ratio that ed yardeni was just talking about, it is high, but you can't compare that to the run-up of the tech bubble. let me give you two caveats on valuations. first of all, and i heard people mention this on the show and if you had a return on equity for the market you get a valuation that's actually below median by historical standards. because of all of the technology in the s&p 500 and those humongous, very large returns on equity, when you look at the index it's actually not that expensive if you adjust for it, so that's caveat number one on valuation. the other one is that the average stock in the world is trading at about 13, take the mscil country world index, equal

weighted and look at its p-e, about 13 and that's its long term 30-year average. so the average stock in the world is valued and it's sort of average relative to history. so we are positioned for a market broadening. we talked about how we're long value and we are long international, small cap and we are long emerging markets and that's how we are playing this broadening? >> yeah. why are you long international small caps? >> i'm thinking if there are enough risks on people's minds here about the performance of small caps where our economy is proving to be, i mean, the most resilient in the world certainly among developed nations, why in the world would i want to take the risk of international small caps now? >> so we're neutral between small and large in the u.s., but we do have an overweight position in international small caps. look, the macro story is not as good outside the u.s., but on a

fundamental basis, if you compare a return on equity for international small caps to u.s. small caps, they're actually twice as high in terms of their return on equity. so they've kind of been dragged down with the whole small cap asset class globally, but fundamentally they're better positioned, so there's more quality in those companies outside the u.s. so to us, that's an opportunity to be contrarian and play the broadening and remember, we're kind of in a global easing cycle and international marks are starting to perform better, so that's how we're playing it right now. >> yeah. >> you like emerging markets, you say, as well, what are you calculating? that china will continue to stimulate their economy for the foreseeable future? >> so, overall, we like emerging markets and that includes countries like india, countries in south america. what's happened in china is interesting and meaningful for short-term sentiment.

we're still cautious on china overall because, look, you have long-term structural problems that you can't solve just with this stimulus, and you've seen a little bit of pullback on this, as well, but it is a case where valuation, obviously,are really good for emerging markets and they're trading really a t attractively and at the same time valuation is never enough. what is the catalyst? the catalyst, china is part of it and it's the overall easing cycle and the u.s. economy is looking in better shape, but if you look at those other countries, south america and india and so on, there are ops especially if you do it with active management. it's a contrarian position for sure. >> let me ask you quick lely ab india because it's been so favored by investors, and even now with the gains that you've seen, better than 20% and not that far away from their own record high. >> yeah. i think the fundamental story

remains strong and it's part of the emerging market story for sure. yeah. we remain confident on it. >> we'll talk to you soon. sebastien, thanks. good to see you as always. >> likewise. up next, the playbook. liz ann sonders and kevin gordon are here on post 9 to lls te u how they're playing the year-end market. we're back after this.

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wife away from the closing bell. >> some of these holdings shares are surging after initiated maintained a positive outlook on the energy drink maker. piper sandler saying celsius is the favorite in the latest teen survey. gxo logistics is exploring a sale to field acquisition requests. a person familiar told reuters. it spun off from trucking company xpo in 2021 any those shares are up 14%. scott in. >> pippa, thank you. >> up next, liz ann sonders and kevin gordon are both at post 9 and find out how they are positioning in the year end. the bell's back after this. ♪ ♪ there's definitely tremendous opportunity for all of us in our country this is truly a country of

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stocks are pulling back today from record highs. investors digesting some hawkish fed commentary, another inflation report and looking ahead to the start of the third quarter earnings season issue as well. joining us is liz ann sonders and kevin gordon this is a treat. good to have you both here. >> thank you. >> it's the 15th anniversary of charles schwab. you'll be on the podium? >> we won't be on the podium. >> we're with the clients. >> good answer. let's talk about this market and where are your kleins looking to make money? how does the market look to you right here? >> so i think in terms of the economic data, we are in a good news is good news backdrop for the market. i think some of the recent wobbles probably had a lot to do with a break above 4% on the

ten-year. >> it back up. >> i don't know if that was a pre precise trigger when you saw the spectrum move up and that was in contrast to what the expect egg was w when the fed launched an easing campaign. of course. >> is that a problem now for your outlook on stocks now as liz ann said, the new paradigm on what yields will do? >> it's interesting because as you've seen yields creep back up and you can say they overfor where policy was going and being too dovish, but what's interesting is the correlation between stock yields -- or stock prices and bond yields has flipped and all else equal which is never the case and all else equal and it's not necessarily putting down as much pressure downward stocks and if you go back into that environment where

to liz ann's point good news is good news and you don't have pressure from the bond market because presumably, inflated is as much the issue anymore, then yeah, you don't have as much of a hostile scenario in the number of years and if you look at the ten-year yield over the last couple of years where you've broken 4% and some of them would have been consistent and over time you've trended higher and it speaks to the fact that it's not necessarily the level of rates that matters as much sometimes as the why. >> if they're going out for the right reasons. >> yields keying off of economic data is a better backdrop than yields off of inflation data and that would revert that correlation back to negative if we saw the continuation in inflation and you would see it move tied more to the inflation data. >> and the right reason that yields continue to go up. >> how do you feel about earnings which are starting tomorrow? >> the earnings backdrop has

been an interesting one. if you think back to the worst part of the pandemic when you had a record percentage of companies that withdrew guidance altogether, we have obviously moved away from that, but i actually think that a lot of companies took advantage of the covid backdrop to not go back to the precision and guidance in many cases and they've been very vocal about saying this is not how we manage our business on the quarter to quarter cents per share. analysts are a bit closer to the vest in terms of the adjustments you make to earnings. when we're in the second quarter earnings season which is the perspective that the bar got lower and the companies did well, the outlooks were a little cloudier and analysts, therefore adjusted down earnings for the third quarter cut earnings by about half, but didn't move the needle much in terms of fourth quarter into 2025. >> yeah. if you look at consensus it suggests we'll have this dip in earnings in the third quarter and we'll rebound right back up in the fourth quarter.

i don't know how realistic that is. it's reflective of companies listening or analysts listening to companies during the earnings season and making adjustments really only one quarter out. >> i wonder if that would put pressure on the multiple? we're assuming that earnings will live up to the expectation of 15% growth next year, if they don't and you have higher rates for longer -- >> you are in a bit of a trickier scenario because even if you look across the spectrum of valuation metrics. my personal favorite is we take sm something and using that to construct your p-e ratio. if you're looking at that for the s&p there are really only two periods in history that are more expensive than you are today, and it was the late '90s and then it was 2021. so automatically someone would look at that and say that's a bearish outcome for the market and we always use the caveat and saying it doesn't work well, but that does speak to your point

and earnings needing to take more of the leadership position and having to do more of the heavy lifting as we go into next year and that becomes a dominant factor. >> some of why we've seen the rotations and the broadening out is that these cap-weighted indexes have lofty valuations and in large part driven by the mega-cap names. you x them out equal weight relative to cap weight and more of the high teens. so i think that's a fundamental reason why some money has looked outside of those areas because where valuations are more reasonable. >> do you think that will continue? that was the story of the third quarter. obviously, all of these other areas, ex tech com services and the like that drove the train in q3. >> i think the broadening out and the rotation probably has legs, but that's not to say that the leadership will stay dominated in what initially happened in the rotation with the interest sensitive areas like utilities and financials, but i think rotations are likely

to persist in fits and starts, at least. >> do you agree? >> i do. to me, what's been the more important story in this rotation that's happened in the past several months has been a lack of a bid for a more traditional defensive. so utilities, if you take that as its own separate story by itself, there hasn't been as much of a pickup in staples and health care and i think the defensive trio where you were working well and you're getting a signal and it has been to liz ann's point more broad in these areas that matter more for the economy and some of the areas that are more economically sensitive, and i think a little bit more in keeping with the fact as evidences as what's come out today with news from bostic and some of the other evidence of fed speak of the fed not taking as an aggressive of an approach when it comes to rate cuts and that's historically a better backdrop for the equaty markets. be careful what you wish for if you're looking for the aggressive rate cutting cycle. it doesn't tend to benefit

equities as much. >> some say it's just expensive and it's not just that you have a terrible year and when you match up 13% or 14% next to 30 it looks like you dramatically underperformed and those stocks are up a lot, too. >> staples, the pricing power tracked along with inflation and you have the top line growth which is strong and it was misperceived with unique pricing power and now that innation has come down so has the revenue side of the equation and that's more acute in those traditionally defensive areas like consumer staples. you look at some of those areas and you say they're expensive. i think the expensive nature of some of these areas and we always use the examples of utilities as a posterchild when there are times when the sector can get expensive and you can argue we're sort of in that environment now because of the significant run that they've had and when you approach it from more of oa value and growth standpoint that doesn't put them

in the standpoint of growth and value. if you look at what has become expensive, the utilities themselves have come back up if you're relating it to the s&p 500 broadly and they're looking quite expensive. >> when you're talking about the amount of power that you're going to need for all of this ai technology that's been driving this market to begin with. the classic way of looking at utilities may have changed. >> yeah. >> the best-performing stock in the s&p 500 this year is now part of the magnificent seven. that's a utility stock only one of the magnificent seven is in the top ten best performers of the s&p. >> point well made. >> two or three are utility stocks and there's definitely the ai play that you get with utility and not the classic defense. >> it's been fun. a treat for us. great to have you here. liz ann sonders and kevin gordon

at post 9. >> still ahead, we'll point out what's behind the dip in delta's stock. "closing bell" is coming right back.

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coming up next, we'll bring you the highlights of amd's big event today and don't miss a first on cnbc interview with the mpy'coans lisa su. the market zone is next.

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stop waiting. start investing. e*trade ® from morgan stanley. ♪ ♪ we are now in the closing bell market zone. cnbc senior markets commentator make santoli is here and phil lebeau on the drop, and kristina part sin avenue loss on amd. mike, i'll start with you. we are in the tactical pause and even though we're up for the week and hit a new record yesterday. i've been saying we're in a 21, 21, 21 market. up 21% year to date, and 21 times forward earnings and the vix is at 21. i think that's why we're attentive to all of the incoming

info, but it doesn't really need as a clear directional catalyst just yet. today, breadth is poor, nvidia is up and you have the market to stay supported. >> nvidia is supporting an all-time high -- >> than it otherwise would without it. >> exactly, i would say for the last month to date, the nasdaq 100 has taken over. >> phil lebeau, what's going on with delta today? >> two tstories here today, scott. noisy in the words of ed bastion, ceo of delta when we talked to them earlier today and they missed on the top any bottom line and there was an impact from hurricane helene of 3 cents a share, crowdstrike outage cost 500 million and that's half the story with shares of delta. the other half is the q4 outlook. they said they were expecting choppy bookings around the election and people may be uncertain and therefore not booking trips, but they are expecting high holiday travel demand and they expect record revenue in the fourth quarter,

by the way, their guidance if you take a look at shares of delta is for earnings between 1.60 and 1.85. for con particular, the street is at 1.75. >> phil lebeau, thank you very much for that. to kristina partsinevelos and it's not giving a stock a boost, why? >> no. definitely not. down 4%. it is a smaller player compared to nvidia, but with an estimate 5 million chips it does seem to be an alternative to nvidia. that's probably the answer to your question, they're comparing the chip with the h200 with has been on the market for a few years and that could be part of the sell-off, but that does mean two amd chips on the market competing with nvidia. su, lisa su, will go from 400 billion in 2027 to 500 billion in 2028. the company also previewed their fifth generation cpu chip

claiming they owned over a third of the cpu market which was once dominated solely by intel. gone are those days. much of this news, though, was largely expected. again, in answering your question, scott, was there no new customer announcement either and it could contribute to the shock of amd. the stock's run up double digits and neck and neck with nvidia since september 1st and much of that news has been priced in, and i would like to talk about the p-e ratio is the same and almost 39 and almost 40 for nvidia and the annual revenue growth for nvidia is 45% next year versus 28% for amd, so take your pick, scott. >> kristina, thanks so much. good to see you, kristina p partsinevelos, lisa su. >> it's the purest play, you

don't have to look at amd and see what's the pc market up to? you're ten times the market cap. nvidia is ten times the market cap, more than that by amd and it's as soon to be the predominant way to capture the flow of dollars and the stock is trading as if we're going to get confidence over the next three or four quarters once we hear from them and hear all of the other crowd players come if. we'll see if that does come around. i would say that there is more differentiation in the mag seven than the first half. [ closing bell ringing ] >> you're going to have to digest again tomorrow bank earnings in the morning. we look forward to that and i'll see you then. to overtime. morgan and dom are coming up. that's the end of regulation and schwab asset management ringing the closing bell and inflation and labor data