i would expect somebody to ask about it in the q&a and if that comes out that will definitely be a positive. >> tom, we have to leave it there. i'm looking for a model refresh on their line. i think this he need that desperately as well. that's just my opinion thanks for watching "power lunch," everybody. >> everyone has been waiting, give us the small car, give us something. "closing bell" starts right now. welcome to "closing bell" scott wapner here at the new york stock exchange. we begin with the selloff and the selloff in the nasdaq today as this final stretch begins the major averages across the board are lower, but the nasdaq is our standout, it's down near 2% very weak today. apple a big culprit as an influential analyst in asia slashes his iphone production numbers by 10 million units. nvidia, amazon, meta also lower on the session they are dragging. tesla is, too, ahead of its own

earnings report coming in "overtime" tonight sharing of mcdonald's following the e.coli outbreak, the stock hit with a couple of down grades today, off 5%. 3m has also been weighing on the dow and we will track that, too. it does take us to our talk of the tape the new rate reality and how that could impact the road ahead for stocks let's welcome in chris harvey from wells fargo securities with us at post 9. >> good to see you. >> that's the story right now, right? the move back up in yields and the toll it's taking on stocks. >> it's the trump trade, backup in rates and it's earnings season so it's all about who just reported last, what that means and what narrative we're going to go with you're right the we've had a heck of a rally so it's time for a little bit of give back. >> why is it time forgive back isn't this rally based on the fact that the economy is good and the fed is cutting and you can say the move in yields is in part for the reasons you

suggested, the reflation trade, but it's also because, you know, look, the economy is good. >> scott, that's all fair and i think that all works longer term, but in the short term typically what we see heading into a presidential election cycle is a bit of a risk off, a bit of a selloff and we've done the opposite after you see that rally we've seen that rally before and so i think we just -- we've gotten ahead of ourselves with rates backing up i think people are getting a little bit nervous and the odds of trump winning appear to be going up, the odds of a sweep appear to be going up and people are worried about thefiscal side i'm not sure that's the right thing to do but in the short term a little bit of give back makes sense. >> that's the thing, the fiscal side like rick santelli was talking about a little while ago, we're worried about the deficit. >> right. >> worried about rates getting a little bit away from us because of that, whether it's trump or harris who ends up winning, policies that are both really deemed to be inflationary. >> yeah. so if you go back to trump's first -- well, first and only

period, inflation was okay so there's a lot of talk that he's going to blow out the balance sheet and things are going to be terrible there's not a ton of evidence to say that do we have a fiscal problem? yes. our fiscal house is not in order. the bigger issue is when does leverage bite? leverage bites when you have a slowdown in growth and we don't have a slowdown in growth just yet. for now it's fine. it's not great we're doing this and no matter who will be elected we're still going to have a fiscal problem and it's not -- it's on a spending side and on the entitlement side and we have to get a better handle on that. >> so your target for the end of this year is 5535, a good amount lower than where we are now. >> it is so we have -- >> why do you stick to that? >> we have six months left in the year, we're going to start talking about '25 at this point in time when we talk about '25 we think it's going to be a good year and bad vintage i think we will see high single digit returns but when we look back from the perch of 2026 and

2027 we will say that was the year that too much leverage went on, people took on too much risk, went too far out on the spectrum and down the capital structure. we're focused on 2025, not 2024 at this time. >> 5535, we are at 5790. >> scott, we were bull on the street earlier on and as we got closer does it really make sense? is it really useful for our clients, for me to revisit that target we're saying, hey, we're going to see a little bit of selloff, a little bit of give back, as we go forward we think things are good but how do we position? a lot of people have done really well in the growth and momentum trade. if you get the trump trade here there could be a bit of a give back so we're working with clients on the positioning side. >> what about the price of stocks david einhorn writing last week that the markets is as expensive as he can ever remember it, certainly as long as he's been at green light is that fair >> no that's not fair.

1999 stocks were much more expensive, fundamentals were much worse and that was -- today is not then. >> but is today a problem nonetheless? >> today things are expensive. today you need to be looking more for your best risk rewards and can't close your eyes and buy any stock at this point in time but the valuation isn't -- prohibitive is not the right word but it's not as if we are back in 1999 and setting up for a fall in valuation. valuation is high because you have really good companies, good growth companies and good balance sheets and a lot of optimism it's not so high where you can't make money going forward. >> but that's -- how much money you can make going forward seems to be a question david kosten was asking that question earlier this week, i'm sure you saw that, over at apollo also asking similar things when you have stocks this expensive expect muted returns in the years ahead. >> if you go out five and ten years mid single digits makes

more sense, more like growth like -- eps growth-like returns with some multiple compression, but, again, if you go back to 1999, you are looking at multiples in the high 20s, growth rates that didn't exist you did not grow earnings for a number of years. i don't think that's true going forward. as we're looking at growth rates, they actually look pretty good for '25. >> mid cap growth, got a lot of play this week and that's where you think a lot of risk reward is. >> yes. >> why >> good valuation, it's at a discount to the market, the technicals they've been -- they've underperformed for a number of years, they're up well into the double digits this year so beginning to perform. they have self-help. i do think that m&a is going to improve so if you're looking for a name that's going to get taken out i think this is a space where you're doing it and they are not as picked over as others and they're beginning to work. >> i'm interested in why you think that you can be tactical

if -- that's my word not yours -- in small caps. >> right. >> if you have a backup in rates the obviously pressure point is the russell, the proof is in the pudding, look at what the russell has done since rates started backing up so why does that work? >> it works because we think that growth is better than expected and people -- in the short term at least and people are coming around to our point of view. credit spreads are still incredibly tight atlanta fed is predicting -- >> 3.4. >> that's a big figure if we go back to july when we had a better than expected number small caps on that day outperformed by about 2% so there is a trade here if trump wins and i still think it's a coin toss, then you're going to have a continuation for a couple weeks and maybe into year-end. >> if the cost of capital for those same small firms is more elevated than i think some thought it would be and it could still back up further and you would still have that issue. >> a little bit but there's also the give and take. when you issue debt it's not

just about the cost of -- corporate data is a combination of a credit spread and what you get in the treasury market those credit spreads are really tight, issuance is still very strong and so that's very important and as long as those markets are functioning and open, that's actually pretty good for small caps, good for m&a activity and good for risk taking. >> let's bring in brynn talkington and max ketner. brynn, what do you agree with? what do you take issue with? >> well, i think that -- i think it makes sense what he's saying around trading small caps, you can trade them, but i think writ large on the market as a whole i think right now, you know, we are in this seasonally weak period of specifically october and we didn't have a great run up i do think we have some just like regular selloff, regular digestion but i do think that rates -- the market is finally waking up to the rate story. as the economy is strong the long end of the curve is

starting to steepen. i think between the steepening of the yield curve because the economy is strong and then the reality ndle it.

if we go back to what happened with trump, you had a 50 basis points bump after trump was elected in 2016. we've had about a 50 basis points bump right here i think you can see more upside, maybe you get to 4.5, you get to 5 then something -- something is wrong. >> i feel like all bets would be off at 5. >> yeah. >> let's just face it head-on. >> yeah. >> i feel like he called you too bearish. he thinks that your view is too cautious on the environment and, by the way, max has been one of

the more bullish people who have come on the show of late, but are you too -- are you too bearish? are you too cautious >> i don't think we're too cautious what we're doing is we're constantly looking for your best risk reward, we're not looking for the highest risk, highest reward, we're looking for the best risk reward looking for good opportunity n in market i don't think you want to set your hair on fire you don't want to go out on the end of the risk spectrum so i think -- and especially with the run up in front of the election, i think it's prudent to be a little bit more cautious let's just call it two mone sume what happened in the summertime is a lot of people that did really well gave back a ton of money but they had another six months to make that back they don't have six months to make that back, they will have six weeks. if you are caught positioned wrong it could be a big problem. are we too bearish i don't think so i think now is a good time to be

prudent. i think markets go higher, i think you buy some healthy selloff but i don't think this is a time where you get super aggressive. >> max, what if we're setting ourselves up for a sell the news on the election? >> i think that's a fair assumption i mean, in terms of setting hair on fire i think probably we disagree, figuratively i don't have too many left so i wouldn't be setting my own hair on fire, but, look, i guess right now to be honest with us i think we're still very, very long, we're still going really bullish into the election i think where i'm starting to get worried is more about the post-election rally. what we're seeing right now is consensus expectations for the q3 earnings season are still utterly low, i think they're way, way too low, particularly for some of the cyclicals. i do think the next couple of days, next two weeks, be long cyclicals into the data. some of the macro data coming in at least in line and if that

comes in line the whole thing around maybe it's going to be much weaker because of the hurricane, that would, i think, prompt even more of a selloff in rates and even, you know, more of a backup in cyclicals i think where i'm starting to get skeptical is really this idea of the post-election rally. chris mentioned positioning. i think an awful lot of people are looking for that post-election santa rally. i do think there is a genuine basis for people getting squeezed into the election but like you were saying once we get the election there is a genuine basis then for saying the bonds have rallied, the cyclicals have rallied. what's left really i think there is really a risk that the post-election, the santa rally, is not coming because everyone got squeezed into the election before that. >> that's a good point, brynn. a lot of things have rallied, cyclicals, financials, industrials, materials, you could find other areas that are already up a lot

have we pulled forward a fair amount and we're going to be disappointed over the final stretch? >> well, it's actually like this quarter if you look at like the 493 that we talk about minus the 7, this quarter is really like a low in earnings growth for q4 2024 we're expecting that 493 estimates to grow close to 15%. so i don't think these other sectors that have started to do well really all year, i think there's more to come from that, especially as we get closer to the year and those expected earnings in q4 are actually realized so i still think this widening of the market, which is very good for a bull market, continues across multiple sectors. >> chris, you want to take a stab at sort of mega caps as, you know, a week from yesterday we're going to be talking about these every day? >> feels like we are talking about every day for the last year so what i do think and what bryn said i agree with. there's a lot of talk about a meltdown and what i think is

going to happen is you're going to have a broadening out of the market and that's going to be hard for a melt up to occur because a melt up usually occurs when you have a select number of companies really run, the magnificent seven. but if suddenly we are talking about a pro-growth-type situation -- >> aren't we already talking about that >> we are, but we're still kind of tentative, we think, maybe possibly i do think the pain trade is for a broadening out i think many people are still in that growth and momentum trade and if that turns around that's going to be a problem. somebody asked me where is all the dry powder it's not so much the dry powder, it's, hey, if i'm in a pro -- if i'm in a growth portfolio, a high momentum portfolio, i have to move around really quickly or i have to hedge if trump wins and we get into that pro-growth-type environment and that's going to cause a lot of things to turn around, that's going to cause a broadening of the market and going to have your average stock do much better, but is also going to keep that melt up from occurring. >> speaking of mega caps,

obviously watching what apple is doing today, it's been under pressure i mentioned that at the outset of our program today stee kovac has a deeper dive on the move and the reasons causing it. >> shares are down 2.5% right now. this is from the analyst at tf international securities and i consider him the best analyst out there following apple's supply chain n a new note he says apple is cutting about 10 million iphone 16 orders this quarter and through the first half of next year. he says the cuts may not reflect in apple's results until next year, though, but year over year unit shipments are still expected to be down because of those cuts also says so far no evidence that apple intelligence which is launching next week is driving sales if apple is cutting now. and on top of that let's look at at&t ceo john stankey this morning, he applied iphone upgrades are less than stellar so far, this was on this morning's earnings call. he said they're still waiting to see if the ai update will drive

more sales but warned it is an iterative technology that could take a long time to adopt. by the way, scott, apple earnings eight days away, october 31st. >> i can't believe, it we're going to be talk being that before we know it. thank you. steve kovac with color on what's happening there today. bryn, what do you make of this news from a very influential analyst, maybe the most according to steve >> well, i mean, apple is at basically an all time high don't be sad for apple shareholders i've been saying this really consistently, i mean, i do not think this upgrade is going to be exponential, i think it's going to be incremental. i mean, i look at my own iphone 14 pro, i already have four ai apps on there, chatgpt which apple is using and so i do think it's going to be incremental i think listening to john stankey it's like this is going to be slower because it's going to roll out and i think we will have to see. so i don't think people are going to be buying iphones for their kids for christmas like they did ten years ago just

because it looks and feels like the old iphone at this point so i think apple investors should expect a market perform which is really what apple has done year to date, it's right on top of the s&p. >> chris, last word to you it is interesting the bifurcation between some of the mega cap names for nvidia and apple going higher, there's been a microsoft that's traded a little squirrely what does that mean to you >> i think that's great. the market is differentiating. if everything was going up in synch, i would have a problem with that. the fact that the market is different differentiating it's a good thing i think that's a healthy sound of the market, one of the reasons why we think '25 will be a good year. >> chris, i appreciate you thanks for being here. bryn, thank you. max, we will talk to you soon. p pippa stevens now. >> enphase is sinking after the company missed q3 estimates and gave weak guidance the ceo told me the u.s. market has stabilized with revenue up

43% quarter over quarter but that europe is under stress which is why the q4 guide came up light he ended enphase is working through the impacts of sun power one of the largest solar installers filing for bankruptcy northern trust hitting a two-year high on the back of q3 earnings, income rose 42% year over year with the company reporting better than expected revenues and lower noninterest expenses, do you have bank calling it a, quote, very good q3. peloton is jumping after david einhorn reportedly pitched the company as a long idea at an industry conference just now according to seeking alpha this comes after green light disclosed a position in the fitness name in august we have reached out to peloton and green light and those shares are up 9%. scott? >> nice pop there. pip, thanks. pippa stevens for us. just getting started up next ashley mac neal is with us next, she will reveal where she's seeing opportunity in the

software and tech space right now. join me at post 9 just after this break we're live at the new york stock exchange you're watching the bell on cnbc ♪♪ from this can't miss moment... ...to this hello new grandpa moment... ...to that whatever this is moment... your moments are worth protecting against rsv. if you're 75 or older, or 60 or older with certain chronic conditions, you're at higher risk of being hospitalized from rsv. and there are no prescription rsv treatments. you have options. ask your pharmacist or doctor about pfizer's rsv vaccine. because moments like these matter. ♪♪ plaintiff. power e*trade's easy-to-use tools, like dynamic charting and risk-reward analysis, help make trading feel effortless. and its customizable scans with social sentiment help you find and unlock opportunities in the market. e*trade from morgan stanley with powerful, easy-to-use tools,

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- it's something about having that piece of paper. some people think that's worth more than my skills. - i've run this place for 20 years, but i still need to prove that i'm more than what you see on paper. - you gotta be so good they can't ignore you. - it's the way my mind works. i have a very mechanical brain.

- analytics and empathy. that's how i gain clients. - i am more... - i'm more... ...than who i am on paper. tech and software stocks taking a back seat today with investors bracing for the hyper scalers reports next week. vista equity partners, a private equity firm investing exclusively in enterprise software with portfolio companies across various industries ashley macneill the head of equity capital markets at vista joins us at post 9 good to see you. >> you, too. >> you take a lot of companies private and then you sometimes

re-ipo them. the market for ipos has been really, really slow. why? >> well, for the ipo asset class to really be functioning well you kind of need three things all working together, one, you need a stable macro environment and realistically we haven't really had that until we started seeing the rate cutting cycle start in ernest this fall. two, you need investors to be risk on and need them to want to deploy capital in the asset class. third and that i think has really come together this year is you need companies being able to report consistently and clearly with investors so ipos work by companies communicating earnings the next three to five years and companies haven't had that yet and i think they really had starting to. >> i mean, the irony in the whole thing is that here we talk every day about how strong the economy is and how the stock market has been hitting record high after record high after record high and yet the ipo market has been all but dead

it's like something has to change soon, doesn't it? >> well, i think you have to bifurcate the tech ipo market versus the broader ipo market. yeah, i think that we're starting to see companies get a lot more comfortable with communicating their story to investors and that's really coming around sort of on both how the gen ai narrative fits into their story but also their ability to digest everything going on in the macro environment. >> companies are staying private longer, that's been a big theme we've been talking about now for some time. what role do you think the growth in private credit has played in that as an alternate source of capital so companies don't feel like they need to go to the public markets, the private markets are exploding with money. >> yeah, look, i think it's definitely played into the delay of the ipo markets returning back to a sense of normalcy. that being said, the capital markets are efficient and creative and we're going to continue to see like the

evolution of the ipo and i do think that the public markets will start to have an appeal, particularly as you point out the high valuations as well as the pull from investors to see these companies public. >> your founder and ceo robert smith sounded reasonably optimistic a week ago when i was with him out in beverly hills at the conference we were both at on a panel conversation about topics like this i sat down with todd bowly famed investor and i frankly was surprised z how optimistic he was. i want you to listen to what he said and we will react on the other side. >> i think we are in the process of having lots of m&a get started. i think we're seeing more and more activity, i think we're seeing people want to transact, people have to kind of get back to, you know, the transaction business so, you know, it crossed our portfolio we're seeing lots of merger and consolidation discussions going on i think some of them are in the earlier days but i think the

animal spirits are coming back and people want to get back to it. >> that raised a lot of eyebrows animal spirits are coming back by the way, i've talked to people offline who think the same thing, that we're about to have that. >> i think that's right. i mean, investors -- there is a palpable energy from public investors wanting to deploy capital in this asset class and i think it's because right now, particularly if you think of tech, there's so much innovation going on and there's so much ways to kind of play this gen ai technology and people want in today because it's so exciting so i think he's right, you know, he's speaking my language. we need ipos back. >> what about higher rates we see the impact on the stock market here. what about, you know, if we are in a backing up yield environment, what's the impact on what you do >> look, cost of capital is always going to come into play and whenever you ipo there is a decision that the company has to make around the cost of equity and do we need at capital and can we find the capital cleaner elsewhere.

a raising rate environment traditionally has not been good for ipos, that being said i want to balance that with the fact we are starting to see three things line up, macro environment, investor appetite and the corporating. >> you guys raise add $20 billion fund not that long ago is most if not all of that going to go towards generative ai enterprise software companies? i know it's the hottest area, but is it the only area that's of real interest right now >> look, we view generative ai and investing in generative ai similar to how you might think about the internet and how the internet came about. this is an early cycle that we are in and there's going to be length and depth to this investment cycle and that gen ai-enabled software is the path to the future. i think you have to look for bread crumbs and proof points along that but i do think that there is no investment without being focused on gen ai in some

capacity. >> what about what has that done to valuations and multiples of private companies that are getting a boost based on the whole craze? and now you guys have to assess, you know, what are higher valuations than maybe you are willing to pay for and how you see the whole environment. >> it's definitely changing the dynamic. that being said we are starting to see and particularly this earnings cycle which i think is going to be exciting because it's going to provide measurable proof points for gen ai to justify some of these valuation numbers you've heard about it's really hard whenever there's new technology to really pinpoint what is it worth. so we use traditional metrics like growth, et cetera i think that this earnings cycle we're going to start seeing from both the public and private companies some real proof points that gen ai is innovating and creating new revenue streams and making these companies more efficient. >> you will be watching the saps, service now's and all of those companies. >> correct. >> for ideas and details about what's really happening.

>> absolutely and also how their strategy and thinking about t are they focused on product innovation, is the innovation cycle long or shorter because of gen ai and where are they putting that on the efficiency line >> i appreciate you being with us today. >> thank you so much. >> ashley macneill, vista equity partners. up next hoop season is back, breaking down the top nba teams to watch what might be next for that league as well. as we head out a quick check on the major averages as we head towards the close. we still have a down day, maybe we are off the worst levels for sure on the dow, nasdaq is off about 1.75%. back with the bell after this.

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nba season getting under way adam silver saying league expansion is on the table. here is discuss mike mosanian. what's adam silver saying? >> i think he's saying maybe like in a couple of years put a team in las vegas, probably get an expansion fee of at least $7 billion. >> is he only looking at one additional franchise or is he looking to grow to league further than that. >> i think you will see two, another one maybe seattle. you have a new arena there, just a hockey team right now, built also for basketball. >> it's amazing the evolution of professional sports in vaccination. if -- vegas. it was the third rail of sports. you have the raiders and now you're talking about an nba team this was just a partnership that had to happen at some point. they couldn't wait any longer, could the professional sports leagues? >> you're absolutely right, scott. not only do we have pro teams there but they're all doing very good the raiders among the top nfl

teams in revenue, the vegas golden knights they've already won a stanley cup. >> that's right. i forgot them. my apologies of course they were good right from the beginning. >> yeah. >> too and selling out their arena. so the marketplace was always there, it was just getting over the hurdle of being in, you know, the epicenter of gaming. >> it's perfect for the nfl because you can make a three-day weekend out of it, four-day weekend out of it with the vegas golden knights they did a great job marketing the team and the league did a super job of making sure in the expansion draft the team got good players. >> they were good quick. celtics, they raised their banner last night, they give out these beautiful rings. we're still waiting for word on their sale any nibbles on that? >> what i've heard and i have not spoken to the controlling owner, is that he may be working on some moves to actually keep the team maybe get some financing in there and so forth where he can

keep t you know, you and i both know he loves owning that team he loves t he's done a great job with t we will see what happens. >> yeah. the final season of the media deal before we embark and we're excited obviously at our parent company to have a piece of that action, too. what do you make of that entering the final deal and then we will step up into this new one. >> it's a 2.6 times increase, an 11 year $76 billion deal one of the interesting parts they brought in amazon so like we've seen with the nfl where they're streaming more, the nba is now doing that. i think this is their plan as they expand reach. so the in-season tournament now the emirates nba cup last year viewership was up 46% for the final game they had almost 5.9 million viewers so people talk about the nba finals not doing the viewership

when michael jordan was playing. when you look at that and then add this new tournament to it you're basically at the same point. >> all right nba valuations coming in january, right we rolled out the big one with the nfl. you've got another one coming soon, too, don't you >> we're going to come out with the national hockey league in november. >> thanks. tomorrow don't miss a cnbc sport exclusive video cast, alex sherman sitting down with nba commissioner adam silver we're excited about that we're getting news out of the cfpb steve kovac has that for us. >> scott, i just got a statement from apple responding to that fine that was levied against them by the cfpb earlier this morning related to the goldman sachs and apple card let me read you the most relevant part of the statement they say, quote, upon learning about these yad vert ent issues years ago apple worked closely with goldman sachs to quickly

address them and help impacted customers while we strongly disagree with the characterization of apple's conduct, we have aligned with them on an agreement, that agreement of course is a $25 million fine, pocket change for apple, but this was related to things at cfpb said about the apple card promoting interest-free payments for apple products and also customers having trouble when they had to dispute a charge and getting their money back between goldman and apple, that's what this was related to again, shares of apple down 2% but mostly off of the iphone use i was telling you about earlier. >> steve kovac. up next, tracking the biggest movers into the close, pippa stevens is standing by with that. >> one tech company could be exploring one of its largest ever acquisitions. the names to watch coming up next

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we're about 15 from the closing bell back to pippa stevens for a look at the key stocks she is watching. >> scott, siemens is reportedly in talks to potentially acquire al tear engineering according to a bloomberg report in what would be one of siemens' largest accusations. stocks of al tear jumping on the news al tear did decline to comment florida chemical maker element solutions reportedly exploring a

sale according to bloomberg, goldman sachs and bank of america are reportedly working with the chemical maker, those shares up nearly 10% on the news scott? >> pippa, thank you. still ahead, we're going to run you through what is at stake when tesla reports earnings top of the hour in "overtime." bell sm could go right back. als to earn their very liberal rates on idle cash. they would descend into chaos.

coming up next we get you set up for earnings in "overtime," what to watch for when ibm and tesla hit the tape

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while now. >> looked like it might get a little bit out of hand around 2:00 or so what's interesting is is there significance to where it stopped i think is the question. it was right exactly at the september highs in the s&p 500 so if you sort of see it as the market sort of defending this october range and trying to stay in a sort of upper register for the third quarter, also treasury yields obviously have been the pressure point, been on the upside all day but right around the same time stocks bottomed they backed off a little bit that's often how this goes when stocks are nervous about how high yields are getting if yields start to back off because bonds get a safety bid, now, these are small moves, it's not a big deal we came into this weekprobably with some pent up selling, so post options expiration and pre-election, you really should expect a little bit more chop. that's what we're getting. majority of stocks, clear majority, down all day i do think we're still in this mode we have to work off some of the built up optimism. i don't think it was crazy

extremes, but that's the process we're in right now. >> yeah. apple obviously an issue today, nvidia is lower but apple on this new -- >> you didn't get rescued by any of the big mega caps, apple to the down side, sloppy reactions to earnings. coca-cola nothing is sellable in the numbers but you get a sell the news that is building towards this little reset in the context of an uptrend people thought would have taken a pause before it did. >> the dow looks -- mcdonald's a problem. >> mcdonald's is over 100 points. >> coca-cola, apple. you see what the stories are seema, talk to us about ibm. >> well, scott, for the first time in a decade ibm is outperforming it's software peers and the broader markets since its last earnings report, shares up 25% in the past three months around a record high. excitement is growing around it's ai business with bookings topping $1.5 billion last quarter.

analysts will want the ceo so quantify how big the enterprise ai opportunity is for ibm. one area of concern for analysts is the consulting business after competitor accent sure delivered softer than expected results also we will look to krishna for a brooder look at the economy, the weakness in europe, the potential rebound in china, scott. >> thank you to phil lebeau on tesla. the first of the larger cap nasdaq stocks to report, phil. >> yeah, that's coming up in a couple of minutes. three things that people will be watching for not only with the numbers but also on the conference call a little bit later on with elon musk, first of all, what are the company's auto gross margins x, the zero emission vehicle redits, the expectation it will be somewhere close to 15%, if it's in that reaction i wouldn't expect much reaction from the stock. what do they say about a lower priced model are they close to production where do things stand there? and then what does elon musk say during the conference call

the expectation has been he's probably not going to dive into politics, though we should point out that the forum where people can submit questions has more than a few where people do raise questions about his political activities so we will see what happens during that conference call which comes up at 5:00 eastern or 5:00 eastern time, yeah and we will be talk about this in a few minutes when the comes come out. >> i will look forward that that i certainly wouldn't be surprised if you have some analysts bring up his political activities at all, but we'll see and you'll let us know phil, thank you. phil lebeau. you're watching this one i know. >> sure. you know, you imagine questions would come up in the context of are your attentions further split and might they get more diluted if you have some kind of a role in a new administration the other piece is i always view tesla as a little bit of a tell on the market's willingness to believe and willingness to gamble on the next huge thing. it's been a struggle around this price area for a while, the earnings estimates have been

hacked away over the last year going to earn a little over 2 bucks a share this year, supposed to be twice that a year ago. obviously it's all about what's the next thing i do think it's been trading kind of soft, the implied move s you know, i don't now, maybe 4 5, 6% on the news. so we'll see, you know, if we sort of pre sold into the number or if there's a little more to absorb there. >> i feel like we'll get now as you inch closer to election day you're susceptible to more volatility as that day gets near. >> yeah, i think if only because anytime you present in front of the market something that feels roughly 50/50, i mean, you just conditioned handicap it that much better than that is correct you're going to have just a cranking up of that anxiety or an unwillingness to take on further risk i'm sure there's going to be gambits, we've obviously seen things consistent with the textbook trump trade work, but also the things as i keep saying that would work if the fed was cutting into a strong economy

and you have essentially the dollar ripping and all the other things that are happening. what was interested today is as the dollar puts in another strong day and you have this perceived tightening of financial conditions, gold down 1% which is absolutely nothing compared to the massive rally it's had but it does give you the sense that people are taking a half step back from the stuff that's worked for a while and are willing to kind of sit there and reassess. >> got the two-minute warning. there are some suggesting like chris harvey was maybe we can sell the news event, pulling all of these trades forward and maybe november 5th turns out to be a sell of news event for some. >> yeah, i could see the makings of that even in a weird game theory way if you have two camps that are, you know, a little bit confident it might go their way, whoever is right hangs with their trade, whoever is wrong has to unwind or express disappointment some other way. the other piece of it is, you know, as i was saying before, if it's a reflationary policy set that you're going to be betting

off if former president trump gets back in there, well, when he got in there in 2016 inflation was running under 2% for a year, we were chronically falling short of growth, you know, you needed exactly that to try and get us out of this decade long fix we were in after the global financial crisis and that's why the market celebrated it by the way, the s&p 500 at this point before the 2016 election was flat over the prior 18 months it had been this chop fest in 2015 and 2016. the point is we're up a lot, have already built in in expectation the economy is performing well and, if anything, we get nervous when it's too well. i think it's a different setup so i don't know if there's a linear way to say if i know outcome x i'm going to bet y. >> sure, we've flooded the zone with so much money over the last handful of years. >> of course. >> we're in a more -- i don't know, some would suggest dire deficit situation. >> well, that's the other piece of it. that's the other part of it. you have the potential media

market base down sides of even more of that, which is higher yields, which by the way the higher yields are just the seeds planted for the next growth scare because that's what's going to happen at some point in they keep going up. >> mike santoli, thank you about 1% declines on the s&p and the dow, maybe a touch lighter than that. nasdaq about 1.5 tesla coming up in a moment. well, that's the end of regulation, curb line properties ringing the closing bell at the new york stock exchange, x trackers by dws doing the honors at the nasdaq. higher yields, a pull back for mega cap tech stocks, big drops for apple and the chips, but the focus now turns to an upcoming wave of earnings, that is the score card on wall street but the action is just getting started. i'm morgan brennan with jon fort a huge hour of results coming your way headlined by tesla, ibm, service now and t-mob