welcome to "power lunch," everybody. alongside kelly evans i'm tyler mathisen. so glad you could join us. stocks are lower today to start off, well, let's call it a big week for the markets. big week for the country. maybe even the globe. but off the worst levels of the day. election tomorrow. fed meeting on thursday. so the agenda, kelly, is full. >> you know, i love watching this play out tick by tick. you can overlay the predicted odds or pick your favorite platform or whatever. the one you hate the least.

with what's going on in the market. djt shares are now up i think 13%. the 10-year is five bips away from going positive on the session. harris came into the trading session with all of this momentum, and now in the afternoon hours we see that trading. so we're just watching all of this play out. literally tick by tick. it's very fun honestly. some big changes are coming to the dow as well. on friday nvidia and sherwin williams will join the index. intel and dow inc. are coming off. >> the dow jones gets a fresh coast paint here i guess. >> and loses the dow component that always made things so tricky when you were talking about it. >> it's the dow. and nvidia now pulling briefly ahead of apple in the market cap race. there you see it's 3.389 versus 3.382. it hasn't closed above apple on that metric since june. so nvidia doing very nicely, thank you very much. but neither are suffering, i wouldn't say. >> it's impressive. >> in market cap. and we will talk to former fdic chair sheila baer.

she's warning about the national debt, saying it could cause the next financial crisis. and neither of the candidates is addressing it. it is always i think leverage and debt one way or another that leads to trouble in markets. and for economies. >> she's been vocal on this for quite some time. but i think it needs an airing and kind of dive deeper into what it could look like under either administration. >> she's written very passionately about it. we welcome her back. >> we start with the markets which are lower although the nasdaq just went positive. the u.s. presidential election is tomorrow of course and the fed decision is on thursday. the fed is expected to cut rates for the second straight meeting. only a quarter point this time. what does it mean for investors? let's ask rich bernstein. ceo and chief investment officer at richard bernstein advisers zpp our own mike santoli is here in the house. it's great to have you. richard, let me just start with you. your protege, michael kantrowitz the other day said he was not a fan of small caps we were talking about rates and so forth

but i know that you are. and i wonder if you would still be as vehement about how tr attractive they are now as you were before. >> markets tend to broaden as profit cycles accelerate. and the profit cycle's accelerating. i always try to point out to people that the cycle by definition is determined by cyclicals. and so if you believe the profit cycle is accelerating, which it is doing, and if you think that's going to continue for several more quarters then it pays to have cyclicality in the portfolio. smaller caps are more cyclical than larger caps. i think everybody knows that. and so that's why we favor still small and mid caps. >> mike santoli, why do you think warren buffett is selling so much stock and raising so much cash and ending buybacks? what's going on there? what's he telling us? >> i think it's definitely a series of things going on both specific to berkshire hathaway and then in general in terms of the market, general atmosphere. clearly buffett and his colleagues don't see great

amounts of value in large cap equities, anything that would move the needle to where you'd want to make a big bet. clearly he always says he would love to buy an entire company or more than one company if the price were right and if there was a willing seller and if it fit. none of that's happening p and therefore i think he wants to reduce some of the outsize bets within the public equity portfolio. that's been seemingly a priority all year. meaning we came into 2024, apple was almost half the portfolio. it had gone up so much. it's also very expensive. it's 30 times earnings versus 15-ish probably when he first bought it. so i think the combination of, you know, selling down some of the outsize positions and maybe more expensive ones and then the cash, he's happy to hold it and collect t bill rates while he waits. also positioning the company for what comes next, to maximize the flexibility -- >> what i hear you not saying is that he is not making a broad call on the markets here, that it has much more to do with the internal composition of his portfolio. >> that's the way it would look to me. obviously if he felt as if the

u.s. economy were about to accelerate and all of a sudden it was going to make things look cheap based on taroday's pricese would think -- but i don't think it's a market timing call in any acute way. >> rich, is there anything you'd add to that? we talked about this last hour but the s&p at 24 times trailing earnings versus 16 a couple years ago. >> well, i think -- look, i don't know the motivation for selling apple per se out of his portfolio or out of berkshire's portfolio to be more accurate. i think we're in an environment where people are embracing risk and historically that's not been the best time for a value investor like warren buffett, right? you tend to shy away from those kind of markets. and for instance, if you look at private client equity beta which merrill lynch puts out o', the beginning of the bull market it was .75. much lower risk in the market overall. today it is a whopping, absolutely whopping 1.45.

so in that environment you should be expecting people like warren buffett who have big gains to be selling some of those big gains and diversifying the portfolio. i really think that's what he's doing, and i think if you're not a momentum investor i think that's a very prudent thing to do. >> one of the things you point out, rich, in a very interesting "financial times" op-ed is that when you start feeling comfortable about which sectors are going to win or prosper the most under this election scenario or that election scenario usually you'd be wrong. >> not only wrong but sometimes polar opposites. i'm sorry, i'm kind of laughing here and i don't mean to belittle any candidates or any past presidents or anything like that. please don't read this the wrong way. but it's sometimes just incredibly funny. i'll take two recent examples. 2016 president trump vilified the technology sector and talked about drilling. technology turned out to be the

best-performing sector during his administration and energy the worst. well, in comes joe biden talking about esg and clean energy and everything else. and the energy sector turns out to be the best-performing sector. i don't think anybody would have guessed that technology would be the best-performing under donald trump and energy would have been the best-performing under joe biden, but that's exactly what happened. so sometimes it's actually quite funny. so i would -- i mean, i don't want to be a debbie downer and try to dismiss all the analyses that everybody's doing right now. i would guess that a fair chunk of them are going to be wrong. >> mike, what would you add to that? what are you going to be watching? >> you know, i think the market has been trading, especially in the last few days, the way you would expect if nobody had an edge and it was a virtual coin toss. in other words, you mentioned earlier, well, it looked like djt was going to be for sale again this morning. once it goes down three days in a row everyone feels like maybe that's not a 50-50 bet anymore, so we can buy it. so it's all tacking in this direction. i don't think -- i agree with

rich. bull markets, you can look back and say there was a certain maybe temporary change of character in the market when a given president were elected. 2016 you definitely got this reflation trade. it was going to be i ahigher nominal gdp. banks and small caps and cyclicals did better. but it didn't last. it wasn't the story of the whole cycle. so bull markets are not kind of born or killed by whatever administration gets turned over. >> rich, we're going to have on sheila baer, who's very concerned about the level of national debt, as many people are. are you? >> look, tyler, there is nothing good to say about the levels of debt and interest payments and everything else. i think anybody who says it's not an issue is kind of deluding themselves about that. but that being said, i think the important thing that i would point out is this is not a new issue. we are not on like the edge of an abyss that we're going to fall into and never come back from. this has been an issue now for

13, 14 years in terms of the downgrading of u.s. debt and higher u.s. interest rates as a result of that downgrade. that was 13 years ago. and the debt to gdp issue has been growing for 40 years. you can see in every administration except for one, and that would be bill clinton's, that we added more debt to gdp. bill clinton was about the only president who lowered debt to gdp without inflation. right? you can talk about inflating away the debt but then you'd be looking at lbj and nixon and carter who inflated away the debt during their administrations. but this is nothing new. it's been a slow bleed on the u.s. economy. it has hurt our competitiveness for 13 or 14 years already. a lot of the problems we now have are a result of that. but the notion that we're going to wake up tomorrow morning and we're going to end up in some abyss i think that's a bit overdramatic. it's more like a slow bleed. >> just going back to that rich, i think it's true correct me if i'm wrong that they were able to shrink defense spending in part

to support that effort which i don't think we can do right now. one of the trades people are wanting to put on with a harris administration is an oil trade because of global uncertainty but then we've had so much of that in the past year and the oil price remains at a nadir. >> you have to remember with commodities like oil it's a matter of supply and demand. we know chinese demand has been weaker than people expected six months ago, a year ago, something like that. i think that's really hurt the price of oil. but i think you know, what you're touching on here, kelly, is this deglobalization theme, which we're huge proponents of. personally i think it's the best investment theme out there right now is deglobalization. and the notion about whether that's in defense or whether that's in domestic production or anything like that i think it's the best investment theme out there. >> mike, any final thoughts? or you want to leave it there? >> we can more or less leave it -- although i would point out this has been -- we haven't really had the seasonal and

pre-election jitters and weakness really at a marketwide level you might have expected. >> no. >> we're 2% and 3% below the highs of the s&p. below the surface there's been a little more indigestion but it's really just set this market up to kind of react. i think it's because everyone's on board with the idea once the election's a clearing event then the final two months of the year tilt higher at least based on historical odds. everyone's not wanting to be out for when that starts if it starts. >> let's hope it's a clearing event. >> sure. >> let's hope it gets cleared. >> even at that we've been talking so long about how there might not be a resolution i just wonder if that might be a jarring surprise. >> all right, rich, have a good day tomorrow. good night tonight. mike santoli, same to you. go rangers. election day is nearly upon us. some late shifts. but the polls do remain really close. our next guest says no outcome would surprise him at this point. "power lunch" will be right back.

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lunch," everybody. we're just one day away from election day as you surely no. polls indicate a very, very tight race in all seven of the so-called swing states. and getting a lot of attention over the weekend was iowa. a new poll there shows harris at 47% versus 44% for former president trump. but the final "new york times"/siena polls show no clear leader in those seven key battleground states. iowa's not one of them, by the way. our next guest says no election outcome would surprise him and says the nightmare scenario would be one or more battleground states decided by a very slim margin. chris krueger is managing director and washington research group strategist at td cowan. chris, welcome. when you say a very slim margin, in the last election 11,000 votes in georgia was considered a slim margin. but we both remember florida in 2000 where the margin was something like 600 votes. >> that's right. so if you go back and look at there were approximately 40

recounts since that florida recount in 2000. the average number that the vote total changes is 551. so anything inside of 1,000 votes would be a rough outcome. anything, you know, 5,000 and above you can breathe a little easier. 10,000 and above you should be free and clear. >> nevertheless, one could certainly anticipate that there will be challenges r challenges to the voting, to the vote counting, to the results no matter which side wins. right? i can't imagine either side, if it is as close as the polls indicate, that either side is not going to raise some challenge if they are on the losing side. >> yes well, i think there are probably two areas to focus on here. first off, you have active litigation. it's something like 175, 185

lawsuits already filed across the country. but then the second part you do have a relative ly hard and fas deadline set in statute. so the first one is december 11th. that's when counting has to stop across the nation. december 17th is when the electors meet in the state capitols. going back to 2000 in florida that was really the catalyst that got the court involved. and then january 6 is when the new congress certifies the presidential. so you do have three dates you can look to. the problem is that they don't start until december. >> that said, chris, we see all the parts of the country that are already boarding things up and anticipating protests. and i obviously hope that doesn't happen. what would you be telling investors to watch for tomorrow evening? what would be some early signs it's breaking one way or the other? >> yeah, look, i actually -- i'm

reasonably confident that we will have some clarity by the time the market opens wednesday morning. that's not because the counts are going to be done. they're definitely not going to be done. pennsylvania will probably take until the weekend. michigan will probably take until wednesday night. arizona might take until the following week. but there are any number of counties. we've got 45 house races we're watching in 34 counties. extrapolating the numbers out of those in the early morning hours. and we should have some clarity. if we don't have clarity, we're into that second scenario where you're literally, you know, inside of five, four, three thousand and we could well be in recounts. >> since you mentioned congress, congressional races, senate races, what do you think's going to happen there? >> i think for the first time in american history the house and the senate could flip to opposite parties in the same

election. that's not because of waves one way or the other. it's just because of geography and math. when you look at the senate map, it's really good for republicans and it's a 51-49 senate. so you have unbelievably tight margins in the senate. and you have arguably tighter margins in the house. you have 435 members in the house. and when all is said and done it's basically a three-seat margin. the issue for the house is unlike the presidency and the senate races a lot of that geography is in very blue parts of the country, specifically california and new york. of the 45 most competitive house races, 10 of them are in california. california doesn't close until 11:00 p.m. eastern. mail-in ballots have until november 12th to come in. so we could have a pretty good handle on the white house, on the senate, on the morning after

the election. the house could take a while. >> very interesting. so you foresee the possibility that the house would flip democratic and the senate would flip republican and then of course obviously the big enchilada is the white house. and that could go either way. >> that's right. and that's largely based just because you have the tightest margins in the congress since world war ii and the geography is basically inverted. the senate, again, good for republicans. the house relatively good for democrats. there are a handful of states we're watching early. not because -- mainly because they're all on the east coast. they all close early and they all count early. so virginia, florida and north carolina. three good states to watch because they close at 7:00, 7:30 and then 8:00 p.m. virginia you've got two house races there in fredericksburg and virginia beach. if virginia's not called by like 8:00 p.m. for kamala harris

that's a really good sign for donald trump. florida, you know, there's a key senate race there. if florida's not called by call it midnight for donald trump that's a really good sign for harris. right? so florida's kind of a reverse of virginia. and then north carolina counts relatively early. there's been a lot of focus on pennsylvania for harris. you know, north carolina donald trump was there this morning. donald trump's math to 270, or his arithmetic to 270 in the electoral college votes really tough without north carolina. that's the first of the seven battlegrounds. so keep an eye on those three. hopefully we'll have -- we'll have some clarity by, you know, 11:00 p.m., 11:30. >> all right, chris, that's an optimistic outlook there. appreciate it. chris krueger, thank you so much. remember, cnbc will be live all night on election night. we will have the results as they come in and reaction from the biggest names in business. all starts at 7:00 p.m. eastern time tomorrow from the new york stock exchange. we'll then have live coverage in

the overnight hours with more results plus asian and european markets opening. and then "squawk box" will begin early. 5:00 a.m. be sure to stay with cnbc all night long. as lionel richie sang. >> that was running through my head. as we head to break, navigating the 2024 election. we'll take a look at the small cap names that could be helped or hurt by tomorrow's results. market navigator explores that next. hi, i'm damian clark. i'm here to help you understand how to get the most from medicare. if you're eligible for medicare, it's a good idea to have original medicare. it gives you coverage for doctor office visits and hospital stays. but if you want even more benefits, you can choose a medicare advantage plan like the ones offered at humana. our plans combine original medicare with extra benefits in a single, convenient plan with $0 or low monthly plan premiums. these plans could even include prescription drug coverage with $0 copays on

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we were not talking football. welcome back to "power lunch." and let's get a quick check on the markets. the dow is still down half a percentage point. the s&p is only down five points right now. the nasdaq is hanging on to a three-point gain, dom chu. what's in market navigator? >> i'm certainly not going to navigate around nfl ownership issues right now. but we've been talking about how big and how important tech will fare depending on the outcome of tomorrow's election. but what about the small cap stocks overall? our next guest says that small caps have had a tough go for the past couple of administrations but that they could be ready to run to the upside regardless of who wins the white house. so joining us now is gustav

little, a senior portfolio manager at all spring gold investments. and gustav, ps an interesting thesis. there's a mean reversion aspect. if you've been underperforming for so long it's got to turn at some point. but what makes you think that now is the time regardless of what happens with the election results this week? >> yeah, that's absolutely right, dom. you know, it's been a challenging period for small cap stocks. historically speaking, small cap stocks do a little bit better in a republican administration. but as you said, it has been a mixed bag. when you look through the last two administrations, it's been about -- all about large cap stocks and small cap stocks have really underperformed. you know, we're into the 14th year of this large cap cycle and we think the market dynamics in the fundamentals set up really well for small cap stocks regardless of who wins the election. >> now, if that is the case, what types of small caps would you be looking at and how would investors take advantage of it?

do they just buy certain value or grothe-oriented etfs in small caps or do they look for specific names that might be in play? >> well, a number of the scenarios that have been driving this valuation gap between large cap and small cap stocks has been the ai data center and also the flight to safety trend. we've seen the valuation spread among large cap and small cap stocks reach historically wide levels. we think there are a number of different ways to continue playing this data center and artificial intelligence theme down cap but at much more attractive valuations. one of those names we think is really interesting here is called myr group. myr group is an electrical construction services provider and they're it really going to benefit from this transmission and distribution center theme regarding the aging grid. there's an expected 700 billion in spending for our transmission

grid that they're going to benefit from, but also they have a commercial and industrial segment that should benefit from the growth in data center and ai. so while you can play this name, smaller cap, it has a strong balance sheet but it's trading for about 50% off the valuations of large cap stocks. so it's trading at about 20 times versus about 30 times for the large cap growth names. but it also is poised to benefit from the same field. >> gustaf before we let you go that's the ai theme. we've been you can thatting a lot about. is it just about ai or are there other plays besides artificial intelligence and tech? >> yeah, it's not all ai and tech. we think there are a whole bunch of high-quality names down cap that you can really focus on here. as you go down in cap there are a lot of non-profitable businesses but as you roll up your sleeves and look at other names you can find high-quality businesses trading for discounted valuations. one of those names is in a beat up consumer sector. it's called car gurus. they are dependent solely on

this tech trade and data center ai trade. but they're taking market share. it's not a very capital-intensive business. but it's also trading for low p/e multiple with high growth prospects in the small cap space. >> gustaf little with the trades on myc and car gurus. we'll see you soon, sir. >> thank you. >> with the elections looming there's always this question, right? people want to talk about whether or not there's going to be some beneficial outcome for certain parts of the market. it's interesting to hear when portfolio managers say that you know what, regardless there are still opportunities and they could flourish no matter who's in the white house. >> i remember -- i have tom lee's words echoing in my brain about small caps taking off. and they -- that's why we asked rich bernstein about the at the top of the hour. it keeps quite not taking the leadership that people argue it should. so i remain omewhat skeptical. >> all right. be skeptical. large caps have been the way to go. >> all i'm saying is saquon goes to the eagles and suddenly he's amazing. >> let's talk about what happens with the jets. >> tyler, over to you.

>> let's check the economic dashboard. investors and economists have been checking for the normal warning signs. employment, inflation rates. but a new warning light has been flashing but it keeps getting ignored. debt and deficits. we will discuss that one next. (cheerful music) (phone ringing) [narrator] not all multi-millionaires built their wealth the same way, you have... the fearless investor. the type a cpa. the bootstrapper. the bootmaker. yeehaw [narrator] but many do have something in common. we all trust schwab with our wealth. [narrator] thanks to our award-winning service, low costs and transparent advice. every day, over a million multi-millionares trust schwab with more than two trillion dollars of their wealth. do you have a life insurance policy you no longer need? now you can sell your policy - even a term policy - for an immediate

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dad: you can talk to me. son: it's been really, really hard for me. presidential election is less than 24 hours away and as the candidates make their final case in key battleground states our next guest says there's one thing they really aren't addressing. our country's national debt which currently exceeds $35 trillion. in a "barron's" op-ed sheila baer claims the u.s. ballooning debt could drive the next financial crisis. here now is sheila baer. former chair of the fdic. ms. baer, welcome, good to see you. >> thank you. thanks for having me. >> why do you think the debt is not getting any attention in this electoral cycle? my guess is that both of the candidates just want to make taxpayers feel good and give them more. >> they do. there's been a lot of the

giveaways, both of the spending and the tax side. it's just both parties have decided that deficits don't matter anymore. which is pretty distressing because they do. and at some point we're going to reach that inflection point and they're going to matter a lot to investors who are going to question whether they want to keep buying our debt. the calculus is now there's no political payoff for it. people don't want to hear the taxes are going to go up or their benefits are going to go down. and even if you go and make those hard decisions and institute some reforms the next generation of leadership could come in and just squander it all. so i think politicians have just decided it's not worth it. >> before we talk a little more about the broader macro economic effects here let me ask you about social security specifically. the trust fund goes into outflow or deficit in a few years. it's not that far away. why hasn't it been discussed to increase the amount of income

that is subject to the social security tax? wouldn't that go a long way to righting that particular program? >> it would. it absolutely would. and actually, the payroll taxes now are pretty regressive. so looking at ways to make higher income people, higher wealth people pay a bit more of that load, that could do a lot to shore up the finances. but again, nobody wants to talk about that. social security in particular is a third rail. i worked for bob dole in the 1980s in the senate, and this is particularly upsetting to me because i remember in 1983 he and ronald reagan and tip o'neill made some tough decisions for social security. they did the same thing with deficit reduction and tax reform and closing tax loopholes. these are hard decisions but it shows leadership. back then we had leaders who could do it, and i want to believe be that we can have that kind of leadership again. but it's tough. you're not going to make anybody happy. >> back then you had bill bradley and jack kemp working to

the same goal. >> you did. >> i'm old enough to remember. >> it was. it was very bipartisan. yeah. and it has to be that way. you have to lock arms and do it. is it just one party? you can't just have one party driving it. the other party will exploit those unpopular decisions. it has to be bipartisan. and everybody has to be committed. and that's what happened in the 1980s. i'm hoping that's what can happen again. we need for it to happen again. >> sheila, i blame the bond market because it's not freaking out the way that it needs to. and if you remember in the early 1980s i think the 10-year was at 15% or something. that's how you get bipartisan coming together and deciding to do something about it. and we can see glimmers of that when yields start to back up and you feel like okay, maybe they're starting to put pressure on the budget situation. but until we see a big sea change it's almost as if the market's saying they don't think we need to worry about it. they're giving the all clear almost for politicians to just keep going in this direction. >> it's absolutely true. you're seeing a lot of -- the

central banks are trying to buy more gold. part of the reason we can get away with this is alan simpson used to say we're the best looking horse in the glue factory. there's no alternative to the u.s. dollar. i don't think people are particularly confident in the way we're managing our finances. but there's no alternative. now some central bankers say maybe we'll do gold. there's increasing talk of having a multipolar financial system where multiple currencies might be able to reduce the dollar's reserve currency. technology could provide a way to conduct transactions without having to rely on the dollar and u.s. banks. so there are warning signs now. we shouldn't wait until it actually gets to be a problem. now's the time to deal with it. we had a $1.8 trillion deficit in fiscal 2024 when the economy's running at about 3%. you start -- you deal with this when the economy's strong because with the next cycle there will be a downturn at some point. you're going to need to spend

more again on safety net programs. it's the good times where you need to start whittling that debt down. at least as a percentage of gdp. so you have some bandwidth to increase it when the economy runs into trouble. but we're not doing that. we just keep spending wildly every year now. and that's very short-sighted. and it's going to limit our policy options when the economy does run into trouble again. and the investors might not be there -- >> so remind me, straighten my numbers out, ms. bair, is debt greater than gdp right now? >> national debt? oh, yes. gross national debt is. it's about 123%. the publicly held debt is about 99%. it's almost over but not quite. >> so what does the doomsday scenario look like? >> yeah. >> if the kind of ominous disaster you fear -- and many, not just you. many people fear happen. what would it look like? how would it play out? >> you got a little bit of a

taste of it with the silicon valley bank failure a few years ago. you know, if investors start losing confidence in our debt, they may keep buying it but at much higher interest rates. so when interest rates go up bond prices go down. especially with longer dated government securities. so this is what happened with silicon valley bank. they had all these lower-yielding securities. huge market losses as interest rates went up. you can have that same dynamic on a massive scale if interest rates on our treasury debt slide because trillions are sold by banks, pension funds, insurance companies, households. throughout the financial system there are massive holdings of u.s. treasury debt. if interest rates spike all that current debt is going to lose value and spike a significant financial crisis. but you saw it on a mini scale with silicon valley. >> you've really drawn a picture for me that really clarifies it.

in other words, if rates go up because we've got to pay more to finance our operations, the value of those holdings, the capital in those institutions goes way down. sheila bair, thank you very much. appreciate it. >> happy to be here. thanks for having me. >> i joke we need a bigger market reaction but i think our cds spreads are trading wider than germany. there are signs it's getting different. let's get over to bertha coombs for a cnbc news update. bertha? >> hi, kelly. the state department says secretary of state antony blinken will speak to israel officials f fishlz later today about the humanitarian situation in gaza. blinken and defense secretary lloyd austin gave israel a 30-day ultimatum on october 13th warning it needed to turn the situation around or risk losing u.s. military aid. missouri sued the justice department today asking a judge to block the doj from sending lawyers to st. louis on election day. they would monitor for compliance to federal voting laws. the city's election board has

agreed to permit their presence. the republican-led state, however, said the 11th hour plan intends to displace state election authorities. and the tropical depression formed in the caribbean near grand cayman today and is expected to strengthen to hurricane strength by wednesday. the storm is forecast to move into the gulf of mexico and could reach the u.s. the national hurricane center says it is already nearing tropical storm strength and is expected to bring tropical storm conditions to jamaica tonight. kelly? >> yikes. bertha, thank you for now. we appreciate it. bertha coombs. and be sure to join the cnbc delivering alpha investor summit in new york city on november 13th. bifrts and business leaders will convene to provide business ideas and analysis to help you deliver meaningful returns. scan the qr code or visit cnbc.com/deliveringalpha. and we will be right back.

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welcome back to "power lunch." stocks have been mostly lower throughout the session although the nasdaq's been flitting into positive territory. it's just there by a hair right now. bond yields have also been falling. we have the fed decision coming up. it's not just the election to figure out. let's get to rick santelli in chicago for more on this. hi, rick. >> hi. indeed, maybe it is more than the election. maybe it's still residual from what was the weakest job creation going back what, almost four years. if you look at an intraday of three-year and we had a three-year auction, we can clearly see several things. first off, after the data this morning we made the low yield. and after the three-year note auction was completed, well, we made the high yield. and if you open that same three-year chart up to the end of july you can see that basically yesterday's close was the highest close since the end

of july. and if you pair up the two-year note on top of the ten-year for year to date i want to draw your attention to the low yields of the year. when were they? they were mid september. what happened in mid september? of course that's when the fed cut interest rates. and they pretty much have been going up ever since. now, if we look at where the yields were right before the jobs number on friday, two-year was at 4.17. excuse me it was at 4.20. it's currently 4.17. 10s were 4.30. right now they're 4.27 1/2. i was shocked yields moved up afterward. i can't tell you why there is a little bit of selling going on but i can tell you this. the yields for the most part have been moving up really for a month and a half. tyler, back to you. >> all right, rick, thank you very much. coming up, a regulator throwing a wrench into one data center's nuclear dreams. we'll get the full story when "power lunch" rushes.

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reaching deals for nuclear energy to keep up with the massive demand ai will require. but today amazon's deal with talon -- is it talon or talon? hitting a road block. pippa stevens joins to explain that and give me the correct pronounce-nation. >> it is talon pippa stevens joins us. >> it is tallon energy. the federal energy regulatory commission rejected this deal for a data center to be powered by tallon's power plant. under this deal, the data center would have been behind the meter and located right next to the nuclear power plant. so, it would not have to pay for transmission and distribution charges. and that's where opponents really came down, including some electric utilities in the region. they said it is unfair for the data center, which is using all of this power, to not pay the fair share of the distribution and transmission charges.

talen has said that it's exploring options. they also said this ruling will have a chilling effect on the economic development of pennsylvania, new jersey, and ohio. and we are seeing this big move in the stocks today, not only talen, but also viscera -- all of them own nuclear assets in unregulated markets. so, they were seen as key beneficiaries. it is important to note no one thinks this is a dead deal. there's a lot of analysts coming out saying you should buy the dip here and they think that some sort of aglereement will ultimately come to fruition. the overarching issue is how do we structure these deals so all the stakeholders are paying the appropriate amount. >> the idea is by basically co-locating the data center next to the power generating center, you get a sweet price on the power you buy because you're not paying any distribution. >> that's right. it's behind the meter. so, the argument for people who

are proponents of that say that you're not actually using all of that transmission and distribution infrastructure so you shouldn't have to pay. but then on the other side, people say that that unfairly shifts the cost burden, all of the needed grid upgrades to consumers to other parties. >> to other parties who are not so located. >> exactly. so, the constellation deal with microsoft for three mile island, that's different because that's in front of the meter. there's not this one-to-one -- you know, it's not completely powering just microsoft -- >> what do you mean in front and behind the meter. i don't know what it means. >> it's just whether or not you're bypassing the meter. it's whether or not it's going through the transmission and distribution. >> i see. >> if you have panels on your rooftop, that's behind the meter. it's generated on site. so, it's whether or not you're paying for that. so, constellation and microsoft is a little bit different. one option is that we could see talen and amazon instead sign a virtual ppa that's in front of

the meter just like constellation and microsoft. >> i'm glad she understands. >> it's good. i want to be behind the meter somehow it seems like. thanks, pippa. >> appreciate it. we discussed all the potential outcomes for tomorrow's election. let's get some ways to trade them. no matter who wins, we do have ideas. three stock lunch is next. and remember to catch our podcast. be sure to lteisn? follow to "power lunch" anywhere you on any platform. and we'll be right back. but i know these attack vectors. oh, had a little upgrade have we? ♪♪ okay, so that's how you want to play. ♪♪ deadline in five! finished and sent. [sending swoosh] we have tight turnarounds. at&t business helps us deliver.

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♪ welcome back. and it's time for "three stock lunch" before we go today. we do have ways to play the election. and our brave trader is -- because this is all that matters, kind of, for the next 24, 36 hours. >> it's crazy. >> it's go time. >> we have a couple of different

scenarios. there is one outlier stock that comes to mind if vice president harris wins. >> it's djt. this is getting a little ridiculous. i'm a technician. i follow the charts. but the fundamentals do not watch up. we are trading this like gamestop on steroids right now. kudos to those that are trading it and making money. over the long-term the metrics don't make sense. the monthly active users have gone down. the advertising dollars have gone down. the two founders, big red flag, contestants from the "the apprentice" sold their stake the second the window opened. the biggest shareholder hasn't sold any, but he owns 57% of the company, in president trump. if he loses, you may see even a little rally, people flocking to the site. but overall how is this going to survive from a fundamental point of view. >> almost short it. >> i would buy puts and it's going to be expensive. but it's something that you have

to be on top of. >> this is if harris wins and trump loses. what if trump wins? is it a buy? >> i think it is still a sell. >> because of the fundamentals. >> you have questions. can he divest. can he own this? why does he still tweet? i think elon musk will help him solve this problem. but what legal ramifications, will this be the mandated place we go to, you know, follow what the president has to say? so i don't think it's a good buy even if he wins. >> i guess elon musk could solve the problem for him. >> he solves a lot of problems. >> he could. scoop it. next is your trade if donald trump wins. you like financials in that scenario. >> love financials under this scenario. what does trump do? he hates one thing, and that's

regulation. in the last administration, a lot of regulatory hurdles. we're talking about deals that should have gone through. spirit airlines, jetblue, two failing -- >> and the hand bag merger. >> how about the vacuum, was it the rumba? and kroger and albertson's. the margins on these stocks are so thin, they need to survive. there's been so much regulation, so many hurdles, i think that red tape is going to be cleared up with trump. and he has been vocal when it comes to rates. i know when jay powell, the person he appointed to fed chief, was in, he was very critical when we started raising rates. we'll see a low rate push under president trump, which will bode well, and i think the regional banks are going to be the one beneficiary. they have not really come back all the way from the regional banking crisis we saw in march of two years ago. >> final seconds, the happy go lucky. you think what benefits no matter who wins the election?

>> cyber security. cyber security is going to be the biggest thing going forward regardless of who wins the election. the best way to play is in a basket. cibr is the best basket. safe way to play, cyber etf. >> jay, thanks very much. and thank you for watching "power lunch." >> "closing bell" starts right now. thanks so much. welcome to "closing bell." i'm scott walker live from the new york stock exchange. this make or break hour begins with three critical days ahead culminating with thursday's fed decision. what happens with stocks? anyone's guess. the backdrop, still positive most say with the economy chugging along, interest rates expected to move lower. we'll ask our experts where this bull market is likely to go in the weeks ahead. in the meantime, there's the scorecard with 60 minutes to go in regulation. it has been a mostly red day for the majors, but we're trying to make a little run at positive territory on