shannon, over to you. >> financials. you think about the opportunity for deregulation, expanded loan growth, m&a, a lot of tailwinds despite the fact we have already seen some ppreciation here, a lostds for financials in '25. >> sirat? >> i like disney. we talked about before, i think the streaming business, the parks business, movie business, they're all firing on all cylinders. >> wiese? >> i going to say bitcoin. but joe beat me to it. meta platforms, it sold up enough. fundamentals are excellent, good time to buy it. >> that does it for "the halftime report," have a great thanksgiving. now over to "the exchange" with jon fortt. have a great day. >> thanks, frank. welcome to "the exchange." i'm jon fortt in for kelly evans. here's what's ahead. it is a reaction, not a rotation based on fundamentals. that's how our market guest describes this post election rally. he says any pullback presents

opportunity and tells us where he would add. plus, how will trump's latest tariff threats impact semiconductors? not much says our analyst, unless something else happens. he's here with what he's watching and how to position in that space. amazon hoping to score big with consumers this black friday. will the nfl in game shopping strategy pay off? we'll look at the latest streaming battle and who is best positioned to win it. but, we begin with today's markets and dom chu with the numbers. dom? >> jon, we're pulling back off the record highs that we saw for the s&p 500. the 52nd record high so far this year. so it has been a banner year for the s&p. still, though, we're down by about maybe half of 1% for the s&p 500. now back below the 6,000 mark. 5994 is the last trade. remember for reference, yesterday's high, 6,025. there is the new high water mark. we're down 27 points. the dow industrials at 44,759, off one quarter of 1% or 100 points. and the tech heavier nasdaq

composite, underperforming so far today. 18,993, off 182 points, almost a 1% decline there. close eye on certain parts of the market, first, what's happening on the dwrir treasury of things. we're seeing a bid for the safety of government debt and drop in yields. we were around 4.4 level there a couple of weeks back. we're now back below the 4.25 mark. the two-year yield, 4.21% there. for those who use etfs to track the long side of the bond market, tlt, it is up about 1% almost, $93.16 for that ticker tlt. another place to keep a close eye on, what is happening with the dollar index. we hit a two-year high, just over the course of the last couple of days here. but the dollar index now after hitting a high of around 108 sits at 105.96 now. we're poised to snap an

eight-week winning streak for the index. sharp move higher. keep a close eye on whether or not that has more downside moves ahead. we'll explore that more in "power lunch." to put a point on these things, bitcoin is back above the 96,000 mark. remember, 99,800 or thereabouts was the record high. we're up about 5,000, 5.5% advance here for bitcoin prices. keep an eye on that. $1.97 trillion was where it was at the highs. we'll see what happens here with the overall market value. it still continues to march toward that 100,000 mark. we'll see if it gets there, jon. back over to you. >> so close, dom, thanks. pce, personal consumption expenditures, that's the fed's preferred gauge of inflation in line with expectations today, rising .2% from the previous month and 2.3% year over year in october. while core pce, which excludes food and energy increased .3% on a monthly basis and 2.8%

annually. my next guest says while inflation is now close to the fed's target, tariffs could potentially complicate their rate cut strategy next year. joining me now is mark zandi, chief economist at moody's analytics, steve liesman is with us as well. guys, happy wednesday. mark, how long is it going to take, you think, next year before the trump policies start showing up in the data? i'm guessing tariffs, even the looming threat of tariffs might start some action. >> yeah. i suspect they'll start showing up in the data in the spring and summer of next year. takes a little bit of time, i think, for the tariffs to get into place and implemented. so, i don't think it is going to be right away. having impacts on markets right away as markets try to digest what the president has in mind and what he's going to do and when he's going to do it. in terms of the economic data, the economic statistics, probably not to the spring or summer of next year.

>> and you say that, this data shows that the economy is in a pretty healthy place to handle that. is that how you feel no matter what the level of those tariffs is? >> no. it depends on what the tariffs -- what they look like, how big they are, how broad-based they are, when they're going to be implemented, a lot of uncertainty around all of that. not just the tariffs, immigration policy, tax policy, spending policy. there is a whole bunch of stuff that is going to be going on next year that is going to complicate things. but, you know, i do think the economy is in a really good spot. it is performing exceptionally well. president trump is getting a very good economy handed to him. it can weather a lot of whatever he plans to do here, but there is a lot of script to be written and a lot of different policies that will impact how this plays out next year and into 2026. >> steve liesman, speaking of immigration, the personal income

portion of this data, up .6%. that's pretty strong. >> yeah, consumers look like they're in good shape. the spending numbers were a little bit lower than that, which meant the savings rate went up. there was a bit of a revision to the past. i think one of the great hopes of retailers seeing those numbers, assuming they were looking at them, is that people were holding their powder for the holiday season. these are october data. well, we know they go into the november and december holiday shopping season in pretty good shape relative to their wallets. inflation is an issue to an extent. though i will say the goods numbers in the pce report were minus 1%. and that's one of the dangers of the tariffs here, which is that the way we have been able to have this, call it 2.5 to 3% inflation is negative numbers on goods and positive and sometimes too positive numbers when it comes to services. the tariffs will get right at the part that is keeping down

the inflation rate. and to your question about when we're going to know this, you know, mark is sort of hopeful about the spring. i don't know if it happens in the spring. i don't know how long the fed sort of holds its powder or begins to start to think about the idea of whether or not monetary policy needs to address the fiscal side. as you said, jon, there is a lot of stuff in the works. when all this shakes out, maybe, i don't know, maybe to the second half of the year before it is evident in the data, and then if the fed waits to it is evident in the data, not until that time do you get some response from the monday mone policy side. >> steve mentions maybe consumers are saving a bit because they're spending less relative to that personal income. but we're also hearing about credit being stretched here, hearing from walmart, and amazon, sort of at the micro level, consumers are choosy about what they're buying. could that have to do with the

fact that some of that income is going toward paying off the credit cards? >> yeah, jon, the consumer is really doing their thing. i mean, i think the saving rate is down because wealthy households feel wealthier. talking about stock market, record high, crypto, record high, valuations in markets are very high. so people are feeling pretty good and still in the top part of the income distribution, you have a lot of excess saving you bought up during the pandemic that is sitting in your checking account. that's why the saving rate is down. i don't expect that to change unless markets get hit here hard, which i would not be a baseline forecast. lower income households, yeah, they're under more pressure because of the borrowing they took on back a couple of years ago when inflation was raging and they were supplementing their income to maintain their purchasing power and underwriting standards were weaker. interest rates are higher on credit cards, typical credit card rates 23, 24%, which is

awfully high. that is taking a bite out of lower and middle income households. the consumer is just powering growth, real after inflation consumer spending, all in, the whole match is 3% year over year. that's extraordinary. that's a very solid picture for the consumer and therefore for the economy going into next year. >> steve, i suppose that puts extra weight on the upcoming jobs report. >> sure it does, but i'm interested, look, president-elect trump says he's going to lower taxes, reduce business regulation. one of the interesting things that has been going on in the economy and economists are so afraid that as soon as they mention it, it will go away, is the productivity boom we have going on. you have productivity running above normal. it looks like it has been around for a bit. but as a fed chair powell has

said, the best bet when productivity is above normal is that it is going to go back to trend and do so pretty quickly. we don't know about that. but in any event, you can imagine that some of the pressure, if some of these things are presidential and work out, forget the tariffs on one side, but say deregulation, some business-favorable policies, you might get something of a business investment boom and that would take some of the pressure off the consumer. i'm looking to see if that has an impact next year. >> okay. mark, how does immigration factor into that productivity trend and how might we expect immigration policy to affect it? >> that's a good point. the underlying growth rate of the economy, the potential growth is a function of first productivity growth, and steve pointed out that's strong, though we'll have to see how strong that is, how temporary or sustained that is. but i'll take it.

it is good. the other aspect of potential growth is the growth in the labor force, just the number of people out there working and looking for work and that is going to be hit by immigration policy. there is no doubt about that. that's going to slow the underlying growth rate of the economy. because, you know, right now the economy is operating at full employment. if you restrict immigration and ask people to leave the country through deportation or make life difficult and they self-deport, that reduces the labor force, that reduces the economy's potential growth rate and it makes it much more difficult for the economy to do the kind of things we need to do to keep the economy moving forward. >> well, we'll see what happens. mark zandi, steve liesman, thank you. today the bulls taking another breather after a week of record highs. my next guest isn't surprised by that, he says the post election rally has been more of a reaction than a real rotation based on fundamentals. does the broader risk opportunities in the new year? joining me now is paul

christopher from wells fargo investment institute. paul, happy wednesday. how you tell it is just a reaction? >> well, it is pretty typical, jon. after elections to see the trades try to go in the direction that that winning candidate promised. the problem is, as you just heard from your guest, we don't know exactly when and where and to what magnitude those policies will be enacted. tariffs, okay. and eliminating immigration, okay. but how soon, how much, and how long will it take for those policies to get enacted and more importantly maybe how are today's -- the tariffs of tomorrow, i should say, going to be different from the tariffs of 2018 and 2019 which a lot of people are using as a benchmark here. there is normal sort of post election kind of reaction. in this case, people thought the deregulation extending of the trump tax cuts, that would be good for equity markets.

equity markets rallied. the bond market looked at immigration and potential limits on immigration tariffs as a source of well, gee, maybe we should be taking our rates higher on maybe an inflation premium. there is a term premium that comes in there, as the economy looks good and stocks look good. the bond yields have to rise. you add on to that, this term -- this inflation premium. you end up with higher yields and stronger stocks, but, hey, that's what we have been predicting anyway. since august. the economy is strong. we thought that the stocks would do better and yields would rise. so, how do you tell the difference? you be patient a little bit here, wait for the pullback, and then stick with the strategy that they got you here, which is really playing for cyclicals. >> while we're being patient, there is a lot of stuff we don't know. there is some stuff, we know, we can be pretty sure about. how much volatility do you expect in yields? can people lock in some decent yields with longer data fixed

income here? >> yeah, that's a good question. last month we made a shift and our main focus was to get money out of cds, treasuries, short-term treasuries and money markets. those rates are going down. what we want to do is move money the long end of the curve, but there is volatility at the long end of the curve as you pointed out earlier, at 4.40 a couple of days ago and now down to 4.25 again. ups and downs will create volatility in your total return, if you stick at the long end. why not build a ladder portfolio. think of short, intermediate, 3s to 7s and then longer than that and take out a short, and then when you finish building that part of the ladder, get your long-term allocations up too. let's call it a long-term strategic allocation, where you can maybe take a small bite of the apple every once in a while. dollar cost average to those

positions. that way you lock in the long-term yields but not subject to those whipsaws that you might see if you put all that money in long-term. >> for the viewers in a higher tax bracket, highly exposed, what about things like munis and considering tax equivalent yields? >> absolutely. we want to recommend here munis for those longer forecasted, vulnerable horizon investors, those with more cash to invest. definitely the munis here, we don't know what is going to happen with tax policy. we think trump tax cuts will be extended. if not, you'll have higher rates, you'll have narrower brackets after 2025. now might be a good time to prepare for that possibility. >> a lot of republicans in congress and in the executive branch, so i don't know, that's certainly the wind blowing pretty hard in one direction. so, when it comes to the financials, the regional banks had an amazing rebound over the

last year plus. do you think all of that is warranted based on how healthy those banks are versus the fears post svb? >> you got the regional banks doing well as the economy looks like it is going to rebalance. lower rates, better credit availability should help the small business customers of those regional banks. we would be a little bit careful, though, with the regionals because you haven't seen the beginning yet of the new regulations that are going to come their way as a result of what happened in 2023. and even into 2024. so, i would be a little bit careful there. we probably go with the larger banks. >> okay. paul christopher with wells fargo investment institute. that was a lot. thanks for joining me. >> thanks, jon. coming up, chipmakers are broadly lower since the election. now with the ooming threat of tariffs on china, mexico and canada, how should investors position in the semiconductor space? we'll ask bernstein's stacy

raspen next. president-elect trump is rounding out his second cabinet. we're looking at what could be carrying out his trade and economic policies. the dow is drifting to new session lows. "the exchange" is back after this. >> this is "the exchange," on cnbc. hive digital technologies is a first mover in the crypto space. combining sustainable bitcoin mining, strong asset holdings and a focus on ai and high performance computing data centers join hive in driving digital innovation. hive digital technologies.

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welcome back to "the exchange." president-elect trump's picks for his second cabinet are in.

and now we're getting a better idea of people who will be expected to carry out his trade and economic agenda. our eamon javers is in washington with those names, and how they fit with the rest of the administration. >> hey there, jon. that's right. president-elect trump rounding out the economic team with a series of evening news releases last night including naming kevin hassett as his national economic council chairman. that's an interesting one because hassett was a well liked presence in trump's first white house, where he chaired the think tank known as the council of economic advisers. this is another council, but it is the national economic council and that job is a step up from that. and it comes with a west wing office, which will give hassett more sway over the economic agenda this time around. that is likely to be welcomed by wall street, where hassett is seen as an advocate of the trump tariff agenda, but one who has his roots in traditional conservative economics. the other big selection last night was jamieson greer, a

lawyer with king and spalding, who will serve as u.s. trade representative. he served as chief of staff last time around to robert lighthizer. and he's seen as a staunch advocate of trump's tariff plans. but he may not have as much autonomy as ghthizer had last time around, because trump wants lutnick to serve as commerce secretary and oversee the trade agenda. that may place greer as lower than lutnick in the trump hierarchy and all that raises the big question of what role, if any, trump envisions in the new administration for lighthizer himself. he's been a key economic adviser to trump for years, especially in these past years when he's been out of office. question is where goes lighthizer. maybe some super economic czar position. we don't know yet. >> what do you think this -- what are you hearing this signals about the level of china hawkishness this time around versus the first trump

administration? >> well, i mean, you definitely have china hawks in all the positions, right? there is no question about that. i think the big wild card with china is elon musk's role in this administration. elon musk has taken on baby brother role or first friend role here, with donald trump. musk is somebody who does a lot of business in china, who is very reluctant to criticize the chinese government, somebody who i was in the building when musk met with xi jinping in san francisco last year. musk is very close to the beijing government. and, you know, that is at odds directionally with what is otherwise a very tough on china administration here in terms of the tariff agenda. >> bringing it back to tech a little bit as well. eamon, thank you. interesting to see how that plays out. trump's tariffs could increase the prices of everything from lumber to gasoline to avocados. one industry that won't be impacted too much, semiconductors. according to my next guest.

while the recent proposals won't change much, risks still remain for chips under trump 2.0. stacy, welcome how much sway is elon musk going to have here? he likes to move stuff back and forth, both within china and between the u.s. and china, i guess. >> let's put musk aside for a minute. but the conversations around tariffs are interesting. trump -- there has always been a lot of stuff during trump 1.0 around tariffs and other things on semiconductors from china. looked like over the weekend he may be planning to add mexico and canada to the mix. mexico and china, it is a couple billion dollars worth of raw semiconductors every year. in the context of a $500 billion kind of industry. canada is a few hundred billion dollars, doesn't really matter

that much. most semiconductors ravel between china and the u.s. inside other things. so clearly there are indirect potential impacts if you're raising the price of pcs and smartphones and cars, and impacting demand, that could have an impact. tariffs and other things that move supply chains around and so those are sort of indirect or secondary effects on tariffs from semis. direct tariffs on these countries on semis, just not that much of a direct impact, not enough volume to matter one way or the other. there is already a 50% tariff from semis from china. >> even outside of tariffs, there has been this dance for several years now, not just the biden administration, trump too, i think, around exactly how sophisticated an a.i. chip can you sell into china. and nvidia will redesign and clamp down on that one. do you expect the trump administration to get the second

trump administration to get more aggressive about that? what can you tell from how trump 1.0 handled it and how biden handled it? was it pretty much just the same or should we expect some kind of shift? >> we may see some incremental -- the export controls now, not tariffs, this is not allowing u.s. companies to ship certain products to china. it is primarily a.i. chips and some semiconductor capital equipment tools. i would say the original -- trump's actions on this were not that effective. pretty leaky. most went after huawei and others and easy to work around. i would say the biden restrictions have been more effective, much more surgical, so really targeted very specific things and put very sort of strict thresholds and they did impact things more. they were able to work around and last year the biden administration de those thresholds tighter. and we're still waiting to see

if we may see more. now, what rump might do, i don't know. he could do anything. he's donald trump. >> what i was getting to, i think you're answering this, the biden administration was a bit tighter on the export restrictions than the first trump administration was. >> they were less leaky, harder to work around and they put the onus more on the semicompanies themselves rather than they were trying to restrict huawei, for example. they put very clear restrictions on, you know, you can't shift a.i. chips that have a performance above a certain threshold. you cannot ship semiconductor manufacturing tools, they can make products that are more advanced than x or y depending what it is. there were more specific limits. it is always possible to work around this stuff, nothing is airtight. i would say the biden restrictions were more effective

clearly than what trump 1.0 put in place and we'll see if trump 2.0 takes any lessons from that. but i can't imagine that things are going to get easier, like, so if best case they'll probably stay where they are and my guess is things will get tighter and that may happen before trump takes office. >> why do you say that? >> we're waiting right now on potential further extensions to the export controls on things like a.i. chips and semicap equipment. there was some news flow recently that suggested that the government may be looking for up to 200 additional chinese companies to maybe put on the restriction on what is called the enemy list to prevent sales to those companies. you have to remember, a lot of the companies that have been buying stuff, you know, within the confines of the controls, they may potentially be viewed as thicks like huawei proxies. they're kind of new, grown up in

the wake of the sanctions. it is entirely tell we may see more tightening even before the inauguration in january. >> all right, we'll watch the impact on the chips. stacy, thanks. coming up, retail wrapping up its best month since february with the xrt etf. that's in part in gains to this online retailer, up 24% this month. it is poised to keep outperforming in this environment. he'll make his case and share his forecast. there are 27 days between thanksgiving and christmas this year, ing it the shortest holiday shopping season. week back after this. oh, had a little upgrade have we?

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welcome back to "the exchange." i'm seema mody with your cnbc news update. president-elect trump has tapped retired army lieutenant general keith kellogg to serve as the special envoy for ukraine and russia. kellogg previously laid out his vision for ending the war in ukraine back in july, suggesting

the u.s. and other nato members delay ukraine's membership in exchange for a deal with security guarantees with russia. the crew of a chinese flag cargo ship that has been surrounded by european warships is suspect of intentionally cutting the undersea cables in the baltic sea last week. they suspect the crew of the ship cut the cables by dragging its anchor along the sea floor for over 100 miles. the ship's owner has declined to comment. and multiple outlets reporting daniel jones is signing with the minnesota vikings. jones became a free agent earlier this week after clearing waivers following a mutual decision to move on from new york. jones is reportedly signed to vikings practice squad already. jon, back to you. amazon gearing up for its second black friday nfl game. we'll look at how it hopes to turn viewers into shoppers rohohe night and what it all means for the advertising

landscape. "the exchange" is back after this. (♪♪)

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welcome back. are you ready for some shopping? amazon's black friday nfl game

will feature the defending super bowl champs, kansas city chiefs and the las vegas raiders. it will also feature interactive ads this year, allowing people to shop while they watch. julia boorstin joins me now with more in today's "tech check." >> hi, jon. that's right. on friday, amazon prime video will stream the nfl matchup between the raiders and the chiefs. and the game already looks like it is a success for amazon. they sold out of ad inventory in august. 40% of advertisers in the game are new and they're reportedly paying as much as $750,000 for a 30-second spot. now, ratings are expected to grow from last year's 9 million viewers on the heels of thursday night nfl ratings on amazon, up 11% from last year and 38% from two years ago. and amazon is rolling out more interactive ads, enabling customers to shop directly with a qr code or even just a remote,

which am exxon sports chief jay maran says was a huge success last black friday. >> our interactive ads saw 280% uplift in actions relative to -- during the normal season. you see people are getting into that shopping mode, holiday spirit, we're excited by what we saw and excited to continue to invest further. >> now, this is all part of amazon prime video's growing commitment to sports, with the nba, wnba and nascar debuting next year, joining amazon's nfl rights. this as it looks to grow its advertising business on prime video. he tells me they're always looking for more ways to invest in live sports. jon? >> how badly do you think amazon wants s taylor swift to show ut that game? >> i'm sure that would be beneficial for amazon. we saw with the chiefs game in

february that peacock streamed. the intention of having taylor swift there was a win. you could be sure that they'll be some taylor swift merchandise for sale on amazon as well. >> i'm saying the crossover in the shopability of that demographic, that would be, i'm sure they would be very excited. julia, thanks. let's talk more about the changing media in sports landscape and if amazon will score a touchdown in more ways than one. welcome. mark, is this perhaps going to be a seminole moment in shopable tv? >> i think it is a start of revolution. but it is going to go a little slow at the start. not a lot of data for shopable ads. it is an area my own company is investing in with partners. i think i'm very bullish on the potential. but i don't think overnight, you

know, the whole industry moves to it overnight based on the game. >> amazon is uniquely positioned, they have a popular app already. so they're on people's phones and, you know, they got this stream. how do you expect this to work? >> i expect them to be hitting you with 10 and 15-ond spots about black friday deals during the game, creating urgency, trying to change the consumer behavior to shop, get deals while watching tv. the big challenge for all these big tech companies is they have traffic, they need to elongate engagement in a three-hour nfl game does that for amazon. >> and, mark, i was seeing a stat here on cnbc, just in recent days, that 93 of the last 100 most viewed tv events over the last while were nfl games. what kind of an opportunity does that present to figure out exactly what might work, especially given how long these games stretch. >> well, i think you'll see more

shopable ads. you can sell merch and other things and the companies advertising can participate in it. not a lot of the companies. the reason i think this is a little bit of a slow increase but i think it is something that is going to come on strong, you see it all over social media, instagram, you know. most of the ads seem to be shopable. it is because the companies that create the ads, the actual brands i don't think are necessarily ready for it. amazon, you know, they're ready for it. i think they're showing the way and i think the industry will follow. but a lot of additional tech is needed -- going to need to be come in to make it really, really easy for the brands to make their ads shopable and to get that revenue. >> laura, am i wrong here, i'm surprised that google, given it's gotten youtube hasn't been more aggressive here? >> i think amazon's business is all about bundling and what they're trying to do is give you more sports rights so they can

raise that $139 price, they're trying to bring in -- this game on black friday is open. if you give them -- you do not have to be a prime member. they're trying to garner email addresses to bring you into their prime membership because prime members buy six times more merchandise on their core business called amazon e-commerce. so, i see a lot of ways that amazon can win here. even though this game will cost them $100 million. >> is this a playbook that facebook, that google can follow? of course, you think about shopping, you're going to think about amazon before those two, but both of them are major advertising players, particularly in the holiday season. >> like i said, meta already does this on instagram. so to them this is -- i would say, you know, more than half the ads say get on meta, you can buy right there from the ad. this is not new for them. >> but an nfl game, i don't think we have seen them taking it to that level, right, on the tv side. >> yeah, i don't think meta and google are going to be aligning

with the sports teams in the way that, like, disney, netflix and amazon are. television is the domain of these big sports events. and none of these tv networks have any -- they're multibillion dollar companies and they have no interest in getting disintermediated by meta. i don't think you're going to see this coming there in the form of big sports events. that's just not going to happen. in my opinion. >> what about little sports events? what did we learn from tyson and jake paul and any more money making opportunities there for the likes of netflix? >> i think netflix needs to take steve jobs' advice. the apple founder, he said, look, every interaction you have with a consumer either builds your brand or destroys your brand. there is no neutral. and sometimes the silicon valley companies jump first and figure it out on the run and iterate and it is bad for brand building.

you would never see disney or warner bros. or fox risk this with their brand. i think amazon is somewhere in the middle. i think it is more respectful of its brand. they're bringing shopability to the big screen and i think both meta and google are condemned to the small screen of mobile, which will become increasingly limited in its economic upside. >> what stock do you think has the most upside possibility from shopability? >> from shopability, from shopability, you got to go with the connected television alternative and so then you can't go with meta or alphabet, you have to go with amazon. apple tv, you know, they're being slow about this. so far they haven't shown any indication to buy these really major sports rights. but don't count apple out with 90 billion of free cash flow a year. >> an opinion on roku here? >> roku attempted this. i don't think they have the scale with the advertisers to do it. i think really what is the big thing coming up is netflix.

netflix has an unmatched ability to basically be the on ramp for your viewing night. and so those -- christmas day nfl games, i think there are going to be e ratings that approach mini super bowls. you watch the evening starting netflix for most people and there is data to prove that. they can turn the tyson fight into 65 million viewers, which was half of the super bowl earlier this year. i think they ultimately are the big winner. and, you know, in comparison amazon, just doesn't have the same ability. >> was it a fight? i guess it was a fight. thank you. coming up, shares of dell down about 13% right now despite an earnings beat. the pc maker light on overall revenue and the fourth quarter guidance came in below expectations. now down 12. a.i. server orders boosted the

demand for dell's traditional servers which use less electricity and can free up room or power inside data centers by igs.le dit we got a check on other big movers next.

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welcome back to "the exchange." the major averages are lower right now, especially, though, the s&p and nasdaq off the lows, russell 2000 hanging in a little there in the green. and let's see, the lows of the session had been put in, i would say, right around during the noon hour. and been bouncing back since then. we'll have to continue watching cnbc to see where things end up. big tech weighing on the blue chips, though, salesforce,

nvidia, ibm and microsoft the biggest laggards in the dow. coming up, retailer xrt slightly higher today as shoppers gear up for the holidays. urban outfitters the top performer. shares up 18% after yesterday's earnings beat. richard haynes saying the company's optimistic about holiday demand. but it is a different story for nordstrom, that's down 9% and the biggest laggard today t beat on earnings, but tempered the fourth quarter outlook after sales slowed in october and november. we'll dig into the retail il divergence and how tariffs could change the landscape, next. the boot maker. hee-ha. but many do have something in common. we all trust schwab with our wealth. thanks to our award-winning service, low costs and transparent advice, every day, over a million multi-millionaires, trust schwab with more than three trillion dollars of their wealth. ♪♪

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welcome back to "the exchange." the consumer discretionary sector touching a record high today before pulling back a bit as the holiday shopping season kicks into high gear. ulta among the top performers, up more than 3%. my next guest downgraded the stock saying the inflection in beauty that the street expects next year, it is unlikely. joining me to discuss that and what to expect from holiday spending is dillon cardin, analyst at william blair. good to have you. why isn't the beauty surge coming in '25? >> jon, thanks for having me.

i think what we -- it is a two-legged sort of thesis here. the first is in the more medium term if you look at other categories with bigger growth out of the pandemic, eyeglasses, pet, furniture, there is subsequent contraction has been about two years. beauty spent two years growing at 10%. the category that has been a midsingle digit grower. you just started seeing softness in the category around spring of this year. the estimates for ulta we think and effectively an inflection by the first quarter of next year, flat com, right down from low single digits in the back half of this year. i think taking a cue from some of the other sectors, it could be a little bit longer of a recovery, you know, even accounting for the fact that beauty tends to be a more durable space. >> so, holiday shopping season, as we tend to traditionally think of it between thanksgiving and christmas, five days shorter than last year, shortest since

2018. you don't think that's much of a problem. let me push on that a bit. the consumer has been strong, but spending on wants versus needs has been relatively weak. does that put retailers in the position perhaps of having to discount more than they want during the season and crushing margins? >> look, discounts are always kind. the name of the game around the holiday. our thinking around less of an impact from the shorter thanksgiving to christmas period is that for the last decade plus you really have seen the predominant trend being buying closer than needs. there are sundries and some certain categories where there is less of an impact or more of an impact as far as demand but not in apparel in our vau.iew. there is a lot of mixed messages. you certainly saw weather impact in september, hurricanes rode into october. a lot of the off price retailers noted that that kind of

corrected in november when temperatures changed, and then you had nordstrom coming out yesterday talking about a deceleration late october early november. if you look at some of the inner quarter demand trends, you saw much softer november, in the beginning of the month. i think there is just a lot of extenuating circumstances out there between weather and the election. the underlying demand trends, though, are relatively positive. you had two years now of real wage growth. so i think all else equals and read between the lines of some of these prints, you are seeing a relatively resilient consumer. >> i'm hearing the return to physical stores is a big trend this year. at the same time, amazon is trying to get us to shop from the couch during the football game on black friday. so which retailers if there is a return to the physical store, but also omni channel is strong, which retailers are best positioned? >> yeah, you have to account for the fact that apparel is now 50% online. i think a lot of people got used to the 2016 through the beginning part of the pandemic when there was still in the early days off online migration.

the reality is you have a much more mature online channel, as it relates to apparel. companies like abercrombie are already relatively split evenly between their online and retail businesses. torrid is similar. i think companies are more aligned with that type of balance in their assortment or in their channels are better positioned to see what is going to become a much more harmonious relationship between the two channels. >> what about discounters like tjx? >> they ignored the online channel. ross got rid of it in february of 2020. you know, for them, that model works. they have been extremely successful in getting people to come into stores because the assortment is changing over every other week. so i think, again, there is still 50% of the industry being done in stores. to your point, still a lot of value seeking behavior and the experiential and value prospect of both of those retailers can't be matched. so there still will be room for

the retail channel. but we'll see. my view is that online or the off price channel could be ignoring the online channel over the long horizon. >> one dark horse name for this season, you think might do well? >> i think if you're looking for danger, torrid and j. jill. both names thrown out. there has been some disruption in the weather impact we talked about earlier in the quarter. but i think the underlying demand trends are still there. >> all right, sounds good. dylan carden of william blair. i'll see you at 4:00 p.m. for "closing bell: overtime. nest founder and ceo tony fadell will be joining me. do not miss that. and, well, that's going to do it for "the exchange." "power lunch" is coming up next, righont the other side of this quick break. finished and sent. [sending swoosh] we have tight turnarounds. at&t business helps us deliver. okay! client wants his head bigger. wow, fast response.

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(♪♪) everyone has goals and dreams. and everyone deserves a way to get there. wherever you're going, getting there starts here. state street. invest in your future with spy, the world's most traded etf. (♪♪) welcome to power lunch. dominic and contessa here. the dow is hitting 45,000 or the first time right out of the opening gate. stocks are pulling back since then. right now the nasdaq is down another % or so >> we have a lot of people getting a head start on line. we are about to enter this crucial holiday time