>> the stock has done nothing in four years 2025 sets up well. sipg singapore is on fire. >> i think jimmy had wing yesterday. >> i did >> i don't forget anything you do i'm watching you.por is on fire. >> and i think jimmy had wynn yesterday. >> i did. >> i don't forget anything you do i'm watching you. >> i'll see you on closing bell. thank you and welcome to the exchange i'm kelly evans it is looking less likely that the rates will be cut and if there is one trade to position in and here to explain. and we have salesforce earnings due out after the bell a good 2025 shaping up despite a.i. making market share

and instacart shares are up a whopping 85% this year but deutsche bank is not putting its name on the list the biggest hurdle for that name and the one that he thinks are better positioned. but before all of that, let's get to dom chu with a market check. >> up and down so far. but we did hit a record intraday level and that's the nasdaq composite. it did set a recordin intraday record at 19,439 and up 35 points the broader s&p has not hit a record we're at 6,046 intraday is 6053 that is the level to watch we're at 6046, just about flat on the session at highs up two points and down roughly 14 at the lows that is your intraday trading

range so far dow is flattish, down to 44,746. no record high there but a key focus today. one of them, a story has to do with politics and perhaps the economy in the u.s. given the new election results and given what will happen in the new trump administration u.s. steel shares are down 8.5% off the worse levels of the day after the president-elect took to his truth social last night and reiterated the opposition that he has towards u.s. steel being acquired by japan steel giant nippon steel and that is resulted in a down move. u.s. steel is still committed to the deal going through and it thinks it is in the best interest of all of the stakeholders so keep it on u.s. steel. and here is one that we haven't talked about a lot in terms of artificial intelligence. look at the move in credo technology group this is up 47% this is a market cap company

it does data infrastructure and computer networks, so think data centers and server farms it is up 70% after a better than expected quarterly earnings report and a hike to the revenue guidance because of, yes, surging a.i. demand. so credo, a name we don't talk about that much. is up 47%. keep an eye on that and a 6 00 move on a year-to-date basis. >> incredible. thank you very much. now stickier inflation has people thinking the fed will skip a cut this time, that could put pressure on u.s. multi-nationals because of a stronger dollar. joining me now is matt from john hancock. welcome to you we jumped right in on the dollar theme. i don't know if that is your top, top level concern but back out for a second and what is the landscape you're

expecting here in year end. >> the u.s. economy continues to hold up and the dollar continues to strengthen. well 47% of s&p revenues are from abroad. if you're translating those revenues back, you're getting a clip here in the fourth quarter. >> and i'm been watching this, the dollar going to $1.06 and the s&p has been going to all-time highs day after day why is it not discounting this. >> the price ratio goes up and it is sentiment driven but the earnings in q4 will likely get hit by this. a mid cap is only 25% foreign revenues and exposing yourself much more to the u.s. economy. industrials are the largest sector many mid cap. if the fed does not cut, the curve could flatten. they like a steeper curve. if that flattens, the banks might not do as well they've been doing amazing

so they might just hit a bit of a head wind here but the industrials don't care about the curve. and that is why we love those more than the cap space. >> it is possible that the trading themes is already locked in and i don't know if the regional banks are still holding up or not. but have we already priced in the idea of a december hold or do you think that could be a significant surprise that will move us further in those directions >> i think that could be a surprise the speakers have been more dovish than thought. but the jolts report and jobs report came in better and manufacturing is coming. every time you think this economy is going to weaken, it comes back with spirit so we have the holiday season coming johnson redbook same store sales came up with 7% week over week and overall on portfolios, we are not trying to turn up the volume and the risk and i know

it is tempting you have cryptocurrency. >> you have a strategy. >> a duct tape banana right now. look, high quality stocks, great earnings and good roe and balance sheets and you go down to industrials, that is our favorite spot in the marketsic >> so about two weeks time, i'm thinking about what data we might get between now and then if the officials are saying we're re iterating this to havishness, what data in the next few weeks could push them towards pausing. >> the jobs report on friday is huge initial job claims have been low. job openings have ticked up. holiday season, perhaps there is a better jobs report you have inflation coming in again. cpi at least not getting pce or it is early for that but at the end of the day, the consumer net worth is all-time high

the stock market might be the most powerful economic engine in the u.s. economy right now and that is still holding on to all-time highs that is going to help holiday shopping into year end. >> let' talk about the specific and mid cap is under 10 billion? >> like 50 billion nowadays mid cap is larger because large cap is trillions but rethink about 50 billion, a hundred billion. but around the $50 billion and $70 billion mark. >> what is the name. >> dover corp. and we've had other names that have gone up a lot emerson electric is one ever them but you could be broadly diversified and it is the largest sector in the index. that is what we're seeing in our strategies that are managing more mid cap allocations when you go into small cap, financials are the biggest weight so you're going into mid cap and getting more industrials they don't care about the yield curve and more diversified

it is building out a manufacturing renaissance in the midwest that is boothing right now. it doesn't get a lot of play because the a.i. hype, but the midwest is the engine that everyone is overlooking and we think it is one of the best earning engines out there. >> that is a fun story on a number of levels and not something we usually talk about. so given what you're saying then and you've warned about the few areas. what do you do with the mag 7? do you take a retainership and do you really recommend kind of no exposure there? >> no, we still have the large cap exposure the bag 7. because it is high quality we go back to 2000 the valuations are almost as high as 2000 they didn't have 40% margins or $100 billion plus in balance sheet strength it is hard to add to it. we're seeing better valuations and good earnings and the dollar

is a story that is yet to play out. that could come out in q1 when they're coming out with q4 earnings so we want to address that ahead of that. >> and the dollar, and this goes back to what is going on post election do you think that repricing is done now or no >> about sixth of the ninth inning we go back to the parallel really in january is where is it started to fade and that was about earnings growth there so it fell back to the earnings growth of the economy and the companies. right now we're still seeing that repricing probably a bit more but frankly the financials, the banks are the number one, they're the epicenter of the new administration trade it was in 2016 if that starts to face headwinds because of races and flattening, industrials should be next play and that is what we like into next year. >> a love it matt, thanks for joining us. by the way, jp morgan sticking with the 2025 year end price target of 6500 for the

s&p. still an 8% lift from here and threats on the horizon and we're not just talking about the fed. for the biggest risk to global growth, scan the qr code on the screen or go to cnbc.com/propick now salesforce will report today, shares lower today. and software seeing some action is on the ipo front. service titan nnouncing it is seeking a valuation of $5.2 billion in a public offering marking the last real ipo of the year and our next guest said while valuations are high in the software space it is not unjustified thanks to a.i. agents he said investors will be looking for software stocks in 2025 stefan is head at bnp. it is great to see you so top level, what is your idea with software? it is going to hold up better than feared. >> hi, kelly, thank you for having me on the show. we have published our outlook a

couple of weeks ago and we've been discussing with investors across europe and the u.s. and they're looking for softer ideas for next year. the sector bottomed in may with peak mess pix around demand and gen a.i. and potential disruption but we've seen a lot of that reverse with more optimism picking one more optimism around a.i. agents taking over co-pilots as a killer app for a.i. and we see that in the sector rallying. >> so i could be slow on the tech stuff connect the dots so you think the emergence of a.i. agents is making software look like it will hold up better than it might have otherwise. >> i think when you look at last year, so about 12, 18 months ago when we had the peak height and excitement around gen a.i., co-pilots were the products that the software companies were developing i think a lot of ceos didn't see the full value there

they saw some improvement for staff. this is about automating tasks and jobs and so i think ceos and cfos are seeing value. we're seeing platforms from microsoft and salesforce coming out and i think you're seeing a lot of interest among customers in adopting the platforms and these a.i. agents in order to drive automation and efficiency and that is where the hope is for next year. >> you could see the lift. to date the excess is up 30% and that has been the past couple of weeks. what are you expecting from salesforce tonight >> so you're right the igf has doubled after the beginning of 2023 and so a lot of the stocks are looking for expensive. so you really do need to believe in revenue growth acceleration for next year and so with we look at salesforce, it is one of the companies in the back half of next year we could see revenue growth and azure should

accelerate in the front half of next year and as co-pilot drives demand for them. and even oracle, sap, and you're still seeing revenue acceleration and the markets other pricing in demand recovery or gen a.i. success. so we still think you need to be picking around stocks that you think could drive revenue growth acceleration next year. >> do you have data points on the microsoft one, from what i heard, this is a few months old, this wasn't a take up of co-pilot or a sense of excitement around the roi and the work force but perhaps you see that changing. >> we're more bullish than the market on co-pilot we talked to the resellers that we cover we think that they could already be at near 10 million seats of co-pilots sold by the end of the calendar year which is above consensus expectations for 7 or 8 million. so we're talking about

multi-billion dollars contribution from co-pilot when you add that to microsoft azure, this is a company that is generating a run rate of $10 billion as of this quarter in a.i. and gen a.i. and i any we start to see that next year as the company disclosed that. so i think next year we're going to see softer take that growth baton on and microsoft salesforce will be the flag bearers. >> that is fascinating you're more cautious on adobe and are ideosyncratic. >> gen a.i. is disrupting a lot of software segments and we think adobe is one of them and you're seeing the hyper scalers come rushing in there. they want to collapse the cost of creating content so we think adobe becomes more competitive and for service we're neutral

but you have 15 to 20% of revenues coming from government spend and next year we want to be more on the enterprise and the government of efficiency in the u.s. and political uncertain in german, france and the u.k. and so we're cautious there as well. >> maybe a great way to be that, would be sort of the stock to -- i hate to use the term go short, but on doge and on global disruption would make a player like that depending on the contracts. that is really interesting and snowflake, they've been in the news because of the cybersecurity issues you still think that is a high growth story >> yeah, absolutely. so we upgraded snowflake and shopify this year as we went down the risk curve looking for some of the high growth names out of favor the last couple of years as we've been in this higher rate environment. we've seen both of those stocks see growth stabilize in the high 20s. we think they continue to stay there. we think they have new products

emerging with snowflake, there is potential for revenue growth acceleration next year so those are the two higher growth and lower probability end of the software spectrum but we still like those two names. >> from fop to the bottom, thank you for joining us >> thanks, kelly. speaking of software, don't miss jim cramer's interview with salesforce ceo marc benioff tonight. don't want to miss it. and coming up instacart shares have nearly doubled this year. but deutsche bank is not buying the rally. the firm said fundamentals face an uphill battle the next few years. the analyst behind that call joins us to make his case. but first we turn our attention overseas with the frechbl government on the verge of collapse as the lawmakers prepare to hold a no confidence vote tomorrow. and south korea saw the first declaration of martial law since

1980 and wlle' break down the market and what it means for investors. the exchange is back after this. >> announcer: this is "the exchange" on cnbc.

welcome back to the exchange the french government is on the verge of collapse with lawmakers holding a no confidence vote tomorrow and south korean stocks have hit their lowest level as that president declared martial

law. only to see parliament reverse that decision less than three hours later. let's turn to seema modi. >> south korea president declared martial law overnight the president accused opposition parties of sympathizing with north korea. now the declaration was quickly a return by the nation's parliament but the damage to the market already done. the south korean etf which tracks more than 90 of the largest companies in south korea tumbled as much as 7% to hit a 52-week low before rebounding slightly and then there the korean stock exchange which announced it was holding an emergency meeting before deciding whether to open for trade on wednesday key stocks in that country that we track here like samsung and high nick are down sharply a story we'll continue to track. meantime, in france, political uncertainty is growing on the ground the current prime minister is expected to hand in his

resignation tomorrow raising questions about the country's budget negotiations that have been ongoing since the summer and any delay on the decision on lowering the country's deficit raises a number of questions for financial markets. and many economists say it could also further weaken the country's standing in the euro zone economists at jp morgan expect further pressure on french bonds and widens of spreads between the french and german 10-year, which is at around a 12-year high overall, european equities continue to underperform since trump won the election and further political uncertainty is not helping. >> one line that i've heard, france is going to face a political crisis and germany is going to face an employment one. >> yeah. germany economy not holding up well narrowly avoiding a recession. massive job cuts in the auto and industrial sector. they are blaming china for flooding their country with cheaper products% now it comes down to the

european central bank meeting next week. the big question is with the two political stories picking up speed there france and germany how could weigh into that decision as well perhaps a larger cut intervention and those are things that people have been speculating around. >> it brings us back to the days of euro zone crisis. we are not there yet but it is not encouraging. political risks here at home be watched the tariffs one of the focus the next guest said the mexico and canadas tariffs will unlikely go into effect but the china threat is more real. tobin, a lot to keep you busy these days in a weird way, i fell like the market is less sensitive to tariff headlines n it was during the first trump administration, what do you think. >> i think given how much noise there is around tariffs and some significant tariffs are likely to end up happening, there is a

lot of negotiation and think markets are going to need to see the whites of the eyes of trump's tariffs threats before reacting. some of the changes were prooer -- were predictable and in terms of timing and scale would make it hard for markets to price it in shortly afrt election. >> you want to hear my theory. that the trump administration -- i'm sure people tell you their theories every little utterance would provoke big market moves and huge reactions from whoever the targeted party was this time around, there doesn't seem to be as much of a reaction leading me to wonder if he's going to have to do things that are more aggressive in order to kind of, you know, show that the dog has its bite, so to speak. >> yeah, i mean, the current threats against mexico and canada look very much like the threats that were made against

mexico in 2019 during trump's first term which lasted all of nine days before an accommodation was reached on immigration and the deal was called off so, i think this kind of thing, le need to deliver at sales people point in order to get those kind of immediate market reactions. i think there are different kinds of tariff threats over the course of trump's second term. this very sweeping move against two of our largest and closest trading partners in mexico and canada, not the easiest thing to deliver on but down the road we'll see more markets that would react to. >> if the goal is to put tariffs on china and they route their goods through canada and mexico, then you have to tariff canada and mexico for those not to become back doors. >> and that has been made by jame jamison greer, he has mentioned in testimony to congress and to federal agencies that we do need to be looking at third countries

hitting them with tariffs where they're incorporating large amounts of chinese content or chinese firms operating there. so i agree there are concerns about literal transshipment of that kind or chinese fdi and more bonafide investment with china behind it, that is a growing concern. >> what do you think is likely on the tariff front with china right off the bat? >> i think that it will probably take some time off the bat, i would not bet on tariffs going into effect in trump's first 100 days i i think they will need to cooperate with congress and negotiate with president xi. but i think we're heading for tariffs increasing from now right north of 10% average across the country, probably heading to somewhere in the 30% range. so not all the way to 60 as he mentioned on the campaign trail, but a very material increase in tariffs across china. >> if we were to say that china's suppressing its own

currency to make its goods cheap is a big problem for the u.s it forces us to buy their cheaps goods and puts us into excess spending resulting in a big piling up of debt. wouldn't tariffs be one useful way to try to offset that issue. because what else could you do we could buy the currency back, but my point, we're trying to kind of fix some of these imbalances that are of their creation and not ours. >> i think that is absolutely right. that china's economic strategy relying on building what we've characterized as over capacity i think that is partially a currency story and chinese firms as well. and the trump administration, campaign have argued forcefully, we're not operating in a free trade paradigm right now begin the extent to which they've invested in building up the imbalances so one way or another we're going to see a tackle from this administration. >> and finally what is your takeaway advice for investors

other than ignore a lot of the noise, we always do the baskets of tariff stocks this and you're saying look through all of that at least for a while, it sounds like >> yeah, the single name trade on tariffs are challenging because there is so much presidential discretion around -- around who gets exclusions, this is the big bone ever contention this time around and some of the macro implications of the expectations of higher tariffs in aggregate, in terms of stronger dollar for example and doing that leg work on who is exposed is a valuable exercise at it point wolf has put together a basket that is a bottom up tariff, and will any companies get exclusions it is impossible to know knowing what the targets are is something that the investors could plan for at this stage.

>> tobin marcus with wolf research. coming up, nvidia soared 800% under pat gelsinger as ceo. but how much does the board deserve for this decades long decline. it goes back further than just his ten you're we'll dig into that next and intel having the worst day in three months. and today it is down almost 6% down to 22.50. and western digital are also under big pressure we're back after this. og people are deciding it's time to quit the kibble and feed their dogs fresh food from the farmer's dog. made by vets and delivered right to your door precisely portioned for your dog's needs. it's an idea whose time has come. ♪♪ (♪♪) (♪♪)

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(director) ahhh, of course. (agent with altered voice) foof, just checking. (vo) it's true. opendoor makes selling easy, in any season. . welcome back to the exchange i'm contessa brewer. china today banned exports to the u.s. of several critical minerals as trade ramps up the targets exports have widespread military applications that include minerals used in semiconductor and ev batteries consumers were just clicking and spending fiends on cyber monday adobe estimates shoppers spent as much as $13.5 billion yesterday making it the biggest online shopping day ever and topping records.

reached just a few days ago on black friday, when people spend an estimated $10.8 billion online. jaguar unveiled the new vehicle design direction and an all electric car call the the type 00. they anticipate several suvs in the years as part of a big rebranding effort. remember it larged the video last month that went viral announcing a decision to ditch the jaguar animal logo which has defined that brand for more than 70 years and that decision sparked a lot of criticism a lot of people with a lot of things to say, kelly about ditching the jaguar. >> a lot of marketing experts to debate that one. intel shares are stressing yesterday's drop they had popped about 4% on the news of pat gelsinger's retirement but the challenges

run deeper than who is at the helm, their down 6% today. deirdre bosa, should the board have done more over the years. >> the intel board deserves a hard look here not just what the ceos have done, but of the 11 current members only a few have semiconductor experience most come from finance backgrounds or from tech companies but not in technical roles which raises question where is the technical leadership at a company that aspired to be a national chip champion take the longest servest boarding member, over a decade of decline and missing the a.i. and gp markets and ceo selections his background is in investment and m&a now he's the interim executive board chair, a position that is no longer independent and comes with more direct involvement in key decisions. now the difference is between intel's leadership and its peers

couldn't be more stark especially after gelsinger's departure. nvidia and amd as board chairs and amd board members, they have engineering backgrounds and experience leading chip companies. intel lost lip-bu tan this year. i'm told by a source that he clashed with gelsinger who had the rest of the board's support. intel as you mentioned, down nearly 6% again today as investors wonder what has really changed and is the board any better equipped to choose a successful ceo after striking out with the last three. >> and many people are wondering if it kind of continues to keep its -- the foundry business as well as the design business or not. but c.j. muse made an interesting point yesterday, they can't separate and receive the dollars they've been given by the government because it was to the combined entity as investors think how they're

stuck between a rock and a hard place, they're realizing they're kind of stuck here. >> they are really stuck and that is what the stock is reflecting i mentioned frank, who is the now interim executive chair. he's a deal guy. so if there is any optimism, there is a deal done, that means giving up the chips act money and giving ns for intel as the national chip champion where do you go from there and the company may need a new board or expert expertise and pat gel singer was there and now he's gone. >> what would elon musk do if he walked into the company tomorrow. >> he would fire everyone on the board, probably. >> that is true. maybe he could take it in a that direction. thank you very much. amazon's andy jassy is making some more headlines from the aws reinvent conference out in vegas let's turn back to kate rooneyer to the details.

>> so andy jassy did announce a handful of artificial intelligence platforms or foundation models, that is here at the aws conference, an annual cloud conference in vegas. this update is going to let you generate text and images and videos and other things in terms of what it could do for enterprise customers the ceo calling it the new nova model, and said customers want better latency and lower cost. so they also want the ability to do more fine tuning. he talked a lot about a.i. on stage. he seed we're not using it because we think it is cool, as he put it. we're using it because we're trying to solve customers problems there has been a lot of pressure for amazon and for aws to roll their own models versus relying on third parties and pits them against rivals you have meta and google and adobe and open a.i. who are you'll trying to do the same

thing and automate more of their services for customers so a major update. back over to you. >> and the shares is up about 1% coming up, instacart is coming off the first negative month since may. climbing 40% in that time. deutsche bank is now warning investors not to put the cart ahead of the horse, so to speak. he'll join us next to explain.

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welcome back shares ever instacart are up nearly 85% this year but deutsche is still initiating their coverage with a hold and a $37 price target and it is at 43 they give them credit but fundamentals will be challenged over the next year or two due to increased competition and the premiums users paid in third party apps joining me to discuss is lee horowitz at deutsche bank. i feel, lee, like i know this one cold i could tell you down to the penny how much we're paying in fees how about the costco partnership. that is a lucrative one? >> yeah, we see as a nice add on

to where the company stands today. but ultimately, the affordability problem on the platform is a large one and instacart can't really set its prices for the goods that they're grocers set on instacart. so with affordability being top of mind for consumers. those price premiums that grocers often put on their goods in the platform, we see as a big challenge. >> is there evidence that there is pushback or is this more of a possible event next year. >> the evidence of a pushback as we see it is we've seen digital adoption rates slow materially poefd covid, so what we've seen is that overall online grocery share of total grocery has slow and we think that is an output of these affordable challenges so, we've seen the evidence at an industry level up until this point. >> that said, some of us are pretty desperate to get the groceries delivered. almost at any cost and in that case, how big is

that -- is that market base, do you think? if it were just the people that really had to do it, is this still a profitable business and a big one? >> well, i think it is -- i think they have proven out that it is quite a large and profitable business as it stands today. they have gross order volume north of $30 billion at this point. for the people that can and can afford it and need the groceries sort of delivered to their home, they are built a large and profitable business. but obviously that is a small fraction of the total available grocery time that measures north of $1 trillion so it is about bridging the gap to that larger pie and we see some challenges there. >> how much penetration do you think grocery delivery will have in this country? >> you know, as it tands today, it is somewhere around 14% we've seen other e-commerce sectors that have reached closer

to 30%, 40%. we think over time grocery should make it into the mid to high 20s, perhaps 30% over a medium amount of time. but we think the pace of getting there is going to be fairly measured given some of the challenges that we laid out there and are thus concerned around overall industry growth what . say it is a hundred dollars basket in the store, how much do you think they're paying to get it on instacart. >> we've done some pricing work to say nothing of the fees chf instacart is doing a great job of bringing fees down for the consumer, but just on the goods themselves, we've seen some premiums that range from 20%, to 30% compared to something at a walmart. >> and finally the shares you think would be valued at something like $37 they're trading at 43 right now. what would the company say about

the plans to address the issues and get a higher share price as a result. >> i think the company continues to integrate with the grocers. i think they would say they're giving their grocers more options to offer sort of like for like pricing on their platform that looks similar to in store pricing they're doing things with the eating store loyalty programs and opening that more available to sort of prices that you would see in a grocery store and other ways of more tightly integrated with the grocers themselves to open up greater price parity relative to what you see in store. >> and dash is still publicly traded i do use that to get saltines and apple sauce the other day in a pinch. how much of a rival is door dash to instacart and is that or are there other stocks that would you recommend in this space? >> so they are certainly a important rival in this space. part of the concern is obviously there is -- you know, there is a

lot of competition and competitors like door dash have other profit pools for which they could take from in order to invest in groceries. so door dash has a large and profitable restaurant delivery business that they could use to try to drive share gains in grocery which is a high priority of theirs. so it is part of the overall challenging back drop for instacart in this industry and other companies that we would recommend, we're buy rated on door dash and on amazon as any large share winner would with online grocery over next several years. >> and that diversification, maybe an acquisition down the road but we'll see. lee, appreciate it today. >> lee horowitz. coming up. shares of palantir are higher after theyef received fed ramped authorization. it applies to their full suite

of products and allowing palantir up 6% and have quadrupled this year they lead the list of companies that would be added to the nasdaq 100 and palantir is trading over $70 a share and it is leading th s&p today and leading this year with that 311% gain. we're back after this.

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that's energy in progress. welcome back to the ex change the nasdaq hit another record high today still in the green by 17 points but we've seen the other averages in the red now. the he declines are slight but they are still notable the dow is down and the treasury just under 420 a long list of apples, walmart and costco and deckers synchrony financial is up half a

percent. and walmart is coming off best month in a decade. it is up nearly 13% in november. and it just keeps going. like the little engine that could. coming up 2024 was one of the biggest years on the record for muni bond issue and we've talked about why. but with the trump tax cs set ut to expire they warn about some volatility ahead some and could their exempt status be in jeopardy good lord. we'll discuss that next.

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so you don't have to compromise. powering smarter savings. powering possibilities. welcome back, the s&p has been outperforming the 10-year since the election but the incoming trump administration and the expiration of trump's 1.0 tax cuts could bring some noise and headlines to the muni market according to my next guest including questions about the tax exempt status. joining me now is knisha patel, from fixed income at para metric you went there tell me what you're learing and what people are talking about. >> so i don't think it is a big surprise that 2025 could be just a big year of taxes and talking about tax policies the implement itself, however,

could take some time and in what form that comes in, that is unknown. something that has been thrown around, considered and is the tax exception municipal bonds. and the reason i bring it up. >> it would destroy the market. >> and you have a $4 trillion market and all of the municipalities and how do they finance all of the projects which both sides of the parties agree that infrastructure projects are needed. it would be catastrophic so in our view, the risk is very low to the actual elimination across the board now, what could happen is that certain sectors could be targeted so, have you not for profit, private colleges a large college with endowment funds that do issue through the municipal bond market. now, on one hand, you make up, it is a small drop in the

bucket if you count kind of the actual remedies that are raised relative to the amount that of the deficit. but you are lifting all mattresses and looking everywhere. >> or if you're looking for opportunity, not to punish, but to take a perceived nem sis, which might be certain private colleges and say well you're time is up so, talk about that. you see immediately i would imagine a back-up in yields. now, i think about the investors in muni asset classes and some of the yields have been upwards of 7%. but you tend to draw in conservative investors so on some level maybe if the tax equivalent were only five, they might still be in the asset class. i don't know. >> look, i would say, i still go back to the tax exemption across the board and our views are a low threat even if you were to tax the entire municipal bond market, that is going to not be anywhere close to the amount of

additional costs municipalities would have to pay in higher financing costs over time. for all of the projects across the country. to your point, what would happen in those sub sectors, the not for profit, you could have yields go up pretty high in which case, if it is going to be fully taxable, you could have your nontraditional muni buyers buy that type of debt but you still have the other sectors that are available now you brought up tax equivalent yields. my main point today is just, look, this is been and i think last time we talked about it was an opportunity then. it is been a bumpy ride for bond investors. i'm not going to -- we've seen that in treasury and munis and good performance in the month of november and we have a positive return in the index, let's hope we close it out this year. but absolute yields are high and that is the good news for high bond investors so if you are in a high tax bracket which is not going to change. >> totally.

>> you're looking at tax equivalent yields anywhere from 5% to 6% and do you not have to take on a lot of duration for this either. >> this hurts my brain today but if salt changes, is that going to change a potential class of investors who would have less urgency to seek out munis or anything like that? >> it would make -- so if the cap is eliminated, it would make munis less appealing particularly for the in state. so you could go then out of state and buy that so overall you would say high level, you could see the demand for munis coming down. however, the current administration is even talking about lowering the cap in which case you could have demand for munis go up especially in state. that 10,000 being lowered. so, again, that is also another element there. so there are a lot of elements on the tax side that could effect the market. and the lost and the last point, the rhetoric

is going to create ckets of weakness and i think that is an opportunity. >> absolutely. just to know that opportunities are coming it a catalyst thank you. good to see you. that closes us out today for the exchange i'll see you on the other side of this break for "power lunch." don't go anywhere. that moment you walk in the office and people are wearing the same gear, you feel a sense of connectedness and belonging right away. and our shirts from custom ink help bring us together. we make it easy to wow all your groups with high quality custom apparel and promo products,

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