making progress. the back story is that the u.s. economy is in very good shape, and there's no reason for that not to continue. so we raised rates to 5, you know, 5 1/4 and 5 1/2, and we held them for 14 months, and other central other central banks had started cutting. we were the last major central bank to cut. we are on a path to bring rates down to a more neutral level over time. you are right, the economy is strong. it's stronger than we thought it was going to be in september. the labor market is better and the downside risks are less. growth is stronger than we thought. inflation is coming in higher. the good news is that we can afford to be a little more cautious as we try to find neutral. >> i'm very curious about how you think about it. occasionally, when you get it wrong or it's not where you think it was going go, as you said, you had a different view in september than you do now.

things change. what was it in september that surprised you? and if you could go back in time, do you think you would have known the difference? >> in september, what we saw was the unemployment rate had moved up close to a full percentage point. again, we held on long after other major central banks had cut. more broadly, there are two risks. there's the risk we move too quickly and undermine the progress on inflation. and the risk we move too slowly and undermine the labor market. we are trying to be in the middle place and get it just right so we get inflation down, policy at a restrictive level but less over time. i would say in september, it was time for us to cut because it was time. also because i wanted to send -- we wanted to send a strong signal that we were going to

support the labor market if it continued to weaken. in the couple of months after that, we got data revisions which suggested the economy is stronger than we thought. the picture is stronger than it was then. >> how do you think we as the public should think -- when we get labor numbers, which seem to get revise the all the time. do we have a counting problem? i ask it really. often, we see a number and then you find out a month later that not only was there a new number but the old number was off by more than you could expect. do you think there's a better way? >> the way it works is, the numbers people see from the household survey -- it's the unemployment rate and then the payroll jobs, that's an establishment -- economic establishment survey. they are surveys. it's not -- you are not counting people nationwide. you are doing as sophisticated as you can, a survey and you are projecting that out to the

nation. what's happened is that survey response levels have come down. that has probably -- it made for smaller groups of people. that means there's more volatility. there's been more volatility in the revisions. you have seen months in which a job number comes in and it gets revised down the next month. that's typical when unemployment is going up. the labor market data is among the best we get. the fed doesn't do discounted data. it eventually gets down to counting people and tax records. but the first numbers are survey based. they are going to be volatile. >> how do you take into account -- do you -- some of the things that may be forward looking in terms of political or new policy changes? we heard a couple things this morning. ken griffin thinks the economy is about to rip in a great way

because the regulatory shackles are going to come off the system that were under the biden administration and president-elect trump is going to take that off. we also talked about tariffs and the uncertainty that that would create, which he doesn't think is going to create much uncertainty for a while. how do you sitting in your seat think about those things? >> like all forecasters, we have to kind of make a guess at this point about what it's going to mean for the economy. let's take tariffs. here is what we don't know. we don't know how big they will be. we don't know their timing and their duration. we don't know what goods will be tariffed. how that will play into prices. what will be the transmission into price s? we don't know how people will react to that. we don't know whether other countries will retaliate. that's the list of things we don't know. it's a partial list of the things we don't know.

we can't really start making policy on that at this time. that's something that lies well into the future. we have to be -- we have to let this play out. we don't know all those things. the main thing we don't know is the other things that will be happening in the economy in six months or a year when this starts to matter. what are we doing? modelling this, looking at it, evaluating it. the decisions we are making right now are not about that. they are about what's happening in the economy now. >> similar answer in terms of immigration? the cdo is calculated if there's one force in the economy today that is -- could be a boost or not to gdp, lowering the deficit, seems to be about higher net immigration. >> let me say, for trade and immigration, the fed has no role in that policy. we don't have an

institutional -- it's not our job. it's the job of elected people. we don't comment on decisions they make. we don't comment on that. i can tell you, there was a great deal of significant wave of immigration. it's come -- the level of immigration has come way down in the second half of this year as the existing -- the biden administration changed its policies. it's true that a lot of people came in and went to work. that was part of why the gdp growth was so high in 2023 was a wave of people coming in and doing more work and spending money. i i i. >> i'm curious because it relates to tariffs. there has been speculation around tariffing countries that may be trying to build their own currency. long-term, think out a long time, the idea of the u.s. as reserve currency relative to somebody else creating their own. is that something that concerns you?

>> you know, you started with this. the administration and more particularly the treasury department has a responsibility for the value of the dollar and for exchange. it's not something we opine on. we stay away from that and they stay away from what we do. >> you hope. let me ask you a slightly different question about crypto. we were talking earlier about bitcoin and it is rising. there's talk in washington also about creating a bitcoin reserve, actually. you do deal with currencies to some degree. you have to think about some of these issues. how does crypto sit with you right now at a time when it appears that this next administration may legalize it in a more broader way. it's legal now but there might be a much bigger groundswell for

it. >> from the jobs that we have, what's relevant is really two things. one is just, what role should crypto be? should crypto assets be in the banking safe? we regulate and supervise banks. we would want the interaction between the crypto business and the banks to not threaten the health and well-being of the banks. that's one. the other one is to the extent anybody is doing that through a bank, we would want the public to -- if people are buying crypto products and things like that, there's a consumer protection aspect of it. they should need to understand what it is and that sort of thing. we're not -- we don't regulate it directly. we don't have that big of a role. >> would you own it yourself? >> i'm not allowed to. >> one of the big issues coming out is taxes and the budget.

one thing you have spoken out quite emphatically about is debt and deficit. you have been doing that for a long time. what is, in your mind, the tipping point for the debt and the deficit in that -- for a long time, i go back to thinking of 2010 or '11. i read some of the speeches you were giving back then and think about simpson bowls. at that time people talked about the deficit, a tipping point, if we don't deal with it, we are on a knife's edge. here we are in 2024. we haven't tipped over yet. in between that, there was this mmt idea that we could just spend money wildly and that would be fine, too. i'm not sure that's gained too much traction either. maybe it's been undone. what do you worry about as the tipping point for all of this? >> you are right, i did work on fiscal policy issues before i came to the fed.

at the fed, we don't have oversight over fiscal policy. quite to the contrary. congress has oversight over us. i would limit myself to saying this. the u.s. federal budget is on an unsustainable path. it's not at an unsustainable level but the path is. we know we have to change that. we have to get back so that revenue and spending are better in alignment. we don't need to balance the budget. we just the economy to grow faster than the debt. that's not happening. we are running very large budget deficits at a time of full employment and strong growth. we need to address that. we have to do it sooner or later. sooner is better than later. >> do you think the fed should or could take into account the debt and deficits and that cost in terms of where you think rates can or should be ever? >> no. never. if the central bank -- this is -- you see this in some

emerging market countries, for example. if the central bank can't raise rates to deal with inflation because the fiscal situation is so bad that they can't raise rates, that's fiscal dominance and it would -- we are so far from that. we will never -- we will always use -- put it this way. we will always use our tools to achieve price stability and maximum employment. we are not thinking about, we better not raise rates because of the budget. we are far from that point. >> before i forget, one of the reasons i wanted to ask you about bitcoin is to some degree people think that that is a symbol of people's faith or lack of faith in either the u.s. dollar or in the federal reserve itself. in terms of the system. what do you think of that idea? >> i don't think that's how people think about it. people use bitcoin as a speculative asset. it's like gold. it's just like gold, only it's virtual.

it's digital. people are not using it as a form of payment or a store of value. it's highly volatile. it's not a competitor for the dollar. it's a competitor for gold. that's really how i think of it. >> when you think about other countries -- it's not your job to think about other countries. but you spend a lot of time, i think, talking to your peers at other central banks. what are you most concerned about? are you concerned about the economy in china right now? are you most concerned about europe? >> as good as things are in the united states, of course, there are always risks. certainly, geopolitical risk is very elevated around the world with ukraine and the middle east. kind of very weak growth in china, that's all out there. i think domestically, we do see low and moderate income people under some economic pressure. if you read -- or listen to the earnings reports from some of the retailers who deal a lot

with low and moderate income people, they will uniformly say people are under pressure. they are very much price shopping and that kind of thing. the aggregate numbers are good. but we see pressures there in the lower income spectrum that we didn't see two years ago after the pandemic when people came out with really significant amounts of savings. >> when we came up -- i don't know if you got a chance to see the video. this idea of how people think. the vibe about the economy. i think the vibe had a lot to do with the result of the election. i'm curious how you think about this question, about inflation. a lot of people were saying, it's this past administration's fault. some people said it was your fault. some people said it was how much money congress appropriated during the period of covid. how do you actually think about it yourself?

>> look, there were -- we shut down the world economy partially. there was a global outburst of inflation. there was a time when there wasn't a single country in the world that had 2% inflation. it was everywhere. what was it because? because of a lot of pentup demand. very strong fiscal support and low rates. all of those things contributed to inflation everywhere. now if you look at -- i can show you a graph of ten countries, and they all look like that. which one is the united states? you would have a one in ten chance of guessing. i think that's what happened. the good news is, in the case of the united states, we're back to a much better place. i will say, people are unhappy because the price level is higher. you can tell people inflation has gone down, which is the change in prices. that doesn't matter to people who are paying 10%, 20% more for the important things in their lives. >> you are known to spend time

talking to folks in congress privately. i'm curious what you think the state of financial literacy is in congress today. >> like anything else, it's mixed. there are people who are very knowledgeable and they tend to be the ones in responsible positions on important committees. there are so many things to be an expert on. think of the breadth of the things they have to know about. defense -- it's endless. it's not surprising that most of them are not -- a good number are focused on the economy and monetary policy and things like that. many of them are focused on other things, as you would expect. >> we are out of time. before we go, i am told you have a special talent. i don't know if the public knows about this. i thought since we are here, we should try it out. which is that you can repeat sentences backwards famously?

>> no. ever since i was a little kid, i was able to see -- for vocabulary words, i can see it spelled forward and backwards. pretty much any word, as long as it's not 12 syllables. i started doing that for friends when i was 10. they were like, what is that? i would write it down. i can see -- not as good as i used to be. but i can see the word forward and backward in my head. >> if you give you a is he tense -- sentence, can you do -- this is -- it may be too long. if we don't do this now, we won't have an economy on monday. >> i will do economy. ymonoce. i'm not going to do the whole sentence. >> jay powell, everybody. thank you.

>> thank you. [ applause ] we are all learning a lot today. that was quite -- >> i'm trying to think if i can spell things backwards. kelly has that talent. >> fed chair powell wrapping up his comments. as the fed chair was thinking, the fed released the latest beige books. let's get out to steve and some initial reaction. >> i'm just going to cut to the chase. his commentary on policy and that he says we were the last major central bank to cut and we are on a path to bring rates back towards neutral. because the economy is doing well -- i will read this. the economy is strong and stronger than we thought it was

going to be. the labor market is better and the downside risks are -- appear to be less. inflation is coming higher. the good news is we can afford to be more cautious as we try to find neutral. i don't know what that little more cautious means. i was watching the fed probability. i will double check one more time. 75% probability of a cut in december. that remains the case. it looked like the march and may data were -- or may probabilities are the same. not a big change. we talked about this in the last hour, which is that there's a bunch of data to come. the fed is in -- doesn't feel any urgency to cut. we will see if the data itself that we get on friday and again another employment report changes the outlook and the fed says, if that's where the market is priced, that's what we will give the market. or if it feels to disappoint the market. i did not hear the word recalibration, which i was

listening for. i don't know. he wasn't asked about it. i don't know if we are still many a recalibration mode. the fed is less concerned about data itself. we will have to wait and see and hear more fed commentary as well as watch the data and try to plug that into this idea that they can afford to be more cautious. >> what did you say were the odds of a december cut? >> 75. exactly where they were. if you call up the december 2025 contract, which i can call up on my thing, i saw it was up a little bit. i didn't see a whole lot of movement there. if you look at the ffz25, which is the december contract. what you see is it was -- came down a little bit more. the ism disappointing. other weaker data as well as perhaps the adp number set the market thinking that maybe the friday jobs report will not be as robust as is dialed in.

there are 214,000. adp came in at 146,000. what does that tell you? we don't know because adp did not appear to pick up the hurricanes and the strike. that's the 30-day. we have another way of looking at that, which is the actual rate minus that from 100 and get the cull rate. it didn't move very much is the main point. the market is in a wait and see mode here where the data is going to tell us where the fed is going to go in december. >> steve, it's dom. the other thing is beige book. the takeaway here is that they say the economic activity rose slightly in most areas in the economy in the u.s. is there anything else we need to focus on with regard to that in. >> i was interested in the comment, employment levels were flat or up only slightly. i think that was an interesting commentary. you had a kind of -- you had a positive above 50 employment

number in the ism services but it was down a bit in terms of the level. prices rose only at a modest pace across federal reserve districts. one other comment that i thought was interesting. if i could just call it up to make sure i get it right. they said -- and put my glasses back on. they expect a current pace of price growth to persist but businesses in several districts indicated tariffs pose a significant upside risk to inflation. if i could take a step back. i have been at the cfo council last night and today. i talked to the guys who run the books for some pretty big companies. i will tell you, there is -- i want to say almost equal mixtures of optimism and uncertainty out there. we were talking last night -- guys were like, if the trump administration -- and women. there were women that do the same job. hey, if we get, for example, 100% expensing on our investments, that's a huge plus. if we are allowed to do more in

terms of rolling back the interest deductions that we had in the prior trump administration, that's great. we have tar riffs. we don't know what's going to happen with them. a lot of uncertainty. cautious optimism sounded like. some people say, those tariffs are coming through. they won't be -- they are a negotiation tactic or won't affect me. a lot of uncertainty but also a good chunk of optimism. >> a wall of worry, proverbially. thank you very much. let's get a check on the markets following the release of the beige book and powell's remarks. remember, it was a record high for the nasdaq and a record high for the s&p as well. for more on the impact, let's bring in ellen hazen, the

portfolio manager, and megan shoo at wilmington trust. you see her. she's a cnbc contributor for us. thank you very much for both being here. let's start with the wall of worry comment. it sounds like this is a scenario where the markets could be constructively higher. megan, given the fact there's uncertainty, but knowing that there's perhaps a pro-business friendly type environment coming in this next several months and years. >> yeah. i think the trick is, what is getting priced in today? what we have seen from a very strong market return calendar year to date as well as the post-election rally is that our sense is that the markets are focused on the business friendly, positive, upside risks. markets absolutely always have uncertainty, have a remarkable way of climbing wall of worry. there is more, i would say, asymmetric risk to the downside

given what is edpriced and valuations and uncertainty. >> ellen, what's the biggest surprise or non-surprise for you as a portfolio manager, as an investment strategist, since the election date and its result? >> what's really interesting is exactly what megan said. there are some positive elements of the policies that had been put forth. for example, lighter regulation would help the energy sector. it might help manufacturing and materials. lighter regulation would help banks. certainly, if the doj pull back on some antitrust efforts, that could help investment banks. there are clearly these pro-business initiatives. at the ame time, tariffs, no matter where they are, they will be higher than today. that will be inflationary. making undocumented immigrants leave the country is likely

going to be inflash airtionary agriculture, leisure and hospitality. finally, look at the deficit. no taxes on tips. maybe no taxes on social security. it's easy to see how inflation stays higher for longer with the deficit where it is. the market seems to be very sanguine about everything when i think there are more risks than the market is pricing in. >> go back to the comments from powell. one of the things he said was that with the september cut they wanted to send a signal they ould support the labor market if it kept weakening. he said the economy is stronger than we thought it was going to be. which would tell you, wait a minute. the door might be open to a pause. as steve said, 75% odds of a cut this month. they didn't change fter the remarks. i'm surprised. >> i think when we are looking at the economic data, this has been a challenging period to understand really what's

happening. you have had strikes. you have had storms. you have had seasonality issues, which i think play into labor market data as well as retail data. just think about the way that shopping behaviors have changed over the last few years. the seasonality trend is challenging as well. when you lump it all together, i think that's where you have to really use smoothing and look at the trend. certainly, in terms of some of the labor market data, it's come in more positive than expected. we are particularly focused on labor demand. that would play into the job openings. while that came in better than expected this week, the overall trend is a bit of a frightening downward trajectory. if it does not sort of level out here, we would become concerned that would start to show up in more layoffs. we're not seeing layoffs. that's good. certainly, we are seeing some uptick in continuing claims, which means it's harder to find

a new job. >> you are right. i imagine this is a big part of the discussion, which is to say, if -- is that why they need to cut rates? is that just going to give companies more breathing room to say, we will use that -- we're not going to do layoffs? inflation is sticky, but maybe that's a big part of the argument. >> if you look at the fed funds rate, nobody is really saying that's neutral. there's a lot of debate about what is neutral. it's not that. we are still in a position where the fed can continue to ease towards neutral. i think if they pause in december, it makes their decisions in 2025 a little harder. when to restart, how to telegraph that. i don't know what they will do. our base case is they will cut another 25. probably more than the market is expecting. >> ellen, the constructive nature of the markets, we know the markets aren't the economy and the markets -- the economy is not the markets. 2025 is shaping up to be optimistically a pretty good

year if you look at the forecasts across wall street. what exactly then would be the biggest hiccup? what would take this market down? pro-business environment, a fed cutting interest rates. what exactly is the downside? there can't be one. everything is a tailwind until it's not. >> if you look at the economy, it's very strong. jobs are strong. corporate profitability is strong. if you look at corporate profit growth next year, it's going to accelerate from 8% to 12% or 13%. as long as you have the corporate property fit growth, market is solid. you are two standard deviations above a 40-year history. that's high. you don't usually stay standard e deviation for that long. anything can cause it to hiccup.

if it does, because underlying corporate profitability is so strong, we think that would be a buying opportunity. we don't think it would be a run for the hills moment. >> if you cut rates in that environment, you can make a case for higher multiples on even lower earnings by the time it's done. >> i was only going to add to that, it's interesting you are not chasing small caps. so many people are. you are trimming big tech. how are you making changes? >> we are trimming big tech. they have gotten really expensive. those are fabulous stocks with phenomenal free cash flow. really strong margins. strong competitive position. they have gotten to be. expensive. if you look over the last 24 to 36 months, see four times when small caps have outformed one month at a time. every single time it has given it back. >> you don't think this time

will be different ? >> i don't. higher debt and so forth. in addition to that, if you look at the trend of earnings estimates for the small cap indexes, those earnings estimates go down and down and down. i think it's really hard, despite the cheapness of those, for them to increase when you have estimates declining. >> do you agree? >> we took down our small cap overweight on a combination of some of the things that ellen was talking about as well as a little bit more softening that we see in the labor market, as i mentioned. i don't think small caps were the value play for a while. very cheap. you were -- you had positive optionality. they are trading in the 95th percentile. there's not as much of the value to be had. >> ellen and megan, you are sticking with us. ellen, thank you very much. we appreciate it. we have news out on artificial intelligence. openai and morgan brennan has

details. this is an interesting development with regard to that and another very high profile privately traded company. >> that's right. openai stepping into national security. doing so with another fast-growing venture-backed darling. anduril industry. they are announcing a partnership to develop responsibly deploy security. this enables them to leverage openai to assess drone threats, to give military personnel to bet make better decisions while staying out of harm's way. this is a counter-drone initiative initially. the ceo of openai says they built ai to benefit as many people as possible and supports efforts to ensure the technology upholds democratic values. in the press release, the

companies highlighting in light of the race against adversaries like china, this strengthens the u.s. commitment to maintaining technological edge and ensures ai tools uphold values while protecting military and critical infrastructure. it's similar to what we heard from others. ai has and will be critical to the notion of future deterrence. openai has been expanding into the space. it's working with the air force. this partnership represents the first time for the startup with another company. in this case, it's the $14 billion fast-growing defense tech company founded by palmer lucky. he struck a partnership last month. meta said it would make ai available for defense work. this is very much a trend we are seeing within not only the national security realm but also in the tech sphere around ai.

very big shift, i would say, from what we saw a couple years ago from silicon valley. >> morgan, with that news on openai. thank you very much. see you later. i guess megan, if we talk about this ai craze that's going on in the marketplace, this is the latest kind of salvo, latest headline. does this part they nership mak more excite order wary? >> i think as it relates to ai, valuations are something to be mindful of. there's a lot of good news priced in. there's a tremendous amount of spend that needs to be monetized. i would say, going forward as we think about a trump 2.0 economy, regulation is interesting. we think about lighter regulation playing very much into financials and energy. i think it's going to play big to tech and ai and how that

transpires. you also have on top of that the prospect for more partnerships. i think that's definitely one of the up side supports that we see from market. that's probably not fully priced in at this moment. i would say it's encouraging. the defense industry, industrials in general are kind of caught in the crosshairs here. there's tremendous potential as we think about ai investment and what they could do to productivity and earnings. you also have obviously tariffs and slower global growth that plays into that as well as maybe a more cautious tone than you typically see from republicans as it relates to defense spending. >> we will have more on this coming up later on. thank you very much for sticking around. coming up, we have details on a tragic event. shocking corporate america and main street america. the ceo of unitedhealthcare shot

and killed in new york city.

(intercom) t minus 10... (janet) so much space! that open kitchen! (tanya) ...definitely the one! (ethan) but how can you sell your house when we're stuck on a space station for months???!!! (brian) opendoor gives you the flexibility to sell and buy on your timeline. (janet) nice! (intercom) flightdeck, see you at the house warming. ptimize your supply chain or keep pace with data driven manufacturing? ey teams are rooted in places where products are made, bringing insights from professionals who understand industrials, the sectors they supply, and the trends driving the industry forward. winners in the market are using data and digital technologies, carving out greater value within the overall value chains. ey. shape

the future of industrial manufacturing with confidence. to go further, you need to be ready for what's down the road. as energy demand continues to rise, we're harnessing breakthrough innovations to increase production in the u.s. gulf of mexico. our latest deepwater development, anchor, produces previously inaccessible oil and natural gas, allowing us to deliver the energy we all need today so everyone can follow their own road. that's energy in progress. welcome back. the ceo of unitedhealthcare was

shot and killed early this morning in manhattan. shocking turn of events. we have the latest details. what have we learned? >> reporter: the new york city police are offering a $10,000 reward for information leading to an arrest of the shooter who murdered brian thompson this morning. it happened about an hour before unitedhealthcare's investor conference was set to begin. thompson was walking to the hilton hotel where the conference was taking place. surveillance videos show the gunman had laid in wait for him, shot him pointblank with a weapon equipped with a silencer and acted quickly and deliberately. >> from behind the car, he ignores pedestrians, approaches the victim from behind and shoots him in the back. the shooter walks toward the victim and continues to shoot. it appears the gun malfunctions as he clears the jam and begins

to fire again. the shooter flees on foot northbound into an alley between 54th street and 55th street. >> reporter: they say he then took a rented e-bike and continued north into central park. brian thompson joined unitedhealthgroup in 2004. he was named ceo in april of 2021. his widow issuing a statement today saying -- she asked that we all respect their privacy. earlier, she spoke with a broking broke -- breaking news reporter. he had been threatened. it's unclear what that was according to police. they told nbc news in the

minnesota area where they live that they didn't have any reports of that. it's not clear that he had any kind of security this morning as he was heading in. it appears he was walking by himself. he had been here since monday preparing for the conference. the conference did start a bit late this morning, but shortly into the program it was canceled. the events were canceled today. police are offering a $10,000 reward leading to the arrest of the killer in this shooting and a manhunt is underway. >> thank you very much. of course the tragedy in midtown manhattan, terrible news. let's turn back towards the markets overall. the dow is short of the 45,000 mark. the s&p 500 and nasdaq hitting record highs in today's session. with that in mind, let's get out

to rick in chicago for a look at how the bond market is reacting to both the beige book and what we heard from chair powell. >> it didn't react much to either. then again, the stencil was made early this morning. if you look at 2s and 10s on the same chart, going back about six hours before the opening, what you can see is rates were on the down. at 10:00 eastern, after we had the data out at 8:15 as expected in terms of adp, we see very weak service sector ism pmi. that really changed everything and put a thruster on the back of the buying that pushed yields down. as you can see on that chart, they are near the lows of the session. if we cover two days, some important distinctions here. if you look at the two-year, it has an outside day. it has a higher high yield than yesterday and lower low yield. the longer maturities do not.

why do i bring that up? it may imply a trend change. there's little doubt what the trend has been. yields moving lower. let's open up a chart up and put our 10s on the same chart as boone for the year. what you will see is that they are unchanged on the year. near the lowest yields of the year. they closed last year at 203. they closed today at 206. contrast that with the 1 1/2 month low that we are hovering near in our 10s, which settle at 388 at the end of last year. we are still up 30 basis points. we want to continue to monitor all of that as it affects not only capital flow but ultimately it may really showcase the weakness that's pure perceivede european union. >> thank you very much, rick. i think it's interesting that the way that dynamic is shaping up.

i'm curious how that all lays out. >> totally. we have seen this. we saw a big run-up in bond yields after the rate cut. caught everyone off guard. it's been calmer lately. it's still higher than i think many people thought we would be at year end. >> yeah. i think we have seen some election -- pre and post-election movement. a lot of the pre-election into immediate election run-up has come off. maybe there's more skepticism from the market around those inflationary concerns than we were discussing earlier. as we think about fixed income more generally, we are neutral. i have a hard time seeing bonds doing anything really spectacular outside of a material deterioration in the economy or an increase in recession risks. one thing that i think this a year like we had as we move into the end of the year, stellar returns from equities.

lackluster from bonds. we will watch rebalancing flows that could put more downward pressure on rates. we rebalance client accounts. it was a couple weeks ago on the mentality that we extended. i think that could be another tailwind. >> be nice if that gets us down toward 4%. it feels like we can breathe a sigh of relief. >> bond influence can push prices higher. rates lower. thank you very much. more after the break. keep it right here.

when you're looking for answers, it's good to have help. because the right information, at the right time, may make all the difference. at humana, we know that's especially true when you're looking for a medicare supplement insurance plan. that's why we're offering "seven things every medicare supplement should have". it's your free, just for calling the number on your screen. and when you call, a knowledgeable, licensed agent-producer can answer any questions you have and help you choose the plan that's right for you. the call is free. and there's no obligation. you see, medicare covers only about 80% of your part b medical expenses. the rest is up to you. that's why so many people purchase medicare supplement insurance plans like those offered by humana. they're designed to help you save money and pay some of the costs medicare doesn't. depending on the medicare supplement plan you

select, you could have no deductibles or copayments for doctor visits, hospital stays, emergency care and more. you can keep the doctors you have now, ones you know and trust, with no referrals needed. plus, you can get medical care anywhere in the country, even when you're traveling! with humana, you get a competitive monthly premium, and personalized service, from a healthcare partner working to make healthcare simpler and easier for you. you can choose from a wide range of standardized plans. each one is designed to work seamlessly with medicare and help save you money! so how do you find the plan that's right for you. one that fits your needs and your budget? call humana now at the number on your screen for this free guide. it's just one of the ways that humana is making healthcare simpler. and when you call, a knowledgeable, licensed agent-producer can answer any questions you have and help you choose the plan that's right for you. the call is free. and there's no obligation. you know medicare won't cover all

your medical costs. so, call now and see why a medicare supplement plan from a company like humana just might be the answer. welcome back. disney plus is making a move to integrate espn+ in the platform. a tile is inside the app. it might seem like nothing or just a minor thing. what it says about disney's overall media strategy. >> this is a strategic step to get disney plus subscribers to adopt a bundle and drive adoption of the espn flagship app when it launched next fall.

they are getting a free taste. targeted at casual sports fans. it will be integrated into disney plus search. when subscribers click on content, they are prompted to subscribe to the other apps as part of a bundle. disney is looking to show its 123 million disney plus subscribers that this app can be their go-to for convent, including sports, hulu and other content add ones looking to keep the nearly 26 million espn+ subscribers locked in by making sports easier to access and looking to grow that number. this is all part of the plan to give the 71 million linear tv subscribers that paid for espn as part of a bundle an option to pay for s p spn a la carte.

it's a necessary move of breaking espn free from the bundle. now disney faces a decision of how to price its flagship service. sources tell me that the sports bundle venue would have offered insights. but since it was blocked, the response to this tile can help disney figure out engagement and pricing, which could be make or break for flagship when it launches next fall. >> thank you very much, julia, for that. megan, quickly on the media thing, i thought it was interesting what happened with at&t. they divest of all the media stuff. now they are up 40%. they had a great day yesterday talking about raising projections and so forth. we are entering ing into a wor where it's divorced from the contend. content might reassemble in many ways we can't predict. espn and figuring out pricing might be key to figuring out what the new world will look

like. >> it's in flux for sure. i think that that is sort of weighing on -- it adds a risk premium if you will to those shares. i think as it relates to disney and the e spn+ move, it's a mov to broaden the base, to try to compete in a very competitive environment where we are all -- we look at a consumer that for a while was just sort of grabbing up all of the different streaming services and subscription services. our view of the consumer is softening going forward. that plays into having to be competitive about pricing and offering content that you can't get everywhere else. disney is a unique product. they are focused on family and trying to make it a more direct pass through to the sports and some of the other viewers. >> very interesting to watch espn make that transition. we will dig into other key stock stories of the day.

(♪♪) (♪♪) what took you so long? i'm sorry, there was a long line at the thai place. you get the sauce i like? of course! you're the man! i wish. the future isn't scary. not investing in it is. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com

welcome back. it's time for three stock lunch. some of the movers of the day.

ahave ava is here to do the honors. let's start with marvel -- sorry, marvell. a story up 24%. robust demand for ai chips. it's a top custom ai chip play over at citi. do you agree? >> i would hold the company, especially after the day's appreciation. it's above 25% after a partnership with amazon. it's five years. that's great news. many analysts this is the next ai place. it does have a bright future. we believe much of it has been baked in, especially after today's 25% pop.

now it's 105 to 13 for the rest of the category. the revenue growth is negative. it's not a bad company to own. we wouldn't buy it after today's call. >> next up is campbell's. it's down 6% after a mixed quarter. falling short of sales estimates. a new ceo. take that dynamic. what's the trade for campbell's? >> it's a sell. we never own -- we would never own the company. the company has been down by 20% the last 25 years. investors haven't made money in the long term. this company does have a different yield of 3.2%. some investors might be interested in the company just for the dividend yield.

there is concern about the health. there's a high concentration of sodium in these soups. millennials and people that are interested in having a healthy lifestyle are avoiding this condensed soup. we don't see the category in general having a bright future. at this point, we think there's very little upside. >> lastly then, chewy. pet food. shares are down 4% after missing on profits. what do you do with this? >> this is a hold. it was a great covid play. we used to own it during covid. we haven't owned it since then. its revenue growth has come down from 47% to 3.7%. that's a huge drop. its enterprise value is 37 compared to 7. not only is the growth down but

the company is very fully prized. i wouldn't encourage investors to own it right now. let's realize that millennials who are into comfort pets back during covid, but we don't see this pattern coming back. overall, this is -- it was a great company during covid. we don't see a bright future going forward. at least in the foreseeable horizon. in this market, there's so many great opportunities that i would encourage invests to look at. >> before we let you go, is the market higher or lower in 2025? >> it's higher. i think i'm very optimistic. we have been optimistic all year round. we have a christmas rally. the next year will be great, especially when it comes to high growth companies and tech stocks in particular. >> always a pleasure. thank you very much. headlines from france where the government has officially lost that no confidence motion.

this is the first time in 60 years it collapsed. the first successful no confidence vote since 1962. macron has to appoint a new prime minister. it's more of a stalemate than a crisis. they are under eu pressure to reduce the 6% budget deficit. >> the prime minister is going to be widely expected to be asked to stay on as an interim or caretaker prime minister in the situation. president macron will have to likely find some kind of a replacement. we don't know who that will be. it's interesting, if you look at the etfs, the ticker ewq, it's still higher. it's been down over the last several months. are the opportunities now outside the u.s.? >> i don't know. it's cheap. the market is cheap. europe has trailed the s&p 500 by 24% year to date, which is remarkable. the valuation is a positive.

we are seeing some upturn in loans to businesses and consumers. for much of the year, it was the story about really slow growth out of germany. now this short-term political headline. i don't see a lot of momentum there. we have been underweight to international developed for the majority of the year. we will remain there. >> as if to underscore the point, we have all-time highs on the markets today. the stat that gets people thinking about this is the percentage of our market cap of global market cap, which soared over the past 15 years. in some ways deservedly. is that a sign of look out below or our engine of prosperity is working better than other snz. >> u.s. economic exceptionalism. we have seen capital flowing into, a trillion dollars over the past three or four years. as you look at it valuations are sort of leaning in that direction outside of the u.s.

there's a lot of moan mentum. >> next time, we will talk workout routines. i have been working on dead lifts. >> megan does them very well. i do not. >> get that form right. don't throw out your back. markets at record highs right as all. >> you have to get the form right. you don't want to throw out your back. >> to markets right now, as we point out, at record highs for the s&p nd for the nasdaq. thank ou very much for watching "power lunch." >> "closing bell" starts right now. >> this hour begins with a record high repeat as the s&p and now nasdaq hit new milestones today. we'll ask our experts how far this bull market could really run. in the meantime, we'll show you the scorecard here with 60 minutes to go in regulation. it is green across the board and tech is leading after octa earnings beat. those stocks are surging and nasdaq is the leader today