yesterday. felt much better after hearing from the cfo at barclays. don't think the stock should be in the 60s. >> the stock has not had a good run really since the election. getting a little lift today. we'll follow the market. i'll take you through that final stretch. hanging around the hoop, as i we will follow the market. i will take you through the final stretch. hanging around the hoop, as i said, on round numbers. 6100 on the s&p. thank you very much. welcome to "the exchange." ahead this hour, servicetitan has opened for trading. it is way above the ipo price. we are at 101 at the moment. a quiet year for ipos broadly. will this be the starting gun for an ipo wave in 2025? we will debate that, whether you should buy this one and what it's telling us about the markets. trump tells cnbc, if you missed it, it was a great

interview, good times are ahead for wall street, for main street and crypto. we will speak with senator bill haggerty about the catalyst we could see and why he put his democratic colleagues on notice. bitcoin holding above 101,000 today. archer aviation are lower today, up 50% in the past month. the company announcing a new defense partnership today. the ceo joins us live with the details and to talk about that landscape under trump 2.0. a quick glance at the market. we are seeing red across the board. stocks are lower following the warmer than expected ppi report this morning. that follows the warmer cpi yesterday. that's two days in a row where inflation has come in hot. add to that jobless claims. two data points in the wrong direction. the ten-year backed up to 430 on the back of the da ta.

on the tech front, adobe is lower and on pace for its worst day since march. it's down 13%. it's the second big tech name to tounder -- underwell many. warner brothers are up 15% after announcing a new corporate structure which will split the cable networks off from the streaming business. if that sounds familiar, our parent company announced the same thing not too long ago. let's begin with servicetitan. it's a service firm for contractors and handymen. opening moments at $101 a share. the ipo was $71. that's above the initial range

they thought would be in the 50s. what gives? we have full team coverage. why the firm is going public now. we have a state of the ipo market. bob, welcome. let's start with you. >> what a close for the ipo market. the last major ipo of the year is pricing on a big up note, i mean a big up note. servicetitan which provides business management software for plummers and roofers and landscapers, opened at $101. it was prized at $52 to $57. upsized to $65 to $67. then $71. what an open. ipo investors are hopeful this will mark the end of three painful years of subpar ipo races. it was another subpar year for ipos. the number as well as the dollars raised is well below

historic averages for the third straight year. so far, 140 ipos have raised $28.8 billion. precovid, we would see $50 billion raised. we have been really down for three years in a row. there were a few winners this year. there weren't many. it deluded reddid, up 300%. astera labs and rubrik and waystar had excellent returns. ipo veterans are claiming a major window may be opening. the reason? markets are at new highs. finally, interest rates have stabilized. here is what's missing. desperation. many hopefuls have private funding and can sell shares for disgruntled employees or people who need to raise money. also missing is a return to hire valuation. most major ipos, including servicetitan, were pricing lower than the most recent private

funding rounds. this price here at $101, that's a big help. this is going to be a very important close for ipos in 2025. it's going to give encouragement to many firms waiting to go public. >> absolutely. quickly, who might be next? things might be quiet right now. what do you think about jan/feb? >> i have a long list of some of the companies that are out there. it could include companies like clarna, which filed to go public. crime, core weave. and del monte, e-toro, databreaks. epic games is out there. liquid death. clobani yogurt. i have a list here.

i am really hopeful that finally we will see it. i have been covering ipos for 27 years. i have never seen three years in a row like this. there's not enough. we need more companies to go public. >> liquid death, they gotta go. the trend is going to turn. the next hot thing will be in town. we will see. bob, thanks very much. stick around. let's bring in leslie looking at why servicetitan may not have had a choice but to go public. >> exactly. there were a lot of similar deals signed in 2020 and 2021. i will explain it in a second. this is seen as a bellwether for the tech ipo market. the software provider for plummers plumbers and landscapers and roofers. it's the tenth tech ipo of the year. three times the levels of 2022 and 2023.

a tenth of the of the average from the heyday. so many are now pointing to servicetitan as an example of a better story. servicetie tan had to go public when they raised private capital in 2022. it agreed to a compounding ratchet. this means that the company will need to issue more shares to make whole the investors such as an ipo or sale comes in below the valuation they paid. the compounding welcome makes it more diluted for the company the longer it waits to go public. service did servicetitan was lower than their lowest private round. the compounding ratchet was triggered. the overall was 1% according to estimates.

ironically, if the ipo were priced at the levels we are seeing now, $104 a share, the compounding ing ratchet would irrelevant. this type of structure and the prospect of doing a down round has kept many perspective ipo candidates on the sidelines for a few years. we will see if servicetitan changes the psychology and creates a bravery. it's not necessarily death by liquidity or liquid death as bob said. >> way to bring it all together. very nice. they could have priced this on how it opened, higher and maybe even avoided some of the issues that you mentioned. what about the capital that they and other companies raised in 2021? are investors -- if they are looking and saying, this is a good sign, but we need a price 30% or 40% above what the market is giving us. is that because of the investors from those peak times? is it just the last --

>> structure like that, i wouldn't say it's the norm. it's definitely the norm when the markets are going crazy. if you are sitting across the table from a vc and you say, i need to be valued at x and they say, no, valued at 30% below x, the way you can come to an agreement is you say, let's put structure in. it tects the down side. when they have an ipo or say, they can do so higher. it's not common. it's not the norm. there are enough of those companies out there that have shied away from the process, because they are worried about some event, about the optics of a down round. they waited out until they can fill out the valuation. >> that's a great point to you bring you in, dan. the conditions are in place. the market is incredibly receptive. we have stocks just almost at frothy levels. this would seem to be a great time to go public except things were more frothier in 2021.

>> it was. in the conditions that have been good for two years. if we went back 12 months, we would have been talking about ipos for instacart and others. there was a ton of stories. i wrote some of them. you probably covered them. the ipo market is opening up. it's going to be great in '24. it wasn't. some of the ones bob pointed out that have gone public, reddit, they have traded well in the after market. there has been a combination of cowardice. there's plenty of money still in the private market to do tenders. also, i think the bankers maybe have misread the market. there's two ways to read this servicetitan thing. the bankers were wrong, they were wrong with the original pricing. they were wrong with the amended pricing. there's questions about -- a conflict of interest among servicetitan's bcs.

some of the folks that had that compounding ratchet probably wanted it to price lower. questions -- did they put pressure to get that happen? bankers telling founders, it's not market. it's been ready. >> it's weird. venture capital, it's a -- they are struggling for exits. we have seen funds shutting. i'm surprised they are not more desperate to say, get the thing out. >> they should be. there has been this trend for five or six years or maybe longer, founder friendly venture capitalists. they used to be viewed skeptically because they came in with sharp elbows. they went in the other direction. they overcorrected. they don't like to push the companies public or push them to do anything. you are right, the startup cycle -- i wrote this today. the startup cycle works if venture capitalists invent. the successful ones return capital so the venture investors

own investors reinvest. that's not happening. there was a survey that came out a couple days ago. 80% of them said they had not reinvented in at least one of their relationships over the past year. a majority expected to do the same this year. that's because of a lack of distribution. >> what you wrote about this, that's meant the ipo, etf is not coming to market. you go back 20 years, there were more privately than publicly held companies. >> i will tell you, there's 32 companies. there were twice as many two years ago. besides the money issue, the fact that they are getting paid to stay private, i want to see what the sec chair has to say. they have talked in the past about making it easier for companies to go public. there may be something to do on the regulatory side. they are getting money thrown at

them to stay private. people complain, companies complain it's too onerous. it's too much lawyers. is there some way -- could the sec look at some way to make it easier for companies to go public without dropping the proper regulatory scrutiny. i would like to see the sec make ma a major issue for 2025. we had the wilshire 5000. there's only 3,500 companies in the wilshire. it's smaller. why? it shouldn't be. why are viewers missing out on the chance for -- to be involved there young companies? why are companies middle-age going public that have been around 10 or 15 year snz s? >> yesterday, ron krzyzewski was on. shares of some of the -- stifle is up 60%.

the joke,bankers is, the banke coming. could you see pressure from them and been fit to their share price if activity starts to pick up. >> the bulk of investment banking revenue has been driven by debt capital markets. those have been on fire. often, in recent years, they have been going at levels 35 to 40 times the level of equity issuance here in the u.s. that has been a big boon. everybody is waiting to see when m & a and ipos will catch up to that. that's the key ver for growth in 2025, if they are able to do that. another interesting element to the ipo market in addition to regulatory and the private markets and valuation is ai. i say this because there are a lot of companies that were getting ready go public. they didn't have a good answer for what the investors -- >> especially, a lot of the investments were in software companies.

>> exactly. how is your business affectsed -- affected by ai? you couldn't go public the last few years. there was so much attention paid. this is a risky investment for a public market investor. if you don't know what the future looks like given this technology, you have to wait and figure it out. >> it's a great point. servicetitan up 204. thank you all for a great discussion. we appreciate t. before we get to the trade on servicetitan, let's look at some of the biggest ipos have done. reddit up nearly 400%. astera labs, up 242. can servicetitan follow in those footsteps? i love this story. they started the company 12 years ago.

the duo who founded it decided to they could cobble together software to help them out. here we are. are you a buyer of this? >> it's an extraordinary story. we know the fragmented and monetization opportunities. who is the growth? you had a great discussion on dynamics and what's kept companies from coming to market. part is the funding dynamics. this is a very strong venture-backed company with some of the best venture investors in the world. there was this capital market dynamic that required -- insent insentived them to do this. if you look at 25% revenue growth, the question is -- you weigh that against the arr multiple. what multiple of annual revenues are they trading at? these are the questions for

investors. i think you talked about what happened with some of the other ipos this year. reddit is a great example. third quarter numbers, not only did they beat on the top and bottom line, but they upped their guide. this say is a company with 90% growth margins. that's why the shares have doubled in a month. i think that's what people are looking for. i think with titan, it's really a question about, where are we going to be on the growth platform? it's been sideways. on a revenue multiple, it's not cheap. >> i'm reminded, if we go past -- zoom back two years. the hyped ipos have been underperformers. the underhyped have done -- even reddit was not overly hyped. >> that's right. i think you have examples of

pinterest and snap. it took two or three years until you saw the acceleration in the revenue model. that's something i think the street is watching. the demand here has been discussed. we could talk for hours about liquidity dynamics. it's a great environment. there has been a backdrop. banks are hungry. all we keep doing in terms of multiples and the money center backs, let alone vestment banks is pushing up the forecast. i think there's more coming. i think this deal, which a lot of attention paid on down rounds and some of the capital markets is part of it. this is a company in a fantastic space. are you getting the growth? a lot of the companies, there's tons of unicorns in the private market because they are well funded. look at the private credit markets. look how strong. we talk about the size of private credit. that's part of the story.

>> i can't wait for the first -- for a lot of people trying to figure out the question of buy now, the answer was hold shares at the ipo. you are doing fine. as for buying it on the open price, what would you say? give it a quarter or two on earnings? >> i would. i'm not surprised at the frothiness and excitement around it. it's a fascinating story. it's a story people can understand and can see the size of the addressable market. it's really an exciting play. i want to see more growth. i want to see where we settle out. >> tim, appreciate you joining us. >> thank you. 30-year bonds up for auction. rick santelli was tracking the action. >> it was a little soggy. the last leg of a three-legged coupon auction process. 22 billion 30-year bonds. the yield, 4.535. that was about a basis point and

a third above the higher yield, lower price. c minus is the grade for this 30-year bond auction. i can make it easy. look at a 10-auction foreign bidders were light. direct bidders, and how much the dealers took down, those improved slightly over average. the pricing wasn't very good. yields made new highs after the auction. if you look at charts, you will see, especially the long data, 10, 20, 30, spiking. the long data treasuries are now on the fourth day where they have taken out the previous day's highs. from friday, monday's was higher. tuesday higher than monday. wednesday higher than tuesday. today, higher than yesterday. i bring that up because we continue to build momentum to higher rates now led by the long end as it was about four or five weeks ago. if there's a lesson to be

learned, it's this. many follow every auction to really assess how the street in general and the world specifically might view debt. when you see these small bumps in the road, they correlate with moves in the market. 86.5 billion for the month of november. that pushed yields higher. connect the dots. those are important parts to pay attention to. back to you. >> great points. thank you very much. coming up, president-elect trump taking time to speak with our own jim cramer after ringing the opening bell this morning on the new york stockents on crypt that could signal a shift. we will tell you what he said and get reaction from bill haggertytennessee. shares of archer aviation ey have more than doubled since the election.

since the election. we ♪ "the exchange" is back more after this. 70 degrees and sunny today. amelia, unlock the door. i'm afraid i can't do that, jen. ♪ (suspenseful music) ♪ why not? did you forget something? ♪ (suspenseful music) ♪ my protein shake. the future isn't scary. not investing in it is. you're so dramatic amelia. bye jen. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com.

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"time" magazine's person of the year. >> i think so. we're going to do something great with crypto. we don't want china embracing it. we want to be the head. we will be the head of ai. it's unbelievable when you think we need more than twice what we already have. if you think that's a specific industry, but we will do it. we have lee zeldon, he will give us strong approvals, i think. he will make sure everything is good and clean and proper. he will give us fast approvals. >> joining me now is one of the key people driving president-elect trump's crypto agenda. senator bill haggerty, it's great to see you.

>> good to be with you. >> do you own crypto? you can imagine, based on your knowledge and interest in the space you have been owning it for five or ten years, you must be doing nicely. >> this is a sore point in my family. my kids wish i would have allowed them to do it. if i want to be able to do my job here in the united states senate, i felt it best not to invest in the crypto space. even though i see potential here in america. as president trump said, we want to be at the cutting edge of innovation. look at the biden administration, this sec, you look at the regulatory onslaught. they are using the legal framework that they are, the lack of legal framework, i should say, to come in and regulate this industry by litigation. what we will look for is a great opportunity for crypto to expand, putting the ited states at the cutting edge.

>> your kids, we could have been multi-millionaires. great, thanks. >> don't bring it up. it's a tough conversation at thanksgiving and christmas. >> i'm curious, senator, there's a lot of people -- a lot of your peers probably -- people who i talk to who really think that crypto is a waste of capital and is not something the united states should double down on and get so upset when they hear this talk of states, whether it's pennsylvania, now text or us doing something nationally with the bitcoin reserve. why do you think this has value for this country? >> it's taken time. my viewpoint evolved. i was u.s. ambassador to japan. i saw a massive heist take place with coincheck. i was concerned about where that crypto currently might have landed. i dug into the technology and saw the potential, where this could go, it's amazing. if i think about basic principles of a decentralized

currency. the freedom and liberty it supports. there's a the positive affects to this. america should be at the forefront. >> you have mentioned japan. because we have you, i would love to know where you stand. will you break with the president you support about nippon steel? doesn't this make a lot of sense to allow this to go forward? >> this is not about our strategic alliance with japan and the united states. this has to do with a strategic industry in america, that is industrial. president trump acknowledged he worked on it in his previous administration. it's a vital industry for us. it warrants a careful look. i might add, the nippon steel comes with unclear hands. they have an unfair trade practice history. we want to see a robust steel happening here in america. president trump has been clear about that.

i'm not surprised that he wants to do everything to ize the growth of u.s. industry. >> it worries me that this goes more in the vein of protectionism than undermines our productivity in the long run. i don't know that much about it, but my understanding is nippon steel may have better methods, more novel ways of producing steel. if we continue in this country to not let in the latest and greatest on the technology front, aren't we going to end up with obsolete, overly expensive, not cutting edge technology? >> one thing i might go back to is what you covered so well earlier in the program. if we look at our capital markets as the source of competitive advantage that they are, out of the business of trying to use climate activist, dei and things like that to guide our capital markets and get back to capitalism, i think we will get that with our incoming sec chairman, what we can do is make the capital available for precisely the ype

of innovation you are talking about. i think everything will change in a positive way in terms of making the type of capital available, the amounts of capital available we need to see more and more innovation happen here in america. >> finally, senator, can you explain -- you were upset and put a post on x about it. these efforts to do a last minute on some of the sec -- you can explain what's happening and why you are upset and how this sets us up for the slate of people that trump would like to see in office next year. >> it's a different circumstance. what we see here is the biden administration and the banking committee in the 11th hour, lame duck session, after the american people have spoken loud and clear on november 5th, they want to see change, positive change. they tried to slam in through a procedural mechanism a back room deal that would have jammed in one of the worst possible candidates for sec commissioner, caroline crenshaw. she's a climate activist. she pushed to go further than

scope 3 in terms of the disclosure requirements that she wanted to impose on u.s. companies, making us less competitive. the diversity requirements she wanted to incorporate, she led those charges. the american people and our capital markets don't need this. >> is this not typical to do so in the kind of waning days of a an existing administration? >> this is what we do not need. the american people have spoke on the 5th of november. what the biden administration is trying to do and the democrats and the banking committee attempted but failed at was to jam in the person that the americans don't want to see. >> understood. thanks for your time. >> great to be with you. another industry that could be impacted by trump 2.0 is defense. that's the sector my next guest's company operates in.

archer aviation is partnering with develop new aircraft. they are up 110% since the election. i wonder if people had this on the list. joining me to discuss it is the founder and ceo of archer aviation, adam goldstein. are you specifically in the defense part? do you do personal travel as well? >> archer builds many different things. we are building electric vertical takeoff landing aircraft for the commercial side of the world. we announced for the first time that we are launching archer defense, our business unit that will leverage the commercial applications into the defense side of things. we announced this parter nershi with anduril. we announced alongside that we raised $430 million of capital to go with it, bringing our liquidity to around a billion

dollars. >> do you have any insight on use case? >> ia very positive tailwind for the industry. the faa has done a really great job in laying out all the framework to allow us to certify and build the aircraft. you are starring to see some of the international communities try to advance this and let us launch as early as possible. i think the new administration is going to be very positive to really help make sure that america can maintain a leading position. it's going to be a big benefit. >> what would you say to critics who are skeptical of this technology? >> there's helicopters throughout today, the product exists today, many thousands of people use these products all over the world. this is a much more simple version of a helicopter. there's have are electric vehicn the ground. they will be in the air. they are quieter and safer. on the defense side, it's clear,

i have heard it today, president trump said his administration is going to focus on defense. we need new products that are autonomous, that are affordable. it needs to happen very, very quickly. archer built the last two generations of aircraft in less than 20 months. that's an incredible pace. that's the innovation that we need to bring back into the vertical lift category to make sure america maintains its leadership. >> the idea of doing evs as helicopters, probably faces a lot of technological difficulties. how big are these batteries or capabilities? how can they stay in flight? how reliable are they? >> we use a commercial off the shelf lithium ion cell similar to the technology you see on the ground. the technology is proven. safety standards are high. the reliability that's built into the aircraft are quite incredible. on the defense side when you move into more of the autonomous

and affordable side, it becomes an extra benefit where you take advantage of the things that we have seen developed on the commercial side. for example, these vehicles have a very low acoustic signature and low thermal signature. benefits applicable on the defense industry. more affordable. if you think about some of the manned systemed and the helicopter programs, they are expensive. this sean this is an opportunity to bring this to the department of defense and do it in a way that is much more affordable, that can allow us to keep pace and lead the industry. >> normally, i think china will come in and come at this market hard like they did with evs. i would imagine the defense department has no interest in letting them do that. i don't know if you have been following the new jersey drone story. do you have any insight on what might be going on with all of these unidentified objects being spot order flying over the state? >> i did see that. it was -- i was just as fascinated i think as everybody

else was. i don't have any insight to it. i have to say, there are a lot of new emerging technologies out there a things that will really surprise people. if you look at this, it's a technology that's been worked on for 15-plus years. it's not a brand-new thing. this has been around for quite some time. as these new ies emerge and show up in public. there's going to be a lot of surprises that people will realize how advanced some of the new aviation concepts are. >> where do you test? >> down in just south of san francisco. we just completed our big factory down in georgia, which is outside of -- it's covington, right outside of atlanta. we will begin production in january. that's a big 100-acre side. the governor was helpful in making sure that product was stood up and done on a favorable time line. we are excited to launch that and bring new jobs to georgia to produce aircraft. >> i guess it wasn't archer vehicles we are seeing traveling in our skies.

appreciate your time today and explaining what's going on. appreciate it. >> thank you very much. let's get over to tyler for the news update. >> we have been seeing drones. the four senators from new jersey and new york are demanding a briefing as soon as possible with the fbi, the faa and homeland security on those mysterious drones flying over the two states in recent weeks. in a letter to all three agencies, the senators cited security risks that the drones pose to military assets, public infrastructure and personal privacy. most victims of abroad chinese phone data hacking campaign have not been identified. sources tell nbc news more than a million people have had their metadata stolen, verizon and verizon, the two companies most affected, have contacted most of the victims. two of the top luxury real

estate agents, were deny bond in a miami/dade court today. arrested wednesday on sex trafficking charges. prosecutors accuse them along with their brother of a years long scheme to sexually assault and rape multiple women. back to you. >> see you next hour. intel telling investors that it plans to ultimately take its chip manufacturing sub sidiary public. there's a lot of opportunity to drive value creation. that came from san francisco. ipo news day. welcome. >> a lot of deal news today. deal activity, especially. optimism around the incoming administration. it's one of the big discusses here in san francisco today at this conference. barkley's global head of technology told me this could be

a popular route for large caps. >> i think we will continue to see aqua transactions. the other piece is probably more carveout deals happening. carveouts of either large cap businesses or breaking up a business and selling one piece to a sponsor, one to a strategic. >> she was optimistic on big tech deals in a new regulatory landscape. she's speaking with some clients about potential $50 billion plus transactions. ai, of course, unsurprisingly, another big theme here. one of the participants said that he thinks there's going to be more code written in 2025 than all of the code that has been written in history. that follows a comment on google's last earnings call that over a quarter of all code at the company is written by ai.

it underscores this idea we have been talking about, that 2025, the ai race is about application. the hunt for the killer app in consumer and enterprise spaces. that continues to be a big area of discussion. the software space, moving from the hardware space going into the beginning of next year. >> totally. i'm as excited as you to see what comes out of that. thank you. shares of kroger hitting an all-time high after announcing a buyback after the bell. that cave after albertson's sued the coanmpy claiming contract o going through on tuesday. shares of krog are up nearly 7%. albertson's is down nearly 2. we are back after this.

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welcome back. another inflation report this morning, producer prices. it came in slightly hotter than expected. ppi up .4%. it was more than expected. the core was in line at about

the .2%. the markets say 97% chance for a cut from the fed. they are completely ignoring the inflation data. this could mean fewer rate cuts next year. joining me is matt mcclennon and matt adams. why is the market ignoring the data. >> the fed signalled at the september meeting they were planning to cut interest rates down to a lesser level by the end of the year. inflation, while running above the fed's target -- if you look at the preferred measure, it's in the 2.5% to 3% range. it's not 2% but not far from it. the fed feels like they don't need it around 5%.

but they are not ready to get down to a neutral level. >> matt, you are a stock picker at heart. do you take a position on this kind of evolving macro view with rates? the ten-year is around 430 today. >> great to see you and great to the be on. i would say there's quite a bit of good news priced in american markets, whether it's expected earnings grown or declining interest rate expectations for the year ahead. if you think about the inflation backdrop, a big benefit from goods deflation in china, we have seen the oil price low in general and we have seen moderating wage inflation. a word of warning here. with earnings having inflicted higher, the s&p 500 and financial conditions anything but tight, we have seen job openings. that could lead to wage inflation, on a downward trend

turning around. we think that with 7% fiscal deficit, haven't slayed the inflation beat. >> do you think the market is punting the rate cuts that will or won't happen into 2025? they will go another quarter point this month and we will work things out in the new year? >> i think in the new year, the fed is likely to signal that they are going to take a more cautious approach towards cuts. we have cuts in our forecast for march and june of next year, after which the fed is likely to go on hold. that would reflect another round of fiscal stimulus coming out of washington, with the republican sweep. likely also some upward pressure on goods prices because of higher tariffs next year. that is enough that interest

rates will probably be under 4% by the end of next year. but i would put a neutral level in the u.s. between 2.5% to 3%. we expect monetary policy to be modestly restrictive in 2025. >> i would normally agree with you. lately i'm thinking neutral might be 5. i don't know if it's the deficit or what. the economy is -- it doesn't feeling like policy is restrictive. to get tactical, what are some of the holdings you have that you feel the highest conviction about for next year? >> happiness is outcome divided by expectation. there's high expectation in a lot of tocks today. technology outside the focal point of the market. a good example would be our largest investment which is medtronic.

the company has a 7% per cash flow yield. they have huge r&d in spinal implant, heart implant and surgical robotics. it's distributing cash flow to shareholders. without having to pay a super high multiple of revenue. >> you are not going to get people excited. they will say, i don't know. health care is boring. a mexican name or worried about what could happen in the new trump administration. a final thought on why you think in a way boring, i'm being tongue in cheek about this, is the right strategy here. >> we are in a cyclical low for high-year- yields are. the market is capitalizing long stories right now.

you have to look outside those areas where the market is most enthusiastic to get a good asymmetry between price and prospect. businesses that are a little more grinded out can be quite attractive. at the end of the day, it's about the arithmetic of the investment. if i can get a sound free cash flow year, i that is satisfactory in a low return environment. >> matt, bill, thank you both. coming up, we will dig into the tax changes that could be ushered in with the new administration, including whether certain unibonds could lose their exsepg exceptions. >> we're cutting your taxes. we will cut them substantially. we got them down to 21% from probably 42% or 44%, depend ing where you are. now we are getting them down to

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president-elect trump e ing tax cuts. my next guest says there's no need to worry. joining me is craig brandon. >> a lot of money being put to work. it's been balanced. what you saw yesterday was a very large day of bonds out for bids. everyone is wondering, what does that mean? weakness in the market? i think the way we look at it is, it was a huge amount of issuance the last couple weeks. if you are looking for relative value trades, you need sell bonds. it's the end of the year. a lot of the big broker dealers, the big banks, they don't really

want stock bonds, they don't want risk with two weeks left in the year. you are not seeing as much buying from the broker dealers. if you bought bonds to sell bonds, you put them out for the bitd. significantly less percentage of that is traded yesterday. we don't think it's a big deal. it's more of a market timing thing. >> i think it through, appreciate the explanation, once you understand why it's happening, to say, for a retail investor, does this create an opportunity? someone looking at the asset class and thinking to our last discussion, stocks feel a little nerve-racking right now. is there someone else you can pick up a decent yield? is there concern on the tax exempt front? >> we are getting $32 billion on january 1st of coupon reinvestment, which is a very big money. we are expecting early january for things to tighten up and for things to rally once that money hits the market.

this could be a short-term buying opportunity if you see bid lists out there. turning to the tax exemption, there are so many logistics to get this done. we have a $4 trillion market. over a million outstanding. in order to -- it's about a $40 billion give-up by the federal government. >> that's it? >> that's all it is. >> $40 billion? >> that's the give-up of the income they give up for not taxing municipal dividends. it's 2%. what you have to assume is that, i'm not sure you can tax bonds that are outstanding. you can only do it for bonds going forward, we think. if you can only tax the income on bonds going forward, it doesn't get you towards budget savings. in theory, there's $40 billion on the table maybe you can do. i think logistically and

legally, it might be very difficult. don't forget, most members of congress started off in local government. we're all taxpayers. we pay the same taxes. if i pay higher taxes to the federal government or lower taxes to the federal government, you are paying state and local. whether you raise financing costs at the local level, so that's going to show up in your local taxes. your local taxes are higher, federal taxes might be lower. as taxpayers, we are all paying the same tax. >> totally. >> you are ing chairs on that. >> i could see the administration saying we want to rearrange. get mad at your local. i have not heard anything meaningfully in that direction. if you were to say to people, look what you can get on -- what is interesting to you? >> i mean, high yield has been very, very technically driven. super huge demand for high yield. one of the best performing asset

classes in fixed income. that's still interesting. that isn't going to last forever. i like high quality, you are earning 4% coupons in the 420, 425 range. a new york city resident, buying a 425 bond in new york state, that's 8.5% or 9% after tax. it's compelling. high quality 4% aa or aaa bond. >> speaking of high quality, good luck to your bills this weekend. >> go bills. >> it could be a super bowl preview. he woul we should do a preview of that. want to mention, apple higher today. they haven't topped yesterday's all-time high. riding a nine day streak of interest intraday high. we will keep an eye on it.

tyler is getting ready for "power lunch." stay with us.

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