garcia, as well. bryn, final trade is what? >> if you want the keys and have income, jepq. 11% distribution yield. >> thank you. josh? >> starbucks under 100 is a steal. >> kev. >> cme group, i mentioned the s dividend. >> it goes x on 12/27. >> trying to get to 102. i'll see you on closing bell. thank you very much, scott and welcome to "the exchange." i'm kelly evans and here is what is ahead. broadcom is soaring to a new all-time high pushing the company's market cap past a trillion dollars for the first time. it gets to join that club. after revenues from a.i. surged more than 220% year on year so is broadcom the new nvidia, the new semi analyst weighs in on

that. but the nasdaq is below 20,000. tesla is the only one in the green. we'll talk about what is really going on in this market and hear from a few voices who are much more cautious on high flying tech. plus apple and google with warned by members of the house china select committee to be ready to remove tiktok from their app stores on january 19th. we'll speak with josh gottheimer, one of the lawmakers who have led the effort to ban tiktok about this and the mysterious drones still being spotted across state. but let's get down to bob pisani with a look at the markets this year. >> nothing mysterious about the markets here. no drone activity here. we're in a modest down trend. this is not unusual for the middle of december, but it is been going on for five or six days so let's look at the major averages. s&p 500, the dow and the s&p are down. nasdaq is flattish right now.

but i would say modest down trend here. we topped out, five seven days ago, except the nasdaq, it hit a new high on wednesday. but the s&p 500 and the dow moving to the downside here. if you close here, interestingly, this would be the 7th straight negative session for the dow. that doesn't happen very often. a few stocks down in the last six or seven trading sessions. united health, down about 15%. sherwin williams and nvidia and cater pillar and home depot. stocks have been moving to the downside. kelly mentioned broadcom, a new high on earnings report, it is the forecast that we're talking about here. they're big tech customers and going to spend money on artificial intelligence and that is the maxi pixy dust here. and this is the big winners today. broadcom and marvel and taiwan semi. they've been the big winners all

year. not just on the stock market, but in the semiconductor space here. this is a good time to take a look at it. nvidia is leading. but there is mar vel and there is broadcom and taiwan semi. these are the big four that have moved and after that there is a second tear, micron is up 17% but not that comes close to the big four in terms of what is moving here. finally, just service type that kelly mentioned, this is the last big ipo of the year. what a huge mover. it is essentially unchanged, down from where it closed yesterday at $101. but i want to point out what a remarkable couple of days it was. so service titan, which provided help to the service industry, plumbers and roofers. they do software management for them. the price talk was 57 to 52 and then priced at 71 and opened at

101? is this unusual? yeah. you don't get a doubling from where it opened very often. so there was a lot of pent up demand. there wasn't many ipos in the fourth quarter and i think that bodes very well for where we're going for 2025. just for the week here, rates moving up a little this week. that is a little bit of a problem. but it is very typical to see weakness in december. most of the gains are always in the second half of the december and particularly in the last week. so, i'm concerned about rates moving up, but it is not unusual to see a little mid-december weakness, kelly. >> good point, bob. thank you so much. let's dig further into this broadcom move today. up 20%. a trillion dollars in market cap. b of a raised the price market the shares are at $217 today and in the custom chips space and call it a leader among peers so it broadcom the new nvidia.

let's ask the new analyst at b of a securities and number one chips analyst this year. vivek, it is great to see you again. i'm ready to jump on the broadcom brand wagon. would you give me any pause in doing so. >> no, i think what we learned from broadcom's earnings reports are two important things. first that the market is still in early stages. that there are a number of really large customers who could spend 3 to 4 times what they're spending this year. and number two, to be successful in this market, you really need very leading edge ip, across computing and scale in the supply chain and in our view there are only three companies that could do that. it is nvidia and broadcom and it is mar vel. and the way the clusters are being out, you have large hyper scalers who a lot of internal work and then behind the

hyperscalers, you have enterprisers and nation state. so nvidia is going after the public work lords, the sovereign opportunity, but when it comes to internal work lords an the custom opportunities, broadcom and marvel are running with that. so the company is executing extremely well. >> there was a lot of talk in the last couple of weeks, whether pretrading for large language models is stalling out and moving to inference going forward. thanks to the likes of meta's llama and open source, if the compute required to build the cutting-edge models is much less than we thought a year ago. in the call last night they talked about how three clients have still mega demand for these kind of a.i. clusters in the years to come. so could you kind of weigh on in how a.i. sort of maturation

cycle relates to what we should expect from broadcom and nvidia into next year? >> sure. i think, kelly, there is a very strong innovation happening on both the training side and the infrared side. when it comes to training, it is not just the size of the model, it is pretraining and getting them trained across a larger amount of data. and when there isn't data available, to create synthetic data and improve the quality of the models. and it is not just one company doing it. you have company as poaching it from a closed model perspective and meta and mistrial from an open model perspective. so the work on the training side and then when it comes to inference, that is where the companies are optimizing it for a whole range of parameters. it could be cost and latency and it could be space and power. so we're seeing innovation

across both of these dimensions and then as i mentioned, the range of customers is very different. and in a financial or health care industry is different than what a hyperscaler might be doing for social versus what a new nation state in the middle east might be to have a model in their own language. it is not a one player takes all market. there is opportunity across the board here. >> the reason i ask is because if we've been in this gold rush land grab mentality for building out these large a.i. models to train, whether they're in this country or elsewhere, obviously that is what has driven this masive demand for nvidia chips. but if you're targeting data kept at nnt enterprise, broadcom chips could be used for that, is that why you think they've been more weak lately? >> i think, so first of all, two things. yes, i think what broadcom's report is, the message that

broadcom is sending that there is a handful of piper scalers who are building out very large clusters for their own applications and sometimes for the public cloud but where is there the most amount of untrained data. that is all in the enterprise. it is not in the cloud. cloud is getting restricted because they don't have enough access to enough public data out there. but there is a lot of -- that is in the enterprise and that requires a very strong partnership between companies that are closest to the enterprise and companies who are building out the public clouds and i think nvidia is absolutely the leader in that market. the reason why i think nvidia stock has been under pressure is just in the last two quarters their in that transition from the hopper to the black belt. in the next report we'll see the surge in orders and that is going to reassure people that the story is in tact.

so i think it is more the transition between product cycles that is impacted nvidia but we think it is a near term concern. >> and the rising tide is lifting all boats in some space right now as a.i. continues to be unleashed across the economy. vivek, thank you for joining us. >> $250 price target. looking beyond the chips at five of the seven maga chains have left only nvidia as discussed and microsoft behind after the runs, apple and amazon and tesla have relative strength over 70 indicating their short-term overbought. but two of them are still a buy for our trader, let's find out which ones. here is lee munson. lee, you're tackling a big one here and we appreciate that. so this is three buys and one bail in mega cap tech for you and your first buy is amazon which has been cing apple.

what makes you so excited about this stock here? >> everything makes me excited. we found out over the last year that they're making a lot more money sending us all of the cardboard boxes and making money selling ads and while that might pressure google, i think that will continue. also, amazon really represents the retail market place sellers paying amazon much more money to access a.i. and all of the things that a.i. could do to help them sell more crap to americans and hit the buy it now button. so i think amazon is a retail story and i think that everything that has go do with the cloud is going to continue to grow and in retail sellers, that is why i love it. >> a lot of people agree with you and say they're not offering this as a bolt on product. granted we're still talking about the cloud and this could be on prem, but this is a huge

advantage. let's move on to apple. recently announced they buying the amazon a.i. chips we were just talking about. apple is up 20%. why are you buyer here? >> i'm a reluctant buyer. but i certainly wouldn't sell it. if you're going to buy high mega cap stocks, amazon is one of them. i'm buying new laptops for my kids an the new stuff because i want to have the new o.s., and the watered down a.i. version that apple is providing for that. we talked about this summer about this huge refresh cycle that is going to happen some day for apple. when a.i. sort of gets there. the refresh happening now. right now people want to get the new o.s. to take advantage of what it is apple is going to sell us into the new year. it is expensive and you can't get 10% solid earnings on a stock like apple for, you know, under 30 plus earnings. it is not where the market is

right now so you have to pay up. >> i look at it as a 3.75 million market cap. i guess it goes to 4 or 5. >> i'm nervous about it. but if i keep buying the laptops and the phones, how is this stock going to go down. valuations don't matter until we have a inflation or a recession. i hate that reality but it is what i live in. >> let's move up to alphabet. they could do computations that could take a computer sent illons of years to do. and people are excited about the tools in gemini that they've been able to unveil. >> everybody looks to rip on google because they're second place in implementation. second and third place in cloud. they're known as the company that always executes second best. but here is the thing. if you want to win the tour de france, just come in fourth place and will you win the

championship, right. and so google is that same way. i think gemmeny has bad press from the olympic and people are bagging on it. more people are happy than on chatgpt. and google figures out how to have gemini link back to sponsored content and anti-trust don't care. the quantum chips, that doesn't mean a lot to me. but it is all positive p.r. people need it and it is cheap and i love cheap cash cows. >> so that ing befores us to your bail. those were the three byes. you're bailing on tesla. >> i hate the product. my analyst jesus and i went to see iron maiden in san diego and i rented a tesla to check it out. everything about the car i hate. some of the clients who run auto dealers, you could make a lot of money in auto dealers, but

people are coming in and saying it morally okay if i switch back to gas because people don't want a electric car, it is a tesla. it is an old design. it is up 50% since the election. i'm sorry, elon musk is going to make bank hanging out being a bro with trump on spacex. tesla is a car company, it is not a tech company. when i say valuations don't matter, there is a line in the sand and tesla just crossed it and i'm not in it. >> i know plenty of disgruntled tesla owners but do you see how we're moving to robo technology, they have to be in the poll position for what driving is going to look like over the next 10, 15, 20 years. >> 20 years. the p.e. doesn't make any sense right now. robo taxis, all of that stuff is going to take a long time and you're going to beat up, like green energy, into rules, regulations and state and

municipal and much more -- where-y don't we have hover cars. walt disney promised me hover cars by 1985 and i think the robo taxi thing is far away and athe regulations going to kill him. >> it is time to book you a waymo, the next time you show up here. >> i'm afraid. >> i am, too. thank you so much for joining us today. >> thank you. and still to come, the dow is trying to avoid its 7th straight losing day and that is the longest streak since february of 2020 and that is not the only market, we are back with that and how to position for year end. and lawmakers are asking joe biden to take action after drones are seen across the state. and president biden signed a potential tiktok ban into law. we'll look at the latet on the front and what the new

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welcome back. while it's ban is still in place for january 19th, byte dance's fight is far from over keeping the app legal. on monday they filed an emergency bid to stop the ban from going into effect something they asked to reject late on

wednesday. the information is reporting that blizzard ceo bobby kotick is waiting to buy tiktok after the inauguration. the next guest led the bipartisan legislation that banned it and served as ranking member of the cyber committee and a vociferous about the dangers of tiktok. joining me is josh gottheimer. it is great to have you here, congressman, welcome. >> thank you for having me. >> there the tiktok-ers, freaking out, not sure if their livelihood will be disrupted and others who say, no, trump is going to take office and it is going to be fine. >> i'm all for protecting livelihoods that is why we've given tiktok time to sell it to

an ally and anyone not focused, the law said, on actually disrupting america and pushing anti-american or hateful propaganda on our platforms in the united states to the 150 million americans or so who are on tiktok and using it every day. and collecting data on americans and, of course, as you saw in the overwhelming bipartisan vote on this legislation, either to force a sale or shut it down, it is come from one place. we're very concerned that you have china, our number one adversary, or the government of china, or others like iran or russia or north korea, controlling information into the united states of america and pushing false information out, especially to young people when if you're under 30, this is the nur one place you get your news from. >> this is probably one of the number one apps in your district. so i have to imagine, would you did he disappointing a lot of people if you were to ban it. because you're privy to the national security information, a lot of us haven't thought a lot about what tiktok might be

pushing since very difficult days during the pandemic and the george floyd era when people were trying to foment problems in this country. are there things going on every day where you think they're pushing misinformation at those using the app. >> i've seen many on the intelligence committee and i can't share what i learn in those rooms. but i could say that broadly speaking, we believe this is a threat to america's national security overall after handing over the keys of a major communication platform, like cnbc or abc or another major channel to a number one adversaries and letting them have complete control of the algorithm and the disinformation they could push out. whether that is on election issues, whether that is on, as you pointed out during the pandemic, whether that is on hate or anti-semitic rhetoric, you name it, the concern on the anti-american stuff pushing support for bin laden. and in washington, it is not

easy to get a bipartisan bill done in a matter of weeks across the finish line to the president' desk. that is what you saw here. you saw democrats and republicans in an overwhelming way to make this law and we're saying just sell it to another company. sell it to another american company or an ally in a company there, there is no reason they shouldn't do that. i'm sure they'll do well on the transaction. but the bottom line is you can't have our top versary over the phones to 150 million americans. >> whether it is bobby codick, and they did 100 million in sales on friday alone on tiktok, so it is a major e-commerce platform, and if there is a forced sale to the u.s., it is unclear if they have to divest international followers which could be considerable. so they're concerned about the income that might be lost as a result of this, the influence

that might be lost. it is a global app. >> it is amazing with technology how we could work things out. you know this better than anyone, given how innovative that our folks are, that they could make things work and i have full faith that if they told to an american company, everybody would be up an running and we'll make sure that all of our small business owns would be taken care of and we protect our national security. listen, again, i'm all for the app as long as it is not controlled by our nur one adversaries to seeks to do us harm and push information to our citizens and underminor strength in national security. that is what democrats and republicans have issues with and that is why i feel so strongly about this. >> is china behind the drones. you spent your day holding a press conference, trying to galvanize -- let me ask you the question this way. do you know stuff about this drones that you can't tell us or do you know no more than the rest of us know about what was going on. i was shocked after all of the

attention on these after the last few weeks, there was so much activity in the skies last night. what is going on? >> mean, here is what i'll tell you. i feel very confident based on the briefings that i've received from the fbi, from the department of homeland security, that there is no imminent threat to public safety or national security. but here what i also know. it is absolutely ridiculous that the fbi and the department of homeland security have not gone out and done a public briefing on this and told americans, especially in jersey, what is going on in the skies. what are those drones. what is all of this drone activity. they're not handling this properly. i've called them to handle it properly, to work with local law enforcement to give them the tools they need to monitor the skies and if necessary to take these drones out if they're over critical infrastructure or our bases our reservoirs or our airports to make sure we could take action. you can't have the wild west of drones in jersey or anywhere else in the country. we have to give the tools to law enforcement. but the idea that the fbi and homeland security and the faa

have said nothing publicly beyond statements on paper is ridiculous. we know these drones are up there. and so don't you think people deserve some answers. >> absolutely. >> give people answers. >> so a lot of us look at this and we keep being told there is no public security threat or however you put it. how do we know? is that even the question? we're glad they're not actively shooting us down. but if there is some surveillance going down, ala the balloons a few years ago. not a single official, not one at the federal level or state level has any idea or who they are or where they came from or why they continue to show up in large numbers. >> i'm always first and foremost concerned about protecting people in our national security and that there aren't drones flying around with weapons that could threaten people. -- is a separate issue that we

should care deeply about. the beefings make me comfortable to say there is no threat to anyones for their safety. i know their concerned and they are worried and i can say that based on what they've briefed me on. but they're not telling us where they are coming from and where are they and who owns them are they registered or unregistered as their supposed to be and what is going on with them? that is what i said to the fbi and dhs. tell everybody what you know and tell them now. there is no reason why you're waiting and if you don't know anything, and beyond that they're safe and secure and for not immediate threat, then tell people that. but this no-man's-land that we're sitting in right now, with no information to people, so that they could just worry is not acceptable. >> it is bizarre. everyone was outside looking at the skies last night and if you thought it was -- if it was overblown on social media, you looked up and said i guess it is real. >> no, they're real.

i'm heard from people through state police that they've seen them and andy kim the senator from jersey, he said he saw them. so, we know people have seen these things. it is not made up. this is not make believe. but the question is what are they and could we get more information and why aren't we and that is the fbi the lead agency in charge of the united states on these sort of situations an the fbi and homeland security should be out there briefing and telling the public everything they know so we could all understand where these drones are coming from. >> congressman, amen, thank you for making the time. josh gottheimer of new jersey. coming up, president trump is touring the store of stock exchange after ringing the bell. and investoring millions of a dollars. that is next after the beak. development, anchor, produce s

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welcome back to "the exchange," i'm tyler mathisen. south korea opposition leader is urging the president yoon's party to back the impeachment motion when it votes on saturday. the bill is the second attempt

to impeach the president after he escaped the first attempt last week when most of the party boycotted the vote. yoon has been facing calls to step down after he briefly imposed martial law amid political turmoil this month. amazon workers at two new york warehouses voted to authorize a strike. they say amazon refused to recognize the union and address the companies low wages and dangerous working conditions. amazon has yet to comment. and new research finds that nearly half of u.s. teens are online almost constantly. according to the ew research center study, youtube was the most popular with 90% of them saying they are on it every so often. 63% are on tiktok. 59% use snapchat. kelly. back to you. >> we'll see what happens to tiktok. the president-elect is set to have a well funded

inauguration. bolstered by a wave of new donations from tech giants looking to ease some of their regulatory headwinds perhaps. deirdre bosa is following today's tech check. >> whether that works is an open question. but at least it could be a gesture of support and a strategic investment in a new power dynamic. the new playbook in trump 2.0, is visited to mar-a-lago and bigger donations to his inaugural fund. we compared donations from last two inauguration funds, biden in 2021 and trump there 2017. now keep in mind that trump's 2025 fund, that is still open so there is still time for others to make contributions. but so far, it has seen million dollars contributions from meta and amazon and open a.i.'s sam altman. three of the players that have the most to lose in the next trump term, meta and altman didn't donate anything in 2017 but contributed a million

dollars each for 2025. amazon upped its amount ahead of the meeting with the president and a step up in support from the three versus the biden 2021 fund. now in altman's case, could be a small way to counter others and so ultimately, this million dollars check, small stakes for these players, won't guarantee protection, but it could make a difference between at least having a sane conversation versus watching from the side lines and they're looking for opportunities. the playbook emerging for this time around is very different, i still remember that awkward meeting at the white house of all of the mega cap tech ceos. very different tone. >> indeed. and he'll have a well funded inauguration as a result. thank you. coming up, materials, materials are on pace for a tenth straight day of losses.

longest losing streak since the turn of the century. and down 6% for the worst ten-day stretch since last year. but there is another sign of weakness. if you're wondering what it is, it is hallitosis. we'll be joined next in studio to explain. "the exchange" is back after this.

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as we've mentioned, five of the seven -- five of the mag seven names have hit all-time highs except nvidia and microsoft. but dan niles told money movers this morning, this is the most interested he's been in years. >> we have a top five stock. this is the first year where i'm debating whether i have not. because a lot of these big things that have driven growth, it is starting to slow down. the a.i. spending, it is going to slow down next year. >> and those high flying stocks have my next guest refocused on the breadth of the rally which is lagging. still thinks the rally will have

a better short-term. it is great to see you, steve. >> great to see you, kelly. >> and we're joking about bad breath. i've seen for nine or ten sessions now, what is going on exactly. >> this is ten of ten where the s&p 500 has more stocks to the downside than to the upside. so coming in, when i did the work, we had about five out of nine prior to today. s&p up days as opposed to down days but nine for nine as opposed to more stocks being down than up. and when we look at the broader market, on the nyse, it is 2.5 decline -- >> really. >> and it means that the big cap stocks, because they're so big and broadcom is up, that could paper over a lot of ills. what you want to see in a market is broadening out, where you had the mid cap doing well and the russell 2,000 well and that is

stalling but it could be a warning sign. it is certainly a bit of a churn under the surface than you think. but i have to wonder if the honeymoon phase of the market is wearing off. >> with valuations so high. >> exactly. >> think back to chatgpt, launched in november of 2022 and in november of 2021 peaked and i think what would have happened if it doesn't rise. maybe it would recover, but we've had nothing like the drivers over the past two years. >> that was november of '22, when is the market bottomed, when this current rally took place. >> coincidence or not? >> some and some. nvidia was at that point -- >> a video game company. >> a cryptocurrency company. crypto had lost its -- and even by february of 2023, they were leaning in a.i. super heavily.

and now you're seeing it with the reaction after google -- alphabet announcement with the quantum computing, people are leaning into that. people love a sexy tech theme and that was the internet 20 some odd years ago and it is a.i. and quantum now. >> and here is point i'm trying to make, which is why not stick with the winners? why worry -- so everyone who is going into small caps, okay, fine, now they face the rate head wind and not as high quality companies, there is overrepresentation from certain sectors that may or may not fair as great. it just feels like if the technology revolution that is taking place and thank god it is taking place, why not just kind of be either in the broad index or in some of the names and think this is the winner for the next however many years? >> because trees don't grow to the sky and a lot of it has been because of multiple expansion. and so let's say of the s&p being up about 70% since november of '22, i'm cuffing the

numbers a little bit. about 60% of that is -- is margin -- multiple expansion. >> wow! >> yes. those stocks have very dominant positions. you could argue duopoly and cell phone manufacturing and between apple and microsoft -- i'm sorry, apple and google. they have tremendous market power. but how much could you keep paying for that. and the other issue is, if the base under -- the foundation on which the market rests keep getting hollowed out a bit, at some point it sort of topples over and if people start to leave the market in any sort of way because they lose faith in stocks, that becomes very tricky when you've gotten so top heavy. in the short-term, yes, they are money-making machines. >> i thought it was -- that you weren't impressed with broadcom results. because, look, they were pro forma and this is not -- it is a

reminder that we could get carried away with the excitement that is warranted over how much better they're doing this year versus last year. >> i wish i could go through life with pro forma earnings and ignore any expenses that arin convenient or a bad story. this is about 50 cents a share on an ongoing basis. yes, they make a lot of money and their guidance was extraordinary, if they could meet it out to 2027, god bless them. but this is one of the fundamental things. at some point, we can't ignore the inconvenient stuff forever. and the way i look at it. the weather has been very sunny and very -- >> fair -- >> -- pleasant. and it doesn't mean you should carry an umbrella. but there is a big spread between below market puts and money puts, yet at the same time the absolute implied

volatilities of the protected puts is low. so they are rich and cheap at same time but there are people out there poking around for insurance or at least not willing to forgo insurance, and -- >> and my left question, what are your recommendations then, into 2025 for instance. >> i wrote a piece not long ago saying don't fight the tape, but insure against it and that goes into the put options, if you don't want to get out of the market and fight the momentum and right now it is a tough tape to fight, i do think it is prudent to either lighten up a little bit, or start to look for some protection in some downside puts because that might come in handy. and remember, with insurance, you don't always want your insurance to pay off but it is nice to have it. >> steve, appreciate it. steve sos nick with interactive brokers. wall street is out with the stock market outlook for next year. the average forecast predicts a

10% climb in the s&p, but to reach each firm's target you could scan the qr code on your screen or go to cnbc.com/propick. and righetti computing soaring and ticker rgti. it is up 15% today. and we'll be right back. sponse. sent! okay, oop! even bigger. sent. [sending swoosh, notification alert] still bigger. okay, yeah i'm not doing that— [typing noises, sending swoosh] i think it still looks good! [notification alert] oh — even bigger.

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welcome back to "the exchange." the dow is down 39 points trying to avoid the seventh straight negative session f. we do close lower, that is the longest streak since 2020. the 10-year yield backing up to 440 and that is pretting pressure on the small caps. coming up, a survey including president biden's final approval rating from the american public. steve liesman joins us now. >> one administration going out and one coming in.

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public more hopeful about the economy. that is according to cnbc latest reed on the issue. steve liesman is here. >> president-elect trump will take office with an economy with public sentiment marginally off the bottom but the hopes for the future are ascendant. when he came to office, people were hopeful, 34% thought the economy was good. here is the low water mark. july of 2022, for the economy under biden and he leaves office, 25% say the economy is excellent. you could see here, 73% now. off the worst day but not as well when he came into office and the economy was still depressed. looking at the next slide, 36%, that is his economic approval rating as he leaves office. we go to the area where we talk about the economic outlook which has improved quite a bit. 34% was in august.

46% now. going down, who is going to -- the economy will stay the same. 29 to 16. and then will it get worse. 33%, we'll talk about that. why? what happened here. biden economic approval, what happened is the change in party views on the economy. democrats, they got much more pessimistic and independents got more optimistic and look at republicans here, 81% now think the economy will get better in the next 12 months. 41% in 2016. to 51%. that is a personal situation. so that compares with 2016 when donald trump took office. 41% thought the economy would get better and now it is 51. and now an increase in those who think it will get worse. we'll see if the policy has that optimism. you could see the independents tied with the republicans on

that. so the democrats got more pessimistic. >> and we have more data points about the shifting consumer outlook. goldman sachs sees improved consumer health across all income cohorts driven by strong sentiment and that sets us you will weapon for next year but there are still risks like the trump 2.0 tariffs. here to talk about opportunities and in apparel and accessories, brook roach is an analyst at goldman. it is great to see you. first of all, what are you picking up on the atmosphere and where in the landscape does that make you feel most bullish. >> thank you very much for having us today. it is great to be with you. we are optimistic into next year. our consumer research group has a proprietary consumer cash flow model which has the different economists with wages and health care and expenditures costs and our research suggests that there is an improving consumer outlook

into next year with discretionary cash growth of 5.2%, better than 4% on a savings adjusted basis into 2025. so what does that mean? we have a more optimistic outlook for the growth for the consumer and for investing behind apparel and accessory stocks into next year. >> some are familiar, but some are on stur, but burlington, but you also like american sports tapestry and shark ninja. why do those pop up? >> one of the things that we've seen throughout 2024 but a theme we expect to continue into 2025 is that the consumer is very choiceful and they're seeking value. what does it mean when their choiceful? they're looking for something new and exciting and innovative to buy. they don't want to buy the same things they have in their closet or at home and we've seen many of the best performing companies this year whether that is sports

or snark ninja, they have provided innovation to the consumer and we expect this to be a more important theme as we move into next year with increased bifurcation between winners and loser. >> so when we talk about the bifurcation and some the losers, kohl's has had a tough year, the ceo apologized for that. and figs, canada goose, are those some that you just mentioned? >> i think in many cases the products that these companies are offering has not resonated with consumers to the same extent we're seeing with newness that have seen stock performance in year-to-date. we've seen some challenges with weather which has weighed on some of the cold weather goods sales in the fall and holiday season. but we think in many cases it is a function of what does the product that you're offering, how new innovative is it, and is

it at the right price point and in many cases that value proposition is misaligned such that you're not seeing the same rates of historical growth and seeing some profit pressure on the stocks that we're more cautious on. >> i wanted to mention a couple of names that you think could be exposed to tariffs and one of them, you've already talked about in a positive way which is actually shark ninja. so the other two, one is yeti, which is not one that i think of as a source from china. but the other is lu lu's fashion holdings. is it wait to see. >> what investors are looking for is sourcing of diversification. we've seen shark ninja outline a clear path for them to diversify sources away from china into other area where's they're not stepping away but diversifying their sources for u.s. and that is provided a little bit more comfort in investing behind this innovative growth brand that has

a lot of potential for international expansion as well as new category diversification within the u.s. consumer landscape. >> got it. >> and so tariff is a little bit more constrains for shark ninja verses earths on our tariff meter that we're focused on. >> i like it. >> we'll leave it there but i like the tariff meter. we'll talk about that more next time. that is it for the show today. tyler is getting ready for "power lunch." i'm see you and him on the other side of this quick break. (vo) whether your phone's broken or old, we've got you. with verizon, trade in any phone, any condition. it's your last chance to get iphone 16 pro with apple intelligence. get four, on us. on any unlimited plan. only on verizon.

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