lng. >> we will see how hawkish we come out today but we think there is an opportunity going into the year. >> joe. >> eis. that is israel 37% technology cyber attack check point software. the exchange is now. thank you very much. welcome to the exchange. we are in the final countdown to the fed. a cut is expected but what chair powell signals about january, that's what investors will be watching for. getting that messaging right will be difficult, says one of our guests. we will get you set up for what is going to be a consequential press conference. the last time nvidia dropped 10% it rebounded nearly 40% to record highs. is today another chapter of that

or is it just normal volatility? we will have more. by tim seymour says it is back to the future for the mag seven. he is here with what he means by that and how he is trading. let's start with the markets. let's get the set up. >> a multi-decade losing streak might be snapped and the dow jones industrial average if the gains can hold. we are up about 160 some points at 43,611. it is important because of the last couple of days, traders have been looking for that 50 day moving average as a possible support area. that number is just around 43,500. that is the level you want to watch. you get the idea. if it can hold above there, maybe we can find some support for the next move higher. that is the level to watch.

the s&p 500 is at 6061. remember, 6099 is the record high. nasdaq up about the same amount percentagewise. we are keeping a close eye on certain parts of the market with regard to consumer stocks. general mills is one of them. general mills is down about 3.5% on what has been viewed as a generally good earnings report but they cut the full year forecast for the coming 2025 year. there were some headwinds with regard to inflation, consumer spending habits. general mills is down on the full-year profit cut. i mentioned before, some of the moves in technology. kelly talked about this nvidia trade. over the last week since broad, and announce their earnings report they are up 26%. nvidia shares are down 2.5%.

if you look at it on a year-to date basis there is a bit of a catch-up happening. nvidia has been the a.i. darling out there. the gap has narrowed significantly with regard to performance from broad calm and nvidia. it is something to keep an eye on only because we talk about the idea that we have breached that trillion dollar mark. could it be the next nvidia? it may not be but if it rhymes a little bit it could have more gains ahead. i will send these back to you. >> a little bit of a different story for them this time around extract less than 60 minutes until the next move on interest rates. let's see what to expect and what to look for. some of the chatter i am getting is people who are worried the long and on rates is about to move higher again. over to you. >> it is definitely a concern. the fed announced -- will

likely announce its third rate cut in about an hour. it's expected the point markets toward a slower pace of rate cuts next year amid uncertainty of fiscal policy from the incoming trump administration and the outlook for inflation. the fed chair powell and the chair are likely to say that it is still lower toward an unknowable thing called the neutral rate. the recalibration process of bringing it down some more in line with inflation will probably be over. future moves will be more dependent on incoming data. perhaps a higher neutral rate. the futures markets have had a major rethink since the days of sub temper when it looked like they were able to hang the inflation line. they now trade with implied yield almost a percentage point higher implying just two my

cuts next year. the keys for the outlook will be the fed chair powell saying they remain on the way to neutral, but just headed there more cautiously. only a modest tweak to the rate cut forecast and estimated neutral rate. they do not want equal cited risks. also be on the lookout for possible dissent. i could think of two, maybe three depending how they frame the outlook. >> as many have pointed out, this is the last meeting before they rescind their voting power. they may want to leave their stamp. this almost feels like the kind of meeting you would not even want to have a press conference. is there more danger having to talk too much about the kind of decision point the fed is that versus just saying, here is the decision. let's see where we are in six weeks. >> not to make light of this but you sort of underestimate fed chair powell's ability to

answer questions without saying anything. he has the perfect ability to respond to questions and not give up her than he wants to give up in terms of the outlook. we will see. i think he needs to see those inflation numbers come down to give him the flexibility to cut if he wants to. he has to have clear picture what is going to happen to fiscal policy. you could make a list on either side of the growth outlook, the inflation outlook, the deficit impacts. things are going to change and it will have an impact on fiscal policy. one question is whether or not they learned a lesson from last time there was a big change in the pandemic when both president trump and president biden stepped forward with big spending packages that many people think were part of the inflation problem. how and when should the fed respond? that's a big question they will grapple with next year. >> we will see you top of the hour with their decision. while a quarter-point cut

is pretty much baked in for today, it's with the fed does next which is up for debate. how it will impact inflation data and potential tariffs coming from the new in flint -- administration. let's talk with stephen, michael, and kathy. the way you are sitting we have the most hawkish, most dovish, and down the line. kick us off with why you think there will be fewer cuts next year. >> fewer cuts than what the federal reserve said in september. they are releasing a summary of economic projections. you have to remember the forecast was 2% growth for this year. looks like that is the forecast for the full year. 2% for the next two years and the fed rate going down to 3.4 and 2.9 all the way down to what they say is the long-term average. there's reason to think it is

possible, but markets are priced in. a less progressive rate cutting cycle. the fed's negotiations. we will probably come around closer to the market view. >> if you were to dial it back you would say we have strong? are we overheating? >> we are not overheating. the inflation data has not been as good as forecast. i would bear in mind the early part of the year has seen seasonality. we are just ahead of that, but we are still at the point where 4 1/2% is still well above the inflation rate, well above long- term neutral. they will be in this environment where they are second-guessed about how fast they go when the economy continues to grow. >> let's get the flipside from michael. can you hear me okay? >> shirt.

>> if you think you can hear me okay, my question because you are one of the few people on the street that thinks the fed will do more cuts than is priced in right now next year. why? >> it is interesting. i think steve made a great point. you talk about the implied terminal rate. it was 290 in september. it is really unusual to be this early in any seen cycle and have a massive gap for the market says you think neutral is 290 or maybe 3%. we think we know better. we will price it 80 something basis points higher. i suspect the fed will chip away at that. it will move a little bit closer but in time over the next 3 to 6 months we think the fed will signal that it's not going to finish quite as quickly as the market believes. we still think the market has two little cuts baked in for next year and also for 2026. >> kathy, you are kind of in line with consensus. just people i hear from are

concerned that it will get disorderly again and the risks are to rates going to the upside. i'm curious how you fall in that. >> i have some faith for the views that the fed will continue to cut rates next year, but that is certainly at a slower pace. right now we have penciled in 75 basis points. i think the risks that they do less and the risk for interest rates are on the higher side. it is the things we don't know. what policy changes do we get on tariffs and trade and immigration. even regulation and some degree. if we get big changes on policy and that affects inflation and it starts running higher or even increases, the fed will pull back and do less. that is really why it is a difficult meeting. it's a pivotal meeting for powell and

the fed but it is difficult because there are so many unknowns. >> i could paint a scenario in which things look more dovish. you rolling to the new year. we have the comps on inflation. you get trump in office that will be increasing the money supply. tell us how we will get meaningful inflation. potentially a break on the economy. there may be a break on the spinning portion. i can add this all up even to below trend growth if you don't get the benefit from the business cycle kicking in. >> a variety of things go wrong. the uncertainty over the 2025 outlook. it will be interesting to see what the federal reserve says where they go with the 2.0% growth forecast for next year. the bottom line for us is that we've had a lot of things go

wrong in the economy. construction, trade, manufacturing. they have not kicked into full gear. we've seen a rise in small business confidence and consumer expectations. i don't think it drives the economy higher but the federal reserve is doing what it can to protect the economy. it has always been the yield curve steepening environment when the reserve is going easy on inflation and it will eventually move in that direction. >> you have an interesting take on how we got here for those trying to figure out how much longer this can keep going. you think we had a stealth recession in 2022. the market bottomed. walk us through the implications. >> we had a bear market in 2020 which was an external shock with all the monetary tightening gave us a lousy economy. in 2023 by many measures at the low .1 .3% year-to-year growth. the bulk of industries contracting profits.

thanks tightening standards for over two full years. then we have some slack in the labor market. in many ways we could have an incipient recovery. >> meaning we are already a couple of years into a. >> it is not meaningful to think about this being so long in the tooth we can't have several more years of growth. it's very possible if there are no big shocks from policy including monetary policy for the economy to spend the next few years growing. i think the stock market reflects that. it is very possible for us to go through the next several years doing nothing but growing. >> michael, what would you add >> >> the problem is that shock seems nice -- likely. donald trump wants to make changes. can trump do it via tariffs? if you think about the impact on growth it is very negative. from our perspective the chance of recession has gone up.

not necessarily a base case but it has gone up a fair bit. when i think about the outcomes for 2025, decision tree has a lot of branches. it is tough to sort through which is more versus less likely. i agree if there is status quo growth is probably likely but he wants to disrupt and make things move around whether it is via tariffs are a very large reduction in taxes i think disruptions will be the norm and not the outlier.'s >> kathy, we will give you a final word and what will you be listening for and maybe watching for in the statement? >> i think chairman powell will indicate they are ready to take a pause or skip a couple meetings, but there is a certainty, the current inflation . are we seeing a stalling out or will die continue to move lower. that is even aside from the

policy changes. even more importantly these respective policy changes has to give the fed a little bit of a pause. we don't know exactly how it will play out the it could have significant impact on inflation and growth so the fed will have to react. i think he will play it cautious . maybe they still have an easing bias but they may be ready to pause in early 2025. >> thank you all for the time today. speaking of dc, the fed decision is not the only thing happening in washington. congress is racing to avoid a government shutdown and keep the lights on through march. emily has the latest. >> reporter: there is a 1500 page bill. there's hundreds of

billions of spending with the payments to farmers and a pay raise for members of congress. they are frustrated that all of these provisions are crammed into a bill rather than getting there on separate votes. congressman ralph norman said it is exactly what voters said they don't want to see. >> first of all very disappointed. we are doing the same thing the voters on november 5 said we should not do. they voted for accountability and change and we are doing the budgeting process with 1400 pages we have not read. >> lawmakers are not the only ones that upset. elon musk to twitter to say the bill should not pass. vivek ramaswamy also called it an early test of the commitment to cutting spending. he said the package is full of excessive spending, special

interest giveaways and porkbarrel politics. he said if congress wants to get serious about government efficiency they should vote no. it's not clear exactly when lawmakers will vote the democrats will need to help republicans avoid us shutdown. once it clears the house if the senate has to deal with it we could be right up against the deadline. >> remind me, what is the deadline and what happens if it is voted down? >> reporter: the deadline is the very end of the day on friday. maybe even saturday at midnight. if the house is not able to pass it they will have concerns about what to do. we say that we are expecting that this looks a lot like the past ones where you have a number of republicans who are opposed but a number of democrats coming in to give them the votes they need to move it forward. i think the big question has been the timing. the house initially had rule that you needed 72 hours from

the time the text was put out until you had a vote but it seems at this point speaker mike johnson is doing away with the role to try to give the senate enough time to move forward. that could anger some republicans and that could play a role next year when johnson will once again have to run for speaker and try to navigate through a very busy and complicated congress with a very narrow margin. >> much more external pressure than he might've faced before. thank you. we will see what happens. coming up, nvidia rebounding today but still lower over the past week while broad calm is up over 30%. today marks 100 days since stress is, starbucks shop the corporate world. shares with search basically flat since then. chipotle is now up 18%. so what is ahead for the new

year? that is ahead on the exchange. 's. 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.

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analyst. it is great to have you. are you in the everybody can win is this invidious moment. >> as we look at nvidia and broad calm we like both. evaluation wise they are about the same. everybody has nvidia. they are keen on the a.i. side. almost $100 billion annually in data center. broad calm is just starting to put up massive numbers. they have a huge one coming up over the next few years. this is heading into earnings. we think that is probably left with much last left on nvidia. >> a lot of people said, i had no idea. it will take a little

while to penetrate the consciousness. what about nvidia? >> in the last few weeks people were getting excited. a little bit of the focus. that said, the leader on the a.i. side by far. that is a market that is growing this year. a massive market to dominate that. i think it's a little bit of a pause. >> in the case of nvidia do you think there is a shift going in the a.i. world. you know more about the latest

going on than i do but is there a pivot from this massive rush to build up these huge data centers and huge model pretraining to time test and all of that. does that actually lesser favor acquire nvidia. >> it can be dynamically shifted . can allocate to where they want for training during the night however they want it. you will see inflation starting to grow. that is why there's an opportunity. >> let me ask you about tesla shares. you made about a week ago to outperform. i was struck by this partnership

of news this morning. i wonder if we will see more traditional automakers. how is tesla going to compete? when do you expect that compact car to be coming? >> we expect some announcement around there in 2025. they have the scale and profitability and balance sheet. with that in subsidies for the tax credits, this legacy they are struggling a bit because they either don't have the scale or there's a lot of competition in china. now 60 to 70% of the china market. they will probably grow 85% over the next few years because the domestic channel market is

being taken over. the rest of the world, we definitely have massive competition for share. our colleagues in japan actually call those, but basically they are trying to get scale to be more comfortable. >> 515 is your price market for tesla which has doubled since the election. speaking of tech, alphabet is up 16% flirting with its best month in nearly a decade. i wonder if we can thank gemini for that. apple is hitting an all-time high tracking for a fifth straight weekly gain of 2+ %. apple is the most overbought right now is a relative strength of 93. anything over 70 is considered overbought. we will have more on the moves and big tech ahead.

welcome back to the exchange. tyler mathisen with your news update. the supreme court said it will

take up the dispute with planned parenthood and south carolina. south carolina trying to keep the healthcare provider from receiving federal funds from the medicaid program because it provides abortion. the state currently bans all abortion after six weeks. the u.s. government wayne to -- weighing whether to ban a popular internet router. they are investigating whether tp link whose devices have been linked to cyberattacks poses a national security risk. it has about two thirds of the u.s. market for routers for homes and small businesses. it's also the top listed twice on amazon and powers internet communications for the pentagon among other federal agencies. kfc is introducing a restaurant focused on tenders and sauces. it is aptly named saucy because it features 11 different dipping options. it opens on friday. the concept comes as kfc struggles to compete with other chicken focused restaurants

including wing stocked -- wingstop. >> i thought they said they got the sauces and the dips. >> i am a big dip. coming up, we are 100 days into brian nichols tenure as starbucks ceo. he has paused price hikes, cut charges for nondairy milk. what's next? we will dig into that with starbucks on pace to post its worst month since may 2023. emily wilkins mentioned that elon musk and vivek ramaswamy have expressed concern over the continuing resolution to keep the government running. elon musk just posted on x, any member of the house that votes on the spending bill deserves to be voted out. the exchange is back rhtig after this.

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he faces union strikes, slowing for traffic. they suspended guidance citing the ceo transition and current state of the business. shares are down about 6%. there are questions whether he could have the same turnaround as chipotle. is starbucks fixable? >> i'm not sure who's trying to get the most done between donald trump and brian niccol but it is close. i think suspending the guidance gives him breathing room and flexibility to execute what he thinks are the right strategies. there are some headwinds. coffee prices are up 75% over

the last 12 months and have risen quite sharply which adds pressure for pricing at a time where he's trying to reduce prices and remove up charges for airy alternatives. he has some headwinds but has also accomplished a lot. >> it's interesting for me to watch as the potential pieces move around. should he divest the china business? i think i was reading that india might be on the table as well. does he make it a u.s. centric name? i don't know if chipotle has international locations. how big are the potential moves? >> china is a difficult one. if you divest you are selling at a point where profitability is at its low point. you also have a ton of competition. they just hired achieve growth officer tony yang in the last week or two. they seem focused on growing

the business aggressively. we will see, but he has made a few management changes. michael conway who is a senior executive, trying to make a lot of operational changes in the stores. time will tell. >> how big of a deal is the unionization push? >> it has been a challenge. this is a lot of what led to a brand push back a year ago was challenging relationships with the unions. it is a really difficult thing to navigate. howard schultz tried to navigate it before, but it's one of the only restaurant companies. there are a lot of franchise restaurant chains out there. it makes it difficult for unions to play a big role in the relationship because you are dealing with franchisees. starbucks operates business primarily so they have to deal with the unions. >> i like your point.

in order to get to the scale that would excite shareholders, for them to grow units 4% over the next five years with positive traffic, the u.s. business will have to be 70 to 75% of mcdonald's eyes. has it topped out >> >> i think it is important to look at the overall coffee drinking space in the u.s. starbucks has about 75 million customers. they have about 40% of the human -- u.s. consumers. what they have done is they have done a really good job of bringing the customers into the loyalty program. 34, 35 million our loyalty customers. the frequency on that is higher. it is 180, 200% of normal starbucks consumer. they need to take that 75 million customers and bring it to 85, 90, 100 million.

we will see if he can do that. >> what would be your parting thoughts if you are sitting across the table from him. what what it take for the shares to have a 20+ % return kind of year? >> i think the company has been very focused on developing in the u.s. it needs to shift the focus on putting capital back into the operational performance of the stores that it has. if it does so it will improve the customer satisfaction. the shares will get a healthy multiple in the scenario. >> i love that he planned to get 200,000 sharpie markers as part of the effort to bring the charm back. for dutch brose, a lot of people ask us about that. do you cover that? >> they are very large competitors. they are growing stores extremely quickly. they have a different model. a smaller footprint. more cold focused and caffeine

focus. i think that a lot of these boxes are opening is a challenge to starbucks. look at the state of texas where there's around 1300, 1400 starbucks. there's about 400 of the smaller coffee chains hat have open. it's a lot of competition. >> i went for a hot chocolate at starbucks which i did not like. and i had this pastry that was delicious. i see the potential but i also see the struggle. they have to be everything to everybody at a time when there's all these rivals. >> it might be more exciting to go try the nuggets down in the south. >> road trip. thank you. coming up, shares of archer aviation are hitting a 52-week high. they upped the price target

after an announcement that they are developing hybrid vertical takeoff and landing aircraft for the military. the capital raise, the ceo said last week will bring their liquidity to $1 billion. a continuing the impressive recent run. we will be right back. that's right james, it isn't. car, where are we going? we're here. (♪♪) surprise!!! the future isn't scary. not investing in it is. car, were you in on this? nothing gets by you james. 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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some of tech biggest names are starting to look and behave like meme stocks. noting the rolling five day option volume is the highest it stwibeen since late july. ll hiory repeat itself? we will discuss that next. plus four lines for $25 bucks. what a deal. ya'll giving it away too fast t-mobile, slow down.

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welcome back. it's not just the share prices of tech lineman lightly. there's been an uptick in options activity and kate is telling us about it. >> we started calling this meme stocks because of the recent volatility. it has been trading like a mega cap version of the meme stock.

alphabet up 14% in two weeks which is really rare with a multi-trillion dollar name. we thought maybe this was the elon musk effect. he was tweeting about it and maybe this was driving the retail. after looking under the hood it does appear to be bullish options activity driving the biggest gains. if you look at equity flows, the good old-fashioned buying and selling. it did not pick up that much as the stock was marching higher. totally different when you look at options. this highlights the massive surge in call options to buy the stock at a higher price. jeff kilburn also pointing out a so-called whale buying a bulk of alphabet calls that expire on friday. they point out it has been net bullish positioning. mega cap tech names have been

making up the bulk of it. tesla alone makes up roughly 30% of all options on the russell. the top 10 or so make up roughly 70%. there's a worry about concentration risk. if they are in the same position they will potentially be in the same sinking boat if something backfires. >> thank you. we will pick it up there. my next guest, does he think they are meme stocks? he says the mag seven could continue to outperform. thank you and welcome. >> they are not meme stocks. sorry. >> let's take some of the superlative. apple is up five weeks in a row. we have not seen that in 15 years. there are some eye-catching things going on. >> there are the ones that outperformed the first half like nvidia and microsoft. apple has been doing this without the a.i. . it's about the core business

which sets it up nicely. we could have had this conversation a year ago and said at 36% if you include broad calm or 34 and change without it. you would not see this concentration at the top of the s&p ever again. as we go into 25 i think the dynamics are equal weighted which are looking so strong up until thanksgiving and have underperformed pretty massively. >> why is that? do we ever know why? >> i think it is a combination of the flow and where we see the year-end. there have been countless drivers around google and catalyst drivers around a handful of other names. even amazon, third-quarter numbers were and inflection and profitability. there was a lag and an opportunity and all the usual secular dynamics. >> a lot of people would say, now that the concentration being what it is, outperformance being what it has been next year will be

different. i think it is hard to take that argument more seriously because we have heard it for about 10 or 15 years. at some point even beneath the surface there is something happening. mike here comes broadcom. what is the dynamic that you want exposure to pick >> you have to think about this as an evaluation perspective. you have to understand that those concentrations we just talked about, these are companies even outside of the higher pe names and even nvidi , the bottom line is the concentration of the earnings profile of these companies is also really important. if you look at these companies on ev to sales basis they are expensive. if you look at them on ev ebitda, a lower portion of the is stocks that are trading at the upper end of the range, the profitability, the year of efficiencies, the gross margin profile. >> alphabet was crazy cheap

until a couple of years ago. they are trading at a higher multiple than nvidia but call it around 40 times. the reason to stick with them, you think this is where the earnings growth is? we know the rest of the market is contributing more than a year ago. is it a case where we have rising growth in the big tech stocks and among the rest of the market? >> to dovetail what kate was talking about, i think you can sell upside. selling covered cost especially in google, broadcom, the ones that have rallied massively. i think it is a really opportune time to do that. if you look at the mega cap in the context of the uncertainty around where policy could go, where interest rates could go. there have been a couple of big reports saying where it could go. that defensive nature, i still think a lot of these names could be funding sources for the broadening of the market. i do think you have really

difficult comps for the group and things to be worried about. i do not think it will be off to the races. it's hard to believe we will have the same off to the races but back to apple. at 27 times forward 26 without a i priced in. i think it is a gross margin story with some of that sales dynamic. >> when you think about the narrative broadly, i don't know if this can continue but when you look at the company name by name you see plenty of reasons to get excited. >> the easiest ticker shock is about how they have lagged for the last six months. they have underperformed the s p but the stats are that the triple or nasdaq have outperformed the s&p by 5% since thanksgiving. you want the market to go higher, these stocks are taking the market higher. >> as always tim seymour. we are less than 10 minutes

away from the fed rate decision. power lunch picks up coverage right after the break. ♪ ♪ ♪ ♪ whether your phone's broken or old, we've got you. with verizon, anyone can trade in any phone, any condition. it's your last chance to get iphone 16 pro with apple intelligence, on us. and, ipad and apple watch series 10. all three on us. that's up to $2,000 in value. only on verizon.

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away from the fed decision on interest rates. while we get ready for that, why don't we get a quick check on the markets. as you can see the industrial is moving the other way today. it has been a long stretch of negative days, today up 165, the s&p about 1/5 of a %, the nasdaq a quarter of a % and russell up about 6/10 of a %. let's get to the panel joining us as often they do jp kelly, stephanie, and jim. let's go around the horn. jim, why don't you kick us off with your thoughts on what the fed is likely to do and say. >> i think it is a mark to market exercise. given where the fed was back in september when they released the summary of economic rejections. tenure is up 80 basis points. two year is up 70 basis points.

more on the dollar index, i think the fed needs to adjust to where the markets are. the question for the fed is how quickly can they do that? they came out with the forecast in september. i think they need to adjust upward. i think it will probably be minor given the way the fed typically operates. it may disappoint the market. >> the forecast will be revised upward? am i hearing you correctly? >> that is correct. i think they need to take a 25 basis points higher across the board. >> stephanie, your thoughts? >> i think that is fair. what we will focus on is the long run. that will probably come up by about 25 basis points. i think the market is anticipating that. this will be a meeting that comes and goes without too much excitement. we will wonder if powell will answer anything about fiscal policy, probably not. and how do they change projections for next year. still unlikely to be four cuts

and the projections will look something like three. in the actual base case we are calling for something like two. the market is looking for something a little more hawkish so there is potential for a dovish surprise. >> how about you? >> some are all about the words and others are about the numbers. i think there will be significant change. they will have to upgrade the economic growth across the board, cut the unemployment over the next few years. increase the inflation. i think that they will make some significant changes to the forecast for the rate cut. the rate cut today, yes. next year you are looking for four, 2026 looking for two. i think they could reduce that to about three rate cuts. i think they want to indicate that we won't have that much going forward. >> thinking back to a year ago

where people were saying we would get six rate cuts. we will get have that many. if you say we will get half that many again come down, david, to where you are with a couple next year and a couple in 2026. it's almost that time the federal reserve cutting interest rates by a quarter-point to a new level of 4.5, 425%. it is still considering the extent and timing of additional adjustments. some economic projections say that they raise the average expected rate to 3. 9%. that is an additional half of a point then what had previously been forecast or