Stocks Hit Record High on Israel Cease-Fire Deal | Bloomberg: The Close 11/26/2024

♪ ANNOUNCER: THE COUNTDOWN IS ON. EVERYTHING YOU NEED TO GET THE EDGE AT THE END OF THE MARKET DAY. THIS IS "THE CLOSE." ♪ >> TRUMP'S, TARIFFS AND SOCIAL MEDIA. FOR WALL STREET, IT IS DEJA VU ALL OVER AGAIN. LIFE FROM HEADQUARTERS IN NEW YORK, I AM ROMAINE BOSTICK. ALIX: AND I AM ALIX STEEL. FEELS LIKE 2016. WHAT IS DIFFERENT THAN 2016 THAT CUTS, BUT ALSO WHAT WE ARE SEEING IN THE MARKET. THE S&P IS UP, CURRENTLY SITTING AT A RECORD HIGH, 52 RECORD HIGHS SO FAR THIS YEAR. BUT FROM WHAT ROMAINE WAS TALKING ABOUT

IN TERMS OF THE TRUMPY SECT, YOU ARE SEEING HIGHER YIELDS AND THE STRONGER DOLLAR. ROMAINE: FOR THE RECORD, IT IS DEFINITELY 2024, BUT TO HER POINT, A TASTE OF VOLATILITY THAT WAS A HALLMARK OF THE TRUMP ADMINISTRATION BACK IN 20. JUST HOURS AGO, THE PRESIDENT-ELECT PUMPING OUT A POST BOEING TO IMPOSED 25% TARIFFS ON MEXICO AND CANADA. GOLD AND SILVER WANING. AUTOMAKERS AMONG THE HARDEST HIT. FORD SLIPPING AS MUCH AS 3%. GM HAVING ITS WORTH TODAY SINCE 2022. >> THE MARKET IS KIND OF A BIT ON TOP OF THIS. YOU LOOK AT THE MOTILITY AND

WHERE THE PRICING OF RISK PREMIUMS HAVE BEEN, IT HAS BEEN IN CHINA IMPOSED EQUITIES AND IT CURRENCIES RETAIL. ROMAINE: STOCKS NOT DOING MUCH BETTER, THE THREAT OF INCREASED TARIFFS AT THE HEAD, DEPRESSED EARNINGS RIGHT NOW, YOU SEE RETAIL STOCKS DROPPING. FOR MORE COMMENTARY ON THE TARIFF ISSUE TONIGHT FROM EXECUTIVES AT URBAN OUTFITTERS, NORDSTROM, AND GUESS, THEY WILL EACH REPORT EARNINGS AFTER THE BILL. THIS BELIES THE TINGE OF OPTIMISM STILL COURSING THROUGH THE MARKETS. THE S&P RALLYING FOR A SEVENTH DAY THROUGH YET ANOTHER POTENTIAL RECORD HIGH AS ECONOMIC DATA SHOWS MORE OPTIMISM IN THE ECONOMY. THE

CONFERENCE BOARD GAUGE OF CONSUMER CONFIDENCE GIFTED TO THE HIGHEST LEVEL IN MORE THAN A YEAR. ARE YOU CONFIDENT? ALEX: I AM TBD ON THAT. [LAUGHTER] FUTURE EXPECTATIONS ARE ALSO AROUND A THREE MONTH HIGH. IT'S AN INTERESTING WAY OF LOOKING AT TARIFFS, IT IS A KEY, IDENTIFIED MISSIONS OF TARIFFS IN S&P 500 TRANSCRIPTS. YOU CAN SEE THE JUMP THAT WE HAVE SEEN SINCE NOVEMBER, WE ARE NOW AT 80 CALLS ON TRANSCRIPTS ABOUT TARIFFS. IT RAISES THE QUESTION, WHAT IMPACT WILL TARIFFS HAVE ON COMPANIES AND THEIR EARNINGS? DOCTOR SAYS IF YOU LOOK AT POTENTIAL TARIFFS -- DEUTSCHE

BANK SAYS PETITIONER: IS A MYSTICAL COULD LEAD CORE PCE INFLATION ABOUT 3% NEXT YEAR AND IT HAS RAMIFICATIONS ON COMPANIES AND VALIANT, CONSUMER CONFIDENCE, AND ALSO ON THE FED. ROMAINE: ALL RIGHT, LET'S KICK THINGS OFF. GREGORY PETERS JOINS US, CO-CIO AT PGIM FIXED INCOME. GREG, CAN INVESTORS TAKE THAT PLAYBOOK FROM THE 2015 TO 2020 ERA AND APPLY IT TO WHATEVER THAT THREAD 20 2029 ZERO IN PRINTER LOOK LIKE? GREG: I DON'T THINK YOU CAN COMPLETELY BECAUSE COMMISSIONS ARE VERY DIFFERENT TODAY. IF YOU LOOK AT WHERE WE ARE ECONOMICALLY, WE ARE AT A VERY STRONG PLACE.

INFLATION IS MUCH HIGHER. MARKETS ARE IN A DIFFERENT PLANE . IT IS SOMEWHAT INACCURATE TO USE WHAT HAPPENED IN 2016 TO TODAY, BUT ALAS, THAT IS WHAT YOU'RE SEEING. WHAT YOU'RE SEEING CURRENTLY IS THAT INVESTORS ARE KIND OF DISMISSING THE NEGATIVITY AROUND TARIFFS, ANY OF THE NEGATIVITY AROUND IMMIGRATION, FOR EXAMPLE,, AND REALLY UPLIFTING AND BOLSTERING SOME OF THE MORE FAVORABLE POTENTIAL POLICIES SUCH AS TAX CUTS AND DE-REGULATION. ROMAINE: THERE HAS BEEN A NARRATIVE SINCE THE ELECTION THAT THE ADMINISTRATION, IT WILL BE RELATIVELY PRO-BUSINESS, RELATIVE TO WHAT WE SAW ANOTHER BIDEN ADMINISTRATION, AND THAT COULD CREATE

FAVORABLE CONDITIONS FOR M&A ACTIVITY OR NEW BUSINESS CREATION, ET CETERA. I AM WONDERING IF YOU SEE CONFLICT BETWEEN SOME OF THOSE PRO-BUSINESS POLICY OF THE MARKET IS COUNTING ON, AND THINGS LIKE TARIFFS AND OTHER PROPOSALS THAT HAVE THE POTENTIAL TO DETRACT FROM THE ECONOMY AND THE MARKETS? GREG: ABSOLUTELY, AND I GO BACK TO WHERE I STARTED, WHICH IS THAT INVESTORS ARE ONLY AMPLIFYING THE GOOD AND NOT REALLY FOCUSED ON THE POTENTIAL NEGATIVES. I DO THINK THE VOLATILITY, THE UNCERTAINTY, THE MORE IDIOSYNCRATIC NATURE OF THIS ADMINISTRATION COMING IN, IT IS IN OUR LIVES AND GENDER CONFIDENCE,

RIGHT, IF YOU GO BACK TO THE FIRST TERM, THERE WAS A LOT OF BOLT FROM THE BLUE THAT HIT WITH HER AT THE INDIVIDUAL CORPORATE LEVEL, OR JUST FROM AN OVERALL POLICY LEVEL. SO, THAT MAKES IT HARDER TO DO M&A, IT MAKES IT HARDER I THINK TO PUSH THE MARKETS THROUGH A MUCH HIGHER PLANE. BUT I THINK IT DOES SAY, ULTIMATELY, IS THAT VOLATILITY WILL REMAIN QUITE ELEVATED. ALIX: WHICH THEN BEGS THE QUESTION WHAT IT WINDS UP MEANING FOR THE FED. IN THE MINUTES TODAY IT SEEMS LIKE THEY COULD CUT MORE FOR THEY COULD PAUSE

DEPENDING ON WHAT THE DATA CALL FOR. WE ARE ALREADY LOOKING AT, WHAT, 20 BASIS POINTS WORTH OF CUTS IN THE NEXT FEW MEETINGS? WE ARE RE-RATED SO MUCH. WE WONDER IF THE HEADLINE IN VOLATILITY RISK CHANGES THAT MORE. GREG: I THINK MARKETS WERE WAY OFF SIDE, I THINK WE'RE IN A MUCH MORE STABLE AND THOUGHTFUL PLACE TODAY. BUT THE REALLY THINK ABOUT IT AT PAGE AND FIXED INCOME IS THAT WE WANT TO GET TO NEUTRAL. I KNOW THAT IS THE DEBATE IN CONCEPT, BUT THINK OF IT AS A RANGE FROM 4% TO 2.5%. IF YOU

THINK WHERE CENTRAL BANK POLICY RATES HAVE BEEN SET, THEY WERE SET IN A MUCH, MUCH HIGHER INFLATIONARY TYPE OF REGIME. WE ARE NOT IN THAT REGIME ANYMORE, SO I THINK WE GET TO 4%, THEN WE REVISIT. AND THAT IS LOWER THAN WHERE WE ARE TODAY. THAT'S THE REAL MESSAGE HERE. ALIX: I KNOW YOU ARE A FIXED INCOME GUY, WHERE DO YOU SEE THE MOST VOLATILITY? WHAT ASSET CLASS? AND HOW DO YOU MANAGE THAT? GREG: VOLATILITY HAS BEEN IN FIXED INCOME. SO I EXPECT IT TO CONTINUE. THE MOVES WE HAVE SEEN IN THE FRONT END, THE

2-YEAR, FOR EXAMPLE, EVEN THE 10 YEAR, HAVE BEEN NOTHING SHORT OF EXTRAORDINARY. WHAT IS NOTABLE HERE IS TYPICALLY WHAT YOU SEE, IS WHEN THE FED IN THIS CASE STARTS CUTTING RATES, VOLATILITY COMES DOWN. WE HAVE NOT SEEN IT THIS TIME. I DON'T KNOW IF IT'S A CANARY IN THE COAL MINE ARE NOT, BUT IT IS ABNORMAL THAT YOU HAVEN'T SEEN VOLATILITY TREND LOWER IN A MEANINGFUL WAY, IN SPITE OF THE FED EMBARKING ON A RATE CUTTING CYCLE. ROMAINE: HOW TIGHT ARE THE CORRELATIONS RIGHT NOW, GREG, WHEN WE LOOK AT THE MOVES OR THE LACK OF

MOVES IN THE TREASURY MARKET, OVERLAID WITH WHAT WE SEE IN EQUITIES AND EVEN IN THE ETHICS AND COMMODITY SPACE, ARE YOU STILL SEEING STRONG OR TRADITIONAL CORRELATIONS? GREG: NO, YOU ARE SEEING IT STRETCH AROUND. THAT IS ANOTHER POSITIVE ASPECTS HERE AROUND ACTIVE INVESTING. YOU SEE THE CORRELATIONS BREAKDOWN. YOU HAVE SEEN THEM MOVE, PARTICULARLY FROM THE GLOBAL BOND MARKET PERSPECTIVE, IF YOU THINK ABOUT WHAT HAPPENED IN THE BONE SPACE VERSUS TREASURIES. WE ARE MOST EXCITED -- IN THE BUNDS SPACE VERSUS TREASURIES. KIND OF THE WORST TYPE OF INVESTMENT ENVIRONMENT IS WHEN THERE IS A COALITION OF

ONE OF THE CROSS. THANKFULLY, WE ARE NOT IN THE TYPE OF ENVIRONMENT GOING FORWARD. SO I EXPECT THAT TO CONTINUE. I EXPECT THOSE COALITIONS TO BREAK AND LIGHTEN AND SWITCH, AND THAT IS THAT BIG INVESTMENT OPPORTUNITY FOR 2025. ROMAINE: AS PEOPLE LOOK TO THE 2025 OPPORTUNITIES, THEY ARE FOCUSED ON RISK, WE HAVE TOUCH AND A COUPLE OF THEM ALREADY, TARIFFS, IMMIGRATION, ET CETERA. I WANT TO GET YOUR THOUGHTS SPECIFICALLY ON THE FISCAL SITUATION, BASED ON SPECULATION ABOUT WHAT WE KNOW ABOUT THE POTENTIAL INCOMING TREASURY SECRETARY, AS WELL AS OTHER POLICIES THAT THE TERM ECONOMICS TEAM

HAVE BEEN ESPOUSING, -- THE TRUMP, ECONOMICS TEAM HAS BEEN ESPOUSING, DO YOU ANTICIPATE THEY WILL HAVE AN IMPACT ON RATES? GREG: I DO. ONE OF THE CONCERNS WE HAVE AT THE FIRM IS THE FISCAL SITUATION. YOU LOOK AT THE TAX CUTS BEING ROLLED FORWARD, AND SOME OTHER AGENDA ITEMS, YOU ARE NOT SEEING ANY CHANGE ON THE PHYSICAL SIDE. THERE ARE TALKS AROUND CUTTING SOME FISCAL EXPENSES, I REALLY, REALLY SMALL PORTION. SO I THINK FISCAL PROFLIGACY IS HERE TO STAY. AND THAT BOND MARKET WILL REACT. IF YOU LOOK AT INTEREST COSTS, 10 YEARS FORWARD, IT ALMOST

EQUATES TO 25% OF THE INCOME COMING IN. SO WE ARE DANGEROUSLY CLOSE TO THIS DEATH TRAP, DEATH SPIRAL. THE MARKETS WILL FOCUS ON IT. THE WORRY IS THAT YOU NEVER KNOW WHEN THE MARKET WILL REALLY, TRULY IN EARNEST START TO FOCUS ON IT, SO THAT IS THE PRINCIPAL CONCERN THAT I HAVE GOING FORWARD. ALIX: SEEMS LIKE YOU'RE TALKING ABOUT A LIZ TRUSS MOMENT, WHERE SOMETHING IS UNVEILED THE MARKETS DECIDE IT'S NOT SUSTAINABLE AND BOND YIELDS'S WHITE HIGHER AND CAUSES CHAOS. COULDN'T WE HAVE SEEN THIS 10 YEARS AGO? GREG: THAT'S THE THING, YOU DON'T KNOW UNTIL

YOU KNOW. I THINK YOU ARE -- WHAT IS HAPPENING IN THE U.K. IS A WARNING SHOT, SO TO SPEAK. YOU HAD SOMETHING A COUPLE OF WEEKS AGO. HE HAS SEEN IT IN FRANCE. SO THE SIGNS ARE THERE. SO THE SCARY PART IS THAT YOU REALLY DON'T KNOW UNTIL AFTER IT OCCURS. THERE IS A BREAKING POINT. THERE IS NO MAGICAL NUMBER, BUT AT SOME POINT THE MARKETS HAVE TO BELIEVE THAT THE FISCAL SITE IS UNDER CONTROL, OR THERE IS A PLANNED. AND WE HAVEN'T REALLY SEEN A PLAN. AND, IF YOU LOOK AT WHAT HAPPENED IN THE

U.K. AS AN EXAMPLE, IT HAS BEEN THE LACK OF PLAN THAT HAS REALLY KIND OF HURT THEM THE MOST. ALIX: DOES THAT MEAN YOU HAVE THE CONVICTION TO SHORT THE BACK AND,, IS THAT THE STRATEGY? GREG: WHAT I THINK IT MEANS IS THAT IF ALL IS EQUAL, THERE WILL BE PRESSURE ON YIELDS. YOU LOOK AT THE AMOUNT OF TREASURY SUPPLY,, THE SHIFTING BUYER BASE ABSORBING THE SUPPLY, YOU LOOK AT THE POLICIES ON THE TABLE, ALL ELSE EQUAL, THAT CREATES A STEEPER CURVE, ADDITIONAL RISK PREMIUM. SO THE PRESSURE WILL BE YIELDS HIGHER, NOT LOWER, JUST BASED

ON THE FISCAL SITUATION ALONE. ROMAINE: WHEN YOU SAY THAT THOUGH, I ASSUME YOU ARE REFERRING TO BENCHMARK YIELDS. WHAT IS THE DISPARITY WE COULD SEE BIRTH OF THE SHORT END OF THE CURVE, AROUND THE TWO YEAR AND LESS? GREG: THE CURVE HAS BEEN EXTREMELY FLAT AND INVERTED FOR QUITE SOME TIME. SO I COULD SEE THAT CONTINUE TO MOVE HIGHER, WHAT THAT MAGICAL NUMBER IS, I DON'T KNOW BECAUSE THAT GETS US BACK TO THE FED SIDE. I THINK THE FED IS EQUALLY WORRIED AROUND FOR GROWTH. TWO TARIFFS AS IT IS INFLATION. SO WE WILL SEE. EITHER

WAY, THE CURVE WILL BE STEEPER GOING FORWARD, NOT FLATTERED. WE ARE COMING OUT OF THIS EXTREMELY STRANGE ERA OF CURVE IN VERSION, AND MOVING BACK TO SOME SORT OF NORMALCY. ALIX: WE REALLY APPRECIATED, GREG PETERS, COZY AT ALL AT PIGEON FIXED INCOME. ROMAINE: I JUST LOVE EVERY TIME WE BRING UP A LIZ TRUSS. CAN WE LEAVE THIS WOMAN ALONE? [LAUGHTER] ALIX: SHE HAS A MOMENT NAMED AFTER HER NOW. ROMAINE: I GOT YOUR BACK, LIZ . ALIX: HERE WITH US ON SET IS BARNABY LYONS, GLOBAL HEAD OF BAIN CAPITAL GLOBAL HEAD OF SPECIAL SITUATIONS. WE TO

SEE YOU, THANK YOU FOR JOINING US. GREG PETERS WAS SAYING PREVIOUSLY THAT THE VOLATILITY IN THE MARKETS COULD POTENTIALLY HURT M&A AND IPO'S. THAT'S YOUR WORLD. WHAT DO YOU THINK? BARNABY: ABSOLUTELY, THERE IS A HIGHER LEVEL OF UNCERTAINTY. IT COULD DRIVE GROWTH, WHETHER IT IS DE-REGULATION FOR TAX CUTS, BUT THERE IS ALSO A LOT THAT THAT CONSTRAIN GROWTH, TARIFFS, IMMIGRATION CONTROLS AND, OF COURSE, GEOPOLITICS IS A WILDCARD. WHAT WE DO THAT BAIN CAPITAL SPECIAL CIDS IS PROVIDE SOLUTIONS IRRESPECTIVE OF THE MACRO ENVIRONMENT. STRUCTURED SOLUTIONS THAT OFFER AN ALTERNATIVE BETWEEN PRIVATE CREDIT AND PRIVATE EQUITY OFTEN

BRIDGING THE SPREADS THAT EXIST IN MOMENTS OF UNCERTAINTY SO FOR US, IT'S A GREAT TIME TO BE INVESTING. ALIX: SO DOES THE MACRO MAKE YOUR WORLD HARDER OR EASIER TO INVEST AND WHAT ARE THOSE OPPORTUNITIES RIGHT NOW? BARNABY: WE HAVE A STRATEGY THAT PURSUES BOTH STRUCTURAL OPPORTUNITIES THAT PERSIST THROUGH CYCLES, AND THOSE THAT ARE MORE MICRO-DRIVEN. THREE TYPES OF DEALS. THE FIRST IS CAPITAL SOLUTIONS, BESPOKE FINANCING FOR COMPANIES THAT FOR SOME REASON PRIVATE CREDIT OR PRIVATE EQUITY MAY BE THE WRONG SOLUTION. WE INVEST IN REAL ASSETS, PICK ON MOMENTS WHERE THERE IS CAPITAL SHORTFALLS AND

OCCASIONALLY WHERE MARKETS ARE DISLOCATED, WE INVEST IN DISTRESSED. THAT IS ABSOLUTELY THE MOST CYCLICAL. IT HASN'T BEEN ACTIVE SINCE 2020. CAPITAL SOLUTIONS IS STRUCTURAL, THERE IS A LOT OF COMPANIES SEEKING PARTNERSHIP IN A STRUCTURED FORM. SOME TAILWINDS WE ARE PURSUING IN AVIATION AND DIGITAL INFRASTRUCTURE THAT ARE MORE SYSTEMIC, AS WELL AS STRESS IN THE COMMERCIAL REAL ESTATE SECTORS THAT HAVE BEEN IMPACTED BY THE RATE ENVIRONMENT. ROMAINE: ON THE CAPITAL STRUCTURE SITE, WHEN YOU THINK THAT WHERE MARKETS THINK RATES ARE GOING, THE IDEA THAT WE WERE HEADED FOR BAD ECONOMIC CONDITIONS THAT DO NOT NECESSARILY MATERIALIZE

HERE IN THE U.S., DOES THAT MAKE THE BUSINESS MORE COMPETITIVE FOR YOU AS YOU MOVE INTO NEXT YEAR AND BEYOND? BARNABY: WE ARE INTERESTED IN OPPORTUNITIES THAT ARE SOMETIMES GIVEN BY CYCLICAL THEMES, AND SOMETIMES BY STRUCTURAL THEMES. AS WE SEE MARKETS START TO NORMALIZE IN THE YEARS AHEAD AND THE BUOYANCY WE ARE SEEING PARTICULARLY HERE IN THE U.S., SOME OF THOSE OPPORTUNITIES MAY GET SOLD BY THE PUBLIC MARKETS WHEREAS PREVIOUSLY THEY WOULD HAVE BEEN A SPECIAL SITUATION SOLUTION. BUT INCREASINGLY WE SEE LARGE-SCALE CORPORATE AS WELL AS ENTREPRENEUR-OWNED BUSINESSES, THEY SEE THE VALUE IN WHAT WE

DO. BASICALLY A PRIVATE EQUITY STYLE PARTNERSHIP ALONGSIDE STRUCTURE CAPITAL THAT DOESN'T HAVE THE SAME DILUTION AS SELLING THEIR BUSINESS. THAT IS STRUCTURAL, AND THAT IS HERE TO STAY. ROMAINE: ON THE DISTRESSED SIDE, WHERE IS THE OPPORTUNITY GOING TO BE PARTICULARLY IF ECONOMIC PROJECTIONS CONTINUE, WHICH IS BASICALLY CONTINUING WITH MODEST GROWTH,? BARNABY: BUT GROWTH FRANKLY THIS TRUST HAS BEEN LESS OF A FOCUS IN THE LAST THREE YEARS. COMPANIES RAISE A LOT OF CAPITAL DURING COVID. A LOT OF THAT CAPITAL WAS PRETTY FLEXIBLE CAPITAL, PRETTY LIMITED COVENANTS. COMPANIES HAVE BEEN MORE CASH POSITIVE. AS WE LOOK FORWARD,

WE EXPECT A RISE IN DEFAULT RATES AS WE THINK OF MATURITIES IN 2025 AND 2026 BUT NOT MATERIAL AS A 2008 OR 2009 OPPORTUNITY. ALIX: DO YOU FEEL COMPENSATED FOR THE RISK YOU ARE ABOUT TO GET? BARNABY: THE LAST TWO OR THREE YEARS, THE ENVIRONMENT IS ONE OF THE BEST ENVIRONMENTS WE HAVE SEEN IN MY CAREER. WE ARE ABLE TO ATTACH COMPANIES WITH BIG DISCOUNTS TO THEIR VALUE WITH BIG EQUITY QUESTIONS BEHIND THEM AND GET A LOT OF RETURNS. BECAUSE WE ARE BRINGING PARTNERSHIP, WE ALSO GET EQUITY UPSIDES. THAT BALANCE HAS HELPED US BE SUCCESSFUL

IN THE FUND RATE THAT YOU MENTIONED IN THE BEGINNING. ROMAINE: I KNOW YOU ARE FOCUSED IN THE U.S., BUT GIVEN YOUR BACKGROUND IN EUROPE, I AM CURIOUS AS TO WHETHER THERE IS A POTENTIAL FOR MORE CROSS-BORDER DEALS IN A WAY THAT WE DIDN'T NECESSARILY SEE OVER THE LAST FOUR YEARS PRIMARILY BECAUSE OF THE REGULATORY THREATS, NOT ONLY FROM THE U.S., BUT FROM THE E.U. DO YOU THINK THAT WILL EASE A LITTLE BIT NEXT YEAR? BARNABY: OUR FOCUS IS ACTUALLY GLOBAL, NOT U.S.-FOCUSED, IT IS THE U.S., EUROPE, AND ASIA AND A BIG PART OF OUR BUSINESS

IS FUNDING COMPANIES AS THEY GO CROSS-BORDER. OFTEN WHEN THEY GO TO A NEW MARKETS, THEY LOSE THEIR BANKING RELATIONSHIPS AND ACCESS TO THE CAPITAL MARKET IN A WAY THAT THEY HAVE AT HOME. ALSO, THEY ARE LOOKING FOR AN OPERATING PARTNER THAT UNDERSTANDS THE LOCAL JURISDICTION. WE HAVE A COUPLE OF EXAMPLES OF DEALS WITH BIG CONGLOMERATE IN KOREA, MAKING STRATEGIC INVESTMENTS HERE IN NORTH AMERICA, IN THE U.S. THEY WANT AN OPERATING PARTNER TO COME WITH THEM TO HELP NAVIGATE THE CULTURAL DIFFERENCES, THE OPERATING AND REGULATORY ENVIRONMENT HERE. WE HAVE DONE THIS IN FOOD, IN RENEWABLE ENERGY,

AND THEY REALLY VALUE SOMEONE WHO CAN OPERATE IN A STRUCTURED WAY WITHOUT LOSING CONTROL OF THE WRITING ON A GLOBAL BASIS. THAT IS A PRETTY STEADY FLOW FOR US AND RECEIVED INCREASING. ALIX: WITH THE POTENTIAL TOUGHEST THREAT ON CANADA AND MEXICO, WHAT DOES THAT MEAN FOR THAT BUSINESS YOU WERE JUST DESCRIBING? BARNABY: WE ARE SPENDING A LOT OF TIME TRYING TO UNDERSTAND THE SHIFTING SANDS ALONG WITH EVERYONE ELSE, AND THERE IS A LOT OF UNCERTAINTY, WHETHER IT IS 6%, THE NEXT DAY IS 10%. WE ARE SPENDING A LOT OF TIME ALSO TRYING TO UNDERSTAND HOW

THE VOLATILITY OF TARIFFS WILL PLAY OUT BECAUSE IT IS NOT, JUST WHAT THAT MIGHT TO CHINA BUT HOW IT AFFECTS THE OTHER MARKETS. THAT SAID, THERE WILL BE CLEAR WINNERS IN THE LONG RUN IN OUR VIEW. THE REDRAWING OF SUPPLY CHAINS TO MARKETS TO INDIA HAVE CREATED INTERESTING OPPORTUNITIES FOR US AS AND WE HAVE BEEN ACTIVE IN THOSE MARKETS. ROMAINE: GREAT CONVERSATION, THANK YOU FOR STOPPING BY, BARNABY LYONS IS GLOBAL HEAD OF BAIN CAPITAL'S SPECIAL SITUATIONS. WHEN WE COME BACK, A CLOSER LOOK AT THE INDIVIDUAL MOVERS IN U.S. EQUITY MARKET, AND THAT INCLUDES PINTEREST. WE

WILL SPEAK TO AN ANALYST ABOUT WHY HE SAYS NOW IS THE TIME TO BUY THOSE SHARES, COMING UP NEXT HERE ON "THE CLOSE," ON BLOOMBERG. ♪ ROMAINE: LET'S GET A VIEW FROM THE SELL SIDE. TOP CALLS, BIG MOVERS OFF THE BACK OF ANALYST RECOMMENDATIONS, STARTING WITH ZOOM COMMUNICATIONS! THE ONLINE MEETINGS PLATFORM DITCHING VIDEO FROM ITS NAME. EVERCORE ISI GIVING IT AN UPGRADE TO PERFORM, WITH A STREET HIGH PRICE TARGET OF $115, ON THE HEELS OF THE EARNINGS REPORT YESTERDAY THAT SHOWED ANOTHER VERY SOLID QUARTER FULL OF POSITIVE EXECUTION AND NEWER PRODUCT OFFERINGS. SHARES DOWN 6%.

NEXT IS CAPRI, UPGRADED TO BUY AT GUGGENHEIM. THE ANALYST CITING EARNINGS RECOVERY AT THE COMPANY WITH ITS VERSACE AND JIMMY BRANDS CONTINUE TO BE EFFECTIVE AND, WHILE ITS MICHAEL KORS LINE HAS DETERIORATED, THERE IS FOR LEADERSHIP COULD -- TO CHANGE IN LEADERSHIP COULD FIX. AND PINTEREST, A BUY RATING OF $38, THE ANALYST CITING MULTIPLE LEVERS OF MONETIZATION FROM THE WEI DU THIS A KEY FOR MONETIZING, TO EASE HER ENGAGEMENT. PINTEREST SHARES ARE UP ALMOST 2% TO 31.05 DOLLARS. THOSE ARE OUR TOP CALLS. WE WILL STICK WITH PINTEREST AND WITH THAT CALL. JOINING US NOW IS

JOHN BLACKLEDGE, RESEARCH ANALYST AT TD COWEN. GOING THROUGH THIS NOTE, JOHN, YOU SEEM PRETTY CONFIDENT THAT MANAGEMENT AND EXECUTIVES WILL FIND A WAY TO BETTER MONETIZE THE EXISTING USER BASE. HOW DO THEY DO THAT? JOHN: WHAT IS INTERESTING, AND WHAT WE SAW WHEN WE LEVERAGED OUR PROPRIETARY TD COWEN SURVEY DATA OF U.S. CONSUMERS, WHAT WE SAW WAS TIME SPENT IS IN 4Q IN THE U.S. OVER ALL, UP 50% WITH 18 TO 34 EUROS WHICH IS PINTEREST'S FASTEST GROWING COHORT. AT THE SAME TIME, PINS IS INCREASING ITS AD LOAD IN 10 AREAS OF THE FORM WHICH

IS, IN PART, DRIVING MONETIZATION. AND JUST GIVEN THAT PIN'S MAIN USE CASE IS FINDING PROJECTS TO SHOP FOR, WE THINK THAT ENGAGEMENT CAN GROUP WHILE PINTEREST INCREASES THEIR AD LOAD. IT ISN'T NECESSARILY INTUITIVE, RIGHT, WHEN THE PLATFORM INCREASES THE NUMBER OF ADS PEOPLE ARE SEEING, IT CAN HAVE A NEGATIVE IMPACT ON USER ENGAGEMENT, BUT GIVEN THE NATURE OF PINTEREST'S PLATFORM AND CORE USER BASE, OR SURVEY DATA SHOWS RISING ENGAGEMENT DESPITE THE HIGHER AD LOAD FOR AND AS A RESULT, OUTPUT HAS BEEN ACCELERATING IN THE LAST YEAR AND CHANGE AND WE EXPECTED TO INCREASE IN THE

NEXT COUPLE OF YEARS. ALIX: HOW MUCH ARE THEY MAKING PER USER? JOHN: IN THE U.S. AND CANADA, THEY ARE DOING $26 PER USER. IT IS ABOUT 15% OF META. A BIG GAP. ONE OF THE OTHER DIFFERENTIATING THINGS WE THINK WE DID IN THE REPORT, WAS JUST DOING A SENSITIVITY ANALYSIS AND SAYING, HEY, CAN THEY CLOSE THIS MASSIVE GAP WITH META-? WHAT WE SAW IS THAT IF YOU GROUP, JUST THE U.S. AND CANADA ARPU, WHICH IS 80% OF REVENUE, IF YOU GREW THAT 1% HIGHER THAN CURRENT ESTIMATES OVER THE FORECAST PERIODS, THERE WOULD BE A 2%

BUMP IN AND WILL UNIVERSE AND 4% BUMP IN FOR ANNUAL EPS GROWTH. IF YOU WERE TO APPLY THAT GLOBALLY, YOU WOULD SEE AN EVEN GREATER BUMP. SO, WE THINK THERE IS A LOT OF LEVERS, AS YOU GET STARTED WITH AND AS WE WROTE ABOUT, TO DRIVE MONETIZATION ON THE PLATFORM. WE THINK THE STOCK WILL BE A GOOD ONE AS WE EXIT THIS YEAR AND INTO NEXT YEAR. ROMAINE: THERE HAS BEEN A LOT OF TALK ABOUT HOW IT IS A NICHE PLAYER IN THE SOCIAL MEDIA SPACE AND MAYBE THE COMPANY IS OK WITH THAT THE WAY

SNAP IS OK WITH THAT, BUT IT RAISES SPECULATION ABOUT POTENTIAL M&A ACTIVITY. WHETHER AN OUTSIDE COMPANY WOULD BE INTERESTED IN PINTEREST. I AM CURIOUS WHETHER YOU SEE MORE OF A GROWTH STORY FOR THIS COMPANY OR WHETHER OTHERS OF THEM FINDING A NICHE AND EXPLOITING IT FOR PROFIT. JOHN: I THINK BOTH. I MEAN, WE HAVE 13% ANNUAL REVENUE GROWTH THE NEXT FIVE YEARS. 19% ANNUAL EBITDA GROWTH THE NEXT FIVE YEARS AND MARGINS HAVE EXPANDED NICELY OVER THE LAST 18 MONTHS. WE EXPECT FURTHER MARGIN EXPANSION IN THE NEXT FIVE YEARS. AND THAT IS DRIVING SIGNIFICANT FREE CASH

FLOW. WE HAVE OVER 25% FREE CASH FLOW GROWTH IN THE NEXT FIVE YEARS. HE HAS SEEN THEM THE SHAREHOLDER-FRIENDLY WITH THEIR FREE CASH FLOW, DOING BUYBACKS. SO , I DON'T THINK THE BIG PLAYERS, GIVEN REGULATORY, CAN ACQUIRE THEM. SO I THINK THEY WILL GO ON THEIR OWN AND, IT'S A GOOD PLATFORM, AND AGAIN, WE THINK IT WILL BE A GOOD START. ALIX: JOHN, THANKS A LOT, JOHN BLACKLEDGE OVER AT TD COWEN. PINTEREST IS UP ALMOST 2% OF THE DAY. COMING UP, THE IMPACTS OF TARIFFS UNDER PRESIDENT-ELECT DONALD TRUMP. FROM THE ECONOMIC SIDE, FROM THE FED

SIDE, AS WELL AS THE AUTO SIDE -- GENERAL MOTORS IS ROMAINE: JUST ABOUT 3:30 P.M. HERE IN NEW YORK. THIS IS THE COUNTDOWN TO THE CLOSE. ALIX: LOOKS LIKE WE ARE GOING TO HIT IT, 52 RECORD CLOSES FOR THE S&P. ROMAINE: THE DOW AT A RECORD HIGH AS WELL. INTERESTING REVERSAL FROM YESTERDAY FOR THE RUSSELL 2000. ALIX: YOU KNOW IT IS NOT GOING TO HELP THEM? ANY TARIFFS. ROMAINE: WHERE WERE YOU WHEN YOU LEARNED ABOUT THE ADDITIONAL TARIFFS? CANADA? I THOUGHT WE LIKED CANADA? ALIX: MY HUSBAND WAS ON THE COUCH AND HE SAID TRUMP TARIFFS,

HE JUST TWEETED SOMETHING. THIS IS MY JOB, WE HAVE DONE THIS FOR A LONG TIME. FED MINUTES SHOWING OFFICIALS PREFER GRADUAL FUTURE RATE CUTS SHOWING THE DATA CAME IN AS EXPECTED AND INFLATION MOVING TO THE 2% LEVEL AND JOB EMPLOYMENT PICTURE LOOKING OK. IT WOULD BE APPROPRIATE TO MOVE GRADUALLY TOWARDS A NEUTRAL STANCE. JOINING US FOR MORE IS MICHAEL MCKEE. HOW DO WE KNOW IF THEY GET DOWN TO 2% WHEN THE TARIFF SITUATION IS A QUESTION MARK? MICHAEL: THAT IS AN INTERESTING QUESTION. AS FAR AS WE CAN PREDICT IS THE DECEMBER MEETING AND THAT WILL

DEPEND ON DATA TO COME IN LIKE THE JOBS REPORT ON DECEMBER 6. AFTER THAT ALL FORECASTS HAVE AN EXPIRATION DATE OF JANUARY 20. WE DON'T KNOW WHAT IS GOING TO HAPPEN. NOBODY REALLY KNOWS WHAT IS GOING TO HAPPEN. INTERESTING POINT WITH WHAT YOU AND ROMAINE WERE JUST TALKING ABOUT. IN THE FED MINUTES IT WAS NOTED THAT SOME OF THE FED BANK PRESIDENTS TALKING TO THEIR CONTACTS AND CEO'S AT COMPANIES SAID COMPANIES THAT WERE LARGER AND IN MORE INFORMATION-RELATED SPACES WERE MUCH MORE OPTIMISTIC ABOUT THE FUTURE OUTLOOK FOR THE ECONOMY THAN SMALLER COMPANIES AND PEOPLE WHO

WERE IN MANUFACTURING. THAT IS SOMETHING TO KEEP AN EYE ON TO THE EARNINGS SEASONS AND EARNINGS CALLS. ROMAINE: I KNOW EVERYONE IS TRYING TO PUT A NUMBER ON WHAT THE IMPACT OF THE TARIFFS COULD BE. ARE THERE ANY PARALLELS BETWEEN WHAT WE SAW DURING THE FIRST TRUMP ADMINISTRATION? IT IS NOT LIKE WE HAVE NOT BEEN HERE BEFORE. AND MAYBE WHAT WE CAN EXTRAPOLATE WHAT 2025 AND BEYOND WILL LOOK LIKE. MICHAEL: THE HARD PART IS THE TARIFFS WE GOT DURING THE FIRST TRUMP ADMINISTRATION WERE TARGETED AT SPECIFIC INDUSTRIES PARTICULARLY IN THE STEEL AND ALUMINUM INDUSTRY WHICH

WAS KIND OF A GLOBAL TARIFF BUT ONE INDUSTRY-ORIENTED. WHAT WE SAW WAS PRICES WENT UP. WE SAW IMPORTS GO DOWN BUT AMERICAN STEEL PRICES WENT HIGHER BECAUSE THEY COULD. THAT WAS PART OF WHAT THE WHOLE POINT WAS. AMERICANS ENDED UP PAYING MORE FOR STEEL. WHAT ENDED UP HAPPENING WAS PEOPLE WHO USED TO STEEL LOST JOBS. SO THE EFFECTS WERE BASICALLY NEGATIVE AND THAT IS SOMETHING YOU CAN LOOK FORWARD TO, BOY, ON HERE IF WE GET THESE OTHER TARIFFS. THE PROBLEM WITH THESE ARE GOING TO BE IF THEY ARE BROAD AND ACROSS THE BOARD, YOU ARE

GOING TO HAVE MAJOR, MAJOR IMPACTS, THAT I DON'T KNOW HOW PEOPLE ARE EVEN DOING FORECASTS BECAUSE IT IS SO COMPLICATED. ALIX: EXACTLY. BEST BUY PUT IT NICELY ON THE EARNINGS CALL SAYING LOOK, IF WE WIND UP GETTING TARIFFS, COSTS ARE SHARED. THE VENDOR IS GOING TO SHARE SOME, THE COMPANY IS GOING TO SHARE SOME, AND THE CONSUMER IS GOING TO SHARE SOME. WE ARE ALL GOING TO PAY. STEW: -- MICHAEL: THAT IS EXACTLY WHAT HAPPENS AND DOZENS OF STUDIES HAVE SHOWN IT IS THE CONSUMER WHO ULTIMATELY PAYS WHEN YOU HAVE TARIFFS. BECAUSE PRICES GET PASSED

ON. BUT WHEN YOU LOOK AT WHAT COULD HAPPEN WITH CROSS-BORDER TARIFFS BETWEEN THE U.S., CANADA, AND MEXICO, THE AUTOMOBILE INDUSTRY, THERE IS SOMETHING LIKE 38 ILION DOLLARS WORTH OF PARTS THAT GO BACK AND FORTH. THEY GO BACK AND FORTH AS MANY AS SEVEN TIMES BEFORE THEY ARE PUT IN A CAR. HOW MANY TIMES DO THEY GET TARIFFED, AND WHO PAYS THEM? THESE ARE ALL THINGS THAT ARE IMPOSSIBLE TO DETERMINE. AVOCADOS, 90% COME FROM MEXICO, TWO THIRDS OF OUR TOMATOES COME FROM MEXICO. IF YOU PUT TARIFFS ON THAT IT IS NOT LIKE WE ARE GOING TO

BE GROWING MORE HERE. IT IS VERY HARD TO FIGURE OUT WHAT THE IMPACTS OF THIS ARE OTHER THAN TO SAY THEY WOULD BE BAD. ROMAINE: ABSOLUTELY. YOU ARE ALREADY SEEING THAT PLAY OUT IN THE AUTO SPACE. MICHAEL MCKEE IN THE D.C. BUREAU, AS WE TRY AND EXTRAPOLATE THE POTENTIAL IMPACT OF THOSE TARIFFS. INVESTORS SELLING OFF AUTOMAKERS, STELLANTIS AT ITS LOWEST LEVEL SINCE 2022, FORD DOWN, GENERAL MOTORS, 8.5% NEAR SESSION LOWS, THE BIGGEST ONE-DAY SELLOFF OF THAT COMPANY SINCE AT LEAST 2021. KEITH NAUGHTON JOINING US NOW FROM OUR DETROIT BUREAU. YOU HEARD MIKE TALKING ABOUT THIS,

THE DEPENDENCE WE HAVE ON MEXICO RIGHT NOW FOR A HUGE CHUNK OF OUR AUTO MANUFACTURING ASSEMBLY. SHOULD WE BE THIS CONCERNED? ARE THESE MARKET MOVES AN APPROPRIATE REACTION? KEITH: WHEN YOU LOOK AT GM AND STELLANTIS IN PARTICULAR AND THEY ARE GETTING 40% OF THE VEHICLES THEY SELL IN THE UNITED STATES ARE MADE IN MEXICO. THEY ARE BIG MONEY MAKERS. THEY COME OUT OF MEXICO. FORD HAS 25% OF ITS U.S. VOLUME COMING OUT OF MEXICO. LET'S NOT FORGET CANADA. THAT IS ALSO A PLACE WHERE STELLANTIS BUILDS MINIVANS AND FORD BUILDS SUV'S. BOTH MARKETS ARE INTEGRAL TO

THE U.S. OPERATIONS OF THESE AUTOMAKERS. A 25% TARIFF WOULD DRIVE UP STICKER PRICES, DRIVE UP COSTS. IT WOULD BE DEVASTATING FOR THE INDUSTRY. ALIX: THIS IS AN INSANELY DUMB QUESTION, BUT IF ALSO PART OF THE SHIFT IS TO SAY TO THESE GUYS, LOOK, LET'S BUILD A FACTORY IN THE U.S., LET'S BREAK GROUND, HERE IS A SHOVEL. HOW HARD IS IT TO ACTUALLY DO THAT? KEITH: IF THEY DID BUILD A FACTORY IN THE U.S. THOSE JOBS WOULD NOT MATERIALIZE DURING DONALD TRUMP'S TERM. IT TAKES A LONG TIME TO BUILD A FACTORY, WHICH IS NOT HAPPEN VERY

MUCH. WE HAVE LOTS OF CAPACITY IN AMERICA, WE DON'T NEED MORE. IT IS NOT SOMETHING THAT WOULD PAY OFF IMMEDIATELY. THE IMMEDIATE PAYOFF WOULD BE THAT CAR PRICES WOULD GO UP EVEN HIGHER. THEY ALREADY AVERAGE $48,000 A CAR AND MORE AND MORE PEOPLE ARE DROPPING OUT OF THE MARKET BECAUSE THEY CANNOT AFFORD A CAR ANYMORE. ROMAINE: PRIOR TO SOME OF THE UNCERTAINTY THAT HAS CROPPED UP AS A RESULT OF THE ELECTION, WEREN'T WE ACTUALLY STARTING TO SEE VEHICLE COSTS NORMALIZED TO A CERTAIN EXTENT? I KNOW THIS WITH A BIG ISSUE WITH EV'S AND THE SLOW

DOWN OF ADOPTION, THE COST. EVEN WITH TRADITIONAL GAS POWERED VEHICLES, EVERYONE WHO HAS BOUGHT A VEHICLE THE LAST COUPLE OF YEARS KNOWS IT IS ASTONISHING. I BOUGHT ONE THIS YEAR AND I AM STILL COMPLAINING ABOUT IT. KEITH: THERE IS A SERIOUS AFFORDABILITY CRISIS IN THE NEW CAR MARKET. THE PRICE OF NEW CARS NOW ARE WHAT WE WOULD'VE CONSIDERED LUXURY PRICES JUST A FEW YEARS AGO. THE PRICE OF NEW CARS HAVE GONE UP MORE THAN 25% IN THE LAST FIVE YEARS. AND THOSE PRICES HAVE NOT COME DOWN AS INVENTORY HAS NORMALIZED AFTER THE PANDEMIC. SO THERE

IS ALREADY AN AFFORDABILITY CRISIS AND THIS WILL MAKE IT WORSE. ALIX: IF THERE ARE CARVEOUTS FOR CARS, COULD THIS ALL JUST BE CHATTER AND NOTHING REAL? KEITH: I WOULD SAY THIS GO AROUND, PEOPLE ARE CLUTCHING PEARLS NOT QUITE SO TIGHTLY ON THIS THREAT. I THINK PEOPLE HAVE COME TO KNOW THAT DONALD TRUMP OPENS WITH SHOCK AND AWE, THEN WE START NEGOTIATING. I DON'T THINK THE ANALYSTS OR ANYONE ARE REALLY EXPECTING 25% TARIFFS TO GO THROUGH UNSCATHED. ALIX: KEITH NAUGHTON JOINING US. LET'S GET TO THE WHITE HOUSE NOW. PRESIDENT BIDEN IS SPEAKING. PRES. BIDEN: HOURS LATER

AT 2:00 A.M. IN THE MORNING, HEZBOLLAH AND OTHER TERRORIST ORGANIZATIONS BACK TO BUY IRAN ATTACKED ISRAEL IN SUPPORT OF HAMAS. LET'S BE CLEAR, ISRAEL DID NOT LAUNCH THIS WAR. THE LEBANESE PEOPLE DID NOT SEEK THAT WAR EITHER. NOR DID THE UNITED STATES. OVER THE PAST YEAR, I DIRECTED U.S. MILITARY TO FLOW ASSETS AND CAPABILITIES INTO THE REGION, INCLUDING AIRCRAFT CARRIERS, FIGHTER SQUADRONS, SOPHISTICATED AIR DEFENSE, TO DEFEND ISRAEL AND DETER OUR COMMON ENEMY AT A CRITICAL MOMENT. SINCE THE WAR WITH HEZBOLLAH BEGAN, OVER 70,000 ISRAELIS HAVE BEEN FORCED TO LIVE AS REFUGEES IN THEIR OWN COUNTRY.

HELPLESSLY WATCHING THEIR HOMES, BUSINESSES, AND COMMUNITIES AS THEY WERE BOMBARDED AND DESTROYED. OVER 300,000 LEBANESE PEOPLE HAVE ALSO BEEN FORCED TO LIVE AS REFUGEES IN THEIR OWN COUNTRY. IN A WAR IMPOSED ON THEM BY HEZBOLLAH. ALL TOLD, THIS HAS BEEN THE DEADLIEST CONFLICT BETWEEN ISRAEL AND HEZBOLLAH IN DECADES. HOW MANY OF HEZBOLLAH'S SENIOR LEADERS ARE DEAD, INCLUDING ITS LONGTIME LEADER NASRALLAH? AND ISRAEL DESTROYED HEZBOLLAH'S TERRORIST INFRASTRUCTURE IN SOUTHERN LEBANON AS WELL, INCLUDING MILES OF SOPHISTICATED TUNNELS WHICH WERE PREPARED FOR AN OCTOBER 7-STYLE TERRORIST ATTACK IN NORTHERN ISRAEL. BUT LASTING SECURITY FOR THE PEOPLE OF ISRAEL

AND LEBANON CANNOT BE ACHIEVED ONLY ON THE BATTLEFIELD. AND THAT IS WHY I DIRECTED MY TEAM TO WORK WITH THE GOVERNMENTS OF ISRAEL AND LEBANON TO FORGE A CEASE-FIRE TO BRING THE CONFLICT BETWEEN ISRAEL AND HEZBOLLAH TO A CLOSE. UNDER THE DEAL REACHED TODAY, EFFECTIVE AT 4:00 A.M. TOMORROW LOCAL TIME, THE FIGHTING ACROSS THE LEBANESE/ISRAELI BORDER WILL END. WILL END. THIS IS DESIGNED TO BE A PERMANENT CESSATION OF HOSTILITIES. WHAT IS LEFT OF HEZBOLLAH AND OTHER TERRORIST ORGANIZATIONS WILL NOT BE ALLOWED TO THREATEN THE SECURITY OF ISRAEL AGAIN. OVER THE NEXT 60 DAYS, THE LEBANESE

ARMY AND STATE SECURITY FORCES WILL DEPLOY AND TAKE CONTROL OF THEIR OWN TERRITORY ONCE AGAIN. HEZBOLLAH TERRORIST INFRASTRUCTURE IN SOUTHERN LEBANON WILL NOT BE ALLOWED TO BE REBUILT. AND OVER THE NEXT 60 DAYS, ISRAEL WILL GRADUALLY WITHDRAW ITS REMAINING FORCES. AND CIVILIANS ON BOTH SIDES WILL SOON BE ABLE TO SAFELY RETURN TO THEIR COMMUNITIES AND BEGIN TO REBUILD THEIR HOMES, THEIR SCHOOLS, THEIR FARMS, THEIR BUSINESSES, AND THEIR VERY LIVES. WE ARE DETERMINED THIS CONFLICT WILL NOT JUST BE ANOTHER CYCLE OF VIOLENCE. AND SO THE UNITED STATES WITH THE FULL SUPPORT OF FRANCE AND OUR OTHER

ALLIES HAS PLEDGED TO WORK WITH ISRAEL AND LEBANON TO ENSURE THAT THIS ARRANGEMENT IS FULLY IMPLEMENTED. THE AGREEMENT TOTALLY IMPLEMENTED. THERE WILL BE NO U.S. TROOPS DEPLOYED IN SOUTHERN LEBANON. THIS IS CONSISTENT WITH MY COMMITMENT TO THE AMERICAN PEOPLE TO NOT PUT U.S. TROOPS INTO COMBAT IN THIS CONFLICT. INSTEAD, WE, ALONG WITH FRIENDS AND OTHERS, WILL PROVIDE THE NECESSARY ASSISTANCE TO MAKE SURE THIS DEAL IS IMPLEMENTED FULLY AND EFFECTIVELY. LET ME BE CLEAR. IF HEZBOLLAH OR ANYONE ELSE BREAKS THE DEAL AND POSES A DIRECT THREAT TO ISRAEL, THEN ISRAEL RETAINS THE RIGHT TO SELF-DEFENSE CONSISTENT

WITH INTERNATIONAL LAW. JUST LIKE ANY COUNTRY WHEN FACING A TERRORIST GROUP PLEDGED TO THAT COUNTRY'S DESTRUCTION. AT THE SAME TIME, THIS DEAL SUPPORTS LEBANON'S SOVEREIGNTY. AND SO IT HERALDS A NEW START FOR LEBANON, A COUNTRY THAT I HAVE SEEN MOST OF OVER THE YEARS, A COUNTRY WITH A RICH HISTORY AND CULTURE. IF FULLY IMPLEMENTED, THIS DEAL CAN PUT LEBANON ON A PATH TOWARDS A FUTURE THAT IS WORTHY OF ITS SIGNIFICANT PAST. JUST AS THE LEBANESE PEOPLE DESERVE A FUTURE OF SECURITY AND PROSPERITY, SO DO THE PEOPLE OF GAZA. THEY TOO DESERVE AN END TO THE

FIGHTING AND DISPLACEMENT. THE PEOPLE OF GAZA HAVE BEEN THROUGH HELL. THEIR WORLDS ABSOLUTELY SHATTERED. FAR TOO MANY CIVILIANS IN GAZA HAVE SUFFERED FAR TOO MUCH. AND HAMAS HAS REFUSED FOR MONTHS AND MONTHS TO NEGOTIATE A CEASE-FIRE AND HOSTAGE DEAL. SO NOW, HAMAS HAS A CHOICE TO MAKE. THEIR ONLY WAY OUT IS TO RELEASE THE HOSTAGES, INCLUDING AMERICAN CITIZENS WHICH THEY HOLD. AND IN THE PROCESS, BRING AN END TO THE FIGHTING WHICH WOULD MAKE POSSIBLE A SURGE OF HUMANITARIAN RELIEF. OVER THE COMING DAYS, THE UNITED STATES WILL MAKE ANOTHER PUSH FOR TURKEY, EGYPT, QATAR, ISRAEL, AND

OTHERS, TO ACHIEVE A CEASE-FIRE IN GAZA, WITH THE HOSTAGES RELEASED AND THE END OF THE WAR WITHOUT HAMAS IN POWER, THAT IT BECOMES POSSIBLE. AS FOR THE BROADER MIDDLE EAST REGION, TODAY'S ANNOUNCEMENT RINGS US CLOSER TO REALIZING THE AFFIRMATIVE AGENDA THAT I HAVE BEEN PUSHING FORWARD DURING MY ENTIRE PRESIDENCY. A VISION FOR THE FUTURE OF THE MIDDLE EAST, WHERE IT IS AT PEACE AND PROSPEROUS AND INTEGRATED ACROSS BORDERS. A FUTURE WHERE PALESTINIANS HAVE A STATE OF THEIR OWN, ONE THAT FULFILLS ITS PEOPLE'S LEGITIMATE ASPIRATIONS, ONE THAT CANNOT THREATEN ISRAEL OR HARBOR TERRORIST GROUPS WITH BACKING

FROM IRAN. A FUTURE WHERE ISRAELIS AND PALESTINIANS ENJOY EQUAL MEASURES OF SECURITY, PROSPERITY, AND YES, DIGNITY. TO THAT END, THE UNITED STATES REMAINS PREPARED TO CONCLUDE A SET OF HISTORIC DEALS WITH SAUDI ARABIA TO INCLUDE A SECURITY PACT AND ECONOMIC ASSURANCES, TOGETHER WITH EQUITABLE PATHWAY FOR ESTABLISHING PALESTINIAN STATE, AND THE FULL NORMALIZATION OF RELATIONS BETWEEN SAUDI ARABIA AND ISRAEL. WHICH IS A DESIRE THEY BOTH HAVE. I BELIEVE THIS AGENDA REMAINS POSSIBLE. IN OUR REMAINING TIME IN OFFICE, I WILL WORK TIRELESSLY TO -- ALL OF WHICH STRENGTHENS AMERICA'S NATIONAL SECURITY. GETTING ALL THIS DONE WILL REQUIRE

MAKING SOME HARD CHOICES. ISRAEL HAS BEEN BOLD ON THE BATTLEFIELD. IRAN AND ITS PROXIES HAVE PAID A VERY HEAVY PRICE. NOW ISRAEL MUST BE BOLD IN TURNING GAINS INTO A COHERENT STRATEGY AND SECURE ISRAEL'S LONG-TERM SAFETY, AND ADVANCES BROADER PEACE AND SECURITY IN THE REGION. TODAY'S ANNOUNCEMENT IS A CRITICAL STEP IN ADVANCING THAT VISION. AND SO I APPLAUD THE DECISION MADE BY THE LEADERS OF LEBANON AND ISRAEL TO END THE VIOLENCE. IT REMINDS US THAT PEACE IS POSSIBLE. SAY THAT AGAIN, PEACE IS POSSIBLE. AS LONG AS THAT'S THE CASE, I'LL NOT FOR A SINGLE MOMENT

WORKING TO ACHIEVE IT. GOD BLESS YOU ALL. SORRY TO KEEP YOU WAITING SO LONG. MAY GOD PROTECT OUR TROOPS. THANK YOU. ROMAINE: THE PRESIDENT OF THE UNITED STATES JOE BIDEN WALKING AWAY TOWARDS THE WHITE HOUSE, LETTING US KNOW THAT A CEASE-FIRE AGREEMENT HAS BEEN STRUCK BETWEEN ISRAEL AND LEBANON. OF COURSE A MILITARY CONFLICT THAT HAS BEEN WAGING EVER SINCE OCTOBER 8, THE DAY HEZBOLLAH STARTED TO FIRE MISSILES INTO ISRAEL IN SOLIDARITY WITH HAMAS, WHICH OF COURSE LAUNCHED THAT HORRIFIC ATTACK ON OCTOBER 7 THAT CLAIMED LAW LIVES OF AT LEAST 12,000 PEOPLE. IN AN EFFORT TO

TAMP DOWN THE VIOLENCE NOT ONLY THE LEBANON AND ISRAELI BORDER, THE PRESIDENT SAYING HE WILL FOCUS HIS ATTENTION ON TRYING TO CREATE A CEASE-FIRE IN GAZA. KAILEY LEINZ IS STANDING BY RIGHT NOW. I AM SURE YOU HEARD WHAT THE PRESIDENT HAD TO SAY, YOU HEARD WHAT BENJAMIN NETANYAHU HAD TO SAY A COUPLE HOURS PRIOR. A TEMPORARY CEASE-FIRE, BUT BIDEN SAYS THAT THIS IS A PATH TO A PERMANENT CESSATION OF THE WAR. KAILEY:, YEAH WHICH IS A BIT STRONGER LANGUAGE THAN WHAT WE HEARD FROM THE ISRAELIS AND FROM NETANYAHU, WHO MAINTAINED IF HEZBOLLAH IS TO DO

ANYTHING TO VIOLATE THIS, ALTHOUGH BIDEN DID SUGGEST THE SAME, ISRAEL CAN STILL TAKE ACTION TO ACT IN ITS OWN DEFENSE. BUT THIS IS OBVIOUSLY A MASSIVE MOMENT FOR PRESIDENT BIDEN IN HIS FINAL MONTHS IN OFFICE, ANNOUNCING THE U.S., WHICH DID HAVE A HEAVY HAND IN BROKERING THIS AGREEMENT ALONG WITH FRANCE AND OF COURSE THE ISRAELIS AND HEZBOLLAH AND LEBANON ITSELF, HAVE REACHED THIS AGREEMENT FOR A 60 DAY CESSATION OF HOSTILITIES, WHICH THE PRESIDENT JUST INFORMED US WILL BEGIN AT 4:00 A.M. LOCAL TIME, SO REALLY JUST IN A MATTER OF HOURS. OVER THE NEXT 60 DAYS

HE SAID ISRAELI FORCES WILL BE WITHDRAWN FROM THESE AREAS AND CIVILIANS WILL BE ABLE TO RETURN SAFELY TO THEIR HOMES. PRESIDENT BIDEN LAYING THIS OUT AS A PATH TO POTENTIALLY A PERMANENT CEASE-FIRE, ALTHOUGH OF COURSE THAT WILL TAKE MUCH MORE WORK. 60 DAYS FROM NOW I WILL POINT OUT WE WILL HAVE A DIFFERENT PRESIDENT OF THE UNITED STATES. THE INAUGURATION OF DONALD TRUMP IS JUST 55 DAYS AWAY, SO THAT HAS THE POWER TO POTENTIALLY SHAPE THE WAY IN WHICH THE SITUATION IN THE MIDDLE EAST MOVES FORWARD. OVER THE NEXT 55 DAYS WHILE HE IS STILL

IN OFFICE, THE PRESIDENT SAYS HE WILL CONTINUE TO PUSH TOWARDS PEACE, SPECIFICALLY A CEASE-FIRE AGREEMENT BETWEEN ISRAEL AND HAMAS. HE MENTIONED SPECIFICALLY GETTING THE HOSTAGES HOME, WHICH DO INCLUDE SOME AMERICANS THAT REMAIN THERE. THIS IS ALSO ABOUT LEGACY DEFINED MEN FOR PRESIDENT BIDEN AS HE IS GETTING READY TO LEAVE THE WHITE HOUSE. ROMAINE: I WANT TO MAKE A QUICK CORRECTION. I MISSPOKE AND SAID 12,000 PEOPLE HAD BEEN KILLED IN THE ATTACK LAUNCHED BY HAMAS ON OCTOBER 7. IT WAS 1200 PEOPLE ROUGHLY. ALIX: I GUESS THE QUESTION THEN BECOMES, WHAT KIND OF ROADMAP MIGHT WE NOW

KNOW THAT COULD LEAD TO A CEASE-FIRE BETWEEN HAMAS AND ISRAEL IN GAZA? KAILEY: IT IS IMPORTANT TO REMEMBER, AND I HAVE BEEN REMINDED OF THIS WITH A NUMBER OF MIDDLE EAST EXPERTS I'VE SPOKEN TO, IS THESE TWO CONFLICTS, WHILE THEY ARE KIND OF EMANATING FROM THE SAME THING WHICH OF COURSE IS TENSION BETWEEN ISRAEL AND IRAN, AND THESE ARE DIFFERENT PROXIES THAT SERVE ON BEHALF OF IRAN, THEY ARE VERY DIFFERENT IN NATURE. SO IT'S NOT NECESSARILY TRUE THAT HE CEASE-FIRE BETWEEN ISRAEL AND HEZBOLLAH WILL EASILY LEAD TO ONE BETWEEN ISRAEL AND HAMAS, WHICH OF COURSE

ISRAEL HAS STATED REPEATEDLY THEIR GOAL IS TO ERADICATE HAMAS COMPLETELY. THERE REMAIN SIGNIFICANT QUESTIONS, AND PRESIDENT BIDEN ALLUDED TO THAT, WITH THE DAY AFTER IN GAZA LOOKS LIKE. WHETHER WE GET AN INDEPENDENT PALESTINIAN STATE, WHICH IS THE PRESIDENT'S DESIRE, OR ISRAEL IS ONLY GOING TO AGREE TO SOMETHING IN WHICH THEY ARE STILL ABLE TO EXERCISE A CERTAIN AMOUNT OF CONTROL TO MAKE SURE HAMAS IS NOT IN CONTROL OF GAZA. THE NATURE OF THAT IS OBVIOUSLY VERY DIFFERENT. I WOULD POINT OUT IT WAS UP UNTIL RECENTLY THAT HEZBOLLAH MAINTAINED ONLY A CEASE-FIRE IN GAZA WOULD LEAD

TO A CEASE-FIRE BETWEEN ISRAEL AND HEZBOLLAH, BUT CLEARLY THE ISRAELIS HAVE BEEN INCREDIBLY SUCCESSFUL IN WEAKENING THE ABILITY OF HEZBOLLAH, TAKING OUT THE MAJORITY OF ITS HIGH LEVEL LEADERSHIP, SUCCESSFULLY DEPLETING THEIR ABILITY TO STRIKE ISRAEL MILITARILY, HENCE WHY WE HAVE FOUND OURSELVES NOW WITH HEZBOLLAH AGREEING TO THIS. ROMAINE: THAT IS MY QUESTION. WHO IS DOING THE AGREEING? MAYBE YOU DON'T HAVE THE ANSWER TO THAT, BUT THERE IS ALWAYS THE FEAR WITH THESE KIND OF AGREEMENTS, YOU GET THE LEADERS ON BOARD AND THEN YOU GET SOME FACTION OF HEZBOLLAH OR HAMAS THAT DECIDES THEY DO THEIR

OWN THING AND THEN WE CIRCLE BACK TO SQUARE ONE. KAILEY: THAT IS THE VERY POINT OF THIS TEMPORARY DEAL BEING TEMPORARY IN NATURE. IT WILL ONLY BE 60 DAYS TO START, IF IT INDEED CAN STICK FOR THAT LONG. THEN THE PERMANENCY OF THAT REMAINS A MASSIVE QUESTION, REMINDING EVERYONE IT WAS ONLY MONTHS INTO THE INITIAL CONFLICT BETWEEN ISRAEL AND HAMAS WE SAW A TEMPORARY CEASE-FIRE IN PLACE, THEN OBVIOUSLY THE WAR HAS PROCEEDED FOR MONTHS AFTER THAT ONCE IT CAME TO AN END. SO THESE THINGS ARE INCREDIBLY TENUOUS AND IS NOT JUST THE PROXIES THEMSELVES AND

THOSE WHO ARE MEDIATING BETWEEN THE PROXIES AND ISRAEL, BUT IRAN PLAYS A ROLE HERE TOO. THESE ARE IRANIAN PROXIES WE ARE TALKING ABOUT AND HOW THEY ARE FEELING IN TEHRAN ABOUT HOW PROXIES ARE ABLE TO EXECUTE THIS WAR AGAINST ISRAEL, WHICH OBVIOUSLY HAS BEEN ONGOING FOR SOME TIME NOW, DATING BEFORE OCTOBER 7, IS GOING TO PLAY AN INCREDIBLE ROLE HERE. THIS IS A SITUATION THE INCOMING TRUMP ADMINISTRATION WILL BE INHERITING. ALIX: THANK YOU SO MUCH FOR THAT ANALYSIS. WE'RE ABOUT NINE MINUTES AWAY FROM THE CLOSING BELL HERE IN THE U.S. LOOKING AT AN SAP THAT

IS HIGHER ON THE DAY LOOKING AT A RECORD HIGH. 52ND RECORD HIGH FOR THE S&P SO FAR THIS YEAR. MATERIALS THE WORST PERFORMING SECTOR, WHICH MAKES SOME SENSE IF YOU ARE DEALING WITH TARIFF THREATS. GENERAL MOTORS THE WORST PERFORMING STOCK WITHIN THE S&P. TECH ALSO GOING STRONGER AS WELL. MORE INSULATED IF YOU WILL WITH THIS PARTICULAR TARIFF. ROMAINE: ABSOLUTELY. AND A LOT THAT WILL HAVE TO BE PARSED AS WE GET INTO NEXT YEAR. FOR RIGHT NOW I GUESS FOR SOME FOLKS, THEY WILL TAKE IT AS THEY GET IT. EMILY ROLAND JOINING US NOW FROM JOHN

HANCOCK INVESTMENT MANAGEMENT COUNTING US DOWN TO THE CLOSING BELL ON A DAY WHERE WE ARE LOOKING AT AN S&P THAT LOOKS LIKE IT WILL NOT A RECORD HIGH, ADOW -- A DOW NOTCHING A RECORD HIGH. WHEN DO THE RECORD HIGHS STOP? EMILY: MOMENTUM IS ON THE SIDE OF INVESTORS RIGHT NOW. NOT ONLY SEEING RISK ASSETS BROADLY, WE ARE SEEING NEW ALL-TIME HIGHS EVERY DAY. THERE IS ALMOST THIS SPECULATIVE FRENZY THAT IS BUILDING ACROSS ASSETS. EVERYTHING FROM LOW-QUALITY GROWTH IN ANY TYPE COMPANIES TO CRYPTO AND CRYPTO-RELATED ASSETS. THERE IS A SENSE OF INVESTOR EUPHORIA PERMEATING MARKETS

RIGHT NOW BASED ON POTENTIAL POLITICAL POLICY, I DON'T KNOW IF I HAVE EVER USED THE WORD POTENTIAL MORE. WE DON'T KNOW HOW THIS IS GOING TO PLAY OUT ALSO MODEST UPSIDE SURPRISE ON THE ECONOMIC GROWTH FRONT, BETTER-THAN-EXPECTED EARNINGS SEASON. A LOT OF GREAT STUFF BEING PRICED INTO MARKETS RIGHT NOW. ROMAINE: I ALWAYS HATE TO LOOK A GIFT HORSE IN THE MOUSE BUT IS THERE TOO MUCH EUPHORIA? THIS IDEA THAT YOU DON'T SEE A LOT OF DOWNSIDE. IT IS ONE THING TO BE BULLISH. IT IS ANOTHER TO SAY I DON'T NEED ANY DOWNSIDE PROTECTION ONE SO

EVER. WHEN DO WE GET TO THAT BREAKING POINT WHERE THINGS ARE TILTED TOO POSITIVE? EMILY: THE CONSENSUS IS VERY MUCH ONE-SIDED ON THE POSITIVE DIRECTION. IN ORDER FOR EVERYTHING THAT IS PRICED INTO HAPPEN YOU HAVE TO SEE CONTINUED APPRECIATION ACROSS ASSETS. YOU HAVE TO SEE PROFITS NOW BEATING WHAT IS GOING TO BE DOUBLE DIGIT EARNINGS GROWTH BEING PRICED IN BY ANALYSTS FOR THE NEXT SEVERAL QUARTERS TO COME. AND YOU HAVE TO SEE THIS CONTINUED SENSE OF INVESTOR UTOPIA. ALL OF THOSE THINGS MIGHT HAPPEN BUT THE CHALLENGE AGAIN IS THE S&P 500 SITTING AT 22 TIMES

FORWARD EARNINGS. SOMETIMES WHEN EVERYBODY IS ON ONE SIDE OF THE BOATS, WE KNOW SOMETIMES IT CAN TIP OVER. SO WE HAVE TO THINK ABOUT PRUNING RISK INTO SOME OF THESE RALLIES INTO MORE SPECULATIVE POCKETS. THINKING ABOUT MITIGATING RISKS WITH ALLEGATIONS OF HIGHER QUALITY MORE DEFENSIVE OPTIONS IN THIS ENVIRONMENT WHERE THERE IS. A LOT OF SPECULATION AND MOMENTUM. ALIX: WHERE ARE THOSE PLACES? EMILY: WE CONTINUE TO FOLLOW THE EARNINGS. STOCK PRICES FOLLOW PROFITS OVER TIME AND WE ARE SEEING OF THE BEST EARNINGS GROWTH TRENDS WITHIN U.S. LARGE CAPS, MEGACAP TECH CONTINUES TO BE AN AREA THAT

WE LIKE. BUT OF COURSE WE HAVE A VALUATION PROBLEM THERE. THE S&P 500 GROWTH INDEX IS GROWING AT A 54% PREMIUM TO ITS 20 YEAR AVERAGE. WE ARE BALANCING THE VALUATION RISK IN THAT AREA BY LOOKING AT PLACES LIKE U.S. MID-CAP STOCKS, WHERE WE ARE FINDING QUALITY AT A REASONABLE PRICE. MID-CAPS HAVE A SIGNIFICANT SECTOR OVERWEIGHT TO THE INDUSTRIAL SPACE, WHICH WE SEE BENEFITING FROM CONTINUED INVESTMENT IN THE U.S. ON ENSURING, FISCAL SPENDING THAT IS HAPPENED -- THAT IS FUNNELED INTO A RENAISSANCE IN THE U.S. FINALLY WE ARE LEGGING INTO MORE DEFENSIVE OPTIONS HERE. HEALTH

CARE IS A SECTOR TRADING AT A 10% DISCOUNT, OFFERS GREAT RETURN ON EQUITY, GOOD BALANCE SHEETS, HIGH-QUALITY. LOOKING AT UTILITIES AS ANOTHER MORE DEFENSIVE AREA THAT WE CAN SEE BENEFITING AS A CONSUMER, POTENTIALLY SEE HEADWINDS INTO NEXT YEAR. ALIX: I AM LOOKING AT THE FA FUNCTION ON THE BLOOMBERG TERMINAL WHEN IT COMES TO THE MID-CAP INDEX. VALUATION IS SLOWLY CREEPING HIGHER. IT IS NO LONGER AS CHEAP AS IT WAS EVEN IF YOU QUARTERS AGO. HOW DO YOU MEASURE THAT? EMILY: I AM SO INTERESTED THAT YOU POINTED THAT OUT. MY CO-CHIEF INVESTMENT STRATEGIST, WE ARE WRITING

OUR 2025 OUTLOOK. SORRY, I REALIZE WE ARE LITTLE LATE THIS YEAR, BECAUSE IT KIND OF CREPT UP ON US WITH A LATER THANKSGIVING. ONE OF THE HEADLINES MIGHT BE THE VALUATION GAP IN MID-CAPS IS CLOSING. SO YOU WANT TO TAKE ADVANTAGE OF IT. THE GOOD NEWS IS WHEN YOU LOOK AT VALUATIONS, WE WANT TO TAKE A CLOSE LOOK AT THE DENOMINATOR AND THE P/E RATIO AND IT SUGGESTS THAT EARNINGS GROWTH TRENDS ARE IMPROVING. INDUSTRIALS EARNINGS TEND TO DO WELL LATE IN A CYCLE BECAUSE A LOT OF THE PROJECTS BEING INVESTED IN OUR LONGER LIVED, THEY

HAVE MORE STABLE CASH FLOWS BEING DIRECTED TOWARDS THEM. SO WE THINK MID-CAPS HAVE SOME LEGS, BUT WE HAVE BEEN TALKING ABOUT THEM FOR OVER A YEAR AND NOW IF YOU HAVE NOT DONE IT, IT IS TIME TO LEAN INTO THAT SPACE. ROMAINE: GREAT STUFF. EMILY ROLAND FROM JOHN HANCOCK INVESTMENT MANAGEMENT, HERE ON A DAY WITH NINE OF THE 11 S&P SECTORS MOVING HIGHER, SETTING UP FOR WHAT IS GOING TO BE ANOTHER RECORD HIGH FOR THE INDUSTRY. BUT NO PARTICIPATION TODAY FROM SOME OF THOSE SMALL AND MID-CAP INDICES. ALIX: NOT REALLY. YOU ARE SEEING UTILITIES OUTPERFORMER

WITHIN THE S&P. ENERGY GOT AN UPGRADE WHICH HELPED THE REST, BUT YOU CAN MAKE AN ARGUMENT MAY BE A SAFETY PLAY AS WELL. ROMAINE: INTERESTING TO SEE THE POP IN ELI LILLY. I THOUGHT WE WERE OVER WEIGHT LOSS DRUGS. ALIX: NO. ROMAINE: A FULL BREAKDOWN OF ALL THE MARKET COVERAGE COMING UP RIGHT NOW. >> THE CLOSING BELL, BLOOMBERG'S COMPREHENSIVE CROSS-PLATFORM COVERAGE OF THE U.S. MARKET CLOSE STARTS RIGHT WE ARE TWO MINUTES AWAY FROM THE END OF THE TRADING DAY. ROMAINE BOSTICK HERE TAKING YOU THROUGH THE CLOSING BELL. SCARLET FU IS IN STUDIO HERE. TIM STENOVEC

AND CAROL MASSAR. GUESS WHAT? ANOTHER HIGH ON THE S&P 500. CAROL: BECAUSE EVERYTHING IS AWESOME. KIND OF INTERESTING ON A DAY WHEN WE’RE SEEING SOME PROGRESS IN THE MIDDLE EAST, ALTHOUGH MANY WOULD SAY NOT DONE YET IN TERMS OF WHAT’S GOING ON WITH GAZA BUT AS WE CONTINUE TO GET MORE INFORMATION ABOUT WHAT A TRUMP WHITE HOUSE LOOKS LIKE, ANOTHER RECORD HERE. TIM: AFTER THAT NEWS LAST NIGHT THAT TRUMP SAID HE’D PROPOSE AN ADDITIONAL 10% GOODS TARIFFS ON CHIN A AS WELL AS TARIFFS ON MEXICO AND CANADA. SOME U.S. STOCKS ARE LOWER. FORD, GENERAL MOTORS,

A COUPLE OF DECLINERS. ROMAINE: DO YOU WANT TO GO THROUGH THOSE NOW? TIM: , NO GIVING YOU A LITTLE TEES. CAROL: THIS MAKES YOU WONDER WHO THESE ARE TRIAL BALLOONS OR WHETHER HE COULD TAKE EXECUTIVE ACTION AND TAKE DEMAND ON DAY ONE. SCARLET: THIS IS WHAT WE HAD TO DEAL WITH THIS HIS LAST ADMINISTRATION AS WELL. ROMAINE: IT IS THE CLOSE BELL. UP ABOUT .3 ON THE DAY. THE NASDAQ, 6 AND CHANGE. THE NASDAQ COMPOSITE UP ABOUT .6% BUT TO THE DOWNSIDE, IT WAS THE RUSSELL,000 LEADING DECLINES WITH A DROP OF FNLT 7%. CAROL: THE

S&P 500, A LITTLE BIT MORE TO THE UP SIDE. 27 NAMES GAINING GROWN. 229 ON THE DOWNSIDE, TWO UNCHANGED. SCARLET: AND NINE OF THE 11 GROUPS IN THE S&P 500 FINISHING IN THE GREEN UTILITIES, COMMUNICATION AND UTILITY SERVICES LEADING THE WAY. YOUR WEAK PARTS OF THE MARKET, MATERIALS AND ENERGY. ENERGY JUST BARELY LOWER BY A QUARTER OF 1%. CAROL: NEWS THAT THE BIDEN ADMINISTRATION IS PROPOSING THE GOVERNMENT TO COVER OBESITY DRUGS FOR MOST AMERICANS, THAT WOULD INCREASE MEDICARE BY A LOT. SOME OF THOSE COMPANIES UP TODAY. SO WE DEFINITELY SAW THOSE STOCKS GAIN IN THE

SESSION. QUICK OVER TO WELLS FARGO. HIGHS ABOUT 1.5%. FINISHING THE DAY WITH A GAIN OF .6%. CLOSING AT A RECORD. THE LENDER IS IN THE LAST STAGES OF A TEST TO LIFT THAT ASSET CAP IN 2025 AFTER FIXING PROBLEMS IN THE FAKE AT SCANDAL. THIS IS FROM PEOPLE FAMILIAR WITH THE SITUATION. SO THAT COULD BE A BLESSING FOR THOSE TRYING TO BE BULLISH ON WELLS FARGO. THE NUMBER ONE ENERGY GAINER IN THE S&P 500NRG UP 10%. PUTTING THEM AT A NEW HIGH. CLOSING AT 101 AND CHANGE. ROMAINE: THAT’S KIND OF A REDUNDANT NAME, RIGHT? CAROL:

I KNOW, NRG -- I’M SURE A LOT OF CONSULTANTS WERE PAID A LOT TO COME UP WITH THAT. TIM: GENERAL MOTORS DOWN 89%. WORST DAY GOING BACK TO MARCH OF 2020. OVER CONCERNS OF PRESIDENT TRUMP’S PLANNED TARIFFS ARE GOING TO HIT THOSE COMPANIES. INSTANT IS, VOLKSWAGEN, FORD AND G.M. WOULD BE HIGHLY EXPOSED ON AN INCREASE IN TARIFFS. THIS IS FROM BERNSTEIN FROM THIS MORNING. W. OF G.M. IMPORTS ROUGHLY 30% OF THE VEHICLES THEY SELL IN THE U.S. AND FORD ABOUT 20%. THAT’S WHY YOU SEE SHARES OF THESE COMPANIES TAKING A HIT TODAY. ALSO, SHARES OF

KHOLS DOWN 1%. IT CUT ITS FULL YEAR SALES OUTLOOK. WE’VE SEEN PRESSURE ON RETAILERS WHO CATER TO MIDDLE-INCOME SHOPPERS BECAUSE CONSUMERS ARE BECOMING MORE BUDGET-CONSCIENCE. SHARES OF KOHLS FELL CLOSE TO 17%. AND AFTER THE EXPERIMENTAL OBESITY SHOT FAILED TO SIGNIFICANTLY OUTPERFORM RIVALS AND SHOWED A HIGH EIGHT OF GASTROINTESTINAL PROBLEMS. THAT’S COMPETING WITH SHOTS AGAINST ELY LILY AND NORVIS. ALIX: IT WAS A TEST OF BE BEST, BE FIRST. AND NEITHER OF THOSE OCCURRED. THE BOUILLON TODAY. ROMAINE: AUTO DESK SHARES RELATIVELY UNCHANGED AFTER THEIR MOST RECENT QUARTER SHOWED OPERATING INCOME SLIGHTLY ABOVE STREET ESTIMATES. THE STREET WAS

LOOKING FOR ROUGHLY 213. THE COMPANY SEES ADJUSTED E.P.S. OF 210 TO 213. SCARLET: WORKDAY, THIRD QUARTER BEATING ESTIMATES, 1.LE OF 89 VERSUS 1.75. REVENUE ALSO HIGHER THAN ANTICIPATED. $7.7 BILLION IS THE NEW OUTLOOK. PREVIOUSLY IT WAS LOOKING FROM 7 7.7 BILLION. PREVIOUSLY SAW A RANGE OF 25.3%. CAROL: DELL CROSSING THE TERMINAL. WE’RE TALKING ABOUT REVENUE THAT’S COMING IN PRETTY MUCH IN LINE WITH EXPECTATIONS. 11.37 BILLION DOLLARS. THE ESTIMATE ON THE STREET WAS 11.34. THIRD QUARTER TOTAL NET REVENUE IS ALSO A LITTLE LIGHT. 34.37 BILLION. A LITTLE BELOW THE ESTIMATE AND DELL IS DEFINITELY SEEING SOME

REACTION. STOCK DOWN ALMOST 5% IN THE AFTERMARKET. IT HAD BEEN UP 85% YEAR TO DATED SO SOME DISAPPOINTMENT IN THESE NUMBERS. TIM: CROWD STRIKE DOWN BY ABOUT 2.4%. THE COMPANY SEES FISCAL REVENUE COMING IN ABOVE ESTIMATES. THAT CAME IN AT 3.89 TO 3.9 BILLION DOLLARS. ADJUSTED EARNINGS PER SHARE OF THE FOURTH QUARTER ALSO DID BEAT ESTIMATES. SHARES DOWN ABOUT 2.5%. ROMAINE: NORDSTROM OUT WITH ITS RESULTS. THE MARKET REACTION TO THE DOWN SIDE. 33 CENTS A SHARE. THE STREET WANTED 22 CENTS A SHARE. NET SALES ALSO COMING IN SLIGHTLY ABOVE ESTIMATES AT 3.35 BILLION. THE COMPANY

SAYS IT IS GOING TO STANDS BY THE FULL-YEAR E.P.S. FORECAST IT HAS PREVIOUSLY GIVEN. NOT SEEING A FULL-YEAR REVENUE ESTIMATE BUT LOOKS LIKE NEVISED WANTED SOMETHING A LITTLE MORE. ALIX: URBAN OUTFITTERS. SPECIALITY RETAILER HIGHER IN AFTERHOURS TRADING. UP 1.5%. ANALYSTS WERE LOOKING FOR 1.25%. ADJUSTED E.P.S., $1:10 BEATING THE ESTIMATE OF 86 CENTS. ALIX COLIN GOING BACK TO DELL FOR A SECOND. WITHIN THE INFRASTRUCTURE SOLUTIONS GROUP, WE MENTIONED THAT REVENUE CAME IN ALONG ESTIMATES BUT THE SERVERS REVENUE CAME IN A LITTLE BIT LIGHT. IT’S STILL YOU WANT 58% BUT IT’S ABOUT $7 HADN’T 4 BILLION. THIS

IS AN AREA WHERE THEY WERE TRYING TO TAKE MARKET SHARE FROM SUPER MICRO. CAROL: AND A LITTLE BIT OF COMMENTARY AND CONTEXT TO ALIX FROM THE COMPANY C.O.O. JEFF CLARK AT DELL SAYING INTEREST IN OUR PORTFOLIO IS AT AN ALL-TIME HIGH. A RECORD $3.6 BILLION IN THE THIRD QUARTER AND A PIPELINE THAT GREW MORE THAN 50%. INTERESTING FOR A LITTLE COLOR THERE BUT, AGAIN, INVESTORS NOT IMPRESSED, STOCKS DOWN ALMOST 6% IN THE AFTERMARKET. TIM: SAYING INCREWSED CUSTOMERS BUYING A.R. SOLUTIONS EACH QUARTER. UP 33% SEQUENTIALLY. ROMAINE: WHAT DO YOU GUYS THINK ALIX WAS LIKE AT 15?

[LAUGHTER] TIM: SHE WAS COOL. CAROL: I THINK SHE WAS AMAZING. WERE YOU TOUGH ON YOUR MOM? ALIX: I MEAN, SHE WOULD SAY YES. I WOULD SAY OBVIOUSLY NO EXCEPT FOR ALL THOSE CURFEWS THAT I BROKE. CAROL: SHE’S SUPER SMART, A GYMNAST SO WHAT ELSE? ROMAINE: KEEP GOING, CAROL. [LAUGHTER] CAROL: ALIX STEEL, THIS IS YOUR LIFE. THAT’S A WRAP. A LOT OF EARNINGS AND STOCKS MOVING IN THE AFTERMARKET. CATCH US TOMORROW. SAME PLACE, SAME TIME FOR THE "CLOSING BELL." ROMAINE: OUR COVERAGE CONTINUES HERE ON PUBLIC SCHOOL BERG TELEVISION. ROMAINE BOSTICK STICKING AROUND WITH SCARLET FU. ALIX

OFF. AND STEVE SOSNICK WILL BE JOINING US. THERE IS "THE CLOSE" SCARLET: WELCOME BACK TO "THE CLOSE." I’M SCARLET F, U. ROPE AND I’M ROMAINE BOSTICK. A RECORD HIGH FOR THE S&P 500. A RECORD HIGH FOR NASDAQ. THAT’S A REVERSAL HERE PRIOR TO THE PREVIOUS FIVE DAYS. THE DOLLAR TENDS TO GET A BIT HIGHER THAN BITCOIN. WHATEVER MOMENTUM WE SAW FROM LAST WEEK APPEARS TO HAVE BEEN LOST. SCARLET: LET’S LOOK AT SOME OF THE BIG MOVERS IN AFTERHOURS TRADING. NORDSTROM REPORTS RESULTS. ANALYSTS SHARES BEAT ESTIMATES. IT’S KEEPING ITS FULL-YEAR EARNINGS SHARE RIGHT NOW. CROWD STRIKE

FALLING ABOUT 3.5% AFTER ITS FIRST QUARTER E.P.S. OUTLOOK MISSED. LOOKING FROM 4 TO 86 CENTS. ANALYSTS WANTED TO SEE 8 CENTS ON A.M. AND DELL DOWN ABOUT 5% RIGHT NOW. DUE TO A DECLINE IN ITS P.C. BUSINESS. THEY SAW A 40% INCREASE IN DRIVERS BUT THE P.C. PART OF THE BUSINESS STALLING OUT. ROMAINE: AND WE ARE STILL AWAITING RESULTS OUT OF H.P. IN A BIT. FOR A BROADER SCORECARD LET’S BRING IN STEVE SOSNICK, THE CHIEF STRATEGIST AT INTERACTIVE BROKERAGE. STEVE, GOOD TO SEE YOU. STEVE: GOOD TO SEE YOU TOO. ROMAINE: I LOOK AT IT IN

AGGREGATE AND I LOOK AT THE NUMBERS. IT SEEMS GREAT. WAS IT GREAT? STEVE: IT WAS GOOD. WE GOT A COUPLE PERCENT INCREASE IN EARNINGS YEAR OVER YEAR THAT WE WANTED. IT’S NO LONGER SUFFICIENT TO BEAT YOUR EARNINGS. IT’S NECESSARY BUT IT’S REALLY ABOUT THE GUIDANCE -- EVERYBODY GOT HIP TO THAT. IF EVERYBODY BEATS THEN THE AVERAGE IS NOT THE AVERAGE SO IT’S GOOD ENOUGH. I THINK THE KEY WAS WE DIDN’T HEAR ANYTHING SCARY IN TERMS OF GUIDANCE SO MARKETS ARE STILL ANTICIPATING DOUBLE-DIGIT EARNINGS GROWTH FOR NEXT YEAR BECAUSE COMPANIES HAVEN’T TOLD THEM NOT TO. ROMAINE:

SOME OF THESE EARNINGS AND CONFERENCE CALLED HAPPENED FRYER TO THE ELECTION. THERE ARE GOING TO BE MAJOR CHANGES TO COMPANIES, MAYBE TO A LARGE DEGREE. IS IT TOO EARLY TO MODEL THAT IN NOW OR DO INVESTORS SIT AND WAIT FOR THE ADMINISTRATION TO FOLLY TAKE POWER? STEVE: I THINK INVESTORS SHOULD START TO TAKE CHARGE AS MUCH AS THEY CAN. LAST NIGHT WE HAD TRIP STORY. G.M. REACTED BECAUSE IT’S FAIRLY OBVIOUS HOW THAT COULD AFFECT THEM BUT FOR THE BROADER MARKET POINT OF VIEW, LET’S SHRUG IT OFF. SIX OF THE SEVEN MAX STOCKS ARE UP SO

WE HAVE AN UP DAY. WE’VE SORT OF ABDICATED TO THE RESPONSIBILITIES THAT IT’S DIFFICULT TO MODEL BECAUSE YOU HAVE AN INCOMING ADMINISTRATION, AN INCOMING PRESIDENT WHO CAN BE ALL OVER THE PLACE SOMETIMES. IT’S UNFAIR TO SAY WE’LL WORRY ABOUT IT WHEN THE TIME COMES. THAT’S WHY I THINK AS THE PENDULUM HAS SHIFTED FROM FEAR TO GREED, IT MIGHT BE TIME TO BE A LITTLE MORE FEARFUL AND COGNIZANT OF HEDGING. SCARLET: IF INVESTORS ARE NOT MODELING OUT, HOW ARE COMPANIES GOING ABOUT PLANNING THIS? WHEN DO THEY START SEEING SOMETHING MORE CONCRETE? STEVE: I THINK THEY’VE ALREADY

STARTED. THINK ABOUT THE COMMENTS MADE BY WALMART LAST WEEK AND EARLY THIS WEEK. THEY’RE VERY COGNITIVE ABOUT WHAT TARIFFS CAN DO TO THEIR BUSINESS. I THINK THEY FIRED THEIR OWN SET OF WARNING SHOTS SAYING THIS IS NOT GOING TO BE GOOD FOR OUR CONSUMERS. I THINK BEHIND THE SCENES THEY’RE ALL DOING IT, PLANNING AS BEST AS THEY CAN. I KNOW IF I WERE RUNNING A COMPANY RIGHT NOW, I’D BE CONSULTING WITH ANYBODY I COULD BUT THE MARKET AS A WHOLE, THE INVESTORS ARE WILLING TO THINK ABOUT IT FAIRLY CHAIR TABLY. TARIFFS ARE JUST A BARGAINING

TACTIC RIGHT NOW. WE WON’T WORRY TOO MUCH ABOUT IT. SCARLET: DOES WALMART DOING THAT, SPELLING IT OUT, GIVE PER MIX TO OTHER COMPANIES TO DO THAT AS WELL OR ARE THEY GOING TO WAIT UNTIL THEY HAVE SOMETHING FOR CONCRETE TO SAY? STEVE: I THINK IT BEHOOVES EVERYBODY TO KEEP THEIR MOUTH SHUT AS BEST THEY CAN UNLESS IT’S CLEAR. THAT’S WHY WE’RE FOOT HEARING A LOT FROM MOST COMPANIES. NO MANAGEMENT WANTS TO BE WRONG. SAY WE’RE PREPARING FOR X AND THEN Y HAPPENS. ON THE OTHER HAND, ALSO, NOBODY REALLY WANTS TO DRAW THE FIRE FROM THE

ADMINISTRATION AS IT WERE, BY SAYING THINGS THAT MAY OR MAY NOT BE TRUE OR PLAY OUT. SCARLET: ALL RIGHT, SO THAT -- STEVE SOSNICK GIVING US A SENSE OF HOW COMPANIES AND C.E.O.’S ARE A LITTLE BIT RELUCTANT TO BE STRAIGHT FORWARD WITH OUTLOOKS RELATING TO TARIFFS. ROMAINE: THIS IS H.B.Q. H. P. HIC. IT LOOKS LIKE THEY MISSED ON A COUPLE OF KEY METRICS. IN LINE WITH ESTIMATES AT ABOUT 93 CENTS A SHARE, THOUGH NET REVENUE MIGHT HAVE COME IN A TOUCH LIGHT. THIS COMPANY BEAT IN THE MOST RECENT QUARTER BUT THE MOST RECENT CONCERN IS

THE GUIDANCE GOING FORWARD. THE COMPANY SEEN AT 2025 TREE CASH FLOW. THE HIGH END OF THAT RANGE MIGHT ENCAPSULATE TO A CERTAIN DEGREE WHAT THE STREET WAS LOOKING FOR BUT THE LOW END CERTAINLY BELOW THE RANCH OF ESTIMATES. SCARLET: GUESS MISSING ESTIMATES. E.P.S. ALSO MISSING THE MARK BY ABOUT A PICKLE, 34 CENTS. WE’RE GOING TO STICK WITH EARNINGS AND BREAK DOWN THE OTHER COMPANIES THAT HAVE REPORTED. THAT’S COMING UP NEXT. THIS IS "THE CLOSE" ON BLOOMBERG. 88 SCARLET: A WAVE OFFERINGS IN THE LAST CUP OF THE MINUTES. A ROUND-UP OF NOTABLE MOVERS AND BRING IN

BAILEY AND ISABEL LEE. BAILEY, YOU HAVE WORKDAY. >> POST MARKET DOWN 6%. AFTER BEATING EXPECTATIONS ACROSS THE BOARD IN 3:00 BUT WHEN YOU LOOK AT GUIDANCE THAT’S WHERE THEY FALL INDECREE MENTALLY SHORT. THE STREET WAS LOOKING FOR 2.04 BILLION AND THEIR 2025 YEAR FORECAST, SUBSCRIPTION REVENUE AT 7.7 BILLION. THEY HAD SEEN A RANGE TO 7.7 TO 7.73. DOWN 7%. WE’VE SEEN OVER THE LAST EIGHT EARNINGS REPORTS. DOUBLE-DIGIT MOVES IN MORE THAN FOUR OF THEM. IT IS A STOCK THAT CAN BE VOLATILE. A SMALLER COMPANY BUT THIRD QUARTER BEATING GUIDANCE FOR 4:00 BUT THE REST OF

THE YEAR FALLING SHORT OF WHAT WALL STREET WAS LOOKING FOR, THAT’S WHY WORKDAY IS LOWER. EMILY: URBAN OUTFITTERS UP AFTER POSTING RECORD SALES FOR THE THIRD QUARTER, BEATING ESTIMATES. THE COMPANY ALSO BEAT ON ADJUSTED E.P.S. COMING IN AT 1 :10 PER SHARE. URBAN OUTFITTERS HAS THEIR OWN BUSINESS SEGMENT BUT THEY’RE ALSO THE PARENT COMPANY OF BRANDS, ANTHROPOLOGY AND THREE PEOPLE. THOSE BEAT ESTIMATES AS WELL. OVERALL THIS WAS A PRETTY GOOD EARNINGS REPORT FOR A RETAILER CONSIDERING WHAT WE SAW WITH KOHLS EARLIER TODAY AND ALSO ABERCROMBIE. ISABEL, YOU HAVE ANOTHER RETAILER. >> BACK TO THE RED.

IN ORDER STOP DOWN BY.5%. AFTER ITS CHAINS REPORTED GROWTH BETTER THAN EXPECTED. SO THIS WOULD ENCOURAGE THE COMPANY’S BOARD TO PURCHASE FOR A BETTER PRICE. THE NORDSTROM FAMILY IN SEPTEMBER MADE A 3.8 BILLION OFFICEROFF WITH A MAJOR SHARE HOLDER TO BUY SHARES THEY DON’T OWN. FORECAST THAT ANALYST SALES WILL BE FLAT VERSUS LAST YEAR. THE COMPANY SAID THE TOP END OF THE OUTLOOK IS ALSO SLIGHTLY BELOW EXPECTATIONS. WE SEE THE TOP AND BOTTOM LINE BEATING ESTIMATES BUT THE OUTLOOK STANDS IN CONTRAST WITH SOME OF THE RETAILSERS AND A HALF REPORTED IN THE PREVIOUS SEASONS AND

ALSO THE COMPANY SAYING THAT THEY FEEL WELL POSITIONED FOR THIS HOLIDAY. THAT’S IMPORTANT BECAUSE WE HAVE CHRISTMAS REMAINING. ROMAINE: THANK YOU. NOT MUCH GOING ON WITH NORDSTROM THERE BUT THE FIVE BIGGEST DECLINERS ALL IN THE TECH TRADE. SCARLET: T-MINUS TWO DAYS UNLESS THANKS GIVING. MANY CONSUMERS CONTINUE TO FEEL THE IMPACT OF RISING PRICES. OUR NEXT GUEST SAYS THANKS GIVING CAN BE ONE OF THE MOST REASONABLY PRICED MEALS TO PUT ON THE TABLE. HE IS IN THE COMPANY’S NORWALK STORE. STU, GREAT TO SPEAK WITH YOU. I WANT TO START WITH THAT IDEA THAT THANKSGIVING CAN BE

ONE OF THE MOST REASONABLY PRICED HOLIDAY DINNERS. THE TURKEY IS EXPENSIVE. A LOT OF SIDE DISHES THAT GO WITH IT. WHAT ARE YOU COMPARING IT TOO? >> SCARLET, NICE TO BE HERE. BY THE WAY, ROMAINE, YOU’RE THE FIRST ONE WE EVER HAD, I HAVE YOUR NAME ON ONE. [LAUGHTER] SO YOU’RE NOTED IN THE STORE ALREADY HERE. ROMAINE: I’M BIG. I’M BIG IN THE PRODUCE AISLE. >> IF YOU LOOK AT YOUR THANKSGIVING TABLE, THINGS LIKE STUFFING. A TURKEY IS A BIT -- YOU CAN GET THEM 99 CENTS UP TO 2.99. YOU GO TO THE DELI, YOU’RE

GOING TO PAY $12 PER SLICE OF TURKEY OR SOMETHING LIKE THAT. CHICKEN BREASTS OR 3.99, 4.99 A POUND. A TURKEY IS NOT THAT EXPENSIVE AT THE HOLIDAY AND THEN YOU HAVE A LOT OF VEGETABLES ON SIDE. YOU HAVE A PIE. YOU GET ALL DONE AND IT MIGHT COST YOU $12, $15 A HEAD FOR THANKSGIVING. THAT’S A PRETTY GOOD PRICE. THINK OF WHAT YOU GET ON THE MARKET. IF YOU WENT TO MCDONALD’S, THINK OF HOW MUCH YOU’D BE SPENDING. SCARLET: THAT’S TRUE. STU, YOU SELL MORE THAN 20,000 TURKEYS EVERY THANKSGIVING. WHAT SURPRISED ME ABOUT THE PRICE

THIS YEAR VERSUS LAST YEAR. IT’S THE SAME OR EVEN ACTUALLY DOWN. STU: RIGHT. WE HAVE A COUPLE OF TURKEYS WE SELL. ONE OF THEM -- IT WAS 2.49 LAST YEAR. WE LOWERED THE PRICE TO $1.99. WE ALSO HAVE ANOTHER TURKEY FOR 2.99. IT’S FRESH. I WOULD RECOMMEND EVERYBODY LISTENING GET A FRESH TURKEY. THE OTHER THING IS FREE RANGE SO IT GETS TO EAT FROM THE GRASS OUTSIDE AND THE THIRD THING NICE ABOUT THAT TURKEY, IT’S VEGETARIAN FED. THAT’S SORT OF YOUR GOLD STANDARD. THE TURKEYS WE SELL, ALSO ONE OF THEM GET SENT DOWN TO THE

WHITE HOUSE EVERY YEAR, SPECIAL ORDER SO WE’RE SEEING PEOPLE SPENDING THIS YEAR. I THINK THE CONFIDENCE IS REALLY HIGH. SHRIMP PLATTERS ARE GOING. NOBODY WANTS TO COOK ANYTHING. WE HAVE A DINNER FOR EIGHT IN A BOX. YOU GET EVERYTHING FROM THE ROLLS ALL THE WAY TO THE SLIDES OR EVERYTHING. I THINK THOSE RETAILERS, I DON’T KNOW ABOUT THE OTHER RETAILERS YOU MENTIONED IN THE MARKET BUT WE FEEL REALLY GOOD ABOUT THE ECONOMY AND WHAT’S HAPPENING RIGHT NOW. ROMAINE: I’M SURE YOU ALSO KNOW THERE’S A SEGMENT OF THE CONSUMER BASE THAT ARE PAYING A LITTLE BIT

CLOSER ATTENTION TO THEIR POCKETBOOKS SO ONCE YOU GET BEYOND THE THANKSGIVING HOLIDAY, FOR THOSE FOLKS WHO ARE COMING INTO THE STORE AND DO NEED TO SAVE MONEY OR AT LEAST BE MINDFUL OF IT, ANY ADVICE FOR THEM? STEW: ONE OF THE THINGS, WE’RE SEEING PEOPLE GO FOR OUR SPECIALS EVERY WEEK. WHETHER WE HAVE BLUEBERRIES OR STRAWBERRIES OF PLAY MINIONS ON THERE. -- FILET MINONS. A LOT OF PEOPLE ARE FREEZING THINGS FOR LATER. THEY LEARNED THAT IN THE PANDEMIC. WE’RE SEEING IN-SEASON PRODUCT LABELS RIGHT NOW. YOU CAN SAVE ABOUT 20% DOING THAT AND THE THIRD THING

I TELL EVERYBODY, DON’T GET TEMPTED BY -- THAT ARE IN THE STORE. ROMAINE: THAT’S HALF THE STORE. HALF THE REASON WE GO SO WE CAN WALK AROUND AND SAMPLE EVERYTHING. STEW: I KNOW. COSTCO DOES THAT A LOT. THEY PUNISHMENT A LOT OF DEMOS OUT AND IT WORKS. PEOPLE LIKE TO TASTE THINGS BEFORE THEY DO. SCARLET: PEOPLE DO. THAT WILL NOT STOP ME NOR I’M SURE YOU, ROMAINE FROM TRYING OUT THE SAMPLES AVAILABLE. PEOPLE HAVE CERTAINLY NOTICED OVER LAST COUPLE OF YEARS THE THINGS THAT YOU’RE BUYING IS GETTING SMALLER AND SMALLER. IT’S NOT IMMEDIATELY NOTICEABLE. IT’S

WHEN YOU PUT IT ON YOUR PLATE AND SAY, WAIT A MINUTE, I’M STILL HUNGRY. STEW: A GOOD EXAMPLE IS TROPICANA. WE HAD A DANEER OF THEIR ORANGE JUICE IN THE STORE AND THEY JUST REDUCED SIZE OF IT AND OUR SALES HAVE DROPPED LIKE 20% WHEN THAT HAPPENED. CUSTOMERS ARE SMART. THEY’RE LISTENING TO ALL OF US AND EVERYTHING. THEY YOU THINK SO WHAT’S GOING ON IN THE MARKETS TODAY AND CUSTOMERS WANT VALUE AND IF THEY SEE THE VALUE DIMINISHING, THEY’RE GOING TO DO SOMETHING REALLY SIMPLE -- VOTE WITH THEIR FEET. WE HAVE TO GIVE CUSTOMERS GOOD

VALUE. ROMAINE: HOW DO YOU DO THAT FROM THE SUPPLIERS’ SIDE. HOW MUCH PULL DO YOU HAVE IN BEING ABLE TO NEGOTIATE WITH SUPPLIERS THAT THE PRICE YOU’RE PAYING ENDS UP BEING COMMENSURATE WITH WHATEVER DISCOUNTS AND BARGAINS YOU WANT TO OFFER YOUR CONSUMERS? STEW: YOU HAVE TO NEGOTIATE WITH THEM A LITTLE BIT. WHAT I’VE BEEN DOING ALL THROUGH THE THE FARMERS ARE CALLING ME. COSTING ME MORE TO PUT FUEL IN MY JOHN DEERE TRACTOR, I HAVE TO DO MORE FOR LABOR. THEY ALL GIVE YOU THE STORY. I SAY LOOK, I WILL SPLIT IT WITH YOU. I

WILL GO 50-50 IF THE PRICE INCREASES. IT IS NOT MUCH, IT MIGHT BE $.10 OR $.20 A POUND, BUT COSTS HAVE BEEN GOING UP. YOU HAVE TO NEGOTIATE A LITTLE BIT. I CAN GET A GOOD DEAL ON ONE OF OUR TURKEY'S. I CALLED UP OUR OTHER TURKEY FARMER AND I SAID I CANNOT GIVE YOU A DEAL THIS YEAR. I HAVE TO LEAVE THE PRICE THE SAME AS LAST YEAR. YOU KNOW WHAT? IT IS A RELATIONSHIP WE HAVE HAD FOR 10, 20L -- 10, 20, 30 YEARS WITH THESE PEOPLE. CHRISTMAS TREES UP IN CANADA, YOU HAVE

TO TRY AND GET THE BEST RICE YOU CAN BUT YOU ALSO HAVE TO MAKE SURE TO GET QUALITY AND THE SUPPLY, THEY DON'T SHORTEN IT. ROMAINE: WE APPRECIATE YOU DOING THIS. YOU HAVE A LOT OF FANS BEHIND YOU. BUT I HAVE TO ASK YOU, WHERE IS DIVA CHEESE? STEW: COME ON OVER, GIRL. CAN YOU HAVE DIVA CHEESE? LOOK AT THE BEST PART OF MY DAY. I GET TO WORK WITH MY DAUGHTERS. SO WHAT DID YOU DO WITH DIVA CHEESE? >> SHE WENT ON TOUR. SHE WAS A SINGING ANIMATRONIC ON TOUR. SHE IS COMING BACK SOON

TO DAN BARRY. ROMAINE: WE ARE GOING TO KEEP AN EYE OUT FOR HER. I THINK WE HAD A CHANCE TO SEE HER WHEN SHE MADE THE ROUNDS IN YONKERS. STEW: HAPPY THANKSGIVING FROM OUR FAMILY TO YOURS. ROMAINE: REALLY APPRECIATE IT. STEW: I AM GOING TO EAT SOME OF THIS. ROMAINE: THE DELICATE WITH IT. STEW LEONARD , PRESIDENT AND CEO OF THE GROCERY CHAIN STEW LEONARD'S HEAD OF THE THANKSGIVING HOLIDAY HERE IN THE U.S. WE WANT TO PIVOT AND GO BACK TO SOMETHING A LITTLE MORE SERIOUS WHEN IT COMES TO THE ECONOMY AND MORE IMPORTANTLY THE

CONTOURS OF THE NEW TRUMP ADMINISTRATION. THERE HAS BEEN A LOT OF POLARIZING DISCOURSE AROUND SOME OF PRESIDENT ELECT TRUMP'S CABINET PICKS IN THE MARKET IS STILL MULLING SCOTT BESSENT'S NOMINATION TO THE FULL -- WILLIAM DUDLEY HAS A MESSAGE TO HIM. GOOD LUCK. YOU'RE GOING TO FACE TWO BIG CHALLENGES. ENSURING THE BOND MARKET FUNCTIONS PROPERLY AND COMING UP WITH A FISCAL POLICY THAT SENDS OUR DEBT SERVICE COSTS SOARING. WE ARE HAPPY TO HAVE BLOOMBERG OPINION COLUMNIST BILL DUDLEY JOIN US TO TALK MORE ABOUT THAT. I DON'T KNOW IF THAT WAS A THANK YOU NOTE OR SOMETHING

ELSE. LET'S START WITH THE SECOND PART OF THAT ON THE FISCAL SIDE BECAUSE THIS IS OBVIOUSLY THE ONE EVERYONE IS SO LASER FOCUSED ON. WHAT KIND OF POWER IS HE GOING TO HAVE TO REALLY ADDRESS THAT ISSUE INDEPENDENT OF HIS BOSS WHO IS GOING TO BE SITTING JUST ACROSS THE ROAD? WILLIAM: HE IS NOT GOING TO HAVE ENOUGH POWER TO DO WHATEVER HE WANTS ON TAX AND SPENDING POLICY. THAT IS UP TO THE PRESIDENT AND CONGRESS. BUT I THINK HE CAN EXPLAIN CLEARLY THE CONSEQUENCES OF NOT HAVING A GOOD SET OF POLICIES IN TERMS OF

WHAT THAT MEANS FOR THE BUDGET DEFICIT. HE CONSEQUENCES FOR INTEREST RATES. AND IF INTEREST RATES, THE CONSEQUENCES OF INTEREST RATES FOR BROADER MARKETS INCLUDING THE STOCK MARKET. I THINK HE CAN ESSENTIALLY BE THE VOICE OF REASON TO MAKE SURE THE POLICY MIX IS INTELLIGENT AND FISCAL CAPACITY IN THE U.S. IS PUT ON A MORE SUSTAINABLE ONE. RIGHT NOW WE HAVE BUDGET DEFICITS 6% OF GDP OR MORE AS FAR AS THE EYE CAN SEE. AND PRESIDENT ELECT TRUMP HAS SAID HE WANTS TO CUT TAXES, HE WANTS TO EXTEND THE 2017 TAX CUTS AND CUT CORPORATE TAXES

EVEN MORE. HOW ARE WE GOING TO PAY FOR THAT? THERE NEEDS TO BE SOMEONE IN TREASURY WHO IS VIEWED AS CREDIBLE NOT JUST WITH MARKETS CREDIBLE WITH TRUMP. ROMAINE: TWO COMPONENTS OF THE JOB AT TREASURY SECRETARY, ON THE ONE HAND THEY DO EFFECTIVELY ACT AS A PRESIDENTAL ADVISOR, BUT ALSO A SALESMAN. THEY HAVE TO GO OUT TO THE PUBLIC AND INVESTORS AND CONVINCE THEM THESE POLICIES COMING OUT OF THE WHITE HOUSE ARE PRODUCTIVE AND ARE GOING TO BENEFIT THEM. DO YOU THINK YOU KNOW ABOUT SCOTT BESSENT, THAT SALESMAN ASPECT OF IT, HE HAS THE CHOPS?

WILLIAM: WE WILL SEE. WHAT HE DOES HAVE HIS CUT ABILITY WITH MARKET PARTICIPANTS. USE ALL OVER THE LAST 24 HOURS THE MARKET REACTION TO HIS BEING NAMED HAS BEEN VARIABLE. STOCK PRICES UP, BOND YIELDS DOWN. PEOPLE ARE HAPPY TO HAVE SOMEONE AT THE U.S. TREASURY WHO IS KNOWLEDGEABLE ABOUT FINANCIAL MARKETS. NOW HE HAS TO MAKE SURE THAT ACTUALLY AFFECTS POLICY AND WE HAVE PUTIN POLICY IN TERMS OF TAX POLICY AND PUTIN POLICIES ON WHERE THE DEFICIT IS GOING OVER THE LONGER-TERM. SCARLET: YOU SAY THE MARKETS WERE CHAIRED BY THE NOMINATION BY SCOTT BESSENT. BUT WHAT

EXACTLY ABOUT BESSENT HAS THE MARKET SO RELIEVED WHEN THE REPORTING SHOWS THAT COMMITMENT TO TARIFFS, WHICH WE KNOW WILL BE INFLATIONARY, WAS A KEY DECIDING FACTOR FOR THE PRESIDENT-ELECT IN HIS PICK? BILL: I AM NOT SURE HOW STRONGLY THE INCOMING TREASURY SECRETARY IS IN FAVOR OF TARIFFS. I THINK HE UNDERSTANDS TARIFFS MIGHT BE A GOOD NEGOTIATING TOOL BUT ACTUALLY RAISING TARIFFS IS GOING TO DRIVE UP INFLATION, IS GOING TO DRIVE DOWN ECONOMIC GROWTH, AND IS GOING TO HURT PRODUCTIVITY. IT IS A BAD MIX. IF YOU ARE USING IT TO JUST GET CONCESSIONS FROM OTHER COUNTRIES

AND YOU DON'T WANT TO ACTUALLY ENACT TARIFFS, THEN THE CONSEQUENCES ARE MUCH MORE FAVORABLE. BUT WE JUST SAW PRESIDENT-ELECT TRUMP TALKING ABOUT ON DAY ONE HUGELY INCREASED TARIFFS ON CANADA, MEXICO AND CHINA. IF THAT HAPPENS ON DAY ONE, THERE WILL BE SIGNIFICANT NEGATIVE CONSEQUENCES FOR THE U.S. ECONOMY. SCARLET: WE ARE SEEING THAT ALREADY IN THE SHARES. IF HE HAD ROOM TO SET HIS OWN AGENDA, WHAT SHOULD THE INCOMING TREASURY SECRETARY FOCUS ON FIRST? WHAT IS THE FIRST THING HE NEEDS TO TACKLE, DO YOU THINK? BILL: NUMBER ONE, HE NEEDS TO KEEP FOCUSING ON MAKING SURE

THE TREASURY MARKET WORKS PROPERLY. ONE OF THE PROBLEMS WE HAVE HAD OVER RECENT YEARS IS THE AMOUNT OF DEBT WE ARE DISTRIBUTING HAS GONE UP FAR FASTER THAN OUR CAPACITY TO DISTRIBUTE IT. THE MARKET HAS RELIED ON ALGORITHMIC TRADING FIRMS THAT ARE BASICALLY THERE DURING GOOD TIMES BUT DURING BAD TIMES THEY LEAVE THE MARKET. AND THEY DON'T HAVE THE BALANCE SHEET CAPACITY TO COME IN DURING TIMES OF STRESS BECAUSE IT HAS BEEN ALLOCATED ALREADY ELSEWHERE. TREASURY MARKET FUNCTION IS IMPORTANT. SECOND IS MAKING SURE FISCAL POLICY IS ON A MORE SUSTAINABLE PATH. RIGHT NOW WE HAVE

A LOT OF COMPETING INTERESTS. ON THE ONE HAND TRUMP TALKED ABOUT LOTS OF DIFFERENT KIND OF TAX CUTS DURING THE PRESIDENTIAL ELECTION. ON THE OTHER HAND WE HAVE THE DEPARTMENT OF GOVERNMENT EFFICIENCY. WE WILL SEE HOW MUCH OF THAT AND TARIFFS WILL RAISE. THERE IS A BIG TUG-OF-WAR BETWEEN LET'S CUT TAXES, AND THEN WE ARE WE GOING TO GET THE REVENUE FROM. ROMAINE: THERE WILL DEFINITELY BE A TUG-OF-WAR BETWEEN THAT AND THE MARKETS AND POTENTIALLY EVEN INTERNALLY. I AM CURIOUS ABOUT SOME OF SCOTT BESSENT'S PAST COMMENTS, PARTICULARLY WHEN IT COMES TO THE IDEA OF A

SHADOW FITCH. I DON'T THINK HE WOULD BEFORE IT, BUT I AM CURIOUS AS TO WHERE THAT IDEA COMES FROM. WHAT IS THE RATIONALE FOR THAT? BILL: THE RATIONALE IS TO UNDERCUT CHAIR POWELL FOR HIS TERM EXPIRES IN MAY OF 2026. SO THE IDEA WOULD BE YOU WOULD APPOINT SOMEONE ELSE TO BE GOVERNOR, MAKE IT CLEAR THAT THAT GOVERNOR WOULD BE THE NEXT CHAIRMAN, AND IN SOME SENSE POWELL AT THAT POINT WOULD BE A LAME-DUCK. I THINK IT IS A DUMB IDEA. POLICY RIGHT NOW IS NOT REALLY ABOUT THE FUTURE, IT IS ABOUT TODAY AND HOW

THE ECONOMIC DATA IS COMING IN. I DON'T THINK THE FED HAS A LONG-TERM VIEW OF WHERE POLICY IS NECESSARILY GOING TO GO. THEY ARE GOING TO ADJUST POLICY BASED ON WHAT DATA TELLS ABOUT GROWTH AND INFLATION. IF THE FED POLICY IS DATA-DRIVEN, WHAT SOME SHADOW GOVERNOR SAYS ABOUT WHAT HE IS GOING TO DO A YEAR OR TWO DOWN THE ROAD IS NOT REALLY VERY RELEVANT. THE SECOND THING IS I THINK IT IS A BAD IDEA BECAUSE IT WILL JUST PUT MARKETS ON EDGE. TO THE EXTENT THE TRUMP ADMINISTRATION WANTS TO CONSTRAIN FED'S INDEPENDENCE, IT WILL

BE COUNTERPRODUCTIVE. BECAUSE IF THEY DO IT THAN ANY TIME THE FED DOES SOMETHING THEY ARE GOING TO WONDER IF THE FED IS DOING THAT BECAUSE THEY THINK IT IS THE RIGHT THING TO DO TO KEEP INFLATION IN CHECK, OR IS THE FED PULLING HIS PUNCHES AND DOING IT BECAUSE OF PRESSURE FROM TRUMP. ROMAINE: DOESN'T THE MARKET ALWAYS DO THAT? WHETHER IT IS POWELL NOW UNDER A BIDEN ADMINISTRATION OR YELLEN OR BERNANKE? BILL: I DON'T AGREE WITH THAT. DEMOCRATS FOR MANY YEARS, GOING ALL THE WAY BACK TO THE EARLY 1990'S, HAVE BEEN VERY CAUTIOUS ABOUT EVER

CRITICIZING THE FED. AND THEY KNOW THAT BECAUSE IT IS COUNTERPRODUCTIVE. WHEN YOU CRITICIZE THE FED YOU CALL INTO QUESTION ALL THEIR DECISIONS, YOU PUT MARKET PARTICIPANTS ON EDGE, THAT FORCES MARKET PARTICIPANTS TO BUILD IN HIGHER RISK PREMIUMS SO INTEREST RATES ARE HIGHER AS A RESULT, STOCK PRICES ARE LOWER AS A RESULT. IT JUST DOESN'T GET YOU ANYTHING. ALL IT GETS YOU IS SOMETHING TO BLAME WHEN THINGS GO BADLY. THAT IS ALL IT GETS YOU. SCARLET: BILL DUDLEY, REALLY APPRECIATE YOU BEING CANDID WITH US. WE WANTED TO GIVE YOU A RECAP OF SOME OTHER MOVERS IN

THE AFTER-HOURS TRADE. HP INK IS THE COMPANY NAME, DOWN SEVEN AND A QUARTER PERCENT GIVING A FAIRLY LACKLUSTER OUTLOOK. DELL TECHNOLOGIES A SIMILAR STORY, LOSING GROUND BY ABOUT 6.5% IN AFTER-HOURS TRADING. THE INFRASTRUCTURE SOLUTIONS GROUP REVENUE IS ONE AREA OF FOCUS FOR INVESTORS. AND URBAN OUTFITTERS SLIGHTLY HIGHER IN OUTFIT HOURS TRADING, UP 1.4%. ANTHROPOLOGIE REPORTED SOME SALES GAINS AND THAT IS SCARING INVESTORS. THIS IS BLOOMBERG. ♪ ROMAINE: READY, SET, SHOP. THE NATIONAL RETAIL FEDERATION PREDICTING A RECORD $183.4 -- 183.4 MILLION PEOPLE ARE GOING TO SHOP FROM THANKSGIVING THROUGH CYBER MONDAY. JOINING US TO DISCUSS WHAT

SHE IS SEEING IS MICHELLE MEYER, HEAD OF THE MASTERCARD ECONOMICS INSTITUTE. I WANT TO CORRECT THAT UPDATE. I HAVE DONE ALL MY SHOPPING. I'M AN EARLY BIRD, SO I'M THE OUTLIER. TO THAT POINT, I SAW A LOT OF DISCOUNTS. EVEN BACK IN OCTOBER. IT WAS HARD TO PASS UP. AND THESE WERE LEGITIMATE DISCOUNTS. WE ARE JUST GOING TO TALK ABOUT MY SHOPPING HABITS, SO PREPARE YOURSELF. IN ALL SERIOUSNESS, ARE WE SEEING ANY SORT OF PULL FORWARD OF SOME OF THAT SPENDING OR WILL THIS ALL BE COMPRESSED TO THE POST THANKSGIVING? MICHELLE: THE RETAILERS GOT YOU.

THAT IS EXACTLY WHAT THEY WANTED TO DO. WHICH IS TO ENTICE CONSUMERS EARLIER IN THE SEASON. IT IS NOT JUST ABOUT ONE DAY. IT IS NOT JUST BLACK FRIDAY THAT MATTERS. IT IS THE PERIOD OF TIME HEADING INTO BLACK FRIDAY WHERE CONSUMERS GEAR UP AND GET READY AND TRY TO FIND THAT VALUE. A LOT OF IT HAS TO DO WITH THE FACT THAT WE HAVE SO MUCH MORE E-COMMERCE SPENDING AND SO MANY PLAYERS IN THE SPACE THAT PROVIDE THOSE CHOICES. ROMAINE: I AM CURIOUS ABOUT THAT. WE HAVE TALKED ABOUT THIS A LOT OVER THE YEARS

AND IT ALMOST GETS TO THE POINT AT KIND OF MAKES BLACK FRIDAY AS A DAY IRRELEVANT. IT GETS TO THIS IDEA TOO, IF YOU ARE A CONSUMER WHO IS MAYBE BUDGET CONSCIOUS, DO YOU START EARLY AND SHOP OR WEIGHT AND HOPE AS YOU GET CLOSER TO THE CHRISTMAS HOLIDAY THAT YOU WILL SEE DISCOUNTS? MICHELLE: I DON'T THINK THERE IS ONE ANSWER BECAUSE IT DEPENDS ON WHEN YOU FEEL YOU'RE GETTING THE BEST VALUE. AND VALUE CAN BE IN A LOT OF DIFFERENT WAYS. IT CAN BE VALUE IN THAT YOU ARE SHOPPING FOR THAT ONE THING YOU

KNOW YOU REALLY WANT TO GET FOR A FRIEND OR FAMILY AND ONCE YOU FIND THAT YOU ARE GOING TO GO AHEAD AND SECURE IT. OR YOU CAN SIMPLY WANT THE BEST PRICE, WHICH MEANS YOU MAY WAIT AND SEE WHAT KIND OF PROMOTIONS YOU GET ON BLACK FRIDAY, THEN CYBER MONDAY, THEN ONE DAY BEFORE CHRISTMAS IN TERMS OF GETTING THOSE PROMOTIONS. ROMAINE: CAN I TELL YOU A TRICK I USE? I ALWAYS MAKE SURE THEY HAVE A VERY GENEROUS RETURN POLICIES SO IF I DO SEE ANOTHER ITEM OR DISCOUNT I CAN SEND IT BACK. MICHELLE: ONE THING

THAT WE OBSERVE WE LOOK AT OUR OWN INSIGHTS IS THERE IS AN INCREDIBLE SEASONALITY TO RETURNS. RETURNS ARE INCREDIBLY LOW IN DECEMBER AND A SPIKE IN JANUARY. THERE IS SOMETHING TO YOUR STRATEGY, WHICH IS YOU KNOW YOU HAVE THAT FLEXIBILITY AND CONSUMERS WANT THAT FLEXIBILITY. SCARLET: ROMAINE IS SO PROUD OF HIMSELF. THIS IS SOMETHING YOU TALK ABOUT EVERY YEAR. IT IS THE CONTRAST YOU PAINT BETWEEN ME AND YOU. MIDDLE INCOME AND LOWER INCOME CONSUMERS ARE FEELING A LOT MORE INSECURE THIS TIME AROUND AND THE EARNINGS REPORT FROM COMPANIES LIKE WALMART AND TARGET MAKE THAT CLEAR

THAT CONSUMERS ARE SEEKING VALUE. WHAT IS VALUE? AS LONG AS THEY ARE EMPLOYED, WHAT DOES THAT VALUE LOOK LIKE? IS IT DISCOUNTS, OR MORE FOR THE SAME PRICE? MICHELLE: I THINK CONSUMERS WANT TO FEEL EMPOWERED AND ACTUALLY HAVE BEEN EMPOWERED IN THE LAST YEAR OR SO BECAUSE INFLATION HAS BEEN MODERATING QUITE SUBSTANTIALLY. AND THERE IS A LOT OF CHOICE OUT THERE FOR CONSUMERS IN TERMS OF HOW THEY SPEND, WHERE THEY SPENT, WHAT THEY SPEND ON. THAT IS HARD FOR RETAILERS TO NAVIGATE BECAUSE THEY FIGURE -- THEY HAVE TO FIGURE OUT THAT MINDSET OF THE CONSUMER.

WHEN YOU THINK ABOUT THE FUNDAMENTALS DRIVING CONSUMERS, A LOT OF IT GOES TO THE LABOR MARKET. WE ARE STILL SEEING JOB CREATION AND WAGE GROWTH IN EXCESS OF UNDERLYING PRICE INFLATION. THAT ALLOWS THE CONSUMER TO HAVE SOME FLEXIBILITY ON AGGREGATE. SCARLET: ROMAINE TALKS ABOUT HOW HE BUYS HIS CHRISTMAS PRESENT EARLY. INVENTORY HAS BEEN A BIG THEME. BECAUSE OF THE PORT STRIKE A LOT OF COMPANIES STOCKED UP. ROMAINE STOCKS UP BECAUSE HE SEES DEALS. WHAT DOES THE RESEARCH SHOW ON WHETHER CONSUMERS ARE LIKELY TO STOCK UP? WHAT FACTORS INTO THE DECISION-MAKING? MICHELLE: IT CERTAINLY MATTERS FOR

RETAILERS WHEN YOU LOOK AT IMPORT DATA YOU ARE SEEING A RISE IN IMPORTS AS RETAILERS ARE TRYING TO GET AHEAD OF WHAT COULD BE TARIFFS AND HIGHER PRICES FOR RAW AND INTERMEDIATE GOODS. FOR CONSUMERS I THINK THAT IS PROBABLY THE CASE FOR SOME OF THE LARGER ITEMS. WHERE IT IS A MEANINGFUL PRICE POINT AND IF THEY ARE SHARING THE TAX FROM TARIFFS IT COULD MAKE A DIFFERENCE. BUT I AM NOT SURE THAT IS THE MAIN DRIVER TODAY FOR CONSUMERS. RIGHT NOW IT IS MAKING SURE YOU ARE CHECKING OFF YOUR LIST FOR THE HOLIDAY SEASON AND

DOING SO AT THE BEST VALUE. ROMAINE: ONE THING I WAS LIKE ABOUT YOU GUYS IS YOU HAVE GREAT DEMOGRAPHIC DATA. I AM CURIOUS, WHO IS SPENDING MORE? NOT TO START A WHOLE GENERATIONAL FIGHT, BUT THERE IS ALWAYS THE IDEA THAT OLDER PEOPLE SPEND BECAUSE THEY HAVE THE MEANS, BUT YOUNGER PEOPLE OF COURSE HAVE A LOT MORE DISCRETION INTO WHAT THEY CAN SPEND. SO WHERE ARE WE GOING TO SEE MORE OF THE DOLLARS FLOWING THIS YEAR? MICHELLE: UNFORTUNATELY WE DON'T HAVE THE ABILITY TO CUT IT QUITE BY DEMOGRAPHICS BUT WE HAVE THE ABILITY TO LOOK AT

A NUMBER OF COHORTS TO SEE HOW SPENDING TRENDS FARE ON A REGIONAL BASIS AND ACROSS DIFFERENT CATEGORIES. THERE ARE A LOT OF INTERESTING ASPECT IS WE CAN OFFER. I DO NOT THINK IT IS JUST ONE STORY. IN GENERAL IT IS THIS TIME OF YEAR, CONSUMERS ARE OUT, THEY ARE EAGER, BUT THEY ARE VERY CONSCIOUS OF HOW THEY ARE USING THEIR DOLLARS. ROMAINE: TO BE CLEAR, YOU ARE FORECASTING AN INCREASE. MICHELLE: WE ARE, OF 3.4%. ROMAINE: THAT IS IN DOLLAR VALUE RELATIVE TO LAST YEAR? MICHELLE: 3.2% TOTAL DURING THE HOLIDAY SEASON. WHICH IS PRETTY SIMILAR TO

LAST YEAR BUT THE COMPOSITION IS DIFFERENT IN TERMS OF THE CATEGORIES. THE OTHER THING I THINK IS UNIQUE PROBABLY TO THIS YEAR IS WE ARE OPERATING IN AN ENVIRONMENT OF DISINFLATION OR EVEN DEFLATION FOR A LOT OF CATEGORIES, THE BIG-TICKET ITEMS. WHAT YOU COULD END UP SEEING IS MORE REAL VOLUME, REAL CONSUMER SPENDING, WHICH IS ALSO SHOWING UP IN THE GDP NUMBERS. IT WAS REAL CONSUMER SPENDING THAT WAS ROBUST FOR DURABLE GOODS BECAUSE PRICES HAVE BEEN COMING DOWN. SCARLET: MICHELLE MEYER, ALWAYS A PLEASURE, CHIEF ECONOMIST AND HEAD OF MASTERCARD ECONOMICS INSTITUTE. WE ARE STAYING ON

THE CONSUMER BECAUSE IN THE LATEST CONFIDENCE REPORT BUYING CONDITIONS FOR BIG-TICKET ITEMS HAVE DROPPED AS MANY HOUSEHOLDS REMAIN FINANCIALLY STRESSED BECAUSE OF ELEVATED BORROWING COSTS IN THE LIVES OF THE COST OF LIVING. JOINING US NOW TO DISCUSS IS SOMEONE WHO CAN SPEAK TO THIS FROM A NEW PERSPECTIVE, SILVIO TAVARES, CEO OF VANTAGESCORE, A NATIONAL CREDIT SCORE AND COMPANY, KIND OF THE MAIN COMPETITOR TO FICA. THE BIG TAKEAWAY IN WHAT YOU ARE SEEING RIGHT NOW IS CONSUMERS ENTERED THIS HOLIDAY SHOPPING SEASON WITH HIGH LEVELS OF DEBT. IS THAT ENOUGH FOR THEM TO PUT OFF SPENDING OR

ARE WE GOING TO GET TO THAT 3.2% INCREASE? SILVIO: WE HAVE A MORE MODEST VIEW ON THE UPCOMING CONSUMER SPENDING SEASON. PART OF THAT IS WE ARE SEEING HIGH-END CONSUMERS STRUGGLING MORE WITH THEIR ABILITY TO TAKE ON DEBT. WE SAW THAT IN THE MOST RECENT VANTAGESCORE CREDIT GAUGE WHICH WE PUBLISH THIS MORNING. IT SHOWS A SURPRISING JUMP IN DELINQUENCIES FOR THOSE MORE AFFLUENT HIGHER INCOME CONSUMERS. THAT IS A HEADWIND HEADING INTO THE CONSUMER HOLIDAY SEASON. SCARLET: THAT IS A SURPRISE, I HAD NOT REALIZED THAT. AT WHAT POINT DOES THAT START SHOWING UP IN PEOPLE'S CREDIT

SCORES IN A MEANINGFUL WAY AND MAKE THEM MUCH MORE AWARE OF WHAT THEIR LIMITATIONS MIGHT BE? SILVIO: LATE PAYMENTS TYPICALLY APPEAR AS SOON AS A MONTH AFTER THAT LATE PAYMENT IS MADE. BUT DON'T GET ME WRONG, IF WE LOOK AT THE OVERALL AVERAGE CREDIT SCORE, A LOW SCORE IS 300, A PERFECT SCORE IS 850. THE AVERAGE CONSUMER WAS AT 702. SO THAT IS A VERY HEALTHY CREDIT SCORE THAT REFLECTS SOME OTHER DATA POINTS YOU HAVE HAD ON YOUR SHOW TODAY. DO OVERALL CONSUMER IS DOING QUITE HEALTHY BUT OF COURSE THERE ARE A FEW AREAS WHERE

THERE IS WEAKNESS. ONE AREA IS WE ARE SEEING AN INCREASE IN THE INFLATION CONTAGION HITTING THE MORE AFFLUENT CONSUMER. AND THAT IS A SURPRISE AND A CONCERN AS WE HAD INTO THE HOLIDAY SPENDING SEASON. ROMAINE: I AM CURIOUS ABOUT THAT. WE HAVE FOCUSED A LOT THIS YEAR ON THE LOWER END CONSUMER AND THE POTENTIAL STRUGGLES THEY MAY BE HAVING IF THE HIGHER END CONSUMER IS TAPPED OUT ON CREDIT OR AT A POINT WHERE THEY DON'T WANT TO SPEND ANYMORE, WHEN DO WE SEE THE EFFECT OF THAT IN THE ECONOMY? SILVIO: YOU ARE EXACTLY RIGHT. IF

YOU LOOK AT THE TOTAL AVERAGE CREDIT CARD BALANCE THROUGH THE END OF SEPTEMBER, IT IS ABOUT 6300. IT STAY THE SAME THROUGH THE END OF OCTOBER. WHAT THAT TELLS YOU IS CONSUMERS ARE NOT INCREASING THEIR LEVERAGE VERY MUCH. I THINK THE REALITY IS WE ARE GOING TO HAVE TO WATCH THAT. THE VALUE CONSCIOUS CONSUMER MIGHT STILL SEE DEALS. I AM NOT PREDICTING A GRINCHY CHRISTMAS, BUT THERE WILL BE AN INCREASE IN SPENDING, JUST NOT AS HIGH AS WE HAVE SEEN IN PRIOR PERIODS. ROMAINE: WE TALK ABOUT THE AMOUNT OF SPENDING THAT PEOPLE MIGHT DO THIS

HOLIDAY SEASON. I AM CURIOUS, FROM THE PERSPECTIVE OF THE LENDERS FOR LACK OF A BETTER PHRASE. ARE THEY BEING MORE STRICT WITH REGARDS TO YOU HAVE TO HAVE A CREDIT SCORE BEFORE WE EXTEND YOU THIS MONEY TO BUY A CAR OR GET A NEW CREDIT CARD? HAVE YOU SEEN AN INCREASE IN THAT? SILVIO: YES. THERE IS A DIFFERENCE IN WHAT BANKS SAY THEY ARE GOING TO DO AND WHAT CONSUMERS SAY THEY ARE GOING TO DO AND WHAT THEY ACTUALLY DO. WHAT WE SAW IS THAT BANKS ACTUALLY PULLED BACK ON LENDING ACROSS EVERY MAJOR CREDIT CATEGORY.

AUTO LOANS, CREDIT CARDS, MORTGAGES, THERE WAS A LOWERING OF GROWTH IN TERMS OF INCREASE. THAT TELLS YOU THAT BANKS ARE SOMEWHAT CAUTIOUS ENTERING THIS PERIOD OF THE YEAR. I THINK IT ALSO MAKES IT LESS LIKELY THE FED WILL ACTUALLY DECREASE RATES AT ITS NEXT MEETING. SCARLET: I HAVE TO ASK YOU ABOUT SOMETHING ELSE WHICH IS LOOMING, WHICH IS THE LOOMING STUDENT LOAN RISK IF TRUMP OVERTURNS PRESIDENT BIDEN'S LOAN FORGIVENESS PROGRAM. HOW MUCH OF THAT IS SHOWING UP ON THE MINDS OF CONSUMERS? SILVIO: IT IS NOT SHOWING UP YET. WE ARE GOING TO SEE THOSE RESULTS

IN JANUARY AS THE CONSUMER LOANS START BEING REPORTED ONCE AGAIN. WHAT YOU CAN EXPECT TO SEE IS A LOWERING IN THE AVERAGE VANTAGESCORE THROUGH JANUARY. THAT HAS NOT HAPPENED YET BUT WHEN IT DOES CONSUMERS ARE GOING TO BE SURPRISED BY THAT DEBT ALL OF A SUDDEN APPEARING ON THEIR CREDIT REPORTS. WE THINK CONSUMERS WILL FURTHER MODERATE THEIR BORROWING AND BANKS WILL BE MORE CONCERNED ABOUT LENDING TO A CONSUMER WITH A LOWER CREDIT CARD. WE ANTICIPATE FOR THAT TO HIT IN JANUARY. SCARLET: HOW BIG A HIT MIGHT THAT BE? SILVIO: IT DEPENDS ON THE INDIVIDUAL BUT

FOR AN INDIVIDUAL CONSUMER THAT HAS NOT REPAID THEIR LOANS, THEY ARE GOING TO EXPECT A HIT AS HIGH AS 80 POINTS ON THEIR CREDIT SCORE. THAT CAN SLIP A CONSUMER FROM A REALLY GOOD CREDIT RISK TO WHAT IS PERCEIVED AS A LOW CREDIT RISK. SO WHAT WE SAY TO CONSUMERS IS STAY UP ON THOSE LOANS. NOW IS A GOOD TIME TO START BUDGETING, REPAYING. THE SILVER LINING IS IF YOU DO THAT, YOU WILL EXPECT TO SEE AN INCREASE IN YOUR CREDIT SCORE BECAUSE YOU ARE NOT GETTING THE CREDIT FOR THE PAYMENTS YOU MADE ON TIME

IN THE PAST. ROMAINE: THAT GETS TO A QUESTION ABOUT YOUR BUSINESS OVERALL, CAN WHEN I SAY YOU I MEAN YOU AND YOUR PEERS. HOW TRANSPARENT IS THAT PROCESS? WE ALL HAVE A VERY NEGATIVE VIEW OF CREDIT SCORES BECAUSE IT WAS KIND OF LIKE A BLACK BOX. THIS DAY AND AGE THERE ARE A LOT MORE TOOLS. WE WOULD HAVE A VERY CONCRETE IDEA OF HOW MUCH THAT IS GOING TO AFFECT MY CREDIT SCORE. SILVIO: I'M GLAD YOU MENTIONED THAT BECAUSE THE KEY TO CONSUMER CREDIT HEALTH IS KNOWING YOUR CREDIT SCORE. VANTAGESCORE WAS THE PIONEER IN DEVELOPING

THE ABILITY FOR A CONSUMER TO LOOK AT THEIR SCORE THEMSELVES. OVER 220 MILLION AMERICANS CHECK THEIR CREDIT SCORE EVERY DAY USING VANTAGESCORE. ROMAINE: EVERY DAY? SILVIO: YES. ROMAINE: I FEEL LIKE MAYBE I SHOULD NOW. SILVIO: IF YOU WERE A CUSTOMER OF THE NATION'S LARGEST BANK CAN YOU CHECK YOUR CREDIT CORE, THAT IS A VANTAGESCORE. WE ARE A PIONEER IN THAT. NOBODY LIKES A GOTCHA MOMENT. YOU WANT TO KNOW WHAT YOUR SCORE IS BEFORE YOU APPLY FOR THAT LOAN. INCREASINGLY WE ARE SEEING CONSUMERS TAKE CONTROL OF THEIR CREDIT HEALTH. ROMAINE: WHEN DO PEOPLE DO THAT? I

BOUGHT A CAR EARLIER THIS YEAR, SO I CHECKED MY CREDIT SCORE BECAUSE I WANTED TO SEE AND KNOW WHAT I WAS WALKING INTO. OTHER THAN BIG-TICKET ITEMS, DO PEOPLE CHECK THEIR CREDIT SCORES WHEN THEY ARE JUST GOING TO DO HOLIDAY SHOPPING, OR SOMETHING MINER? SILVIO: YOU WOULD BE REALLY SURPRISED. THE REALITY IS CONSUMERS DO CHECK YOUR CREDIT SCORE FOR THAT. TODAY, A CREDIT SCORE IS NOT JUST USED FOR CREDIT, IT IS USED FOR A VARIETY OF THINGS. I WAS SPEAKING TO A CEO RECENTLY APPLYING FOR RELEASE. THEY CHECKED HIS CREDIT SCORE. WE ARE SEEING THE

VOLUME INCREASE SIGNIFICANTLY. LAST YEAR VANTAGESCORE GREW VOLUMES BY 43% TO 27 BILLION SCORES. SO WE ARE SEEING HUGE GROWTH IN THAT USAGE. ROMAINE: YOU NEED TO CHECK YOUR SCORE -- SCARLET: YOU CANNOT OPEN TOO MANY CREDIT CARDS. ROMAINE: YOU HAVE TO TELL THEM TO STOP DOING THAT. SCARLET: SILVIO TAVARES, CEO OF VANTAGESCORE. ROMAINE: WE ARE GOING TO SET YOU UP FOR WHAT COULD MOVE THE MARKET. STICK WITH US. A LOT MORE COMING UP ON THE CLOSE RIGHT HERE ON BLOOMBERG. ♪