B (3:10)

That feels like a little bit of a different view from what, what I've heard from many people, this idea that you think rates are going to continue to go up. I mean the markets move back towards pricing in December as a pretty good chance to cut rates. Kevin Hassett, the name being tossed around. Yep. If the president wants rates to be cut, Hasid's going to make the argument to cut rates. I mean, so why do you think rates are going to continue to back up? And by the way, the economic data hasn't been like gangbusters either.

A (3:38)

No. And the ism today, what are we, nine consecutive months in contraction. So the things that suggest yields should be going down. Okay, but yet yields are not going down.

B (3:49)

Well, they were going down last week. I mean, so they're up a little bit today. We're making a whole statement based on one day's activity.

A (3:55)

It seems as though there's support, support at this level between 392 to 4%. I'd like to see yields push below that level. We're not seeing it. I also see that precious metals continue to move higher. I think that's signaling something as well. So I usually like to look at a message from a market that's not doing what it should be doing based on where the fundamentals suggest it should be.

B (4:18)

All right.

A (4:18)

And everything you're citing would lead me to believe that yield should be lower. We're up nine basis points today. You can't dismiss that.

B (4:24)

I mean, I know, but it's in a day.

D (4:27)

Okay.

B (4:27)

B of A says better breath in. The market favors a Santa Claus Rally and you look at the sectors that did look at, let's throw up November and the sector moves that you saw because it was a broad move. Technology disappointed, discretionary, excuse me, disappointed. Industrials did too. But look at health care and comm services and materials and staples and financials. It was a better breath looking kind of market. Goldman Sachs trading desk today says there appears to be a growing acceptance around the potential for further dispersion within the market. They look at tech too, but in the market, Jimmy at large and they say that is a good sign. Joe doesn't sound like he is expecting all that much over this final stretch.

D (5:09)

Yeah, I'm on the other side from Joe, which is okay. It makes a market I look at just to start with the 10 year because you guys were just talking about it 4.09%. That actual absolute level doesn't worry me and it's sort of right in the range we've been at. Joe, I'd be worried, worried frankly if we got below 4% on the 10 year. Given that there are concerns about a slowdown in the economy and a weakening Labor Market below 4% I'd be worried. I actually take comfort at where the 10 year is right now. I acknowledge what you're saying about Japan yields. They've been spiking. It could be competitive but I don't think that's going to upset an economy that is still growing nicely despite the slowdown where we're going to have the stimulative effects of the budget bill in January where we see earnings estimates continue to go up and frankly regarding the broadening of the trade, lower, lower short end of the yield curve is going to help that as is quantitative tightening coming to an end. I'm a big believer that that is a stealth rate rate cut on top of what is most likely a rate cut next week. Both of which should help the smaller sectors and the more cyclical sectors of the stock market. So I'm a believer in the broadening of the rally and a rally into year end.

B (6:14)

So we'll see. Bryn, if we have a bit of a disagreement here on, on two perspectives that vary a little bit, where do you come out?

E (6:22)

So I think if you take a step back on the 10 year, we started the year at close to 480 and we're at 409. So yields are going the exact right direction as we've had rate cuts on the short end. Rates over the long end have also come down. And so I think where I agree with Jim on the long end is that we're actually in a good spot. And once again we've come down close to 80 basis points this year, which is great for the real estate market. What I do think though is that next year, as GDP supposedly is going to go higher, I think it will, the long end actually should steepen because that's telling you when the economy is getting stronger, you want a steepening yield curve. So while the Fed should be cutting one rate in December and we'll see if we get one or two next year, the long and steepening is telling you the market is healthy. I think you can never compare Japan to the U.S. japan owns like 90% or 80% of their own bonds plus their own stock market. I think the, the issue in Japan actually hurts crypto has, hurts hedge funds because you have this weird delevering, I think that's occurring over there. But I do think we're going to get somewhat of a broadening and I think within tech we're going to continue to see that dispersion of return within tech as people are trying to figure out who is actually going to be, you know, the winner in this ending of the air race.

B (7:42)

That's how Goldman's looking at it, Jack, that the dispersion that you've witnessed within the regular, you know, the market at large and in many respects in tech too is likely to continue. If you look at November's performance within the Mag 7, for example, or at least the Mag 6 taking Tesla out as the, you know, we're talking about the hyperscalers related to the direct AI trade Alphabet, the clear winner. Nvidia, the clear loser. These are not a monolith anymore. If we learned anything in November, it was just that these guys are going to start moving in opposite directions, in different directions. No longer trading as one large group, correct or no?

F (8:19)

No, I think that's absolutely correct and I think that makes for a healthy market. Scott. I think, you know, as I see the story would go unfold and kind of coming into this year where Chatbots was going to be the major disruptor and disrupt obviously the search business for Google and obviously Google has, has stayed strong through this entire year. They are very well vertically integrated, they have multiple revenue streams and if we think about what's going on with Google Cloud as an example, which by the way a few years ago was an unprofitable story for them and now is profitable and growing at a 30% run rate quarter after quarter. I think these are all positive developments for the market. And you want to See this horse rate with different horses leading the story from time to time.

B (9:05)

So you've heard everybody's perspective, which seems to be a bit on the other side of you.

A (9:08)

Yeah.

B (9:09)

You want to have a rebuttal?

A (9:10)

Well, the rebuttal would be first of all, the beginning of the year. The 10 year was at 480 and now the 10 year is at 410. I don't care where it was at the beginning of the year, I care what it is now because next year is only 30 days away. And if you're managing a portfolio, you're thinking about the environment 30 days from now. Where are, where's risk going to be over the next six months? Brin cites it Bitcoin lower. Today we see a very clear effect on what's going on in Japan as it relates to sentiment and towards risk and taking down leverage. And the caution that I have surrounding if we're going to see these elevated yields is if in fact that is the case, then you are going to see a continual process where the desire to increase risk, consumption exposure is not ultimately going to be.

B (9:59)

I'll go back to at, at every, if not every, virtually every point of concern in this market over the course of the last year, it has resulted in a V shape recovery. That's because every single time.

A (10:15)

And I think that's because of market structure. I really believe that. I think market structure has changed so dramatically over the last several years that both when, when markets need to recover or when markets need to work off some overbought conditions, you see very violent, aggressive moves in one direction that resolve themselves much faster than we're used to over priorities.

B (10:38)

But it's also emblematic of people getting all beared up about a specific issue and then realizing that the overall environment weighs too heavy to the bullish side. So then they realize, okay, well we're going to buy that dip, just going to just go buy it. Every single opportunity that investors have had, you go back to, to deep seek, you go back to Liberation Day and, and the next one and the next one after that. And if today is any way related to Japan and there's a little risk off activity, aren't you going to get your eye back on the prize of what still is the table in front of you?

A (11:15)

I'm sure tomorrow you're going to have turnaround Tuesday. That's usually the case. And ultimately what I'm expressing is a degree of cautiousness as we move into 26. I think we've priced in a lot of really good things in 2025. And don't let my remarks indicate that I think the market's going down in 26. But I think it'd be very difficult to replicate the type of performance, the broad based performance that we've had so far in 25, both in equities and in bonds. In 2020, 26 we could have a positive year. I'm just not that excited about the opportunity for 26 to look a lot like 25 or look a lot like 24 or even 23.

D (11:57)

You know, you may be right. From the perspective of 2026 where we have double digit gains, it's going to be hard to do when we're trading at 22 and a half times next year's earnings right now. But we still can have pretty decent growth just on the basis of the earnings growing and the multiple staying the same. I understand the distinction you're making. I'm going to accent the point I'm making which is that December should be a good month. That's my opinion. And it has a lot to do with the old adage, don't fight the Fed. Look, it may sound trite, but it's one of the most powerful forces out there. Don't fight the Fed. The Fed is coming at you with a double barrel shotgun right now. It's going to give you another cut, it looks like next week. And they're inserting liquidity by stopping quantitative tightening. I would not get in the way of that.

B (12:37)

I'll tell you what's interesting too. Since we've been talking about the trade all, all year long at, for the last few years, obviously everything outside of Amazon and Nvidia has underperformed the S and P this year. You know that everything outside of Nvidia, which is, you know, up 33% year to date, basically 34 in Alphabet because of this incredible comeback that the others in the group have underperformed.

D (13:06)

You know, you go ahead and I.

F (13:08)

Think that that's part of the story for me as, as it relates to next year. Yes, we're 30 day, 31, 32, whatever. Right. 30 days away. I get it. But when we, when we're talking about breadth, health care, comp service materials, staples, financials, financials obviously done well this year, I think there's an opportunity there. And especially with all the names that haven't all done well. Amazon's been in the basement all year.

B (13:32)

Right.

F (13:32)

And we've talked about the retail margins really growing, AWS reaccelerating. I think there's a story to Tell about these other names and I think that is what could drive the markets forward in 20.

B (13:42)

I mean, I don't know. Watch out next year if Amazon and Metta actually have decent years because you could say that they both had. Well, certainly relative to the S&P's overall performance they've had down years. Amazon is up not even 7% on the year. In a normal year you'd probably take the 10% from meta and this year it looks paltry.

E (14:03)

Yeah. And I think that's why I think only about 20% of large cap managers are outperforming the S and P because of exactly the stat you gave. I mean who would have guessed those are the two to overweight, right. Otherwise you just should buy the S and P. And so I think you're once again you're going to continue to see this dispersion. I think right now the closer you are to open AI, the worse your performance has been and I think that's, that's hurt Microsoft, Microsoft for better or for worse. Right? I mean Microsoft has Mustafa, Microsoft has Satya there have Copilot. But I think right now the open air concern is hurting Microsoft. We'll see what happens next week. And Oracle comes out. But I still do think that Google, Google, Nvidia, we're not talking about Tesla. Tesla I think will continue to be the outperformers because we have a clear line of sight. I don't think we have that clear line of sight with the other companies. I don't think Amazon gives me a clear line of sight how they're going to have margin expansion from their what version one chip or what have you. And I just think you see that with Nvidia and, and Google.

B (15:10)

You know the other thing we marked this past weekend is chat GPT turning 3. It launched on November 30th of 2022. Now the gains that have come since then have been astounding for the hyperscalers because it really changed the game, you could say changed the world. Certainly changed the stock market because it got everybody thinking about what this trade was going to mean. Deirdre Bosa joins us now with a closer look at what this rollout some three years ago has meant to all of us.

G (15:40)

Doesn't it feel like more than three years, Scott? It feels like sort of an eternity now to me. Well, you guys have just been talking about this. The markets have been trading as though it's a winner take all cycle. Look at Alphabet this year. But that short history of AI, it tells us something different. I has behaved more like a commodity. Year one was the era of magic and optimism. The goal was the smartest model and the winner was the disruptor, the open air universe. But year three has been the hard comedown math scale infrastructure model leads have proved fleeting and Google approaching a $4 trillion market cap because it owns the infrastructure and it can spend from a cash rich balance sheet. Now the ultimate lesson so far has been that the foundation race is a low margin, high burn business. If everyone learns the same way with more data, more GPUs, that means that every advantage erodes quickly. So OpenAI the early winner feeling pressure from model convergence, cheaper open models and enterprise overlap. Now, whatever year four of the AI cycle becomes. Guys, it is clear that it won't look like the first three because for the first time this is something interesting to look out for next year. The architects of modern AI, they're stepping away. They're stepping off of the big platforms and starting their own labs. Ex Open Air exacts Ilya Sutskever, Miramoratti, you've got Yann Lecun from Metta. I has had startups certainly, but not this density of top tier researchers starting their own labs. So Scott, the next phase may be driven as much by new ideas as by sheer scale. And that's sort of the viewpoint from here. I know that you guys are talking capex and infrastructure, but some really exciting things are going on from the people, really the modern engineers of AI.

B (17:17)

Would you place your bets on Open Air going public in 26?

G (17:23)

No, I don't think so. You would in 27? I don't think so. I think there's so. And you know, there's also a certain sort of understanding, at least in Silicon Valley that it's better, it's easier to build in private. And OpenAI, many of the brightest companies, databricks, anthropic, are taking advantage of that narrative. Very few think that you get sort of a real advantage by going private, especially when there's just so much money to raise in the private markets.

B (17:50)

Yeah, thank you very much. We will see. That'll be one of the intriguing questions of the new calendar year by the way. Alphabet still trying to get to 4 trillion. Needs to get above 331. It has some work to do. It kind of stalled on the doorstep. Amazon's price Target goes to 3 or 5 from 290. How about Broadcom has really, really made made gains. Broadcom's Target goes to 443. It goes to 460 at B of A. And according to CNBC Pro, we looked at a screener on that. Broadcom is a proven winner in December, the average gain being just shy of 11%. So keep your eye, Joe, on that name.

A (18:27)

And they will report earnings. I believe It's Thursday the 11th. Check me on that. This has been another of the really big winners off of chat GPT. They're up nearly 600%.

B (18:41)

70, 70 year to date. 70%.

A (18:44)

So it's been remarkable what we've seen Broadcom do and Vertive and Vistra and some other names as well. But I think when you think about Broadcom right now, you have to understand the partnership, the design partnership that they have with Alphabet on the TensorFlow processing units and the news that we heard last week with Alphabet and Metta, that's a very powerful catalyst, a very strong tailwind going into earnings. So I wouldn't play the other side of what has been a really strong winner. Yes, the valuation is getting a little bit rich. That's one argument that you can make. But we've maintained position and I've maintained position in this throughout.

B (19:22)

Okay, big week for software earnings. As many of you may know, the IGV, that's the index, the ETF, down 10% in November. It's only up 4% year to date. There are questions around a lot of stocks, probably first and foremost, Salesforce. IT reports Brent on Wednesday. You have any expectations here for something that's going to blow you away?

E (19:43)

I've been in the stock for about a quarter and a half and I'm flat on it. And I feel that Mark's going to come out and say he's going to talk about strong free cash flow. They're going to have, I think, 8% revenue, about 20, 20% earnings growth. They're going to say all the right things. But my. But what I'm seeing is the market just doesn't like this stock right now. And I don't necessarily think we're going to see a catalyst this quarter where all of a sudden the market gets excited about Salesforce because they have stable and growing free cash flow, unfortunately. So we'll see what happens. I'm not sure I want to stick with this name much longer, just because when the market goes up, it does nothing. And when the market goes down, it goes down, down a little bit. And if you look at a chart over the last three months, it's literally just bumping around 326, 336. And so I feel like dollars, unfortunately could be used in other places. So we'll see if I hold it going into earnings or not. I'll let you know.

B (20:37)

Guys, give me a year to date of Salesforce versus Snowflake, please. Because if dollars and cents are going elsewhere, they've been going to Salesforce. There's the outperformance which is pretty stark on that. On that Snowflake Salesforce beating out Snowflake. Did I say something different if I misspoke? Jason, you have Snowflake.

F (21:00)

Yeah, it's been a phenomenal performer. You see, it's got up 63% year to date. So data warehousing has been the story. I think they continue to create new AI tools that I think is going to be a positive for the stock. Operating margins have been growing. What I'm watching for here is product revenue. Product revenue is going to be the key metric that's going to be in focus for me as we as we watch and report. But it's been a great story and I think that's obviously where the flows have been going.

B (21:23)

Crowdstrike is this week after the bell on Tuesday. Dan Ives says we maintain outperform. 600 is the price target. Joe, you own that. You own some others in that space too. It's a popular area to be.

A (21:35)

I would focus on Crowdstrike and Palo Alto. We also own Okta that's reporting.

B (21:40)

Fortnet would not.

A (21:41)

Yeah, I think this is really beautiful come about these two companies for CrowdStrike. Look at the annual recurring revenue. That should be pretty strong operating margin somewhere around 21 to 22% as well. And I think the reason it got dragged down last week. Scott, is Palo Alto doing that there for Chronosphere after doing the cyber deal, the market was a little troubled by that.

B (22:01)

All right, let's talk some retail too for obvious reasons because we had a pretty good Thanksgiving shopping weekend and we are in the throes of Cyber Monday. Since we're talking about cyber, we might as well talk about about Cyber Monday. The XRT ETF is up 9% in some five days. Best five day stretch of the year according to bank of America. The third best five day stretch in some three years. You got Ulta this week. You own that but you have other exposure to how you feeling about this. Burlington, Costco, Ross TJX and Wal Mart Williams Sonoma as well.

A (22:32)

Very idiosyncratic. It's interesting because when I look at the 11 major sectors of the S and P consumer discretionary is where you have the most difficulty in finding momentum and sustaining momentum. Your Hit rate is not very strong there. So TJX to your point's been good. Burlington was awful last week citing warm weather impacting traffic but yet it was okay for tjx. Ross Star okay as far as Ulta on Thursday should be okay. Online has been really strong. They've limited promotions which has worked in their favor. They're really focused right now on profitability Options Market says 8% move either direction.

B (23:08)

Jay Costco Talk to me what's up.

F (23:09)

With this stock man? What's up Costco flat for the year. Right.

B (23:12)

You normally don't see some of the things that have been happening with.

H (23:15)

Right.

F (23:15)

It's been kind of a bifurcated retail market. Would you talk about some of the numbers that we've seen in retail? For me as it relates to Costco, I think it's expensive. I think it's had a nice run last year. Listen, the renewal rates are still above 90%. Kirkland brand is still doing fantastic and you know, I mean their consumer is a little bit different than you know they cater to the higher end consumer. But it's just kind of been lapping itself and struggling with the price action here. So I'm going to hold on to it here. I think it'll be a better 2026 for me for this one.

A (23:45)

All right.

B (23:45)

We'll finish where we started the outlook because RBC is out. Joe, I'm just going to. I'm going to bring this right into your, right into your grill.

A (23:54)

Sure.

B (23:54)

All right. 7750 is RBC for 2026. Investor sentiment may have more room to fall. They say in the near term they're channeling you but is already at levels sending a contrarian buy signal over the long term. That's them.

A (24:09)

7750.

B (24:11)

Okay.

A (24:11)

Sounds. Sounds potential like it potentially could happen. Here's what I think about 2026. 2025 was a year of momentum. 2026 will be a year of quality. Okay, I'll take it.

B (24:26)

You're just leaving it at that.

D (24:27)

Let's take it a little differently. Quality or how about broadening because if this AI trade which is now entering its fourth year is supposed to have an effect on the rest of the economy, we should see it showing up in results of non stocks next year. It is overdue.

B (24:42)

Well by that logic you're suggesting that every single stock in the market should go up because it's going to. Everybody is going to. I think you touched by.

D (24:49)

I understand your turn that far but I think that's you taking it too far?

B (24:52)

I don't think so. That's basically what you said.

D (24:54)

No, no, what I'm saying is a broadening of the rally.

B (24:57)

If you thought because I was giving you all this love about alphabetical that.

A (25:01)

It was just going to continue on.

B (25:03)

This, this love festival.

D (25:05)

I didn't think that. I did not think that long enough to know better, though. Obviously not every single one of the other 493 stocks is going to be positive next. That's not what I said. Joe, stop. But no, we should be seeing effects now in things like, like the consulting companies, like the travel companies. We should be seeing productivity effects that show up in better than expected earnings.

B (25:26)

All right, we will take a break. Coming up next, doubling down on the casinos. We have two bullish calls today on two committee names. Is it time to go all in to push your chips into the middle of the table? We'll debate it next.

G (25:47)

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B (27:27)

We are back. Bullishness abounds with the casinos today. Wynn added to Goldman's conviction by list. Las Vegas Sands Target raised to 80 at Argus. Both stocks hit new 52 week highs today. Jim, you get win first. That is yours.

D (27:43)

A lot of things going right for Wynn. First off, you got Macao November gross gaming results much better than expected. And every indication is that Macao is going to be a cash cow for the coming future. Las Vegas, no matter what slowdown happened over the summer, win outperforms because it's the highest quality resort on the strip. And then finally, the most important thing about Wynn is the Al Marjan Resort, which is going to open in approximately one year. And it is now starting to get recognized by analysts including Goldman Sachs. And it's not the first time they've mentioned it, but they're starting to focus on this as something that is not yet fully priced into the shares. So I do think Wynn is a great stock. I have to point something out. Scott, please do. Transitioned from a value stock to mo. A momentum stock. It hurts me personally and deeply that it's not in the Jyoti. I've discussed it with Joe enough. He's got other stocks in there that he thinks are higher quality.

B (28:36)

You know what is in there? Las Vegas Sands. But I mean, the point being that your neighbor has gone out of his way numerous times disparaging the casinos he hates on the stocks. He calls them dinosaurs in the desert. And then he hides behind the rules of his ETF and buys Las Vegas Sands. In the face of all that and.

A (28:58)

Not when you happy. The heat's back on me. Now, let me. Let me tell you the reason that we did not buy win. And it is because of the return on equity. And you know that. I know you know the company. The return on equity is slightly higher than what we found in Las Vegas Sands. So you're right. The momentum is there for both of these casino names. They're both doing well. Las Vegas Sands gives you a little bit more exposure to what is a recovery in China. I think that's been very clear in 2025. And a little bit of a better balance sheet. Don't get, don't get offended by that. But I think you would agree with that.

D (29:33)

All needling aside, the momentum is there in these names. Unmistakable. And you got to ride it right now.

B (29:37)

Okay? Exxon reiterated by today 145@UBS. You own that too, don't you?

D (29:43)

Exxon? I mean, look, I've had conversations on the desk with people who will not be named, but who often irritate me.

B (29:49)

Name them, please. Just name them.

D (29:52)

It's your friend and mine, Steve, who says this stock can't possibly go Higher, even as oil prices go lower. Well, yes, it has gone higher even as oil prices have gone lower because it's the best in the business. And unless you're not going to own energy at all, which is the wrong move over time, then you have to own ExxonMobil.

B (30:11)

All right, you got anything else you want to say about him?

D (30:13)

No. I mean, listen, if he's listening now, he knows he's living rent free in my head, so he'll come back on.

B (30:17)

That, but he's already thinking up the comebacks that he's going to use the next time he's on the show. Raymond James was removed from Goldman's conviction by list. They still have a buy rating and they don't really point to a specific reason either for removing it. But it has been removed.

A (30:35)

It has been removed. The turn in the dollar marked some of the financial sectors peaking and Raymond James is one of those names. September 18, the stock peaked earnings were. You weren't able to turn it around either. It's now decelerated. It's into its critical moving averages and could technically break down further.

B (30:55)

It's kind of weird that you, you have it on the conviction buy list. It's done nothing year to date and now it just goes to the buy list and maintain it as a buy. You do you maintain it as a buy?

A (31:08)

I think no, I agree with the downgrade.

B (31:10)

I think you have downgrades from conviction buy to buy.

A (31:13)

Well, that's a downgrade for in the eyes of Goldman Sachs, that's a downgrade. Someone that looks at that, do you? Extensively.

B (31:19)

You maintain it as a buy.

A (31:21)

I think that the momentum is clearly decelerating. That September peak and the subsequent price action, you have to respect it. A lot of names in the financial sector, not your JP Morgan's, not your Citi, not your Goldman Sachs. They've maintained the resilience strength into the fourth quarter. But you'll find some financial sector names that found the peak in the quarter.

B (31:42)

By the way, I'm glad you went there because I was going to bring this up earlier in, in the fact that it's been all AI all the time, right? The big banks, they've crushed it this year. You know, some of these gains, Citigroup, Jimmy, 46%. Goldman's up 40%. We've been talking about those stocks hitting, hitting highs on a regular basis. JP Morgan's up 30.

D (32:07)

I mean, let's, let's.

B (32:08)

Bank of America's up 22.

A (32:09)

I think it's a deregulation.

B (32:10)

Well, is up 20.

D (32:11)

I think it's deregulation. Before we talk about deregulation, let's just acknowledge the results have been fabulous at these companies. They really have been fabulous. Fabulous. Yes. Deregulation, yes. The IPO market reopened. Yes. There's M&A activity, 35 activity. I mean, they're. Yeah. And yet they're still not expensive. They're not looking at these and saying, oh, my goodness, this is like, you know, 30 times earnings or something like it was 20 years ago.

B (32:34)

Which ones do you have?

F (32:35)

Goldman Sachs. Goldman Sachs up 40. I mean, so what we were talking about earlier in the first block, you know, steepening yield curve is going to benefit a lot of these names. Names, I think loan demand. You'll see. I don't own the money centers, but you talk about like a Bank of America. I could see that popping even further. But I continue to like the IB names like Goldman Sachs and that's the best agree there.

B (32:54)

All right, get the headlines now from Kate Rogers. Hi, Kate.

E (32:57)

Hi, Scott. Indiana legislators are expected to convene today to push for new state congressional districts that would potentially flip the state's only two Democratic House seats and give the GOP a 9 to 0 sweep. Lawmakers are facing pressure from the White House to draw new maps in a number of states to make it harder for Democrats to regain the House majority. In Washington, Hong Kong officials said Today they arrested 13 people for suspected manslaughter in an investigation into a fire last week at a high rise housing estate. The death toll now stands at 151 and more than 40 people are still missing. Authorities say contractors used substandard scaffolding netting on the buildings which allowed the flames to rapidly spread. And Chinese retailer Sheehan is now facing a probe. In Texas, the state attorney general, Ken Paxton says the state will investigate whether the popular Fast Fashion platform violates state laws on labor standards and product safety. The probe will also examine the company's data collection and privacy practices. Scott, back over to you.

B (33:58)

All right. Thank you, Kate Rogers. Up next, your ETF edge, the big risks lurking in one of the hottest trades in the ETF market. We'll explain. Plus, we'll have a fresh committee move to tell you about several of them in fact. Stick around. We're back after this break.

C (34:17)

Hi there. It's Andy Richter and I'm here to tell you about my podcast, the Three Questions with Andy Richter. Each week I invite friends, comedians, actors and musicians to discuss these three where do you come from, where are you going, and what have you learned? New episodes are out every Tuesday with guests like Julie Bowe and Ted Danson, Tig Notaro, Will Arnett, Phoebe Bridgers, and more. You can also tune in for my weekly Andy Richter Call in show episodes where me and a special guest invite callers to weigh in on topics like dating, disasters, bad teachers, and lots more. Listen to the three questions with Andy Richter. Wherever you get your podcasts.

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B (36:11)

All right, welcome back to the Halftime Report. I'm Dominic Chu. Now, earlier this month on etf, we learned that according to a recent market analysis by ETF action, roughly 90% of single stock ETFs and leveraged or inverse strategies are owned by retail investors. They've been a favorite of bullish individual investors and demand for increasingly complex products has skyrocketed. But as volatility spikes, it might be time to reassess potential risks versus rewards. So joining me now for the discussion is Mike Koh, strategist over at yieldmax, co founder of of Open Interest Pro. He's also a CNBC contributor. Mike, let's talk about the options derivative side of the general markets vis a vis what these ETFs are doing with inverse and leverage type products.

I (36:57)

Yeah, I mean, so I mean, I guess the first thing I would say is that there's, you know, a lot of different flavors of these types of ETFs. And as a portion of the overall ETF market, these things still remain quite small. So if you can imagine, there's maybe 150 billion in products like this, that's perhaps 1% just of what the AUM for ETFs in the United States is alone in the United States ETF market is substantially larger than it is in the rest of the world. Now I think that the spirit of some of these things is quite good. I mean, what you're trying to do is give strategy access to people, basically democratized strategies for people who don't either have the ability or the time to implement some of these strategies themselves. And some of those, as you point out, include leverage or inverse positions. A lot of the ones that we manage, for example, include options overriding. But you know, one of the important things to remember is that of course this is a double edged sword, the power of leverage which can benefit you when asset prices are rising, when volatility increases or you start to see big drawdowns in the underlying stocks. Those things are going to bite a little bit harder in the levered products typically. And I think this is something that retail investors probably want to be aware of.

B (38:13)

And really quickly before we let you go for this part of the discussion, Mike, if you take a look at the true transaction costs of implementing some of these types of leveraged or inverse strategies versus using the ETFs themselves and paying the fees, where do the fees stack up?

I (38:30)

Well, you know, one way I like to think about it is that some of the strategies, if they're more complicated, those tend to be something that you would see generally in something like a hedge fund where the fees would actually be much higher. But in some cases if it's sort of a Delta one product or it's just straight leverage, you know, you ought to keep an eye on the fees for those levered products just in case they, they might be creating more of a drag on returns than, than you are hoping for. But I will say that, you know, these things in many cases are strategies that people cannot implement themselves. They just really need to know what they're buying.

B (39:02)

All right, we are going to continue this conversation over at ETF edge.cnbc.com Mike is going to be joined by Nate Jurassi of Novadius Wealth Management to talk broader ETFs and leverage. So Scott, we'll send things back over to you. All right, Domino.

I (39:16)

Thank you.

B (39:16)

Dom Chu. Up next, we track the trades. Bill Baruch, he joins us next. Several moves he is making in his portfolio. He'll tell you what they are next. All right, welcome back. Busy Monday for Bill Baruch. He joins us now. Several moves to go through. Wow, you bought App Lovin. That's pretty interesting. I hope you had a great Thanksgiving by the way and thanks for joining us. Tell me about this move as the target by the way today goes AT loop to 860 from 825. Why this one?

H (40:02)

This pulled back to the February high and a lot of support. We could watch this name for a while and the balance sheet is great. I mean they're growing margins by 70%. Earnings around 90%. Yeah, the multiple is a little high 43 but we've loved this name Clean Balance Sheets and we like the space with the AI marketing and the fact that we pull back against support which is against the previous highs. We think we're in a great bull cycle through April. This gives us a great spot here to put this name in the portfolio and I hope it gives us reasons to increase this position as time goes.

B (40:34)

All right, you've joined Joe, because we talked about it many times. You have it in the T. I do.

A (40:38)

What do you think? I like what Bill did here. It pulled back to the 100 day moving average at 523. It looks like it's held. The earnings were not bad at all that were reported recently and they are seeing very strong momentum in gaming, in AI, in automation and certainly advertising.

B (40:55)

All right. Also isrg, right? That's a new buy.

I (41:00)

Yeah, yeah.

H (41:01)

So we've been leaning into health care and ISRG gives us that, but it also gives us the robotics. I mean as, as AI and we see that get further down the road here next year it's what businesses are going to get impacted. What we're seeing here from ISRG, it's a multi year compounder. It's only up about 10% year to date. So I think this is a great consolidation year for the company and they're growing this robotics revenue about 20% annually. So I think there's some really good legs here next year. That's what we're planning for.

B (41:30)

All right, how about so far? That's a new one too.

H (41:33)

Again, looking at next year I think health care is to continue to benefit but then banking as well. And we're going to see names like so far that utilize AI to help their profitability to gain more business. Now they did return to profitability which is a positive. Now it's, you know, this name. I think there's more momentum behind it than, than really the clean balance sheet part of it. But I think that's going to continue to improve and next year could be a really great year for it.

B (41:59)

All right. You also bought more Micron and more Vertiv as well. Yep.

F (42:03)

Yeah.

H (42:04)

Vertiv was a new name we added about a week and a half ago. Now we took down Tesla in the portfolio and this gave us a reason to lean into a more another sort of a name. This we like the infrastructure here. Great balance sheet, great moves that we've seen in this name on the year again pulling back to support the previous highs January high as well as the July high 100 day moving average. It's responded in the coming the following days. That gave us a reason to lean into it for further on Wednesday. I think this name is going to be you know it's going to get above 180 was the was the hope here this week and to continue to run out above 200 again this infrastructure play I think names like that in the air space and data centers are going to continue to see the revenue growth into 2026 is going to is going to benefit Micron as well. Micron is a very low multiple. Was it 157% earnings growth. High bandwidth memory, you're going to need high bandwidth memory for the energy efficiency efficiency in the, in the overall as as these data centers and continues to improve Micron and these high bandwidth memory chips are going to be a bigger and bigger part of it. So the name has been less cyclical than it has been in the past. And I think that's another thing here that it's such a low multiple around it's about a 10 multiple here. This could go with the repricing to say 20 multiple at some point and this name is sort of dust bubble. I really like this name we added to a concentrated portfolio as well with the starter position at a three and a half percent slice.

B (43:31)

All right, good stuff. Thanks for joining. We'll see you back here on the desk. By the way, Micron's investing about 10 billion according to a report to build a plant in western Japan to make memory chips for AI applications. Coming up, Santoli, he's on the other side of this break with his midday work. Welcome back senior markets commentator Mike Santol. He's at the desk with us now. Your Monday Markets column assesses the case for a year end chase.

F (44:00)

Yes.

B (44:00)

And what does it find?

A (44:01)

I think you have to begin the expectations game for the rest of the year acknowledging that you have an upside bias that you not only because it's December, not only because the year has been strong heading into December but because you did have enough of a positioning shakeout some of that May be reversed, you know, with the 5% pop. But just because of all those things does not mean you're guaranteed of anything. So we have like an 80% chance the market goes up in December when the market's already been strong. Well, you know, the Panthers had less than a 20% chance to win over the weekend by the odds and they did. And nobody thinks that some cosmic event. I think the market's reacting pretty well today to the bitcoin tension and you know, just the general kind of give back of some of the leadership of things like Alphabet. So we're sort of rotating around doing okay. And also yields moving up the way they are. This global move higher in yields. So I feel as if everyone's leaning a little too much on the seasonal stuff because there's nothing really else to necessarily focus on when you have all the earnings in the bag and you're not getting in that much of an information, you know, incremental information from macro.

B (45:11)

Maybe the Panthers have had their own V shaped recovery, Mike.

A (45:14)

They look like about that at this point and but the problem is even up till Sunday they were ten and a half point dog. So that a lot of translates to about a 17% chance of winning.

I (45:27)

All right.

B (45:28)

You have a more negative bias towards the market here.

A (45:32)

No, I know.

B (45:33)

Don't say that.

D (45:34)

I don't.

A (45:34)

I'm cautious. I just think. I think you have to think about 30 days from now and that calendar is going to flip and what does the new year look like And I just don't think it's as exciting. It may not be as exciting. And I think people should be careful what they wish for if they want to broadening out Jim, because the index won't necessarily be flattered in that environment. It'd be good for stock pickers, would be good for value. And the other thing is I think sell side is getting bull done. I mean nobody thinks the market's going to be flat to down next year.

B (46:02)

Yeah, that is fair. I'll see you at 3 on closing bell with Mike of course for his last word. Final trades are next. To join me. Closing bell, 3 o' clock Eastern out of Parker. Chris Harvey has a new gig with CIBC Capital. He will be here. Sherry Paul of Morgan Stanley and Alex Cancerous as well. I hear the music is that. Well, we'll do final trades first. Brian Quick, what do you got?

E (46:34)

Nike, I think it's got a good setup into the low 70s.

B (46:38)

All right, what do you got?

F (46:39)

Amazon AWS for you.

D (46:41)

Accelerating a good momentum name in the Jyoti Delta Airlines.

A (46:45)

A good quality name Apple. Remarkable resilience.

B (46:48)

All right, I will see you at three. And now she's back. Ladies and gentlemen, Kelly Evans is back. I don't know what you missed, by the way. The AI trade is still a thing, in case you were wondering. I'm not sure if you thought it was over.

G (47:01)

So I hear, and as I log.

E (47:03)

Into ChatGPT Scott from the computer once again, it's great to be back.

B (47:08)

You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.

G (47:20)

All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Halftime Report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com halftime reportdisclaimer hi there.

C (47:59)

It'S Andy Richter, and I'm here to tell you about my podcast, the three Questions with Andy Richter. Each week, I invite friends, comedians, actors and musicians to discuss these three questions. Where do you come from, where are you going? And what have you learned? New episodes are out every Tuesday with guests like Julie Bowe and Ted Danson, Tig Notaro, Will Arnett, Phoebe Bridgers and more. You can also tune in for my weekly Andy Richter Call in Show Episodes, where me and a special guest invite callers to weigh in on topics like dating, disasters, bad teachers, and lots more. Listen to the three Questions with Andy Richter wherever you get your podcasts.