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Record Shutdown, Fast-Casual Falters & Barry Sternlicht’s Warning for New York City 11/5/25
00:43:19
The government shutdown is now the longest on record, and it could have an impact on Q4 GDP. Plus, are fast-casual chains like Cava and Chipotle losing their edge as consumers pull back? And Billionaire Barry Sternlicht says New York City is in for a rough time following Zohran Mamdani’s win.
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Introducing Fidelity Trader Plus. With customizable tools and charts you can access across all your devices. Try our most powerful trading platform yet@fidelity.com TraderPlus investing involves risk, including risk of loss. Fidelity Brokerage Services LLC Member NYSE SIPC You're a guy who just wants to look nice. The kind of nice where you might get a nice compliment on the niceness of your nice new outfit. Good thing Men's Wearhouse has everything from polos to jeans and yes, suits. Plus a team to help you find the perfect fit to make sure you look nice nice. Love the way you look. Men's Wearhouse. All right, Scott, thanks very much here. Welcome to the Exchange. I'm Dominic Chu in for Kelly Evans this afternoon. Stocks are higher with the NASDAQ and the S and P coming off their worst day in just about a month. Yields are also higher with the 10 year holding right above the 4 point call it 15% level. And here's a potential reason why. A pair of solid economic reports. ADP private payrolls up 42,000 for the month of October, stronger than expected and the highest level since July. And the ISM services reading also stronger than than expected in October as new orders accelerated. And a quick check on cryptocurrencies, Bitcoin specifically higher today after falling 6% and dipping below that key $100,000 level for the first time since June just yesterday now hovering right around 103,000 and change. But we begin in Washington, D.C. as the shutdown now officially becomes the longest in American history. And the Congressional Budget Office estimates it could lower fourth quarter GDP growth by as much as 2 percentage points. Emily Wilkins is live on Capitol Hill with whether there is any kind of an end in sight. Emily?
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Hey Dom. Well, like look, last night we did see a very strong night election wise for Democrats that has led to concerns from President Donald Trump that the shutdown is hurting the Republican Party. We're now at day 36. The shutdown is the longest ever and Trump told senators over breakfast today that that was part of the reason that their party lost last night.
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The shutdown was a big factor, negative for the Republicans. And they say that I wasn't on the ballot was the biggest factor. But I don't know about that. But I was honored that they said that.
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Trump is also continuing to push for the end of the filibuster. Now that would allow just a simple majority of senators to reopen the government, get rid of that 60 vote threshold. However, Senate Majority Leader John Thune says the votes are not there to end the filibuster at this time. And several Republicans who I just spoke with a few hours ago said that they are supporting keeping that 50 vote threshold in place. However, some others, like Senator John Cornyn, said that if the shutdown keeps going, Republicans should consider maybe ending the filibuster for spending bills or appropriations bills. Meanwhile, bipartisan conversations about the way to end the shutdown. They are still going discussions about pairing a short term step gap with year long spending bills, plus a promised vote on extension extending those Affordable Care act tax credits. Those are all still in play according to lawmakers involved in the talks. However, we've had some other Democrats tell us that simply guaranteeing a vote on the tax credits in the Senate is not good enough. They're going to need similar commitments from Trump as well as Speaker Johnson. But remember the math here. Republicans only need five more Democrats to join them to reopen the government. Around a dozen are involved in these talks to end the shutdown. And there is still a lot of optimism that we could wind up seeing a breakthrough. Although, Dom, we don't have any specific details yet on exactly what that looks like.
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Emily, has anything we note that there is an entrenched kind of cadre of folks on both sides of the aisle who are not willing to give going into this election. Per President Trump's own comments, has anything really changed now post election that could catalyze those talks moving towards reopening the government?
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If something has changed, it's not immediately evident. A lot of the Republicans who I've had conversations with and Democrats this morning seem equally dug into their positions. But we do know that that bipartisan group that's meeting that's having some of these discussions, they are keeping things very close to the chest. And so as far as exactly if there is some movement there, if there's a path forward, there could be. I think it does remain to be seen exactly what's going to happen with the rest of today and tomorrow if senators wind up staying in town this weekend to figure things out or if again we see them go home and we see the shutdown drag into yet another week.
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All right, Emily Wilkins live in Washington, D.C. with the latest on the longest ever government shutdown in U.S. history. Thank you very much for that. We're going to stick around in the Beltway over the court case over the legality of President Trump's tariffs going before the Supreme Court. Our Eamonn Javers is there following that story for us and has a look at just what's at stake Eamon. Yeah, hey, Dom. That's right. The Supreme Court arguments here wrapping up just within the past 20 minutes or so. And we heard some of the expected arguments. I think eyebrows were raised, though, by how skeptical some of the conservative justices were on all of this. Let's bring you though, to start with John Sauer. He's the Solicitor General. He works for the Trump administration. He was making the case here that this 1977 law known as IA is a law that does give the President the authority to issue these tariffs because it gives him the power to regulate foreign commerce. And as a subset of regulation, that gives him the power to tax. Here's what he said. We don't contend that what's being exercised here is the power to tax. It's the power to regulate foreign commerce. These are regulatory tariffs. They are not revenue raising tariffs. The fact that they raise revenue is only incidental. The tariffs would be most effective, so to speak, if no person ever paid them, if they achieve their goals. But there were a number of skeptical instances, Dom, with some of the more conservative justices here pushing back on some of those arguments that this particular law gives the authority that the Trump administration says it does. Here's Neil Gorsuch expressing some of that pushback. Congress, as a practical matter can't get this power back once it's handed it over the President. It's a one way ratchet toward the gradual but continual accretion of power in the executive branch and away from the people's elected representatives. So, Dom, it's always difficult to sort of read the tea leaves here and figure out what the vote might be at the end of the day. We do know that these justices are now going to take all this under consideration. They're going to ruminate for a little while. They're on a bit of an expedited schedule here, but it's not clear exactly when they might rule. One point that's interesting here, the pressure on them is that these tariffs are being collected every single day now. So the meter is sort of running on the tariffs. So if they are going to overturn that authority, every day they wait to do that, they're adding more money to the treasury that the treasury is ultimately going to have to pay back to those American companies tomorrow. Eamonn, I know that it's hard to speculate about what the, what the high court will do, but how exactly do these particular circumstances with tariffs juxtapose against the times that we have seen the high court side with the Trump administration on executive actions? It's taken with regard to other parts of the executive branch and the powers that they hold. From a regulatory perspective, I can think back to times when everybody thought the Supreme Court was just going to unilaterally side with the administration. Yeah. In this case, though, you know, it comes down to the Constitution's authorities that it gives out to the various branches of government. Right. The power to tax is very clearly given to Congress, not to the presidency. And tariffs are, of course, a tax. And so the question is, did Congress delegate its authority? How much of its authority did it delegate in that 1977 law? The Trump administration is arguing here that that delegation was pretty sweeping when they passed that law. What you're hearing from the plaintiffs here, who are lawyers representing a number of small companies who are impacted by tariffs, you know, wait a second, Congress gets that power to tax, they didn't say, you know, an unlimited blank check to the executive branch to create these tariffs worldwide. They did say that he has power in narrow circumstances to regulate. And that's an entirely different thing. All right, Eamon Javras here with the latest on those tariff policies at the Supreme Court. Thank you very much for that. From Washington now to valuations, there are several risks bubbling underneath the surface now for markets overall. And while our next guest says the market is priced for perfection and vulnerable to pullbacks, those pullbacks are a possible buying opportunity. Joining me now is Larry Adam, the chief investment officer over at Raymond James Financial. Larry, the interesting part about this question and segment here is juxtaposing it against what's happening in Washington, D.C. as we've done here. How exactly are the markets dealing with what's happening in Washington and still hovering at or near record highs. So taking both of those, the first one, when you look at what's happening with the Supreme Court, I don't really think that has a big ramifications on our outlook because if those tariffs are upheld, it's pretty much status quo. And if they are overturned, I think the president has a plan B where he's going to just reconstitute and get those tariffs ultimately in place, whether he uses 122, 338, 232, whatever. But you are going to see his policy of wanting tariffs in place once again by, by the end of the year or whenever that does need to get put into effect. As far as the shutdown, though, I do think that the longer that does stay in place, it does potentially lead to more downside risk to the economy. Right now, our expectations are prior to this shutdown is that this economy was weakening during this quarter, that we're in pretty close to a zero to a half a percent growth this quarter. So the longer it stays around it could potentially make it even weaker. If you are seeing signs Larry, of a weakening economy, just how much could markets pull back hypothetically in a scenario where there is a slowdown, perhaps even a possible recession at play, it seems as though every time there is a pullback it gets bid up, bought up. Right. And the pullbacks have become shallower it seems over the course of the last few years. I mean, you're absolutely correct. If you look since those April lows, the biggest drawdown that we've seen in the equity market has been just under 3%. Right? That's 105 days of not having a pullback of more than 3%. That's the second longest streak that we've seen going back to 2000. So that just tells you how small these pullbacks have been. Now if we do get a pullback, I think it's going to be rather normal. I think somewhere in the neighborhood of 5 to 10% is probably likely. Why? Number one, if you look at technicals, you know we're basically we're 12% above the 200 day moving average. So bringing that back 5 to 10% just gets you still on that upward trend. And then the other thing is that that, that I'm watching for is what could potentially take us lower. And right now I just think that some of this softness isn't being priced into the market and it could start to negatively impact earnings, particularly for goods produc and that could lead to some weaker spending during the holiday shopping season. And you know, we do a proprietary survey every quarter and 88% of the respondents in our survey said that they were going to spend the same or less during this upcoming holiday shopping season. So I would look for some potential weakness in those consumer related names, particularly. Larry, the current price action aside, in today's market, what we have seen very near term is more of a relative pullback in some of the Mag 7 tech, media and telecom mega cap names compared to other parts of the market. Is this perhaps the sign right now that there is vulnerability? And if so, with the economy seemingly there possibly slowing down, is it the time now for investors to start rotating into some of those value oriented sectors, the more defensive ones in nature? So I don't think it's a surprise that you're seeing a bigger sell off in some of those names. Right? That's where we've had the biggest upside since those April lows. And if you think about it, those names have a little bit more beta. So if there is a downward tilt to the market, they're going to be more negatively impacted. But going forward, I still believe that the best fundamentals are in those mega cap tech names. I mean, if you just look at this current quarter for earnings that we've seen, you've seen earnings for Those companies basically double 17% versus 8% for the rest of the market going in the fourth quarter. That's not expected to change. Actually, you're going to see a tripling where those mega cap tech stocks are expected to see their earnings grow 19%. The rest of the market only 3%. So I still think that this rotation is going to continue to be delayed until we see a more sustainable increase in earnings for the rest of the market. All right, Larry Adam, chief investment officer over at Raymond James Financial, thank you very much. We'll see you again soon, sir. All right. Coming up on the show, Kava shares back in the green. After falling 8% in the pre market trade, the fast casual chain is cutting its full year forecast. We'll tell you why and what it means for the rest of the entire restaurant industry coming up next. Plus, we've got more than a quarter of The S&P 500 reporting results just this week alone. We'll look at some of the biggest names that are still on deck, including this mystery chart up 270% this year alone. How you can position into that print and more ahead. The exchanges back after this. This is the exchange on cnbc. Think of your commute, your train, your car, maybe your walk. Even if you don't realize it, crypto and blockchain innovations are all around you on your way into the office. So why not learn about them on the way? From institutional custody solutions to 247 cross border payments with nearly real time settlements, crypto and blockchain are shaping flexibility and innovation for institutions all over the globe and your city. Join Ripple and host David Schwartz for crypto and blockchain conversations on Blockstars, the podcast. It's happening with Ripple. And now a next level moment from AT&T business. Say you've sent out a gigantic shipment of pillows and they need to be there in time for International Sleep day. You've got AT and T5G so you're fully confident, but the vendor isn't responding. And International Sleep Day is tomorrow. Luckily, AT&T 5G lets you deal with any issues with ease. So the pillows will get delivered and everyone can sleep soundly, especially you. AT&T 5G requires a compatible plan and device. Coverage not available everywhere. Learn more@att.com 5G Network Extra value meals are back for just $5. Get a savory and sweet sausage, egg and cheese McGriddles plus/Browns and a coffee for a limited time only. Prices and participation may vary. Prices may be higher in Hawaii, Alaska and California. And for delivery. Welcome back to the Exchange. Shares of fast casual restaurant chain Cava are seeing a big reversal. After falling as much as 8% in the premarket trade. The restaurant is cutting its full year forecast for same store sales growth, citing a slowdown in younger diners. Our Kate Rogers has a closer look at that and the rest of the restaurant space. Kate, how indicative of Kava is it for the rest of the industry?
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I mean it is tough out there right now for the restaurants, Dom. So as you said, Kava reporting EPS and revenues right in line. But it did miss on those same store sales estimates. They were up 1.9% lower than the street was looking for. The company also cutting guidance for its full year same store sales growth. That's the second guidance cut in a row. Cover Seeing what Chipotle saw a pullback in the younger consumer ages 24 to 35. CEO Brett Shulman saying last night on the call, quote, they don't have the steam that they had last year in the way that they were visiting or their frequency of visiting. It's not necessarily they're so challenged with us, it's just that they don't have the vigor or frequency they did last year. That's exactly what we saw in Chipotle. It's less exposed to the low income consumer but saw same store sales strength from that group and then over to McDonald's. US comps up 2.4% better than expected, but the lower income consumer continuing to struggle, which is why McDonald's is further leaning into value in the months to come. Its CFO Ian Borden saying this morning we would say we certainly still feel cautious about the consumer. And I think obviously the conditions still remain challenging in the US and we certainly see that as well in many of our top international markets. So not just in the United States. McDonald's CEO Chris Kempinski also referring to a bifurcated consumer saying QSR traffic for lower income customers declined nearly double digits across the sector while upper income consumer traffic increased nearly double digits. So a lot going on here right now. It's kind of tough to figure out domestic what is going on. But the way I'm seeing is consumers are just being really choosy right now about where they want to go out and spend their money because the economy, the economy is feeling a little bit more uncertain.
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All right, so Kate, McDonald's is a different consumer, at least base consumer, than say, a kava out there. At what point do we feel as though there is a path forward for some of those higher end consumers that are trading down into mid scale restaurants or mid scale diners trading down to quick service? Could those help offset some of the lower income spending off months that we were seeing so far over the course of this past quarter?
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So it looks like that is what's happening with the trade down into McDonald's. But for Cava and Chipotle, they're talking specifically about that 25 to 34, you know, middle income, upper middle income consumer that makes under $100,000 a year. And when you talk to executives, they're saying, you know, the job market is not great for that group right now. Cava's executives brought up student loan repayments kind of weighing on as well. So again, I don't know that they have the money or the confidence to go out and spend. And I think everyone you talk to kind of says that that's likely to continue back half of the year into early next year. Dom.
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All right, so Kate, I want to shift gears for a moment here as well because we have some news on the Starbucks side of things where some workers have now authorized a strike in certain stores nationwide. What can you tell us about Starbucks and the labor front?
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Sure. This, they are not on strike, Right. This is just an authorization vote. But Workers United announced that a super major of its union members, Don, they're saying about 92% voted to authorize an unfair labor practice strike ahead of the company's holiday season. So again, 92% voted yes. They say on striking on Red cup day, which is November 13th in 25 cities to begin with. And they're threatening to escalate if they don't see progress on the contract that the union's been seeking since 2021. Now, Starbucks spokesperson Jack Anderson telling us we're disappointed that Workers United, who only represent around 4% of our partners, has voted to authorize a strike instead of returning to the bargaining table when they're ready to come back, we are ready to talk. Starbucks also adding, you know, it will be ready, of course, to serve customers on that day if the strike does come to pass. But we will be watching this one closely all Right.
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Kate Rogers with the latest on restaurants. Thank you very much for that. We're going to turn back towards that fast casual space. We'll talk a little bit more about the pressure on the lower end consumer. Greg Frankfort is the lead restaurant analyst over at Guggenheim Securities. He's with us now for more color on that conversation. Greg, Kate's report talked a little bit and focused more so on that kind of lower income consumer feeling the pain. Is that going to reverberate through not just McDonald's but other parts of fast food as well? Yeah, it's clearly been the issue and I think Chipotle's probably laid it out the clearest. That kind of sub $45,000, 45,000 household income customer has been pressured for probably 18, 18, 24 months. But that has spread to the 45,000 to 100,000 household income customer and that makes up 30% of Chipotle's business. But the bottom below 45,000 is only 10%. And so they were feeling it, but it wasn't on enough of their customer base to really make a dent until probably the last six to nine months. Has there been any indication from your channel checks, your research and analysis that shows that there are places within restaurants right now that are at least relative beneficiaries of some of that weakness in the low end consumer? Is there a bright light, so to speak, in this, in this kind of consumer sentiment downfall that we've been tracking? Yeah, I mean I look, you look at Taco Bell's comps of up 7, you look at McDonald's comping up 2 to 3, Domino's comping up 5. There are places in fast food that are insulated. It actually kind of runs somewhat contrary to the Ozempic thesis that's been out there that a lot of these fast food companies would really get crushed. And look, restaurant stocks have underperformed the market a ton this year. The S and p is up 16%. Most of the global franchise or businesses are up 3 to 10%. Most of the company operated fast casual chains, a lot of them are down 40 to 60%. There. There's been a lot of pressure on the top line, a lot of pressure on stocks. There has been some bright spots and casual dining, which is that higher income or maybe upper middle income customer has been performing relatively well and outperforming fast casual, which is, which is a dynamic that we maybe didn't expect as much going into a bit of a softer and choppier restaurant top line environment. And Greg, we heard just A little bit about some of the labor issues facing potentially facing Starbucks. How does Starbucks fare? Price wise, price to, you know, risk, reward, perspective wise, given what we are seeing in terms of a possible labor at least shortage in the holiday shopping season. Look, when, when Brian Niccol came to Starbucks, there was a big premium put into shares. That premium is still somewhat there in the stock and he has gotten a lot of rope to cut earnings a ton with the hopes that that comps and traffic would improve. They have gone positive. They will need to go more positive to recapture the profitability that's been reinvested back into labor. I think the one thing that's interesting and probably really important to call out is this is one of the loosest labor markets and hiring markets for restaurants in 10 years. I think you're going to see wage growth come down a little bit for lower and middle income or for a lot of these restaurant workers. And that may be a margin beneficiary for some of the big restaurant chains. But that's something to watch. It is turnovers down. It's gotten a lot easier to hire for a lot of these chains. All right. And because your coverage universe is rather expansive, top pick given what we are seeing with the consumer over the course of the next three to six months. Yeah, we've laid out Texas Roadhouse as the best idea for us. The shares are at $160ish. There's been some concerns that beef would be inflationary. But this is the chain that when you get cost pressure, they reinvest it into, into the bottom line, into the guest experience. And so you know, if you look at a 2027 revenue and you put a 17% recovery margin on the business, it's trading at less than 18 times earnings. For a very strong top line, very strong bottom line growth business, we think it's attractive. All right. Texas Roadhouse, the topic from Greg Fangfort at Guggenheim. Thank you very much. We'll see you soon, sir. Thank you very much. All right. Coming up to the democratic socialist Zoran Mamadani will be the next mayor of New York City. And Wal already weighing in. Maybe not shocking. Ahead, an exclusive interview with New York billionaire investor and real estate developer Barry Stern Licht his take on the so called Mamdani effect on commercial real estate, on housing and much more. The exchange is back after this break. Welcome back to the Exchange. Some of the stock movers getting the most attention today include bank of America. Shares of America's second biggest bank by market value are down by roughly 1 1/4% that's off the session lows this as the Money center bank holds its first Investor Day since 2011. That program is still in progress up in Boston right now, but so far some of the main points investors appear to be focusing on include guidance for net interest income, NII's that growth of 5 to 7% annually over the next five years, earnings per share growth of 12% or more in the next three to five years, and a bump up in targets for return on tangible common equity rotce to a 16 to 18% level from a previous guide in the mid teens. Next up you got shares of Danish pharma company Novo Nordisk. Those shares are down by just about a percent or so after a quarterly earnings report that was seen as mixed. But the maker of the blockbuster weight loss drugs, diabetes drugs, lowered the high end of its previous full year profit and revenue growth forecasts as it faces stiffer competition for pricing and pressure for its blockbuster Ozempic and We Go V weight loss treatments. So those shares off fractionally will end with a big drop in shares of Trex, down about 29% after the maker of composite building materials most well known for decking is down after it reported a more disappointing quarterly earnings report. It also lowered its outlook. The company saw some better trends in the spending side of things for remodeling in the early part of the season, but saw weaker market conditions in the back half and then see those trends continuing into the seasonally slower fourth quarter as well. So keep an eye on that 29% decline in Trex. Now let's send things over to Julia Boorstin for a CNBC news update. Good afternoon, Julia.
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Hi Dom.
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Mexican President Claudia Sheinbaum says she is.
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Pressing charges against a man who harassed her and groped her in the streets of Mexico City yesterday. In a video circulating on social media.
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The suspect appears to try to lean.
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In and get kiss her and touch her body. Sheinbaum called it an assault on all women and that's why she's pressing charges. The incident also raised concerns about the president's security detail and why the man was allowed to get so close to her. Closing arguments will take place Today in the $40 million lawsuit filed by a former Virginia teacher who was shot by her six year old student. Abby Zwerner is suing former assistant principal Ebony Parker, alleging she neglected to act when multiple people raised alarm bells about.
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A student having a gun on campus.
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Parker also faces a criminal trial next month for eight counts of felony child neglect. And Interpol today launches A global effort to dismantle criminal networks behind illegal logging, timber trafficking and gold mining, which lead to large scale deforestation around the world. The effort was announced just ahead of the UN's COP30 Global Clients Summit. Back over to you.
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All right, thank you very much, Julia, for the news update there. Coming up, here's your final look at today's mystery chart. One of the names set to report results this week. We'll look at how to position ahead of that big print coming up next. Those shares already up 280% year to date. The heaviest metal credit card of all time, rumored to be one of only 18 in existence, plated with the very same tungsten that forged the international space station and wielded at business dinners like a samurai sword. It's a classic corporate power move. But the real power move having end to end visibility on your most critical shipments. FedEx, the new power move. And now a next level moment from AT&T business. Say you've sent out a gigantic shipment of pillows and they need to be there in time for International Sleep day. You've got AT and T5G so you're fully confident, but the vendor isn't responding and International Sleep Day is tomorrow. Luckily, AT&T 5G lets you deal with any issues with ease. So the pillows will get delivered and everyone can sleep soundly, especially you. AT&T5G requires a compatible plan and device coverage not available everywhere. Learn more@att.com 5G Network welcome back to the Exchange. More big names are on deck, including Qualcomm, Lift Hood and Snap after the closing bell for their results and for the trades heading into those prints, let's bring in Tim Seymour, the chief investment officer of Seymour Asset Management. He's also a CNBC contributor. Tim, we're going to start with shares of Qualcomm reporting shares are up 2% ahead of that earnings report and up more than 4% over the past month. The chip maker recently announced it would be breaking into the AI data center market. So what's the trade for Qualcomm heading into that print? Well, the core business is better than expected, especially because of their their share in the Apple iPhone 17, which seemingly is a better story as well, is closer to 90% versus the 70% expected. The flip side of that is they have less of a share in Samsung. Both of these, whether it's Galaxy or iPhone, you know, they're looking to be in house right now. Qualcomm seemingly is in a better net position. The AI data center and what it means for AI 200, AI 250 chips for Qualcomm I think is really the big question. And that's where you get a boost to the multiple at 16, 17 times. Not expensive. More important also will be the development of their Internet of things, their auto business. And I think that's really the core part of the exciting story. Data center is the buzz here chart has backfilled a little bit even of that big announcement. But I like Qualcomm here. I think, I think it's a combination value and has growth drivers. All right, so that's Qualcomm. Next up are shares of Robinhood. That was the mystery chart by the way, that we showed you right before the commercial break. Those shares are down about 4% this week mirroring Bitcoin's move lower. Maybe not shockingly, but Robinhood's been seeing momentum in its prediction market business as online betting continues to grow. What's the thesis heading into the print for Robinhood? Well, the thesis is that it's it's a financial kind of. Sorry, it's a digital proxy play for all that is going on. Whether it's tokenization that they will be I'm sure right in the middle of but other dynamics and where they are creating with a SL slightly different demo than the traditional wealth management world. The financial super app, not cheap 45 times but 27 million funded accounts which is a number that keeps growing and their exposure for investors who tend to look past the valuation because it is such a proxy to what's going on in the digital space. They have multiple products just announced a new mortgage business. I think they will continue to grow the top line. All right, 67 times forward earnings by the way for that Robinhood stock. Now to shares of Snap, the parent company of Snapchat. Those shares are off 31% so far this year. Analysts are saying they're keeping an eye on engagement and product velocity as we head into the print. Not too much love on the street though for this name. 72% of analysts polled by FactSet have a hold equivalent or neutral rating. But Tim, you are long Snap. Yeah, I'm long and like to believe this was bottom fishing a couple years ago. Although it's made new bottoms and I, you know, structurally I'm not sure Snap sits in the right place in the marketing funnel, so to speak, the engagement funnel. But question is really what are the drivers here? When Evan Spiegel gave his annual letter a couple of months ago, he focused more on cost cutting savings. That's not a reason to be excited here. This stock, the implied move into these numbers is probably 15 to 16% over the last eight quarters. It's been a widowmaker. I think expectations are flat and I think therefore the expectation, the sentiment around the stock, not great, could move higher. Don't get too excited by opportunities here. All right. Not for the faint of heart for sure there. Finally, let's get over to Lyft. Those shares are higher ahead of their results. Uber reported solid third quarter numbers yesterday, but that still hasn't been enough for Wall Street. Those shares ended the day down about 5%. So, Tim, do you think Lyft could suffer a similar fate or buck the trend that Uber has set? I think Lyft's at least a relative improved story over Uber again, relative to itself. Mobility, pricing trends are better. I think there's some real excitement around potential way more partnerships, loyalty partnerships. I think management changes over the last couple of years have brought a lot more confidence. I'm long the name exciting. I've been long a couple of years. And again, this is a story about normalizing trends in their core business but where they might be in some of these exciting places, including Waymo. So I like the lip story. I think the sentiment here is somewhat mixed. It's had a pretty good move. But I think, you know, at 16, 17 times, this is a $27 stock, times 26 EBITDA. All right, Tim Seymour, thank you very much for the thoughts. We appreciate your Dom. Thanks. Coming up on the show, New York City's mayoral race grabbing national headlines amid fears from corporate leaders that there would be an exodus if Zoran Mamdani actually won. Ahead, billionaire Barry Stern Lick weighs in on what Mamdani's win means for the business community, particularly when it comes to real estate. It's a CNBC exclusive interview. You don't want to miss it. Keep it right here. Welcome back to the Exchange. Wall street couldn't stop mayoral Mayor Mamdani. Now it has to work with him. That is the headline on a Wall Street Journal piece today following Mamdani's mayoral victory. In an exclusive interview, our own Diana Olich got to actually speak with one of Wall Street's heavyweights about Mamdani's potential policy impact, especially on real estate. Diana, talk to us a little bit about your conversation with Barry Sternlicht.
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Right.
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Well, Dom, I sat down for more.
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Than a half an hour just now with Barry Sternlicht, who is the chairman and CEO of Starwood Capital Group. And he had a lot to say.
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About The Mamdani effect.
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But his message was clear, at least for commercial real estate. Democratic socialism does not work.
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So maybe he'll have. He'll learn from history. Maybe the million people that voted him won't realize that socialism's never worked anywhere on the planet Earth, ever. And especially what we'll watch is safety and security. That's the number one thing. If people feel like their kids aren't safe on the streets, they will pull them out of school and they will leave. And if you defund or he doesn't give them the honor and prestige they deserve, I think the city's in for a really tough time. We have a big office here ourselves and I mean, we'll see how this works. But the team in New York is for the first time saying maybe we should leave.
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And I asked him if he had.
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Contributed to the Cuomo campaign.
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He said no. I asked if he had spoken with Mamdani before the election. He also said no. But he said he does expect to see both people and businesses leave. New York City.
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City, New York will survive. It survived de Blasio. But it's a shame. It's probably going to get a lot worse before it gets better. And that's coming from a business perspective. I am a greater New York area person. There's an amazing city with a great vitality and great youth and energy. But the core issues are not what he's focusing on. We need to increase housing. That's not going to happen easily. Right? You need serious up subsidies from the government if they want us to work with unions. You know, the unions have to be more accommodative on their work laws and the wages and everything else. Otherwise you can't add economically.
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And he added that Starwood Capital, of course, has a presence here in New York City. And he said they were already talking about perhaps moving out. But there is just so much more in this interview. Just here, the full 30 minutes. You want to subscribe to the CNBC Property Play newsletter. It will be out now, next Tuesday with the full interview, the video podcast cnbc.com propertyplay Dom, back to you.
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Diana, Just a question with regard to just how long it could take for New York City to feel any potential impact of some of the policies that Mayor Mamdani, or soon to be Mayor Mamdani, has put out there. We haven't seen any wholesale ridiculousness in the real estate market on the residential or commercial side in New York City yet. Is there any kind of an estimate on what it would look like timeline wise? For when we could start to see some of that impact. As Sternlich talked about the moving out of certain people or businesses leaving for elsewhere around the Tri State area, well.
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He didn't have a specific timeline because he was pretty clear that it's already in place right now that things are simply too expensive for developers. He said you can't pencil multifamily housing. You can't pencil the kind of construction and development that the city really needs to see because it's just so expensive because of unions. He went on about that a lot and he expects it would get even more expensive under Mamdani. So what the timeline is depends on when Mamdani can get his policies, if he can get them passed through. But as he said, it's going to get a lot worse before it gets any better.
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All right, Don Olik there with a great interview with Barry Sternlich, thank you very much for that. Coming up on the show, AMD shares are bouncing back after falling as much as 5% despite solid earnings. Is solid earnings just not enough to cut it? These days we look at the hype, the headwinds and the potential catalysts coming up ahead. Tech Check, Advanced Micro Devices. Keep it right here. Welcome back. Shares of AMD are trading higher after reporting a top and bottom line beat for its quarter with investors focusing on areas like growth in its AI chips business. Mackenzie Sagalos has more in today's Tech Check. Mac the AMD trade is an interesting one versus Nvidia.
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Nvidia it really is. We don't get the Nvidia numbers for another two weeks, but for all the buzz around AMD's AI push, the actual payoff still isn't showing up in the numbers. Yes, the quarter was a beat and guidance was strong, but investors wanted proof that those big ideals are starting to pay off. Even as shares reverse course to the upside, the street is left to contend with two big holes in the print, China and AI. On the earnings call, analysts press CEO Lisa Su on export restrictions which AMD has said could cost him $1.5 billion in lost revenue this year. Once again, China bound AI chips were not included in the results, though the CEO did say that they've now received some licenses for their Instant Instinct series and that could and that revenue could start flowing.
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Now.
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That gives AMD an edge over Nvidia, at least in China. Nvidia's rival H20 chip is still stuck in approval limbo as both firms face tougher restrictions. From Beijing, Reuters now reporting that China is forcing state backed data centers to use domestic AI chips and in some cases tear out foreign hardware that's already been installed. And all of this comes on top of AMD's splashy AI partnerships with Oracle, the US government and OpenAI in that chip and equity deal that helped double AMD stock this year year. But so far that halo effect hasn't translated into stronger margins or revenue guidance, raising fresh doubts about how profitable those AI shipments will be once they actually arrive.
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Dom, now the catalyst for AMD shares. It's already up massively over the course of this kind of year to date period. What exactly then would need to happen? What would need to be shown by AMD metrics wise for it to actually say that it is capitalizing on this AI boom to the degree that say Nvidia has.
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When you think about that open Air halo effect that we've seen in the markets the last few months, it was Broadcom and our amd, Nvidia and Oracle that saw these huge surges in their stock price. Oracle, it was a record run, biggest one day jump since 1992. And all of that was off the back of single deal announcements with Open Air. What I will say Dom, is that in all of those announcement announcements they made clear that this compute was not going to come online until the back half of 2026. But the hope is that we're going to start to see that in revenue projections for future quarters and that is what the street is looking for. And so far, so far AMD only is the only one of those four names to report. So we haven't seen what the guidance looks like from those, from those other three companies.
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All right, we'll see what those ones look like when they do come out. Mackenzie Segalas with Tech Check, thank you very much for that. Now coming up, consumers may be pulling back from say fast casual dining but they are still spending what else on their pets. Elaine co Animal Health has had a massive run up this year. It's up 80% in change on a year to date basis. We're going to get the story from the CEO who joins us live next. Keep it right here. All right, welcome back to the Exchange. What you're seeing right now, markets at this hour is a Dow that's up almost 290 points, up 2/3 of 1%. The S&P is up about 3/4 of 1%, up 56 points. And the NASDAQ Composite up north of 1.25% right now to a level of 23,632. I mention this because we're all pretty much at session highs right now in this market. We'll keep an eye on whether we see that momentum continue into the two and three o' clock hours. Meanwhile, Elaineco Animal Health is beating earnings estimates and raising its full year guidance. The company crediting growth in its innovation portfolio, strong segment performance and foreign exchange tailwinds, not headwinds. Now despite shares being down 3% today, the stock has had a massive run up this year. It's up roughly 80% as consumers still continue to spend in the pet market. So joining me now in a first on CNBC interview is Elaine Co Animal Health CEO Jeff Simmons. Jeff, we've spoken numerous times before at this point. You know I have multiple dogs in my household. Like many millions of Americans, we care about their health care. What's been driving Elaine Coe's results specifically when it comes to the pets versus the farm side of things? Yeah, Dom, thanks for the time. Yeah, we delivered a great quarter. 9% organic, constant currency growth. It really marks nine consecutive quarters of growth for the company. Really a reliable, consistent delivery. And we've set up a nice long Runway of growth tied to what you just said. Really it's pets and protein. We are in pets and livestock. We saw the highest quality quarter of growth we've probably seen in three to four years with pet protein. Both sides, the livestock and the pet side, international and us. And it all comes back to innovation. Pet owners are willing to spend in veterinarians on innovative products. Whether that's in dermatology for an itching dog or parasiticides or pain, that willingness to spend is growing. We've seen durability even in these dynamic consumer tested times. And on the livestock side, protein demand is at an all time high as these dietary requirements are changing. And that's really allowing strong markets like for us, the US beef market right now with a shortage of 50 year low of cattle numbers, the beef economics have been really strong and Elanco's got a blockbuster there in experior that's helping as well. So. So it's all about innovation. That's what's creating the growth and the trajectory. So Jeff, speaking of that growth, as the CEO of an animal health company, where are you devoting the most resources towards? Where do you think the higher growth potential is within your product portfolio and your product pipeline? Yeah. What's made Elanco so distinctly different in this durable market? Why we've really started to emerge as top tier growth and I think the most compelling value proposition is we're not in one what makes this industry so compelling isn't just pets and protein, but it's the diversity we're in. Multiple species across multiple geographies and multiple therapeutic classes. So today we've got six blockbusters that are really significant. One of them is Credelio Quattro we've talked about before. That's that tick, flea, heartworm. We've got the broadest coverage in Credelio Quatro. Fastest product to 100 million in our history, one of the fastest in the industry. We announced today it's leading the puppy index. That means veterinarians are giving more puppies Quattro cradle Quattro because of what they see in the drug. We're in this derm market, the itching dog market. It's a $2 billion market growing 13%. And we've got what we believe is some best medicine in Zenrellia there. And we're launching right now in Europe and the international markets. And then as I mentioned, we really see ruminants, so that dairy, beef and poultry globally being really a strong Runway. We're going to have an investor day in December and we're going to talk about, you know, this ruminant, this cattle market, this poultry market and pet market as really the three key segments we're going to lean heavily into. Now, we just showed Jeff, we just showed an interesting chart. We know that you are the CEO of Elaine Co and that you're not going to speak about the competitive dynamics for some of your biggest competitors. But one of your biggest competitors is Zoetis, which was the spinoff from Pfizer years ago. You're the spinoff from Eli Lilly. The chart tells an interesting story. What exactly have you been telling investors about what your product portfolio is like and what you are telling investors about in terms of its relevance or its relativity to a company like Zoetis? Why the divergence there? If you can speak to your side of that equation? Look, we serve farmers and veterinarians all over the world. And this is a value base. We're not in a payer market, we're in a cash market. So think about big protein companies, small farms, veterinary clinics. There's 30,000 of them in the U.S. they're spread across the world. And this is all about value. And this customer base values innovation. They value a portfolio of innovation. And our portfolios are winning. We're adding innovation into each of our key portfolios. That's allowing our core business to grow, price and volume to grow. And we're taking market share because of that. We're in the para market growing 40% and we're a lead best medicine in that derm. As I mentioned, we're doing the same. So to me, this is all about value, innovation and portfolios that can add value. That's what's driving us forward. But what excites me more is what's to come. We see a long trajectory as these innovations globalize. We have another major derm product. We're expecting an approval before the end of the year. We've created this engine a little bit like Lilly. We've created an engine that's going to create a consistent flow of high impact innovation. Gotcha. That's what I like. Our prospects for the whole decade. All right, Jeff Simmons, Elaine Co, thank you very much for that. We appreciate it. That does it for us right now. Thanks for watching. The exchange power launch starts right now.
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