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tv   Closing Bell  CNBC  October 27, 2022 3:00pm-4:00pm EDT

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publishers publishers not just anadine communications platforms. how do you tie the violence to the rhetoric >> and the real versus intent may be different >> why don't you all go away now and think about this for the next day and we thank you for watching "power lunch. >> "closing bell" starts now >> a strong gdp print, solid blue chip earnings helping off set the drag from meta's meltdown that is make or break hour for your money take a look at where we stand in the market look at the dow. up 276 points. then you've got the nasdaq down 1.5% the story there is big tech and meta in particular, which is down at the moment 25% just ugly. dragging all of tech with it apple and amazon right at the bottom of the list
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alphabet is sinking again, though there is strength in semi names nvidia is bucking the trend. check out the earnings movers of the day. tells a story. meta getting crushed on weak earnings and down beat forecast. big time spending. more on that straight ahead. caterpillar is surging comcast getting a boost and mcdonald's in the green after being up 3.5%. coming up today, we'll talk to peter orszag about his outlook for deals and the state of investment banking lots more on the fed and midterms as well plus, metaverse expert, matthew ball, about mark zuckerberg's huge bet on the metaverse and whether it will ever pay off let's get more mike santoli and vfor the first time in a while, feels like we've got a growth versus value split in the trade today
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>> that's one way it's working for sure the market's ability to set aside the problem children and to focus on things that's working. so market, money is moving within the market not out of the market meta is responsible for about half of the s&p's net decline today. in other words, if meta shares were flat instead of down 24%, you'd have half a decline. managing to hold above these levels, 3800 it's up 7% so october has lived up to that reputation of being when you often have a bottom created and a little bit of a reversal to the upside so, so far so good we kind of tentatively have broken above that little splied. but credit markets are doing fine the soft landing story is not totally out of the question so that's supported at the moment take a look here at a split between apple and other versions of the technology sector right here so this is a three-year chart.
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apple holding the vast majority of what it had put together in terms of gains over this three-year period and what has fallen away? rwt is the equal weighted technology sector. so the median technology stock has been really left behind by apple. apple is a huge percentage of the sector then the semiconductor index they were neck and neck in november of 2021 from the starting point that's now buckled then of course, fdn is basically internet stocks. fang mostly. that is flat on that span. so it shows you that apple's been considered not really a tech stock it's not representative of other stuff going on in the industry not really a bellwether for the direction of the s&p it's kind of its own species of asset at this point. >> which is why it matters so much to pay attention to what treasuries and currencies are doing. ten-year's below 4% and ueuro i
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weakening. the ecb raised 75 basis points but the emphasis from lagarde on the down shift of growth i think got people hoping hey, maybe the next move is going to be a smaller one. that pivot, hey, maybe the fed is going to pivot, too, and it feeds into this bullish narrative. >> slowing to a pause. there's no doubt about that. i agree that's at work, but what's fascinating is we can now say lower yields in themselves are not a reason to buy the nasdaq it's done nothing but underperform this week it was never a simple story. it shows you it's supportive in general of equities, but not just growth stocks >> we have specific catalysts. next week, it might be watch yields mike, thank you. we'll always fight about that. let's get more on the big story of the day meta gets crushed after missing expectations for q3, but what investors really seem disappointed with, growing
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costs. meta saying its expense outlook for next year will be 10 obillion let's bring in two guests for two takes on this. joining us is eric hippo and light shed partner, brandon ross eric, you think zuckerberg's making a big mistake here? >> i do. >> why >> i think his view of the metaverse is not espoused by the majority of people in technology it's a journey we don't know what the outcome's going to be the killer application for metaverse today exists on platforms like roblox. so what application is he proposing to us? that we live our lives in this kind of immersive, you know, world that doesn't exist, but what are we going to do in that world? he's not explaining that
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so i think he's way ahead of his time and if he was spending a tenth of what he's spending, you might say, okay, good bet. he's betting something relatively small, but the bet that he's making, about $10 billion in year and another $10 billion next year and who knows how much later, is completely out of sync with the reality of the metaverse. >> brandon, do you disagree? are you buying it? >> no, i actually agree very much with what eric said i mean, there's two components to this cost increase. on the one side, it's the costs are going up to maintain the status quo to compete with tiktok and to fit really advanced a discovery engine in that way and that spend is necessary it's a wake up call to investors, which is one of the big reason the stock is down today, but it's necessary spent. on the metaverse side, we believe that the internet is
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going to continue to evolve. ar, vr and interacting in 3d space is going to be a part of it, but the amount of spend that zuck is putting forth here is too much for something that is not perfect. >> yeah. it's, reminds me about the british government and the market is totally rejecting and i wonder if they'll force him t not spend as much. he used the word patience last night on the conference call those that stick with him and have patience will be rewarded it's happened before when he bought what'sapp and messager and instagram and none of those were monetized at the time and didn't have huge user bases and all of them actually grew. so i guess the question is on the track record and the trust front. >> well, in this case, he's not buying something he's developing it himself this is something from the
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industry should be developing together because you can't end up with you know, ten different metaverses that are not interoperable. you need to have industry standards, which he's not doing. so what'sapp had quite a few users in those days and there is no evidence that they are real users in this metaverse. there's about 200,000 active daily users on his platform, which is nothing it's a drop in the bucket given how much he's spending on it >> you guys are invested in some of those companies, aren't you eric, nifty league, genies >> they are. we're concentrated on applications that work such as gaming we're also investors in digital art. we're nfts and digital art which we believe have a great possibility. and so we are kind of nibbling
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on the outside of the metaverse and looking for areas where there is activity. what, and already stated they have nothing compared to what zuckerberg is doing. but you know, to me, it's akin to self driving cars, right? the industry predicted that by 2025, there would be self-driving cars. self driving cars, except for limited geo fenced applications, are probably not going to be with us for another five, ten years, yet the industry has sunk $100 billion to develop self-driving cars. most of those investments, volkswagen, chevy, most of the investment is going to go out the window and i'm afraid this is what's happening with meta, that the money they're putting in today will not be relevant when metaverse blows up. >> the other problem brandon is it's coming at a time when the economy is weakening and we're
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seeing ad revenue weaken alphabet, facebook i guess the question is the core product, the legacy, facebook application, going to remain profitable enough to generate the ad revenue it needs to fund this whole metaverse vision. >> you see that free cash flow last q3 was $9.5 billion this is 173 million. there is enough cash creation to fund it and there's certainly ways of raising further cash, which is actually mind boggling when you think about the sort of cash flow machine the company known as facebook has been throughout its history i think it will be there i think the cost is too high in terms of dollars and you're also messing with the engineering talent by moving them around we talked to several people at
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meta who were unhappy with their new roles and the culture is changing and that's a big risk as well. it's not just the dollars. when stock price goes down, that also affects the human side of the business >> yeah. >> can't be forgotten. >> no. no longer in the 20 most valuable companies eric, i know you're an investor in private companies is there a level where facebook gets too cheap you would be interested in it? or you think it's just overdone? >> i also believe that there's a fund mental issue with meta, the traditional facebook product and instagram. instagram, he's also spending a lot of money on instagram because tiktok and so rather than really defend his core business, which still has about 3.7 billion active users, he's been distracted with his vision of the metaverse so he's not doing, he's not doing, you know, a favor to people who love his products because he's
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kind of bending them of sorts. >> so you're not happy with that down 72 and three quarters percent for the year thank you both for joining me today. >> thank you >> appreciate it we're going to talk more about meta when we're joined by matt ball the founder of the metaverse etf. used to have the ticker meta until mark zuckerberg went all in also ahead, shares of lazar getting a boost. we'll talk to peter orszag about the quarter, his outlook in these uncertain times and much more about the uncertain environment. dow's up 245 not the full story the nasdaq is down 1.6% and the s&p down half a percent. you're watching "closing bell" on cnbc.
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welcome back dow's up more than 250 but the nasdaq and s&p are near session lows of course, that meta plunge is dragging on the index and it's also taking down other big cap tech players like apple, amazon, microsoft, alphabet all lower today. meanwhile, lazard is getting a boost after the company beat estimates. financial advisory segment seeing record revenues for the third quarter and joining us now is the ceo of financial advisory, peter orszag welcome back nice to see you. >> great to be with you, sarah >> besides your leadership, what else is working here in the financial -- >> obviously >> obviously it's all you
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deals have felt a little slow. are restructurings, bankruptcies piling up? is that what it is >> no, these results reflected a variety of things, but especially strength in europe where we outperformed the market the market year-to-date in europe was down. we've been significantly up. i think it just reflects being in the right place at the right time with the right bankers. so that's what we're aiming to continue >> what does it look like from here especially in europe where there are some serious growth worries. >> there are definitely serious growth worries and the last time i was on with you, i was concerned about the pace of ecb tightening i remain concerned about that with the move today. i think the european growth outlook is quite challenged and a lot of that has to do with energy prices for which there are you know, we may have additional shocks coming not with regard to natural gas prices in europe, but regard to
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oil prices because as you know, there is a significant additional set of restrictions comes at the beginning of december and without the so-called price cap idea that the administration here has put forward, you can see significant additional movement on oil prices in that case. back to your point yes, the outlook for europe right now is somewhat challenged no way to kind of sugar coat that >> no, i remember last time you were on, you were saying the ecb you thought was making a big mistake and it did another one >> i still do. >> why >> obviously, the same thing for the fed. i think again, the central banks that are the leading central banks now have the conviction of the converted. they are probably overdoing things they're going to, it seems like they're going to continue tightening until they see actual inflation in the range they want the problem with that is as we know, monetary policy has a really long lead time.
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so there is a ton of tightening that's already in the pipeline that will be hitting the economy in 2023 and there's a real risk of overdoing things. that's all the more so because at least for the united states, the dollar strengthening is also going to have a cooling effect a lot of what happened in the gdp report this morning was very strong net exports that's a temporary phenomenon because normally what you'd expect is as the dollar appreciates, that will start to flip in the other direction. so we've got all these things in the pipeline that are making the outlook for 2023 more challenging and the central banks both the fed and the ecb are sort of ignoring that and just saying well, we don't see inflation coming down enough yet so let's just keep tightening. >> so then will be the result? you think we're headed for what? a deeper recession than consensus expects in the u.s. next year? >> well, in europe, i think
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what's going to happen is the ecb is going to have to reverse its monetary policy at some point next year as the economic situation there deteriorates in the face of ongoing high energy prices in the united states, it's a little bit less clear. again, the report out this morning showed strength, but a lot of that came from net exports. the report also, there had been this debate this year about whether we were in recession the united states is not currently in recession talking about whether there will be one right. whether there will be one. and you know i think as i said last time i was on with you, if the fed wants to create a recession, it can. so we are on a path where with continued tightening, this is very likely where we're going to wind up. the question becomes whether there's an all terntive path where we just wait and see what the impact of the tightening that's already again in the pipeline that hasn't yet hit the economy. you saw residential investment
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and also non-residential investment decline materially in the numbers out this morning, also there's a lot more of that to come the alternative approach here is there's been a lot of tightening done we can kind of wait and see how it plays out then the fed and the ecb can always do more if things look really great next year i don't think that's the most likely scenario. >> but they were so late to get a hold of inflation. don't you think for credibility's sake they need to do everything they can to show they're on top of it and we have really not seen those inflation rates come down as much the market had expected. >> so first, on the inflation rates, there was a little bit of good news this morning in that the price indices contained in the gdp report came down a bit, but yes, you'r point is right inflation in general has not come down as much as one would hope again, that's because you'd expect monetary policy tightening to take a while
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and so, yeah, there is a lag i think you're right though. what they're doing right now is they are playing for credibility because it is again the conviction of the converted. they're going to overplay the hand the problem with that is swinging from one, having pendulum swing too far in the other direction, having made the mistake of waiting too long is also itself a mistake. you're sort of doubling down on being wrong on both sides of the equation and we could well wind up in 2023 looking back and realizing it was a mistake to have overtightened then the fed will start reversing itself. again, the worst thing for credibility is to do things just because of how they look as opposed to doing the right thing. >> well, we've also got the midterms, peter, in less than two weeks. >> yes >> the narrative seems to be with republicans getting a swing here in voter sentiment in the polls and the betting odds that ultimately will be good for the markets. to have gridlocked government
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and a check on some of president biden's policies do you agree >> well, here's the ticking bomb let's just assume one or both the house and senate flip republican, which is i think a very likely outcome at this point. there is a ticking time bomb that arises as a result and that is the debt limit. where again, the hardest thing when i was back in washington was negotiated the debt limit increase that's only become more difficult. so what i think is democrats need to do, should they lose one or both of these houses, is during the lame duck later this year, they need to either eliminate or raise the debt limit by a massive amount because if not, this is going to be become a dominating future of 2023 with a ton of instability that comes as a result so it may be painful to do later this year, but frankly, i really think again -- >> do you think they're going to do that? own raising the debt limit indefinitely
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>> they don't want to, but again, if they don't, they're going to have a president of their own party who will be held hostage throughout 2023 as a result so it's not pleasant frankly, the whole thing doesn't make any sense to a logical construct anyway it is thank you stupid but your two choices are to allow that to play out during 2023 or do a, i'm not diminishing the difficulty, but you've got bad choices as a result and the least bad choice is to clear the pathway and kind of take the bullet later this year >> peter orszag, thank you very much it's always good to catch up with you >> thanks for having me, sarah down about a third of a percent in the s&p 500 so maybe some slight improvement. dow's up 300 points. nasdaq down 1.4% really is isolated to some of the trouble spots. namely meta, which is down 25% align technologys also down
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19%, weighing on the nasdaq. some of the pharmaceutical companies as well. but there's a lot of strength today. industrials, financials, energy, utility, staples, and real estate all those are green. after the break, we'll talk about the stock disaster of the day. we'll bring you the buzz on why credit suisse is taking a leg lower. check out the tickers on meta unseats the ten-year note yield. because it's that big of a disaster down 25% the ten-year there's buying today with yields slipping below 4%. apple, down 3% in sympathy with these big tech names tesla remains solid. up about .4% we'll be right back.
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at fidelity, your dedicated advisor will work with you on a comprehensive wealth plan across your full financial picture. a plan with tax-smart investing strategies designed to help you keep more of what you earn. this is the planning effect. what is wall street buzzing about? credit suisse. shares are plummeting after the bank announced a third quarter
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loss of $4 billion that's approximately secven time the amount analysts were expecting. there's also a $3 billion restructuring cost and a dilutive capital raise with a saudi national bank. rick spoke earlier on cnbc international about what he sees as the most significant points of the bank's transformation >> number one, a radical restructuring of the investment bank number two, a significant reduction of cost. and number three, and further strengthening of our capital base i think that, we have all the necessary ingredients to say together to go where we want to go >> let's bring in leslie picker who's been following this story closely. so they're going to split the bank and do this big capital raise. v investors aren't exactly enthusiastic >> they are not. shares are trading at a record low now. a 20% drop it's one that analysts were
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actually expecting following this news. it's a retrenchment of about 40%. you've also got the capital raise which was uncertain going into today there were reports it was happening, reports it wasn't ha happening, and the potential for furth further dilution down the road there's also this financial target that they laid out for 2025 a pretty low 6% return at that point in time. they say things will accelerate from there, but 6% is nothing to get too excited about in terms of a return on tangible equity all of that together, shares are basically slumping 20% on this news >> right and the question is what is left of this bank as they are now breaking off pieces doing some sales an splitting the investment bank. >> right >> basically what they're going to be doing is managing money for wealthy people
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they'll devote about 80% of their capital to wealth management, asset management, a swiss bank that's something that's been emulated by their peers. ubs has done something similar deutsche bank has done something similar. they've retreated from investment banking and focused more on this business which tends to be less volatile, stickier and something european investors are now comfortable with in terms of reorg of that business they've been in the u.s. for quite some time. made a lot of inroads, although in certain areas, they've lost shares and with all the macro concerns, it's been a big overhang for them. >> leslie, thank you very much when we come back, canter fitzgerald's eric johnston who has nailed it this year on whether stocks can keep rallying without big tech we'll talk to him about it when we come back
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big tech earnings have largely disappointed this week but the market has pretty much shaken that off. our next guest says the rally
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will extend through year end he's been right so far this year, turning bearish on stocks back in early january then bullish early october. market's rallied since then. but do this week's disappointing tech earnings change the thesis? let's bring in eric johnston eric, welcome back >> sarah, good to see you. >> reaction to some of these results. does it make you think twice about the bullish call >> so i think there's a exchange going on in the marketplace but the big cap tech names are still very important to the mark they make up the top names in the s&p 500. account for about 20% of the s&p. so just mathematically, they are very important but i think what's happened is that in the past, the other 494 stocks were used as a source of funds to buy these five or six that were putting up great numbers you could count on they were seen as almost defensive where you count on beating numbers each time.
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i think now we could be in a process where the reverse is happening where you actually use some of these larger cap names as somewhat of a source of funds to buy the other 494 stocks or buy small cap et cetera. so i think as long as you know, all five names are not disasters and which i don't think we're going to see from amazon and apple, yes, the market can rally without megacap tech, which is a big change from the past couple of years >> even the cyclical part of the market, which are working really well today industrials, caterpillar has good earnings. financials is that where you'd want to be as everyone predicts 2023 is going to see economic pain >> in the short-term, i think so part of our thesis has been and is still the market is going to be repricing the chances of a soft landing say the chances are higher because our view is that inflation is currently, real world inflation is falling, not
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cpi, but real world inflation is falling and the fed is close to the end. so i think the market is going to say, okay, the fed's almost done inflation is coming down and you have the unemployment rate that's still 3.5%. consumers are still very strong. spending is up 10% year-over-year so i'm not saying that i believe that we're going to have a soft landing, but i think the odds have gone up in the last couple of days and i think they're going to go up over the next month or so. >> sorry, but the fed has not changed its tune at all. i know the market always anticipated the move before the fed. but we've been here before and it's been a bunch of fakeouts because this fed is really serious about inflation and inflation as they measure it is not coming down that much. >> so i think the story in "the wall street journal" on friday i think was important and you know, it happened exactly at the time the ten-year yield was
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getting somewhat out of control. so i think that was not a coincidence and all it suggested was they are not just going to go on with blinders doing 75 bips every meeting until the cpi is down to 3 or 4% i think that was my takeaway from what they said. if you look at inflation and you don't look at i think the fed has all the data that we have and what we can see the rents are actually, new rents are actually falling right now you're seeing multiple data points from zillow, red fin, apartment list the largest rental owner in one of the largest in the country today saying that the occupancy rate is falling and that's why they were lowering numbers so it's clear as day that home prices are falling rents are now falling then of course, used cars and deram prices, container prices, they're all, commodities, they've all, they're well, well, well off their highs so i think it's an easy you know, message from the fed to
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say look, number one, there is a six to 12 month delay hitting the economy. number two, we're seeing plenty of signs now that inflation in pockets of the economy are falling and hence we're going to slow down and the market will take that as they're pretty much close to the end >> it's really interesting case. eric, thank you for joining me >> absolutely. thanks for having me >> eric johnston, canter fitzgerald when we come back, a company you wouldn't normally associate with ch chips is issuing a nightmare outlook because of supply chain issues we're going to reveal that stealth mover straight ahead easy-to-use tools, and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. power e*trade's easy-to-use tools make complex trading less complicated. custom scans help you find new trading opportunities. while an earnings tool helps you plan your trades
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sleep number investors in for a rough night of sleep tonight in this stock beating estimates, but showing a nightmare outlook, slashing its full year guidance citing slower demand, but also semiconductor supply chain issues. now down more than 60% nfor the year up next, matt ball on whether investors are making a mistake by souring on mark zuckerberg's whole metaverse spending strategy. plus, a top analyst on how to trade amazon and apple inside results when we take you inside the market zone. dow is up 287 points, nasdaq down 1.4%. we'll be right ♪ ♪
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. we are now in the closing bell market zone mike santoli here to break down these crucial moments of the trading day. plus, seema mody is here on cat pill lehr. mike, the dow's up 238 points which means we're going for five days in a row of gains for the dow. clearly, that's not the whole story because the s&p is down nasdaq lower, but the rest of the market able to shake it off. why? >> first of all, it's a relatively routine earnings season you've got three quarters of all companies beating estimates. it's up a couple of percent in aggregate. s&p, down 4% no worse than expected so that part of it is pretty much on plan then of course the relief from yields we have a relief also from fed
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speak this week. so all of it together shows you again an underinvested seet. so it'rota as sed to retreat all for the market>> olt catllar rag driverehind the dow's dain more than twoearst the hey eqent maker easily beating estimates thanks to strong pricing and an increase in sales volumes seema, all the worries about china, aut tousiarket, here's a company ts on the most cyclical companies an et ielt. right?ood ter. >> no signs of recession the outperformance really tells us two things. one, as europe imports more l and g from the u.s., they're betting its equipment for fracking will be in higher demand it is the market leader and its energy business saw sales up 22% year-over-year the ceo also said that while supply chain issues are still ongoing, some parts are improving, which analysts say was a positive sign for a ceo who tends to be a bit more conservative but again, no signs of recession in this report strong pricing as you pointed out, sarah >> bullish sign, i would say, for the global economy and what's been a sea of doom. >> and assets. >> up 8% thank you. to the big earnings loser of the day. meta down more than 20% into the close. 24, more than 24%. a miss on earnings, revenue falling for a second quarter in a row. the forecast was the thing projecting another drop this quarter and investors balking at how much the company is planning to spend and invest in the metaverse. joining us now is matt ball,
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founder of the etf you're the most expert we know on the metaverse and the question of day is zuckerberg making a mistake going all in in this kind of environment what do you think? >> i think it's interesting when you go back to october of last year, zuckerberg was very clear that 10 billion was the floor in losses setting the expectation for 12, 13, and potentially as much as 15 in the years to come. since that time, we hit a macro economic pullback. we've seen the impact of apple's p privacy changes were more than expected and tiktok became a competitor i think investors are right to say we need to see more control or at least more before the investments continue >> what tabout the idea of the metaverse?
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you've written a lot of research on this, but is it necessary to spend that much and what is he actually chasing here? >> i think part of the challenge comes from expectation setting if you consider microsoft, nvidia, apple and others, their investments are also in the five to 10 or sometimes billion more in rnd per year the forecast sits within the trillions. the challenges those companies had very healthy core businesses they're graduating into the metaverse and they didn't set the expectation with investors that this was going to be an extraordinary opportunity within this first half of the decade. by changing the name of the company and by spending as much they are when under attack from apple and tiktok and others, they set themselves up for a very tight rope and it seems to be one that's certain. >> it sounds like you're not questioning the strategy you're questioning what the
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strategy right now in this economic environment and with the core business seeing some weakness, but the idea of the metaverse, eric was on at the top of the hour and he was saying it's a gaming play and that's not exactly what zuckerberg is after here so it's really hard for investors to grasp just what that is. >> well, the challenges we see two areas of attack. one is on the gaming side. you see this with roblox and unity and epic games the other is what microsoft and nvidia call digital twins or the industrial universe. it's taking a look at a much larger tam with much, much more staple customers and a much longer progressive rant. going from a new vertical in both virtual reality devices and enterprise productivity software where you need to pioneer the tech, pioneer the understanding, pioneer the software and then drive enterprise adaptation, that's the timing issue.
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many believe in this opportunity but they're giving it more time to unfold. >> do you do anything with meta, with zuckerberg on this front? are you working with them at all? >> no. >> because i think the criticism besides all the spending and what it's going to take is just trying to envision just what that is. is it commerce is it social is it all of the above i know you've been on many times to remind us about that, but does zuckerberg's vision line up with a analyst that you do >> it does broadly, but it correlates to what i just mentioned. when you take a look at the center piece of their strategies very much focused on virtual reality headsets and transformation of enterprise productivity through those devices. i tend to hold the opinion that these devices are farther off than many have expected before and meta seems to today. that's going to be a challenge >> are you going to get your ticker symbol back
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meta before they took it? >> i'm just an index provider. >> right but used to be meta until facebook went all in thank you, matt. very valuable to hear your perspective on this. matt ball. appreciate it. metaverse etf. let's check out apple and amazon both out with earnings after the bell the latest megacaps to report in a week of disappointing results from these major tech players. tom forte joins us to share what he's watching. just last week, reiterated a buy rating on apple and amazon tom, which do you prefer which would you rather >> i prefer apple. the challenge for amazon is consumers are clearly spending their money. just not spending on ecommerce they're spending it on travel. of the two, i worry for both they have a high proportion of their sales coming in u.s. dollar so i think there's a possibility of one or both would miss on the top line given the strength you see in the u.s.
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dollar the benefit for apple is with the supply chain improvements we've seen this year versus last year, they should be able to have more and better sales of iphone 13 then for amazon, their cloud computing business is doing well their advertising business is growing, but i'm concerned they decided to have a second prime day in one calendar year i think that's a reminder of how weak ecommerce sales are so of the two, i would lean toward apple >> the stocks have sold off in reaction to alphabet, to meta. is there any real correlation besides maybe just ownership, hedge fund positioning, that sort of thing, where you can extrapolate what those reports mean >> i think there's correlation to the extent. what you're seeing is a lot of weakness in digital advertising and some of it is because of apple's influence, but apple and amazon generate revenue from digital advertising. what you're seeing is weakness
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in megacap tech. i think that is very worrisome for amazon and apple >> mike santoli, how do you see the two positioned >> what's interesting is you have an investor base right now, because of everything going on in the other companies, that is acutely focused on return on investment, let's return a tighter shift. amazon has been moving in that direction in recent quarters of trying to essentially say we overinvested, we're taking a little bit more of a sharp pencil to expense. we'll see if that theme runs through here in addition to the obvious concerns about whether cloud demand is flagging and now the consumer is behaving the fact that apple numbers have not really changed very much the forecast in months, i think is kind of interesting people assume it's going to be stable we'll see if that comes through. it's probably good it's down 3% in the stock heading into that number >> i was just going to ask, tom, where expectations are mismatched in terms of reality because the expe expectations a
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that the business would slow as well as in cloud and advertising. i don't know if they've moved this much for apple. >> it's a great question if you look at the multiples fo both, they've come down quite a bit. we'd expect to rally if either can say anything that's anything good but i do think that the weaker ecommerce for am sazon heading into the fourth quarter should have a dampening impagt on their profitability in general i think it's more challenging for amazon right now >> got it. tom, thank you very much apple and amazon lower two minutes to go in the trading day. mike, what do you see in the internals? >> kind of mixed you have positive in the new york stock exchange formost of the day, but not as strong it's just about 50/50. with this pull back in longer term bond yields, take a look at the three-month versus ten-year treasury yield curve it's been dipping slightly negative that typically has been a
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precursor in past cycles i don't think it predicted covid, but there you have it this is one of those things aligning inflation the volatility index is backing off. a lot of back and forth stock by stock, sector by sector action is compressing volatility at the index level, but we have the pce number and the fed meeting is probably going to keep it elevated for the next few days >> new 52-week highs and lows to talk about the highs are in staples and energy names like hess and exxon are at record highs also campbells soup and smucker. the lows of course are in technology alphabet trading at a 52-week low. meta align technology there's the dow, 181 points higher so that will be the fifth day in a row of gains it comes on the back of non-tech
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earnings being strong. seema told you about caterpillar. mcdonald's adding 56 points to the dow. honey well boeing it is technology that is suffering. nasdaq closing out with a loss of 1.6%. a lot of that is meta. amazon and apple next. that's it for me on "closing bell." see you tomorrow, everyone now into overtime with scott thank you very much and welcome. you just heard the bells we are just getting started here at post nine from the new york stock exchange and st stakes could not be higher this hour. that is our talk of the tape apple and amazon and intel all set to report earnings with so much on the line. can they reverse the megacap meltdown started by microsoft and alphabet only to be made worse by meta? have the chewed up chips bought them we'll get you the answers to all of those questions in a matter of minutes our team of experts standing b


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