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tv   Closing Bell  CNBC  November 23, 2022 3:00pm-4:00pm EST

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so many people bought cars during covid and still not taking public transportation and on a tuesday and wednesday and thursday in manhattan it is impossible to find a space this is why you're seeing these new innovations and condo powers. >> free space, at work. >> to be thankful for. have a great thanksgiving. you, too, robert frank, thank you. happy thanksgiving to all. >> "closing bell" starts out in. major averages giving an early pop regaining ground amp the release from the fed heading into final hour of trading, make or break for your money. melissa lee in for sara eisen. where we stand in markets, s&p 500 up a half percent, just about, by now. had been seven points higher highs of the session on s&p. nasdaq feeling a bigger pop. all on the backs of the release of minutes and pullback in yields we saw after that
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check out oil action today t pulling back sparply over price cap on russian exports talk more about that news in a moment ahead on the show as well, former fed president thomas honig, outlook for fed policy and the economy plus his reaction to the fed minutes released just this afternoon begin with fed minutes full team coverage to break it down steve liesman and mike santoli with the market's reaction and all things global investments joins with his analysis. steve, stars us off. >> thanks. a meeting in which the fed hiked 75 basis points fourth trait time, minutes showed agreement, slow the pace of rate hikes in the future minutes of that november meeting said "substantial slowing in the pace of increase would soon be appropriate. most people believe that means a 50 basis point rate hike comes in december. same time the fed had disafrom
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time to time how much furtherer to go. minutes said some officials were more concerned about the cumulative rate hikes on the economy. others suggested the fed may have yet more work to do than previously expected because of higher than expected inflation here's market pricing right now for rate hikes what it looks like 81% probability of a 50 basis points hike in december. 70% for 50 in february and 51%, in other words, that march 25 basis point hike is kind of on the cusp 49% thinking no hike an additional 100, call it 125 basis points of tightening still to come, still priced in minutes importantly came before the recent inflation report that came in lower than expectations but perceive the stuff got in the last week, retail sales and business spending data, prompted upgrades to the growth outlook suggesting more work ahead for the fed to cool the economy. melissa? >> steve, i thought interesting was the language of course, always looking at the language when it comes to fed
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statements and minutes the notion of down shift the term substantial majority used when it comes to how high we have to go, only various officials reviewed a big difference in underscoring the division where that terminal rate should be >> i think that's exactly right. saying for a while now, melissa. the disagreements on the fed are in the future. not in the immediate present i guess is the best way to put it. two things are clear one, that we're, like -- i think 80% probability is maybe even low for the 50 in december that's going to happen more rate hikes also are going to happen, but how much more is unclear. various tests and that's the place where the fed is a little divided. some more concerned about financial stability from rapid rate hikes the economy and lag of defective rate hikes others say inflation is still too high may have a lot more work to do
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i wouldn't worry too much about that for the moment. i think this idea of the fed going the 5% is probably pretty locked in. i had previously thought it was 4.5% several months ago. looks like half a point added. i think conventional wisdom here. >> yeah. 5% by june is what the markets are pricing in now steve, thank you steve liesman. get to mike santoli for the market reaction. mike, interesting to watch the markets get a pop. in particular higher valuations, riskier areas of the market, like an ark or igb really took off. >> yes a little spring loaded there melissa. bon yields lower right? one of the responses longer-term yields come in more or less underered scored the premise of part of this rally we've gotten in the last five, six weeks. which is maybe the fed's destination in well in hand. suddenly the last few months are a lesson how to make a half percent rate hike seem dove ush. market bought it interesting sitting as levels.
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intraday high last week just above 40 25 or so up 15% from that october 13th low. next, everybody watching, really between 1% and 3% up from here 200-day average. down trend line here just above 4100 you have to decide if it's another bear market rally or something more and maybe this was an actual bottoming process with the retest in october debate to come if we get a little highter stocks versus bonds. a consistent story all year. one-year chart of the aggregate bond index relative to the s&p 500. give in take in terms of its reship stock catch up to bond yield on top, not much the whole story. st stabilization in bonds, portfolio more balance than it did say in middle part of this year. >> all right mike, thank you. mike santelli.
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bring in brian jacobsen from allstrings global investments. what was your reaction to the minutes? what caught your eye >> yeah. actually i think some of those adjectives, determiner statements used to describe how many people felt what. so i think we'll have a battle between the various and the several, at the next meeting what is the various? does that mean three, four, five, six? what is several? typically in fed speak a couple two, few three, some four never various before maybe they had to bust out the thesaurus not wanting to repeat several of them. a battle for those who want to go higher and those that want to take a pause at our asset team a discussion before i came on seems if you had to take over or under in terms what the market is pricing in, maybe shifted a little to the under, as far as high high they might need to go.
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>> the under i think what steve liesman said was interesting inners it of fed agreeing what to do immediately not necessarily out into the future that's an equity markets what they look at question, how high and for how long the rate remains there, are huge questions, brian. does that -- i feel like the markets assume once we hit that terminal rate there will be some sort of turn then. an eason then. in actuality we might stay at that terminal rate for quite some time and what will they do to your outlook? >> hope of the fed, and i think experience suggests to us they have oftentimes had to reverse course, because they are a little late to the game. they were late to the game in terms of hiking. probably be a little late to the game in terms of when it's appropriate to cut the market, if you look at what they've done in the past, really was only the 2004 to 2006 experience able to hike and hold for a while, and that's because
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moving at a predictable somewhat glacial pace with those hikes. so i can understand why the market might be pricing in that they need to reverse course. the fed might be a little stubborn when it comes to actually getting to, say, 4.5, to 4.75 and why maybe instead of trying to go fast, high and hold it for long, they might want to go a little bit slower go a little bit shorter as far as how high they need to go and actually begin to hold it at that level for maybe, let's say, until end of december. so if they go too fast and too high, then they have to reverse course too quickly >> right the reaction rates was notable, and in turn saw sort of higher pe areas of the market take off. ark up 3%, dprins. nasdaq 100 up 1% got semiconductors up a percent as well. if i told you that we're going to hit 3.5% in the next would weeks or something does that change what you take a look at
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does it change how you view some of these quote/unquote riskier areas of the market? >> you know, it does the areas that we're most interested in right now, so up to this point we've been overweight united states relative to europe, consumer staples relative to the broader market to be a little more defensive, but if we're going to be at 3.5% on the ten year, realistic, we think, actually would not be surprised getting there end of this year that would tend to favor more, let's say technology more faang stocks that are, were interest rate sensitive as rates went up and those are the ones hurt the most are likely to be beneficiaries here a little more interested in, say, technology. for the defensiveness, reits interest rate sensitive part of the market like our managers in that space. we think that maybe it's an area oversold so two of those areas that we would actually really like, if we were moving down to 3.5 on the ten-year treasury. >> all right
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brian, thank you brian jacobson >> thank you oil's recent slide accelerating as placing a cap on russian exports. just how far crude could fall up next you're watching "closing bell" on cnbc.
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welcome back it's been a wild day in the commodities market as crude oil pulls bas sharply. and we have a look what's driving this. >> off to best levels of the day earlier saw contract up 12% at a
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two-month high holding a gain nomore than 8% four key factor. first, most important, weather forecasts calling for colder temperatures, which means greater demand from heating. second is that possible rail strike, if curtails deliveries boosting demand for natgas and saw the 50-day moving average supporting prices and volatility ahead of monday's expiration. >> pippa, thank you. for more on natgas and crude bring in energy aspect research. great to you have with us. >> thanks. >> natgas you say is all about weather, right getting colder forecasts calling for colder weather. so no surprise to you? >> no. look, latest weather really been a lot colder, and potentially next week we are calling for triple-digit withdrawals from storage, first this season and then, of course, you called
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the rail strike, which is, could potentially impact coal movement for that adding further. so, yeah, weather has really been very, very bullish when gas prices are considered. >> talk crude. we did see a 4% drop on clothes here, amrita a lot is the price cap proposed price cap more than anybody thought according to reuters 65 to 70 why is that a surprise and why did it move higher. >> hearing the price gap will be around $65 and right now russian crude euro is trading at around $60, even slightly lower than that, after toes's correction in stock price. now, the price cap does not impact europe's ability to buy russian oil. i think that's the problem and that's the confusion in the market.
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the issue is, remember the eu is coming up with the embargo on 5th of december? that's superseding the price cap, but the confusion in the market isn't particularly in the u.s. you have so many clients calling asking us, oh, does this change your view how much russian oil can flow into europe no the eu is still going ahead with the embargo, which means come december barring countries exempt, europe cannot import russian oil. the price gap is about other countries. like in asia the reason europe is working with the u.s. to come up with this number is because europe is home to 95% of maritime, shipping insurance, things like that that's what they're trying to meet price cap was always about the rest of the world's ability to buy russian oil. >> can you factor in china, at this point, then before we looked, looked like chine be in a was opening up
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china is part of the world that would be affected potentially by the price caps or falleneder that sort of group of countries. now opposite picture increased lockdowns at this point. how does that impact everything? >> i would say china much more than russia has been one of the biggest drivers and probably will be the bigger driver for prices for the simple reason the swing in japan can be over 2 million back in april, over 2 million a day. buying erratic and our view has been for some time reopening is really not going to happen until, april, very earliest. problem even take longer and it's going to be slow. in terms of the price gap. no other country has actually accepts the price. only the g7. for all headlines and hoo ha around the price gap what is very, very interesting right now
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is other countries actually accepted, and russia who said i'm not going to send that, accept the price gap a bit of a moot point but the confusion it creates is why prices are down today. >> right i also want to ask you about, which i never thought i would say to you, amrita you mentioned in a roeport, initially the fall, saw oil fall do you believe that sort of relationship will continue or was that just the initial shock of it? >> yeah. i also never thought the margarita had anything to do with it. stop calling it coronation it's not a real coronation which is true. problem is we're in november right? we always get sell-off like this in november before thanksgiving. liquidity tries up and that's why you get crazy correlations like this, because you don't have specialists trading in the
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market you good get aren'tdom like bitcoin, krcrypto we have seen move away from energy or oil in particular to equities for sure and also heard from some clients who have to sell their oil positions to effectively get some margin to be able to warehouse their risk around there's some genuinely relationship but generally much more to do with lack of liquidity. remember, last year a similar sell offaround the sbr a couple years ago, same thing so around thanksgiving, always become as bit of a black friday. >> all right amrita, thank you. fascinating. get a check on the markets heading off to break dow right now higher by about 141 points s&p 500 strengthened just a touch. at 4032 now higher bein 0.7% after the break, new details
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about bob iger's first week back at top job at disney and what he's telling employees later, joining us with first reaction to the fed minutes and as we head to break check out some of today's search tickers on cnbc. ten-year yield getting interest followed by tesla, crude oil, amazon and the s&p 500 we'll be right back. good luck. td ameritrade, this is anna. hi anna, this position is all over the place, help! hey professor, subscriptions are down but that's only
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an estimated 15% of their valuation. do you think the market is overreacting? how'd you know that? the company profile tool, in thinkorswim®. yes, i love you!! please ignore that. td ameritrade. award-winning customer service that has your back.
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welcome back inside a developing story on disney ceo bob iger holding a town hall meeting on monday with employees a week after coming back to lead the company. breaking that story, alex sherman now on the phone alex, what will the ajgenda be >> we don't know probably not a lot of detailed specifics about bob iger plans to reorganize the company or new hires. remember, he didn't even know he would have this job a week ago. so i would imagine it's probably going to be more in terms of why
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he took the job. answering some questions of employees and also in the memo he specifically notes disney's legacy of creativity, innovation and inspiration. i imagine one of the things he's really going to harp on is how to bring the disney culture back to disney so that all of the employees can be proud of disney which was one of the things i think his predecessor job chapek may have struggled with. >> thank you disney shares up by 3%. up next, former kansas city fed president thomas honig whether the fed will be able to avoid recession.
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hour fed jumping on the news seeing smaller rates coming soon joining us, former kansas city thomas honig >> great to be kwi you. >> slowing down seems to be expected what the end rate, terminal rate should be. seems to do be the question, thomas i wonder how you think about
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that where should that be markets pricing 5% by june, although bullard, this week, last week, said between 5% and 7% the restricted zone what's your take >> i suspect given the discussion i read in the minutes that rate will be -- you're right. slow it, 50 basis points in december no surprises and i think given that they were looking at maybe potential gdp growth being around 2.5% getting rates up to 5% they'll want to that will be kind of the target if inflation comes in higher they'll move it higher than 5% that's where a lot of the discussion in december will focus on should be the end rate and i think you're talking right now at least -- public statements, 5%, 5.25% the number and probably the number they will be and once they get there, and i
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suspect before june, once you get there, then the discussion will turn to, how long you leave it that's a big issue in terms of making sure you get inflation numbers down towards the 2%, for it to stay there a big discussion we'll see. >> i feel like that's even perhaps the bigger issue, or should be, at least for market participants, for investors and traders. how long do we stay at that terminal rate? we don't know yet. i think there's a notion in the market that once we get to that terminal rate the coast is clear, but clearly that's not the point. so when you're thinking how high we could potentially be at the terminal rate? a matter of months a year >> well, i would think they would -- i think if they were doing it, they should shoot for, say, march, and get there in the march time frame maybe the next move after that get to the 5% level. so 50 basis points increases and
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then stay there until inflation comes down below 3%, or at least in the neighborhood of 3%. if the market -- if the market kind of bullies them into lowering rates sooner than that, i think they risk inflation re-ignited, because, remember, the consumer is still pretty, pretty engaged in the economy. they're still consuming. we see retail sales still higher than some people thought it would be so they need to plan on staying there quite a while and the market needs to accept that. i think if we're going to bring inflation down towards 2% and have it stay there that will be their challenge convincing the markets -- >> interesting yeah you use an interesting phrase, thomas, that is, if the market bullies them do you think the market has bullied them do you think the fed that jerome powell would acknowledge that sometimes happened or that it's a factor? market reaction is a factor what they do or how they say things >> sure. i don't know if he would admit
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it you'd have to ask him that, but i think the market has in the past and would do it again, you know, become, you know, from start of the paper tantrum on react strongly that forces the fed to rethink their situation they don't want a volatile markets but i think the fed has to -- i think given -- powell's recent speeches at least, i think committed to thinking we're going to get there, stay there until rates, until inflation comes down, and we're not going to be pushed too fast. >> uh-huh. you mentioned the consumer doing pretty kel a lot of retail earnings recently commentary within the conference call about the consumer interesting. the notion consumers are drawing savings down that credit usage is outpacing debit usage. it's down. strains shown right now. jerome powell and many others talked ak a lag effect
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is this just the beginning of it, thomas how do you think what the full impact of the consumer will be that's what we'll at home want to know. are we going to see unemployment to 5 prgs %? is that a forgone conclusion and are we going to see tougher times ahead. >> highly unlikely we'll get to 5% bringing down inflation number, that's the tradition get it to go higher i consider that a mild recession myself, and i think the fed would be pretty pleased with that, if they got inflation down and more than 5.25% i think the consumer has been a strong point and will be they've received a lot of money during the pandemic that's still there and they're -- they're coming down. they're withdrawing savings down but also had less leverage so their leveraging up somewhat and i think wages even though they're not keeping up with inflation, they have at least been advancing
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you have those three factors keeping the consumer engaged and that will be important, i think, to the fed as they try and gauge the end rate for raising, and then how long they keep it there. and behind that the investment sector, and whether not only durable goods but investment in plant equipment staying at least reasonably strong, or reasonably level, should i say. >> right you another, the other effect of easy money or free money ending, thomas is that accesses are drawn out of the market. i think one evidence or one example of this. there are many in the stock market there are spacs other speculative stocks but also crypto cryptocurrency downfall of ftx, may nerve verify gotten to the state it did without free money free money that needed to go
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someplace. be invested without due diligence, invested in currencies et cetera as the tide comes out, thomas, do you think others will be waiting in the wings that will show themselves? >> i certainly think so. i mean, free money for so many years, and the malinvestment that came from that. now, not all -- i agree, not all stock buybacks are bad but those of releveraged, they have a reckoning. took on debt that has to be refinanced don't have equity. those things are going to have to kind of come up and be levelled out, and that's going to be painful. and that's why i say the other side of this is not just the consumer it's the -- it's businesses and who have to continue to invest in plant equipment and future growth, and that's where the
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trade-off between getting rates back up to where they should be and getting some of the bad action out of the market and get it focused on investing and productive means in the future i will agree i mean, zero interest rates and free money is why cryptocurrencies took off so much looking for an alternative it was a game played that's going to be adjusted. other areas and other companies able to hold on and leverage themselves they'll have to, shall i say, level up now and pay the price. >> yep thomas, thank you for your time. appreciate it. >> sure. glad to be with you. thank you for having me. >> thomas honig. take check where we stand in the markets as we approach the final minutes of trading on this wednesday. dow up a quarter percent nasdaq holding on just under a percent gain at this point today's early movering cooking into high gear after scoring big in yesterday's session we reveal that name next and listen to "closing bell" on the
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and mover manchester united stock soars. unvesters shouting "goal"! did i do that okay anyway, exploring strategic alternatives for the iconic soccer team.
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it's unclear who could make a pitch to buy the team. estimates, manchester united worth $4.6 billion quite a score for the glazers who paid $1.4 billion 17 years ago. it's been a rough year for retail significantly underperforming the broader market up next, top retail analysts reveals three stocks he says are recession-proof. that story, plus tesla taking off. we take you "inside the market zone." cted o costs.ocket so if you're on medicare, or soon to be, consider this. an aarp medicare supplement insurance plan from unitedhealthcare. medicare alone doesn't pay for everything. and what it doesn't pay for, like deductibles and copays, could add up to thousands of dollars. medicare supplement plans help by paying some of what medicare doesn't... and making your out-of-pocket costs a lot more predictable. call unitedhealthcare now and ask for your free decision guide.
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and michael baker. first, change your title, mike change your expertise. the market action is interesting. saw initial pop pull back a little from that pop bull yields. yields are still, they're still low. >> the yields are still low. you know, the market, of course, was, sort of seasonally primed to levitate a little bit right here and i think just sort of a little bit on alert for the potential of an unexpected hawkish surprise within the fed minutes. may have come, jay powell, remember, fed conference a few weeks ago given what committee members knew then, revising outlook would have taken terminal rate higher, at least he would have. didn't see that general sentiment reflected there. a small move but stretching this rally towards above 15% over the last five, six weeks feels as if in a comfortable spot with regard what we know about the fed. of course, three weeks we'll
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find out what their actually going to do and what they say about it. >> a lot happens in the next three weeks in terms of other economic data points we've learned within the rally in terms looking what got the most pop is that if we said yields would be 3.5% on the ten year, seems like there is this gravity that this pull to technology regardless what was behind the 3.5%. >> right i mean, i think that is the reflex move. >> yeah. >> i don't think all moves in tech up and down are fully explained even close to that by yield. yeah that's what's going on now depressed areas. spec tech seems to have still unfinished business, let's say, in terms of valuation on the down side. >> get to deere here one of the top performers on the s&p 500. heavy equipmentmaker being wall street's earnings estimates upbeat outlook for next year thanks to price hikes. increase in infrastructure projects and yesterday on
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"closing bell" the investor discussed why he's bullish on the stock. >> there's a lot of stocks you want to own despite an economic contraction. give you another example farm equipment john deere reporting tomorrow morning. american farmer, the american farmer works, fix the bence and get $525 billion of cash flow from livestock and commodities care last year like $400. where will they spend the money? equipment available? >> seema mody joins s us with reaction to the report free cash flow particularly strong and particularly in out year raised guidance. >> right and growth interest in technology the bright spot, melissa. that business specifically saw sales increase 59% year over year a division including semi and fully awe ton mig tractor,
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planters, spraying, requiring let manual labor on the call an interesting point made lack of skilled workers now prompting ing more farmers to it in equipment with enhanced technology and the infrastructure billick canning in with order in the construction business already 70% full next year you discussed higher pricing certainly a prevalent being. managem management indicating supply shortages starting to ease good news. priced into the stock. 20% now up additional 5% high expectations going into 2023. >> what happens when crop prices continue to fall i say will continue in theory because fed is doing what it's doing, et cetera >> then there is the uncertainty around geopolitics jpmorgan analysts there writing
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that if this war in ukraine continues that could raise likelihood of higher crop prices, which will extend agriculture equipment psyching yes, price of crops heavily tied to former sentiment, therefore, how much they're willing to spend on big machinery and all the equipment they need next year that's pivotal. >> seema, thanks check out shares of coupa. this has no comment on the report frank holland joins us with latest on this one frank, a lot of competition in supply chain software from sap and oraclewhat makes coupa in particular a target? >> melissa, go to the fluctuations with apple this week look at the apple iphone 14, getting a new one. supply chain disruptions like the ones apple seeing due to covid lockdowns in china a big
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tailwind for supply chain software, coupa or anyone else predicted analytics, business spend management increasing disruption from ukraine war, trade war, et cetera seen so much of it and also half of u.s. ceos believe supply chains will continue into next year and nearly half saying supply chain issues will force them to raise prices that's why it's an attractive business potentially for businesses to get into spoke to robert smith last month during a cnbc event looking for mission critical software companies to buy certainly fitting the bill asking why coupa may consider selling, look at their stock performance recently shares down 70% off their high also sky-high valuation 100 times forward earnings rates down now not the only reason stock it down certainly something that could put pressure on the stocks if rates go high around faced a lot of competition from major companies like sap and oracle in
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the supply chain business but providing a wider suite of offering under the umbrella, and hr software as well. a lot of times, reasons why right now might be a good time for coupa to look into selling you mentioned, vista not commenting on this potential deal. >> mike, go the to wonder if private equity firms sniffing aroun coupa, 137 times down, giving permission for investors at large to look at some of these software names that have really been taking a beating? >> right certainly it would put enough perceived. i point more to something like five to six times revenue type multiple coupa trades at now to a private equity firms believing getting leaner more relevant term what's they get t for it back end. vista is into buying this type
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envision '01, '02, lucky ones sold at a huge discount ultimately traded at peak, but a pretty favorable outcome relative to where they had gotten to and an investor can start to hunt around those valuation zones. >> frank holland, thank you. meantime, tesla shires popping as well. stock getting upgrade from neutral to sell and citi analysts highlighting strong positioning in premium media market and improved execution some reasons meanwhile, closely watched morgan stanley analyst out with a new note today reiterating overweight rating on the stock acknowledging, $1.50 a share and sticking with price target of $3.30. phil lebeau, notion tesla is beaten down so much maybe at this point, pricing it a lot >> well i think you're right,
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melissa. these were not -- read the notes. nothing in these notes made you say, i've got to go out and buy tess la right now beaux it's of to the races both saying notes so beaten up remember fsundamentals where tesla is positioned within the ev market. the other question, an investors with tesla right now, where is the next possible catalyst look to next week when the company is expected to deliver the first tesla semi truck that's supposed to happen december 1st that delivery in and of itself is not huge. what is significant is whether or not elon musk is at the delivery event and if he talks in a down market like this, elon musk talking is oxygen for tesla investors. that is the kind of thing that they will look to, and that potentially could move the stock higher or at least stabilize it after the brutal year that it's been going through. >>yeah problem is might be too busy as
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twitter looking at supply closets at t-shirt left behind, mike, and in fact, put in for twitter, stock down i think 50% or so. you know, funny phil said neither of these analysts come out to the table on this language adam jonas uses, value opportunity is emerging. may not be here yet. just emerging. >> trcorrect, melissa one thing to remember with tesla shares, keep in mind, when they pop, historically they move. off to the races very quickly. you can't just sit there and say, let me see if it goes up a little and maybe dip my toe in there. either you buy into it and wait for that pop or you can wait until after it pops but missing the real big moves >> yeah. we'll see if that's pattern holds. phil, thank you. phil lebeau. >> you bet. check on the market inte internals? >> improved.
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started 50/50. relatively lie, a more positive split in advances versus declining volume not wait to 2-1 but close. etf now up at a more than six-month high back to about may 4th. last time we traded up around this 36 level. hiring reels, credit holding together okay. decent formula for a value group. volatility index showing down side under 21 now bottom this year a couple of times at or just below 20. similar angle of decline as we saw from june to august and we'll see if they culminate in similar way or not. >> thank you four and a half minutes to get ready for the "overtime" stocks. see you then. and nord sstrom in the red retailer saying higher discounts cutting into profitability meantime, strong retail from
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best buy, burlington, abercrombie. joining us, senior research analyst. michael, great to have you with us. >> thanks, melissa >> feels like the ones that have uponed are ones that, where the expect ations were so cut down, so low, an upward surprise what's your take a statement on strength of the consumer >> certainly low expect aces hel expectations helped. and outperforming since middle of the year. big underperformance earlier in the year, but outperforming really since june 30th some of that is expectations came down. one of the things we saw in earnings report inventories very high but broeth of in-- growth f the inventory, working through that and got themselves in over the summer margins down and investors are looking
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forward to end of the year when inventory should be cleaner and then next year, start over with the clean slate. market forward-looking in a way. sort of looking through the holiday season already mix it's signals from holiday season for sure. some areas spending some areas of weakness. i think looking ahead declaring inventories better margins next year. >> yeah. a look ahead in terms of consumer is what, michael? going out to next year and beyond what we're hearing now is consumer showing signs of some stress savings, being drown down. debit use down, credit up. past quarters at walmart higher-income consumers going to walmart. what's your take where the consume sir? are we going to see the fed's campaign actually work and therefore the consumer weakens at a time when retailers finally cleared out their inventory? >> exactly right, i think. earlier in the month we cut all
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of our 2020 pre-sales. really across the board and in our consensus and did it after seeing third quarter gdp report showed savings rates down about 88%. savings rate is about 3% right now. historically on average 7% during the pandemic as high as 20-plus percent. concerned about spending next year do think margins will be better, spending weaker. all in all makes us a little bit cautious back half, last month of the year here not a great time to own retail black friday to year-end retail underperformed in 9 of the last 12 years be casual technically. freed to own anything, want to own names with very little holiday clothes auto parts, retailer, think lowe's a good name to own and o'reillys. >> and you like o'reilly and bjs
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the ones we are showing to you right now. buying opportunities now, michael? >> sure. so definitely back a longer term 12-month price target favorite ideas are bjs and o'reilly's like those three because products are recession and also none of those three have any inventory of course, big problem with retail this year but these retailers really are not over stretched in inventory at all we think -- hard to call bj's best, costco out there. and bj's is a well-known name. >> quite a performance 20%. outperformer versus market thank you for your time. michael baker. here we are. got about 30 seconds left to the
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"closing bell" holding on to gains here also levels of the day. best levels. nasdaq higher by about half percent. sort of growth areas higher valuations of the market software strong. ark and atf strong and final session before thanksgiving does it for us on "closing bell." see you tonight on "fast money." now to "overtime" with mike santelli. welcome to "overtime" i'm mike santoli in for scott wapner you heard the bell just getting started coming up, hear from one strategist who is bullish into year end and highlighting one sector he's betting as biggest upside and a fed downshift driving a market updraft hint of slowing rate hikes in the latest federal reserve meeting helped stocks to a two-month high while sinking bond yields. bring in josh brown to talk more about it

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