Keep Buying the Rally? 12/6/24
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All, thank you very much. Welcome to the half time report on this friday. I'm scotland in front and center of this hour, rising stocks, even more records within reach.

Now we have new moves to discuss as well and to debate with the committee joining me for the hour, genee hearings and steep, wise Jason night. Take you the market to show you what's going on the day that was read. Everything else, though, is Green.

After a very strong job support, unemployment ticking up to four point two sixty one hundred within reach from the S. N. P.

S. That's what we are on watch for today. As I hear more, more people now, especially after the jobs report today, say goldy locks. That's the term that of the day.

Is that right? Yeah, I mean, is the reason not to believe that? I mean, it's it's actually been goldy lights for a while. Yeah been looking at a soft landing for a long time and looking at a fed that's that's accommodative. We'll see if they are not at the next meeting uh, on seventeen, eighteen.

Although Frankly, I don't think IT matters the market in the least where they go into the twenty five or stay where they are. I don't think the commentary because what overshadow that is the belief that you've got basically a guarding Angel looking over the market in business and taxes, everything in the two ministration. Now the issues could come up next year, and IT won't be that long next year.

Now I know that I E positions I want to sell, but or cut back for sure. What am I doing? IT, until january, he was, whenever taxes is going to be rich, active to the beginning of the year.

So you may see a turns of selling early on, particularly if he gets to some rows. What will drive inflation? You, your. Initiatives in the market.

So so look, so right now, there's no reason to believe you know absent something really exciting is coming in in in the market, which always what causes in the major market sell off new jc reactions. I think you go ever. And what what I really like seeing and obviously invested in this outlook is what time the technology right is.

Jenny, are too many people on the same side of the boat? I mean, I know there's a good reason that most everybody's positive. I don't ask that question suggesting that it's bad, but egr Denny is talking about there maybe too many charged up bulls. Is that a risk or not? I think that is have to be.

I really love that term. Too many charged couples. And so when I heard that thing in golden ox coming for sure, not a gold ox market, a goddamn CS market would say, well, valuations are neither to rich nor nor to poor earning exert this neither too throth y nor too.

But I think it's like a flat house party in the market. And so so that charged up ball like me made that flat house party pop in in my head. And I think that's what it's like. Like the market is party as if it's never going to stop.

And if we start to look at strategies estimates for next year, they all presume a ten percent of market from now, but the markets already trading at twenty two and a half times next year years ten percent higher earnings. So does that mean that we're already saying, okay, twenty, twenty six is going to be tempora at higher? And by the way, twenty two and half times is fantastic.

I would love someone to really convince me the twenty two times and a half multiple is just wonderful, you know. But there is no room for expansion on that. I don't think the biggest multiple we ever got to before this was twenty four and a half times and is twenty four times, and that was in a combo prior to twenty twenty two is where we are now. So there is these real cross currents to be a very lovely economy and a market that I think is really, really being made by your .

dane's charged up. Okay, Michael hardt, A B, A, A jay talks about froth forming that the overshoe is the risk is an overshoot in in q one. What do you think about that? I mean, you take IT in the context with you. Are Denny or maybe as know, Jenny thinking about dean warmer for animal house on a cold water on all the fun? Yeah yeah.

And the .

yeah so I mean, I think jen a loose a couple really great points. obviously. You know the market multiple expansion obviously has been the story the year this year.

I mean, the S M P training at twenty two times forward, we're expecting about percent earnings growth this quarter. We had a closest six percent earnings growth for expecting around five percent earnings growth for the fourth quarter. So clearly, earnings have to ring through for this for the the market continue to grow because I do believe that the multiple is obviously rich.

I think the market knows that, but there's been margin expansion and barriers sectors. I mean, the you as as I mentioned earlier, I mean, earnings have been good this quarter. Sentiment is is is really strong, clearly.

Um but I think as you go into generate wise mentioned this earlier, I think you'll see a lot of tax settling. There's some chase to at the end of the year. I mean, that's what portfolio agers are doing.

They want to get good report cards, good receipts for year in. But I think you know first quarter will be a little bit about to know. I think that's what .

will seeing and genuine. And just say one thing, we talking about charged up balls. If you take a look at the chart of the S M P over last year or the nack, you see a very steady rise. You don't see big Spikes, nastec ers from to big bikes, no.

But if you look from the election to now though, you see a lot of Spikes.

or you can say about thirty percent year, today is a dix. Well.

actually there there are many periods in the market where you've seen multiple thirty years return and years successively. So so I don't think it's have the question either. They were .

only into two or three.

I mean, europe for the S P, R, up almost six percent since the election. It's not just performance of the charge up. It's sentiment.

Almost everybody is bullish. Yes, no, probably for the the right reason is a really reason to be barriers. Ed, you want to be barrister because the feds going to cut fewer or slower, really. Steve leeman has some breaking news out of the fed today that plays right into the story because that hate that is talking today to clefts president and has some very interesting commentary city.

that is, truth got SHE is a voter and SHE on the hawk kest side of things, in fact, kind of hinting at a possible pause. And i'll go through exactly what this language looks like. He says we're at or near a point where IT makes sense to slow th Epace o f r ate c uts.

He sees one rate cut, but we now and the end of january, with a few cuts in twenty twenty five, if her forecasts comes up to a faria between a strong growth of a good labor market and declining inflation. But he says he's looking for further, quite convincing evidence that inflation is heading back to the tube percent. He is, by the way, the new clean fair president x of goldman sacks.

He says monetary policy is only somewhat restrictive right now, and we may not be too far from the neutral rate today. So he is not looking, Scott, for a whole lot of rate cuts and even suggest this idea of do one cut, but either make a december or january IT looks like got a little bit of of a cell off in stocks and a bit of a decline. Very modest though in the december probability, so not having much effect.

But he mic is a voter IT follows by the way, some hawker's comments from um the bowman the fed governor who dissented maybe hinting at another possible to sent from her and then goods be saying he expects a series of meetings that will be close calls between cutting and not cutting up between maybe twenty five and fifties he says the funds right however, is like going to come down over the next year so a bbi of a hawkish talk from this a jobs number. Scott will point to the fact that we have a CPI report next week and we have a retail cells report before the fed meeting. One thing you may want to pay tension to you, maybe not everybody's radar, is on monday. I believe the new york fed t comes out with their inflation expectations survey.

IT doesn't seem maybe there's not a huge reaction in the prediction markets in this because IT IT doesn't seem to be so much of an outlier view when you really dissect IT. okay. So we can get another cut either.

In december, january, been hearing a lot of stuff like that, a pauses in the offing. IT may be in december. IT may be in january.

So SHE hits on that note. And then okay, well, maybe we get a few next year. That seems to be a what is developing to be a relatively consistent view, even shared by the market. Know of a few cuts next year.

Maybe IT is exactly shared by the market. And you can show that if you put up the december twenty five fed funds contract, the guys I think it's ffc twenty five dot. Why I think is the code on that.

If you put that up, you'll see that we're about three seventy years old. So if you think about the idea there so good in the back, how good is that? So there IT has got three seventy is the expectation for the funds rate a year from now.

And you can do the math on that. What do you talked about? Thirty, fifty five, three or four cuts, three, three cuts really makes, which we be now and a year from now. So the markets already got that Price in.

And you're also write, got if somebody came to me and said the fed needs to stop cutting in december, I wouldn't say they were crazy if they say they were cutting in twenty five. You can make a case for that. It's very much on the line, although the market is fairly well Priced for its still I want to see there have been any additional movement still around eighty four percent, eighty five percent probability of that december cut, cut.

The expectations are purely changed in in the last four, five, six months. Steve? Thank you very much, Steve.

At least in our senior economic reporter guys, any reaction here? I mean, it's not a great surprise as we suggest, but IT does introduce the fact that the market just has to fully come to grips that we're not gonna as many cuts as we once thought and we're not gonna as larger cuts as maybe we thought and or they're going to be as quick. But you say doesn't matter.

but I say the next one doesn't matter. I don't believe that does because that's not where the focus now we've been through periods. It's I been in the business for three decades where the focus has been on different things gone from jobs.

It's gone initially from l BIOS you from too much debt with companies tech. And now here we are the focus purely on on policy next year. And the policy is uniformly thought to be, as we say, uniformally.

It's in the majority investors leave that. But you know he's talked to I just wanted talk about the market ports market perform is actually only up three percent since the prior peak in early october. So this quarts up three percent despite all the good news we've had aside from what we received as trump s election being good news. And what we've had is going back full circle to Stephen comment the economies in great change.

So that chair yeah or two days ago, whatever was two, three days ago with the Andrew called the remarkable .

and this is remarkable. So what's the point? So what's remarkable? The reason why you cut rates is to stimulate the economy because economy a restrictive stance.

but they are. But, but the restrictive .

stance typically leads to tired winding distance and slowing come right.

They don't want to risk going too restrictive. Even if it's not as restrictive as they once thought. They don't want to stay too restrictive even on the margin, too greatly impact the labor market. There are costs of that. They make the point repeatedly yeah.

but their hands are tied now because inflation seems to have sort of steady. We're not seeing the major or games and inflation so stuck.

I don't think their hands are tired. You put IT that way. I think they have what this, my word, the luxury. Because the economy, the economy is so strong, they actually have the luxury they could pause, they could go on to twice. But whatever the point here is.

Investors continue to put money into the market and they continue to put IT into places that you you just find interesting. Certainly since the election, the flow show from bank america, you have nine straight weeks now inflows in two equities, the the largest four week inflow ever into crypto assets. We can hit that because you keep buying bitcoin and you did IT again as we would. So bitcoin again because we got one hundred k kissed IT that we came back a little bit and we're hovering right along right.

which is unusual. So so i'm in my old chicago and I see the news of who from pointed for the S. C. Dly .

person. exactly.

So is trading. I think IT was in one ninety seven thousand times, immediately bought some more and said, this is going to be the kind scare. Three hundred didn't get through one hundred anyway.

Now yesterday we saw a five percent correction. It's not unusual when you go through these psychological points that are resistance to fall back behind IT. But I now think a hundred ds is gonna be support and that we will keep going once see administrations to actually.

well there. The yesterday was, if I recall, IT correctly, overdone, but not over, right? That might have been wolf research that said overdone but not over than you had other calls of saying, well, yeah, they agree with with voice hundred thousand. Okay, you know any up you meet two fifty well.

next year and next, the beauty of investing something that no intrinsic value because you just can't say it's an overvalue as time to value, it's purely momentum.

So what are .

you playing for a wise you money?

Are you playing for twenty five .

percent return on IT? I don't think i've defined in playing the momentum the moment when the moment OK.

That's a that's a good point for the next debate because he doesn't really matter. He's playing the momentum. Do you continue to play the momentum and direction ary of fourteen and a half percent? Sce, the election.

Do you continue to play the momentum in financial up seven and half percent since the election? What do you do as a momentum market? And you can see IT on a thousand different levels in layers. Yeah.

but I don't invest your momentum. So what I do is I pick off individual stocks, right? And if i'm looking at a stock, i'm like, okay, I want to earn eight to ten percent year on average over the next three to five years. So let's say I write IT and like I expect and fifty percent between the next three and five years playing.

you're happy to get the moment, happy to ride the momentum. You tell me you're not you're not happy to ride the docker sign momentum. It's our part of the day to day.

why? Because it's surging after earnings, it's up forty four percent. Ince the election, yeah fifty two week, obviously highest laws in April of twenty two years. That stuff.

right? But we own is not because we are chasing moment and we owe us. We bought this september of last year.

When is trading at forty two dollars, trading at fifteen times of the seven percent free cash for yelled? And we're saying, like k, by the way, when we bought at this time a couple months short of this time last year, IT was down almost ninety percent from its pandemic. I there was no momentum chase there.

IT was us saying, this is a wildly undervalue its stock. And why is IT up this much day? Well, IT was a great quality quarter.

Revenues wrote eight percent. Billing was up at nine percent. International growth is up thirteen percent.

But here's the key. What they're doing is they're del delivering extremely profitable growth. So their Operating income was up nineteen percent.

Your Operating margins after thirty percent when we bought at last year, Operating margins for twenty five percent, and that was a big part of the thesis. So it's very different than the bitcoin. But I also knowing this woman I know in this, what i'm playing for what i'm playing for is multiple expansion. And by the way, up twenty five percent today.

That seems a little crazy.

I'll take IT twenty seven. 我 i wanted to make one more point because .

I know as soon as you talk， we're going to leave this subject. No.

no, no. We're going to go deeper into IT. You poor out name becomes a verb. Good things are gonna happen. Like you could look at all the numbers and all the matrix when you say, hey, i'll dog and you don't really know what is a great company I want don't really care about the momentum, although to your point.

you happy to ride the hotels. So here's one three. Number one, eighty percent of my portfolio is bottoms up fundamental.

We have different investment styles. You track your clients with eighty ten percent returns. So that's what you do at.

The point I look for absolute performance and I will continue to I do if targets with evaluation, I to play most my portfolio, but I also have twenty percent where I can trade IT. And i'm to hold on, Jenny. And what i'm training is momentum bitcoin, and i'm very conscious of that and I will continue to run. So i'm there to make money regardless of where IT is, right? You're they are saying I got to do this and to do that because that's what quite expect might have a different expectation.

But i'll tell you, I ask the question because I think IT like i'm actually curious and I think our views are too like I have a client right through one of the advisers that we work with who just cashed out an enormous portfolio, right? And not just when we managed, but the one one of the major and IT was a combination growth stocks in a national stocks.

What's the point? This is what about you about bitcoin microstrip, gy plentier? And like another bit point in tf, hundred percent in that. So i'm.

Saying to myself like .

what does he think he's going .

to get .

and you how much .

on the table don't know person, don't know the I could care less i'm not thinking about IT for any more than this time that you said IT.

I know what i'm doing OK, that's great. You know, both your strategies, this great. Jason snopes speaking a momentum. You bought more netflix.

I I did place.

Is that mean been a tone .

of a hundred? I mean, for me, what is a little we've been talking a lot about ay to lie sport and how great that's been. Obviously the mites and five, we got n fell sports on Christmas on Christmas day.

But really what they've done is focused on profitability. The baLance sheet free cash flow continues to grow. Margins continued to grow, the stocks up percent year to date. So the spread between them in the other players is only growing. So we decide to to take the opportunity.

Do IT just all roughly back to the same question. Do you continue to buy into this high momentum market? Or do you get a little sketch as the momentum starts to get what some would suggest like that? You're Denny showing signs of from the time board question. Yeah right? That wave before IT crest and turns over.

So sorry, no good. Let me say. I would just say momentum is obviously a real thing that is extremely powerful.

And I think for me in in our in thematic s, so we're looking investment things I play out throughout the year. And momentum is a theme, whether you like IT or not. And I think you have to play IT as long as IT goes, IT could go the other way. Very rough on the downside clearly. But I think for now, I think it's it's a place to be.

Amazon, for example, is pull up the amazon T A moment in behind that name is part of the this resurgence in the mega caps. Apple meta, amazon new high up another two percent today, bank america. Speaking of playing the momentum, you just continue to you know.

you named in your top pic what i've done anymore til don't be upset relief for not disclosing this is that i've .

he's rolling your eyes right now. No, she's saying again.

I know, I know, I e's said, coming to shot, what do I expect from today? At any event, I did add to invidia for a trading position over above what I own. I did add to met over above what I own. I added slightly to amazon over above what I own. So I typically where a trade first revision I have, those are purely to capture the momentum you know into the year end, but they will be sold know as we get into your end, not the positions, just the trading positions I have on top to.

So you know meta is another good one. Jenny. It's it's up. Gosh, I was up like seven percent as of a couple days ago since sucker berg went to marathi and had dinner with the president elect. You had a tiktok ruling today, which meta gets a bump off of, and we're going to have little more on that later. But it's another almost three percent move week to date meet us up near nine percent, right?

This is where our kind of new current state this is hasn't changed verses a month ago, which is who, when the shares were at seventy nine percent, I mean seventy nine dollars, mark sucker berg was really focused on efficiency and cost control when there at six hundred and twenty five, will he run that as tita ship? Because I think he needs to to keep to keep this growth going. So it's just something that we will need to wait and see.

You know, we've trimmed IT along the way, and that's just taking a little bit risk off, a little bit risk of. So we're happy to have IT. We're happy to have the momentum.

We don't want to sell IT right now because the gain is huge. We're looking at year and just a few weeks away. And like everyone else, we're kicking the can on capital gains .

for it's like jot sorry, it's like jot on APP love, which is can we show APP loving year to date, please? It's up another eight percent almost today. It's up nine hundred and twenty .

five .

percent. Well, mean, you hope that the momentum continues. Is the time old questions like if you got into APP love in at the beginning of the year, if you got into bitcoin when I was much lower than IT is now you're like, oh, well, i've done so incredibly well. Now there are tax purposes to think about clearly, but it's like, well, there's a lot of momentum left in these trades. Do I really want to sell?

Now what what I find is that a lot of people are saying, like, just get me to january first, and then i'll take a little bit off of the table, put some of my winnings in my pocket, so that I curious to see what you talk about already.

APP love is up twenty .

one percent in this week, so because is just incredible. But the moves all year long .

haven't makes sense. When you see stacks go twenty five percent because they beat the quarter by a penny, you I want a base of of four dollars. It's just type charge in market.

This will take a quick break. We're going to come back. We will talk uber because they hit a big speed bump this week. Shares are facing for their worst week of the year, but Jenny and Jason owned that stock, as you probably know, which means i'll debate IT next.

Get let me see in. The some like valley lies in american success story.

The more success that here, the more .

success that comes .

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Still stocks on the move. It's spent a tough week for uber there. IT is it's down now walk up one percent today, but IT is facing for its worst week of the year. IT needs to be down more than eight and half percent this week, in fact, to get that. So we will keep our eyes because it's just about there.

We had the way mo going to miami yep, mask as close to the White house in the overall ice, whatever as as he needs to be um brad garshin, to remind everybody, was as big a in uber supporter as I think we have had on this program until right to know month ago around the election when he sold. And here's why I think the year of twenty twenty five is going to be about robot taxi. We had we were present at the robot taxi day um you know we were impressed by the robot taxi. And so for over they have to get past this moment right where you know they have a hugely disruptive force coming in the case of tesla, alright stocks down uber ten percent in ce election. Mention the what doing with your position yeah.

So we're still holding IT. We're still holding IT. I mean, the heads keep coming from obviously .

a headline standpoint. So you sweat over now or no?

No, i'm not not because I think uber has a tremendous network. six. I mean, that you have really, really huge network. And I think the other thing is the way mo news yesterday.

I mean, there they're partner with way mo, so i'm not terribly concerned about I look at the earnings call, the last call delivery mobility evo growth was really strong. Um you know and again, I get back to this. This is an event time.

I agree with that. There are concerns potentially going for how long does IT take for the story to play out? I think uber can continue .

to perform going for because I want you to go deeper for me. Some say this is not the fact of a story playing out. The goal posts have literally moved. And once they move, they move. Do you feel that at all?

I'm aware i'm very obviously, i'm very aware of IT. I don't think necessary the goal positive move again, I get back to the network, the uber IT. There are so many streams to business, their AI capabilities that they are continuing to, to put in force going on forward.

Um so I I think that they will find ways to get past this storm. And I think that cash Carry is a tremendous o and he he is innovative enough, so you'll figure that out. So that's why I remains a core position for me. I added to IT earlier in the year. It's been sightings for some time, but I think I think there be an opportunity.

What are you thinking about your position here?

okay. So I think it's interesting that person are sold when he did because I was at this Price where he, where he chAllenged me to be more imaginative.

IT, yeah, that was before the goal post moved.

In his mind, I don't think the goal post move. And here's like an interesting thing to imagine. Imagine the fact that will a couple things, imagine the fact that they are that they're creating eight billion dollars here and precaution, know what if they thought the way to go was to actually own the driverless cars.

They could buy forty thousand driverless cars a year, swimming about two hundred thousand pop and create their own fleet. But I think that they are looking at this is like, hey, our software, our APP, our network, like that's the Better margin. That's where we want to be.

Now another thing is tesla is okay. This this is going to be rolled out in twenty twenty six. When has tesla ever delivered on time? So I think if I use my big imagination, I think uber got a long way to go, probably a lot longer than twenty twenty six, where they're minting eight billion a year. And free, casual, nine billion, ten billion doors can do a lot.

With that, let you talk about margins. Right now. The drivers are responsible for their own chance, their own fuel, their own a body work on the car, buying the car, a car page wants you want you have robot taxi who's going to pick up those cars? okay. So i'm not .

suggesting that uber wants to do that. I'm suggested they don't. So why would .

they just work for a maybe.

maybe the way more robot t taxes.

which are ready happening that people have those issues that .

I I someone figured out? And I think my point was if goober thought, hey, that's the way to go to own the cars, they'd go there. But you're kind of making the point for me, like who wants actually on the car? That's not the profitable part of this of this a red hAiling business.

the profitable part.

And I do I want .

to get a one of more time owns the cars or uber owns some wait is not the autumn and lose money.

So they are I don't .

think it's working about right.

OK, that's a great lululemon .

surging today after earnings. Please show the chart um a lot of optimism here. Now stock is this thing back up percent .

is of their demise were greatly exaggerated. So you I regret not buying IT. Whenever I see lulu as I travel around the country, they're always crowded.

And when my personal o sure we just thought to be the big hope can also speak for for them, they are empty. So obviously, that's a limit sample size. But but they continue to be the market leader.

And I don't think it's much different, Frankly, than your example with netflix versus the other competence at at some point, a brand is just much stronger. So I will buy the stock. I'm hoping a back. But if IT doesn't, I don't think it's on recently valued for such a unique brand with limited competition.

Will watch that one more dollar general got a double upgrade today. IT was from cell to buy. I was bank of america. We don't have ownership on that. But IT leads me to a retail related new new news retail related news, I tried to say five times um for you, you sold calls take me through that. Real has been so interesting .

this quarter where there there's just big winners and big losers. We saw walmart rate target, terrible auto, fantastic calls, which owns a terrible a huge part of investment. This is uncalled was that time kingsbury, who had turned around billington and cov battery, was going to come in there and turn around calls with this past quarter investment thesis, just like full undesigned ted. So getting back kind like .

your intel idea. Oh.

i've got three. We can go for B, N, G. Foods right now to, if you okay, but yeah so on. So i've had three companies where the investment pieces are just designed and for different reasons. But you know what? Getting to a point about the huge realized capital gains that people have, the huge unrealized capital gains like you just sell IT um there was no salvation .

yeah down forty six percent year to date. And just like let's get the headlines with pip, Steve and he got president .

and in his staff are debating whether he should sue blanket cards, some people perceived to be enemies of president elect trump. That's according to two sources who spoke with nbc news and said the idea would be to preemptively extend clemency to list of current and former government officials to short circuit a campaign surprisals from the new administration.

And it's the topic likely to come up this weekend when nbc news Chris Walker will interview present elect trump sunday on me the press. The jury in the Daniel penny trial sent a note to the judge this morning that is deadlocked on the top charge of manslaughter. Henny is charged with manslaughter and criminally negligent homicide and the chocolates ath of Jordan nearly on a new york city subway de, the judge urged the jury to keep deliberating. And gold man sax is leaving a coalition of banks trying to a line lending and investment with efforts to fight climate change, the investment bank's decision coming against the backdrop of pressure from summer republican lawmakers and state attorney's general who say membership in the net zero banking alliance could violate anti trust laws.

Guy, okay. pip. A, thank you. Pip of Stevens coming up. We have more moves to get to from the entire death. Plus Kevin simpsons just added to one big industrial name. He's going to join us with the update when we come back.

Once a destination for powerhouse, now of money making powerhouse, driven by money, power and faith, cities of success saw leg city premier center tennis R C N B C, serious sex one twelve.

All right, we have moved to document more of them. Jenny, you sold B, N, G foods that stocks down thirty seven percent year to eight one.

My worst loser.

Why isn't this worse? I don't know. And I think .

that's part of the problem is I really don't know, two quarters ago that looked like they were back on track, IT looked like they would manage the portfolio and looked like they were returning dollar earnings. Then this quarter, like all off the table, with no good reason, with no way to say, this is why I IT hasn't worked. So at that point, i'm just like I I have no investment. This is left somehow, by the way, neither them more calls have cut the divided and they were sticking with that.

But i'm out. You, I can.

No, I added.

bought, you know interesting about the last .

time I was on when we were talking about this and new and Stephen, I was saying when we are reading the room, we're seeing chaos. What what happened was um with the R F K nomination to H H S, we saw all the consumer stable stocks just tank like eight and ten percent like working on kanna gr all year. So this is the most drama free plain vanilla stock that I think and hope i'll buy in the next year.

Canoga makes food lot of frozen food. Um it's I think a healthier portfolio then say a smokers or a pepsi or her shy. And so you've got a company with a five percent dividend eld trading about nine ten times earnings, three to four percent earnings growth ahead.

They expect the dividend to throw grow about three percent on top of that. And I think the multiple is too low. So if you just had any growth plus the dividend, I think you get eight, nine percent growth in the years ahead.

If there is a little bit of muff expansion where they get back to historical averages for the group, may be you eleven, twelve, thirteen times multiple and you get a nice bump on top of that. But I think this is a really good place to hide out in a drama free spot in a world that may be chaotic. O you buy .

at honey. Yeah, you used to own toyoy, which you sold in the spring. Why you buy hand hand .

is such a cool story. So this is for national income strategy, and i'll go quick on this five and a half percent dividend. Yld, fifty percent of the market cap of the company is sitting in cash on the baLance.

That's crazy. They're buying backstairs, but they could, if they wanted to, just fine the dividend for the next ten years. Meanwhile, they get their their main areas are automobile and motorcycles.

In motorcycles, they ve got thirty five percent global market chair. I think one of thought there is like o terf s, they have a huge factor in ohio, a huge factory on obama. So things are produced locally.

They get out of the terrace that way. Yes, the summer ontario motorcycles are produced locally. So there's not terrible issues and they've got really nice growth.

Oh, sorry. And one other thing, as interest rates come down, that drives motorcycle growth. So it's just a terrific company that's really safe right now.

okay. Thank you for that, Jason. Step, you're shelling into IT.

Yeah, solid. The momentum s obviously not. There has been a very weak year for the stops only of four percent year this year. Last year was obviously a great year. The dog is considering a lot of things.

so show IT over the last, I don't know. So what does a one month look like? Because in IT or even a week or so, this was I mean, some of the tax filing reforms that are being talked about that what you're looting to, yes, out of dc hit the stock pretty hard. The data that news .

came out a hundred person tear point. Obviously, dog is considering they're considering that free tax filing APP, which obviously would run ride into turbo tax, which is their play. Um you so who knows if that will happen or not? At in my opinion, is unlikely.

They had to addressed in the artist call, which makes sense, you know but for me, they miss on the guy that they beat on the top, in the bottom in the last quarter. Software is obviously run a turn over the last six months after thirty seven percent, they have not participated in a meaningful way. So that's why we decided to move .

on and look here, there's kind of like a one month there gives an idea of what was up. And then, you know, I went through that little valley. There is your trimming? G, X, O.

yeah. So IT pains me to do that because I still like the story, but it's can be dead money. So the stock took a here first.

The stock was lifted when they are rumors published by bloomberg browsers that they were up for sale and being approached by buyers. The story came out the same day the story came out. They were not.

Sales process ended and the CEO mk. Molson, who have gone to know fairly well, was retiring. So both took the stock down more than ten percent.

I sold not quite at the laws, but I also had some puts that partially heads the position when they announce the potential cell. Bloomberg, that is gx o never did so at this point is dead money. I don't know.

New CEO is going to be of course, they're retained search in poor. Additionally, growth has to pick up and a highly computer space. And if take a look at fetch x, for example, they just signed to deal with nimble 8 tics that fully automates the warehouse， no people and that's going to be their partner in the business. so.

Love the growth .

is .

all a dead money. Just here's where we are in jx o.

The investment thesis on gx o for us is that if you look at the multiple versus old, damion IT trades IT like half the multiple. So I disagreed. Dead money, but but it's predicated on meeting multiple different, not super king. okay?

Kevin simpson joined us now because he has a new move to document too. I didn't go where I thought IT mine.

Kevin simpson.

join now you bought more honeywell. Can you tell me why you have any of the activists there? Is that why?

No, we're filled that he is here, Scott. And the thesis that the the parts are worth more than holes, absolutely. Why we're in IT now.

Earlier this week, they announced a huge deal with research development deal with bomb theory. It's an airplane manufacturer of canada we've done business with for some time. And I think IT was just a headline sell off because they did have to downgrade, at least reduce some of their guidance.

They showed earnings per share for twenty twenty four probably commit about five percent lower than expected and the socks sold off. But you need to dig a little bit deeper into the into the data to see why this is gonna a creative long term IT costs a little bit of money to to put a deal together like this. They're talking about seventeen billion dollars in potential revenue over the next few years in the life of this deal.

I think that's very powerful. But more importantly, I think that lends itself to the theses that this break up is going to happen. Era spaces is absolutely the sweet spot here. Aviation is a close second, automation is a third. But what we saw with general electric from the brake perspective, if we get half of that on the honeywell, it'll be awesome, right?

Good stuff. good. We can see you. We got bout let's Kevin simpson and I and told his only other side.

No where is?

Senior markets commented to mix and told here at post nine here the gold locks word again.

Yes, the jobs number definite came into that zone. You know, you can certainly look for the softest under the surface just enough to solidify the view of what we're going to from the fed. You have you look at the growth income, right? All payroll, number of jobs, hours worked.

It's still holding up at a pretty healthy level. So I think you have that combination of know the fed is doing its orderly thing, but it's not responding to anything particularly scary. I think we're okay with that for now. And then you guys have been talking about, as I have for weeks, the sort of racy end of this market where there's just no is kind of like no end to the appetite for some of these moments in place .

at love we were highlighting. You want to talk about what you're seeing, what IT makes you think about. I mean, it's up and another now it's I said earlier, IT was up like another seven, eight percent. Now it's up almost more it's more than nine percent today, twenty three percent this week and more than nine hundred, almost nine hundred and fifty percent this year.

And it's because it's Operator ly in the meme zone, right? And me, clearly, people feel as if they can just keep piling on top of this. But yet you're also getting the fundamental upper revision case to say that there's a cover story for IT. What's again, what I essentially is, is a subset of this market. It's not really bleeding over into everything else will see if if I kind of just burge IT self out at some point.

Good stuff. I'll see a little bit. A little later. We're back word after this.

We're back with some news on tiktok. The more Julie boston following that story force today, Julia.

he got we just got a statement from tiktok saying they plan to appeal this ruling that allows the ban on tiktok to go forward, saying, quote, the supreme court has an established historical record of protecting america's right to free speech, we expect they will do. Does that going on to say the law was, quote, pushed through based upon inaccurate flood and hypothetical information resulting an outright censorship of the american people, the tiktok ban ali stopped with silence of voices of over one hundred and seventy million americans. I was worth noting that meta, snap and the alphabet are all higher on this news of the tiktok ban going forward back .

over you mean move certainly today. really. Thank you. That's truly born with the very latest from that still developing story, right?

To set up js snipe is all about you. A oracle earnings on monday, best year since ninety nine. What do you think hundred percent?

I mean, the stocks up eight, two percent year to date. Again, when when I think about the company that has endless demand, more demand than they have to pass IT, they will double their cattle acks in twenty twenty five just to meet that demand. So I think it's going to be a great quarter .

autozone on tuesday, all time high. Today, you're on that two auto zone.

up twenty six percent year a day. They opened up two hundred and thirteen stores this year. I think that's what's going to continue to grow that they do IT yourself business there all time high for costco.

which reports on thursday, keeps on pounding .

I me up fifty percent year to date. I mean, you on the stock obviously is always the expense is trading at fifty five times forward again, when I when I see who they cater to, which is a fluent consumer, fifty percent of consumer spending is done for twenty to thirty percent of a fluent household and where class results.

good stuff. We will take a quick break. We'll do finals next.

Closing bell, couple of now let me see the the world school making another friday appearance with us. Can wait for that and a stage eero, so will be with us as well long work and family. Sherry, paul, it's just in final. We ve got thirty seconds of j night first oracle.

I think it's going to be a strong quarter .

stay now verdie.

I don't know how the stuck can never see a downturn .

other than today, down almost three percent.

Mystery jane. Ga.

down a 7 percent .

on the R K nomination， four and five percent OK. So we going to .

watch the market over the final stretch. I'll you through IT. If we get sixty one hundred on the p and not that far away, that'll do IT for us. Exchange begins right now. You've been listening to c nbc's halftime report, the podcast you can always catch us live weekdays at twelve n only on C, N, B, C.

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