Stocks Jump As America Votes… And Cathie Wood Weighs in on Tech 11/5/24

0:02Live from the Nasdaq market site in the heart of New York City's Times Square. This is Fast Micro in focus. The semi-company posting its first earnings report since its lead auditor quit, she tried to say, and what to make of the numbers and how to trade that sector. Plus, Palantir pops to record highs when investors lose their bet on the casino stock and Boeing's machinists approve a deal to end a seven-week long strike. The trades on all of those moves are coming up. I am Courtney Reagan in this evening for Melissa Lee. Coming to you live from Studio B at the NASDAQ. On the desk tonight, we have Tim Seymour, Karen Feynerman, Dan Nathan and Guy Adami.

0:53And we start with some solid market gains this election day. All three indexes up a percent or more. The S &P and Nasdaq less than two percent from record highs. Every sector in the S &P up today with consumer discretionary and industrials leading the gains. And Mag7 names also higher today. NVIDIA overtaking Apple to become the biggest publicly traded company for the first time since mid-June. So is today's action the market? Are we breathing a sigh of relief that we will soon be able to put this election uncertainty behind us. Tim, what do you think? What is the market telling us? How are you feeling?

1:28The people you're talking to? Where are we right now? I think the VIX tells you a story of a market where there's a little less volatility, but it's still trading at 20. And I think that the market is also has some sense that there could be a continuity here that maybe is unexpected. So I'm not sure what the outcome is going to be. Remember, folks, we don't predict that stuff here. I just think we're going to get where we actually had pretty solid numbers out of, say, mega cap tech companies, where we also heard, you know, sectors like industrial sectors like banks. We've seen financials outperform.

1:59I think the setup in November is that this is the best year month of the year for stocks. The backdrop when you had an ISM services, we all know the biggest part of the U.S. economy. It's the highest in two years came out today. The labor market looks fine. The Fed's going to go and they're probably going to cut 25 basis points. The market without elections should be going higher, even though we're already up almost 14 percent off of the intraday low on that fateful August 5th day when we all thought that the world was crumbling. What we learned since then and now is, one, the job market's not falling apart.

2:29The U.S. economy is probably above trend growth. And the Fed is your friend. That's where I choose to opine, because I think no matter what happens in terms of the polls between now and when we actually know, and that's part of the unknown for markets, is I think markets will get back to the reality of where we are with this economy right now. And I think it's a pretty good backdrop for stocks. That is an interesting point, Karen. I mean, whoever inherits the White House does take over a pretty good economy. Obviously, we're talking about many stocks near record highs. Market broadly performing pretty well.

2:59I mean, does it matter who wins the White House for markets? I think it matters if there's a sweep. OK. Then I think we would see a mandate from one side or another. And so that could lead to very different markets. But I think who knows how it's going to come out. And I think the likelihood of a sweep, I don't think that's the most likely. But I think that would be even if actually it's not a sweep, it's just extremely close. It may be hard to get anything done. And I think for the markets, that may be a very good case scenario. Yeah, I believe that's what Stephanie Link was saying today, that that sort of the markets almost want to have the split Congress.

3:32Dan. Yeah. I mean, again, I think there's probably two likely outcomes. one that Harris wins and you have a split government and then another that you have a Republican sweep. If Trump wins, then they take the Senate and they keep the House. And I think that that's kind of contrary to some of the things that people are saying, why the market rallied the way it did. You know, we heard Trump trade, Trump trade, you know, all that stuff for a long time. I don't think there's really any evidence that the stock market trades better than it does, you know, under a Republican president as it does a Democratic president.

4:00And I can go back just in the last 25 years, some of the worst market periods were under Republican presidents. And so, you know, at the end of the day, I think today's rally speaks to more what Tim is talking about, that the economy is, you know, we have a 2.8 percent GDP. We have unemployment at 4.1 percent. It's still at 50 year lows. Right. And we have inflation that is down from 9 percent to below 3 percent. Now, I'm not saying that's the rosiest picture. I mean, it could be late cycle sort of action. But I think Q3 earnings told us, to Tim's point also, that things are OK right now. Right.

4:33And there's still high expectations for 2020. 2025, I think, in fact, has year-over-year earnings growth at like 13%, 14%. Now, a lot of us coming into this year didn't think we were going to hit that 11 % bogey year-over-year earnings growth, and it looks like we are going to. So, again, I think that the economy is okay. That's probably one of the reasons why I think the market goes up no matter who wins. UBS is saying equities are attractive regardless of the result. Guy. Well, a lot's changed since the last time you were here in May for you without question. Welcome back, Bonnie. But in terms of the market, not a lot has changed.

5:04I think everybody's saying sort of similar stuff. I mean, if you look what we've done over the last four or five trading sessions, we basically got back today and Friday while we lost Wednesday and Thursday. And that's sort of been the pattern. One or two big day sell-offs, the market recovers over the ensuing week. And we're seeing now the only difference is, to Tim's point, we have a VIX that's still either side of 20, which may just be, you know, election concerns, you know, people obviously hedging against that or into that or in the weeks after that. But with that said, all the same themes are working.

5:35You know, banks continue to trade pretty well. All seemingly this, you know, renewed sense of the economy and the economy is doing better than people think. Those trades continue to well. And quite frankly, precious metals continue to work as well, which is somewhat, I don't know, doesn't make a lot of sense. But that's been the theme now for quite some time. Yeah, that's funny. Tim, in this UBS report, they're actually talking about how gold remains a valuable hedge against sort of uncertainty regardless of where we are. This is Karen's line, right? Yeah. Yes. What's what's the reason why I can't invest in gold?

6:04I can't find it. So precious metals are certainly your friend when there's political chaos. They are your friend when there's some type of a deflationary force out there. Sometimes they're not your friend in an inflationary environment. And if you look for the period where gold actually really underperformed in the last three years, it was during that period. And it was underperforming barely. Actually, on a relative basis, it was outperforming in absolute terms. it wasn't going higher. So, guys, right, I think we've liked gold here for a while. I think we've liked precious metals here. We've noted that silver has outperformed over the last few weeks.

6:36It probably will continue to. But gold is a function of a long-term trend, which is, say what you want, it's not even about the fall of the U.S. empire. It's really a case where central banks have been diversifying really since the last, I don't know, 25 years that I've been looking at gold, is that this has been a trade that certainly that's part of the dynamic. The The other part of the dynamic is there is a deficit. There is a fear out there that there's fiscal, you know, just lack of restraint out there. Whatever party in power, by the way, look around the world and you can probably see a lot of the same thing.

7:08That's why gold works. That's why I would not run too far from that trade. You're writing down something over there, Karen. Yeah, no, I don't own gold. I always joke that, oh, no, everything's good for gold. So you should have gold. I do have Bitcoin. I've had it for a long, long time. It was supposed to be some of the things that it's not a store of value that really hasn't worked. It really does not become useful for transactions. But for the fear of fiat currencies, which we're in a situation where a fiat currency could really be devalued. Right. I think the case is there. Unfortunately, it's sort of shrouded in regulatory hassles that as those have been dismantled, it's done much better.

7:44But that's sort of my fiat currency hedge. All right. Fair enough. Well, we've got an earnings alert here, I think, on Trump Media. Shares down after hours. Julia Boorstin has those details for us if she's ready.

8:01All right, Julia may not be there. Yes, I'm here, Courtney. Trump Media and Technology, ticker DJT. Shares are down now about 1 percent this after the company reported its quarterly results. Of course, reporting on Election Day here, the company reporting$1 million in revenue for the third quarter, in addition to$4.7 million in interest income. The company also reporting an operating loss of$23.7 million and a net loss of$19.2 million. The company stating in the release that it, quote, continues to explore additional possibilities for growth, such as potential mergers and acquisitions with companies that would benefit from Trump media and technology and branding, including in the realm of fintech.

8:42Shares now down 2%. Courtney, back over to you. Got it. Thank you very much, Julia, for that. For more, let's bring in Weekly Advisories' Peter Buchvar. Peter, thank you so much for joining us here. Really appreciate you being here with us on a very, very active day for markets, of course, as well as for the world and our political landscape. What do you think investors should be positioned right now, as we said, where we have no idea what the outcome will be? Will it be a sweep? Will it be clearly one candidate or another in the White House? What are you advising? Well, policy-wise, if there's a split Congress, the Fed meeting on Thursday is going to be more relevant than who's the next president.

9:19Even though we're pretty sure they're cutting rates and you still think that. Yes, but I think the bond market has been the most interesting thing to watch since the Fed last met in September, when the tenure is up 70 basis points since they met. Now, if you're a responsible central banker, you have to ask yourself, OK. Hold on a second. Is there such a word? I hate it's an oxymoron. I agree. OK, interest rates have gone straight up since I cut rates. Gold's at an all-time record high. Credit spreads are extraordinarily tight. Inflation prints have been a little bit above expectations if you look at the last CPI.

9:55Jobs data is very confusing. I think you've got to look in the mirror and say, do we really need to cut? And if I do cut, maybe I pull back the expectations for December. So I think we really need to see this bond market action here. And getting back to whoever's going to win, regardless of who wins, debts and deficits in the U.S. are going to continue to go higher. Spending at 23 percent of GDP is not going to stop. And whether we raise taxes, lower taxes or whatever, it usually hovers around 17 percent of GDP. So I think that the bond market is sort of taking control in a sense of the narrative.

10:33OK. And I think we need to pay attention to that. OK, but regardless of who wins, I mean, they don't control the Fed, right? The Fed is independent. So why does that message change back to your earlier point? Well, I think from an investing standpoint, you know, we're obviously focused on who's going to win. But I think where interest rates go, where earnings go is going to matter much more. In terms of policy, whoever wins, the most important thing is what happens to the Trump tax cuts next year. Outside of that, I can't think of anything that is as important. Yes, the tariffs matter, but, you know, both sides kind of like tariffs.

11:07I'm not a fan of them, but they're there. But, again, legislatively, it's what happens to those expiring tax cuts. Peter, in the notes it says the equity market will care about yields, but not until 6%, which makes me believe you think there's a more than remote possibility that 10-year yields go to 6%. So how do we get there? Well, it'll be Washington, D.C. that will only care if it gets there. Because everyone says, well, either candidate's not talking about deficits. When will it matter? When will it matter? And that 6 % is when I throw out where you can be sure on the floor of the Senate or the House, people are going to say, oh, boy, we need to start paying attention to this.

11:46Because that's sort of the crisis level. Now, whether it gets there, I'm not sure. I do think that we retest 5%, which was the high of last year. And this 430 level is really key in the 10-year because it's the 50 % retracement of that 5 % on the upside. the 360 that we saw a few weeks ago. So this 430 really matters. Peter, thank you very much for being here with us. Peter Bookvar of Bleakley Financial Group's CIO and CNBC contributor, we should add. Karen, what do you make of the rate picture right now and where we are? We've had a lot of action there in the bond market, clearly very important.

12:18I know. See, I kind of think they should pause. I think either pause with the more, maybe some dovish rhetoric or - Because of ISM numbers? Because of like, yeah, things of, yeah, both ways. I mean, inflation is sort of doing OK. Right. So I don't know. I guess I feel like they have covered to do that if they want. But we had Loretta Mester on the other night. She seemed pretty confident. Who knows? But 25 basis points is the right path. I don't know. I don't think it's really necessary. And what is the bond market telling us that it's moved so much since that 50 basis point cut? Right. And the economy is doing great.

12:54Yeah. And you mentioned this again. The Fed's supposed to be apolitical. I think candidate Trump has mentioned on a few occasions over the last couple of months that he thinks that the White House, the president, should have a say in monetary policy. And you just made the joke about whatever it was about central bankers. Can you imagine what would happen if it did become a political entity, an arm of the president? Yeah, we would. And so I just think that that's just. With all due respect to Turkey. Of course. I mean, maybe. You know, I mean, we got chickens, we got turkeys. I mean, at the end of the day, I just think that that's just one of the other fears that we would have.

13:29I mean, you're talking about fears of devaluing fiat currencies. I just can't imagine that turns us into a banana republic at least. Reversal on the bottom, real quick, in terms of the TLT, if we can put up a TLT chart. I mean, there was one point today where the TLT was falling out of bed. It reversed midday-ish and closed higher, which means tenure yields actually went down. I think they closed around 428 off about 435 high. That's interesting. It sort of dovetails something that Katie Stockton said on the show a week and a half or so ago. She thought it was an interesting place for yields to pause and maybe head lower in the short term.

14:00And Peter just talked about the technical setup for that as well. It makes a little sense. I'm still one of these people, though, that think and agree with Peter. I think we're headed to 5 percent, maybe by the end of the year. And I'm not sure how the equity market is going to react. Well, coming up, after hours, action and shares of Supermicro following its latest earnings report. The numbers, the troubles. We're going to dig into this name next. Plus, Palantir's post-earnings pop. What is investors piling into this software? High Flyer coming up right after this. Stick with us.

14:30You're watching Fast Money here on CNBC. We'll be right back.

14:46Welcome back to Fast Money. We have an earnings alert on Supermicro. the embattled tech stock down following its first report since its lead auditor quit. That conference call is underway. Our Seema Modi has the very latest. Seema, what's going on? Hey, Courtney. Second quarter earnings, excuse me, second quarter outlook is a lot lower than Wall Street had anticipated, a sign that this flurry of accounting concerns are potentially starting to weigh on future sales. Now, on the earnings call right now, Supermicro CEO Charles Liang says it's in the process of engaging a new auditor and, quote, working with urgency.

15:21It follows news last week that Ernst & Young resigned as Supermicro's auditor, citing transparency issues fueling concerns of a potential delisting from the Nasdaq. That deadline is approaching November 16th. Supermicro did share that a special committee's investigation found no evidence of fraud or misconduct and recommended a series of measures to strengthen its internal governance. However, it remains unable to predict when its 10K will be filed. Supermicro does face two fierce competitors in the AI server market, Dell and HP Enterprise. But capturing market share doesn't happen overnight. Industry experts we spoke to say what sets Supermicro apart is its design expertise and price.

16:02One customer telling me its AI servers are about 40 % cheaper than its peers. We are looking at shares of the company down about 13 percent in after hours court. Seema, thank you very much for following along with that. I can imagine that conference call might have been a little contentious when they were talking about the auditor. Karen, I mean, how much headline risk is in this stock? Giant. I mean, there's a lot of things. I mean, there's the auditor thing, which is huge. And if you read that letter of resignation, that really wasn't delightful at all. At all. And so I'm sure they're really trying very hard.

16:32I have no doubt they're trying really with urgency, with urgency as they need to be. Right. And then remember, on this sort of horizon is do they get kicked out of the S &P 500? Oh, that. Right. There's that. But then there's also they cite there. The challenges don't impact our ability to service customers. I find that potentially hard to believe. Right. You've got to think that your employee base is kind of spooked by this and distracted. Right. And so, I mean, there's just a lot of things going on that aren't great. I don't know. They should if I always think companies shouldn't give guidance anyway.

17:07But I feel like if you're in this situation, even guidance for a quarter that is closed, but not yet. I know I'm a little skeptical on the the announcement that they don't that there's no impact on the financials. I'm a little skeptical about that. I don't know. It could be the case. But I feel like that auditor resignation is so important. And so this is one I am long puts just to, you know, so you know where I stand on it. But I think I wouldn't touch it here. At some point, they'll all cover them because the risk reward has changed. But I don't think this is a down three bucks is enough to like, wow, I got to jump in.

17:46Yeah, I don't know why they decided they needed to give guidance. And what's the disconnect between EY and between this special committee, special auditing committee, special investigation committee that seemingly found nothing wrong? I mean, there's obviously some sort of chasm there. And then you have to deal with the delisting from the Nasdaq, which they probably can get themselves out to February of next year in terms of calendar. But that's still hanging out there as well. So, you know, if you pull up a long term chart of this thing, we've talked about it for a while. It feels like it's headed back to high single digits, low, like, you know, eight to twelve dollars is where it started this whole run back a year and a half, two years or so ago.

18:23Well, let's get the latest read on the election as we are starting to get the first exit polling. Megan Casella has the latest from Washington, D.C. Megan, what can you tell us right now? Hey, Courtney, that's right. The first round of exit polls out just now at the top of the hour, giving us our very first glimpse at any results in this election and telling us a little bit about how voters were feeling as they left their polling places both today and during early voting. So take a look here. We have the results on three of the economy focused questions. On the question first of how voters would gauge the state of the economy, only 5 percent called it excellent.

18:56Not really a surprise there, given inflation. 28 percent called it good. And a plurality here, 35 percent said not so good, while 32 percent, just about a third there, called it poor. On the question of how your family finances compare now versus four years ago, 24 percent, almost a quarter, calling it better today. but 45 percent, almost half, saying that their families' finances are worse today. Well, about 30 percent said it was about the same. And then finally, a head-to-head here on the question of which candidate you trust more to handle the economy. 51 percent said Trump, but 47 percent said Harris.

19:32That is an issue on which Harris has been focusing most of her campaign. There had been a much larger gap there in polling as to who was the better candidate for the economy there. So for Harris to be within four points, that's probably a hopeful sign for the Democratic campaign, although, of course, the Trump campaign would say we're still leading there. It's always been his top issue. A couple of caveats on this. This data will continue to update throughout the night as more results come in. And we also will get later a look, a chance to look at poll results in the battleground states specifically, showing us how voters there are feeling in the states that matter the most tonight here, Courtney.

20:04But for now, just our first glimpse, at least as how voters are feeling on the economy. Back over to you. Hey, Megan, it's Tim. Thanks for joining us. Is there any sense how the exit polls or how the voters are able to reconcile job, you know, an employment market, a labor market that's arguably never been stronger with wage gains, which wage growth and an economy that seems to be apparently not well like? That's been the hardest issue for the Biden administration and the Harris campaign for years now, that even though all the fundamentals of this economy have been so strong, voters consistently say that they just don't feel it.

20:40And the issue for the campaign has been how do you message on an economy, you can't quite celebrate your wins if nobody feels like they're doing that well. So that's the issue that they've been dealing with. Harris has really gone out and tried to combat it with approaches, saying things that she would do, a ban on price gouging, for example, help with down payments for housing. So that is going to be the disconnect here. If you see that the economy is strong when you're looking at the data, but if voters don't feel it, can you make that trickle down to the campaign? That's one of the things that we're going to figure out tonight, I think, Tim.

21:10Megan, does the stock market ever come into consideration? Because obviously we're sitting here all time highs. Do people just feel disenfranchised or not part of what's been an incredible run over the, forget about the last, you know, four years, the last eight years, effectively? I think so many people don't think about that. They might, you know, vaguely know what their 401k is at, but, you know, vast majority of the country doesn't own at least not very much in the stock market. So it doesn't seem to come up very much, except in this sense of sort of consumer sentiment or how the economy is doing.

21:38I think it contributes to this overall feeling of how the economy might be doing, but not that much, because like we were just saying, you know, they don't think that the economy is doing that well. So even though the stock market is doing that well, when prices are still high, home loans are still high and expensive, that's what matters more day to day. Fascinating stuff, Megan. Thank you so much for bringing it to us. And obviously, we're going to be checking back in with you throughout the hour and throughout the evening as well. Dan, I want to turn to you. I thought it was very interesting in Megan's numbers there that that 45 percent of Americans feel that their financial condition personally is worse today than it was four years ago.