Manufacturing index hitting its best level since november 2018 but tech stocks as we mentioned lagging. The nasdaq is in the med as apple, amazon, microsoft all trade lower 59 minutes left in the session. Back off the lows. Coming up on todays show, ever corps founder roger altman on how the outcome of the election could affect your machine. Plus mond leez and paypal report earnings after the bell we will bring you all of those nbc first on cnbc with mond leezs ceo as soon as those numbers come out. We start off the month of november with gains after a down ep to october. Bob pisani is tracking some of the action. It is turning out to be a fairly simple narrative to understand today that is investors are choosing stimulus over stayathome plays. Let me show you what i mean. There is a belief there ises going to be very gig stimulus coming somewhere down the road again. Thats taken hold here look at the s p 500, up. Wait look at the small caps, up almost twice as much generally the bep year of a stimulus play. The equal weight s p up twice as much as the weighted s p another thing thats clear today, value is dramatically outperforming any kind of growth whats value its Energy Stocks like apache and hall burton. Its bank stocks like fifth third and regents financial. And its an awful lot of industrials like caterpillar this is a stimulus play overall. At the expense of mega cap you see amazon weak there. A six week low on amazon today apple, microsoft and facebook also well off of their highs and down today meantime other groups in the stayathome air that sort of went along with the mega cap tech moves, zoom, slack, docusign all to the downside today. Stocks socialed with the reopening plays typically retailers for example, or some small numbers of industrials like United Rentals on the upside gap under armour and tapestry all doing well simple story here. Whether it is correct or not, not clear. Buy stimulus the game. Bob pisani thank you. Sebastian page joins us now, head of Global Market acquisition at t. Roe price. He has a new book out. Good to have you on again. How are you thinking about stimulus when how much what to do about it . What you see today is a little bit of the recovery trade. But if you step back we would argue that now is not the time to be a hero we continue to believe in the recovery trade but we expect a butchy ride due to politics and pandemic and bumpy ride. The pandemic is still very much on the markets radar even though today tech stocks are underperforming. Part of our process is to formulate a riskon versus riskoff view. In the shortterm the election will drive that sent member. But we have not eliminated election tail risks and the risks of a contested election is still there. So you have also, though, an aasset allocator, to worry about covidon versus covidoff. Typically the recovery trade has been associated with covidoff you need to get rid this Health Crisis in order for the economy to fully recover so the bottom line is that in this environment with politics and pandemic we would argue not to be a hero, to sty diversified between stocks and bonds, not take large positions on the margin we would long the recovery trade i am trying to parse your words and figure out what that means to individual investors. If you want to be lon the recovery trade you buy stocks. And if you want to be prepared for the bumps in the road you buy bonds. But that hasnt worked out bonds havent protected you in that way what should investors do bonds arent as good as a diversifier as they used to be we saw that in september the market went down 9 and bonds actually went down you have to take that into account. The way to position for the recovery trade i think is to not be a hero and be neutral between stocks and bonds at the top level because if you think that stocks are expensive, bonds are even more expensive. However, under the top level, there are ways to be long cyclicality while taking advantage of attractive relative valuations you saw small caps do well today. Small caps relative to large caps are down 11 year to date you have been talking on your program a lot about value versus growth value is down 33 year to date relative to growth and we are starting to dip into value. So because of all the uncertainty and this bumpy ride ahead, you dont need to take a lot of risk in stocks. But under the hood, how you allocate your stocks, you can take advantage of cheap cyclicality, small caps, emerging markets, a little bit of value stocks, and some credit, high yield bonds for example. Sebastian, last week clearly we had a massive pullback in the markets as we approach election. If we dont get a clear result lets say within the first 24 hours or so does the market quickly pivot back to being worried as to what that means for stimulus and Everything Else or have we already priced in the risks around that with the pullback last week there is a fair mamt of risk priced in. It is not that common to wait 24, 48 hours, several days for an election result what would be worrisome would be an indication that we will be into this contested election for a long time. Now, the polling data and we know the polling data is not perfect. It tells us that that is more of a tail risk than the central scenario but the short answer wilfred is that you would see the market react negatively if you think this is going to be a real problem for several weeks and drag on. If you are still counting ballots and sorting out certain states results, then thats actually not that out of the ordinary. So you mentioned you like value and small caps here in the long run on the recovery trade, sebastian. Does it matter who wins the election tomorrow in both the presidency and the senate . I think it does now, we tend to think six to 18 months ahead and our thesis is that six to 18 months ahead, we will be in a better place and we will move towards a covidoff environment. The election result, if you get a blue wave, if you get a biden president , you could expect value stocks to perform better than growth stacks and thaeb thats sort of the price action that you are seeing today. Because of the way the tax reform would be structured, because of the stimulus, because of the Infrastructure Spending and remember, we are just talking about the valuation spread, right . As we go into the stimuluson, covidoff environment, you know, value stocks could pop because they are so cheap. Even our own stock analysts are starting to lock at bank, for example, and upgrading bank. So there is room for upside there in value but i want to be clear i still think that now is not the time to be a to. I wouldnt sell completely out of Growth Stocks and go completely into a value stocks i am talking about a tilt toward value stocks that we can build on incrementally as some of the election uncertainty gets taken out of the market. Sebastian, thank you for joining us appreciate it. Thanks very much. Sebastian page from t. Roe provides dow is up 200 point. Up next we will talk with ever corps founder roger altman will joe bidens economic plan and whether businesses should be concerned about higher Corporate Tax rates. You are watching closing bell here on cnbc any welcome back 47 minutes left of trade on this election eve in america. The economy and taxes certainly key issues for many voters out there. But there is a lot of noise surrounding joe bidens tax plan robert frank separating fact from fiction for us. Robert sara. It would be the largest tax hike in over 50 years but bidens tax plan would barely rank in the top ten of the nations history between 1940 and today there have been over 20 tax hikes. The biggest was during world war ii when we had a tax increase of over 5 of gp. Bidens plan is. 7 of 1 of gdp. That would put it in tens place, not the biggest in history as the president likes to say as for the tax burden it would increase federal revenue as a share of gdp to about 19 . That would bring us back to the levels of about 1998, 2000 now, the big question for biden is whether we are going to have enough tax revenues from his olympian to do all he wants to do his plan would raise between 2. 5 to 3. 5 trillion but his spending plan are over 5. 5 trillion. You have got a 2 trillion gap there. Hes either going to have to cut spending, borrow, raise more revenue, or perhaps a little bit of all three sara, back to you. Probably a lot of the middle one there, borrow more robert thank you for that. For more on what this all could mean lets bring in ever corps chairman and founder, roger altman good to see you. Thanks for having me. The first question, regardless of what the plan is is how quickly any of it gets enacted given the sort of environment, the economic environment as to whether some of these plans like a Corporate Tax hike may only come in later during any biden term rather than sooner. Thats a complex equation and it is a very good question it is complex because the very first thing that i would expect a new Biden Administration to do and i dont have any special secret information about this would be economic stimulus the type of package will eluded the two sides in the run up to the election and which could possibly happen, some of it, at least n the lame duck session. But thats more unlikely to me than likely. I think step number one will be a large stimulus package and because its stimulus, it wont be paid for. Otherwise, it wouldnt be stimulus you know, the elements of that will likely be extended supplemental unemployment insurance, Fiscal Relief to states and localities. Probably funding for covid relief and a series of items like that. By the way, i think increased food stamps probably those four so that would likely be number one. Whether or not the long term biden agenda that you are basically asking about is joined to the stimulus bill or dealt with probably a little more likely, dealt with separately following the stimulus bill, thats a kmikted question. And as far as the taxes are concern a complicated question as far as the taxes are concern and directly responding to your question i dont think there is any negative economic effect at all of raising the corporate rate back to 28 it was only four years ago in the waning days of the Obama Administration that the business round table and others were arguing for reducing the corporate rate to 28 . So i dont think that should be delayed. I dont think it will have any negative Economic Impact whether or not other biden tax steps are immediate or passed with a later effective date, these are all complicated questions. I dont know the answer to them. Fundamentally, this country needs more revenue your colleague just mentioned or indirectly mentioned that federal revenues today are run being 16 of fpd historically thats one of the lowest levels ever in american history. Even if the entire biden tax plan is enacted as he said we would only be back between 18 and 19 , which is still below long term historical levels of revenues of gdp. How much of an impact do you go the makeup of the senate has on all of this a lot its one thing to govern with only one or two votes to spare in the senate. Of course it is much better than the alternative of being in the minority vastly better. But you cant you cant afford to lose more than one or two votes, depending on your margin if you end up with 53 or 54 seats, then you have a lot of running room and you are going to get probably a lot more of your agenda, of your full, longterm agenda, which in the case of Vice President biden is appropriately ambitious, you are going to get more of that enacted. Your margin in the senate, whether it is very thin or relatively expansive, makes a big difference roger, its sara. I know hey sara hey, your world has been doing very well in terms of m a activity and you guys have been involved in some of these deals how many it is reelection activity and what happens after the election what are people worried about if it is because they are trying to get it in before the election . I dont think any of it, sara is preelection thats based on my own observations working on some of these. And secondly, you know that larger transactions take six, nine, 12 months to complete. So no transaction announced today, at least in most industries, is going to be able to be completed between regulatory reviews and shareholder votes and so forth, depending on the precise deal, anywhere they are not going to be able to be completed before the onset of a Biden Administration should we have one. In fact, we will only be just beginning, in term of the process of completing it so i dont think any of the stepped up activity and there is quite a bit of it is represents efforts to announce something before the election because the opportunity to do that, if you were worried for example, about regulatory approval, you would have had to do it nine or 12 months ago. Not today or yesterday what do you think, roger, about market levels and this huge activity in m a is that a sign as contrary indicator . I dont think so. I think it is pent up demand the m a market froze over like a pond in minnesota in january following the covid outbreak in mid march, and the lockdown. And it was essentially frozen for four or five months. And a lot of things which were being discussed or even negotiated prior to that just were halted. And now a lot of those [ no audio ] thats what i mean by pen up. So i dont think it signatuifie top at all m a levels in terms of total global volume are running around the levels of year ago and so it is not like we are breaking alltime records. We are not we are just returning to where we were earlier. Why do you think President Trump still scores relatively high, in polls relatively high on handling of the economy thats a good question. Some aspects of that mystify me. I suppose it has to do with voters remembering that precovid, Economic Conditions were pretty good we did have record low unemployment across all sectors, including black and hispanic unemployment and the stock market was at relatively high levels but, actually, as im sure everybody has read a lot about this, the trump economic record, and for that matter, the trump record on the stock market is not anywhere near one of the very best. His record on the stock market for example, right through this morning is worse than that of the last four president s, of both parties so i think people remember this because the president talked about it and we all know he can be bombastic, to put it charitibly and i think there is that residue of memory partly explains why he still gets pretty good credit but i honestly think if the election were six months from now and not tomorrow that would probably fade. Roger, thank you for joining us good to see you. Always a pleasure thank you for having me. Tomorrow night of course be sure to keep it here on cnbc for special election coverage starting at 7 00 p. M. Eastern time. We have 38 minutes left in the session. We are recovering nicely again after that brief pullback an her or so ago. We are up by 1. 7 on the dow and the nasdaq is back into positive territory just about. Still ahead, Liz Ann Saunders of Charles Schwab will explain how Election Results could impact stock prices Going Forward. And why the balance of power in the senate could hold the key the determining the markets next major move. We are back in a couple minutes. Not whats easy. So when a hailstorm hit, usaa reached out before he could even inspect the damage. Thats how you do it right. Usaa insurance is made just the way martins family needs it with hasslefree claims, he got paid before his neighbor even got started. Because doing right by our members, thats whats right. Usaa. What youre made of, were made for. Usaa were made for. And sweetie can coloryou just be. Gentle with the pens. Okey. Okey. I know. Gentle. Gentle new projects means new project managers. You need to hire. I need indeed. Indeed you do. The moment you sponsor a job on indeed you get a short list of quality candidates from our resume database so you can start hiring right away. Claim your seventy five dollar credit, when you post your first job at indeed. Com home. Welcome back time for a cnbc news update with sue herera hi, sue. Heres whats happening at this hour. The Massachusetts Governor announcing a nightly stayathome advisory. Restaurants and other businesses are also getting curfews in addition baker is requiring face coverings be worn in Public Places by everyone over the age of 5 the new restrictions go into effect on friday. Texas surpassed california as the state with the most coronavirus cases. Thats according to Johns Hopkins university both states confirmed roughly 940,000 infections in wisconsin a judge has set a 2 million cash bail for kyle rittenhouse. Hes the teenager accused of killing two people during a process. And in vienna, Police Reporting several people injured in a shootout, including a Police Officer this after a local newspaper reported an attack on a synagogue. The suspect has been arrested. We are continuing to follow what is a developing story. You are up to date thats the news update this hour sara, ill send it become to you. Sue thank you. Are americans stocking up on Food Supplies once again as virus cases surge . We are going to talk to the ceo of snack giant mondelez. It is one of the nations largest packaged Food Companies when he joins us next hour on the back of earnings. Heading to break, a check on bonds. The tenyear is currently yielding around. 85 little change. Staying at the elevated levels we have seen over the last few weeks. Closing bell will be right back at calvert, we know responsible investing is hard. If youre concerned about the environment and climate change, how do you find companies that are driving the right outcomes . If you care about economic equality and social justice, which firms are addressing it in their workplaces and their communities . For nearly 40 years, calvert has delivered competitive returns by investing in Companies Making a difference because we see value in doing good. Talk to your Financial Advisor about investing responsibly with calvert. Talk to yo