Recordbreaking rally after we head into a long weekend while it has been a number to remember, the best month in 33 years, the recent leaders and laggards have been turned upside down chevron leading the way and apple up only 7 power lunch starts right now hi, everybody, im kelly evans. Stocks are pulling back after this huge november rally lets go to dominic chu. A huge november rally thats put the dow at least in some catchup territory as you can see in the 2020 over the last year plus, weve seen the dow industrials just up 6. 5 in that span the s p, meanwhile, is up 16 , nasdaq up 40 . That catchup play in play right now. Watching whats happening with the rotation element weve been talking so much about, as tyler mentioned, look at the way energy has played out just over the course of the last month 38 monthtodate gains for the energy etf financials up 19 . Industrials up 17 the value and economically sensitive sectors are the ones leading the way higher in the month of november. As you dig deeper within there, take a look at stocks were focused on deere shares are off 2 . After a better than expected profits, better than expected revenues and is a rose wherer outlook for Farm Equipment in the coming year, all of that because, look, on a yeartodate basis, that stock is already up 47 . So, as we watch the way these stocks are playing out, kelly, tyler, the idea here is the leadership so far in this massive rally for stocks in the month of march has been on that. By the way, on industrials, whats leading the way higher . Boeing, up 51 just this month. Helmet, up 45 general electric, up 41 i would note, folks, the topperforming stocks in the s p 500 industrial sector all have one thing this common. Theyre aircraft or aero focused. Thats something to watch in the recovery trade with covid. Boeing, a huge gainer. The best performing stock in that sector overall so far in this particular month of november, guys back over to you although today, salesforce weighing on the dow after this news from the journal ask reuters that salesforce is potentially in the running to acquire slack. Slack shares up, what, 25 now cnbc has confirmed some of the reporting weve seen from the wall street simprournl reuters. Yes, there are talks that have happened, some engagement, perhaps o that front slack shares up 25 . Salesforce up 3 now, the reason why this is a big deal is because what this could do is change the Competitive Landscape and workplace production slack already does a good amount of that. Salesforce we know does a good job of that. If you bolt those two together, hypothetically could you compete more with the likes of, say, a microsoft . Take a look on a yeartodate basis. In this span, salesforce shares are up 55 even with the drop weve seen today if this were, perhaps, some kind of a stock deal where salesforce exchanged their shares for slack in that hypothetical world, it could be a notion salesforce has the war chest, the ammunition, has built up enough capital to be able to use its stock as a currency to make a bolt on acquisition. This would be the biggest one that salesforce has mailed mulesoft was a very big one for them as we talk a little more about the way that the Software Space is starting to line up, this is potentially a blockbuster change here in the way things are happening. Well watch salesforce, well watch slack. Ill send things back over to you. Dom, thank you very much, dom chu. Lets get out to Rick Santelli as we get those fed minutes. Do remember, a lot has changed since november 4th and 5th. Think about the underpinnings of fed programs and the treasury money behind them. Also think about the notion Interest Rates have firmed up because most of the headlines i am now seeing, as Steve Liesman peruses the details, is there was lots of discussion about bond buying and changes, meaning quantitative easing. What would it take to buy more are we buying enough these are the types of questions that would only be under consideration if theres a general nervousness regarding Interest Rates maybe moving a little too aggressively to the upside we all know for the most part, we live in a managed rate society at this point. Its been that way in some form really since the credit crisis as you look at 2s, 10s, 30s on an intraday basis, you will see a slight deterioration on the longer dated treasuries, like 10s and 30s, which make sense because i doubt if the fed is thinking about buying less in the form of quantitative easing and to take it one step farther, as the economy does better than any analysts or economists expected back in march, and i understand theres still a lot of pain out there, just look at atlanta gdp now chart. This chart starts at the very end of october we are now up over 11, our low water mark was the first day we are seeing a much more aggressive positive sign to todays data affecting Fourth Quarter gdp. Tyler, its all yours. Rick, thank you very much lets go now to Steve Liesman for more details on those fed minutes, as youve had a couple of minutes to look at the minutes. Steve . Speedreading through the minutes. Tyler, the fed did discuss additional options for asset purchase it came to no conclusion i actually was expecting maybe a more definitive result from the meeting, but from what i could read there, glance, i guess is a better way to put it, theyre not ready yet to make a change to the asset purchases they say they can do a lot of things with it they can increase the term structure, do it over a longer term horizon they like what the bank of canada is doing. They didnt see any immediate need to adjust the level of asset purchases, now at 120 billion a month. There was some thinking that, hey, if Interest Rates were to rise and there was a lot of treasury issuance, the fed might need to do more. They said changing conditions could warrant a change to the asset Purchase Price again, no particular hurry, it sounded like ill have to read more closely i dont think we can expect this is what i was looking for, an immediate change to the asset Purchase Price in december although the end of the facilities, the emergency facilities, the decision by secretary mnuchin could change that but i dont see a need in the market right now a couple things, they said there was Downside Risk from the surge of the virus that was expected. Also they saw a Downside Risk from the lack of fiscal policy as well as what was happening in europe in terms of the virus they did acknowledge just what rick was talking about, that the economy overall seems to have come back faster than expected whether or not that remains the case, tyler, as a result of the lack of fiscal policy and the surge of the virus, thats something the fed almost certainly has been saying its warning against. Some of those jobless claims numbers were also a bit of a surprise, werent they, steve . Yeah, they were the idea well, its been something that i think has been expected by people who have been watching the High Frequency numbers, tyler that data has continued to deteriorate. You can also by a matter of logic come to the conclusion, given whats happening with the virus around the country they are deteriorating Consumer Spending has held up relatively well. I think thats Good Business investments. Been okay. You saw Consumer Sentiment also not doing that great along with, as you say, the jobless claims numbers. Theyre going to get worse, tyler, because whatsing going to happen, a lot of people will roll off theyll lose their benefits right after christmas. Absolutely. Steve, thank you. Stick around as we continue the conversation and get more reaction to the fed minutes and the impact on the markets and the economy. Brin talkington is manager with requisite capital manager and seth carpenter with ubps brin, what is the market saying to you obviously, november has been an incredible month where you see energy had the best month ever the russell 2000 had the best month ever and i think to steves point on the fed notes, we all have to remember these notes are from november 4th and 5th i think the fed continues to say what we all know were in the middle of a pandemic we need more fiscal stimulus, but the market has climbed this massive wall of worry to all the naysayers who were so bullish earlier in the year, i think this year has been a spectacular recovery in the market thats been able to look through all of the uncertainty and it definitely seems we have much clearer skies in 2021 than well have in 2020. Seth, do you agree with that . Is that what the market is telling you, that get ready for a very nice 2021 i mean, i think theres a lot of reason to agree with that weve been writing a lot about how the news coming out from the various vaccines has changed our outlook and really upgrading things everyone knew, i think, that there would be a vaccine next year, but the news that came through from pfizer and then moderna of 95 efficacy is a bit of a gamechanger. We think that means next years growth is at least a percentage point higher than it would have been if you had to wait another half year for things to settle down with the virus. In that sense, absolutely. But i also agree with steves point. Everyone in the market was looking at the fed with their Asset Purchase Program asking, what are they going to do . Are they going to make a change in december . And there really wasnt that much in the way of guidance there. How critical, bryn, is the idea of a fiscal stimulus and when, if ever, do you think we will get one and of what size . I think its definitely critical its critical for the economy that you still have unemployment way too high and you still have, you know, especially as steve pointed out, at the end of the year, a lot of these benefits are going to drop off. We need fiscal stimulus. It seems like were not going to get it until possibly after the inauguration the market has looked through it so far but i think to all the individuals out there who are going to lose their benefits, there does need to be a stopgap as the economy, you know, recovers but these are individuals that do need that bridge. Its not their fault were in this pandemic. We need to make sure the economy as a whole stays together so we can all recover. Steve, that you can to me about that a little more, the loss of benefits, the need for fiscal stimulus, and also the idea of what really is the market stock market, that is, what is it really measuring . And are we in a world where, after we go through this next three months where in many cities, restaurants are going to be completely shut except for carryout or pick up food, and theres going to be more job loss theres going to be a lot of retailers, i would think, are going to shut down after christmas. Whether these are big chains, i doubt it, but a lot of the smaller ones are just going to go what is the market measuring i was listening to the conversation and i couldnt help but think about seinfeld we had a virus, yadda, yadda, yadda, we had a vaccine. Thats kind of the way the market thinks about this there is no inbetween there the amount of pain thats going to be suffered over the next couple months in the absence of fiscal policy, i think its sort of unspeakable you see pictures of people lining up at food banks trying to get thanksgiving dinner you have this idea that millions are going to lose what i am learning and puzzling over, and i think this is a time forsett and i have to have one of our long conversations about the underlinings underpinnings of the economy, i have been amazed at the ability of the stock market and wall street to prosper given the pain on main street and i have been wrong about the potential effect it would have on the stock market. But the ability of the market to go, yadda, yadda, yadda, were going to have a vaccine, everything is fine and the ability of the market to focus and look at what the earnings prospects are down the road, i am not saying the market is wrong here because thats just sort of the fast road to poverty here, is to be betting against whats been happening in the market here, but if you had told me they were going to have the number of unemployed, the number of Small Businesses go out of business, and that companies were going to be able to prosper the way they have been prospering, i would have said youre crazy. Best buy, it really does stretch ones credibility. Seth, why dont you jump in here thats the genius of seinfeld. Seinfeld speaks to everything, one way or another why dont you address steve there, seth. Thats fair i think steve is nailing it in lots of ways i think a couple of points are clear. Yes, the next couple of months are going to be rocky. I think the risk of outright contraction in the First Quarter is very, very real as benefits expire, as the virus cases go up i think the disconnect is just how skewed the u. S. Economy is if you think about what the s p 500 represents, for example, its not the entire economy. We know that this shocked the economy, did not hit the economy uniformly. Chair powell consistently says the worst of the burden was borne by those least able to bear it. What were seeing are some companies that have access to, say, capital markets, those that are discount their future earnings by the very low Interest Rates, their stock valuations are going up a lot but it doesnt reflect the small mom and pop stores on the street it doesnt reflect a lot of the Service Sector this thats very much where the hurt in the economy is. Thank you for your comments bryn, same to you. Steve, and to all a happy thanksgiving kelly . Tyler, thank you. In this recordbreaking topsyturvy november, financials are outperforming tech can the banks continue to roll, especially as Interest Rates stay low well debate that. As for tech, the Million Dollar heavyweights are underperforming. Is it just a brief pause for these favorites . Should you bet on tech to take the lead again and these names in particular . Its all ahead on power lunch. Announcer this cnbc program is sponsored by pimco. You make my heart sing wild thing i. Think i. You know what i think . I think you owe us 48. 50. Wild thing. If you ride, you get it. Geico motorcycle. Fifteen minutes could save you fifteen percent or more. Welcome back to power lunch. The latest great rotation on hold today the rotation away from tech and growth stocks, we mean, thats led the market most of the year, but into value stocks has been the trade of late. The dow and s p are trailing, trailing the nasdaq which has been positive. That hasnt been the norm. Since hitting 52week highs on september 2nd, several mega techs are down apple is down 13 . Amazon is down 9 . Microsoft is down 6 from then jason weir, a partner and chief Investment Officer at albion financial group. He joins us now. Jason, im sorry, well be back in just a couple of minutes. Here operun. N ow lch this is decision tech. Find a stock based on your interests or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. Lexus has been celebrating driveway moments. Heres to one more, the lexus december to remember sales event. Lease the 2021 is 300 for 339 a month for 36 months and well make your first months payment. Experience amazing at your lexus dealer. At morgan stanley, a global collective of thought leaders offers investors a broader view. We see companies protecting the bottom line by putting people first. We see a bright future, still hungry for the ingenuity of those ready for the next challenge. Today, we are translating decades of experience into strategies for the road ahead. We are morgan stanley. Iwhat is this . S we call that a window. Window. Dundundaaa the first big screen. We really need to limit thunks window time. Not now. The birds are on. In my day we fought them. Let me live my life hi, everybody. Welcome back to power lunch. Im kelly evans. Lets do some trading nation the fed discussing additional asset purchases at its last meeting as they settle into lower for longer Interest Rates. You can see the tenyear yield zipping after that cross financials are up big in november the second biggest gainer monthtodate despite being the second biggest loser so far this year what does the feds stand mean into the end of the year in 2021 craig, ill start with you financials, a buy or a sell for you . Well, the financials are having their best monthly return since april of 2009. When you look back post that period, four out of five months post that big return in april of 2009 they had positive returns for the xlf. When i look at the specific chart of the xlf, i have to make the observation were in this bullish try appearingle, breaking out and setting ourselves up for potentially another leg higher if we could start to see this index move above this 29 level so, im watching that, kelly im also watching Interest Rates. Tenyear bond yields moving above 95 basis points, holding a bit further power behind this move for me at this point in time, im going to watch if and im waiting for that 95basis point move, then i would be more bullish and have a much stronger opinion on the Financial Sector right now. So the xlf over 25 confirmed, tenyear over 95 gina, what about you, what are you looking at for the financials do you like them here or would you hold off i think the financials are interesting here despite the fact theyre just cheap, you also have to look at the fact that their margins on got hit dramatically during covid. But if you have an outlook that is more constructive at the end of the pandemic coming, if you look at what happened to financials after 2008, it took them about 24 months to get back into really great profitability. So, we can see a path out of here and although the lower for longer is not necessarily helpful to financials, it has mitigated the credit risk that they would have otherwise taken during the pandemic. And so it actually makes it more likely that they become even more profitable afterwards so, i think that things are setting up quite good for financials from here do you also need the tenyear over 95 basis snoints. Yes, you actually need to get