Closing Bell 10/2/26

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0:58And welcome to Closing Bell. I am Frank Holland in for the Judge Scott Wapner. This make or break hour begins with stocks on the run following today's weaker than expected jobs report. Tech stocks, they are leading the way as risk-taking resumes. The Nasdaq hitting a fresh record high. Here's a look at the scorecard with 60 to go in regulation. Take a look at the markets, a lot of green on that board. Looking at the Dow off of its highs of earlier, but still up just about a half a percent. Similar story for the S &P, up about three quarters of one percent. The NASDAQ and the small caps up about 1%.

1:27Let's take a look at Bono's. We've got to talk about those. They pulled back a bit from yesterday's level again after that weaker-than-expected jobs report. The 10-year sitting at 5.277. And it takes us to also oil and energy. A lot to talk about there after G7 Nations announced they will release some diesel stocks. Take a look. WTI, the U.S. benchmark, pulling back by about 2%. We're looking at some of the forward contracts as well. A lot of red on that board. However, last check, Brent Crue was actually moving higher. And that takes us to the talk of the tape, the bounce in stocks with the Nasdaq leading the way.

2:00Will tech continue to lead the way in Q4? Here to help us answer that and so much more. CNBC contributor Triberi, it's Adam Parker right here with me at Post 9. Great to see you, Adam. Yeah, good to be with you. All right. So, Adam, I got to hold you a bit accountable. Earlier this week, you said tech and the MAG-7. That's defense. That's how investors are playing defense. Today, we're seeing that area, all those areas, those names moving higher after a weaker than expected jobs report. Is it still defense or is it on hopes that the Fed will not raise rates at its meeting later this month? Well, I think tech is both defense and offense.

2:30And the part that we commented in the note was it's been offense. We've been recommending semiconductors for several years. We wrote that kind of well-known note I think three years ago called our North Star that we like semis over software. But I think the fact that the MAG-7 or grade 8 or whatever people call them now were actually kind of outperforming on down days made me feel pretty good that if they're going to do OK on down days and they're going to do OK on up days, I think you call that a good stock. Right. And so I think that's been a bit of change in the tenor. I do think today's action is we've had a very tight correlation between the oil price and rates, the highest since 2018.

3:07And so if oil comes down a little, rates come down a little, you finally get a little bit of multiple expansion back. And I think that was something that people have been worried about a lot the last couple of weeks. All right. We're looking at some companies that are making new highs today. We're looking at NVIDIA, of course, AMD, and two of the biggest cybersecurity players, Palo Alto and CrowdStrike. What does that say about investor sentiment? We've talked a lot about AI risk and AI governance. Is this simply people responding to these concerns about AI and AI agents, and that's why they're putting money in these names?

3:36Look, I mean, there's an overarching market dynamic over the last several quarters, which has been the penalty for missing assets has been harsh. And then if you beat, you never know with Mike Brown if it's going to go up or down, but certainly the reward has been less good than the penalty has been harsh. So if you're in a world where maybe price of forward earnings or the multiple so-called are contracting for everything related to AI revenue, what do I need to own? Fast earnings growth and it doesn't miss. What fits the bill? The stocks you just lifted off. They're not going to miss October earnings.

4:09The conditions look pretty good. If you went to any buy-side conference in September, Corporate's pretty much told you current conditions are remaining robust. So I've got achievable estimates and fast growth. And that's enough to offset any multiple contraction, I think. And that's why I kind of like that group. And I think they'll continue to trade well and end six, nine months from now. They'll be higher for sure. So Scott Rubner from Citadel put out a note earlier, basically saying September delivered much of the reset that at least he wanted to see. Leverage came down, retail cool, systematic sold, valuations compressed.

4:39As we go into earnings season, do you see this market as cheap or do you need to wait for earnings season to come up to really make that determination? It's funny because I know he had this call at Citadel that September would be a bad month. The month was kind of flattish despite a lot of negative news. But it felt bad. It felt bad. There were some under-the-surface rotations. But when you kind of look at the whole month, it wasn't really that big of a deal despite the fact that I would say the oil, the rates on the macro stuff were bad. And I think the reason it was okay was because of those corporate conferences, conferences because companies are telling you earnings are pretty good.

5:14And so I think the challenge here is we're heading into an October earnings season. I don't expect any big pre-releases that are negative next week. I think ultimately the earnings season is going to result in numbers coming up for 2027. And so if earnings grow low 20s next year, let's say mid-teens the year after, I don't think the equity market is going to be commensurally 25, 30 percent cheaper in 18, 24 months. So even if the multiple continues to contract, I still think the market can go up in absolute terms just because it's growing through that. So I don't think the valuation, your question, matters that much.

5:45I think earnings will grow through it. You know who it matters to? Value investors. So you put out some notes of growth versus value. It does matter to them quite a bit. You gave some names that you like right now. In the value space, UPS, Toll Brothers, Clorox, sorry, Granger is actually on the growth side. So three names, UPS, Toll Brothers, and Clorox. Is growth more attractive right now? Is value more attractive right now? We do have a few questions, especially about the energy market, inflation. We have some other reports coming up, PPI and CPI. Look, what we're showing in that research we did recently on style investing is that if you're a growth manager, you got to just own more growth names than normal because the bets are more concentrated.

6:25So much of it's AI related. If you're a value investor, you really almost can't run a diversified mega large cap fund. There's very few choices. So you call it in-between growth or value to find some other ideas. And so, look, I think if you're focused on valuation, you're not going to make money. Cheap stocks don't really outperform expensive. What you have to focus on is something that's going to improve in the future, but isn't missing today. So I still think the growth area will be better. We focus a lot on am I overweight AI revenue? Am I over at which parts of the chain? Because again, And if the setup is multiples contract, I need to grow through it.

7:07So I would say I like growth more than value. But the S &P, of course, is more growth than value anyway. I want to dig into your growth thesis in a minute, but I want to go to one of your value names, Toll Brothers, in the housing space. So you've got to walk us through the thesis right now. The housing market is pretty clogged up due to higher rates, mortgages hitting multi-year highs. Consumer sentiment pretty low. And also, I thought there was another important thing in the jobs report. We haven't talked about much here on CNBC. I want to make sure I get this right. Hourly pay up 3.1%, but consumer price is up 3.4%.

7:36So wages are not keeping up with inflation. Yeah. So look, every investor I talk to is looking for stocks that aren't related to AI, that are economically sensitive, could get better. They want to own housing-related stuff. You know, if you go out in the extreme, it might be a home builder, like you mentioned, but maybe it's just Lowe's or Home Depot or something else. People are looking at that space. And when rates are rising, it makes them feel worse about it. So they're sort of hoping for if oil pulls back, instead of going to the classic discretionary names, which have other issues, maybe they can go into something rate sensitive and housing related.

8:11So I think that's where institutional investors' heads are. I think in terms of the consumer, look, a lot of the case-shaped stuff so far has been more that they don't participate on the balance sheet side. But the income statement, look, unemployment rate itself is still pretty low. People can get a job if they want it. 90-day credit card delinquencies, other signs of stress are still low and actually down this year. If you had told me a year ago, ah, there'll be tariffs, there'll be war, there'll be diesel at$6, oil will be high, you might have thought we'd see worse credit conditions from the consumer.

8:42So I think the consumer's held up okay, and maybe surprisingly relative to what people thought. I think it's a big surprise. I think it seems like even you thought, and I certainly know what I've thought. We upgraded from underweight to neutral discretionary a few months back. I think we had a good call on the underweight. I mean, we'll see. I'd rather take a shot if oil comes down and owning some housing than I would, I'd say, going into Staples or things where I think you just have more structurally impaired business models. To your point, Staples on a multi-week losing streak. All right, Adam, stay with me.

9:11We are getting some news out of Washington. Our senior economics reporter, Steve Leisman, has that. Much more for us, Steve. Yeah, Frank, this just broke up. Bloomberg reporting from an interview they just did with Attorney General Todd Blanche that the Department of Justice will not reopen the criminal probe into former Fed chair and current Federal Reserve Bank Governor Jay Powell. Blanche says that it's not something that they will be pursuing. We're attempting to call the DOJ, but we want to report this report from a Bloomberg interview that was done with Todd Blanche, the attorney general.

9:46Meanwhile, we had, as you know, Frank, a miss on the jobs report and the missing those expectations, changing expectations for the Fed, though not eliminating the betting that's out there right now on another rate hike this year. Payrolls at just twenty nine thousand, estimated eighty four thousand. Revisions took off sixty thousand from the prior two months. Unemployment rate ticking up. Average hourly wages, as you just were saying, up a disappointing zero point one percent was the real disappointment in the report. Year-over-year, average wage is just 3 % compared to 3.1 % in the prior report.

10:19Modest job gains, downward revisions, and weak wage increases lower the risk that the job market could be a source of inflation for the Fed. You can see here the probability of a Fed redneck in October plummeting to 23 % from 70%. That was earlier this week. And the probability for December now at 86%, down from 95%. The odds fell earlier this week in part because of Fed speak from top officials who made clear they were in no hurry to hike. John Williams from the New York Fed said there is no need for urgency. Vice Chair Phil Jefferson, those two, along with Warsh, would be the leading triumvirate at the Fed.

10:54Jefferson is saying we will need to come to our own judgment, which may take more time. And Kashkari, who interviewed with me, the Minneapolis Fed president said, I don't have a strong view on October versus December, though he does want another hike. Economists are divided on whether this is an orchestrated message from Fed chair wars or Fed speakers acting independently? Whatever the answer, there's still a general belief that there could be one more hike this year. Kashkari still wants one more and one more next year. Dallas Fed President Lori Logan saying last night that she wanted 50 basis points more of increase in the Fed funds rate.

11:28And you're talking about the 10-year. Well, all that rhetoric that hikes are still coming along with lots of debt from the government and the AI build-out and maybe stronger growth, they're keeping bond rates high. We had an initial rally this morning, but then they yield surge back after that rally. The key question for the U.S. economy, does productivity growth fill the void of labor force growth that's going away? And do wage gains running below inflation? Does that mean some potential cooling in consumer spending in the months ahead, Frank? Senior economics reporter Steve Leisman. Steve, thank you very much.

12:00Always good to see you. Want to bring in MetLife's Drew Mattis, Triberi, it's Adam Parker still with us. Drew, happy Friday. Thanks for being here. You're looking at a rally in the markets right now. You gave us some notes. You're saying the softness in the job market has taken the October cut, the meeting coming up in a few weeks, off the table. So does that mean the rally starts up again? Does it also mean there are reports like PPI, CPI, ISM manufacturing, a leading indicator? Do they mean less to the market? Well, I think they mean less to the Fed. You have a Fed that's responding to inflation, but current inflation, because there's no long-term inflation being built into longer-end yields.

12:40So what they're saying is we want to try to control inflation this month with interest rates that don't affect the economy for six to nine months. So it tells you that everything that they're doing is really just signaling rather than an actual attempt to reduce inflation. And that's part of the reason why we have them going like every other meeting. There's really no benefit to them kind of reinforcing a performative exercise at every meeting. Every quarter is good enough. And so I think that's why you'll get a rate hike in December. You'll get another rate hike probably in March. And then we'll see what's happening by that point in terms of the unemployment rate or inflation.

13:18But, you know, the potential then exists for them to kind of do another one maybe sometime later next year. So, Adam, I want to come back to you again. Adam Parker still here with us at Post 9. Agree with this thesis? October just off the table? Yeah, I have no idea. I mean, I'm sure Drew's way better at it than I am. I mean, or, you know, Leasman, too. I mean, look, I struggle with this because if you come into the year, everyone thought there was going to be two cuts, right? And then six months later, it's two hikes. So if you're focused on equities and the S &P and trying to beat the S &P and you ingest too much of an interest rate strategist view in your call, you're always wrong.

13:55It's really hard to do that. I guess the thing that is the same for me, I came to the year with a view that earnings would be strong and the multiples would contract. I still think that's right. If you go back a few years ago when it was anticipating eventual accommodation, then you can guess the multiple is going to expand. I don't think whether they pause, cut, pause, or whatever the heck they do, it's going to change my path, that earnings are strong and that the multiple contracts. So I don't really care is the answer. All right. That's fair. Fair answer. Drew, I want to come back to this.

14:26And I have no skill at it. Understood. Yeah. Understood. Doesn't stop a lot of other people. No, most people don't have skill, but they don't admit it. Yeah. Drew, I want to get back over to you. So I thought this was interesting. You're saying that the risk in the market is in the AI trade. At the same time, the AI trade is powering the market. Where do you see the risk? You see the risk in earnings, beating, but the market not being impressed and stocks still pulling back? Or is it the idea that sentiment might change about the realistic opportunity when it comes to the AI trade? Could go either way.

14:57I think the issue that I'm worried about is that we're a one-trick pony right now. We have AI investment driving the real economy. We have the wealth effect from the AI equity trade driving the consumer, keeping the consumer in the ballgame. And so that could unravel a number of different ways. It could unravel with CEOs saying, hey, I'm spending X on AI and where are my returns? I don't see them just yet. And maybe I need to rethink that. Or it could come from, hey, AI is so great that we end up with a more rapid changeover and more disruption to the underlying economy. And so there's a bunch of different ways it can unravel because everything's tied to one thing working out.

15:44And so if you kind of do too well, you're putting things at risk. If you do too badly, you're putting things at risk. We really need the AI trade to be like the Goldilocks trade, that's just kind of the gift that keeps on giving. All right, so you're saying we're overly concentrated. A lot of notes out about what percentage of the S &P is below its 50-day moving average and things like that. Is there another sector outside, specifically tech and comm services, where you could see more upside or maybe money going if we don't get the Fed raising rates as you don't expect them to do? You know, just like Adam wasn't going to throw me under the bus for having kind of the wrong rate call.

16:22I didn't know you did. I'll let you ask Adam because Adam is much more of an expert on kind of how that's going to play out in the equity space than I am. I didn't know what your rate call was, but when I worked at Morgan Stanley, they were wrong every year. I didn't mean you. Look, because it's hard. I have no skill. I think it's a hard thing to do. And I was, you know, look, my view is there's a shortage of top views. I don't take it personally, Adam. Yeah, yeah, yeah. No, we're all. Listen, I appreciate the modesty. A lot of honesty on Post 9 and from you today. The older we get, the more we realize we don't know anything.

16:53You know what I mean? That's why people turn into closing bell. But honest takes on the market. And honest takes on what you know and you don't know. Listen, if you're not a little bit paranoid in this world that AI is going to replace you, you're probably a little bit of a psycho. You know what I mean? So I think we've got to live in the reality chamber. The way I think about it is there's a shortage of compute. There's a shortage of power. I would answer that question is I really think health care services could ultimately be a bigger beneficiary to AI productivity than people think. It's uncorrelated to the AI trade a little bit.

17:22But your question, Frank, is spot on, man, because everyone's asking where do I get alpha without AI? Speaking of energy and power right now, oil is on the move once again today. Our Pippa Stevens taking on the action for us. Pippa, what are you seeing? Hey, Frank. Well, the G7 announced today it will release 100 million barrels beginning immediately and spanning four months, which includes a, quote, front-loaded substantial diesel release within the first 20 days. Now, a statement said they will convene in the coming days to discuss the possibility of additional diesel releases as necessary. Now, this comes after the U.S.

17:55increased pressure on European allies to take action. About 40 percent of diesel stockpiles worldwide are located in Europe and about 20 percent are European government reserves. That's according to Citi. Now, diesel futures falling about 3 percent today, but ending off the lows of the session, while European diesel declined about 5 percent, with traders seemingly unwinding the possibility of an export ban. Oil initially came under pressure from the announcement, with WTI earlier trading below 90 and Brent below 100. But it later retook triple digit territory on a Reuters report that Saudi Arabia is planning an assault on the Houthis to break their hold on Bab el-Mandab, which has seen Aramco divert much of its western exports north to avoid the narrow waterway at the south end of the Red Sea.

18:41Frank? Thank you very much for that latest look at the oil market. Adam, I'm going to come back over to you. A lot to digest there, a lot of geopolitics. Does that directly impact the equity market or even the bond market, the fact that we're seeing these diesel stocks be released? But also, there are continued tensions. We mentioned here on CNBC throughout the week, the U.S. is sending another carrier group over to the Middle East. I think right now what the market's focused on, people I talk to focus on, is just this correlation between the change in the oil price and the change in the 10-year yield.

19:13And that correlation got pretty high. And so it just felt like we need oil to come down, for rates to come down, and for multiples to go back up. That was sort of the short-term window we're in. You know, the president has called like 87 of the last zero ends to the Hormuz conflict. So it's sort of hard to listen every day and change your thesis. I think if you go back to my view of like what's going to have pretty good estimate of achievability and growing fast, you can own some oil stocks. I mean, the S &P, whatever it is, 4 % of the index. So you can own 79%. You can be overweight energy for the time being.

19:45The challenge is just that if we ultimately do get progress, the stocks are going to go down, it's anticipating that the real supply demand number is more like 70 bucks or something like that. So I think that's the issue. I think you can own a little because it's not correlated to semis and AI semis. But I guess it's not the one trick that Drew was talking about. But I worry a little bit about the market being anticipatory if things do get resolved. So Drew, I'm going to come back over to you. Obviously, gas prices, increased diesel prices have been a big story, not only for the economy, but specifically for the consumer.

20:15You say going into Q4, consumer and consumer-related investments are going to possibly be a driver? Yeah, I think so. I think if you look at how the consumer is behaving, even with what was a weak jobs report, I mean, when we net out the jobs, we're talking about minus 10 ,000 effectively over the last three months, right? That's what came out today. That's not a good report by any stretch of the imagination, but the people who do have their jobs are benefiting from the equity market. Even if they tell the sentiment people that they're depressed, they're still spending. And of course, in a weird way, it kind of makes sense because when you're upset, you tend to spend more money to try to make yourself feel better.

20:59It's going to be really interesting to see, though. And then, of course, if anything persists long enough, people become used to it. So this has been going on for so long now that I think People are just kind of used to like, hey, there's this geopolitical risk out there. I don't know how to value it. I don't know how to price it. But there's like multiple giant flashpoints around the world. And they're just going to persist. And that's the world I live in. So, you know, I'm OK with that. Drew Mattis, your big call. Retail therapy. It's a trend for Q4. All jokes aside, Adam Parker, Drew Mattis.

21:30Great to see both of you. Have a great weekend. See you, Drew. All right. I want to send things over to Brandon Gomez for a look at some of the biggest names that are moving into the close. Brandon. Hey there, Frank. Happy Friday. Starting off, shares of On Semiconductor are up on a deal to purchase Synaptics for$123 a share, valuing the merger offer at$5.7 billion. Now, the deal is a revision down from a$7 billion all-stock deal from June. On Semiconductor edging up 4 % on the purchase in Synaptics, still higher up over 14%. Next, Broadcom also up today following a report that it would lend Anthropic up to$42 billion to finance AI infrastructure and computing supply.

22:07An Anthropic, which is gearing up for an IPO with an unspecified date, now stands to become Broadcom's largest customer in the chip design business next year. Broadcom stock up about 3%. And Twilio edging lower today after it was announced that the cloud communication company will join the S &P 500 on October 6th. Twilio is replacing Warner Brothers on the index after its merger with Paramount Skydance. Twilio shares down almost 3 % now. Frank. All right. Brandon Gomez from the NASDAQ. Brandon, thanks very much. We'll see you in a bit. And we are just getting started right here on Closing Bell.

22:40Coming up next, Tesla's back on the growth path. Shares are charging forward. Can the EV giant keep this momentum going? We will discuss. We're live from the New York Stock Exchange. You're watching Closing Bell on CNBC. Legacy credit scores only look at a brief snapshot in time, and that limited view often leaves millions of qualified credit seekers out of the picture. Vantage Score is changing that by modernizing credit scoring. Vantage Score uses 400 % more credit and alternative data to create a fuller picture of financial behavior, including trended credit data, rental payments, and timely utility payments.

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24:35Back to closing bell. Tesla shares are on the rise today after third quarter deliveries. They beat expectations. Here to break down with the watch from the automaker going forward is Yorkville Ives co-partner and senior managing director Dan Ives himself. Dan, good to see you. Great to see you, Frank. All right. Tesla shares moving higher on his delivery beat. One part of this beat that I thought was interesting, the Model 3, the Model Y, 98 % of deliveries. Is that an issue for this company? Look, I mean, that's going to continue to really be the growth story for Tesla going forward. But it's really about the European bounce back.

25:08I mean, this is a sigh of relief for investors. You know, go back to the last few years of declines, you'll finally see growth this year. And I believe it's a big step in the right direction for Tesla in terms of what we saw right here. What about the Cybertruck? I thought that was supposed to be a product that was supposed to kind of take Tesla to the next level. Obviously, a bigger vehicle with utilities similar to a pickup truck. What's going on with adoption of that? Look, I mean, they still saw a strength in terms of Cybertruck over the last year. But the reality is, given the high-end part of the market, it's not going to significantly move the needle from a demand perspective.

25:43I think going forward, as you go in 2027, the question is, do you actually have a new model released? And then for the stock, it all comes down to robo taxis, autonomous, optimist. I mean, And this is essentially a company transitioning from the EV player into what I view as really a true AI player. And right now, this is sort of that sort of time in between where you see in the stock, the investors are waiting to see success. OK, so you're saying it's the time in between. That implies that you have a sense of when Optimus is going to be out here rolled out and these humanoid robots are going to be rolled out.

26:20Do you have a timeline? I haven't seen a very clear one. And obviously, we know that Elon Musk, he often sets a date and then pushes it back, sometimes once, sometimes several times. Yeah, I think 2027, I mean, call it early to middle part of the year. The big thing is going to be about the robotaxi launches, because so far it's been slower out of the gate, wow, that because of regulatory. As you have robotaxi and the autonomous story take hold, I think Optimus is the second half of the year going into next year. And that's why 2027, I think, could be a golden year for Tesla. And we continue to believe, you know, by the end of the year, next year, it's very possible, over an 80 percent chance, that SpaceX and Tesla ultimately walk down the aisle.

27:04A little marriage there. Well, I want to get to some other tech stories, but very quickly, when you're talking about the RoboTaxi business launching next year, is it standalone? Is it with a partner? How does that all work? It's really now, I mean, this is something about scale. Because as you go to more and more cities, it's then when you actually get to the cyber cab launch, when does this actually take the story to the next level? I think that's what investors are waiting for. I think right now this is sort of the appetizer to what's really going to be a key year for Tesla in 2027. But in terms of what we saw on the demand side, demand stabilizing.

27:41And that's important. It sets the stage for I think what could be a very, very strong year. All right. I want to talk about the broader markets, the Nasdaq possibly on pace for a record close. NVIDIA and AMD also hitting all-time highs. What is your take on this? Why are we seeing such bullishness? Is it simply the bond yields pull back slightly? Is there something else at play today? I think it's also if you look at Micron and you look at the read-throughs through the Asia supply chain, the reality is we're going to be going into an earnings season. It's going to see robust earnings, I think, across the board for tech, from hyperscalers to chips and others.

28:13And right now, it's 13 to 1 demand supply for chips. And you've seen it with NVIDIA. You saw it with AMD. And I think investors continue to underestimate the scale and scoop of this AI revolution. It's still third inning. Despite some of the jitters, nervousness, oil, and tenure, it's tech that's going to power this market higher. I think that's what's playing out here front and center. Dan Ives, always a pleasure. Great to see you, as always. Have a great weekend. Thank you. You too. All right, coming up here on Closing Bell, The next big bet on weight loss drugs is taking shape. We have the details on Eli Lilly's and Novo's Next Frontier.

28:48Closing bell coming up, or coming back, I should say, right after this quick break. If you like YouTube, you'll love YouTube Premium. Hi, I'm Sean Evans from Hot Ones, and I want to tell you about YouTube Premium. It has offline downloads, so you can watch without Wi-Fi. Background play, so you can lock your phone, and it still plays, baby. Oh, and it is completely ad-free. Yes, I said it, ad-free. Try YouTube Premium for two months free at youtube.com slash premium. Trial eligibility varies, terms apply, cancel anytime. Weren't agents supposed to take things off your plate? Building another to handle the others is a bit much.

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30:02You know what? Forget the music budget. We're going to stick with whatever's in the public domain. Give it a try at mintmobile.com slash switch. Upfront payment of$45 for three months,$90 for six months, or$180 for a 12-month plan required. $15 per month equivalent. Taxes and fees extra. New customer offer for initial plan term only. Greater than 50 gigabytes may slow when network is busy. See terms. Welcome back to Closing Bell. The next big thing in weight loss drugs may already be taking shape. Annika Kim Constantino has more on the next Frontier and the obesity drug boom. Annika. Hey, Frank.

30:33One of the next big obesity bets may not be about replacing GLP-1 drugs, but using a new hormone called amylin. Lilly, Novo, and other companies are developing shots, pills, and combination regimens that target amylin, and that's a hormone released alongside insulin when you eat that helps regulate hunger and fullness. And the idea here is that amylin could boost weight loss on top of existing treatments or provide another option for people who don't get enough benefits from GLP-1s alone. New Daddy from Lilly this week supports that. the company's experimental amylin drug delivered greater weight loss when combined with terzepatide, the active ingredient in Zepound and Munjaro, in a phase two trial on patients with obesity and diabetes.

31:16And Wall Street sees a big opportunity here. Leering Partners estimates Lilly's broader amylin franchise could generate more than$23 billion in annual sales by 2035 and points to potential market of more than 10 million people who don't respond adequately to GLP-1s. But Novo's own combination treatment, Cagre Sema, will likely be the first major test of the Amlin class when it enters the market next year, Frank. All right, Annika Kim Constantino, good to see you. Have a great weekend. All right, coming up, more on today's Market Jump and what's in store for your money in Q4. Dr. Ed Yardeni of Yardeni Research coming up next.

31:54Stay with us. And we are back on the bell. Stocks rallying today with tech leading the way. Here to discuss is Yardeni Research president, Dr. Ed Yardeni. Great to see you as always. Happy Friday. Thank you very much. Right now, we're in striking distance of record closing highs for both the NASDAQ and the S &P. The number for the NASDAQ is 27 ,244. What do you think is leading to this? Is it simply a softer than expected jobs report that a lot of people think is taking a Fed rate hack off the table later this month? I don't know about that. What I see is that employment growth is being held down by supply, labor force issues.

32:34We're seeing a lot of baby boomers retiring. Obviously, migration has changed pretty significantly. The labor force is actually declining. But meanwhile, GDP is doing very well. So the implication is that the productivity numbers are probably awesome during the third quarter. And I think we're continuing to see a productivity-led boom. I think it's got further to go. I think the market's anticipated that will continue to drive up profit margins and earnings, broadly speaking. All right. So earning season is coming up. I also want to point out we're just talking about tech. AMD, Nvidia trading right around their all time highs as well.

33:13So when we're looking at the AI trade, a lot of people are concerned about the narrowness in this market and the market's dependence on about 10 names to keep it moving higher. Is that sustainable? Do you see that trend changing in any meaningful way? Well, frankly, they've done it, right? I mean, how many times have we had this concentration concern during this bull market that started in October of 2022. And yet here we are at an all-time record high in the market. And along the way, there has been some broadening. It's kind of a push and pull kind of market in terms of the breadth issue. Right now, it is concentrated, but I expect that we'll see broadening out again, just as we did earlier this year, because these AI companies have to sell to somebody.

33:57They They can't just be making better profits out of thin air. And these companies that are paying them are paying them to increase their productivity using AI. All right. So you brought up 2022. Another kind of callback to 2022 is the ISM manufacturing. It's on its longest expansion streak since 2022. I look at those reports very closely because I cover transportation. As you look in those reports, prices keep going up and it's a leading indicator of inflation. So what does that mean for the Fed? Again, if you even believe that October is off the table, what does it mean going forward for inflation?

34:32We know that the prices in that area leading indicator continue to go up. Well, I don't think we've got this stagflation. I think we've got it. It's an awkward word, but the growth inflation. The economy is growing. And at the same time, we've got inflation. But it's inflation that's sticky rather than going up. It's kind of stuck around 3 percent. I think what this means is the Fed has got to continue to raise interest rates, not because so much of just inflation, but also because it makes sense in an economy that's this strong. The so-called neutral interest rate where, you know, nirvana level of interest rate that everything goes right is higher than the Fed thought at the beginning of the year.

35:13And they have to catch up with that. So, Dr. Ed, just, I mean, straighten me out on this one. And if the Fed hikes rates, doesn't that hurt the AI trade and also hurt other parts of the market? So how does the rally continue to go if they raise the rates? Frank, as you know, a lot of people have been saying that industries are going to stay higher for longer. I don't like that expression because I think it's high. They're going to stay normal for longer is the way I see it. So this is normal. This is normal. This is this is a sign of confidence in the economy. This is what bond yield should be.

35:46And the Fed needs to raise a little bit more. But the bottom line is the economy is strong. Earnings are strong. That's what's driving the market. I call it fabulous earnings momentum, TMO. And have a good weekend would be my conclusion. Before we let you go for the weekend, Dr. Yardenny, I got to ask you about bonds. At what point do they become competition for the equity market? We've been seeing, you know, throughout this last, I guess, three or four weeks, ever since the 10-year hit 5%, I think a lot of people are saying lock in that yield. I think we may be there already. I was visiting institutional accounts of ours in Toronto over the past two days, and every one of them were telling me that they're looking to buy bonds, even some people who just haven't touched bonds in a very long time.

36:30So I think we may be there. But it may be that the money is coming out of money markets. People are just saying, you know, instead of just getting any market rates and not being sure about how long they're going to stay here, Why not lock in the bond yield? I don't think this is going to be a big drag on the stock market. I don't think it's going to drag the valuation multiple down. There's so much liquidity in the system on a global basis that I think the bonds will be bought. There is always a price, and I think we're pretty close to the correct yield. Ed Yardini, you have a great weekend. It's always good to see you.

37:06Thank you. All right, coming up next here on Closing Bell, SpaceX shares are surging. We're going to tell you why. Plus, the other big movers as we head towards the close. We're back in just two minutes. Just over 12 minutes into the closing bell. Let's get back to our Brandon Gomez for a look at some key stocks to watch. Brandon. Hey there, Frank. Yeah. First up, hardware names Seagate Technology and Western Digital, both the worst performers in the S &P 500 today. A report from Nikkei revealing one of its industry competitors, Toshiba, will double down in its production capacity for hard disks used in data centers.

37:36Seagate Technology is sinking 10 percent, while Western Digital is down about the same 10 percent. Semiconductor solutions company Allegro ticking up today after RBC Capital Markets gave it an outperform rating and a price target of$50 a share. The firm says Allegro's data center accounts revenue is on pace to double in fiscal 2027. Shares of Allegro are up about 10 percent as well. And finally, SpaceX climbing today after CEO Elon Musk said it could achieve a, quote, big deal with NVIDIA's AI hardware. On X, Musk said SpaceX could run its version of NVIDIA's VR72 system at 250 kilowatts of power.

38:13The stock also climbing after a Falcon 9 rocket launch with Google's homegrown AI chips on board SpaceX. That stock ticking up about 8 % now. Frank? All right, Brandon Gomez, we'll see you in just a bit coming up in the zone. Coming up next, the crypto comeback. Bitcoin bouncing back in the third quarter. Can the rally keep running through the end of this year? That and much more. when we take you inside the market zone. Stay with us. We're now in the closing bell market zone. Mike Santoli and Wealth Enhancements Ayako Yoshioka are here to break down these crucial moments of this trading day. Plus, Oliver Rennick is standing by live from the Sebo Global Markets in Chicago.

38:47Brandon Gomez is outlining the busy week ahead for the consumer. And today, Amikil is mapping the moves in Bitcoin. And if the turnaround is finally here, Mike, as always, we start with you. Yeah, Frank, I mean, week is flattish on the S &P basis, But I do think you can probably say that at the index level, the market continues to hold serve. You know, there were these concerning divergences. The majority of stocks really underperforming for weeks. Some of that was rectified today. We did get something that was close to Goldilocks economic data this week. Bond market, though, wasn't really fully able to celebrate.

39:21So we had this little bit of confounding move higher in yields after the modest job growth we got this morning, probably preventing the overall stock market from fully relaxing. and getting any kind of push higher. But I do think you'd have to say, you know, it's sort of watchful in terms of the leadership of this market. It remains very AI centric. And, you know, we kind of live to fight another week until we figure out if we're going to resolve out of this range higher or low. We've been in this range for four or five months. Mike, what's coming up on OT? Well, we're going to have a dissenting voice on Meta, as a matter of fact, someone who is not that bullish on the news rollout.

39:56Laura Martin from Needham is going to talk to us about her thoughts about what it means for the AI strategy. All right, Mike, we'll see you in just a few minutes. Thank you very much. We're going to get over to our Oliver Rennick at the CBO in Chicago. Hey, Frank. NVIDIA was a story of the day. It rocketed out of the gate, setting an all-time intraday high and getting within 5 % of a$6 trillion market cap. That sparked a wave of bullish options flows across semiconductors and tech that helped keep the S &P 500 afloat, and VIX at the lowest all week, despite bond yields making that sharp U-turn higher.

40:33NVIDIA traded more than 4 million options worth over a billion dollars, with more than four times as much money spent buying calls than puts. In its wake was unusually bullish flows into smaller chip names like STMicroelectronics, Wolfspeed, and Poet. And while NVIDIA cooled off in the second half, market makers are still assigning just under a 50-50 chance. It hits$6 trillion by the end of this month and more than a two-thirds chance it happens before your end. Oliver, thank you very much. Also, we've got a bunch of consumer names getting set to report next week. Brandon Gomez is back to run through what to watch for.

41:12Brandon. Hey again, Frank. Yeah, busy week. Consumer optimism slid in September to its lowest level since 2014 as fears escalate over rising prices and labor market conditions. That's not the best stage for consumer earnings set to report next week. We'll hear from two major beverage makers, Constellation Brands on Tuesday. That company struggling with a pullback in North American demand, albeit faring better than some of its peers. PepsiCo on Thursday. It recently said it will hike prices back up after price cuts didn't translate to the volumes they'd hoped for. Another consumer test will come in apparel with Levi Strauss reporting on Wednesday.

41:45A beat last quarter led it to raise full year guidance and its quarterly dividend. And all that leads up to consumer sentiment data on Friday. Busy week of consumer health takeaways, Frank. All right, Brandon, thank you very much. Bitcoin bouncing back in the third quarter. But can the rally hold on into the end of this year? Today, Mikhail has much more on that for us. Yeah, that is the expectation. Frank City today lifting its price target even on strategy shares on expectations of a Bitcoin reversal. Look, October is historically a very strong month for Bitcoin. There have only been three negative Octobers since 2013.

42:17And there are signs that this one could play out exactly as Bitcoiners expect and hope. So data from CryptoQuant showing Wales stablecoin inflows to Binance are up, meaning they're putting cash on the exchange, which usually signals that they're getting ready to make moves, possibly expecting an uptober. Those inflows up 40 percent to 30 billion dollars just in the past 30 days. We know institutions are buying Bitcoin per the ETF inflows. And then from here, frank investors are going to want to see Bitcoin go up without crazy leverage, which is kind of a mixed picture right now, while interest rates and liquidity become more favorable.

42:53So look at today's jobs report. The economy is weakening enough that the Fed may have less reason to keep raising rates. So you've got more money ready to buy crypto and perhaps a more favorable environment for risk assets. Throw in a crypto friendly regulatory environment and we could be ready for a bull market here. The next inflation data, though, is going to be the biggest and most interesting piece of the puzzle. Frank? Tanea, thank you very much. Have a great weekend. We are moments away from the closing bell. Let's bring in wealth enhancements. Ayako Yoshioka, thank you for joining us. I want to start off with tech.

43:24We look at NASDAQ very close to a closing high. NVIDIA and AMD hitting highs. You're bullish on tech, but you say there may be a disconnect between earnings and some of this exuberance. Sure. I think, you know, when it comes to the expectations for future returns, the bar is pretty high. I think everybody expects the AI theme to continue and to generate lots of returns. We know that a lot of the tech companies have talked about how short they are in terms of compute. But, you know, valuations have continued to go higher and expectations have garnered higher as well. So we're a little bit just concerned that expectations might need to level set at some point as we go into the third quarter earnings season.

44:06OK, you also like financials. If you look going back to September the 14th, when the 10 year hit 5 percent, almost all the big money center banks are down double digits. JP Morgan actually exception down about 6 percent or so. What's the thesis on financials now in this higher rate environment? Sure. So we think that, you know, a higher rate environment actually is a positive for banks and their net interest margins. Typically, you know, this allows, especially for banks that have low deposit datas, they're able to pass through and get better, higher revenue from the higher interest rates. And the costs associated with paying higher deposit rates is a little bit of a lag.

44:45And so banks tend to benefit in this environment. Does the Fed make a big difference when it comes to the equity market? We have a meeting coming up in a few weeks. A lot of people think that a hike is off the table. Does that mean more bullishness? Does that mean a rally? How do you see it? Sure. I think in the short term, we're getting a little bit of that reprieve. But, you know, as we talked about earlier, the consumer is still in a bit of a tough spot when it comes to the macroeconomic environment. I think a lot of pressure is weighing on that inflation, the CPI print that we'll get in mid-October.

45:17And we'll see whether or not the Fed really has to do anything or if they have some room to pause. All right. So you're saying that there's still potential, I guess, volatility in the market based on inflation reports. Why do you think so many other people are just so convinced that that hike is just totally off the table? I think we've seen the labor market data come in this week that shows that Goldilocks environment in which the overall labor market remains relatively healthy and not pressuring wages higher and pushing inflation even higher. And so all of the pressure, I think, for the Fed It really goes towards whatever the inflation report is going to show with that CPI report in mid-October.

46:01All right, Aya, thank you very much. You have a great weekend. I appreciate it. Thanks, you too. All right, take a look at the markets right now. You are seeing the NASDAQ 100 up over 1 % right now. The NASDAQ, the composite actually moving a bit higher. The S &P up about three-quarters of 1%. The Dow up just about 250 points. Two of the big stories of the day. Banyo's moving back and Pep taking leadership left again. A billion A &B trading very close to their all-time high. They are also turning back a bit after the G7 Nation's announced that they're releasing diesel stocks that does a proposing bell.

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