Closing Bell 10/20/26

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0:56Scott Wapner: Thank you very much, guys. Welcome to Closing Bell. Scott Wapner live from Post 9 right here at the New York Stock Exchange. This make or break out begins with the bull market. As sectors other than tech rally yet again, it certainly raises questions about where things are heading over the remainder of this year. We'll ask our experts over this final stretch. There's a scorecard with 60 to go in regulation. We're still green. We're off the best levels of the day, though. So health care, financials, utilities, some of the better sectors today. Oil is above 100. It's reversed a bit. We're watching it.

1:26Scott Wapner: Well, there it is. Now it is back above 101 for WTI, almost 109 for Brent. Maybe as that has stayed above that level, the market's gotten a little bit cooled off. Most of the mega caps, they are red today. Don't forget Meta reports tomorrow. We do begin with our talk of the tape. All that is riding on those big earnings reports in overtime tonight, SpaceX and Netflix. We do begin with Julia Borsten, who's following Netflix. Julia? Well, Scott, ahead of earnings, Netflix has been making some big changes, which are fueling investor concerns about the quarter. With Netflix shares down over 40 percent in the past year, down more than 4 percent since its last earnings report, it's been making moves that are seen as foreshadowing a rough quarter.

2:08Last week, Netflix laid off 6 percent of its staff and replaced Chief Content Officer Bella Bajaria with Fox veteran and Disney veteran Peter Rice. yesterday firing Netflix film chairman Dan Lin. And just today, Netflix announced it's expanding its ad platform with new tools to target ads and measure their impact and plans to expand ads to 15 more countries next year. Now, all of this comes as new numbers reveal evidence of weakening engagement. Nielsen reporting that Netflix's share of U.S. viewing time is down one percentage point year-over-year to 7.8 % in July versus YouTube gaining nearly as much to 14.2%.

2:45Key bank with an overweight rating saying, quote, we believe management is aware of these issues and expected to expect to see corrective action taken across content investment and expense realignment to bolster growth and earnings and deliver value. Scott.

3:03Scott Wapner: All right, Julia, thank you very much. Julia Boorstin. All right. SpaceX with our Morgan Brennan now as we walk up to that report. Hi there. Yeah, we are walking up to that report, Scott. And when SpaceX reports Q3 results in T-minus one hour, can't help myself, a little space here. Wall Street is expecting this to be the first profitable quarter on an adjusted basis. We're looking for 13 cents per share on about$12.7 billion in revenue. Big dynamic here. Can growth in Starlink continue to help bankroll the build-out of AI as that business begins to grow revenue dramatically itself? Now, for the connectivity business, which is Starlink, it's about subscriber growth.

3:40And ARPU, it's the V3 satellite rollout. The plan for Starlink Mobile with the recent Spectrum deal. Wall Street wants guidance for the next Starship flight as well in an attempt to catch the ship. And for AI, it is about compute capacity, cursor integration, Grok adoption, and of course, all of those NeoCloud deals. Here's the big thing to watch and what will likely move the stock. Guidance for adding more compute capacity. Elon Musk previously said 5 to 10 gigawatts next year. That represents hundreds of billions of dollars in spending. What's the CapEx plan and where does the capital come from?

4:14Also, analysts are looking for any hint of a merger with Tesla, which reports after the bell tomorrow. Might be a bit of a long shot, but the speculation has been growing ahead of this report, Scott.

4:24Scott Wapner: Well, and it's not going to go away either, as we both know. Morgan, thank you. That's Morgan Brennan. Let's bring in our panel now, Big Technologies, Alex Kantiewicz, Odyssey Capital's Jason Snipe. Alex and Jason are both CNBC contributors. Jason owns Netflix, but I'm going to start AK with you and SpaceX. I heard one bullish analyst earlier this afternoon on one of our programs say it's a hard one to judge because it's such a long term story. The quote was, what's science fiction versus financial model? It's, I think, underscores how investors and maybe some analysts are sort of grappling with this one, how to really think about it.

5:03Scott Wapner: What about you? Yeah, well, the closest thing to science fiction that we have to reality with SpaceX is the building and selling of compute and the building and selling of AI. SpaceX made a lot of progress recently with GrokBot, which is a AI agent that's been taking off the cursor acquisition is a good deal. And then you look at compute capacity across the board. There was the secondhand relaying of a story by Ben Horowitz about Andy Jassy, who said that you can't get compute in 27. You basically have to wait till 28. Now, Elon Musk is excellent at building these data centers. So, you know, a lot of this, of course, is forecasting AI demand into the future.

5:42It looks like that demand is going to be, the supply will be constrained for a while. So SpaceX is in good position there. And as the company makes money there and builds a footprint there, you have all these future bets. And then a potential merger with Tesla.

5:54Scott Wapner: Morgan alluded to it. I mean, don't kid yourself. This is a hyperscaler. And that's what the conversation that the analyst community and investors, for that matter, are really going to be hanging on. Right. How much are they going to spend? And I thought, you know, the way that Morgan put it was perfect. And where's the money going to come from? We need to know this. That's right. Well, look, the demand is wild. And in fact, the revenue is growing for SpaceX. I mean, if you would have told us a couple of years ago that Elon Musk's rocket company would report earnings and the biggest item of revenue was going to be from AI data centers.

6:25Going back to the science fiction comment, people would have said it's total science fiction, but they've made it a reality. It's obviously played pretty well for investors. Now, SpaceX has had up and downs since the IPO. If it's able to really solidify this story and continue to build the way Elon's been building and sell it, because you can mark it up like crazy as it has to companies like Anthropic, You know, you're looking at a major, major player in AI hyperscaling, and that itself is a good enough business.

6:56Scott Wapner: What about the combination with Tesla? What do we really think about that? I think people think it's going to happen. They're just waiting for the win. Oh, I think it's inevitable. It does make all the sense in the world. I mean, I think that right now you have Elon, who's divided his attention across a couple of companies. You bring them together, and you start to see them be able to build on each other's strengths, right? So Tesla does a lot of AI with self-driving. SpaceX, obviously, a lot of AI with XAI. You bring that together on a common infrastructure. You share. I mean, they're already sharing what they've learned among groups, but you share it more closely.

7:28And, of course, the big thing on the merger front is robotics. You bring the robotics knowledge across both of those companies together. And then all of a sudden, these big future bets, humanoid robots, autonomous driving, and what that leads to. and that lead to industrial robots, the potential is limitless if they're able to make it happen.

7:47Scott Wapner: What about the Starlink angle and this, you know, I think expected move into mobile? Yeah, I think mobile companies should be nervous. One of the nice things about Starlink is, you know, because it's in space, there are a few dead spots. So, you know, I could already see the commercials. Can you hear me now? Yes, of course I can. Of course I can hear you. I could always hear you. Oh, that's a good one. Well, we'll see. We'll see what they say, if anything about that. Let's turn our attention to Netflix. And Jason, I'll start with you on that one. The stock has looked awful. I don't need to tell you that because you own it.

8:20Scott Wapner: You need to look at it every day. What's the biggest issue here? It's been a tough story, Scott, as you know. Stocks down 26 % so far year to date. You know, so what are we looking for? Obviously, this quarter, about$13 billion worth of revenue, 82 cents worth of earnings. I think for me, as they kind of reshape the story, the vision for 2027 is going to be very important with a new chief content officer. Obviously, Peter has really had some signature stories in The Simpsons, American Idol, The Modern Family. They've been signature shows. I really want to hear from them. And what is the vision for next year as far as content, the content?

9:04They have$20 billion to spend. Obviously, that's a very rich number. So that's going to be very important. As we also know, their live foray into live sports has been an important story for the stock over the last few years. You know, this kind of event-driven story is not scalable. I think they're going to have to find some real rhythm to look to, almost like Amazon Prime and Thursday Night Football. You need to see a story that's reoccurring over and above what has been event-driven. And so that, for me, is what I'm looking to see from them. Lastly, I'll say, you know, the ad business has been an important story as well.

9:41We will see a double here this year. I think that's going to be important to kind of analyze as well.

9:47Scott Wapner: Okay. I mean, this thing was so loved, this stock, and now it's got hair all over it. Adding net subs, been a problem. The overhaul of the creative leadership, that's getting all the headlines. And as you know, and Jason really alludes to this, It's a what have you done for me lately business when it comes to content and finding the next big hits, which have been a struggle. That's right. So Netflix, not a pure technology business in the sense that without those hits, it's not going to be able to grow. But you look at a competitor like YouTube, you know, Netflix has raised prices 30 percent about over the past year and a half or so.

10:22YouTube is free for most people. And what YouTube can do is basically it's an amazing editor. Most people don't see the back end of YouTube, but what the back end of YouTube does is it effectively pushes content creators in a direction that the audience is going to love. So it's basically the advances in AI that Google has made are programming YouTube. And if you look at that Nielsen data, YouTube is up 1 % in share of viewing and Netflix is down. And it's not a surprise to me. If you raise prices, your free competitors using AI to program, you're in trouble.

10:54Scott Wapner: Well, and I remember, Jason, when everybody was saying that if anybody has pricing power, it is Netflix. And they did until it appears that maybe we're in the midst of yet another structural shift in the way that people view media. You know, from, you know, the disintermediation of traditional media from the streamers. And now the streamers like Netflix being upset by the YouTubes and the TikToks of the world. And if it's a structural change, it's not so easily, if at all, reversible. There's no doubt about it, Scott. And obviously what we've also heard from them, and Alex just alluded to, they have raised prices outside of Canada and the U.S.

11:37They've raised prices internationally. Latin America is growing some, and also Asia. But I think from a pricing standpoint, and I'll go back to something that we just talked about earlier in terms of the Paramount Universal deal. I think that, you know, in terms of what they own and properties, in terms of, you know, professional sports, MLB, UFC, NFL, you know, that becomes a very difficult comp for Netflix to kind of play against. And to Alex's point, you have YouTube and short-firm content starting to grab market share. The AI story there does make sense. But I think, again, the story for Netflix is$20 billion worth of spend, right, that they could utilize for content.

12:22We're going to see what Peter Rice is going to architect into 2027. I think that's going to be the story.

12:27Scott Wapner: All right. Well, we'll see because that story is going to hit the tape in about 45 minutes or so. We'll look forward to that. Jason, thank you, AK. Always thanks to you as well for coming over here. In the meantime, the AI trade mixed today following a sharp drop in a South Korean IPO. Seema Modi following that story for us joins us with more. What do we know? Well, Scott, it started overseas with the IPO Ellis pricing at the top end of its range, raising$150 million, strong retail demand, but plunging on its first day of trade, taking down the once hot South Korean market, the Kospi, which is now down to roughly 40 % since June, with memory names like SK Hynix, Samsung participating in this broader sell-off.

13:04Ellis' brutal first day, Scott, does follow a series of delayed AI listings. You think about and scale firmness SB Energy, which is backed by SoftBank. In fact, the Japanese investment firm recently raising about$11 billion in the junk bond market to cover a bridge loan. We're told by a source that Masayoshi's son has spent time in the Middle East to raise additional capital, due in part to OpenAI's delayed IPO in which SoftBank is an investor in. If we take a look at CoreWeep, it has paired early losses. It's up on the day, following now three bullish notes over the last 48 hours from Goldman, JP Morgan, Barclays, though analysts had bared, pointing out They're modeling about$30 billion that it needs to raise in 2027.

13:42We're hearing from credit folks that we won't see any activity in the high-yield debt market before the midterms. Question is how quickly after the election activity could resume. A similar question for Oracle, though it has said it won't raise any more equity or debt this year, Scott.

13:56Scott Wapner: OK, Seema, thank you. Seema Modi. Speaking about the AI trade, a very interesting conversation today between the hedge fund manager, Lauren Taylor-Wolf, and our own David Faber. That was at the Active Passive Summit. A year ago, Ms. Wolfe telling David Faber that she thought AI was in a bubble. So what did he do? He asked again today whether she still thinks so or what she sees. Here's what she said. It's very hard to understand when a bubble might pop. But what we do know is that there seems to be a CapEx race. Hyperscalers and neoclouds are increasingly borrowing, especially with the neoclouds.

14:32They're borrowing. The cost of their debt, you saw with Corweave, is going up 15%. The real question is you have an inflating cost of compute and you have a deflating price that customers are willing to spend on tokens. All right.

14:46Scott Wapner: Let's welcome in Liz Thomas, SoFi's chief market strategist here once again at PostScience. Good to have you back. Good to be here. I mean, what do you make of the way the market's trading, right? The AI trade feels like it's in big question now. Now, people have been going towards more defensive areas of the market, which continue to lead today, like health care. What do we do with all that? Well, to start off with health care, I still like health care. I think it's a good place to be, not just for the near term, but for the long term. So I would stick with that trade. And I've been on that bandwagon for a while.

15:17The AI trade, I mean, I think it's experiencing some cracks. I wouldn't say that it's down in a bad way or that it's wholesale negative. But there are certainly some fragilities that we're finding out right now. Some of those were multiple related fragilities. Some of those are now, you know, what will the market look like if Anthropic and OpenAI's IPOs aren't quite as gleaming as we all expected? I think the market is still OK. But the demand that is there, the fundamentals that are there are still underpinning the strength, I suppose, in the theme. And I think that will carry forward for a while.

15:54Scott Wapner: Yeah, I mean, there's no indication that really anything that's happening is fundamentally driven. Correct. Like from a demand standpoint? Yeah. Good luck finding the case that there's a demand problem, right? Because there isn't. Right. Why don't we focus more on that? Well, I think we are. Those of us that come on television and talk about it, I think we continue to say the fundamentals are still in place. The reality is that... In other words, you said, like, seemingly, like, there's some level of doubt, even if there really shouldn't be. Well, the market's clearly doubting it. I guess that's what I picked up on, right?

16:28Yeah, right. So the market, the order of events is the market goes first, then you see the fundamentals crack. If there was something more sinister in store, right? You see the market go first, then you see fundamentals come down, then you see something like it leaks into the broader economy. So far, the market is cracking, right? We've got an issue in semiconductors. We've got clearly an issue with some neocloud businesses. Some of the places that have been those highfalutin trades for the most of this year have cracked. But nothing is in a terrible bear market at this point. I do think that there's still a decent chance that this is a painful pause and it's a painful re-rating as we get later in the cycle.

17:08What concerns me is when people are still unhinged bullish about it and saying we're still, you know, in the mid 90s sort of part of this cycle. Well, a lot of people think that we're still in the early innings.

17:19Scott Wapner: Yeah. But you just said late. I mean, on what basis? Well, I firmly believe you have to respect a cycle, whether it's the business cycle, the market cycle or even the cycle of a theme. And this is, without a doubt, some sort of cycle. Right. Well, we're only three years into whatever cycle we think we're in. That's reasonably young for as transformational a cycle as this appears to be. I mean, there's no indication either that spending is slowing down anytime soon, nor is demand. So how can we be late in the cycle? Well, I think you have to think about pattern recognition. So the speed of the cycle is not always the same.

18:05And I think we can all agree that this cycle has happened faster than some of the previous ones. And we always draw these parallels to the 90s. It's all gone quite a bit faster because the innovation is stronger. Things are just moving at a faster pace and the market is digesting it more quickly. So I don't think it's going to last necessarily as long. And then even if we draw the parallels to that, there are some corrections that have happened in this cycle that almost exactly line up with what happened in the 90s. So if we're looking at pattern recognition, I think we have to be honest with ourselves that this is a cycle and we're further along in it now than we were two years ago.

18:41Scott Wapner: Well, of course, just by virtue of the calendar. Sure. But we don't know how long the cycle is going to last. We can only go on the idea that everybody who matters is talking about spending is not waning. And I think we'll probably figure that out again during earnings in a few weeks, maybe starting tomorrow with Meta. and people can't keep up with demand. So we'll get a little bit more technical here. Yes, spending is not waning yet. They've committed to spending over a number of years from now, right? If some of these IPOs don't go as well as expected or if the market doesn't continue to reward AI companies, then we've got a capital issue for some of those companies.

19:22If the revenue slows down, which I think there is fear about, that the revenue might slow down or that at least for this part of the cycle, some of the demand has been saturated with models, that we're not going to move the needle by coming out with another flashy model. There's the build-out that still has to happen to take us to the next level. So if the revenue slows, if capital markets are not rewarding these companies as much as they have in the past, which I think it's clear that they're not, then we have more pressure on multiples. Then we have more of an issue with how much can they actually increase spending for the next few years.

19:56Scott Wapner: Is it clear that they're not? I mean, people are going to trip over them. to get a piece of Anthropik when it goes public. I don't know that that's true. I don't know that that's as true as what the market expects. I'm not saying it's a bad investment, but I don't know that we can say without a doubt that Anthropik and OpenAI are going to have these blockbuster IPOs. I think we've already seen some concern over what the numbers might look like and how impressive they'll be. They'll still be impressive. So let's say it's not$2 trillion. If it's$1.5 trillion, I mean, it's hard to find people who don't think that those IPOs, I mean, at least the anthropic one.

20:32Scott Wapner: I don't know about OpenAI because that's not right in front of us like the anthropic one appears to be. You really have doubts that it's going to be a successful IPO? No, I'm not saying it wouldn't be successful. I just don't think people are going to be tripping over themselves necessarily to buy it and send it up three times, six times in the first few months. Well, the way these things are engineered to begin with, it's hard to make a judgment based on all of that. Yes. And I think right now what's keeping the market afloat is the build-out, not necessarily the companies that are building the models.

21:03So we've got energy demands. We've got semiconductors. We've got memory. We've got compute. There's so much demand for other parts of the ecosystem. That's what's going to keep us afloat for a while. My concern is when you look out over the medium term or even the longer term, if the revenue isn't there to justify all of this spend, then we have a problem.

21:24Scott Wapner: Well, I mean, for sure. But of course. And I don't know that it will. But are we pre we're I feel like we're we're we're we're trying to build a bare case by almost suggesting that is a is a likelihood rather than maybe not. Maybe maybe maybe everything's going to work out just fine. I mean, it's not it's not wrong to raise the issue. But if a lot of things happen, then a lot of bad things could happen. I mean, with every investment case. Yeah, that's fair. Here's what I would say. And I think I said this on Closing Bell about a month ago. I think the right approach right now for investors is balanced by extremes.

22:03So you've got on one end of the extreme being all in on the AI trade on the chance, which I think is a good chance, that everything works out perfectly fine. And we haven't even seen near the peak of this cycle yet. Maybe we still have another unhinged 50 percent to go up. I don't know. It's possible. It happened in the 90s towards the end of the cycle. But then on the other end, I think you have to be honest with the fact that it is maturing. Investors are getting more discerning. We're not rewarding good earnings as much as we used to. And you have to protect, especially in a period when the Fed is in a hiking bias.

22:37We have yields at higher levels than we've seen and that investors have had to grapple with. And they are offering a decent alternative to stocks. So you have to have exposure, I think, on both sides. My concern is for people that are still saying all you do is all in on AI. I don't think that that's a prudent way to invest.

22:55Scott Wapner: OK, all well made, made a well made case. Thanks. Thank you. Liz Thomas. All right, let's send it to Brandon Gomez for the stocks moving into the close. What do you see? Hey there, Scott. First up, shares of 3M popping after lifting its annual profit forecast as part of its third quarter earnings report. The industrial giant also expanded its data center deal with Amazon earlier today, announcing that it issued a warrant to a wholly owned Amazon subsidiary. giving it the right-to-purchase common stock worth over$521 million. Also in the green meantime, Northrop Grumman, after reporting its third quarter results today.

23:28The defense contractor's earnings topped analyst estimates but missed on revenue. Those shares you can see now up almost 5 percent. And then on the flip side, General Motors sinking despite beating expectations on earnings and revenue for the third quarter. The automaker also raised its free cash flow expectations but narrowed its 2026 full-year guidance. You can see shares down about 7.5%, Scott.

23:49Scott Wapner: All right, Brandon. Thank you, Brandon Gomez. Just getting started here at Post 9. Coming up next, the top-ranked bank analyst, Mike Mayo, on whether the financials can build off of some of the momentum we're seeing on that chart right there. We'll get his top picks next.

24:10We'll be right back.

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25:24Welcome back.

25:25Scott Wapner: Bank Stocks having a strong day and with earnings now in the rear view, Are they primed for even more gains ahead? Let's ask Mike Mayo. Wells Fargo Securities just named, as he was quick to point out as he sat down in his chair, the number one analyst on Wall Street for the seventh straight year. Do you think we weren't going to mention that? Did you think we didn't know that? Well, if I get two more years, I make the Hall of Fame. So it's very important to me. Yes. All right. Fair enough. It's important to us, too. It's important to us, too. OK, so The stocks haven't really worked well. I'm not going to make much of a nice green on the screen today.

26:02Scott Wapner: Why do you think they haven't worked? Well, I'd say bank stocks are down but not out. Why have they been down? Before you give me the whole sales pitch, I want to know why have the last few months been bad? Well, the last six weeks, banks have been down. That's the longest string since the global financial crisis. So you have a battle between fear and reality. Fear number one is the AI scare trade, that all the deposits are going to flow out of the banks. Fear number two is higher interest rates, and that is like 2023 all over again. And fear number three is capital markets will implode and cause some sort of accident.

26:38So it's a boxing match between fear and reality. And fear has landed some pretty good body blows. Yeah, right.

26:44Scott Wapner: I mean, some parts of the fear spectrum are correct, aren't they? Uh, overblown at a minimum. I mean, the banks are down 11 % the last six weeks in a flat stock market, and the earnings are up 15 % year over year. So there's a disconnect here. And I think beer in the end is going to lose to reality, because the reality is bank deposits are not flowing out of the banks because customers value trust more than anything else. And having a new technology like AI agents grabbing your deposit, it's not going to happen. I've been on your show for a long time. We had internet banks in the 90s. We had fintech.

27:20We have digital banks. The deposits are safe. Risk number two, higher rates.

27:25Scott Wapner: Yeah, the net interest margin shrinking as a result of what the market thinks that the Fed may do. I mean, that's where the, you know, it's a little bit different now because rates have come a bit off the boil and maybe the market doesn't think anymore that the Fed's going to raise in October. But it was sort of obsessed with shrinking net interest margin, no? It's a fair point, but what's more important, traditional banking revenues are volume times margin. And margin in the third quarter was flat, but volumes picked up. Commercial loan growths picked up. The economy is healthy from a bottom up standpoint, from Mike Mayo bank analyst standpoint, the economy is humming along.

28:04So the volume is allowing traditional banking revenues to grow quite nicely.

28:08Scott Wapner: What about the IPO market, which by all accounts has stalled. Let's just say that. I know Anthropic is going to come public, barring some surprise, in 2026. But elsewhere, it feels like it's stalled. What's the impact there? Well, I just want to pull back the blinds here. We had the failure of a major hedge fund this past quarter, situational awareness. Where did that show up? Did you have any big holes? No, that's better risk management. That showed up at Citadel. That's where that showed up. But, I mean, look, capital markets grew 15 % year over year in the third quarter. That's gone from great to good.

28:43It didn't go from good to bad. And you still have robust backlogs, especially advisory. Equities is off the charts. And, you know, this is what you would call good volatility. And, by the way, Goliath is winning the largest banks. The biggest five, especially the biggest three, are still gaining market share. They've gained market share for the last decade.

29:04Scott Wapner: Okay. So we'll get to those. But your favorite pick, you say, is a super regional, right? Fifth Third? Do you call that a super regional? Yeah, I'll call that a super regional. I mean, if I'm wrong, tell me I'm wrong. No, it's a super regional. Now, they did an acquisition of this bank that I said should be taken over 10 years ago on your show. And I think Fifth Third's acquisition of this bank, ticker FTIB, will be the best merger in over two decades in the industry, excluding the crisis-related mergers. That's a big statement there. And that's because the strong bank has bought a weak bank. They're implementing better efficiency.

29:41They're implementing better funding. And the CEO, Tim Spence, is the best of the next generation.

29:46Scott Wapner: Okay. And Citi is still your best bet. I got to go, but I just want to make sure that's clear, right? Ticker C stands for commitment. Citi is committed to having much higher returns that are not reflected in the stock price. It also stands for congratulations again. Seventh year in a row. Top analyst on the street. Good to see you. Thank you. Mike Mayo. Breaking news on Boeing. Phil LeBeau has that for us. Hey, Phil. Hey, Scott, check out shares of Boeing. The FAA has officially certified the 737 MAX-10. That is the largest variant of the MAX family, the last of the MAX airplanes waiting for certification by the FAA.

30:23Without a doubt, this is a milestone moment for Boeing. The MAX 10 is the largest of the MAX family, and it is about a third of the backlog. There are airplanes, or I should say airlines, that have been waiting years for this aircraft. Those deliveries can now begin. It's now been certified. We will be talking exclusively with the Secretary of Transportation, Sean Duffy. He is out here in Everett, Washington. We'll talk to him next hour about the importance of the MAX finally being certified and whether people can have trust in the 737 MAX family. A lot of comments over the last several years, Scott, as you well know.

31:01Scott Wapner: Duffy has said, and I've talked to him about this, that they have really done a rigorous review of everything at Boeing, including the MAX, and it will only be certified when it's ready to fly. And that is the case now with the 737 MAX-10. Scott, back to you. Got United earnings on tap, too, right? Tomorrow? We do. Coming up at the top of the hour. Oh, yeah, tonight. What am I talking about? Thanks for keeping me honest. Phil, thanks. Phil LeBove. Up next, NBA's back. A new season tips off tonight. Big expectations. Star-studded matchups. Championship yet again on the line. We'll break down the big money storylines heading into the tip next.

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33:11Scott Wapner: schedule, including the defending champion New York Knicks against Philadelphia and newly signed star LeBron James. Our Alex Sherman joins us now with more. What's your take? Yeah, I mean, Knicks fans, NBA fans know they're coming off a championship, a huge deal for the city of New York. But really, if you look back a few years, there's been a overwhelming theme in the NBA in, let's say, the past eight years or so, and that's parity. Different teams every year competing for the title. Take a look at the last eight years in the NBA. There has been a different winning team in each of those last seasons.

33:47And by the way, it's not just the team that wins the championship. Even the teams that they're playing in the finals are different each year. So this has been, in NBA Commissioner Adam Silver's mind, a big success for the league. He says that the data indicates that the more parity you have each year, interest in the league is higher, engagement in the league is higher, it leads to a healthier league. But I spoke to Draymond Green, and he gave me a different opinion on what he thinks of parity. Take a listen to what he told me. Ultimately, it's a reason why Michael Jordan dominated for a period.

34:25The Spurs dominated for a period. LeBron dominated for a period. We dominated for a period. Now it's all over the place, and I don't love that as a basketball fan. I don't love that. He's basically making the argument that parody is not good for the league and that what fans wants are actually dynasties. Now, take it with a grain of salt, of course, because Golden State was one of those dynasties,

34:45Scott Wapner: and we haven't really seen one since, Scott. I do feel like we like dynasties until we don't. We just get sick of the dynasty. Yeah, you know, from a national media standpoint, the data does indicate that there is more interest in these sort of dynastic franchises when they are in repeated finals, but you also have to take into account the regional ratings. And obviously, the more teams that are going to compete for a championship, the better those ratings are going to be. I actually asked this question to NBA Commissioner Adam Silver a couple years ago. Listen to what he told me about parity.

35:21The data is absolutely crystal clear that the more competition you have, the more it drives interest in the league. If you have a 30-team league and you only have four teams that are competing for championships, Of course, the fans of those teams love that. So I think that's the rub, right? If you're a fan of the Golden State Warriors and they're great, you're going to like dynasties. But if you're a fan of the Oklahoma City Thunder, the San Antonio Spurs, you know, you're probably very happy where things are right now, where even these smaller markets have a chance to compete for a title.

35:50Scott Wapner: Yeah, probably so. Alex, thank you. Alex Sherman. Up next, we track the biggest movers into the close. Brandon Gomez is standing by once again. What do you see? Hey, Scott, a credit data giant and a toy maker popping on earnings while aerospace results weigh on one industrial player. The ticker is taking over these last few minutes of trading coming up after this. Less than 15 to the bell. Back to Brandon now for the stocks he's watching. What do you see? Hey there, Scott, another round of third quarter earnings movers. First up, we have GE Aerospace slumping despite delivering an earnings and revenue beat.

36:20Although the jet engine maker raised its 2026 profit forecast, free cash flow fell short of estimates. The stock popped a bit in the morning, but you can see now down almost 4 percent. Meanwhile, shares of Hasbro surging after reporting better than expected results. There was strong demand for its Magic the Gathering game helped drive the beat, with the toymaker also raising its revenue growth outlook for the full year. You can see shares up about 10 percent last I checked. Finally, Equifax also rising after posting a solid Q3 beat. Revenue was in line with expectations. Although the company dialed back its revenue guidance for 2020 sticks, The stock has been down about 19 percent this past year.

36:55It was up about 11 percent today last I checked, Scott.

36:58Scott Wapner: All right, Brandon, thank you very much for that. That's Brandon Gomez. We do have some news breaking on Anthropic. Our Kate Rooney joining us with that. What have you learned? Hey, Scott. So the Wall Street Journal now reportedly says it's seen a copy of Anthropic's highly anticipated S1. These are the numbers that the company plans to put out ahead of its IPO from what we're hearing could happen in November. Remember, the headline here from the journal, it's around some of the revenue growth. They talk about massive computing bills here and then some of the risk factors, including customer concentration.

37:28First half revenue, according to the journal here, 16.3 billion. That's up from just about one billion a year earlier. So massive growth. It is not the run rate, which is what a lot of the companies have reported up until now, which has been sort of a snapshot in time extrapolated out the rest of the year. This is a first half revenue number from the company. Anthropic has not responded, I should say. We did reach out to them. They declined to comment on this. There is also the enormous cost of keeping all of this revenue going. $80 billion net loss for this company. So massive headline, but there's a little bit more behind the surface here.

38:04It does show that that was$72 billion of that was an accounting charge. So based on some of the financing around their strategic investments and compute. So the headline doesn't necessarily meant they lost that, but worth noting that the losses here are extremely steep, even though they are growing revenue. Compute bill also massive. There is a number here, basically CapEx, that they're commuting, excuse me, computing commitments are roughly$750 billion going forward in terms of future commitments. And then finally, Scott, there's a note here about customer concentration. So just two of Anthropics customers, the journal says here, accounted for about a fifth of first half revenue.

38:44So we do expect to see some of these when that S1 flips. We could get that in the next couple of weeks here, but a little bit of a glimpse of what we may see.

38:52Scott Wapner: And the other risk factor they mentioned, according to the journal, is what they say data center backlash could be a business problem. Yes, that's what's really hard to quantify. And that's the great unknown. And we also don't know how long that backlash is going to last. whether it is as pronounced as it feels like it is today and what happens post midterms. Those are really key questions. It's a great point, Scott. I think that is, as you said, it's really hard to quantify. We have the midterms coming up as well. And that's one of the timing calendar issues that you talk to bankers and investors in this company.

39:25We're hitting a time when AI is the number one political issue. I mean, we talked about the data center backlash. There's also the wealth creation of these IPOs. We saw Anthropic allocate about 5 % of its IPO. to the greater public and saying that it's going to donate those. So they're clearly aware of some of these. It's showing up in the risk factors. But I think you're right in that, does that mean that data centers can't be built? What percentage of data centers or existing projects pull back? So it's one of those in the long list of risk factors. We've also reported that this is going to be a long list of risk factors.

39:57It's really a way for the company to get legal cover. So you expect these things to be long. This company is unprecedented for a lot of different reasons in terms of AI safety and what's going to show up in these risk factors, including the debate over things. I mean, the extreme example of human extinction that they've talked about is starting to show up. But again, all of these things are really hard to quantify in terms of what it means for the business and what it means for potential investors as people start to underwrite this.

40:23Scott Wapner: All right. Kate, thank you. That's our Kate Rooney. Up next, we set you up for the earnings in overtime. The market zone's next.

40:34Scott Wapner: Now, the closing bell markets on Mike Santoli and requisite capitals, Bryn Talkington, are both here to break down these crucial moments of the trading day. Oliver Rennick live, CBO Global Markets in Chicago with some options action for us as well, ahead of SpaceX earnings, which are coming in overtime. So what's your big thought today? What would your market memo be topped with, Mike? Well, the market finds a way, maybe. You know, essentially, there was really no assertive comeback in the hard hit AI trade, the one that I really do think probably needs to get back to driving things if you're going to lengthen and enliven this bull market more.

41:07But when health care is up 2 percent a day, you can afford to kind of wait. And there is very strong breath today. So it is one of those days where you have the majority of stocks are up. A lot of the big ones aren't doing much. And, you know, we kind of sort of churn around these levels. If I look outside the MAG-7, the XMAG is sort of in this mini little uptrend. It's making higher lows. So the market wants an excuse, I think, to break free of this kind of noisy churn period. It's just not getting it. We got a Fed meeting next week. We still have to get the critical mass of earnings in, obviously, the election.

41:41So there's a lot of excuses why maybe we're holding back. But I'm open to the idea that we have seen a pretty good clean-out of leverage and speculative positioning. We'll see if we can make anything of that.

41:53Scott Wapner: We'll get reminded of the spend on the build out with SpaceX tonight, the hyperscaler itself. Michael, we'll see you in overtime. Look forward to that very much. That's Mike Santoli. To Oliver Rennick we go in Chicago. You're looking at SpaceX options, right? That's right, Scott. Some very marginal preference for call trading in SpaceX today, but nothing that suggests more confidence than normal in a stock that sees regular upside speculation among retail traders. What's most interesting to me is that traders, big and small, see SpaceX as being a much calmer trade than it was at the outset. Options imply just a 6 % move compared to a 13 % swing last time.

42:35And one of the biggest trades of the day was someone collecting almost$4 million, selling both the 145 strike put and the 155 strike call for next August expiry. That's a bet the stock goes nowhere for eight months. Strikes me as bold, given this is a company that's quite literally shooting for the moon or Mars. Of possible concern, though, is that something like 1.5 billion shares will be available to sell by insiders over the next 10 days. But keep in mind, the stock did just fine with those previous lockups unwindings, Scott.

43:08Scott Wapner: All right. It's going to be fun to watch just a little bit. Oliver, thank you very much. That's Oliver Rennick at the CBO in Chicago. We bring in Bryn Talkington, who joins us now. What's your big market thought for this day? Well, I think to pick up something that you and Oliver as well as Mike talked about, I mean, between we have about 22 percent shares of the float out right now. By December 8th, we'll have 40 percent of the float out. So I think there's just this natural downward gravity on the name because of that float. And so that's why I've been somewhat cautious on the stock. It's a new IPO.

43:37They're going to have good earnings, by the way. This should be a positive quarter. They should do 13 to 15 cents in earnings. I just think investors do need to understand of that downward gravitational pull as these shares come online and trade accordingly. I think that's where that options trade is a pretty good one because you can get massive call premium selling out of the money calls or they sold puts in their case.

44:00Scott Wapner: Are you growing more cautious on the AI trade or do you think this is overblown, whatever sort of fear is circulating the market? Well, I think that there doesn't get enough attention. I mean, we talk about it. The massive delevering in the hedge fund space is huge. And I think investors really need to understand that distinction. You could say the AI trade is, let's say, blowing off. I think we're just having this massive delevering on top of that midterm weakness. And so I think let it settle. And then November, December, I think will be quite positive. So I'm still looking at this time period to add to positions.

44:35And I just think we're kind of at peak bearishness. But I think more of this is more of delevering than actually something fundamentally changing in the AI narrative.

44:44Scott Wapner: Oh, interesting. So you think it's a bit of a sort of a false tell on where the overall story is going. We're making too much of the selling that we've seen in some stocks and also the volatility? I do. I mean, you're seeing the delevering. like we haven't seen sometimes somewhat since 2008 on the hedge fund side. These trades are so crowded. All of these hedge fund longs were in the same positions. They're delevering. And when you have like four or five times leverage of these multi-strats unwinding, it's really going to put weakness on top of all of what's happening in the COSPI. So I think let it settle in.

45:18But I wouldn't get too bearish because once the midterms happen, I think this AI trade is going to pick back up.

45:23Scott Wapner: I got less than 30 seconds. So what about the broadening, then, if that's your take on the AI trade? I hope so. We own RRSP. We've owned it for a few years. We like to have that as a hedge to have something in the portfolio outside of the S &P and the NASDAQ and tech companies that isn't AI. So I do like having that RRSP. It's done quite well this year, not as good as the NASDAQ. But I like having that in the portfolio just to have something different than what's in both the NASDAQ 100 and the S &P, which are basically the same. All right. Good stuff, Dan. I appreciate you. You can hear their clapping.

45:54Scott Wapner: which means the Dow's going to be winning. Dow's looking pretty good. He'll be up more than 500 at the end of the session here. So all in all, pretty decent day. And then we head towards those important earnings in overtime. It's Netflix and it's SpaceX and I did. Stay tuned in overtime for all that. I'll see you tomorrow.

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