Closing Bell 10/23/26

0:00There are three kinds of investors that listen to this show. Those protecting what they've got, those looking for solid returns, and those swinging big. Most tools pick a lane. VectorVest doesn't. Every stock gets three scores. Value, safety, timing. You decide what matters most. Stop overthinking what to buy and sell. Go to VectorVest.com slash closing bell. Get 30 days for just 99 cents. Vector Vest provides stock analysis tools, not personalized investment advice. Terms at VectorVest.com. At Jared Jewelers, we know it's about more than fine jewelry. It's the moment they open the box. That smile they can't hide.

0:39Knowing you chose exactly right. Because the right gift can bring a lifetime of meaning. A promise. A milestone. A memory in the making. Make every moment unforgettable. Find great gifts starting at$250. Jared, make the holiday last forever. Shop Jared Jewelers. Guys, thanks so much. Welcome to Closing Bell. I'm Scott Wobner, live from Post 9 here at the New York Stock Exchange. This Maker Breakout begins with this rough week on Wall Street and all that lies ahead with critical earnings looming. We'll ask our experts what is really at stake in this week ahead. In the meantime, the scorecard looks like that with 60 to go in the week.

1:19We're red across the board. This time, not really the AI names leading things lower. However, defensive areas like Staples and health care, they are weaker. The sectors that have surged as tech has weakened lately. We're watching Apple as well. It's foldable iPhone hitting the market today. We'll have a live report coming up from right here in New York City. It does take us to our talk of the tape, whether the bull run in stocks is facing too many obstacles to continue. Let's ask the professor, Jeremy Siegel. Wharton School, professor of finance, Wisdom Trees chief economist. It's good to have you back with us.

1:52I mean, how would you answer that? Do you think the bull market's in trouble? Well, let me point out a very interesting fact that I actually discovered when I looked at the averages. Yesterday, the Russell value, the Russell 1000 value index, which is a very important index, hit an all-time high. It's off a tiny bit today, but hit an all-time high. The S &P, which has its own way of looking at value, the S &P value index hit an all-time high. So, you know, it's hard to say the market's in trouble. Certainly, you know, the AI trade, which has been the winning trade, has wobbled. And what we see is something I mentioned two weeks ago, and that is that you've got to balance your portfolio.

2:50I'll tell you what. Why don't you grab a sip of water if you have one nearby? We'll let you catch your breath for a second. Because it is, I think, the question of the moment, whether the AI trade is as durable as people think, whether there's as much confidence in it as people once had, if the wobbling, as you put it, is justified, or if it's being overdone. How would you assess that? Well, I think the AI trade is, it's such a big trade and there's such variability to it. So, you know, any piece of news or sentiment that says, oh yeah, the AI spending is going to pay off. It's going to be greater than ever.

3:36That sends it up. And that actually sends the yields up. I mean, I'm thoroughly convinced the 10-year is really connected to the hip right now to the AI sentiment. Now, there are the threats to the AI trade, as we all know, the threats of a breakthrough on chips that will, you know, make the current chip configuration data centers obsolete much faster, the open models from China that are going to be, what, 10%, 5 % of the cost. And I think one that everyone is looking at is the spend on tokens paying off for the non-AI companies. You know, I'm talking about those value companies that are spending on tokens.

4:24Are they getting their money's worth or not? We have had precious little information on that. In fact, Goldman Sachs put out a report about two Two months ago, they measured the margins of different industries depending on the penetration of the AI trade. They found no correlation. Now, maybe it's too early and, you know, it hasn't been revealed. But that is also a risk. Is the tokens being spent? I think Torsten Slaught came out with a memo just a couple of days ago saying a lot of the token spending is actually not by public companies, but by other private, you know, future IPO type companies that are spending.

5:14So that all any information that moves sentiment one way or the other is going to send that sector up, send that sector down. The long rate's going to move up or down with it. And in the opposite direction, the value stock, because once the long rate moves down, hey, that makes financing better, capitalization better for those stocks. So you can you can really see the seesaw going here with the information that is flowing. Are you losing confidence yourself in the fundamentals of the A.I. trade or not? I don't have enough information because I I think we're all waiting for that information. Well, let me tell you what is a little troubling, but it's early on.

5:55We haven't seen really great increases in productivity in a macro sense. You know, everyone tells you how efficient the AI tray is making everyone. We really haven't seen it. We also haven't seen firms. I think there was one analyst that said two firms actually showed how many extra earnings per share they got from using AI. Only two out of the thousands that exist. How much really after the spend is going to the bottom line of those firms? And there is precious little information. And I think that that is what the market, one of the factors the market is really waiting for. because the firms say, listen, I'm spending a lot and I'm just not getting that return.

6:47Whoa. That's not going to be good for them. We never had the information, though. And we were still willing to bid up all of these names on the expectation that when we got the information, the information was going to confirm the reason why we bought the stocks in the first place. Right. Well, because we all see how amazing it is to us. and we all say, oh, it's got to be amazing and profit-making to the firms. But yet, as I said, there is just so precious little information on that yet. And clearly there's going to be some of the drug manufacturers, the biotech industry, some of the engineering firms, they're going to be spending for that frontier model, whatever is necessary on tokens.

7:35The breakthroughs could be quite astounding. But for 95 percent of the other companies, hey, you know, hey, the free using of ChatGPT is good enough for me. What do you what do you make of the weak price action on even names that have had really good earnings? Because earnings are going to be great. But there are a number of stocks, whether it was Micron at the end of September or Lamb Research. Today, it's Western Digital. You could perhaps even say Meta. stocks that have really good earnings and yet the price action has been bad. It's like exactly the opposite of what you want to see. Yeah, it is the opposite.

8:17But I think that means that the big picture is overwhelming these individual earnings. The sentiment flows on the big picture of whether the I spend is really going to pay off or not overwhelms the earnings of the individual. Now, the individual stocks will move. And, you know, some of them, you know, if they do really well, they won't move down as much if the sentiment goes against them. But I think that that sentiment is so fragile, so volatile, that that is now dominating these pushes, these flows towards the AI. And I think we're all waiting for, you know, more information. And by the way, you know, people talk about we're going to get a lot of earnings next week.

9:01Yes, we are. But don't forget, that's last quarter. And then this is. Yeah, we're we're we're paying on the demand for commute is, you know, infinite and all there. Yeah. But I think that that is passed. Right. The guidance is something that we know the numbers are going to be good, but we don't even care about that because we know they're going to be good. The guidance is what matters most. Yeah, but the guidance, you know, the guidance, these companies, the CEOs, have we ever had negative guidance from Jason Wang on NVIDIA? Have we ever? Forward guidance. I mean, they're all optimistic or they wouldn't be in the industry.

9:41I hear you. I mean, I don't think they're hiding anything because I think the demand for compute is there. But I mean, I'm just waiting for all that spend on tokens to be computed and the firm saying, hey, this is or is not worth it. It is going to the bottom line or it's not going to the bottom. Before I let you go, I mean, Goldman's trading desk has a note today which just says there's too many obstacles to get over, at least right now. You've got the Fed meeting next week. You've got an election obviously coming up. And by the I mean, earnings, obviously, you need to see what they do. Is the Fed?

10:18I mean, how do you see the Fed right now, given what's happened in the market, what's happened with rates? I don't need to tell you consumer confidence today was ugly. Yeah. Yeah. Well, actually, as I thought that the last September meeting was one of the most interesting, you know, going against Trump's recommendation for his move. I think I think next week's meeting is going to be most boring meetings ever of the Fed. But first of all, he's not going to move. Secondly, he doesn't tell us much. You know, I mean, he cut that last presser afterward short after a half an hour. And, you know, I think maybe this one, maybe 15 minutes, you know, the statement is going to be, you know, five sentences long, period.

11:02I mean, next December, we have the SEP. We have the, you know, the other FOMC members are going to chime in. But, you know, next week's next week's meeting is not one going to be not one of the big movers of the market. All right. Well, I mean, we'll see. You never know. Professor, thanks. Enjoy the weekend. We'll see you soon. That's Jeremy. Thank you very much. We did mention rates are a huge and have been a huge story this week. The 10 year yield hitting its lowest levels in months, plus new and dismal numbers, as we were just saying on consumer confidence. all of that just ahead of the meeting of the Fed that we were just talking about.

11:39Our senior economics reporter Steve Leisman joins us now with more. All right. So you heard the professor say, I think you heard him say, it's going to be one of the most boring meetings of all time because the news conference is going to be short. There is no summary of projections from the Fed. They're not going to do anything. What do you think is most important? Do you think that credit conditions have entered the fray, if you will, now for the Fed to really seriously think about what they're going to do with policy? Yeah, I mean, Scott, we know they're thinking about it. We've seen several times in the minutes.

12:19It was two meetings ago that they've been discussing AI risk out there more broadly for the economy. So that's on their mind. And, Scott, I've been to a lot of Fed meetings and some are more newsy than others. I never find one boring because I always think there's something interesting. I know you're going to fight that. I mean, come on. This time around, there's a couple. I wish I could find it boring. I would, you know, it would be easier. But I always find it interesting. But here's the thing. This time around, there's a lot of things for the Fed to think about. Whether or not maybe the economy is coming off the boil, that's something that might be in the bond trade these days.

13:00What's happening with inflation is very interesting. You're looking at WTI has been above$100. There's an interesting thinking that you have a bout of food inflation coming down the pike in several months. And Fed Chair Warsh has said he wants to look ahead. He doesn't want to look behind. And so you can plug in some numbers. You can come up with a pretty decent argument for food inflation coming down the pike. The other thing I think that's interesting here is the guidance, right? So we know that the Fed, we don't know, but we suspect the Fed is not going to hike this time. But you have that hike built in.

13:37An aspect of that we're thinking about is if you look at, say, compared to Monday, you're down a little bit on that December hike. It had been at 90, now it's at 78. And so there's a potential movement here. You know, Jeremy Siegel is the professor. We all listen to him and learn from him. But you could imagine a dovish signal from the chairman about that December hike having a pretty big impact on the two-year. If he goes dovish on that, then the trade in the two-year will be anything but boring. Yeah, well, especially given yesterday's exceptionally non-boring move that we saw in the 10-year yield, which just adds some flavor into what might happen next week.

14:19Steve, I got to go. I've got a lot on my plate this hour, but I appreciate you joining me. We'll see you, obviously, next week. And we'll talk many times leading into the meeting and day of, no doubt. Steve Leisman, oil, a big story surging today, both WTI and Brent above 100 bucks. Pippa Stevens joins us with more on that. What do we need to know here? Well, Scott, we did see Brent hit a high of 117.45 today as escalation fears rise, especially heading into the weekend as Iranian state media says it's fully prepared for asymmetric warfare after strengthening its capabilities, while President Trump said the U.S.

14:50is not negotiating with Iran. And that is now more than offsetting the normalization of crude flows out of the Middle East, with concerns growing that these numbers will just not be sustainable. Now, with this week's move, Brent is just about$10 shy of its post-Iran war high of$1.26 back in April, leading Barclays to say, quote, oil is the source of all evils, fueling inflation, social unrest and tighter credit conditions as investors increasingly have to contemplate a higher for longer oil backdrop for a war that was initially billed as only going to last for a few weeks. Now, energy is also contributing to inflation fears in Europe.

15:26Natural gas there topping 93 euros per megawatt hour today. That is a nearly four year high and 11 and a half times higher than U.S. prices here on Henry Hub. Scott. All right, Pippa. Thank you. Pippa Stevens, now to our panel. Abby Yoder is U.S. equity strategist at J.P. Morgan's private bank, Cameron Dawson, chief investment officer at New Edge Wealth. It's nice to have you both here. You've been among the most positive people that I can remember speaking with. Great. Right. Is that waning at all? I mean, I think it's changing at the margin in terms of where we think leadership is. Like, I think all of these questions around what's happening from the credit mark, like a credit mark perspective and therefore a funding perspective creates the question like, OK, do you really want to be in the end of infrastructure players right now, like the semiconductors of the world?

16:11Or do you want to maybe favor more of the hyperscalers? Obviously, that trade has already been somewhat reflected over the last couple of weeks and months, just given that, OK, let's say they do worst case scenario, have to pull back their spending, the hyperscalers. That means their free cash flow profile becomes more attractive. But I do think on your question around, like, is there potential for the Fed to think about what's happening in the market and take that into account in terms of what they do next? I think that's exactly what they've been saying, right? Like the market is doing a lot of the work for them, right?

16:39And that's exactly what we've seen. The market is taking funding out of the hands of the companies that they don't think should be involved in this build out as much as they had in the past, right? Because they have indebted profiles. They don't have the longevity. They don't have this clean balance sheet. And that's what this market is doing. And that kind of does take the pressure off the Fed in terms of what they're thinking. You're growing more cautious about where this bull market is or what? Well, I think that there has certainly been a reassessment of risk. We can certainly see that in leadership within this equity market.

17:07You've had huge surges in the deepest, most defensive parts of the market. And you can look at breadth measures and say, hey, they're looking better. Look at 20-day highs. Look at percentage of names above their 50-day moving average. They're doing better. But it comes with that big, huge caveat that it's because defensives are leading the charge. So that's something that we shouldn't get too encouraged about. The thing that helps us look through some of the volatility is you're still actually seeing earnings estimates move higher. GDP forecasts are still moving higher, but we do know those will be lagging indicators.

17:38The biggest question for us is, does the Fed want to oversee a tightening of financial conditions to the point that they're actually tight? We've seen them tighten a little bit, but something like 360 basis points on high yield spreads is not historically a sign of a crisis and a sign for them to blink. If they think that they need to tighten financial conditions further in order to be able to get inflation lower, it suggests buckle up for more equity volatility, buckle up for more credit volatility. Wow, I mean, buckle up for more questions about a potential big mistake by the Fed, hiking further into some of these questions that both of you are raising.

18:14You worry about that? Yeah, well, the market at the end of the day is a few percentage points from all-time highs. So if the Fed is blinking now and we're just three, four percentage points from highs, that certainly would be historically unprecedented. If you look at the two-year yield, as was mentioned earlier, one of the things that was interesting is that if you look in history, the only times that the two-year yield has certainly overshot to the upside of what the Fed was actually going to do is when something broke. The two times were 1994 and 2018. So if we're in a scenario where the two-year is now reversing, we find ourselves with the Fed on hold and potentially considering cuts, it suggests that something has certainly broken.

18:53So the price action, as I was talking about with the professor on earnings that have been really good, has been really bad. Yeah. Is that a danger sign of what could still come with these big earnings next week? I mean, you need earnings. Earnings are going to be good. We know that. But if price action is bad, what do we do with that? Well, I do think it's very hard to distill last this week's price action as it relates to earnings, because you did have oil surging that same day, and you had a headline in a major publication saying that there was, you know, the administration was planning on escalating in Iran right after the midterms, right?

19:28Yeah, sure. So it was this combination of, you know, macro factors and then, you know, earnings that were fine. They were actually okay. But I do think we are in an environment where it can't just be okay. When you're mid to late cycle, like, you got to be great. And if you're not great, then you're not going to get rewarded for it. But I do think that results were pretty good this week. I think there's just a sentiment overhang. And I think something that stands out as being like this is positioning related as it relates to this momentum on wine is, yes, you're having the defensives outperform.

19:56But you're also having things like consumer cyclicals outperform, right, like consumer stocks. So it's like that, to me, suggests that there's some positioning dynamic that's taking place here as well. It's interesting that you say mid to late cycle. Do you think we are? We're mid to late cycle? I mean, I think it's a great debate. Yeah, I do too. As you hear, no, we're in the really early innings. You know, it's still at the first few batters in the first or second inning. It sounds like you think something's different. Well, no, I would say the question, are we in mid to late cycle economically?

20:25And then where are we in the AI cycle are two different questions. You don't think they're tied at the hip? No, I don't. I think the AI cycle is, to your point, like in the fourth inning, whereas like third to fourth inning, whereas the economic cycle, it's hard to because this has been such a weird cycle from like a Fed perspective, from just the economic gyrations that we've had, the shocks that have happened each year. But it does feel like we're mid to late cycle, just given the price action and the fact that we've had this earnings recovery and now we're kind of plateauing and slowing in growth.

20:54I would think that suggests we're mid cycle. What do you think? Just because we are early in the adoption curve for AI and potentially early in the AI infrastructure build out does not mean that we are early in the price action for these companies. Meaning that semiconductors are going to peak before the fundamentals peak. That's how the equity market works. And so we could be in an environment where all of the fundamental signals are still saying there's still growth and there's still opportunity ahead. But the price action, look at the price action breaking down of these semiconductors, testing support at the 200-day likely enough to bounce.

21:30But they're trading at 17.5 times forward earnings. That's indicative that the market is starting to price in a higher probability that 2027 is peak earnings, not just peak earnings growth, but peak earnings. If the market's wrong, these are huge buys. But if the market is right, prepare for more volatility. Well, the market obviously is thinking more that it's right than wrong. That's why every stock to a stock, to a name, other than NVIDIA, pretty much every stock in the group is down 30 to 30 plus percent from their 52-week highs. The market's trying to get ahead of something it thinks is going to happen.

22:05And that happened in 2025, right? And then we ended up having big, huge upside to hyperscaler CapEx forecasts. That drove big upside to semiconductor earnings forecasts. So the question is, will we see a lot of upside to hyperscaler CapEx forecasts in this earnings season? We get that information next week. Yeah, we do. A big caveat to 2025 versus today is at that point in time, the funding was all from cash, right? Whereas now you don't have just free reign from a hyperscaler perspective to say, I'm going to spend to the moon because now it's being debt financed. and you got higher rates. So it's going to be, there's going to be a lid on that much more than there was in 2025.

22:42You guys enjoy the weekend. Both of you will see you back here soon. All right. Apple hitting a new all-time high earlier today, the new foldable iPhone hitting stores finally. Mackenzie Segalis live outside the Apple store in Midtown Manhattan with more. Hi there. Hey there, Scott. So this is the first major test of Apple's push under CEO John Ternis to bring several entirely new products to market in quick succession. The foldable today, a touchscreen MacBook widely expected next week, and then Home View is in stores next month. Now here at Fifth Avenue, the line for Apple's first foldable wrapped around the block twice.

23:17Walk-in stock was gone by 10 a.m., but the more consequential test is how quickly Apple can make and ship more devices. IDC tells me that it's holding its forecast at 7 million shipments this year, saying that that figure already accounts for supply chain challenges. This is sophisticated hardware from the hinge to the folding display and getting an assembly line up to speed while meeting Apple's level of quality control standards often takes time. But even with those constraints, IDC sees Apple overtaking Samsung in foldables next year, taking 40 percent of the market in a highly profitable category.

23:51One that I'm told by a supply chain source yields 55 percent gross margin on the 512 gig duo. So this weekend, what I'm going to be watching is how quickly stores sell through their walk in stock, whether those delivery windows move in or out, and what third parties sell through data actually shows us. Scott? Well, we'll see you this weekend. You'll let us know early next week. Mackenzie Segalis outside the store in Midtown. Thank you. We're just getting started. Coming up next, some new numbers on OpenAI's valuation, that company gearing up to go public. Kate Rooney following that money for us next.

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26:34All right, welcome back. New numbers in the AI IPO race. OpenAI, close to finalizing a$30 billion financing round, which could value the company at$1.25 trillion. Our Kate Rooney here with more. Tell us about this. Hey, Scott. So what I'm hearing is that OpenAI is getting close to wrapping up another funding round. This would be ahead of its IPO. This time it is a$1.25 trillion valuation. So that number doesn't include the new cash being raised. So the pre-money valuation, as it's known, this is according to two people close to that deal. The AI giant raising up to$30 billion, from what I'm hearing, could be lower.

27:12The FT reporting after our initial piece published yesterday that OpenAI wasn't quite able to raise at that initial$1.4 trillion valuation that it was first asking for and laid out to investors. I did ask around about that, Scott. I did hear OpenAI from sources had initially gone out with the higher price, but the lower price does speak to the amount of exposure. A lot of private investors already have to this name ahead of its IPO. And then there are some jitters around AI in the tech trade, so that could be impacting the price as well. One source close to this deal told investors from the United Arab Emirates and CO2 are the ones leading this round.

27:48Both are existing backers as well. And then there's also a compute side of this deal. So OpenAI is negotiating a commercial deal with the UAE to secure more computing capacity from that region. That is according to a person close to those talks. Sources describe this as an opportunistic bridge to an IPO. CFO Sarah Fryer has told investors that a public listing will likely come in 2027. OpenAI has already filed confidentially to go public, and rival Anthropic is expected to go first. It could make that IPO filing. And the number is public in the next couple of weeks, maybe days, Scott. We'll see how soon that comes, and then we're expecting that listing to come in November.

28:26Yeah, we're on the edge of our seats until we get it. Kate, thanks. Kate Rooney. For more on all of that, let's welcome in big technologies, Alex Kantowicz. He's also a CNBC contributor. It's good to have you back. Is it a bigger story that the number looks to be 1.25 $5 trillion or that they couldn't do it at$1.4 trillion? I mean, so let's throw it out there to begin with. This is a large valuation increase from where they were before. They were under a trillion. They're able to raise it$30 billion. You know, go back a couple of years ago, it would be anything everyone was talking about because it would be the biggest raise in VC history by multiples.

29:02But that being said, the fact that they didn't raise at their target does suggest that companies have basically invested all they can into OpenAI. You'll notice it's from the UAE. That's the leader. We didn't hear Microsoft. We didn't hear NVIDIA in this round. And so basically companies have made their play. They have invested in OpenAI. And there is a limit there. And the Financial Times story, by the way, that Kate referenced, it's really eye-opening. It talks about how investors have had indigestion with the amount of money they've put into the company and that before in previous rounds, They were clamoring for open AI stock, and this stock landed with a thud.

29:38That's pretty dramatic, I would say. How does it compare with what you're hearing or what people are saying about Anthropic? Yeah, I mean, Anthropic is going to be a little up in the air because it's going to come out, obviously, IPO-ing any week now into an uncertain environment where the market is not sure exactly how it feels about the AI trade right now. It doesn't know how it feels about investing. And it's going to depend a lot on the most recent numbers that Anthropic will be able to share. Of course, it had a surge in Claude Code and co-work revenue over the beginning of the year. But if we see any sign of a slowdown there and it can't point and say, well, you know, we're still increasing in other areas, it's going to be a problem for them.

30:17Is the biggest risk right now to the story at large any level of delay by Anthropic of coming public? Everybody now assumes you said it yourself. You know, it's a matter of weeks, not months. This story can't afford to have a hiccup, can it? Definitely not. What does a delay suggest? It suggests slowdown. It suggests that it believes that its stock isn't going to do as well when it initially comes out. It doesn't suggest any strength. And then, by the way, you're on the back foot. OpenAI has been doing good work on its enterprise products. So now, all of a sudden, you risk OpenAI coming out earlier, showing better growth.

30:59And it'll be a real problem for Anthropic. But I think the broader concern is if they delay, then even more questions about the AI trade will emerge and have emerged to this point. And you just don't want that if you're anthropic or an AI investor. You had Alphabet CEO Sundar Pichai on your big technology podcast, right? I did. What did you ask him about? I asked him about compute. Basically, Sundar has an incredible balancing act right now. He has a fast-growing cloud business. Google Cloud Platform grew 82 % just about in the past quarter. They have a chance of overtaking Azure to be number two.

31:32But there's also the side of it where he has to fund AI research with that compute. If he can get that balancing act right, he's in great shape. If he can't, Google risks tilting too far one way or too far the other and losing some competitiveness. Let's listen to a clip. I think we have that. Today, obviously, when you sit and look at anything, everyone is short, not just us, other companies. and everyone wishes you had 2x of what you had planned for. Our cloud business is, at any given moment in time, foregoing short-term revenues because we are making compute trade-offs to support frontier AI development.

32:15Seemed pretty confident about the environment that we're in. What was your takeaway? Well, he has the good fortune of being able to do an equity raise, and Google did just complete one, $84 billion earlier this year. So they're working to build the next level of capacity. He also knows that if everything goes right for Google, he has basically a play in every bit of this AI moment. He can have a unified agent with Gemini. He can have information retrieval, which a lot of people are using AI for, with search, the cloud business. I think there's a chance the cloud business can overtake Microsoft if it continues growing at this rate.

32:49And that would be a major story. And then, of course, there's driverless, autonomous driving with Waymo, and he has a massive investment where he's committed something like$30 billion to Anthropic. This is out now? Sorry, the interview. Yes, it's live on Big Technology Podcast. Yes. All right, good stuff. Got to get the plug in there. All right. Thank you. Thank you. It's Alex Kanchowitz coming up just hours away from the first pitch of the World Series. But will the matchup between the Tampa Bay Rays and Milwaukee Brewers be a home run or a strikeout for Major League Baseball? Alex Sherman, He's on deck.

33:22Next.

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35:28series tonight many questions swirling around the game of baseball these days and the potential for a work stoppage ahead of next season cnbc sports reporter alex sherman is here with more what should we know about? Yeah, Scott, it adds a level of intrigue to this series because these are two of the lower spending teams in the league, the Brewers and the Rays, playing in the World Series, whereas right after the World Series, the owners are going to push for a salary cap with their main argument being that there's a competitive balance problem in the league. Well, optically, at least having these two teams in the World Series, it looks like there That said, if you take a look at Calci markets, it still seems as though traders are in essence wagering that there will be a work stoppage.

36:1677 % are the implied odds that the Major League Baseball season next year will not be a full season with a forecast implying roughly 400 games or 16 % of a season will be missed. Just to turn our attention to the actual series, there is about a 60-40 split these days as of now that the Brewers will win the World Series over the Rays. Scott? I mean, I was kind of surprised when you said I heard you in the last hour talk about the fact that, you know, if you debate the issue of the haves versus the have-nots, It's who do people like to watch the fact that the Dodgers now they are one of those sort of global heavyweight brands over the last couple of years when they won back to back titles brought big ratings with them.

37:07That's right. If you take a look at the ratings, just even the last four World Series or so, the Dodgers have won the last two. Both of those World Series average more than 15 million viewers. viewers if you take a look at the two before that that were you're talking about like the let's say the texas rangers was the 2023 world series those average ratings were under 10 million so it's not even close in terms of ratings and i would imagine brewers raise is probably going to fall more in line with what we saw with the rangers or the astros the year before that than what we saw most recently with the dodgers this speaks to this argument which is by the way a basketball argument as well about what do fans really want?

37:48Do they want parity or do they want dynasties? And Adam Silver, the commissioner of the NBA, has been very vocal saying the data suggests they want parity. And clearly that's where Major League Baseball is leaning into now. But I just asked this question to Draymond Green last week, and he said, no, like the fans want dynasties. And And the evidence for him is these sort of NBA finals or World Series data, which are consistently a lot higher when the team involved is a dynasty. Well, you also have a sort of transformative star like Shohei Ohtani. I mean, they like to watch Shohei Ohtani play baseball.

38:26That's one of the reasons why the numbers were so huge, as they like to watch stuff and company. Well, those are linked, right, Scott? If you have a dynasty, you're more likely to generate one of these stars, even if they weren't a star to begin with. Yeah. All right. We got to bounce. Alex, thanks. Alex Sherman. Coming up next, the biggest movers as we head into the close. We're back after this.

38:49About 10 from the bell. Back to Brandon now for the stocks that he is watching. Tell us what's on your list. Hey there, Scott. Starting with American Express, shares slumping today after the company announced plans to cut 5 % of its global workforce and incur a$336 million restructuring charge. The company's CFO told CNBC that the restructuring will allow the company to, quote, take advantage of AI in the coming years. Amex also reporting third quarter revenue that came in slightly below street expectations. That was this morning. Stock, though, down almost 4 % there. Meantime, Dollar Tree sinking 4 % after Wells Fargo warned that higher diesel prices could squeeze profits through the second half of this year and into 2027, naming the discount retailer as the, quote, most exposed to the spikes in diesel and freight prices.

39:34Dollar General and Ali's bargain you can see also trading lower. And then you have shares of Decker's Outdoor falling after the company cut its full-year revenue outlook amid lower sales growth for its Hoka and Ugg brands. You can see their stock down about 5.5%, Scott. All right, Brandon, thank you very much for that. Brandon Gomez. Up next, 314's Warm Pies. He joins us right ahead and into these final moments of the week.

40:01All right, we're now at the Closing Bell Market Zone. Mike Santoli and 314's Warm Pies here to break down these crucial moments of the trading day. Oliver Rennick is dating by live from the CBO Global Markets in Chicago. Julia Boorstin tracking me jump in cell tower stocks today. And SEMA is following the latest trade in the semis. Certainly one of the biggest this week. I'm sure you're thinking about what the semis did this week, Mike, where they go next and what it means for the AI trade in general. For sure. Sure. I mean, testing the July lows at the index level for semis. It's really the AI hardware trade hasn't been able to get out of its own way, hasn't been able to capitalize on being sort of oversold or really on some of the early results that have come out that have been kind of reinforcing the long term demand story.

40:42That being said, you know, the rest of the market has managed to try and step in. I think people would embrace the idea that the broader majority of stocks are supporting the index if it were not just defensive names that were doing it. if it was not sort of this reaction to what rates are doing. You know, October 5th and 6th was the peak in 10-year Treasury yields at like 5.3%. And the S &P 500 since then has basically been on a steady decline. Now, the equal weight has done better. But I do think this market is just sort of not quite sure, having started from a position of being overexposed to the AI trade, exactly when they need to add to that trade, especially with the market pushing back against just how hungry that group is for capital.

41:26So I find it interesting that we're going to just kind of sit here right at those June high levels and, again, try to figure out if the big earnings next week break us out of the range. Give us a preview of what to expect in about five or so. We do have Gabelli's top growth fund manager focusing on tech to talk about exactly whether he's stepping in and finding things to buy here with all the carnage. All right. Good stuff. We'll see you in just a little bit. Mike Santoli to Chicago. We go. What are you looking at, Oliver? Hey, Scott, for all the volatility this week, SpaceX held steady, which I think surprises many.

42:02Despite a brief pop after earnings, it's still right around 145 where it's been for the better part of two months. Big money options traders are betting that continues by selling options in both directions. For context, SpaceX's 60-day correlation with the Nasdaq 100 is 0.6, and for the S &P, it's 0.4. So despite being big tech, it's trading fairly independently. SpaceX vol is now half what it was three months ago, while index vol for stocks has gone up. So it's options for SpaceX that arguably look very cheap. As a result, there is some speculation still going on around the edges. One contract stood out there, the 170 strike expiring November 20th.

42:45That's a$2 bet that needs SpaceX to rally 17 % this next month, Scott. Oliver, thank you. Oliver Rennick. Julia, how about these tower stocks? Tower stocks and mobile carriers have to point out that the mobile carriers are tumbling today on a report that SpaceX is in talks to access 80 ,000 cell sites for a new network. Take a look at shares of AT &T and T-Mobile. Both of those down 7.5%, and then you have Verizon shares down 1.5%. No comment from SpaceX on this report, but this move towards building its own wireless network is sending those mobile infrastructure companies surging. American Tower and Crown Castle's stocks both up dramatically today, 4.5 % and 9.5 % for Crown Castle.

43:33Now, all of this comes after AT &T CEO John Stanky downplayed the impact of SpaceX moving into their territory during AT &T's earnings call on Wednesday, saying it takes time and heavy investment to become a formidable competitor. Meanwhile, Citi noting that the news today raises the probability of SpaceX completing a full network build out, but saying it could take a decade for SpaceX to approach the market share of the current national carriers. Scott? All right, Julia, thanks so much. Seema, how about Western Dig? One of those stocks just not getting a lift. No, certainly not, Scott. Negative sentiment tied to AI, sort of overshadowing an upbeat earnings report.

44:13Barclays touting Western Digital's strong pricing power. Executives at Western Dig did point to CapEx to average around 4 % to 6 % of revenue in the next five years and used the word modest to describe its spending over the next two. Still, the market has become more critical on the AI spending debate. Meta earlier this week, and now we look to Oracle's AI World and Investor Day next week, where it's expected to detail some financing plans. That's going to be a key read for the sector, plus semiconductor earnings from the likes of Intel, Wolfspeed, and Sandix that have also been caught up in the recent sell-off but are still higher on the year, Scott.

44:46All right, good stuff, Seema. Thank you very much for that, Seema Modi. All right, Warren, is this thing intact or what? It's a matter of timeframes. I think if you wake you up at the end of the year on December 31st, we're going to be higher. Good chance that we're still going to hit 8 ,000 on the S &P 500. But the next 10 days, two weeks, likely to be choppy. We have all those events that Mike outlined. We have both labs trying to raise money and S1 dropping from Anthropic, Fed meeting, midterm election and earnings. All those things are big time. They paralyze institutional investors right now.

45:22So people are afraid to put money to work in this window. The other big dominant negative factor in the near term, this is the end of the year for mutual funds. So tax loss, selling, all these things converge to make this negative seasonal window right here. But in my opinion, all those things I listed out there, except for maybe the midterms, are going to have very positive, market positive reactions. And these are the types of that you get paid to take risk. And I think this is the time you should be putting money to work through this window of weakness. What you're painting is a picture not driven by a deterioration in fundamentals of the story that got us here in the first place.

46:00And that's critical. Yeah, I mean, to me, that's one of the most encouraging things. If you list off the negatives and the positives, a big positive that sticks out to me is that P.E. ratio for P.E. ratio is corrected 20 percent already. If you're calling for a lot more downside from here, you're calling for like a 25, 26 percent P.E. correction. We've only had four of those in modern history, 2002, 2008, 2020 during COVID, and 2022 when the Fed hiked 550 basis points. So I don't think we're in that neighborhood. I don't think the AI story is over. I think that it's easy to fade those fears. We see GPU rental rates continuing to push higher.

46:37Availability, a GPU availability is at new lows in our 314 index. I think Lab ARR, when we get to the end of the year combined for the two labs, is going to be, you know,$170 to$190, starting the year at$30 billion. That's huge growth. I think it's intact. You have to push against the FUD right here. You know, you get paid to step into volatility, basically. So, yeah, fundamentals are intact. And I think we get through this and we're going to be okay by the end of the year. Have a great weekend. Bells ringing. Warren Pies, thanks for joining us. Bring us out red in a volatile week, but it sets up for a big one next with all of those earnings on deck.

47:18Into overtime with Mel and Mike. At Jared Jewelers, we know it's about more than fine jewelry. It's the moment they open the box. That smile they can't hide. Knowing you chose exactly right. Because the right gift can bring a lifetime of meaning. A promise. A milestone. A memory in the making. Make every moment unforgettable. Find great gifts starting at$250. Jared, make the holiday last forever. Shop Jared Jewelers.