Closing Bell: 10/30/26

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0:56Scott Wapner: Welcome to Closing Bell. I'm Scott Wapner, live from Post 9 here at the New York Stock Exchange. This make or break out begins with today's tech turbulence, what it means for not only your money, but the AI trade at large. We'll ask our experts over this final stretch, show you the scorecard here. With 60 to go in regulation, we've been under significant pressure throughout the day. And really, it is the NASDAQ as the big pain point where the most damage has been done. We're at the lows of the session. We're pushing almost a 1 ,000-point decline. That's better than 3.5 % down. Amazon is certainly one of the big stories today.

1:33Scott Wapner: It's falling after its earnings report. Just couldn't meet very, very high expectations. The biggest and most stunning move today, probably Intel. Look at that. Down 31%. That's the worst day since the 70s. And that's after the company's guidance. So the fallout from that has been pretty dramatic and pretty widespread. Other chip names are falling sharply. NVIDIA down more than 5%. AMD almost 13%. Marvell more than 12 % as well. I could have shown you many more, but those are some of the keys. The semi ETFs, both of them falling below their 200-day moving averages for the first time in more than a year.

2:12Scott Wapner: That is significant as well, and it all plays into the story we are following at the top of our program. Is the AI trade on the verge of a major reset? It was already under pressure, as you know, today. And then a headline about Anthropik's coming IPO hit midday might have caused even more concern around the whole complex. Our Kate Rooney is following that money, joins us now with what it all means. Hi, Kate. Hi, Scott. So Anthropic, from what we're hearing, might not be able to unlock cheaper credit that often comes with going public. So the company is on track to list in November. We got that S1 on Monday.

2:47The FT now reporting that Blackstone is telling investors that Anthropic might receive a credit rating below investment grade as it goes public this year. Reportedly marks a shift from prior expectations. It does come as Anthropic is already committed to spending more than$800 billion in the AI buildout. and it's expected to tap debt markets as part of that. And as a lot of the big tech companies have, Microsoft yesterday with a$25 billion bond offering, a junk rating here could result in overall higher costs for this company and a smaller pool of potential lenders willing to finance this build out.

3:23It does also highlight Anthropik's dependence on big tech, even ahead of its IPO. Broadcom is one big example. It's guaranteeing an Anthropik loan for more than $142 billion, and it's putting its own credit behind that deal. So worth noting as well, the big three credit agencies have not formally rated Anthropic. No comment from the company yet, Scott. For now, Anthropic does have plenty of cash. At least what we saw from that filing on Monday showed it's got around$112 billion, plus another roughly$20 billion in short-term investments. It does come at a time, of course, big tech companies are under pressure.

3:57We had earnings this week. I know you're going to dive into what's going on with the Nasdaq, Scott, but that's the latest.

4:01Scott Wapner: We are. There's one more point, too. You highlight that it could become more difficult and more expensive to borrow money to fund those large numbers that you just read us. But there's a significant potential fallout for the stock market as well in that, you know, institutional investors, pension funds, insurance companies, et cetera, might not be able to buy non-investment grade equities, just not allowed to take positions there, which could obviously play into the demand question on the IPO. Yeah, it's part of that smaller pool that I mentioned, pension funds. There are certain large potential buyers that would be sort of exempt from buying credit, at least buying into Anthropics debt.

4:48It's also one big motivation, Scott, for why philanthropic, why open AI want to go public in the first place? I mean, there has been up until now plenty of money floating around in private markets. The big motivation for a lot of these companies is to go out and get investment grade credit, to be able to leverage that, use their own balance sheet. This would really be an issue. If the AI companies debuting in the next year or so are just not seen as investment grade, again, we don't know yet if that's the case across the board. But it's important to note that that is why these companies in large part, I mean, they obviously want to raise money from public markets and go public and have this big liquidity event.

5:25But debt is such a huge part of these companies' motivation to get out there. So it's especially important as we think about it that way.

5:33Scott Wapner: All right. We'll wait for a comment if we get one from any of the parties involved here and what this reporting suggests might happen. Kate, thank you very much. That's Kate Rooney. Just the mere talk of this has obviously had an impact on the market itself and almost every quadrant of the AI trade. Let's bring in Yorkville Ives partner, Dan Ives, and also NYU Stern School of Businesses, Oswath de Motor. It's good to have you both with us. I'll get you, Dan, first on this FT headline, which, again, a trade that was already under some pressure today. It looked like it took another leg lower when this came out.

6:05Scott Wapner: What's your concern? It's a perfect storm moment. It's the last thing investors want to see because Anthropic, foundationally, is so key to this AI revolution build out. And I think it's something where does it ultimately affect the IPO in terms of the appetite? I continue to think that sort of$1.5 trillion valuation will continue to be there. But in terms of the amount of money they're going to have to raise, just like we're seeing with Oracle and others, it's an arms race. And it definitely would put them a bit in the penalty box. But then it comes down to, as they prove out their model, can they get back to investment grade if that's such as the case?

6:41I think that's how investors are thinking about it.

6:42Scott Wapner: You use interesting words when you say, can they prove out their model? I mean, the market, even though it's a private company, is sort of giving it the benefit of the doubt already. By virtue of how it's invested and pushed higher a lot of the stocks in the food chain, it's so central and integral to the whole story because its customer base is the story. That's why there would be concern. And then it goes back to, I believe, you're talking about a company that, whether it's a trillion dollars in revenue when you get to$500 billion, I mean, this is one that's going to have significant growth opportunities over the coming years, given where they play on the enterprise.

7:17And you say the same thing for OpenAI. I think what's happening today is it's a tale of two cities because you have the CapEx buildouts. You have very strong numbers from the hyperscale in terms of cloud. But the disruption that's happening from memory to advertising to everything else, it's really festered up. And I think that's why you're seeing just the nervousness and the sell off we're seeing here.

7:37Scott Wapner: Professor, we brought you on today because we noticed your attempt to put a valuation on Anthropic after we got the S1. Now, of course, we have all these other developments. You have a market that's in a bit of turmoil. Investors are trying to figure out what's what. How are you thinking about all of that in the context of this massive to come IPO and just what we're feeling in the market right now? Now, IPOs are all about mood and momentum. And the worst thing that can happen for Anthropic is the mood keeps going the way it is right now, because that is going to mean that the initial reception at least is not going to be as positive as they hope to be.

8:19I mean, there are three groups of players in the AI game. They're the AI builders who've been spending trillions of dollars in CapEx. They're the AI suppliers, the chip companies, the broad comms of the world, which are the suppliers. They're like drug dealers, basically supplying the drug to the CapEx makers. And you've got a third group, which is the Anthropics and the OpenAI, which are leasing the space. And they're all connected at the head. If one falls, they drag the others down with them. And today, we're seeing that interconnection play out. I think that the rating story is perhaps more significant for the people on the lending side than it is on the equity side.

8:58because it's never made sense to me that young companies which go out and enter into these contractual commitments, as Anthropic is doing. I mean, you risk your entire story because you want to line up some compute commitments without putting in the equity. So I think that's what biding them is essentially the use of debt before they're ready to use debt.

9:19Scott Wapner: You know, Dan, is this the fly in the ointment, if you will, of just this whole story? The way that interest rates have moved higher. There's a much more significant crunch for cash and capital, as we've been talking about. They have$800 billion in plans to spend on compute over the next 20 years. You really can't have anything get in the way of that, can you? I mean, your story is all built on everything just working out really well. It's why you continue to remain positive on the IPO. It's why you continue to remain positive on all of the hyperscalers. I mean, what's your sort of temperament now for anything that upsets your story.

9:55Yeah, and I think, look, in terms of even what we've seen from earnings season, you've seen the capex and the ultimate build out from the hyperscalers and the cloud, and that's the huge adoption for enterprise. When you talk about flying the ointment, I mean, we started to see with CoreWeave just in terms of the concerns there. You've seen it in Oracle. You see it here in Anthropic. Look, my view fundamentally is you're going to have three to four trillion spent in the next three to four years. We'll go through bumps in the road? Yeah. Could cost a capital increase? Is there a scarcity of capital?

10:25Yes. Could there be game musical chairs and some are left without a chair? Yeah. But to me, it's focusing on the winners, whether it's on the chip side, hyperscale or software. And I just think the market right now get the nervousness. And we've heard from investors the last 48 hours, underestimating the scale and scope of what this is going to look like over the next 12 to 18 months.

10:45Scott Wapner: I want to mention another story that's developing here at the New York Stock Exchange today. And We'll get back to this direct conversation in a moment, and we'll even have more on what I'm about to tell you coming up as we try and chase down what exactly is going on. But there was expected to be an IPO here today called Opay. It's a Singapore-based digital banking and fintech platform backed by SoftBank. What's most interesting is that it hasn't opened, and it's 10 after 3 on the East Coast. Markets only open for another 40 minutes, as you know. Hard to know whether it's directly related to today's market conditions, which are obviously a bit upsetting.

11:23Scott Wapner: It was priced at 19. That was already at the lower end of the range. Right now, the match looks at 1625 to 1675, obviously substantially below where it was priced. Citi is the lead underwriter on all of this. We've asked Leslie Picker to try and chase some down, chase some things down for us. And she joins us now. What do we know, if anything, at this hour, Leslie, about this IPO, which is yet to have its first trade here? Hey, Scott, yeah, you're right. It is highly unusual to surpass 3 p.m. Eastern time and not see an IPO open for trading. You can see that 625 to 675 indicates that the range for an indicated open has narrowed to a point where hopefully it could open.

12:08But you're right. I've been calling around to sources close to this one. As you mentioned, it has a slew of lead underwriters here, Citi, Deutsche Bank, Standard Bank, CICC. This is interesting. It's going to be an ADR. It is a Nigerian fintech company listed here in the U.S. It priced at the low end of the range, as you mentioned. My understanding is that it got a lot of cornerstone demand. In fact, 80 percent of the offering was this cornerstone demand, mostly domestic African investment funds that expressed interest and therefore comprised about 80 percent of the book here. So it's not a very liquid story on that front because it is more bespoke in that it is more of kind of a domestic Nigerian interest, I am told.

12:58In terms of kind of the mechanisms for something like this, what the underwriters are looking for right now, what the stabilization agent is looking for is essentially enough liquidity to open the stock, regardless of what price. They want to make sure there is enough of a kind of market for this stock in order to open it. And based on what we're seeing right now, you know, it doesn't appear that that's the case. So it is highly unusual, to your point, Scott, that it wouldn't be open by 3 p.m. It would be highly, highly, highly, highly unusual for it not to open in the next 45 minutes or so. My understanding is that it did break syndicate, which means the offering was essentially sent out, that the shares were distributed to those who expressed interest in them.

13:44And so for it not to open on a full day of trading would be very unusual.

13:49Scott Wapner: I mean, what you really underscored, too, in the way that you've explained the mechanics behind how an IPO operates, there are just not enough buyers, is what you're saying, for them to open a stock. Buyers and sellers, really, because you can open a stock very, you know, much below the offering price, obviously a price below the range or at the low end of the range at$19 per share. So you could price it well below the range if you have sellers at that price point, but you need a market of buyers and sellers. And so if you have 80 percent cornerstone, that only leaves maybe 20 percent that would be willing to transact or open to transacting.

14:29And perhaps that could be one of the reasons why they don't have enough liquidity to really make a market, even though it's 313 in the afternoon.

14:37Scott Wapner: Yeah. You know, as all this was sort of going down, I was thinking to myself, I don't remember seeing anything like this as long as I've been doing the programs down here at the New York Stock Exchange. And I talked to one of the gentlemen who's, you know, around the floor, said in the 40 years that he's been here, he's never seen anything like this. Is the next step, if it doesn't open, that it's, I mean, there's a decision to be made at some point, obviously, by Citi or whomever else, that it's either postponed or withdrawn completely? I think the decision would be, it's a great question. It is already effective with the SEC, and they have sold these shares.

15:23So I think what they would have to do is just open it with really, really, really thin trading. I don't know what that looks like or what happens if that were to be the case and how that's the worst case scenario. I can't imagine they would pull it since those shares have already been distributed to the people who have requested them. And they've received them as of this morning, I'm told. So to pull it, I don't even know how that would even work. But again, as you mentioned, Scott, we're kind of in uncharted waters here. Neither of us have seen anything like this happen before. But, you know, hopefully they are able to get it open in the next 45 minutes, even if it is thin trading.

16:04Scott Wapner: Yeah, we'll see. I mean, there's a what I can see as a reasonably small group gathered around the post post six here at the New York Stock Exchange. And it's great to have you, Leslie. You're so much better versed on all this IPO stuff than me. So it's great to get your insight. Not true. How all of this is going down. So thank you very much. That's Leslie Pick. If you get anything else, raise your hand and we'll put you on. obviously. So that's Leslie Picker. Professor, I'm going to come back to you on this and how, you know, what you think this market is churning through in its, you know, proverbial head, what it's trying to figure out relative to this AI trade.

16:44Now, I think what the market is sending a message to is slow down. I think that might actually be the best thing to happen to the AI business is for this process to slow down. The rush towards CapEx, the rush towards getting AI agents out there, the rush to grow, I think is dangerous for AI as a business and dangerous for the rest of us. But the only thing market companies listen to is the market. And maybe the message from the market today to all of the hype, everybody involved in the process, the hyperscalers, the suppliers, the LLMs, is slow the process down. This is going far too fast, given the size of the disruption.

17:23Scott Wapner: Speaking of size, I mean, we didn't even get to the original headline of why we wanted you to come on. And I want you to speak to it of, you know, as we wait for this IPO, whether it'll be, you know, two trillion, one and a half. Like we're trying to get our arms around these very, very large numbers. You've crunched the numbers as you do. That's why they call you the dean of valuation. What'd you come up with? I think that even if you go with the royal flush, this is not even a base case, a royal flush, a trillion dollar revenues in 10 years, which would be huge. It would be the largest company in terms of revenues.

17:57Give it margins somewhere in the top end of the software business and assume that compute power gets cheaper and more accessible. I get to about 1.4 to 1.5 trillion. And that's before you discount for the governance issues and all the rest of the issue. So if they're priced at$1.5 trillion, you're pricing a company that you assume can pull that off. And I think that is really something to keep in mind as the heating up for the IPO comes out and people get caught up in the pricing process that takes it to whatever price it might be. This is a really, really big business, but it's got lots of obstacles to get through to get to be big.

18:39And you've got to ask, you know, with the governance structure that they have, can they pull that up?

18:44Scott Wapner: Do you think that they can? I think they have a plausible path. But as I said, my biggest worry is somewhere along the way, they will have to change goals. They'll have to adapt because that's the way these businesses evolve. And I'll be watching to see how they adapt because, I mean, this is a company where the founders essentially control how the companies run. I mean, it's going to be a dictatorship, for lack of a better word. And I want to see whether they're adaptable enough to adjust to changing circumstances or whether they get caught up in their egos and refuse to change. Dan, I'll give you the last comment here.

19:19Scott Wapner: I mean, NVIDIA down 5%. Is this in part related to the FT story about Anthropic? Is it in part thinking about the big picture of spending plans from the hyperscalers, which obviously were front and center this week? What's your biggest takeaway going to be from the week that was based on the large companies that reported? Yeah, look, it's been a nightmare week for tech investors or bulls like ourselves, because the reality is, is that the spending is there. The monetization is starting. But patience, as we've always talked about, is wearing thin. And when you look what's happened on the advertising side with Alphabet, on the memory side with Intel, on the software side with Surface now and Fortinet, it's disruption.

20:02I still believe this is a near-term disruptive period, but we are going through some significant turbulence this week.

20:10Scott Wapner: We sure are. NASDAQ right now down 3.5%, more than 900 points. Professor, it's so good to have you with us. Dan Ives, you as well, right here as we follow this market right up to the finish. Lowest level now in three months for the NASDAQ. For more on where all this is heading, let's bring in Professor Jeremy Siegel of the Wharton School, also Wisdom Tree Chief Economist. We always speak on Fridays, Professor, not normally under this degree of selling, especially related to one specific group. What's your takeaway today? Well, first, I'd like to comment on Anthropic. Why doesn't it just float$30 billion more of stock?

20:48That's only two more percent of its market value. Then it wouldn't have to tap the bond market. Then it wouldn't have to be non-investment grade. And then everyone could buy it. You know, the truth of the matter is, you know, the bondholders only get the downside of a company. If it doesn't come through, they take the hit. Equity holders can take downside, but they get that upside promise. So I think this is a time maybe, hey, you know, don't borrow from the bond market if it's skittish and worried about the downside. You know, just float a little bit more of equity. But, yeah, I mean, yeah, this has been a brutal week.

21:25I think it's really important to put this in perspective. I mean, the NASDAQ is down 9 % from its all-time high, which is less than a month ago. That is still, that's called pullback territory. That's the mildest description of a decline. The S &P is down 2 % on the broader market. The value indexes, Russell value, S &P value are at all-time highs. Equal weighted, I think, S &P was up 1 % today, within 1 % of its all-time. Now, I know that most of the people watching CNBC are really interested in the tech stocks, the AI stocks. I mean, that's where the stories are. But, hey, there's a lot of other stocks that are not doing badly at all, in fact, doing very well.

22:14And I think it's really important to keep that perspective.

22:17Scott Wapner: I mean, respectfully, you've got 60 percent of the constituency of the S &P 500 down 20 percent or more from their highs. So, yes, we're within three plus percent of an all time high. But that doesn't tell the full story, because if you lift the hood up, the engine looks messy and it's being overshadowed by the shiniest objects in the automobile. I mean, how do we deal with that? Well, that's true. But, you know, we always, a lot of people are saying, oh, my goodness, I hate so much of the market is indexed today. And they don't have to look under the hood. They say, listen, I believe in the market.

23:01I'm buying the market. You know, I don't care about the churn under the market. Yeah, this market could go down more. Is this the rotation? You know, we talked about this last week and the week before that the uncertainty about AI, both for upside and downside, has never been greater. And that really tells investors how important it is to be diversified into the non-AI stocks and not forget about them. How important it is also bonds, which, you know, now they've done extremely well over that period. So, I mean, again, you have to think of the big picture, not just one sector. Now, technology of the S &P, I think, just entered into correction territory today, down 10%, 11%, the mildest that you could get.

23:53By the way, the technology sector of the S &P is up 17 % from today's level is up 17 % for the year. And that's greater than the S &P itself, which is still up, what, 11%, 12%, which is greater than the historical average. What I'm saying is, yeah, we could get all upset. And if you're over levered, you are really upset. But when I take a look at the entire market and what's going on in the entire economy, you know, I don't feel that this is a sort of something that's going to be a big decline.

24:30Scott Wapner: But if you look at, you know, as people talk about this rotation that's taken place, it almost feels like a running for cover, so to speak. Over the last month, if you look at double digit gains for, you know, utilities and staples and health care and energy for obvious reasons, that that's not exactly the most optimistic sign of a broadening for the right reasons, if you will. Is that fair? Well, you know, that's what hedges are for. I mean, when people buy insurance policies for bad events, and a lot of those are insurance policies for slowdowns in AI, which, by the way, as we talked about, brings down interest rates.

25:15And by the way, if oil wasn't, wow, at, you know, 104 right now, I think those other stocks would be up a lot more. You know, we're going to see what happens. You know, the midterms coming up in three days, and what Trump has promised after that, That's also going to be really a market movers, I think. So, you know, that is exactly what hedge and balance and insurance is for. Yeah.

25:37Scott Wapner: I just want to note something related to the story we were talking about earlier, this OPEI IPO not getting that first trade that it hasn't opened. Now the signs are gone, too. Our SEMA Modi doing some reporting around that. So they've already changed the signage at post six around that. and two traders that she spoke to off the record aren't so sure it's going to open again. That's a small sample of reporting, but nonetheless significant in the context of what we've been following. And Professor, whether it's Leslie Picker, certainly myself and those that I've spoken with down here on the floor, they can't remember a moment like that where you have an IPO that has priced.

26:22Scott Wapner: Granted, it was looking to open below the already at the low end of the range price. And that doesn't open at all. You've had IPOs pulled at the 11th hour, so to speak, throughout the years. But nothing, you know, when you're at the starting gate like we're witnessing here. And I'm wondering and without certainly knowing whether it's an idiosyncratic issue with this name itself. It's not pure AI play. It's a digital finance company. What you think that signifies, if anything, about what we're all trying to figure out in this market? Well, first of all, this is an ADR, an American depository of an African firm where liquidity is limited.

27:06And I don't blame them. You don't want to go public in the last half hour of one of the worst days of the year for anything tech or digitally related. You know, hold it off. If we get a bounce back tomorrow, I'm sure they'll put it back on the board that way. I think ADR and the limited supply and demand is a big factor here. I don't think you would see that with a U.S. opening stock.

27:39Scott Wapner: And do you still have the greatest amount of optimism around an anthropic IPO, which quite literally the entire ecosystem seems to be reliant on in some respects, at least from a customer standpoint? Maybe not every single company, but it certainly feels like it in this moment in time. Well, it's going to be the, you know, the SpaceX of the fall. And, I mean, that's unprecedented in and of itself that we have$2 trillion plus companies. And if OpenAI goes, you know, early next year, it's unprecedented to have that. And certainly, you know, you want a little piece in that. to say that not overweight by any means, it's like you should not have overweighted what we saw in SpaceX.

28:33So, you know, we'll see. I mean, you know, your previous professor, you know, said he thought, hey, the valuation could really be this level. But given what's going on right now, you know, is it possible that Anthropoc might say, hey, November's not the right time to go? No, I think that they're probably committed to go. But, you know, the difference between that and the firm that we just saw withdrew their IPO is, you know, black and white and worlds apart. So I would, you know, I wouldn't say that. But obviously, you know, IPOs are linked to the enthusiasm for the industry that is being floated.

29:22And less enthusiasm will bring down that price on opening on the IPO.

29:28Scott Wapner: It's such a significant day in the market. We needed two professors to help us figure it all out. Professor Siegel, thank you as always. I so much appreciate you being on our program. today. By the way, Jillian Austin, who runs a show down here at New York Stock Exchange for us, she has asked the New York Stock Exchange for a comment about this IPO, which never did open. And we haven't heard back regarding that. About a dozen or so people, maybe a few extras, kind of hanging around the post here, trying to figure out what the next move might be. Excuse me. If we learn more, we'll obviously bring that to you.

30:06Scott Wapner: We'll move to another big story. There's so many on this day. The crypto world stunned today following the biggest ever hack. Our Mackenzie Cigalos has been following that from the outset. What do we know here? So, Scott, investigators are pointing to North Korean hackers as being responsible for this heist of Binance with$6.3 billion stolen and almost all of it moved out in 20 minutes on Thursday. Now, it is the worst hack of a crypto trading platform on record. More than 4x the amount stolen from the Bybit exchange last year. The FBI is now involved in the Secret Service, says that it's working with Circle and other private sector partners to freeze, trace, and then recover those stolen funds.

30:44Binance withdrawals for the moment are still paused while the exchange rebuilds the system. Co-CEO Richard Tang saying that users should regain access before Sunday, but Binance will not switch withdrawals back on until the new system passes rigorous testing. And one broader concern here is whether more capable AI models make attacks like this one easier to execute as these new models push the boundaries of mathematics and essentially put encrypted data at risk. Though there's no evidence, at least at this point, that AI played a role in the Binance hack. But the fallout is certainly hitting crypto markets amid this broader tech sell-off.

31:20You've got Bitcoin again breaking below$77 ,000 today with Ether. And Binance's own native token, that BNB coin, also in the red. Crypto stocks getting hit even harder. The QQQ is down 4%, but Coinbase is off nearly 13%, circled 10%, with Robinhood lower and the Bitcoin treasury trade under pressure as well, including Strategy, which is the largest corporate holder of Bitcoin. Now,$3 billion of Binance's stolen assets have already been frozen, which makes it a lot easier to retrieve and return to users. But the next potential trigger for the market comes when Binance reopens withdrawals and we see whether there's a run on the bank.

31:58Scott?

31:59Scott Wapner: Okay. All right. Good stuff, Mac. Thank you. That's Mackenzie Sigalis coming up. All right. I know you probably need something else other than red all over your screen. We've got it. The big showdown tomorrow in Germany's big soccer league, the Bundesliga. We speak with legendary player and coach Jürgen Klinsmann. When we come back. Ever notice how every new AI tool asks you to explain your business to it all over again? Google Workspace with Gemini skips that. You get Google's AI built right into the premium versions of Gmail, Docs, Sheets, and more. No new tools. No extra logins. Just one subscription that gives you personalized AI right inside your actual workflow.

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33:45Scott Wapner: All right, welcome back. The biggest rivalry in Germany's Bundesliga is tomorrow. Bayern Munich taking on Borussia Dortmund. It's on CNBC at 1.30 Eastern. Our next guest played in a few of those, also went on to coach the U.S. men's national team for a bit. He is footballing legend Juergen Klinsmann, and he joins us now. It's so great to see you. I think we all need a relief from looking at this ugly market that we're dealing with today. So welcome. Thanks for having me. Yeah, it's good to have you. Look, you played. We have the Classicos and Darbys and things like that. And this is really special, though.

34:22Scott Wapner: What are your best memories about playing in this game? Well, best memories, you know, playing a game like this of that magnitude by Munich Dortmund, which is shown of, I think, over 200 countries in the world tomorrow. Definitely the emotional side, you know, both clubs have billions of followers on fan base. It's always sold out. It's always very dramatic. It's always very physical and it's a bit like Dodgers, you know, Dodgers against the Yankees, you know, or the Chicago Bulls when they played, you know, in the 90s, the Lakers. And it's just massive, massive for all our soccer fans. And that's why we're always looking forward to that classical that they call it in Germany.

35:06And at the moment, both teams are doing well. They're both teams leading the table, and they are hungry, hungry for success this year. And the usual favorite is mostly Bayern Munich. But Dortmund is always there to give them a really, really tough time. And thanks for showing some old footage there.

35:26Scott Wapner: Oh, well, you are a footballing legend. I wasn't lying when I said what I did at the top. And you've won so many personal accolades on so many of the lists of the best players of all time, obviously. Harry Kane, speaking of Bayern, he's obviously the biggest star, and he just won the Ballon d 'Or. Was that the right call, do you think? Others saying, well, what about Lamin-Yamal, Mbappe's always in the conversation. What do you think? No, it's absolutely the right choice, you know, because he's not only there over the last year, he has been extremely successful in anything he does. You know, he's a top school scorer in Germany.

36:00He's won with Bayern Munich very fine in the Champions League, played for England a major role in the World Cup. They've done extremely well. and he does that since more than 10 years, basically year in and year out. So he definitely deserves this Ballon d 'Or, which is European Football of the Year Award. And yeah, we're going to give him a huge congratulations and there's enough time still for Mpapé and for Yamin-Yamal. They are very, very young to win some of those ones in the future time.

36:30Scott Wapner: Yeah, no doubt about that. You mentioned the World Cup. You won one, obviously. and you were the U.S. men's national team coach. What would your assessment be right now of the state of U.S. soccer as you watch it now from afar and you see the run that we had in the World Cup? But then I think maybe you could also suggest a bit of a reality check. Well, I think obviously the game grew over the last 20, 30, 40 years tremendously on both sides, the women's and the men's side. And it's fantastic to see how far soccer took it in this country. It still has a way to go to be highly competitive, obviously, with the European leagues, like the Bundesliga, the Premier League, the Spanish League and the Italian League.

37:15But it's done tremendously well over the last years. And now you have the players playing for big teams like Pulisic for AC Milan, McKinney for Juventus Turin, for big clubs, which is fantastic. So it's come a long way, but it still has a long way to go, too, because the reality check came in the World Cup or comes every four years in the World Cup where you kind of need to figure out a way to get out of the round of 16 at least into a quarterfinal or a semifinal one day. And that's still not happening.

37:47Scott Wapner: Therefore, there's still some work ahead of everyone. We'll look forward to speaking with you again soon. Enjoy the game this weekend, Juergen. Be well. You too, Scott. Thanks for having me. All right, Juergen Klinsmann. By the way, catch the game tomorrow, 1.30 Eastern, right here on CNBC. Don't miss it. We're all over the sell-off. Get back to that in just a moment, in two minutes, when we come back. NASDAQ right now down about three and a quarter percent. Ever notice how every new AI tool asks you to explain your business to it all over again? Google Workspace with Gemini skips that. You get Google's AI built right into the premium versions of Gmail, Docs, Sheets, and more.

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39:43Scott Wapner: We're selling off to end of the week. You know all about that. just more worries about the AI trade technology in general. Mike Santoli is with us now. He's getting ready, obviously, to figure out how you're going to frame all this in some 15 minutes in overtime. But what's your big thought here? What do you think is most leading to what we're seeing? I mean, I think essentially, Scott, for months we've been asking at what cost does all this growth come at cost in terms of free cash flow, debt service, foregone profits, opportunity cost for what else you can do with the money, buybacks, all of that stuff.

40:16And now they're yelling that because it seems as if there's a little bit of greater questions around how the core businesses are performing and the durability of the boom. We all know that. What I'm most interested in, three hours ago I said, you know, we're not really seeing washout conditions. There's always something to buy when they're selling tech. We got a little closer to washout as the day went on. So I think I almost like to see that. We're testing these levels that go back to the spring. We have six months of no progress in most of the major growth sectors of this market. And I would say that's a start.

40:49So sometimes you have to see it get super oversold and hated. I don't think we're there, but I am interested to see how we respond. We also have a risk off bid in treasuries that's also trading with AI sentiment. So all of it's fitting together a little bit here. I don't know, though, when we're going to get an answer on the durability of the boom or when valuations are going to basically say, look, it's cheap enough to deal with the uncertainty there. Sentiment and valuation have become less of an impediment to progress in the market. That much we can say over the last month or so.

41:22Scott Wapner: I've got to let you run in a moment to get ready for your own program. But what does this FT Anthropic story mean to you? I think it honestly is just rubbing on a raw nerve out there about the creditworthiness of this boom. To me, the rating doesn't matter that much because SpaceX is rated investment grade and the bonds don't trade that way. So I think it's much more about yet another thing put on that side of the scale that says this industry may not be able to shoulder all of the expense and the risk. Yeah, I bet just a continuation of this conversation that we keep having. Michael, thank you.

41:55Scott Wapner: We'll see you in just a bit, about 15 or so till overtime. We'll lean on your insights after the close for that. Let's bring in Solis Alternative Asset Management's Chief Strategist, Dan Greenhouse. Your thoughts? Yeah, it's not a good day. We're obviously a bit off the lows here, called 75, 80 basis points off the lows for tech. But it's not a good day. And I think Mike touched on a lot of the important points and had a good couple of conversations all hour. I think the one observation that hasn't been made that sort of I will make it as hopeful is the queues are coming up on the 200-day moving average.

42:31And not that that automatically means a bounce, but it quite often is important. And so a little bit more downside until you get to those levels. And we'll probably start talking about whether that that is a basing area for a rally in T-E-R-N, assuming no other terrible headlines.

42:46Scott Wapner: Does it feel to you as though the midterms will be some degree of clearing event in any part of this conversation? I think it will in the sense that it's OK. We've known for a while and I've been one of the many that are arguing that elections and the coming two years are going to be worse for data centers and AI than the preceding, let's say, two years. But to the extent that you're able to get some clarity on that outcome, I think we all sort of know how it's going to go. You can at least have some clarity and move past it. But I think the problem really is that you could own these names to a large degree going into the election as long as they were doing as well as they've been doing.

43:30What happened, obviously, this quarter is you saw some, as everybody knows, some slowdown in the core businesses, which makes them even less desirable to hold going into what are probably going to be a series of negative headlines in coming quarters from the macro Washington sense.

43:46Scott Wapner: What do you make of the sort of notable moves we've been seeing in bond yields lately as well? Yeah, I think they're sort of, they are a derivative play of what's going on in equities in the sense that you're having a risk on, risk off trade going on here. The other thing that I should mention that hasn't been mentioned is it is there a number of officials on the tape reminding people that we're probably gonna get another hike number i don't think that's a foregone defense of conclusion but at this point is probably at least fifty fifty if not a bit higher but the treasury market is a corollary to what's going on

44:21Scott Wapner: are we lost and uh... we appreciate him joining us as we get to uh... ready for the close you do have yields really across the curve lower, even as Dan was suggesting at that event here in Manhattan today with many former Fed officials, some more hawkish than others, obviously, and even some current Fed officials, too. Maybe not voting members, but nonetheless, some hawkish commentary and yet yields are down. This kind of shows you where we're at in this market, the psychology today. Up next, more on what's happening in these markets as we head to the finish. We're now in the closing bell market zone.

44:55Scott Wapner: JP Morgan, Stephanie Aliaga, and CNBC contributor Capital Wealth's Kevin Simpson here to break down these final moments of the trading day. Oliver Rennick at the SIBO Global Markets in Chicago. Annika Kim-Constantino looking at the big moves in the healthcare sector, which has hit a record high today, more defensive in the kind of day that we have. What do you see from Chicago, Oliver, in the options market? Slow and painful burn today, Scott. this morning, it was a little odd that things were so quiet in vol, but as stocks melted down, VIX steadily grinded higher to the highest level since April.

45:29Traders have been piling into options on VIX all day. Volume is twice the normal on the volatility index. And it's a pretty even split between who thinks vol has more to go next week and who wants to fade VIX into the weekend, which is usually the move given you lose trading days out of the weekend. But most importantly, we're just not seeing the buy the dip in tech trades that used to get that knee jerk reaction from retail options traders. In memory ETF DRAM, whose peak dates back to June, there's more puts trading than calls today. And in SMH, there were more than two and a half puts traded for every call.

46:06In queues, of course, early call buyers that were showing some signs of resilience got run over as we head into the close with two and a half billion dollars of put premium in the queues eclipsing the$1.5 billion tied to calls. Now, if you search through vol, there is one bright spot, and that's that NASDAQ puts the payoff in a big decline, like 8 % to 12 % are actually cheaper than they were this time two Fridays ago, Scott.

46:32Scott Wapner: Okay, Oliver, thank you very much for that. That's Oliver Rennick in Chicago. Annick, I'll send it to you. I don't know if people know healthcare is the second best sector year to date after energy, slightly better than tech that gives you a look at where the action's really been. You're exactly right, Scott. The healthcare sector climbed to a 52-week high today on the back of upbeat earnings reports from pharma giants and a rotation out of tech. That includes Lilly, Merck, and Gilead, all of which beat on the top and bottom lines yesterday. But we also have some earnings movers today, including AstraZeneca, which topped Wall Street's estimates for the third quarter.

47:09But investors are pleased with the company's new plans to save about$1.5 billion annually, which will help the UK drugmaker free up resources to invest in its drug pipeline. Looking ahead to next week, we have several health care reports. That includes Pfizer and Amgen on Tuesday and Novo on Wednesday, where investors will be focused on the progress of the Vigovic pill launched now that a rival obesity pill from Lilly is on the market, Scott.

47:32Scott Wapner: Okay. Annika, thank you. Annika, Kim Constantino, an update on that IPO that we Edmund talking about OPEI, the ADR, expected to open here at the New York Stock Exchange. We told you it never did. It took the sign away. It took the bell away. And with that, any hope away, really, that this was going to actually have a first trade today. We did get a statement now from the New York Stock Exchange in which they say, quote, NYSE regulation has halted trading in OPEI Limited. News pending. The company expected to file a 6K with more information and direct us to direct any inquiries that we have directly to them.

48:07Scott Wapner: So it doesn't look like that's happening at all today. We'll bring in our panel, as we said, Stephanie Aliaga, JPM, Kevin Simpson. It's good to have you both. What are your thoughts as you, like the rest of us, try to make sense of this market? Try to make sense of it. Look, big picture, we're shifting from what has been a very cash-financed investment boom to one that is much more externally financed, which means that investor sentiment can be a huge factor when it comes to how much gets built and how these companies are rewarded. Investor sentiment has been skittish for a variety of reasons.

48:38There's been all sorts of clouds of worry. But I think where we are going forward is a much better position. The interest rates have come down. We are getting a lot more visibility around AI demand and AI monetization, which the magnitudes of the moves in stocks that we saw this week following some of these earnings reports, I don't think is really justified given a lot of the good news in some of these AI native sectors.

49:02Scott Wapner: OK, so you're positive. You're staying positive on this market. I am. And I think where valuations are today, I mean, given the fundamentals and the earnings power beneath this market, it's an attractive time. Wow. OK, Kevin Simpson, do you agree? And if you do, what are you doing about it? I think I'm going to sit on the sidelines a little bit more with the dry powder we have. And I like how Stephanie started this segment talking about interest rates. You and Dan were hitting on it before the break. If you think back a few weeks ago, Scott, you and I were teasing the idea that maybe the 10-year was topping out at around 5.3 percent.

49:35We've seen it come down a lot, and nothing's happened in terms of the equity markets. And what that tells me is the cost of capital matters. You combine that with this rumor about Anthropic and their potential rating, and I think that's adding fuel to the fire in today's sell-off. And I'm not sure that it's over just yet.

49:53Scott Wapner: I mean, if it's not, how much more dislocated do you think certain parts of the market could be. As I mentioned earlier with Professor Siegel, yes, we're only, what, three and a half or so percent away from an all-time high on the S &P. However, under the surface, 60 plus percent of the constituents within it are down at least 20 percent, Kevin. Yeah, well, I think we have to wait until Tuesday. I think that's going to be the catalyst where maybe there's a sell the news event. You think about this data center spend and what that might look like in terms of the next government, the next Congress, I think things are going to be a little bit more difficult.

50:32You say, well, they're down 20 percent. And that sounds like a lot. But if we're coming off of a base where maybe they were up 100, being down 20 percent doesn't give us the all clear just yet. Now, I'm no bear. I'm not going to cash. I'm not calling this the, you know, no mass market. But I think a little bit more patience and a little bit more news next week, they give us a little bit clearer picture, Scott.

50:54Scott Wapner: Yeah. I mean, what do you make of the below the surface damage? It doesn't concern you at all? I mean, I think there's going to be this common theme of dispersion going forward. We used to talk about the MAG7. We don't talk about that anymore. I think there's a lot of opportunities for investors to rotate into other parts of the market to build greater resiliency in portfolios because you don't want to just have acute concentration to a few tech names. Like what? Well, we were talking about healthcare earlier. I mean, healthcare is supposed to see really solid, you know, upper teens earnings growth next year.

51:23And those valuations have not been super demanding. So I think that looks attractive. I think, look, the AI monetizers, semis, and the hyperscalers, I think are the clearest winners in terms of where we are in this phase right now.

51:35Scott Wapner: Man, look at that right there, 7 % on the SMAs. We talked earlier, Kevin, that both of the semiconductor indexes were like at their lowest level in more than a year. I mean, it's been just bludgeoning of a lot of these names. Yeah, but you're not seeing the dip buying, Scott, by the retail investors. So that tells me it's not over yet. But I like the broadening story. I like the health care story. We had AbbVie this morning report. We had Chevron report. It's not all bad news heading into Halloween. But I wouldn't be chasing this market just yet. I'd rather Scott pay a little bit more with something that I'm more comfortable with than trying to get in here before the selling's over.

52:16Yeah.

52:17Scott Wapner: All right, guys. Have a good weekend. I appreciate both of you being with us as we get ready to hear those bells ring. And by now, you know, it's going to be a decidedly red day. We cycle through any number of tech stocks. It's Amazon, obviously, on the back of its earnings. Intel was down 30 percent. Worst day since the 70s, taking a lot of the other chip names and sympathy down there as well. We did have that FT report on Antropoc midday, maybe that weighed on sentiment as well. As we said, the IPO that never opened here at the New York Stock Exchange today, never had a first trade on the floor.

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