Closing Bell 10/6/26

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0:58Scott Wapner: All right, guys. Thanks so much. Welcome to Closing Bell. I'm Scott Wapner, live from Post 9 here at the New York Stock Exchange. This make or break hour begins with new momentum for the bulls. The S &P hitting its first record high since mid-August. We will discuss what all that means with our experts over the final stretch. Let me show you the scorecard here with 60 to go in regulation. We have been green all day for the majors. Rates, oil, both down. That's obviously helping the picture today. Well, crude's up a little bit, but it's not rising fast. Market breadth, it's good as well. Most sectors are green.

1:29Scott Wapner: Strength today, broad. Tech, utilities, discretionary, industrials, you get the picture. Marvell's a big mover as well. We'll tell you exactly what's going on there in just a little bit. That's good for 6.5%, highs of the day. Cyber, strong once again throughout basically the whole complex. Microsoft extending its recent run along with NVIDIA, which takes us to our talk of the tape, where this record-setting market is heading and whether another broadening move is about to happen because we've gotten so narrow. Let's ask our panel. CNBC contributor Trivariance Adam Parker, SoFi's Liz Thomas, Partners Group, Anastasia Amorosa.

2:04Scott Wapner: It's great to have everybody with us. I'll come to you first. If I told you that in the last month the Fed was going to hike, the 10-year was going to rise by 50 basis points, we'd have no earnings to fall back on, and oil would stay high and that the first handful of days into October, the S &P would have hit a new high? Would you have said what? Well, you know. Ain't going to happen. Yeah, you know that, you know, like in my top five least favorite subjects is the Fed. Okay. So take them on. And rates. But they did hike, though. Right. But like, you know, like the bogey in the last 15 years that I've been thinking about this stuff, it's like I remember somebody saying, oh, there's no way equities can work if we get to like 4%.

2:49on the 10-year. It's like impossible they'll work. And four and a half is like the sound barrier. And that just goes up if the economy's strong and earnings are strong. Ultimately, that kind of trumps everything. Well, that's your answer to that.

3:03Scott Wapner: Because the economy has remained strong and earnings are expected to be strong. So none of those other things matter. We had seasonality was against us. The speed of the move in rates was against us. People talk about the Fed being a friend or foe. The Fed was against us. And yet here we are. And the good news is I write twice a week and we never once wrote we were concerned about any of that stuff. So I could prove that I've been worried about it. But at the end of the day, I think what mattered is I don't have sufficient history to analyze. Right. Like we don't have a lot of history where the Fed's rising will have 10 years backing up.

3:37We don't have a ton of history in the last eight years where oil has been correlated to rates. So you can go guess at what historical regimes is relevant, or you can say, what's different about today? 25 % earnings growth next year, probably another 20 the year after. Earnings are probably too low. They've been too low for two or three years since AI has come out. The MAG-7 or Grade 8, whatever you want to call them, their numbers are coming up. So the call we had at the beginning of the year is probably still the right call, which is multiples contract, earnings growth through it, and the market ends up higher.

4:02I think that's still right, and we'll see if we get some more real growth scare on the 10-year or not. We'll see. But I don't think it's at these levels. I think it's higher. So we shouldn't be surprised by

4:12Scott Wapner: by where we are, given all that stuff? I would change the statement to be if you had said all of those things were going to happen, and then what the market was going to do was rotate back into big cap tech, the MAG-7 would come back in, other sectors might kind of lag back a little bit. Which they did. Therefore, mathematically, the index is higher. I would say that probably makes sense because that's what we've done every single time in this cycle. And I think actually what's happening right now is we might finally be seeing classic late cycle behavior. So you've got investors going back to large cap stocks.

4:43We've got growth that's strong, a Fed that's hiking, and some of their defense is saying the economy can withstand it. We're strong enough. Inflation is rising again. Growth is OK. The labor market is solid. This is late cycle feelings. And I think we have to really be aware that that could be the stage we're in.

5:00Scott Wapner: But we're not late cycle in the principal driver of the economy, which is the AI build out. We're not even close to late cycle and that if you look at all the numbers and the earnings. So how could you think we're late cycle if all of that, the most incredible economic driver that we've seen in decades, is like, what if that's mid-cycle? How can you be late cycle in the economy? There's always a driver that takes it through that late cycle and actually concentrates the stocks. If you look at what happens in late cycle, it's usually about 10 to 15 stocks that drive the index higher until it stops.

5:34Late cycle can last a while. I think we all made calls for, oh, we might be heading towards late cycle a few years ago, and it didn't happen. Maybe this is just the beginning of it. And I do agree, we still have some room to run. I don't think we've hit the peak of inflated expectations, according to the hype cycle in AI. I think there's still more to go. I don't think we've hit the peak in the market. I don't think we've hit the peak in earnings. But I think we're closer to it than we were a year ago. And we should be wary of the fact that the Fed is hiking.

6:04Scott Wapner: That's fair. And I mean, that's a little more nuanced than saying, you know, this is like sort of classic late cycle. Not classic approaching recession late cycle, but classic in the sense that what happens in late cycle? The economy is usually strong, maybe verging on overheating. And if AI is the thing that's pushing us into that place, what does the Fed usually do in that scenario? They start hiking rates, and they try to do that to bring things back into balance. Sometimes they accomplish that. Sometimes they don't. Usually what happens is in a hiking cycle, if that's what's about to occur, it ends in tears.

6:39Now, I don't know that that's exactly what's going to happen. In fact, I think the Fed's going to have to tap the brakes on this hiking cycle sooner rather than later.

6:46Scott Wapner: What do you think? I'd love to talk about the Fed, first of all. I do think the market may be getting over their skis in terms of how much they are pricing in in terms of the rate hiking cycle. Well, we've seen that, right? The two years backed off of where it was. Right, right. But we're still looking for three more rate hikes from here on out. And I do think that maybe some of that will start to shift. Because, first of all, case in point, we looked at that core PC number, which is significantly lower than where the market expectations were. If you look at the three-month annualized trend of the core PC, it's actually starting to soften.

7:16And I do think whether it's energy, whether it's portfolio effect, whether it's tariff prices, some of that will start to wane. And so if the Fed can be patient here for another month or two, maybe they don't actually have as big of a case to hike rate. So with that, you know, kind of back to, you know, to the optimism point, I'm actually quite optimistic on this market, especially heading into Q4. And that was not the setup, I would tell you, going into the summer because, you know, in the summer, valuations were a lot higher and maybe momentum was not as certain. But today, we have valuations that have actually reset quite meaningfully.

7:49That's right.

7:49Scott Wapner: We're 19 times. We're 19 times. We're like 23. It's true for the S &P. It's true for the S &P. It's true for the semiconductors. It's true for even the XMAX 7. So I like the valuations. And then there's the earnings momentum. And then I do kind of want to come back to oil in the bond market. I think just maybe we may have seen the bulk of the move higher in rates. And, you know, we should talk about the appetite investors have for bonds at 5.25%. on a 10-year treasury, you have a lot of end-user demand that is coming into the bond market. So that in and of itself may cap the move higher in bond yields supporting markets.

8:24Scott Wapner: Well, I mean, there are some who suggest that the movement in yields could cap the move in stocks because now for the first time in a long time, you actually have competition. It's why people like Rick Reeder, who's still constructive on the market, thinks you're not maybe in the greatest investing environment he's ever seen, but a little bit lower because there's competition for stocks, and there hasn't been. Yeah, I mean, one of the things Liz was thinking about is, like, the challenge that we all have is when we were formulating our investment heuristics when we were slightly younger, things were more synchronized, cyclically.

8:58You know, it felt like housing was lined up with autos and lined up with industrials, and now I feel like everything's cycling at a slightly different time. The Fed's a little out of kilter. The AI thing is this totally separate cycle. So it's hard to, like, know some things are late cycle and some things are. You know, it's hard to perfectly align. I just, I feel like the thing that institutional investors are asking me in my meetings are, give me any ideas you have that are consumer or industrial that aren't AI and aren't rate sensitive. I'm loaded to the gills with the other stuff. So is there anything?

9:31So there's search, is it health care services, which I like. Is there anything I can find that's going to get me some different alpha stream? I tend to agree with your view. I think we're three and a half years into an AI cycle because I think day one was NVIDIA's May 2023 upward earnings revision. Three and a half years into an eight to ten year cycle. It's way too early to get bearish on that. And on a social sense of what I really agree with, a lot of people two weeks ago were worried about the midterms, regulation coming to my meetings, data center stuff was noisy, the correlation between oil and oil rates.

10:02I think we could get a huge relief rally after the midterm just because it's behind us and we end up the year higher. I'm not great at three-month market calls, but I wouldn't be surprised if, you know, we kind of had a big move higher when that's said and done.

10:14Scott Wapner: Yeah, you can't be, you can't think we're, you know, late cycle if you think that Micron's going to double. Yeah, and just to be clear, the double was from 780, so we're on the way. We're at 1 ,050. Yeah, yeah, so we're about, you know, we're 40 % of the way there. Was it at 780? We said 1 ,500, but yeah, was it about a double? But yeah, we got a way to go. I think we're going way higher. I think Micron's going higher. And I think it's one of the reasons the market looks cheaper is because you get a$1.2 trillion market cap company that trades it five times. That itself is almost a whole turn on the equity market because they're growing so fast.

10:46Well, that's kind of like NVIDIA.

10:48Scott Wapner: That's why its multiple is the cheapest it's been in however many years. It's like almost$6 trillion in market cap. I struggle. Look, if somebody asks me in a vacuum, like, do you like it when stocks beat the quarter and don't go up? The answer is no. But I think Micron's a really interesting case where I would take a step back and say, look, I've been following semiconductors for 25 years. It might be the greatest quarter ever produced by a manufacturing company in the history of humankind. I mean, they did$50 billion in revenue. They make stuff in a factory. They did 85 % gross margin. Name me one other company that's ever done that at that scale.

11:15So it trades at five times peak, 11 times normalized. Is that the right number for a company that's going to do 30 % of its market cap in cash in the next 70 quarters? I don't think so. So I think that stock's going to go meaningfully higher. I do. Whether it doubles or 60%, 70%, you can give me a hard time later. But I think it's fine. Yeah. I think, you know, to Adam's point, to actually kind of maybe slightly disagree, but I think what's unique about maybe a slightly unique environment that we have today is actually I think several things are working together in unison. You know, it's not just pitting all of our hopes on the U.S.

11:45consumer, but it's actually also looking at the corporations. They're seeing narrow record margins and that earning strength that we talked about, but also CapEx. You know, if you look at CapEx numbers, they're up 15 % year over year. And this is something like we haven't seen in years. And it's not just AI. I would say it's the whole reindustrialization and onshore momentum that's showing up on all sorts of supply chains. So, Adam, to agree with you, I will say. What was the slight part? I didn't even hear the disagreement before. Well, you were saying that different parts of the economy are behaving differently at different times.

12:13I mean, like autos are bad or housing are bad. But today, more things, from my perspective, are good in unison than not. And to agree with you, I would say the industrial sector, you know, is certainly really interesting because of that.

12:25Scott Wapner: So the question we asked, Liz, at the very top of the program, this is the second day in a row where you've had basically every sector up. Could we get into another broadening period? Or as long as rates are up where they are, you're still going to have that move back to the mega caps? I think we're thirsty for a broadening period. So you're going to hear people talk about that if there is light at the end of a tunnel in certain sectors. I think you'll hear about it in financials. I think you'll hear about it in industrials, because the way that they're trading looks like they're ready to bounce, both of them.

13:00And I think the beginning of earnings season is a good catalyst for that. But as long as rates remain where they are, as long as the Fed, and in reality, the Fed is in a hiking posture right now. They may change their tune. I think they will change their tune. But right now, they're in a hiking posture. And I'm not going to disagree with them, because the market's going to follow that. So the rate-sensitive sectors, I think, are going to stay under pressure until that changes. I think it'll change pretty quickly if inflation continues to come in cooler, if oil prices come down, and maybe even after the midterm elections and we get some of this angst behind us and we get a nice relief rally in stocks.

13:34I absolutely agree with that side of it. But I do think that it keeps a lid on the market really ripping in all fashions until rates come back down. It depends what you mean by broadening.

13:46Scott Wapner: Well, I mean, kind of like let's see something other than tech go up. because over the last month, really, it's kind of been tech and everything else is red. Tech earnings are growing 60 % plus this year. They're supposed to grow 40 % plus next year. You're asking for a lot of relative multiple contraction for tech not to outperform in the uptake. So I think it's less likely we get broadening, more likely we get further concentrated before the cycle. Really? I mean, you can still have tech outperforming and have other areas of the market start performing better again, no? Q3 was a little more bifurcated.

14:18I mean, NVIDIA was a good stock, but Broadcom and Micron weren't because of the July rollover. I think if you look at the numbers, I think there's risk that the grade 8 or the Mag 7 plus Broadcom, whatever, could outperform in an uptake. I think there's more upside to their numbers than there is the market for the other 492. The industrials, there's some good stuff there, but most of the ones that are good have been correlated to the AI trade. They trade like an AI semi. So when you run a diversified book, you could fool yourself saying, I own power or I own industrial, but really you own AI semis.

14:46It's all the same trade. And so I think you've just got to decide how much of that you want to own. And you see that on the market. I agree. I like some of the industrials. But I like the ones that are exposed to the fact that we need more power. So I don't know. I don't think you disagree with anything. But I'm fine that you teed it up. I agree with you. We'll leave it there. I agree with you. It's like disagreeing. We've got to bounce. All right, cool.

15:04Scott Wapner: Thank you, everybody, for being here. It's nice to have all of you on the set today. Let's get to some of today's other stories, starting with Marvell. Shares are surging. Seema Modi is tracking that for us and joins us with more. Hey, Scott. So Marvell coming out hot with an incredibly bullish revenue target for 2031, projecting sales of$70 to$90 billion for 2031, well above the$46 billion estimate, giving investors yet another reason to get bullish on this name, the stock, which has already had a huge run-up this year, up 240%. Its guide sort of tells us three things. One, the AI build-out is creating a new cohort of winners beyond the GPU titans like NVIDIA and AMD.

15:41Second, there is a need, a growing need for networking and connectivity, and that's going to rise as hyperscalers build their own custom chips and need Marvell's technology to ensure their chips can communicate with one another. And third, as Marvell's CEO, Matt Murphy, said on the Investor Day today, hyperscalers are continuing to rethink their networking needs as they build these chips. Worth noting, Marvell's key competitor in all of this is Broadcom, which is also up on the day by around 4%. We'll hear more from Marvell's CEO tomorrow morning on Squawk on the Street, Scott.

16:12Scott Wapner: All right, good stuff. Seaman, thanks so much. We look forward to that. Alphabet signing a 20-year nuclear deal with Constellation Energy. Mackenzie Sigalos is following that story and joins us with more. Hi. Hey, Scott. So Constellation Energy shares jumping 12 percent on the deal. Google is contracting for 3.6 gigawatts of power from Constellation Energy across the PGAM grid. That's the country's largest power market covering 13 states and D.C. And it is the latest sign of just how aggressively big tech is locking up electricity for this AI data center build out increasingly through these kinds of long term deals directly with the power producers.

16:49And a key piece to this agreement is squeezing more electricity out of nuclear plants that Constellation already operates. So upgrades to 11 existing reactors in Illinois, Pennsylvania and New Jersey are expected to create nearly a gigawatt of additional capacity, roughly enough to power 750 ,000 homes with the first of that newly generated additional capacity expected to come online in 2028. Now, Constellation says that it is putting up$4.3 billion in capital to fund those reactor upgrades and add new generating capacity. And of course, this comes in a week where Constellation's already signed with Amazon to provide nuclear power.

17:27For both Google and Amazon, locking in contracts like these is becoming increasingly important to the AI build. But as data centers put more strain on the grid, PJM has proposed requiring new data centers to bring their own electricity supply or risk being curtailed during peak demand. And the companies say this deal is a direct response to that. Scott?

17:47Scott Wapner: All right, Mac, thank you. Mackenzie Segalis, another bullish call on SpaceX. Got one yesterday, got one today. Brandon Gomez following with the new details. Hi. Hey there, Scott. Yes, SpaceX shares climbing to their highest level since June, returning Elon Musk to trillionaire status. Now, the move comes following an increased price target, as you said, by Goldman Sachs. The bank lifting their expectations$10 from$2.20 to$2.30, reiterating a buy rating, saying it believes that AI segment estimates still look conservative relative to street estimates over the next six to 18 months, absent a correction across the broader AI operating landscape.

18:21Now, remember, as you said, Morgan Stanley's Adam Jonas reiterated his overweight rating and$300 price target yesterday, saying the stock is cheap and getting cheaper. It also comes after the company successfully launched a crewed NASA mission and separately sent Google's AI chips into orbit. Now, shares have been incredibly volatile this year. It took less than three sessions to go from the 171 to its intraday high of over 225 after its June debut. You can see in the chart there, shares started trending lower soon after, bottoming in early August, but have since climbed back around 58 percent since then, Scott.

18:54Scott Wapner: OK, Brandon, thank you. That's Brandon Gomez. We're just getting started. Coming up next, a new model shaking up the AI arms race and threatening the industry's biggest players. We've got the details, plus Alders-Anne Crawford weighs in next.

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21:08Scott Wapner: Welcome back. A new model in the AI arms race threatening to shake up the competitive landscape. Our Kate Rooney joins us now with more. Tell us more about this. All right, Scott. So this is a startup. It's backed by NVIDIA. It's called Reflection, And it's right now being seen as the American answer to the popular low-cost Chinese options of AI that have surged in popularity. So unlike what we have in the U.S. from OpenAI or Anthropoc, they're closed models. Other companies, so if you think of a bank or a startup, for example, can take these models and then customize them with their own data.

21:40That route can be cheaper while keeping some of the more sensitive information in-house. Alex Karp of Palantir is among those that have argued for this. Reflection's CEO was on Squawk Box earlier this morning. He compared it to owning versus renting. I kind of think about it from an AI rental market to an AI ownership market. Closed models is kind of like renting your AI, like renting an apartment. And as enterprises use AI more, they want to own it as much as possible because it becomes such a big line item. And so we see a big shift happening to open source and meeting this moment to produce a great American Western open model that enterprises can use for their most critical workloads.

22:21And Scott, there is also a geopolitical factor here. Chinese companies have dominated this open source space while banks and government agencies right now do have a limited amount of Western alternatives. If they do want to do that and run AI themselves, go in that ownership direction. There is a similar trend coming out of Europe as well. AI startup Mistral this morning out with an even larger open-weight model. It does claim that it beats Reflection's version. It's called LeChonk. These models are still expected to lag the very best closed systems here in the U.S. from OpenAI and Anthropic. But the bet here is that a company can take a good enough model as another option in this AI race.

23:00It could also add some pressure to OpenAI and Anthropic in terms of margins as these companies look to go public, Scott.

23:07Scott Wapner: Yeah, it's a great point and a great look for us. Kate, thanks so much. That's Kate Rooney. Joined now by Aldridge, Anka Crawford. She runs several tech-focused funds, holds a position as well in Anthropic in the private markets. Good to have you back. Have we ceded too much power to Anthropic and OpenAI in thinking about their positions in this race, knowing what we are learning from something like this? I think that there's going to be a kind of a panoply of different kinds of models. I think OpenAI and Anthropic may own the frontier, and there will be several other models that will dominate kind of 80 % of the workloads.

23:49So I don't think it's seeding anything necessarily. We need someone to be at the frontier and be very, very good and highly intelligent. But we also need the rest in order to do the bulk of the work.

24:03Scott Wapner: I'm trying to think back to, you know, if this is ostensibly our answer to DeepSeek in some ways. Right. When that was introduced, the A.I. market cratered. Right. Because there was worry about cheaper, faster, et cetera, et cetera, et cetera. Do we need to have a similar conversation, though, about what this could mean to some of the other big players? And I wonder if open and Anthropic were on the public markets today, would we see a negative reaction in the market? Because you can't really get a great look by looking at the shares today in the private market. Right. How do you assess that? So I think when DeepSeek happened, the reason we saw cratering in the market, and even with Kimmy, I think people just don't understand how this will land necessarily.

24:53Are the margins for Anthropic and open AI supposed to be 75%, 80 %? Is that an appropriate margin? And we'll just have to see, Scott. I don't know exactly where they land. But I do know that, you know, you have to allow for value in the ecosystem so that they can invest. And if you don't allow them to invest at the frontier, then the frontier won't be built.

25:19Scott Wapner: I wonder, though, so I'm just back from Dallas, right, where we had this CNBC AI forum. And one of the interviews that I did there was with an executive from AT &T. What do they do? They're using open AI. They're using Anthropic. And they're like, wow, it's really expensive for the kind of needs that we have to keep spending as much as we're spending on tokens. So we're going to go to a more open source model. And it has been a game changer for companies like that. This speaks to that. And I wonder if there's more risk of other big Fortune 500 companies who spend a lot of money on their, you know, AI work that are going to make similar moves.

26:04Scott Wapner: And they look at this as something like, you know what, it's going to force our hand. Right. And that's why I think you have to look at the kind of ladder of different models that you have. So incredibly intelligent work will be done on the frontier. When you're developing an app, when you're developing or looking for a new drug, you will do that at the frontier. As you take that to production, you will most likely move it to the workhorse in the economy, which will be mostly commodity models, whether it's Nemetron or Reflection or some version of Chemie or DeepSeq or Le Chonk from France. So, you know, I think that the production workloads will remain in open source model because it is efficient on a cost per performance basis.

26:54However, a lot of the frontier innovation will most likely be done at the frontier. So, again, I think you have to think of this as two separate markets.

27:04Scott Wapner: Okay. Let's look at this market, what's happening now. The fact that the mega caps are obviously back, is this now firmly in place for the rest of the year? Are you thinking what was a broadening trade for a little bit now got more narrow, and that's just the way it's going to be as long as rates remain elevated and as long as the Fed's threatening to hike again, rates are probably going to remain elevated? Yeah, so I think what's happening in part is oil is coming down. we've seen the majority of rates, you know, the rate move, the majority of it is now behind us. So we're at 5.3. Is it going to go to 5.6?

27:44Well, that's the majority of the pain that is already behind us. And so we can start stabilizing on rates, which actually helps credit spreads. And it helps like financing. It gives some stability to the market in general. I think that's a little bit of what you're seeing, but you're also seeing we're getting closer to the midterms. Everyone thinks that the midterms are kind of like a catalyst for the market. And usually when you see that, the market starts to move ahead of that. And especially as you go into earnings, where earnings should be pretty good. I don't see any signs, at least in the broader industrial economy and in the AI economy, that things are slowing.

28:23Scott Wapner: Okay, let's do a stock pick before we go. We can show Nebius, which is up a lot again. So we need another They're an obvious-like pick. And you, WDC, Western Dig. You want to talk about that. Why? Well, so Western Dig has come in from$800. It's a$400 today. And a part of it, it got caught up in the memory trade. Now, one thing that people don't realize is that there's only like two players. And there's a very far distant third player, Toshiba. Recently, Western Dig had, on Friday, there was a report that Toshiba wants to take 30 % share of the market. That would be lovely. You know, I too would like 30 % share of the market, but you actually have to have the technology to do it.

29:06And today there was a report that Toshiba was going to be buying one of the suppliers. The misnomer in the market is that actually that supplier is a supplier to both Westendage and Seagate, and it is not. It's only a supplier to Toshiba. So, you know, it trades at less than six times earnings on 2028. Kind of doesn't make sense for this business to be trading at this kind of multiple, even if it is deemed a commodity. But usually commodities have more than two and a half a player.

29:40Scott Wapner: It's like a micron-like multiple. That's right. That's right. And it trades with micron and in part because, you know, hard disk drives can be cannibalized by NAND at some point. But that spread today is so wide that it's not today and it's not over the next three years. And trading at a five and a half multiple, I mean, they can buy themselves back in five years at these kind of earnings. All right. Well, it's already up 138 % year to date, so we'll track it. Thank you. Honka Crawford from Alger back at Post 9. Up next, private credit concerns not cooling investor appetite for the private markets.

30:12Scott Wapner: Why alternatives remain in demand? Goldman Sachs is global head of alternatives. Kristen Olson joins us next.

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31:52Scott Wapner: Welcome back. One of the big questions in the alternative space has been, would the issues around private credit negatively impact how investors saw opportunities in that space? Well, a new survey from Goldman Sachs suggests the answer is no. Kristen Olson, global head of alternatives at Goldman, joins us now with more. It's good to have you back. Thanks for having me. Were you surprised by the answer being no? Because, I mean, we've talked a lot about issues in private credit over the last year. I was a little bit surprised. I would say when you looked at the overall results, people definitely, the perception of risk and alternatives definitely went up.

32:25But when you look under the hood, investors that have been educated and familiar were the ones that were unfazed. And I thought what was particularly surprising on the private credit side was over half of the people we surveyed had experienced a redemption issue or a gate. And yet, two-thirds of those said they were either staying the course or increasing their allocation of private investments. Wow. Only 3 in 10 said it made them more cautious.

32:52Scott Wapner: Why do you think that is? Well, look, I think the optimistic part of me thinks that hopefully they were educated and understood that there wasn't liquidity and that this potentially could be one of the features of the product. On the other hand, I think the secular trend towards investing in privates is so strong that people are going to continue to stay the course. I mean, if you look at, I guess there's more evidence of that in the fact that it's such a broad array of strategies, too, that your survey revealed. 57 % of current owners are invested in private equity versus 19 % of former owners.

33:27Scott Wapner: 34 % private credit versus two. 16 % of current owners invested in private infrastructure versus two. It's just because, I mean, it's a performance issue, too, right? They made me go where the returns are. Yeah, a couple things. I think, one, you're seeing investors that are familiar with alts adding. So 40 % said they were going to add to their alternatives, and they're diversifying. So they might have been in private credit, but if you look now, they're adding to all those other asset classes in privates. And then to your performance question, I thought what was interesting was 97 % of the people we surveyed who owned alts said that they were happy that these, 93 % were happy that they owned alts, and 97 % said they performed as expected or better.

34:12Scott Wapner: I want to go back to the education thing, because I think that's interesting. Satisfaction with the products themselves is not the issue, as the results suggest. As people become more educated, there's a correlation, obviously. The more educated you are about this asset class, the more money that is going to continue to flow there. Can you draw a straight line? Definitely. Overall, only half of the respondents were familiar with alts. And then when you dig below the surface, you see in a lot of the different questions we asked, the more familiar someone was, the less risk they perceived. And you actually saw that for someone who's never done alts, if they felt they'd been educated and they were familiar, they were five times more likely to initiate a private investment over the next 12 months.

34:58So very meaningful jumps from education. So there's a real opportunity for advisors to be getting in front of clients and trying to explain to them why they should own private investments in a diversified, balanced portfolio.

35:11Scott Wapner: How much do you think the, I guess for lack of a better word, hype around AI is playing here? People want access to companies that are not yet public so they can get that in the private market. People want access to other areas of AI, like, okay, so software, obviously, with what's happened in private credit. But private credit is, private lending is going to be happening in other parts of the AI food chain, too. And people want exposure to this booming trend. It's 100 % a large trend that's spurring interest in private markets, right? As you said, people want exposure to these transformative companies where so much of the value creation is happening in the private markets.

35:51And then you see all the areas, to your point, that are affected. Private infrastructure, lending to the space, right? It really does. It is a through line in kind of all of the private investments that we're seeing.

36:00Scott Wapner: Like when we're talking private infrastructure, are we talking about like data centers, like things? Data centers, chips, you know, all of the supply chain that's going to feed into what we need to fuel the data center needs for AI. I think the other number that surprised me, 92 % of millennials currently own alternatives. Yeah. What's behind that? So I think they started much more native, you know, learning about private investments, in particular, to your point, looking at what's happening in the venture and growth space and seeing all these companies that they're much closer to and recognizing, if I want to participate, I've got to get familiar with investing in private markets.

36:38And so I think they're going to continue to add. We even saw that they're interested in putting it in their retirement accounts, if that's a possibility.

36:44Scott Wapner: Wow. Really interesting. Thanks for coming by and sharing this information. Kristen Olson with Golden Sacks. Up next, we track the biggest movers as we head into the close. Brandon standing by with that for us. Hi, Scott. A storage shakeup, an agricultural upgrade, and a hot quarter for potatoes. The three stocks making moves as we head into the close after this break.

37:06Scott Wapner: All right, well, less than 15 to the close. Back to Brandon for the stocks that he is watching. What's at the top of your list? Yeah, first up, Scott, Seagate Technology dropping today after Bloomberg reported the data storage company is competing with Toshiba in a bid for TDK's magnetic heads business for hard disk drives. Shares of the company are down about 9.5 % today. And then next up, we have Corteva climbing after JP Morgan upgraded it to overweight, citing potential in the agricultural company's cost structure and its crop growth profiles. Corteva is up, as you can see, about 12 % on the upgrade.

37:38And then finally, shares of Lambwesson surging after reporting better than expected earnings and revenue in the fiscal first quarter. The producer of potato products also lifted its outlook for the year, citing its cost-cutting initiatives and growing demand. That stock up now about 8%, Scott.

37:53Scott Wapner: All right, Brandon, thank you. Brandon Gomez up next. Constellation Brands getting ready to report results at the top of the hour. We're breaking down what to watch for when those earnings hit the tape. We'll do it in the Market Zone next.

38:09Scott Wapner: All right, now in the closing of Market Zone, Mike Santoli and Bartlett's Holly Mazzocca are We're here to break down these crucial moments of the trading day. Plus, Oliver Rennick standing by live from the Cibo Global Markets in Chicago. Brandon Gomez watching Constellation Brands ahead of the print in overtime. And Julia Boorstin looking at shares of Skydance. Gets everybody in a minute. Mike Santoli, you first. What are your observations on this day? Yeah, I mean, certainly net positive. It's never bearish when the major indexes hit new highs, as they have today. That said, there's always something that's sort of drawing against the conclusion that it's an all-clear.

38:43And I think today you would look at things like small caps and banks. Yes, it's a broader rally. Yes, there's more participation. But I do think that, you know, one of the costs of having a market that goes sideways instead of actually correcting across the board is that you don't have those kind of comprehensive oversold conditions where all of a sudden you're going to get a momentum push out of it. And so it's a little bit of trading one thing against another. We got relief on yields and oil. That's obviously good stuff for sort of the cyclical parts of the market. But I don't know that you're going to look at this and say that we're definitively in a new higher range for the S &P specifically.

39:20Scott Wapner: I need a little more proof. What's on the plate for OT? Well, we'll tackle all that. We've got a chief investment officer from BlackRock as well as Krinsky about his technical observations. Also, Salveen Richter, pharma analyst from Goldman Sachs, who went to China, is going to talk about where the biopharma industry there might be a threatening opportunity to our drug company. Oh, OK. Good stuff. We'll see you in, Mel, in just a little bit. Mike, thank you. Let's go to Chicago to the SIBO Global Markets. Oliver, Renex playing options action. Where? Hey, Scott. Everybody's in a pretty good mood here on the floor today, but there is no shortage of haters on the tape.

39:55The two biggest options trades actually strike me as skeptical. With volume and SPY 20 % above the average, the biggest trade of the session was someone buying puts. A very chunky 100 ,000 lot of 655 strike puts worth$61 million, expiring in March, a strike about 18 % lower. Now, they also sold$17 million of the 500 strike puts against it to define their risk and make this a spread. But what's most telling is those 655 strike puts they bought are the cheapest they've been in three months. So they probably think this is a valuable hedge, a.k.a. buying cheap vol. And VIX did hit 14 handle today.

40:39And then separately, in Meta, it was a weird one here, but a big one, with someone selling almost$70 million of in-the-money calls, also likely some sort of hedge as Meta's muse becomes the face of this rally, Scott.

40:53Scott Wapner: All right, good stuff, Oliver. Thank you. Oliver Rennick to Brandon Gomez, Constellation Brands, reporting in just a little bit. What should we look out for? Yeah, right. That's right. That's right, Scott. This quarter is really a test of whether its beer business is stabilizing. Wall Street expects about three and a half percent revenue growth, topping two point five four billion with earnings of three fifty six a share. But investors will be focused less on the headline beat and more on demand for Modelo, Corona, Pacifico. The company's premium beer portfolio has continued to take share, but broader beer consumption has been uneven with consumers pulling back, going out less, spending less.

41:25Not pressure has been particularly important for Constellation. It has over-indexed exposure to the Hispanic consumer as well. The other items to watch, whether management can maintain its full-year outlook and offer evidence that share gains and Mexico capacity investments can outrun a tougher alcohol backdrop right now, Scott.

41:41Scott Wapner: All right, we'll look for those earnings, Brandon. Thank you. Appreciate that very much. Julia Boorstin now on Skydance. Tell us more as this deal closes. Well, Scott, Skydance stock is down over 4 % as the company's co-CEOs David Ellison and Enon Kreese get to work. The big challenge, they're promised$6 billion in cost-cutting and synergies within three years, while also adhering to the company's commitment to state attorneys general to produce 30 theatrical releases a year. Now, a key concern for investors is the company's nearly$80 billion in debt, which now bears$400 million more in annual interest payment than it would have had the debt been sold a few months ago when treasury yields were about a percentage point lower.

42:23Now the newly combined leadership faces the challenge of integrating the companies and their products. Raymond James writing, quote, We also expect some near-term revenue pressure from overlapping streaming subscribers, where we estimate about 35 % of Paramount Plus subscribers overlap with HBO Max subscribers. Scott?

42:41Scott Wapner: All right, we'll be watching. Julia, thank you very much. Holly Mazzocca sitting next to me here at Post 9. When you sat down, you said, Are we going to talk about something other than the MAG-7? I mean, do you think, does the market want to talk about something other than the MAG-7? Well, as we're going into fresh highs today, it's clear the market is pretty focused on the narrow portion of the AI trade. However, there are opportunities here to be selective and really look for those stocks that allow you to participate and be in without being all in on the semiconductors and hyperscalers. But the operative word there is selective.

43:18Scott Wapner: does that mean you still think we're going to be in a concentrated-ish market, that you do have to be so selective to find the names that are outside of where the big flow is? Yes, I do think this is an opportunity as we head into earnings season to find those companies that can really continue with very durable earnings and demonstrate that they have diversified earnings stream beyond just the AI pieces and also companies that are truly innovating and using it within their productivity base. Okay. I love that you came with StockPix because normally we don't even do that at this time when we're waiting for the bell, but I love that you did.

43:55Scott Wapner: Amphenol, why do you like it? We love Amphenol because it's a great little company that goes into the connectivity space. You can really think about the AI growth without betting on a particular product, without betting on a particular hyperscaler, where Amphenol has about 40 % of their revenue tied to growth in AI and communications data. However, it's diversified beyond into automotive, into industrial, into the growth in the space technologies as well. Not like it's undiscovered. I mean, you're looking at the stock, it's up 31 % year to date. Absolutely. It has been, but when we look at it, there's still opportunity for continued growth and earnings.

44:35And we also like that it does have that really durable earnings base behind it.

44:40Scott Wapner: Okay, so you're still looking for things that can ostensibly play in the AI theme, just maybe not so many of the obvious ones. That's exactly right. I would also start looking at those companies that are unloved in this area of the market, where we've seen rates go up, and they've sold off companies like NextEra, companies like Waste Management, where they are seeing opportunities to really use AI towards innovation and creating improved margins on the bottom line. NextEra, like a utility, which obviously is, you know, those stocks have looked terrible lately because bond yields have backed up.

45:16Scott Wapner: You think that dynamic is going to change? Investors are clearly selling the entire sector without really appreciating that there's opportunity here. 30 % of NextEra's earnings are coming from growth and clean energy, a lot of which is going into the continued build-out of the data center play. So we think that there's opportunity for investors to really dig in, look beyond just sector exposure, and start to be selective where you have your exposures here. What about waste management? We got a lot of trash at the data centers or what? We do. Think of waste management like an infrastructure company that tends to have a big focus clearly on waste, on collections.

45:54What we like about it is that you're seeing growth in their smart trucks and growth of actually utilizing AI and the way that they build out their plants. And it's incredibly fascinating to see the bottom line. $300 million to the bottom line that they're starting to see from the growth in their smart trucks and into their manufacturing facilities.

46:12Scott Wapner: We've got like 15 seconds, literally, but we could close above 7 ,800 for the very first time on the S &P. Surprised we're here, given everything that we faced? I think we are surprised that we are here, but we've seen incredibly durable earnings, and now's the time to be selected. All right, well, the rent season is almost upon us again, so we'll see. Now we need to back it up. It's great having you here, Holly. Thank you. Holly Mazzocco joining us here. You can hear they're cheering, they're clapping, and they might as well, because as I said, it looks like we are going to get that first-ever close on the F-15 above 7 ,800, and in fact, they did.

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