Closing Bell 10/9/26

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0:58Scott Wapner: All right, Brian, thanks so much. Market getting a bump off those headlines. Welcome to Closing Bell. I'm Scott Wapner, live from Post 9 here at the New York Stock Exchange. This Maker Breakout begins with the markets as it grapples with questions about the AI trade, rising rates, soon to come earnings, perhaps the midterms as well. We discuss all of that with our experts this hour. Take a look at the scorecard here with 60 to go in regulation. Now, Dow's up more than 1%. In fact, let's just throw up an intraday chart, guys, while we're going through this too because we did get a lift. We were green throughout, but you can see we did get, we're at the highs of the day now, and I don't think it's by accident either with a headline like that.

1:36Scott Wapner: Push oil prices lower, and then again, you get that kind of move. Got to watch rates too because they have been so tethered to the move in crude oil as well. There's your picture. We've been higher on the curve, long end, the 30 at 560. We'll watch all of that, of course, as this still developing story filters through the markets in this final stretch. Watching Apple today, too, it's lower on a report that it's cutting component orders for the new iPhone. We'll have a closer look there as well. A good day for Microsoft and Amazon as we keep our eyes peeled on the tech trade today. Humana is ripping on some Medicare news.

2:13Scott Wapner: We'll tell you more what's behind that 13 percent or thereabout move. Let's get right to our talk of the tape. All that lies ahead for stocks and your money in the weeks ahead. Let's get right to our headliner as well. Professor Jeremy Siegel of the Wharton School, professor of finance, of course, Wisdom Trees, chief economist. Good to have you on. Let's just start with the news. I just get your reaction to it. I mean, obviously, anything that's deemed to be positive in the energy complex is going to be well greeted by the market, whether it's a play for midterm votes or what. Market doesn't particularly care as long as it sees the price of oil and gasoline go down.

2:49Yeah, I mean, very honestly, I don't like, it looks like Trump cut a deal with the devil, which is what I referred to Putin, and politically, I'm not in favor of that. However, and I did see that it was a 20 cent per gallon reduction in the futures market in diesel right at that point, which helps four or 5%. The spokesman on the previous show said it was maybe two or three days worth of diesel. Of course, it's supposed to be increased. It's not a permanent solution at all. It's sort of a short term bandaid. And, you know, cutting back on or eliminating sanctions on Russia for the invasion in Ukraine, I think, is a very unfortunate consequence.

3:48Scott Wapner: Paul Sankey, I mean, just on, obviously, with Brian Sullivan looking at the numbers, suggesting in the overall picture de minimis. Yes. But nonetheless, it's shown positive things are happening. I mean, the march on AI is still on and not going away. and, you know, the growth prospects on the economy for the AI revolution are as intact this week as it were last week and the week before that. So, you know, really very, very, very little has changed over the last couple of weeks in terms of the direction of the market. I mean, the direction of the market is upward and nothing is thwarting that at all.

4:33Scott Wapner: Yeah, I mean, we had, I guess, a scare yesterday? Is it fair to call that report regarding OpenAI's revenues simply that? Yeah. Yeah. And, you know, I think we got Jim Cramer talking about, you know, that they weren't looking at the right earnings. And it shows a sensitivity. Listen, any growth stock, any bad news is immediately going to get put in there. So, listen, we're all going to have rumors. I mean, you know, started two years ago with DeepSeek and throughout that, there was the, you know, situational awareness fund. There's going to be there's going to be bumps on the road. But that that car and or that train, I should say, called AI is is not slowing down.

5:26Scott Wapner: So you don't you don't have any trepidation whatsoever about that trade itself as we not that That trend. I mean, what I think it's very, listen, there's risks. I mean, there's great prospects and there's great risks. I don't think I've ever seen the cone of what could happen in the economy be as wide as I see it today, which really means you still have to be diversified. And I'm beginning to look at bonds and say at these rates, especially these real rates that I have not seen for 25 years, this might be a hedge, as well as, of course, the stocks that have lagged behind the so-called value stocks.

6:12If there's an interruption in the train and, you know, could be it could be anything. You know, all of a sudden compute becomes not as necessary. A breakthrough means we don't have to build those data centers. I mean, you can go one right after the other. You need a balance on the other side, even though certainly a hedge is always painful when the trend continues as it has over the last several months.

6:39Scott Wapner: Does it matter at all to you what I'm going to show on the screen right now? Now, the fact that the share of S &P 500 stocks that are outperforming the index on a three-year trailing basis has just been steadily declining. The market's become more concentrated, more top-heavy. And now you have a very small group of names essentially carrying this market higher and higher. Yeah, and if you take a look, if I could infer that that previous period was 1998, 99, and 2000, the previous time that we got to a new low. And I'm always asked the question, is it like that bubble? The real rates also surge, just like we saw in the bond, seeing in the bond market today at that particular juncture, hitting its high in March of 2000, even higher than they are today after inflation.

7:38The big difference, of course, is that these are real companies with earnings that are so great that the P.E. ratio of many of them have actually gone down over the last six months because the earnings have jumped so much, as opposed to 98, 99, 2000, when there was scarcely any earnings, or if there were, the P.E.s were 100 or 200 rather than 20, 25, and 30. So, you know, there are similarities that concentration, the movement of the real rate, But we got much sounder companies now, certainly, than we did 25 years ago.

8:16Scott Wapner: But you're going to get more concentration with rates where they are. And even if they back up further, you can't really convince people that cyclical areas of the market are going to do all that well. So no surprise that the chart looks that way more recently. Absolutely. I mean, with the train of AI continuing to go and the higher real rates are squeezing the value sector, until they can experience the productivity growth from AI to offset these higher rates, you're going to see their stocks go down. And you have seen those stocks certainly go down in a relative sense as a result. So if the AI bubble burst, I think interest rates are going way down.

9:02And believe it or not, I think, although it'll certainly hurt AI and derivative stocks, that downward movement interest rates will have a counterbalance in the so-called value cyclical sector of the economy. And that's, again, why diversification, either with the bonds or the cyclical sector, I think remains important for investors looking forward today.

9:28Scott Wapner: What are you thinking about earnings season, which begins in earnest next week? Obviously, expectations couldn't be any higher. And that's one of the reasons why we've, for the most part, overlooked anything that's been thrown in our way. Rate hikes, yields up, oil up, unsettled geopolitical news, et cetera. Yeah, well, it's unprecedented. 25 to 30 percent year over year gains not coming out of a recession is something that is just unprecedented in in in in financial history really i mean this boom happening in the middle on on on earnings is is is is absolutely extraordinary and uh in a way you know a lot of the stocks didn't realize that this bump is not going to be 20 30 percent forever and that's why you actually We have NVIDIA and a number of others, even though they're growing 40%, 50%, 60 % a year, are selling at 19 times earnings, of course, which, you know, under normal circumstances would not happen.

10:34So I think there is a degree of holding back. I don't think these prices are wild. I just think that the outcomes, both on the upside and maybe on the downside, have widened. Stocks, of course, absorb upside. Bonds only take downsides. That's why we see the CDS spreads widen for those companies, because if there's an even bigger boom, bondholder is not going to get anything. But if it doesn't turn out, the bondholder is going to get it. Stockholder gets that upside. That's one reason why I think stocks have been holding in so well. Normally, CDS spreads go up like this. You just don't see the individual company doing as well.

11:15But I see that that's because these are these two scenarios moving forward.

11:20Scott Wapner: Professor, it's good to talk to you as always. Thanks so much for joining us. You're a regular Friday guest, and we love the way you lead us into the weekend and help us think about the week ahead. So be well. We'll see you soon. Professor Jeremy Siegel. Thank you. Now let's bring in CNBC contributors, Fundstrats Tom Lee, requisites Bryn Talkington. We'll continue the conversation where we left it, Bryn. People seem to be pretty sanguine on this market. It's kind of hard not to be when you've got earnings right in front of you, right? And the earnings are all going to be about technology stocks.

11:51I mean, you and I have talked about this for 2027. Micron and NVIDIA alone are going to contribute 40 percent to the earnings growth of the S &P. So 2027 is right upon us. So I think we're also going to see the more compute people are using, the more cloud we're going to be using. And so I think that plays really well into Google, Amazon and Microsoft. as the big hyperscalers, maybe SpaceX as well, but just those three big hyperscalers. And when you talk about all this money is being spent, it's really four or five companies taking trillions of dollars and spending it with the likes of the NVIDIAs, with the Microns, et cetera.

12:29And so you're having this changing of hands. And so I think we're still going to be talking about technology over the next month or so, because that to me is going to be where all the excitement and where all the earnings growth is happening. So I think if the equal and the other more cyclical sectors are going to take a backseat here for a little bit longer while we talk about tech over the next month.

12:50Scott Wapner: Well, Brennan, if we're talking about just four to five companies, like you said, is that and the fact that the market's done so well, relatively speaking, is that a sign of strength or weakness? Well, it depends if they monetize the CapEx. Like right now, I think we have a boom in earnings growth because these big companies, I mean, look at Dell. Dell is an amazing recipient of all of these dollars. And so if the CapEx ends up having a return on capital, then yes, this was a good spend. We know a lot of it has been wasted. But I think when I look at Microsoft, which is, you know, I was really negative on.

13:28I didn't sell it. I kept it. People are using Co-Work because all of a sudden they went model neutral where you can just use Claude. You can use OpenAI, whoever you want. And now all of a sudden that's much stickier. So as long as ultimately these big companies can show ROI, then yes, the CapEx was good. If not, but we're not going to find this out for, I think, a couple of years. Then, yeah, these stocks have been wasting money and the stock prices will go down. But I don't think that that's I think that's still multiple innings away.

13:59Scott Wapner: Hey, Tom, I feel like yesterday we learned just yet again how reliant we are on the AI trade. You know, a headline comes out, market reacts, makes its own judgments. And then we have to determine after the fact what's what, whether it was a nothing burger about OpenAI's revenue or something more. but the market is so in tuned on this story that all it takes is a simple question, even for a second. And you see what the fallout is. Yeah, Scott, I think yesterday and today are examples of why this market is a coiled spring. On the negative side, creating the max pain is oil. We got some good news today on that.

14:48And, of course, interest rates. And there's a pervasive pessimism. I've been meeting with investors on the road since September 28th, and investors are very skeptical of this AI boom, which they many view as a bubble. But you're right. On the other side, if we see setbacks or cost of funding or pulled IPOs on the AI side, it triggers more risk off. I'm going to be in a camp that third quarter earnings is going to restore the confidence of AI. And similarly, I think the midterms are a clearing event of sorts, because once that's behind us, I think that AI stocks sort of have that political pressure alleviated, even if the Dems take the Senate.

15:32But fundamentally speaking, I think that concentration makes sense. I'd rather see a few companies driving the spending. I mean, one, it makes sense because it shows you the moats that are being created. And by the way, all these companies are basically American businesses. I mean, it's really not that different than financial giants. Like, I've not really heard people say the financial industry is too concentrated because J.P. Morgan and Goldman are so big. And that's really what's happening with AI.

15:58Scott Wapner: So when you told our producers that equities are a, quote, coiled spring, can that really be true with rates where they are? How does that work? Well, I think it works in sort of two ways to look at it, Scott. One is, are rates reaching a point where it's even harder to push rates above that? Because we know there's record commercial shorts, and we know that this move-in rates is extended. And also, at the end of the day, these high rates are actually causing capital demand to weaken, right? And not everyone can issue debt at these levels. So I think we're reaching sort of the peak point there.

16:38But if rates actually fall, and that may be highly correlated to what energy does, that's actually going to take a lot of the pressure off stocks. And I think PEs can expand. So, I mean, I think we're at the point here where rates are no longer a negative story for equities.

16:54Scott Wapner: Well, if they remain where they are, don't they remain as competition for stocks? That's part of the story. That's why I asked you the question the way I did. Yes, a coiled spring, perhaps if yields come down considerably. But if they stay here or continue to back up even further, that just gives more fuel to the I need to look elsewhere fire. Yeah, that's a great point, Scott, because you're right. Bonds and tips are competing with stocks. But I think viewers have to keep in mind something. Higher rates is also higher investment income for American households. You know, it's at least 10 trillion a year of investment income now being generated because of high rates.

17:38That does have to get recycled. Not all of it is going to go back into buying bonds. It actually is flows into equities as well.

17:47Scott Wapner: I mean, Bryn, if rates remain where they are, right, I mean, I'm sure you're having conversations like that with your clients, right, about opportunities that may exist today that didn't exist a year ago. 100%. I mean, we have said, I've said it on air, that especially long duration bonds have been a great way to grow poor safely because you haven't earned any return. But now, you know, we're looking at a seven-year investment grade corporates, you can get over 6 % for seven years. And then on the muni side, if you're in the highest tax bracket, that same seven-year investment grade, it's got you're over 7%.

18:24And so that's really attractive. And so I think that why would I buy a dividend yielding stock when I could get, if I'm a client, if I'm an investor, why would I buy a dividend yielding stock yielding 4 % or 5 % if I could buy an investment grade corporate yielding 6 % or munis yielding 7%. And so I think we have this interesting juxtaposition. There is about 8 trillion of money markets that continues to grow on the sidelines. I'll be curious, that to me is where you could see some movement going into longer duration fixed income. I don't think people are going to sell their their meta and go into bonds.

18:58But I absolutely I mean, we are having these conversations. We are allocating and looking to allocate more into seven, eight year corporates and also munis as well, because those are wonderful returns that you really don't have risk in. Right. You just don't have to worry about it. So as part of an allocation, I think investors will absolutely be starting to allocate to longer duration bonds with this yields, elevated yields.

19:22Scott Wapner: Guys, we'll leave it there. Appreciate it. Good weekend to you both. We'll see you soon. Bryn talking to Tom Lee. Be sure to catch Tom at CNBC's Digital Finance Forum. By the way, when it returns, November 17th, New York City, you can scan the QR code to request your invite or visit cnbcevents.com slash digital finance. More now on those reports today about Apple cutting orders to iPhone suppliers. Stocks reacting. Mackenzie Cigalos has more. What do we know? So those Apple shares breaking from the broader tech trade to end the week as investors weigh whether those supplier cuts are an early warning on iPhone 18 demand or just part of a much more complex launch cycle this year.

20:00Now, Nikkei, they are reporting that Apple has grown more conservative on shipments since early September, with October component orders for the iPhone 18 Pro and Pro Max cut by at least 15 percent from original plans. Now, Apple hasn't commented on the report, but the company does have a history of placing aggressive component orders ahead of launch and then trimming them back. What's atypical here is how early those cuts are showing up. Usually that would happen later in Q4. The street signals are also mixed. JPMorgan and UPS are both seeing shorter wait times for devices despite stable supply, which can be a sign of softer demand.

20:38While Citi says that some buyers may simply be holding off for the Duo and that staggered launch schedule is part of why this is so difficult to read. There's no base iPhone 18 this fall, and some of Apple's most loyal customers may simply be waiting for its first ever foldable, the$2 ,000, at least a starting price for the iPhone Duo, which goes on pre-order next week, Scott.

21:00Scott Wapner: Okay, Mac, thank you. That's Mackenzie Segal. Big moves today in Humana, Moderna. We're focusing on health care. Anika Kim-Constantina watches that every day, joins us with what is going on here. Hi. Hey, Scott. Let's start out with Humana, who is the biggest winner of new star ratings for 2027 Medicare Advantage plans. Humana yesterday said 95 percent of its Medicare Advantage members will be enrolled in plans rated four stars or higher in 2027. And that's up sharply from 20 percent in 2026, thanks to the company's work to improve measures of care quality and member experience. CMS rates Medicare Advantage and prescription drug plans on a scale of one to stars and higher ratings lead to bonus payments from the government.

21:43For example, Oppenheimer analysts see roughly$3.6 billion in added revenue in 2028 for Humana thanks to these higher ratings. Now let's turn to Moderna in the green today on a new New York Times report detailing a new NIH effort to accelerate cancer vaccine development. If you remember, Moderna and Merck are developing a personalized cancer vaccine which showed promising phase-through results in a certain skin cancer back in August. So investors see Moderna as a potential beneficiary of this public-private partnership, which also involves drug makers and other researchers, Scott.

22:18Scott Wapner: Annika, thank you. Finally, Verizon, AT &T, T-Mobile, all falling as SpaceX buys Spectrum for Mobile. Julia Boorstin following that story for us. Not a huge surprise given where the conversation's been around that issue over the last several months, but nonetheless having an impact. Yeah, having a huge impact on all three of those stocks plummeting. AT &T shares down nearly 10.5%, Verizon off 9%, and T-Mobile down nearly 13%. This on SpaceX making a deal that shows that it is serious about competing in wireless. SpaceX is acquiring a nationwide wireless low-band spectrum portfolio from Grain Management with a reported$8 billion price tag subject to FCC approval.

23:00CEO Elon Musk writing on X, quote, this is the last critical piece of the spectrum puzzle needed for SpaceX to provide complete phone coverage in America. Now, while analysts agree this move is negative for the mobile providers, several say SpaceX would have to buy much more spectrum to become a true player. Wolf noting spectrum auctions in the next two years offer SpaceX more opportunity, predicting that in the meantime, this will weigh heavily on telco stocks. Bernstein writing, quote, whether or not SpaceX ultimately builds a nationwide network, Musk's track record creates a credible threat that is likely to remain an overhang on incumbent valuations.

23:39And Evercore writing that, quote, SpaceX's presence in the space pushes up clearing prices at coming auctions, whether or not it wins. Meanwhile, it's worth noting that shares of cell tower infrastructure stocks, including American Tower and Crown Castle, are higher on the news that SpaceX could become a new big customer. Scott?

23:58Scott Wapner: All right, Julia, good points. Thank you, Julia Boorstin. Just getting started right here on Closing Bill. Coming up next, open questions about OpenAI after concerns surrounding its revenue rocked the AI trade a day ago. We have full team coverage for you live at the New York Stock Exchange. We're back after this.

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26:03Scott Wapner: We learned yesterday how even the slightest question about demand in the AI food chain can send stocks in that universe sharply lower. Our Kate Rooney continues to follow the fallout from that report about OpenAI's revenues joins us now. We've had 24 hours or so to process all this and do some more reporting. What do you know? Yeah, Scott, well, the takeaway 24 hours later is this was a lot of accounting confusion from what I'm hearing around OpenAI's revenue numbers. It did send shockwaves through the entire tech sector. It did pull down chip names. You had the Nasdaq lower on that headline, which was yesterday that OpenAI's revenue was about$20 billion lower than expected.

26:38The Financial Times reporting annualized revenue was approaching$50 billion, at least at the end of September, compared to the$70 billion that was widely reported. I did confirm those numbers with a source, but the discrepancy was more about accounting when you look under the hood versus slowing demand. So OpenAI, in previous projections, again, from what I'm hearing from a source included sales through some of the cloud partners, I should say, that it has and also providers. Amazon and Microsoft are on that list. The newer numbers were in a pitch deck for its latest funding round that it's been going out and doing.

27:10So they are excluding certain partners from revenue at this point. It is considered a cleaner number when they do this fundraise. As I mentioned, it is part of an ongoing$30 billion fundraise. This company is in the process of doing$1.4 trillion valuation. I'm hearing that round has been gaining some momentum No term sheet has been signed yet. And these AI companies are widely using annualized revenue in terms of the run rate to show growth rather than traditional public company metrics. So that adds to some of the confusion. It can make it a lot harder for investors to get a full picture here.

27:40These are, of course, private companies. And the knee-jerk reaction from the market yesterday was a reminder of just how dependence got the AI trade is on the growth of these private companies. And again, we don't have a lot of information. We're kind of relying on uncertain reports, but that's the latest we know.

27:56Scott Wapner: Yeah, we were definitely reminded of it one day ago. Kate, thanks. It's Kate Rooney. Now let's bring in CNBC contributor, Plexo Capital's Lotoni. It's good to have you. So what's your reaction when you see a story like this? Well, first, Scott, congrats on 15 years. Thank you, man. I appreciate that. And look, I don't see this disclosure as evidence that something is fundamentally wrong with open AI. I think obviously we need a clearer reconciliation of gross versus net revenue. But that 20 billion difference doesn't mean 20 billion of customer demand just vanished and disappeared. The operating signals are encouraging.

28:39Their enterprise sales reportedly more than doubled since July. If we look at open router data reported by the Wall Street Journal, It looks like OpenAI might have reached equal spending share in that sample set with Anthropic in September. And their advertising business is showing progress to support the consumer business. And look, having worked at eBay, I'm familiar with this, you know, separating transaction volume with the revenue that the company captures. At eBay, it was gross merchandise value and then our take rate equaled the revenue. And with AI, we need to go a little bit further. And, you know, how fast is the comparable revenue growing and what remains after both distribution and inference costs?

29:24But I just want to point out one thing. Yesterday, I listened as this news was breaking. And your use of the word fragility, I think, really captures the market issue. OpenAI and Anthropic have really become central to the expectations supporting the entire AI build-out, and some would argue the global economy. So stocks are pretty much priced for exceptional execution. They're priced to perfection. And confusion over a revenue number can trigger a sharp reaction. So, you know, look, we're at the point where if OpenAI even hints at a sneeze, the market might catch a cold. Yeah.

30:05Scott Wapner: If I have this right, you're an early investor in Anthropic, not in OpenAI. Is that right? That's correct. Why? Why did you make the choice? I'm assuming, now I could be completely wrong, that you had a look at both. We did have a look at both, but we had a better look with direct access at Anthropic. and there was a little bit of a gap between the time period where we looked at OpenAI. I think we might have gotten a look in spring of 23 and then got a look at Anthropic around the fall of 23. And that was when Sam famously got fired for a week. And for us, it really came down to we liked Anthropic's focus on the enterprise.

30:54We liked the team. We could tell that cost was going to be a factor. And at that time, we thought Dario's plan of focusing on a more structured approach to creating models that could more efficiently use data and not need as much compute, we thought would be very compelling. And then it was just the valuation. We thought that there was a lot more upside. But nonetheless, that was still an$18 billion valuation and the most expensive thing that we had done. And even then we said, God, this is going to need to be a trillion dollar exit for us to really make a venture return. And here we are.

31:31Scott Wapner: I've been thinking a bunch lately because I went to CNBC's AI forum down in Dallas and did an interview with an executive from AT &T. And he got me thinking because that company, like many companies, felt like it only had one choice. And that was paying whatever the service fee is, for lack of a better description, for OpenAI and Anthropic to provide their AI services. And then they found that open weight and open source models were much more economical for them. And CFOs everywhere now are looking at that issue of what the cost of compute is for their own businesses. So this is a company that now is using open weight models rather than the frontier models.

32:20Scott Wapner: And I think there was some conversation in Twitter today about whether the market's appreciating the fact that all of that is driving the costs down for Anthropic and OpenAI, theoretically driving their margins down. And if I have that right, then wouldn't that be something that would concern investors as these companies move to go public? Absolutely. And I think it's warranted. And this is why we need to better understand what the actual margins are. But let's just take a look and have a step back for a moment around open weight models versus the frontier models. When we talk about open-weight models, typically people focus on the actual cost of those tokens.

33:06And that kind of doesn't really address two things. Number one, the infrastructure, you know, the chips, the networking, the compute needed to process those models. It's the same whether it's an open-weight model or it's a frontier model, right? There may be some efficiency gained, but for the most part, the compute is the same. What you really drive the margins with is the way that you're structuring the cost of your tokens. And all tokens are not created equal. And I think what we're seeing the market move towards is instead of cost per token, cost per task completed. because there are instances where more tokens might be required for an open-weight model as opposed to a frontier model, which can process a smaller number of tokens and produce a more efficient task completion.

34:00So that's one of the things that I think is really important. Second, I think it's also really important to think about the model of the frontier labs. Their goal is to be at the frontier with each of their new releases. Once they achieve the frontier, they're able to complete tasks that formerly had not been able to be done. There's a market that's willing to pay a premium to be able to complete those tasks. And the beauty of these frontier models, as we're now seeing with the pricing, is once the next generation comes out, there's a reduction in price that we're now starting to see that started with open AI and now Anthropic is following.

34:37So now what used to be the frontier model, but now it's kind of the second or third generation from the frontier, as those prices drop, what we want to see is we want to see an expansion in the total number of people that now are willing to pay for using that model. And then we increase the total volume. That's, in essence, Jevons. But we, again, need to prove that out by getting transparency into those numbers.

35:03Scott Wapner: Gotcha. Have a great weekend. We'll see you soon. And thanks for the insight, as always. Lo, Tony. Plexo Capital. Coming up, NBA taking its game global. Why the league is making a big bet now on Macau and the billions of dollars at stake as it looks to expand further in Asia. We're live in Macau next.

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36:57Scott Wapner: NBA season chips off October 20th, but it's global push already underway in Macau, where the league is back this year. Contested Brewers there, too, with more on why this matters so much to that market. Hi. Hi there, Scott. Yeah, the NBA and Sands really pulled out all the stops to host the NBA-China games, just to, you know, put it on a good show. For the hundreds of millions of basketball fans in China. Commissioner Adam Silver told me the expected return on the investment here is concrete. It's an opportunity for a limited number of fans to experience it in person. Tremendous social media presence from this, but then there's also the media presence of the games themselves with Tencent is our partner here, CCTV.

37:42So these games will be widely seen in China, also time zone appropriate. I mean, people are used to watching games in the morning here because obviously around the evening in the United States. But it's an opportunity for a huge audience, a huge fan base to experience the NBA firsthand. Likewise, it may be an opportunity for the WNBA in the very near future as well. Mavericks owner and CEO of Las Vegas Sands, Patrick Dumont, told me he's enthusiastic about hosting the women. And then Silver said, yeah, he'd like to bring the women here to play. This is a strategy that the NBA is deploying worldwide in Africa, in Europe.

38:18Training young players, Scott, developing teams, growing the audience, and, of course, the potential profits for all the investors involved in the game.

38:27Scott Wapner: Yeah. And we've seen it for years, too, as you know. I mean, the NBA has been leaning in big time overseas, but really, really hard in China. And the fact that they've been able to have some players from China in the NBA help as almost ambassadors there in growing the game over the last couple of decades. Yeah, and you could see that in the way that Yao Ming was celebrated at the game here tonight. You know, the crowd just went wild for him. What is surprising is the amount of passion and fan fervor that the audience brings in, even for the younger players. You know, Cooper Flagg was out here shooting some amazing shots in the game tonight, and the crowd was really into it, even though he's such a young player and they barely had time to get to know him.

39:14Scott Wapner: Well, I was channeling Yao, and I was talking about that. You're good at what you do. Contessa, thanks. Have fun. We'll see you. Contessa Brewer in Macau. Up next, we track the biggest movers as we head into the close. Brandon Gomez standing by with that. What do you see? Hey, Scott. An AI bet, a defense push, and an FDA green light. We'll discuss what three stocks are popping right after this break. We're 10 for the bell. Back to Brandon now for the stocks that he's watching. Tell us more. Hey there, Scott. Yeah. First up, cloud computing company Fastly climbing today after an Oppenheimer upgrade to overweight.

39:44The firm citing the company's improving growth outlook and agentic AI monetization, potentially supporting stronger revenue. That stock's soaring today up about 16 percent.

39:54Scott Wapner: Next up, we have Archer Aviation higher after Barclays lifted it to an overweight with an$8 price target. Analysts say Archer's defense sector ventures are an immediate need for its revenue and cash flow. The aerospace company is up about 15 % today, though it was down nearly 35 % year-to-date. Finally, pharmaceutical company Teva in the green after announcing the FDA has approved an injectable drug for monthly use, while Truva for adults with schizophrenia. Teva's share is up about 4.5 % last time I checked, Scott. A 16 % move deserves a double take. It's all good. Brandon, thanks. We'll see you soon.

40:31Scott Wapner: Good weekend to you, Brandon Gomez. Coming up, why the crypto trade can't find its footing. Plus, Truett's Keith Lerner, what he says now about this bull market. Just put out a new note. We'll talk about it next.

40:46Scott Wapner: All right, we're now in the closing bell market zone. Truett's Keith Lerner here to break down these crucial moments of the trading day. Oliver Rennick is standing by live at the CBO Global Markets in Chicago. We'll play options action in a moment. Diana Olick looking at the move today in the home builders. And Mac is back on why Bitcoin continues to struggle. Oliver, we begin with you. What are you looking at? Scott, I'm looking at the interplay between bonds and stocks through the options lens. We're going into the weekend with the biggest buildup in put contracts relative to calls in QQQ since June.

41:19And traders today piled into puts on the semiconductor ETF SMH three times more than calls on higher than average volume. Now flip to bonds. There was continued bullish call buying, both in TLT, where three times as many calls traded as puts today, and in rate-sensitive utilities, where it was two-to-one calls. For many, that may be a head-scratcher. Tech bears getting aggressive just when yields finally stop going up. But strictly going by the charts, it arguably makes some sense. The correlation between the 10-year yield and the NASDAQ is currently positive 0.8. So if you think to get higher stocks, we need lower yields.

42:03The message this week from options may be that you want to think twice.

42:08Scott Wapner: Oliver, thank you. Oliver Rennick, what do we need to get higher Bitcoin? That's the question Max looking at, right? Now about a year removed from its record above$126 ,000. But today it's trading at just above$82 ,000, down some 34 % from its peak. And what a difference a year makes. That high came amid optimism around a crypto-friendly Washington, a strategic Bitcoin reserve, and strong institutional buying through the spot ETFs here in the U.S. Today, the trade looks very different. Higher Treasury yields, a stronger dollar, and oil above$100 are all weighing on risk assets. One of the industry's biggest policy hopes has also stalled.

42:47The Clarity Act failed to advance in the Senate last month. And while it could technically come back, the odds of passage this year now look increasingly slim. The near-term pressure, though, is more technical. ETF flows are net negative on the week, and Thursday's sell-off triggered more than a billion dollars in crypto liquidations before Bitcoin clawed some of that ground back today, Scott.

43:08Scott Wapner: OK, Mac, thank you. It's Mackenzie Segal. Diane Oleg, tell us more about these homebuilders. Well, look, it was another volatile week in the bond market, which mortgage rates, of course, follow. But rates actually ended up slightly lower today than they were last week. The average on the 30-year fix started the week at 7.61%, wobbled around a little bit, then fell more sharply yesterday, up a little today, but ended at 7.52%. But for perspective, look at July. Just three months ago, we were nearly a full percentage point lower than we are now. Now, an interesting note from BTIG on the home building ETF, that's ITB, it made a fresh 52-week low yesterday morning below the May lows, but bounced back, giving what they call a false breakdown signal.

43:56This creates a very attractive and timely entry point, they said, with a well-defined stop below the$83 level. Analysts there also noted that there are also zero names in the S &P 1500 Home Builder Index above both their 20 and 200 daily moving averages. Scott, please don't ask me about next week because we've got a lot of inflation data. Who knows where rates go?

44:18Scott Wapner: Well, then we'll come back to you many times next week, Diana. And thanks, Diane Olman. Keith Lerner, you said yesterday the market still deserves the benefit of the doubt. In your latest note, why so? Great to be with you, Scott. I like the pocket square you have today, looking sharp. So as far as the markets, you know, that's been our tagline for the last few years, giving this bull market the benefit of the doubt. We turned four on Monday. As we look at the weight of the evidence, it still suggests we should still give this bull market the benefit of the doubt. And I'll break it down a couple of ways.

44:47One, history. We've had 11 bull markets historically. This is the 11th since 1950. Six of the previous ones that lasted, you know, or turned four have seen, sorry, five of the six ones that have turned four have seen continued gains. As we look at fundamentals for the overmarket, valuations have reset. Earnings are still strong. The primary trend for the market is still up. There's certainly some divergences below the surface to watch, and we are watching them. But all in all, if the economy continues to move forward, which is our base case, and this AI theme, which we still think is the key to this bull market, is still intact, and we still think ultimately this market has more gains to see.

45:29Scott Wapner: So as long as the AI trade stays intact, as long as earnings remain robust, which they're obviously expected to be, then the backup in interest rates doesn't matter all that much? I don't think it does matter. And, I mean, it is slowing things down as far as within the internals of the overall market. But I would say our view is that these rates are starting to be somewhat attractive. And even the last week, we've seen some bias that's been around this 535, 530 level. Listen, we jumped to 6%. We may have to change our tune. But all in all, I think the market will continue to power through. And historically, even though this is somewhat high on rates over the last decade, in the 90s, rates were close to 6.5%.

46:09So I think as long as we start to stabilize in rates here, I think the market can power through. but it will likely continue to be more on the tech side as we think about over the next year.

46:18Scott Wapner: Got to bounce, but you're feeling pretty good about earnings, right? Yeah, I still think, I mean, listen, over and over again, our companies have gone through one shock after another, and they have continued to improve as far as margins, and we continue to see forward estimates move higher. I think a good signal is 2027 estimates are now in focus, and we're starting to see those estimates move up instead of the normal move, which is typically down. So I think all along, again, it doesn't mean there's not going to be pullbacks. It doesn't mean it's going to be a straight line. But all along, we still think this bull market deserves that.

46:49Thanks for the doubt.

46:50Scott Wapner: Take care. Talk to you soon. Keep learning to join us. Go green. You go out green. Today is your head for the week. Have a great one, everybody. And all this time, this is Melissa Lee.

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