Closing Bell 11/3/26

0:00At Edward Jones, we believe rich isn't about having life all figured out. It's opening yourself to all the possibilities. That's why your dedicated financial advisor provides long-term planning built around you, meeting you where you are, and helping you get closer to where you want to be. So no matter where you're starting from, you can move forward with confidence. The key to being rich is knowing what counts. Let's find your rich. Edward Jones, member SIPC. So weren't agents supposed to take things off your plate? Building another to handle the others is a bit much. Don't make more work out of work.

0:38Gemini is the one agent that knows all parts of your business and actually gets stuff done. You give it a project, close your laptop, and when you come back, the job's finished. No matter your industry or role, your agent has the skills to help every team stay in their flow. Seriously, make work less work with Gemini on Google Cloud. Check response, subscription required. All right, guys, 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 the market's next move after the mega caps and the midterms. So where do stocks go from here?

1:09We'll ask our experts over this final stretch. In the meantime, I'll show you the scorecard here with 60 to go in regulation. Pretty decent day for the NASDAQ, two-thirds of 1%. You do have a strong move today in the semis. We're watching all that closely. Take a look at AMD. Nice move ahead of the earnings report in overtime. Not the only one. Memory's doing pretty well today, too. There's the space and everything is green. Most of the mega caps are as well, with the exception of Apple. Its services growth and margin guide sending shares lower today. We're going to take you through the biggest movers all around the markets coming up.

1:41It does take us to our talk of the tape. Stocks over the final stretch of the year and a big warning today from a well-known hedge fund. Our Leslie Picker begins there. Les? Hey, Scott. Yeah, quite the acronym from Elliott in an investor letter. It's FOGO, or fear of getting obliterated. This is the theme of the$80 billion hedge fund's October investor letter obtained by the Wall Street Journal. Paul Singer's firm warning about AI and the debt-financed capital spending and circular investments, according to the journal. The report said that Elliott wrote about the potential market impact if there were any pricing pressures of AI products.

2:17Quote, so many factors have lined up to cause this great boom that it may take disruption in only one or two of them to shift this momentum into reverse, leading to a cascading, self-reinforcing unwind of this bull market and an abrupt change from FOMO to FOGO or the fear of getting obliterated. According to the journal, Elliott writes that, quote, at present, virtually every alarm bell warning of a substantial bear market ahead is ringing. The report said that other issues highlighted included U.S. budget deficits, persistent inflation, private credit portfolios, in addition to market distortions caused by factors like zero-day options or betting on meme stocks.

2:59We've reached out to Elliott for comment but have not heard back yet, Scott. Well, Les, it's a talker. You know that. And I'm glad we led with it. Thank you for your reporting. That's Leslie Picker. Voters hitting the polls today as well. Midterm elections underway from coast to coast. Wall Street preparing for more volatility. Eamon Javers following that angle for us. Eamon? Yes, Scott, that's right. Wall Street analysts have been quietly forecasting what they think is coming after today. And in a word, what they see is volatility. The big caveat, of course, we don't know the results ahead of time, but the analysts are generally assuming Democrats will have a good night tonight.

3:32So how does Wall Street think President Trump will handle that? By doubling down. Analysts at Piper Sandler wrote that Trump is likely to make more aggressive policy moves after the election. And they said Trump might try to upend the status quo in the Persian Gulf, increase tariffs significantly, step up his attacks on the independence of the Fed, demand Treasury Secretary Scott Besant take a more activist approach to try to lower rates. An analyst at Raymond James wrote that post-election President Trump is likely to remake the mold of a lame duck president and press the limits of executive action.

4:10And what about newly empowered Democrats. Wall Street doesn't expect them to be able to get much passed, with one important exception. Piper Sandler analysts wrote that Democrats may push for tax increases, higher regulation, tougher antitrust enforcement, and higher domestic spending, and they expect aggressive investigations of the Trump family's business dealings. The result of all that, they say, plenty of acrimony. But Deutsche Bank analysts point out that neither side will likely have veto-proof majorities. So Democrats may have to content themselves with slowing or blocking executive branch appointees, including at the Fed and at the Supreme Court.

4:50And here's that key exception, populism. Piper Sandler flags the possibility of compromise on interest rate caps, on credit cards, or an increase in the minimum wage with which both poll well among Republicans and Democrats. And Deutsche Bank, of course, points out that data centers could come under bipartisan fire in 2027. Scott, back over to you. All right. A lot to consider there as well. Eamon Javers, thanks very much to you. Our panel now. Solace is Dan Greenhouse, Alexandra Wilson, Elizondo of Goldman Sachs. New Edge is Cameron Dawson. It's nice to have everybody here. We could take midterms first.

5:25I mean, do you feel like a lot of volatility on the other side? Acrimony equals a more volatile market or what? I don't think so. We've discussed this in the past, what's a foregone conclusion? Almost surely, if not, I would bet dollars to donuts as we say that Democrats take the House. That seems like a given. The only question is your margin there, probably 15 seats, something like that. The Senate's a toss-up. But even if Democrats don't take the Senate and they take one House, you have, for all intents and purposes, divided government. And Eamon laid out the landscape pretty clearly. There's not going to be a majority to do anything.

6:00You're going to have the investigations. Senate appointments are probably going to grind to a halt and nothing's going to happen for two years. And you're going to say gridlock is good. No, I'm not going to say that. No, you're not. But people in the markets are going to say gridlock's good. I mean, that's traditionally how the market thinks about that. Unless something needs to get done. But in this case, listen, what is the government doing these days? Not much of anything. And with respect to the volatility comment, I would just push back. I don't know why that environment creates a particularly volatile investing environment.

6:28If you're focused on companies, cash flows, yada, yada, divided government or single, I just don't think it's going to factor very much over the next two years. Well, that goes to the point where gridlock is good. I mean, acrimony, gridlock brings acrimony, and then maybe it translates into a less volatile market. Let's take the Elliott warning, if you want to call it that. Do you agree with any part of what they say? Listen, I think any time you have a lot of leverage in the market to a singular trade, there's that risk. But, you know, I think it's more of a local pause right now. And there's a lot of opportunity.

7:01I would actually take the other side saying you can get high quality paper at 8 percent. I mean, these are some of the most important companies in the world. And I just I see that there is a lot of fears. Things have re-rated. They've repriced. Some of the tech stack looks really compelling to us. So I would say versus a few years ago where you were buying 100 year bonds at zero and now you're actually getting paid for complexity and risk and even quality. there's a lot of stuff in the market that's very, very exciting. Your points, earnings are still great. Stocks have gotten materially cheaper.

7:34And what's been happening with questions about AI has just manifested itself into a rotation. One, two, and three are all positive, you make the argument. Yeah, I do. And then even we'd argue you could see local peak bond yields. Add all that together with 4 % nominal GBP next year, that's really good mood music for stocks. You agree with that? Look, I think that what the market is trying to contemplate right now is that you have semiconductors trading at 16 and a half times forward earnings. That's a multiple that suggests that we're near a peak in earnings. But if you look at earnings estimates, they're expected to double over the next three years.

8:11So you have pockets of areas of the market that look cheap because there's pricing and potentially that earnings are going to slow down. The question is, will we see any confirmation of that earnings actually slowing down based on what hyperskillers are saying about their spending and the flow through down to the bottom line of semis? Well, I mean, AMD reports tonight, you know, you'll get a good look and then commentary from from Lisa Su. She'll be on the network tomorrow morning. By the way, are you making the case that semis have peaked? Because that's a bigger conversation and a more negative one.

8:41You could easily argue for the overall A.I. trade, couldn't you? I think we have to open our minds up to the idea that June could have been the peak in semiconductors. Now, that doesn't mean that you can't own the names. It means that you might have to own them for more tactical reasons. You could see a 25%, 30 % rally just to get back up to a downtrend line. But the reality is that these charts are starting to look more and more like we are seeing a peak, mostly things like the Kospi, for example. So it raises the question of if the market is looking so confident that earnings are going to continue to grow, but you're trading them as if you are at peak already, there's a big, huge divergence there that will have to be resolved.

9:19But it's also important, and not that Cameron doesn't know this, but it's also important to contextualize the recent pullback in the semiconductor stocks and the Kospi as well. You had a humongous rally, a legendary rally leading up into the summer where you eventually peaked and have traded sideways since. Many of those stocks and certainly the indices themselves are only 50 % off that pre-move earlier this year. So there's still tremendous gains in the books. But what you've seen more than I think any questioning of a peak in semiconductors is just the broader rotation that you alluded to. Yes, semis have been trading sideways for a while.

9:53The whole market has generally been trading sideways for about five months. However, the S &P 500, if you X out tech and you X out comm services, is making a new high. The equal weight index is pretty close to making a high. So I think not that I disagree too much with Cameron. I think just more right now, there is a fear that's taking hold in the tech sector that's leading to a reallocation into some of these other names. And if Lisa Su has some positive things to say, I think you might be able to reassert that uptrend. But wouldn't you also agree that the equal weight has been making these new highs carried in part, in a large part, by defensive areas of the market?

10:30Not exactly the greatest sign to say, hey, did you notice the broadening out in the market? The equal weight keeps sitting in the high. Why do you make that look? Look, I mean, Staples, utilities, health care have been the biggest gaining sectors over the last month. Not even close by a lot. We've been doing this for a lot of years, Scott. How many times over the years have we said, oh, health care is the leading sector this quarter, this month, this year. Isn't that bad for the market? No, but I said health care, staples and utilities. Yeah, obviously I'd rather cyclical parts of the market leading it higher.

11:00However, to the extent that we are focused on the market and not individual names, then you have these other names seeing the rotation and seeing the move higher. Over the last month since the S &P itself peaked, I think it was 10.6 was the peak, every single staple stock is up. Every single, basically, every single staple stock is up. Basically, every health care stock is up. Basically, every materials name is up. Now, is that enough to compensate? Well, no. That's why the market has traded sideways for five months. However, if you're picking individual stocks, that's a good chunk of stocks that you can invest in and rotate as you wait for some confirmation that maybe studies haven't peaked.

11:36Earnings breadth has gotten better, too, which is why a lot of stocks outside of tech, I hate to use the word deserve, but maybe some of the moves are justified because the earnings power of a lot of things outside of tech has looked pretty good, too. It has, but I would even argue some of those sectors have guided down on the forward and they're still trading up. So there is just some defensive rotational trade in the market that's taking place, which is going back to the point of it's still in the market. It's not rotating out completely and going to treasuries or gold. In fact, you've seen the opposite there.

12:08So from my perspective, it's just this indigestion that's taking place, a little bit of a rotation, and then we're going to see it go back up. So if you think semis may be in the process of, you know, maybe they have peaked, And then you make the argument here, too, that some of these alleged safety valuations look stretched, too. Are you negative, the overall market? No, the market can still make a new high, even if you have higher beta names part of the market already having peaked. We learned that in 2000. Remember, the market didn't peak. The S &P didn't peak in 2000 until September. Tech stocks peaked all the way back in March.

12:44So it's very possible that you see leadership rotations. I would say being careful around some of these perceived safety trades. You have staples trading at a 29 percent premium to the S &P 500. That's the max premium it has over the last 10 years, and the average is 6 percent. So there definitely is some stretch. But it's not just cyclicals or defensives that are rotating higher. You are seeing some signs of life out of things like regional banks, hotels, restaurants, some of the transports, aerospace and defense. Well, lately, I mean, oil came down a lot from where they've had, you know, hit what may have been a top.

13:19So obviously those trades were going to work. You make the point, too, in thinking of what Elliott had to say, that this is your note to our producers. I didn't know it was going to get read online. It always does. If you don't want it read on the air. Stop you now. Don't send it. Okay. All right. This is or will be a bubble in AI. Which I've said repeatedly. Is it? I don't. Well, listen. The main argument I've made on this topic, which I stand by entirely, is for all of humankind in a free market capitalist democracy like the United States, nothing gets done without enthusiasm and a bubble. We've all listed them forever.

13:57Sometimes it's nonsense like tulips and sometimes it's productive assets like communication services or railroads. And we're probably in one of those moments right now that will only reveal itself in hindsight. By one or two years, we'll have built too many data centers, too much power, too many gigawatts are coming online. We'll only know in retrospect. So nothing really gets done without a bubble. But that's not necessarily a negative. Obviously, if you're invested, it can be a negative in the short term. Well, it depends on the time frame that you put forward. So if you say in one or two years, I think they're starting to get a fear in the market that is it one or two months?

14:28Have we already sort of come to the, you know, towards the finish line of this cycle? That's some of the argument that's made. Cameron is essentially not making that this is a bubble point, but making the argument that Semi is a peak. I would just simply argue you don't know that in real time. It's going to be incredibly difficult for any individual investor, let alone an institutional investor, that lives and breathes this 24 hours a day to determine that in real time. So I'm not someone who advocates building diversified portfolios. And you want to weather the story. You don't want to have a diversified portfolio?

14:58No, I would actually make the opposite argument. You want to be concentrated. But that's another segment. I don't know that this is a bubble. But where I would disagree, listen, Elliot is a, I have nothing but positive things to say about what they do. Okay, but where are you going with this? I disagree with this argument as much as I disagreed with Henry Blodgett 10 years ago, as much as I disagreed with Stan multiple times. There's a lot of negativity. You can point to deficits and you can point to excessive optimism, etc. But that would have been true a day, a week, a month, a year, two years ago.

15:32Everyone is still trying to be Noriel Roubini a la 2009. And I just, with all due respect to all the people I just named and everyone else, I just I find it impossible to think that you are going to replicate that. We all see the same data. I get it. There's a lot to be concerned about. I just don't think from a professional positioning standpoint, you really need to fear every time one of these people comes out and says this stuff to fear. Are you D greenhouse at Solis or is it Dan dot greenhouse? Don't give out my email. Don't do that. That's not my email. They'll find it. There's numbers in the email.

16:03You'll never find it. But how do you address that idea of, you know, the market seems to be trying to figure out if earnings have peaked or they're in the process for AI, if we are inflating a bubble that's going to get pretty ugly and maybe sooner than people think? So I think as it relates to earnings, the market is struggling with the second derivative, which is the growth is still there. It's just less aggressive than it has been. As it relates to the question of bubble or no bubble, I mean, I just think that it's a really pedestrian question. You're not asking the right question. And the real question is, how do you invest in the most interesting industrial cycle that we've seen as investors?

16:45You have to know what you're buying. You have to know what cash flows you're getting, the quality of the credit that you're investing in, the security, all of that. You can't just be out there saying, like, I'm going to ride the beta wave. The market's basically telling you that that trade's over. Yeah, look, I think the second derivative point is exactly why the market is struggling so much. You have a market that's going to grow earnings by 36, maybe up to 40 percent this year. That slows to 15 percent next year. But there's no contemplation in forward earnings estimates that we peak. You have earnings growing in 14 percent in 2028, another 12 percent in 2029.

17:18So I think that is going to be the big question driver of returns is at what point do those earnings forecasts start to level off? And that's when the returns start to level off. Guys, thanks for being here. Appreciate everybody's time. Let's get to some of today's top movers. We'll start with Apple shares lower following earnings. Mackenzie Sigalos has that story for us. Hey, Mac. Hey, Scott. So Apple actually pairing its losses going into the close, only down around 2 % now as the street starts to look past the margin squeeze to a record year. You've got 2026 revenue rising 15 % to nearly half a trillion dollars, EPS jumping 20%, and then Apple's guiding to holiday quarter revenue growth in the range of 7 % to 10%.

17:57That's a beat on the street, and it comes despite those ongoing supply shortages of Macs, iPads, and the new foldable iPhone. own. Apple can also absorb higher memory costs better than Android and window makers. Part of why it's been taking share this year and Mac sales, they jumped 24 percent, even as Intel just had its worst day since the 1970s on a weak PC outlook. But that high margin services business is, of course, the sticking point this quarter, with growth guided below 10 percent going into December. But excluding the hit from a stronger dollar, Bernstein actually says its services grew 12 percent last quarter in line with the quarter before.

18:34So the real drag here looking ahead is a flat app store plus weaker licensing revenue, which some analysts read as the billions of dollars that Google pays to be the iPhone's default search engine. But if AI chatbots keep pulling searches from Google, the concern is that payments to Apple could then fall. CEO John Ternus, though, telling me that Apple's answer here is Siri AI and those heavy users hitting usage caps who will ultimately be asked to pay more for capacity. Scott? Mac, thank you. Mackenzie Segal, chip stocks ripping, as we said at the top of the show, getting ready for AMD's results in overtime as well.

19:07Seema Modi taking us there. Seema? Well, Scott, AMD needs to prove to Wall Street that its outlook looks bright, despite potential weakness in the PC market, where AMD does compete with Intel. Remember, Intel saw a drop-off in demand in late August and early September from PC customers. Executives there are blaming higher memory costs. The question is if AMD CEO Lisa Su shares a similar outlook. Also top of mind, How big of a driver is MetaMuse to AMD's bottom line? And if AMD plans to be more acquisitive following its$9 billion acquisition of WorldLabs, the AI research startup. Worth noting, AMD has been less active than its peers in the debt market.

19:46Scott, only raising about$5 billion in debt so far in 2026. We did confirm separately that Meta is out today with a$20 to$25 billion debt sale. that doesn't seem to be denting optimism the way other AI financing news did yesterday with NVIDIA, Intel, Broadcom all rebounding. After we get AMD tonight, Scott, we will focus on Qualcomm results, which are out tomorrow. Also tomorrow, AMD CEO Lisa Su on Squawk on the Street, 9 a.m., Scott. Yeah, we'll be there. Thank you, Seema Modi. Let's get now to Pippa Stevens watching the move in the AI power names today. What do you see? Well, Scott, it's been a high bar for data center names this quarter, with many struggling to clear it, but not eaten, which is up 7 % on the day after a solid report with electrical orders coming in ahead of expectations, perhaps dissuaging some concerns around the pace of the AI build-out.

20:33Now, the company beat on the top and bottom line an also updated Q4 EPS guide with the midpoint ahead of estimates. The company's backlog grew 33 % year over year and said electrical sector data center orders on a rolling 12-month basis more than doubled, with data center revenues up about 65 percent year over year. The industrials are the best sector on the day, with other AI power players, including GE Vernova, Qantas Services, Generac, and Vertiv in the green. Now, all of these names have gotten hit by the AI slowdown fear and remain at least 17 percent below their recent highs. But strong earnings reports now counteracting some of those fears and perhaps setting up a better outlook on the other side of the midterms.

21:14Scott? All right, Pippa, thank you. Pippa Stevens, we're just getting started. Coming up next, Beiser is lower despite hiking its full year outlook. We'll tell you what is weighing on that stock today.

21:31Legacy credit scores only look at a brief snapshot in time, and that limited view often leaves millions of qualified credit seekers out of the picture. Vantage Score is changing that by modernizing credit scoring. Vantage Score uses 400 % more credit and alternative data to create a fuller picture of financial behavior, including trended credit data, rental payments, and timely utility payments. Vantage Score safely broadens access to the credit economy and brings 5 million mortgage-ready borrowers into the market. That's why top lenders like Rocket Mortgage, as well as nine of the top 10 banks, rely on Vantage Score 4.0.

22:08With higher predictability and greater access to credit, everybody wins. Get started at VantageScore.com.

22:42required. Tired of the same old game night? Switch things up with Chumba Casino. Play over 200 free online social casino games from classic slots and blackjack to exclusive in-house favorites you won't find anywhere else. However long you got, you can play your way anytime, anywhere. Make your next chill night a little more fun with Chumba Casino. Only available in permitted states. No purchase necessary. See terms and conditions for details. VGW Group Board were prohibited by Log 21+. All right, welcome back. Shares of Pfizer lowered despite an earnings beat today. Annika Kim Constantino has the details on exactly why.

23:23What can you tell us? Hey, Scott. So Pfizer had a solid quarter and raised its full year sales guidance by$1.5 billion at the midpoint. And this is on the back of strong growth of newly launched and acquired products, which contributed$3.8 billion in sales this quarter and grew 32 % operationally. And those drugs, including the targeted cancer drug PADSEV, are helping offset the steep declines we're seeing with COVID products. Here's what Pfizer CEO Albert Bourla told us earlier today about the trajectory of these newer products. What we acquired were platforms that they have tremendous pipeline that we are working on it right now.

24:00So in addition to the revenues that they generate now and they will continue generating so that we can overcome the patent, the loss of patent exclusivity, we are bringing pipeline that will perform even better in terms of growth. So those new drugs are central to Pfizer's strategy for managing upcoming patent expirations for blockbuster drugs, including the blood thinner Eloquist that it shares with Bristol-Myers Squibb, Scott. All right, Annika, thank you. Appreciate that. That's Annika Kim Constantino. Now to Julia Boorstin on Disney. Those shares higher following reports. The company planning to cut several thousand jobs.

24:36What do you know here? Well, Scott, Disney is indeed planning to lay off several thousand employees, according to sources familiar with the situation. Now, those sources are telling me that some managers in certain parts of the company have been asked to reduce costs by as much as 20 percent from both labor as well as general and administrative expenses. This was signaled by corporate management in recent months. In Disney's August earnings shareholder letter, the company said, quote, we remain highly focused on reducing costs across the enterprise to create incremental capacity to invest for growth and are evaluating a variety of levers, including reductions in labor and SG &A, saying we are midstream in this work.

25:18They said that back in August. Now, all of this comes after Netflix said last month that it would lay off about 6 % of its workforce. And Skydance, the newly combined Paramount and Warner Brothers discovery, is expected to do meaningful layoffs to achieve the$6 billion in synergies it's committed to. Scott? Okay, Julia, thank you. Shares of Shopify as well sliding today after reporting that company's results. Brandon Gomez following that. What's behind this move? Hey, Scott, shares down almost 8 % after the company showed strong growth but missed Wall Street expectations. Revenue rose 32 percent and adjusted earnings beat.

25:52But investors were also watching the cost of that growth. Shopify expects fourth quarter gross profit growth to trail revenue growth as it invests in AI and infrastructure. Shopify's president also joined Squawk on the Street earlier today. Take a listen to what he said about the health of the consumer. I think businesses are really optimistic. I think shoppers are feeling some economic pressure, which means every new dollar spent is a more deliberate decision. But truth is, we're seeing growth across merchant sizes, geographies and channels. Strength seems very broad based. So the question here, can Shopify keep growing across its merchant base and turn that momentum into more profit, Scott?

26:32OK, Brandon, thank you. Appreciate that, Brandon Gomez. Coming up, one of the nation's top ranked financial advisors opens his playbook as we head into that final stretch of the year. Treasury partners Richard Saperstein. He is at Post 9 next.

26:51Hey, this is Will Arnett, host of Smartless. Smartless is a podcast with myself and Sean Hayes and Jason Bateman, where each week one of us reveals a mystery guest of the other two. We dive deep with guests that you love, like Bill Hader, Selena Gomez, Jennifer Aniston, David Beckham, Kristen Stewart, and tons more. So join us for a genuinely improvised and authentic conversation filled with laughter and newfound knowledge to feed the smartless mind. Listen to Smartless now on the SiriusXM app. Download it today. Weren't agents supposed to take things off your plate? Building another to handle the others is a bit much.

27:33Don't make more work out of work. Gemini is the one agent that knows all parts of your business and actually gets stuff done. You give it a project, close your laptop, and when you come back, the job's finished. No matter your industry or role, your agent has the skills to help every team stay in their flow. Seriously, make work less work with Gemini on Google Cloud. Check response, subscription required. With the Vivgard Hytrulo, Efgard Tigamod Alpha, and Hyaluronidase QVFC pre-filled syringe, self-injection is in your hands. It's your treatment routine. Use at the time and same day each week.

28:08take the pre-filled syringe with you on vacation, or have it handy for cozy staycations. For more information, visit livevividly.com. That's L-I-V-E-V-Y-V-I-D-L-Y.com. Brought to you by Argenics. With just 40 trading days left in 2026. Can you believe that? 40? That's quick. Top financial advisors like this guy look into the year's final stretch for big opportunities. Richard Saperstein, Treasury Partners founding principal and CIO, one of this country's top-rated financial advisors. Welcome back. Thank you. Sounds like one of the country's top-ranked financial advisors is getting a little cautious on the market, more so than you've been recently.

28:53Is that fair? Yeah, I'd say so. The narrative has changed from how big is the AI opportunity to how is it going to be funded, what's the return on the capital. and we're seeing indigestion because of the missed expectations, not from the fundamental underlying growth. So, I mean, you think risks above decent-sized pullback are increasing, elevated? How would you describe that? Look, we've been trimming equities all year. You have? Yeah, we've been talking about that. Yeah, but you've been trimming some and then just adding to mega caps, right? We've held mega caps, but trimming peripherally. And we've been buying high-grade municipal bonds.

29:33Still? Yeah, we're still buying. We're buying very aggressively now. Why right now? Well, because yields are 4.5%, 5 % tax-free. And for our clients, where the return of capital is more important than the return on capital, it's a very important asset reallocation. Secondly, when you think about our client asset allocations, in the last four years, the market's up, what, 120 %? So a lot of clients are overweight equities right now. So it's very important for us to start trimming. And we've been doing that all along. So when you talk, as far as I can remember, at least in the last couple of years, at least about munis, can you be more actionable for people who are watching this and thinking, OK, I'm down with that.

30:17But which ones? OK, so the bonds are long term, let's say 20 to 30 year final maturities. and they have call features in, let's say, 10 years. So they're called kicker bonds because if you, they aren't called, they kick to the coupon rate of the bond. So right now, though, they're trading at a 455, 5.25 % tax-free yield. Every state has these muni bonds. And so depending on what state you live in, you can find bonds that are appropriate for your risk parameter and your exact maturity structure. So it doesn't even matter. Wherever you live, you can find something that fits what you think makes sense.

30:59Yes, exactly. When you see someone like Elliott come out today and sort of give like a laundry list of major worries about the market, you share some of those concerns? Look, we've had disruptive technologies have market pullbacks for years, whether it was deep seek or tariffs or Iran. Constantly, there are pullbacks in the market. And what he's doing, and by the way, he's a very well-known investor. What he's doing is basically... Well, one of the greatest, I mean, obviously. Exactly. He's accumulating all of them and bringing them out. So these risks are there. Yet we could have talked about many of them a year or two ago, and the market continues to go higher.

31:40I'm not whistling past the graveyard, and I'm conscious of it. And that's one of the reasons why we're reallocating assets right now. But we still like large cap technology. Why aren't you relocating, reallocating assets to sort of other areas of the actual stock market? I mean, the Equal Weight's done well, as guests have already pointed out. The market's had an undoubtedly more defensive tone. You know, Staples Healthcare Utilities are representative of that. Are you not a big believer in the durability of any bigger broadening? We do have other industry groups within our portfolio. So we're not just exclusively in large cap tech and the peripheral stocks around it.

32:24But I think it's like what? Pharmaceuticals, banks. All that is healthcare. We're in pharma, we're in banks. There's other names in our portfolios, but we're concentrated in large cap growth. If you look at PEG ratios, the PE ratio to the growth rate, large cap tech is 0.6 to 1, 1.5. Whereas if you look at Procter & Gamble or other industry groups, they're over 3, 3.5. So you're paying for less growth. And that comes down to, like, take Google, for example, where there's a very negative attitude about the stock right now. Yeah, stock's, like, down a really large amount from its high. Exactly. So the narrative is there's an existential threat against their search business, which is$320 billion a year, which puts them in the top 10 of the S &P 500 right behind Exxon.

33:18That's the size of this business. So it went from 19 % growth to 12 % growth. Now, Google has four key things. They've got chips, compute, they've got a frontier model, and they've got cash. So they can always string together a consumer agent and compete with Meta. So I wouldn't really just throw the company out of a portfolio right now and keep in mind, names like that we've owned for over a decade. And we use these opportunities when dust clears here to add to that. So you come out of mega cap earnings season, everything but NVIDIA, right? Because we now have had everything but NVIDIA. Right, we just had Apple.

33:57And you feel as good, if not better, about the stories than you did six months ago? Yeah, and here's why. The question is, what's the return on all this massive CapEx investment? It's a big question. It is. And we go right to the cash, the funds from operations. And if you look at Microsoft, Amazon, and Google, the large three hyperscalers, and look at the growth of funds from operations over the last three years, it's averaging 150%. So Amazon and Microsoft,$240 billion of funds from operations. Google,$270 billion over the next 12 months. These are stratospheric amounts of cash they're creating to reinvest in their businesses.

34:40So if we're going to look for the returns on this investment, look at the cash. It's there. And that's why we own these stocks. I know, but the cash is kind of decreasing. It's being consumed more than the cash, and they're going into the capital markets. Do you have no problem with that? I do not. They're not at all. Microsoft is under leveraged. These companies are under leveraged. But they're always under leveraged because of the size of their balance sheets and their cash hoard. Exactly. So they can use to issue debt and more efficiently use their balance sheet. So I'm completely comfortable with it.

35:15We're a long-term investor. I know. I hear you. Thanks for being here. It's my pleasure. All right. Rich Saperstein. Up next, we track the biggest movers as we head into the close. Brandon's back with that. What do you see? He's got a crypto name bounces back with Bitcoin. A luxury automaker races higher on guidance and a food distributor gets hit by weak restaurant demand. These are the tickers taking over these last two minutes of trading coming up after this.

35:41Fifteen from the bell back to Brandon with the stocks that he's watching. Top of your list is what? Hey, Scott, top of the list. Coinbase jumping nearly six percent after sliding 10 percent Friday and another three percent on Monday. Now, that initial drop followed Q3 results that showed weaker crypto trading volumes. Morgan Stanley then downgraded the stock. Bitcoin now trading higher after declines last week and may be a reason for Coinbase's turnaround today. Meantime, Ferrari is up 3 % after raising its 2026 guidance and posting Q3 results that beat estimates. Management citing stronger consumer personalizations, lower than expected currency headwinds, and its Formula One championship position as the reason for the move, the stock seeing its best day since mid-April.

36:21And then Cisco, ticker S-Y-Y, sinking 9 percent after posting Q1 revenue that missed estimates while profit came in line. Cisco CEO says the cyclospore outbreak worsened already weak restaurant demand. The company had halted distribution of Taylor Farms iceberg lettuce from Mexico in July following that outbreak, Scott. OK, Brandon, appreciate that. Thank you, Brandon Gomez. Coming up all over the biggest names reporting in overtime. That and much more is in the Market Zone, which is coming up next.

36:51We're now in the Closing Bell Market Zone. Mike Santoli and Empower's Martha Norton here to break down these crucial moments of the trading day. Oliver Rennick standing by live from the Cibo Global Markets in Chicago. We do have full team coverage on the names reporting in overtime as well. Seema Modi with a last look at AMD for us. McKenzie Segalos back to look at Block. And Contessa Brewer is watching booking holdings. However, Michael Santoli, we will begin with you. What do you think about this market today? I mean, pretty understandably, we stayed at kind of a low idle, I think, pretty much trying to remain neutral ahead of the election results.

37:27Clearly, there's signs that we are a little bit kind of tightened up ahead of what is to come in terms of those results. The VIX at 20, even though the index isn't doing a whole lot. And I think some of the stuff that looks like it got overdone in the short term, having some reversals, makes a lot of sense. Semis bouncing, Staples pulling in a little bit. But I think there's a very plausible case that you will have an exhale, perhaps, after the midterms, assuming they go roughly as expected. And, you know, there's plenty to prove. I think a lot of parts of this market that were previous leadership are very wounded.

38:00And they have some work to do, I think, to kind of win back their status as engines of the bull market. I mean, we've got to get something good from AMD, right? And the commentary from Lisa Su. I mean, you'll have that coming up in overtime for a trade that's taken some body blows. No doubt about it. It's been a while since one of the main bellwethers actually not only delivered the results, but also, you know, got applause from the street and had coattails, and you had other stocks following it higher during this earnings season. So maybe we're due for one of those. We'll see. Presumably, you know, expectations should have been beaten down a bit heading into this.

38:38We'll see if that's enough. Yeah, well, the stock's running into the print, too. and SEMA is going to have more on that, of course. We'll see you coming up in overtime, Michael. Thank you very much. We'll go to the SIBO Global Markets. Oliver's playing options, Zach. So what are you looking at? Midterms too, Scott. It looks like someone thinks clean energy stocks are a win if it goes blue tonight. That's the best explanation I can see for a big and very one-sided surge in options trading on underperforming names like First Solar, SolarEdge, and the solar ETF, TAN. That fund usually trades around 500 to 1 ,000 options max per day, and today it surpassed 20 ,000, and 99 % of them are calls.

39:20The most popular trade was buying the 50-strike call for December expiry for$0.80 and looking for a 17 % rally. Other notable trades included buying the 35-strike call expiring Friday on SolarEdge, which reports earnings in the morning and currently trades at$32, as well as buying the 35 strike call for January in Enphase, which already reported earnings and trades at$31, Scott. Okay, Oliver, thank you. That's Oliver Rennick for us in Chicago. Sima, we mentioned AMD. It's coming up after the bell. The stock's having a nice run today, and there's a lot, I think, weighing on this. What do we need to know, you think?

40:01Well, overall, Scott, Wall Street is expecting AMD AMD to see about a 92 % year-over-year jump in third quarter earnings. So the bar is higher. And investors recently have been souring on the chips trade. AMD has been a solid outperformer, outbeating the gains in Nvidia and its peers in 2026 as investors grow optimistic about AMD's pipeline, the relationship it has with Meta and powering Muse with AMD chips. CEO Lisa Su's goal to play a more meaningful role in the data center stack, that's expected to be a big topic on the earnings call. We'll also want Sue to address those topics as well as her read on the personal computing market.

40:37We have seen the stock fall about 26 percent from its recent high, Scott. Okay. Seem to thanks. We will certainly see what happens, as we will, Mac, with Block. So, Scott, Block's earnings have been on a tear this year. The company slashed headcount and then reorganized around AI, and profit is expected to nearly double from a year ago. Now investors want to know how much room is left on margins or whether Block has to start spending again to fend off rivals like Stripe and Toast. Cash App, it is the engine here and lending is driving it. Block is stretching out its short-term loans and charging more for them.

41:12That should lift profit, but longer loans also means that more customers aren't going to pay them back. And that is the bear case here. Block has been sharing less detail on credit in past reports. The other knock is on Cash App, that user growth has been virtually flat for three quarters. And then on the merchant side, Square's growth has been picking up, but Wall Street expects a slight slowdown this quarter in an increasingly crowded market. Block is running way ahead of the three-year targets it set at last year's Investor Day, so watch for whether it raises that bar again. Last quarter, Block beat and raised, and the stock still fell.

41:46Those shares are off this year's August high, still down 70 % from their 2021 peak and down 2 % going into the close. All right. So we'll watch those earnings as well. Mac, thank you. Booking holdings as well. Contessa, tell us more. Well, Scott, booking is having a tough year here. Stock is down 30 % year to date. Two big focal points for investors in this report. What's travel demand like globally, especially with the conflict in the Middle East? What's the competitive impact from AI on the online travel agents? Now, we've from other global travel companies about uneven demand, that they're seeing it strong at the premium level still, still there for corporate travel.

42:25But Booking has said it's employing AI to its own advantage now and, for instance, deploying penny at Priceline, its agent to better serve and sell customers. So we'll see what they say in on demand and on the AI competitive threat. UBS today cut price target on Booking from$274 to$265. Wall Street expects Booking to report adjusted earnings of$450 per share on revenue of$9.5 billion for that quarter, Scott. Okay. Contessa, appreciate the walk-up there. That's Contessa Brewer. Marta Norton sitting to my left here. Midterms first. We get this clearing event out of the way. Is that what it feels like to you?

43:03I mean, it feels like that today, but I think one of the concerns that investors have is what happens geopolitically once we have the midterms in our rearview mirror. It's not really clear. We're getting a lot of mixed signals. That's the way Iran has gone all year. Yeah. Feels like something's going to happen. Yes. I mean, oil market's been really interesting over the last few days as well. You say this market requires investors to, quote, live in the gray zone. What does that mean? Well, I think there's a lot of mixed signals when we're looking around the market. I don't know if there's a single sector or industry where you can say all signs point to yes.

43:36You know, a lot of the defensive areas can protect you from volatility, but they don't have valuation in their favor. You can look at some areas like small caps and say earnings could pick up, but you could also suggest that with rising rates, that's going to hurt that area. And then with the AI trade, all of a sudden you need a contrarian mindset to start delving in there. You think that the defensive areas of the market have run too far? I think they've run too far or too fast. Yeah, I mean, health care was an area we liked for the past year. And even though some of the fundamentals are good, now the valuations just seem way higher than makes sense to us.

44:10What about the whole broadening story? I mean, how do you see that? Certainly more defensive, although that big move in oil lower got a jump in discretionary and industrials and materials and those more cyclical areas. So what wins out at the end of the day, do you think? Well, I mean, from an earnings perspective, you can make the case for broadening, right? You can even see some of the softness and hyperscaler earnings already appearing, and then you can make the case for health care and small caps. I think the bigger question is whether you can get prices to follow that, and I think But that's a little bit harder to ascertain.

44:42I think areas like financials, asset managers actually are cheap. And so if the economy remains strong, maybe that's an area that you can go to. But I think the broadening trade itself has enough question marks around it that you don't want to consider it a sure thing. Do you have questions about the AI trade at this point? Do you think it's fully intact? It doesn't feel like it at the moment. I think what we all have to do is consider where the fair values sit in an AI world. And that might not be for the hyperscalers where they were pre-AI. And so that's where we're doing the most work right now, is figuring out whether the discount is as large as it seems or maybe a little bit more modest.

45:19You think because, well, I mean, they have, valuations have compressed a bit too. They've compressed quite a bit, right? Doesn't that help the case that you're trying to figure out? It does. It just, I wonder whether fair value also comes down. You look at something like Alphabet and its core business, and the advertising questions are there. So they have to pivot their business. And how does that work? What does the monopolistic position look like in an AI world? I think those are questions that we have to answer. What about the semis? It's such an important group. We're waiting on AMD. It doesn't get as much pub as NVIDIA does, but it's no less important, especially just now, when we're asking these questions about a super important space within the market.

45:58Yeah. I mean, the semi trade broadly has seemed overdone to us, but I still think that... Overdone to the downside? Overdone to the downside, but had a very strong run in the first half of the year, right? So I think the fundamentals remain intact. It's whether the prices really offer you much opportunity. All right. Well, maybe AMD will help us answer some of those questions. Thanks for being here. That's Michael Norton from Power. We're going to ring the bell as we do approach those earnings. Dow is going to be negative by a couple hundred points. S &P looks positive. NASDAQ is going to win this day.

46:27I'll send it into overtime with Melissa Lee and Mike Santoli. Don't go anywhere. A whole slate of earnings.

46:50I'm Roman Mars, host of 99 % Invisible. It's a podcast about all the thought that goes into things most people don't even think about. You're going to see stories everywhere. Follow and listen to 99 % Invisible wherever you get your podcasts.