Closing Bell Overtime: 10/15/26

0:02At Janice Henderson Investors, we believe working together is the way to work better. Like combining your portfolio plans and our in-depth strategy, your valued assets and our valuable insights, your vision and our mission, working in harmony to seek the right investment opportunities. Janice Henderson Investors, investing in a brighter future together. 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. 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.

0:47No 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. The Bell's bringing an end to the trading day at the NYSE. The Headstrong Project ringing the bell. And at the NASDAQ, the Go Well Technology doing the honors. Welcome to Closing Bell Overtime. We're live from Studio B at the NASDAQ Market Site. I'm Melissa Lee, along with Mike Santoli. Stocks well off their lows of the session. They're closing higher by a full percentage point, 556 points there. The NASDAQ Composite sneaking into the green late in the session.

1:19S &P 500 also snapped a three-day losing streak there. CoreWeave kicking off the tech selling yesterday with concerns about its debt. At the low of the day, the stock was below$60 a share. You see a big comeback there above$69. It was down there for the first time since May of 2025 before the rebound. Also a dramatic day for bond yields, closing sharply lower despite this morning's hotter-than-expected PPI report. The quest for safety amid the tech sell-offs seeming to outweigh inflation concerns in the near term. We also saw the safety trade in the stock market. Nearly every stock in the consumer staples sector closing higher.

1:54Walmart getting upgraded. Kimberly Clark reporting preliminary results. And health care, what a standout. Continues to be the best sector recently, up 6 % in a week, once again led by Eli Lilly. Let's get the first take on the close now. And the dramatic decline in bond yields. We went down to as low as 5.04 % at one point in this session. That really seemed to alleviate the pressure across multiple sectors, including technology. It did. It definitely released higher a lot of the hard-hit consumer parts of the market, the leverage parts, housing, home builders, things like that. Beyond that, you had really, I think, selling panic conditions in semis that were isolated around midday.

2:30Basically, people said, look, even if this isn't the bottom, it's a bottom. And they managed to rally. So I do think you still can see this clear quality bias in all of this with the blue chip self-financing type businesses way outperforming. It was Lilly and Visa and all that at the top of the index. Quality ETF week to date up 2 percent. Momentum ETF week to date down 5 percent. OK, so now the question is, is that did that kind of do the job of trying to discount some of the risks in credit markets and the rest of it? I also don't know if you want to see bond yields on the Treasury market swinging this wildly day to day.

3:04I mean, it is a little bit unnerving. It's volatile. But obviously, at least for now, going in the correct direction to relieve some of the pressure. And I don't know if anything is really resolved, excuse me, around the neoclout issue in terms of the borrowing costs at all. I mean, the 5-plus percent on the 10-year Treasury yield, costs are still elevated, and the bonds are not really trading that much better in light of the increase in the stock price that we've seen in today's session. I mean, Corweave stock, 21 percent short interest. And we also had some favorable comments from Jensen Huang, who, of course, is talking his book with NVIDIA having a 10 percent stake, but saying, you know, Corweave, their borrowing costs are actually lower today.

3:41They're getting lower every day. And so you had him out defending that stock. That's certainly added to the sort of positive swing higher. I don't think there's anything like an all clear for those questions. I do think, though, it's worth a reminder that we've been in this process of questioning the assumptions underlying the AI hardware build out for four months. Semiconductors peaked in June. All of the neocloud stuff peaked around that period of time. Storage, AI industrials, all of it has been months in the making where you're kind of 20, 30 percent off the highs. It doesn't mean it's over, but it does mean it's not the beginning of things.

4:14It did remind me of yesterday's action with that Gartner report saying most of these neoclouds are not going to survive independently. 80 percent. I mean, what a crazy number. Eye-catching, kind of persuasive on some level. But it reminded me of the Citrini report on SaaS software from February, which was scary, caused a mini panic, but occurred closer to the low in software stocks than to the high. So always know the markets sometimes get there first, I guess, is the lesson. Well, Corweave stock did rebound, as we said, after a sharp two-day sell-off that was sparked by rising yields on the company's debt, which climbed to more than 15 percent.

4:48Bond investors grew increasingly concerned over its heavy spending and debt levels. Corweave has taken on more than$51 billion of debt and obligations to fund its AI infrastructure buildup. The stock's declined weight on other neocloud companies and triggered a broader downturn across the AI sector. Joining us now is Niles Investment Management founder Dan Niles. So, Dan, great to catch up with you here on this. You heard the conversation. I think one of the debates going on, ultimately, even beyond the immediate kind of credit and solvency concerns and all the rest, is where are the economics of the AI boom going to settle?

5:22At what sorts of companies, at what layers of this boom? Well, I mean, I think if you think out, to your point, like where does it settle? It'll settle at the full stack hyperscalers. And by that, I mean Microsoft, Google and Amazon, because not only do they have the raw chips, they have the services, they have the software, they have everything to support that. Where you're going to have problems. And I've been saying this for I don't know how long is at the neocloud level, because what the Microsofts and the Googles are doing is they're contracting out with the likes of CoreWeave for that excess capacity.

5:58because everybody, I think, agrees that AI is the most transformational technology we've seen since the internet. If you believe that, you know that you're going to have overinvestment because everyone knows if you're the last company left standing, you're Google or Amazon, you're going to make a huge amount of money on the other side of this. But what you don't want to be doing is overbuilding your own capacity. And so that's why you'll contract out with these neoclouds for that excess. And I think that's where you're going to see a huge wave of bankruptcies when this ultimately implodes. So I'm not sure if you saw the report.

6:35Excuse me, I'm losing my voice. Dan, in terms of the Gartner report, saying 80 percent of these independent operators will go bankrupt. I mean, do you see the logic in that? I mean, given what you've laid out, it does sound like you think that eventually there will not be a place for the neoclouds once compute is somewhat rationalized. Yeah, 100%. And by the way, that extends out to you've had me on the show before, and I've said, look, all the people that you think are going to win at the LLM layer, they're going to have problems too. And I think OpenAI, as I've said multiple times, is at the epicenter of that, where I think ultimate winners will be, you have Microsoft on the enterprise, because they've done a good job of taking advantage of all this talk about, oh, AI is going to kill 10 % of us.

7:20And corporations feel safe because they've got a Microsoft 365 license. And Microsoft's like, look, you can access AI in a very safe environment. They've done the co-pilot overhaul. I think Microsoft ultimately wins an enterprise. I think in consumer, it'll ultimately be the Android ecosystem, which is obviously Google, and it will be Apple. So for consumers, you'll either talk to your iPhone or your Samsung or whatever it is running Android and you won't care what model underneath it it's running, whether it's MetaMuse or, you know, dots from OpenAI. It won't make a difference. And you honestly won't even know what's running and you won't care because those two companies will route your query to whatever is best to get the job done at the best price.

8:08So that's kind of how I think about it to Mike's question of ultimately where do you end up? It's Microsoft on enterprise. It's Google. It's Apple on consumer. and then you've got a whole lot of carnage, you know, on the names outside of that. Yeah, I've thought about that analogy, Dan, of, you know, Android kind of this, you know, sort of open system that is kind of seamless and it's essentially kind of profitless really, too, at the operating system level. However, you know, in smartphones, in mobile, you do have one premium brand that commands more than 100 % of the profits of the whole ecosystem, and that's Apple.

8:44Is there going to be a layer of premium LLMs? Is it going to be OpenAI and Anthropics still able to feed the upper end at the frontier that's going to actually make their businesses sustainably good ones? I don't think on the consumer side. Right. How many consumers are you going to have saying, hey, you know, Vibecode me a database software management. Right. You're not going to get that. You're going to be go get me a good airline ticket. Give me seats to the theater. You can lose an incredibly cheap open source model to get that done, which is why if I'm going to bet on either Anthropic or OpenAI, I've said this from the start, OpenAI focused on consumers.

9:23Consumers are used to getting things for free, right? We use Google for free. We use Instagram, Twitter for free. You're not going to want to pay. That's why you saw OpenAI switch to the enterprise market earlier this year. Anthropic from day one has been focused on the enterprise market. Why? Because businesses will pay. And so I think that's going to shake out. And I think Anthropic will make it through that. OK, but I have real concerns about OpenAI. And let's not forget, both of these IPOs have gotten pushed out, right? Anthropic was supposed to come earlier. Actually, OpenAI was supposed to come first.

9:58That's been shoved out to next year. And you've already had deals get pulled. Firmus, which was backed by NVIDIA, they couldn't get that deal done. In Australia, that was like a$30 billion market cap. At one point, you had AirTrunk, which was backed by Blackstone and the Canada Pension Fund. That was like a$15 billion IPO in Singapore. That couldn't get done. And that reminds me of sort of, I don't think this is 2000, but you have to keep an open mind where I remember a lot of deals got pulled at the top and you couldn't get funding. And this goes back to our original conversation around Corweave and where the bonds are trading.

10:35And so you do have to keep that in mind as to where are we in the process. I wanted to unpack with you, Dan, and extrapolate it. If you do think that there is going to be a period of rationalization of compute and that these neocloud businesses don't really have a place in the AI ecosystem eventually, how do you then sort of, what is the impact on the chip makers, particularly when you have a lot of the memory makers are facing increased competition from China, so you have that element as well? Are we just counting too much on those long-term agreements, thinking those are ironclad when in actuality we're not going to have the demand later on.

11:12There could be force majeure, you know, called forward to break the contracts or whatnot. Plus, there's all this, you know, competition on price, et cetera, eventually coming from China. Those long-term contracts are worthless in my mind. I mean, go back to what happened during COVID. If you remember, there were a lot of long-term agreements struck during COVID. And what happens is this. The customers go back to the semiconductor suppliers and they say, well, I know we agreed to this, but we want the terms changed. If the semiconductor supplier says, nope, we're making you honor it, what will happen is exactly what happened to Microchip.

11:48Microchip was probably the most aggressive company in terms of coming out of COVID, making their customers, and by the way, microcontrollers are not a commodity like memory is. So it's, you know, even more important to some degree. And they made their customers honor it. They went through four quarters in a row where revenues were down over 40 percent, four zero year over year. The CEO got kicked out. The prior CEO got brought back in. He canceled all those LTAs and said, look, we're not going to make customers buy what they don't want, because if you do make them honor it, a company like Apple will say, well, fine, we'll honor the contract we signed.

12:26And as soon as it runs out, we're going to give all the business to your competitors. So these LTAs, to me, Matt, are just as good as the LTAs struck during COVID. Which are not good at all, it sounds like. Dan, good to see you, as always. All right. Thank you. Dan Niles. According to Morgan Stanley, an estimated$466 billion of AI-linked debt has already been raised by companies so far this year. That's up from $101 billion year over year with Corweave's debt trading as a distressed asset. How concerned should investors be about the credit of the companies involved in the AI buildout? Joining us now is Seth Meyer.

13:03He is Global Head of Client Portfolio Management at Janus Henderson. Seth, great to have you with us. Thanks for having me. As you see what is happening with Corweave bonds, and granted, Corweave is very different from the credit quality of a bigger hyperscaler, but what are the implications? What are the ripple effects of how core we've bonds are trading to the rest? Yeah, I think it's the natural process of sort of repricing risk, right? I think one of the common themes we've been having here at Janice Anderson ever since the Fed started raising rates was the return of cost to capital. And I think what investors are starting to do is every AI dollar going to infrastructure spend isn't going to be the same.

13:45We're going to now start putting cost of capital differences between companies. And that's a healthy sign, how quickly this has happened. And now we're at where core weave bonds are trading. You talk about technicals or longs and shorts, et cetera. But I think ultimately what's ended up happening is we're repricing the risk. Some of the uncertainty that Dan was just talking about two seconds ago about the winners and losers and neoclouds even being needed, those are real questions you have to ask when you're lending. You think about CapEx budgets of some of these companies. You think about core weave's needs over the next 12 months.

14:16Where is it coming from? How are they going to finance it? Is it is it secured debt or unsecured debt? Will it be converts? Will be equities? And the whole the whole ecosystem sort of starts hurting itself as bonds start underperforming. So do the sort of the stocks. And then there goes your equity issuance possibility as well. I think what's been interesting, too, is this isn't just applying to what we're seeing with CoreWeave. Right. You can even you can even dig into the IG market today and just look at Oracle. Bonds there are actually significantly wider over the past two weeks. Or even Broadcom, strong balance sheet.

14:52Bonds are 15, 20 basis points wider there. So investors are actually becoming very discernible when it's actually when you're deploying capital. The question now is, how do you fund that as we move forward? There's still a hole, and they'll have to come to a market. We don't know which one to fund this CapEx budget. You know, it's fascinating, Seth, because the last couple of days I've been saying, You know, there was this popular line out there that said, why would the Fed be raising rates? These, you know, AI CapEx trend is inured to higher interest costs. They're going to be able to spend no matter what.

15:25You're laying out why that's not true. Right. Financial conditions have tightened. Capital is being rationed, you know, based on potential risk and payback. What do you think that means on a macro level, if anything? I mean, is it really going to slow the CapEx push to GDP? And fascinatingly, this all happened when we got too hot inflation reports and Treasury yields are dramatically lower. Yeah, I don't know if there's any connection there, but I think to your first point, Mike, the question, what does this mean economically? Realistically, the CapEx budgets of the largest hyperscalers, right, those with a fortress balance sheets, this means very little.

16:06We're still going to see one point two trillion dollars in spend next year. Whether or not Corweave spends their$50 billion, for all intents and purposes, will that impact GDP growth in the country? Will we see a build-out slowdown? Most likely not. When I think about the build-out, to me, it's really the four Ps. It's power, can you power it? What's the local policy where you actually get it approved? Do you have the people? And then finally, where are you going to get the paper to finance it? The paper to finance it in the high yield market right now, when you look at what's happening with CoreWeave, might not be available there or not at terms they would actually like.

16:48The paper to finance it in IG, they'll certainly be able to get those investment grade deals done. So from an economic perspective, I would see very little true impact because those CapEx budgets will be spent and they will over the next 12 months. on the margin? Can you make the argument that other companies have a hard time with any of those other P's? I think you can make the argument that's the case. But that, to me, would be on the margin. Nothing major in terms of these CapEx budgets of$1.2 or$1.3 trillion. There's so much overlap, Seth, in terms of what an AI play is in terms of sectors.

17:26And you take a look at a lot of the power sector, the construction sector. And I'm wondering, in terms of the spillover, even for investment-grade issuers? Is it more costly for the issuers in those other tangential sectors to also raise money at this point? We haven't seen, I mean, to a certain degree, the entire market is a little wider than it was, you know, 45 days ago or 60 days ago, particularly in high yield. The entire high yield market is wider by about 50 basis points or so. Investment grade is slightly wider. But for the most part, We haven't really seen a trickle outside of sort of these specific names.

18:03Weakness has happened, but it's really hard to point a finger at that with only 50 basis points in the grand scheme of things with how tight spreads have been in the high yield market isn't all that meaningful. So we haven't yet seen it spill over to where a power company is having a hard time getting financed. Construction companies would have a hard time getting financing. We haven't seen that yet. it's been very name-specific and idiosyncratic-specific. That, to me, is a pretty healthy sign. Also, if we do start seeing some weakness in names that are really solid, I think that's exactly when bottom-up security selection will really start winning, and managers that go out and pick those individual names should start seeing outperformance.

18:46Seth, great to talk to you. Thank you. Thank you. Seth Meyer. Coming up, much more on the tech credit crunch. The stocks bounced off their lows today, but is this issue going to keep cropping up? Is it time for investors to rotate elsewhere? Close the bell over time. Be right back. Legacy 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.

19:24VantageScore 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 VantageScore 4.0. With higher predictability and greater access to credit, everybody wins. Get started at VantageScore.com. This message comes from Wise Business, the only account your business needs to scale globally. You're building a business with global ambitions, but hidden fees are eating into your margins. With Wise Business, you can pay overseas suppliers without exchange rate markups.

20:00Have customers worldwide get payment details in 22 currencies so you get more of each hard-earned payment without hidden conversion fees. Be smart. Get Wise Business. Download the app. T's and C's apply. 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 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 Tax aging reversal today, so do you stick with it or is it time to rotate out?

20:48Joining us now is Eric Johnson, Chief Market Strategist at Cantor Fitzgerald Asset Management, as well as the Head of Equities at O 'Connor, its Alternative Investments Business. Eric, great to have you with us. You've sort of recently turned bullish technology, but you're closing out that position at this point. Yeah, a couple of weeks ago we decided it had a big run and there were longer-term risks that were sort of marrying with the short-term picture, which looks pretty good. Today, we obviously saw a big de-risk, and we saw over the last six or seven sessions that you've seen a material sell-off, material de-risking, and fear levels very high.

21:21I actually think that within tech, I think semis do look attractive, and I think they are going to get a bounce from here, and there are a number of catalysts over the course of the next couple weeks. hyperscaler earnings, I think will be a positive around CapEx. Likely hearing something around Anthropic, I think just hearing that about going public will be very important. And I think the midterm elections, I think that the AI campaign concerns that everyone's talking about will go away post midterm. So I think there are some good catalysts. And of course, semis have great balance sheets. It's fascinating how you've had to kind of track all of these overlapping many cycles inside the market.

22:05I mean, today, everything that had been obliterated and underperforming for a long time got huge bounces. Yes. Right. So it's kind of like, OK, fine. We have these concerns. It seems like you have credit flaring up. But if Treasury yields come down and certain parts of the market got sold out, they're coming back. But like, what's the sustainable theme here? Right. So I think part of it is I think there was actually a much more correlated rally. And so, as you said, rates have now started to come off. The 10-year yield is only 80 basis points off of the average for the last three years, which is in the scope of this economy, which is being dictated by AI CapEx.

22:43It's just not as meaningful. It's obviously very negative for housing. But I think that yields do sort of level off here. And that's been our view, that there is a ceiling to them. And that's based on the Treasury. We think, don't forget about them. They're going to be, I think, active and trying to control yields. Inflation break-evens are at 5.35 % over the next five years, very contained despite the move up in oil. And this term premium that everyone talks about is attractive, right? It's over 3 % for the 10-year, over 3 % for the 30-year above inflation. That's a pretty attractive price that I think is going to create some demand.

23:22Are yields at this level around 5 %? Is that enough to continue to release some of the pressure that was felt on some of those yield-stricken sectors like financials, home builders, discretionary, et cetera? I think so, because I think they've been really left for dead. If you look at the big picture over the course of the last year, and you look at sectors where consumer staples or utilities and even retail, they've been hit hard and they've been rotated out of. And I think if you can see yield sort of calm down and then nervousness within many parts of the tech sector, that's likely going to help other sectors of the market where it's just like, I want to be out of some of the more higher beta tech names and maybe go into safety and something with a dividend yield that's going to look more attractive if yields do come down further.

24:11If I widen out the picture and you kind of try to read the market's mind a little bit, the fact that valuations have come in so much given earnings growth has been so strong, implicitly it suggests the market is saying, OK, we probably saw peak earnings growth. Not only that, the earnings growth is so concentrated in these areas that are exactly the ones we're not convinced have multi-year growth paths ahead of them, like AI hardware. Does that resolve? Is that just going to be like the world we're in for a little while going into 2027? I think it's the world that we're going to be in. And I think that remains a major risk for the market and for the economy, the fact that the concentration is so heavy.

24:51You even look at sectors like retail, right? Nothing to do with the AI trade, but the consumer has been held up by the wealth effect, right? And so they have the highest exposure ever to equities. Equities have gone up 20 % a year for the last four years, and that's helping the retail sector. So it all comes back to this one trade, this one theme. And I think that's going to remain a risk. And I think that it will cause a cap to the multiple because the market's always going to be afraid that, OK, if this were to roll over, if this was just to slow down, it could have a cascading effect. So I think you have to have that in the back of your mind for any portfolio that you're running.

25:32Yeah. Relying on the denominator to keep growing. Yeah. All right, Eric. Good to see you. Thank you very much for coming in. Coming up, Walmart could be an inflation winner, and Amazon hoping to create some buzz with its new products. Those stories coming up on Closing Bell Overcast. The quarter pounder with cheese is made with 100 % fresh beef, cooked when you order it. Then comes the melted cheese, the slivered onions, the pickles, the ketchup, and the mustard. Add hot crispy fries and an ice cold Coke, all for$8. And if things go well, one loose fry at the bottom of the bag. The Quarter Pounder with Cheese Meal, now$8.

26:20Oh, look. You just got added to a meeting. About coordinating another meeting. To prepare for the pre-meeting. Ahead of the follow-up meeting. which will, of course, require a recap meeting. And then another meeting. Hit your booking point, book with Southwest, and enter airplane mode. 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. 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.

27:04No 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.

27:18Shares of Walmart moving higher today. The stock is up 14 % in October, back above its 200-day moving average. Deutsche Bank upgrading the stock, saying the setup going into 2027 looks more favorable. The firm says inflationary pressures will help Walmart's advantage as a value retailer, adding that Walmart is evolving from a traditional retailer to a technology-led marketplace. I thought what was interesting within this upgrade, though, was sort of the talk about higher fuel costs and how that will trickle down. They said if diesel prices remain basically where they are and remain out in 2027 at these levels, it'll be 50 to 100 basis points in inflationary pressure.

27:54It'll basically eat up all of the tariff refund that they benefit. Right. I was going to say, Walmart is going to obviously absorb most of that. There is maybe a net positive, which is that they can gain market share in grocery even more because they are a value leader in that area. And the other piece of it is arguing that it deserves an even higher valuation because the parts of the business growing the fastest should be the ones that you pay up more for, like advertising and e-commerce. I guess that's true, but it already is a pretty expensive. I mean, it's at 38 times forward earnings. It never traded above 35 in the prior 20 years until a couple of years ago.

28:27So you have to still make the case that, you know, that it deserves a rich valuation. There's also talk about agentic AI and how it would impact Walmart. And I thought that was interesting, too, because it was sort of unclear, like, is it going to be a negative impact on advertising? And they're making the case, the analysts are making the case that actually it would be fine. They wouldn't really lose anything. They wouldn't lose access to that very valuable first-party customer data because they will own the transaction. They'll own the customer. and then the AI agent provider will also own part of that transaction.

28:56So everybody wins is the case. I wonder how that will play out, but that's the case. And I guess arguably if the agent is hunting for the best price, greatest assortment, Walmart is going to do better than most on that scale. Well, Amazon is hoping a pair of new devices that it hopes can help generate a lot of buzz as part of the next phase of AI hardware as it develops. The company unveiling the Bee Frontier wearable bracelet and the Bee Eclipse, which attaches to smartphones. Both are AI devices that record, transcribe and summarize users' conversations, can generate lists and reminders based on those conversations.

29:33Amazon says a light indicates when recording is happening. The audio is never stored and users are even prompted to ask others for their permission to record. The products will cost between$75 and$100. You know, obviously, OK, you're warned if you're recording. What occurs to me with this is a previous generation of digital social interaction was all about ephemeral. Snapchat, the photos disappear. Instagram story is something I've never figured out. But what? They just go away after a little while, right? And now it's like, nope, we're going to preserve everything and we're going to use that as fuel to figure out what you want next.

30:13Right. It's kind of crazy because, I mean, Amazon has always been sort of they create these devices and you actually have to prompt it. You know, Siri, do this. Not Siri. Sorry. Alexa, do this in order for it to record. And so for this to be recording 24 seven for you to be wearing, it doesn't even have a watch interface. So it's sole purpose really is just to record things. And then imagine if I if you every single time recorded, I would have to say it's a two party state or multi party state when it comes to privacy. Mike, do you mind if I record this? Yes. How awkward is that? I also have to say, I mean, I guess AI doesn't get, like, bored.

30:50And, you know, the fact that most of it's wasted and it's not going to be useful is OK. But, you know, the idea that it's preserving everything as if it's valuable is interesting. There's a lot of useless conversations that I have during the course of the day. No doubt about it. Me too. Time now for a CNBC News update with Brandon Gomez. Brandon. Hey, Melissa. The Republican donor who accused Kimberly Guilfoyle of asking him to wire her$100 ,000 to pay off a credit card bill sued her today for defamation. Businessman Eric Dieters claimed she promised him access to White House officials in exchange.

31:18Guilfoyle, who was pushed out of her role this week as the U.S. ambassador to Greece, questioned the authenticity of messages Dieters shared with news outlets. Meantime, a federal judge denied a request today to order the Justice Department to preserve all its records from investigations into former CIA Director John Brennan. He was a central figure in the U.S. intelligence community's findings that Russia interfered in the 2016 election on behalf of President Trump. His attorneys said they needed the records to challenge potential charges as vindictive or selective. And a working Apple One computer signed by co-founder Steve Wozniak just sold for$1.15 million at auction.

31:58It was originally purchased in 1976. The Apple One was the tech giant's first product and was sold as an assembled circuit board. Melissa, that's your news this hour. Send things back to you. Thank you, Brandon. Alcoa shares are higher after reporting earnings just a few minutes ago. Earnings of$1.82 a share were$0.35 a share, better than the estimate. But revenue came up short. The company reaffirming its production and shipment guidance, but they are seeing some inflation. Alcoa expecting higher raw material costs and planned maintenance to hurt results by about$30 million sequentially. Up next, the aluminum giant's CEO breaks down the results with us in an exclusive interview.

32:34Closing Bell Overtime, be right back. Welcome back to Closing Bell Overtime, live from the Nasdaq market site. Stocks closing mostly higher after bouncing off intraday lows. The Dow up 556 points, the S &P 500 up a third of a percent. The Nasdaq with a small gain. The Russell 2000 up more than 1%. The Nasdaq 100 also well off its lows, but still closing just a bit lower, made for its fourth straight session in the red. Eight of the 11 S &P sectors closing higher today. Healthcare once again the leader, thanks to Lilly. Materials and discretionary also with nice gains. And shares of J.B. Hunt slightly lower following its results earlier this hour.

33:11The ship are missing on earnings,$1.82 versus the estimate of$1.89. The company's revenue per load was up 11 percent from last year, but most of that increase coming from a fuel surcharge. Well, shares of Alcoa higher after reporting earnings EPS beating, revenue missing, though, with the company warning of some inflationary pressures ahead, particularly in raw material costs. With us now to discuss the quarter is William Opplinger, Alcoa CEO, and our own Morgan Brennan. Morgan, take it away. All right, Melissa, it's good to see you. And, Bill, it's great to see you as well. So let's start right there because you also reaffirmed full year production and shipment guidance for both aluminum and alumina.

33:45How would you categorize the quarter and how would you describe current market conditions? Thanks for having me on, Morgan. It's good to see you again. Third quarter was a really strong quarter for us. We had production records in six of our facilities around the world. We delivered close to a half a billion dollars of free cash flow. We're executing on our strategy in that we're progressing the large transaction that we expect to close in the first half of next year. And on top of all that, we announced that we sold our first closed site for data center development up in Messina East. So it was a really good quarter.

34:23And you can see we delivered the earnings. And in the results, you'll see strong cost control and really strong production. I want to go back to this data center news. I mean, at a time where we're seeing both the credit and the stock markets freak out a little bit here, or at least get nervous about AI infrastructure build out and future funding for that. What are you seeing in real time? As you just mentioned it, and we've talked about it in the past, but data center demand is driving demand for aluminum. We've not. Well, there's two components to that. First of all, we have 10 sites around the world that we're looking at redeveloping and selling into the data center market.

35:05So we announced the first one of those here in this quarter. It's up in Messina, New York. That's a community that we've been in for 100 years, and it's with a midsize developer that will convert that to a data center. That's part of a broader program for us where we're looking to monetize 500 million to a billion dollars worth of closed assets before 2030. So, this is the first one of those, and this could be as large as$320 million, depending on the size of the actual data center. In addition to that, the growth in data centers is really positive for aluminum. For every megawatt of data center capacity that's built, you need about 30 tons of aluminum.

35:52So if you think about a gigawatt, you need about 30 ,000 metric tons of aluminum. So it's driving some of the strength and demand that we're seeing globally. Bill, specifically in Messina, it looks like the residents there are a question, and there is pushback against data center development. I'm wondering if you're encountering that in other places where you hope to do the same. So clearly, we work with the developers who are working with the communities. In the case of Messina, this is a site that's been closed for over a decade. And what a data center will bring is it will bring some jobs and it will bring some tax revenue to the community.

36:29So our belief is that it's strongly supported by the local community. We're also looking at other sites around the country. Any site that we would engage in selling to a data center, we would certainly take community concerns into consideration. The other piece of the puzzle here has been what's happening with aluminum prices, because on the one hand, we've seen a lot of supply come out of the market in large part because of what's happening with this warrant in the Middle East. On the other hand, we've seen prices come off a little bit. So I just want to get your sense of what we are seeing in real time in terms of the global picture here.

37:02And at a time where we are talking so much about crude oil production and shipments beginning to recover coming out of the Middle East, what are we seeing with aluminum? So there's a couple of things that are going on that factor into that pricing of aluminum. First of all, when the conflict started, around 40 percent of the capacity of aluminum smelting production within the Strait of Hormuz was taken offline. That is slowly coming back to market today. But as you can imagine, there's a massive amount of uncertainty of how quickly that can come back to the marketplace. Then if you go to the demand side of the picture, we see strong, resilient demand in both of our end markets.

37:44In 2026, in North America, every one of our major end markets grew from a demand perspective, with the exception of building and construction. Same thing in Europe. And so as we roll into 2027, we see continued growth on the demand side for primary aluminum, with the exception of building and construction. And that will really depend on where interest rates go over the next year. And, Bill, I'm going to ask you my every quarter I ask you this question, but trade and tariff dynamics. I'm not going to call it a trade war. I'm going to call it a trade row between the U.S. and Canada. What does that mean for Alcoa?

38:20Yeah. So prices in the United States have risen to a level. Aluminum prices have risen to a level whereby they cover the tariff expense. So Alcoa is paying gross tariff expense of close to a billion dollars on a run rate basis. Aluminum prices have risen to cover that. So from our perspective, it's actually a net positive for our company. We have a U.S. footprint. We have two U.S. assets that sell under that tariff umbrella, and that actually helps them. All right. Bill Applinger of Alcoa, it's great to speak with you. Appreciate it. Good to see you. Thank you for having me on. Our thanks to you, Morgan.

39:03Great to see you. Thank you. Great to see you. Up next, we'll break down the charts to see why the S &P 500 could be nearing its first sell signal since March 2025 and what that could mean for the market and your money. Closing bell over time. Be right back. The S &P 500 was able to shake off the slump in tech today. But was it enough to diffuse the risks bubbling up in the market internals? Joining us now is John Kolovis, his chief technical strategist at Macro Risk Advisors. So, John, it feels like you were kind of keeping the market on a shorter leash. Did today change any of that? Not not too, too much.

39:34It was a good kick save and a beauty, if you will, for the tape. But the thing that concerns me the most here right now is that the internal trends of the market are starting to deteriorate quite significantly. So what I brought here today is one of these risks that I see in the tape is that for the first time in 18 months, we're about ready to get a sell signal with 30 percent of the market underneath its 50 day moving average, which is over here, and almost 40 percent underneath its 200 day moving average, which is denoted over here. But the last time we had a sell signal was back before the bear market of 25 and before that, the bear market of 22.

40:11So when we have this configuration here, we need to take it very, very seriously and put our risk management hat on here. Because, again, this could be a precursor for a deeper spoon in the equity markets. OK, so a sell signal sounds kind of scary, John. But you're saying we just need to monitor this. So what are you actually, what is the message to investors here? And as a sell signal, I mean, because it's for the S &P 500, is it mostly a call on technology? It's a little bit of both, a call on technology. But now this is where things could start to roll over in terms of the overall market conditions, which would include technology.

40:43I think investors need to really just put on the risk management hat here, essentially, meaning like be mindful of your level. So technical analysis, one thing that's beautiful about it is it's not just about predicting the future. It's really not that. It's really about risk management. And when we are in a downtrend and when this gives us a sell signal, that means that volatility is going to go up and left tail risk is going to go up, meaning the probability of some sort of market mistake. I don't want to say the C word, like a crash could happen, but it's possible. And in terms of the 10-year yield, John, of course, it's also been kind of fascinating.

41:13Everyone thought nothing could keep it from going higher. And now we got this two-day retrenchment. Does that tell us anything about the trend? When it comes to the 10-year, yeah, here we are. So, yeah, so what happened here with the 10-year, it was projected to peak around the 515 level. It started to pull over. How did you get there? Bear sentiment. You got there with COT data and the RSIs, even some Elliott Wave. Now what we've seen is a consolidation pattern. What was interesting about yesterday was that it was a bit of a selling climax after CPI. And then you got the follow through down right now.

41:43I'm interpreting that more as a flight to safety than a proper reversal in trend and also in risk sentiment. But for now, I think we have enough of a decline in consolidation to see it work its way down to about 5 percent before we work our way higher once more. And we saw a major reversal in shares of Corweave in today's session, John. And I'm wondering if that augurs well for the semiconductor trade. It does to a certain extent. What we need to be mindful with the semi trade is that this is more of the higher beta part of the market. Right. So when high beta is underperforming, this is where we need to be really, really careful.

42:20So the good way to measure it is I brought today the relative ratio of the semiconductor index to Max seven. And this ratio peaked back in June. When was that? That was the momentum peak. That was a speculative peak within technology and has continued to work lower. What I'm worried about here is now this ratio is testing the 200-day moving average. And if they are on the RSI basis, it's oversold. What I'm afraid of here is that this trend were to continue, it's going to create forced liquidation and a lot more of those names. So it is encouraging to see Corweave recover and all those names recover.

42:50But again, this trend needs to reverse. So another way to think about it is I want to see this start to resolve higher before I put more risk in my portfolio, particularly within the technology sector. Yeah, still got a fair bit to prove there, I guess, John. Great to catch up with you. Thanks so much, John Kolovis. Well, data center opposition could be a major factor in one key state during the midterms in less than three weeks. That's where Pippa Stevens is right now. Hey, Mike, Ohio ranks sixth across the U.S. for a number of data centers, but local communities are increasingly pushing back in this battleground state.

43:24A look at how one project is dividing an Ohio city and what it means with the midterms just days away. That's coming up next. We are less than three weeks away from the midterm elections, and in Ohio, growing opposition to data centers is one of the biggest issues for voters. Pippa Stevens is in the Buckeye State with the details. Hi, Pippa. Hey, Mike. So data centers are top of mind here as Ohioans prepare to head to the polls in a seat that the Democrats are hoping to flip in the Senate. Now, ahead of this, data center backlash is really growing. But in local communities, the decision around these projects is often nuanced.

44:02So I'm here in Oregon, Ohio, where Advantage Data Centers wants to build a 500 megawatt facility in the fields behind me that right now is just open land. Now, this project was first proposed a few years ago, but local opposition has really taken off in the past few months thanks to a grassroots organization that was able to secure enough signatures to bring a measure to the ballot that would limit the size of data centers in this area to 25 megawatts. Now, this Toledo suburb is a really interesting case because they are no stranger to large energy infrastructure. There are multiple refineries, power plants, manufacturing facilities, but residents told me that this project feels different.

44:46I think we just don't know enough about them. I mean, from the very beginning, this whole thing has been so secretive. It just gives you an uneasy feeling. You know, if it's such a great idea and they're so beneficial to the community, why didn't they just come out and say that in the very beginning? But on the flip side, it has secured support from local labor unions as well as the Oregon City Federation of Teachers. President Ben Pfeiffer told me it would be transformational for Oregon and that it would be a needed and big boost for the school system thanks to direct payments. Now, this has really fired up voters and it's a key battleground district here.

45:24This is Ohio's ninth district. And Speaker Johnson was actually in this very county just last week saying that this is a top five race to watch and that every single vote will count. And there is no doubt here that data center opposition or support is going to lead to much higher turnout at the polls next month. Guys. So there's that measure on the ballot specifically about data centers. But Pippa, is this a dividing factor between the candidates? Is this a partisan issue or is this largely bipartisan? soon. So what's really interesting is that previously it seemed like candidates didn't really want to touch this because it kind of transcends party lines.

46:02And so, you know, politicians didn't want to take a strong stance because they didn't want to alienate voters on an issue that sometimes they don't exactly align with. And so what we've kind of seen is all these candidates coalesce around the same idea that it should be left up to local communities. Now, all of the candidates here, both in Ohio's ninth district, as well as at the Senate level, have attacked their opponents based on their prior data center stances, especially given that Ohio issued very lucrative sales tax credits for data centers that wound up costing the state a lot more than previously expected.

46:33But now kind of everyone is punting it, you know, if you will, and saying that it should be up to local communities because there is clearly a lot of growing opposition. And in Ohio specifically, it's an interesting one because Democrats have been traditionally very pro-labor here in Ohio, and the data centers are using labor construction workers. And so that's another key factor. So it doesn't quite come down to party lines, meaning it is a very thorny issue. And everyone is just saying what's best for the community. Yeah, repeat that a couple hundred times around the country, I guess. That's what we're in for in a few weeks.

47:06Pippa, great stuff. Thank you very much. That's going to do it for overtime. Fast Money starts right after this big break. Hey, this is Jeff Lewis from Radio Andy. live and uncensored catch me talking with my friends about my latest obsessions, relationship issues, and bodily ailments. With that kind of drama that seems to follow me, you never know what's going to happen. You can listen to Jeff Lewis live at home or anywhere you are. Download the SiriusXM app for over 425 channels of ad-free music, sports, entertainment, and more. Subscribe now and get three months free. Offer details apply.