Closing Bell Overtime: A Wild Day of AI Developments 9/29/26

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1:02Sarah Friar: Welcome to Closing Bell Overtime. We've been listening to President Trump, along with many tech CEOs field questions from the media after an AI day, in which I think the big headline, Mike, is no new federal regulations or no federal regulations. Instead, they've all agreed to this White House accord, which would effectively mean self-policing by the industry. Yes. Mark Zuckerberg articulated some of the principles in there, essentially internal controls, layers of audits. Boards of these companies are supposed to have independent oversight over these things. And supposedly everyone is going to adhere to it.

1:37And the president referred to it as morally binding when asked if it were a binding agreement legally.

1:43Sarah Friar: Right. So, yes, we promise we will we will abide to what was agreed upon. He also mentioned that they have renamed artificial intelligence. It might take us a while to get used to the new one, superintelligence. And there will be a superintelligence czar named in the next three to four days or so. Let's get more on that meeting at the White House. Eamon Javers is in Washington. Eamon. Yeah, Melissa, you heard Mark Zuckerberg there call that session historic. And I think that's right. We've really never seen anything like that. The president of the United States on the north lawn of the White House briefing reporters alongside the top tech CEOs in the world.

2:19You know, you had Mark Zuckerberg there, Elon Musk, Jensen Wang, Dario Amodi, so many famous faces from Silicon Valley here in Washington for this meeting with the president. We're going to need more detail, as you guys were just picking through, about what it is exactly that they signed. Zuckerberg was describing a document which agreed to some sort of voluntary self-policing organization in which they would check each other's models and verify in some way that they weren't dangerous. But we're really going to need a little bit of detail on what exactly was the ink on the paper there and that agreement that they signed.

2:52Because to your point, if it's voluntary, if it's non-binding, how official is it? What are the situations in which you would have to disclose this to your competitors? All of those details we still don't know as we stand here right now. But clearly they signed something. And they're also, the president said, going to sign a document in which he's going to proclaim that artificial intelligence should now be known as superintelligence. And you saw him correcting some of the CEOs. He likes that branding better. He thinks the word super is better out on the stump than the word artificial. And the president has an instinct for this kind of branding.

3:24And so he wants to really change the conversation around that. But I would say, guys, we've now seen the president three times today, once before this meeting, once during the meeting and now once after the meeting. And in all three sessions, the president really has not wavered from his position, which is that the Department of Justice and the FBI and the traditional regulatory agencies can handle this AI regulation issue. He doesn't want to see anything that slows down AI development. He sees an era of super growth. Elon Musk there calling it an era of abundance. That's what the president wants to get to.

3:56He's very skeptical of the AI doomers in the crowd who are with him today. And he thinks full steam ahead, no breaks. Let's go. Let's do this.

4:06Sarah Friar: You have to wonder, though, how this resonates with the electorate. He's got to be thinking of those midterms in just, you know, a few weeks or so. There's so many questions regarding data centers. And the response of the president was just, you know, steadfast in terms of data centers will help the communities in which they are built. They will help make people rich. They'll help the schools there. They will help the communities. Right. And I don't know if that's going to fall on deaf ears in terms of, you know, the recent polls that we've seen about how people feel about data centers being built in their backyards?

4:36Yeah, look, and you heard Mike Johnson talk about data centers a little bit as well. The president believes data centers are a political winner. That's a gamble in this political climate because we've seen all of the poll numbers that you're talking about, Melissa, and we've seen what an incendiary issue this can be in some of these communities where they really don't want this kind of development in their backyard. That said, something has got to power this AI boom if we're going to get the growth that the president wants. So he doesn't want the political concerns around data centers to overwhelm the growth that he's looking for to get to that super abundance that Elon Musk was talking about.

5:10The president's a believer here. And that's why I think he had Jensen Wang at his side there. It was fascinating just to see that moment of, you know, the president literally calling on Mark Zuckerberg, on Jensen Wang, on Elon Musk, asking them to step, Sundar Pichai, asking them to step up and make a few comments. The president wants them all on the record on this. He wants to press them on it.

5:28Sarah Friar: Yeah. I mean, we've all been in financial news for a long time. I don't think we've seen anything like that ever, really, in terms of Mike and I were chatting. The amount of market cap represented right there behind the president of the S &P 500, it's got to be about like 25 trillion dollars. Exactly. It's it's it's really amazing. Mike did the numbers. Excellent. Yeah. Well, I'm ballparking it. But yeah, Eamon, thanks. Yeah, not sure. Back of the envelope from the White House. Joining us not to react to what we have heard out of the White House meeting, Tusk Ventures founder and CEO Bradley Tusk.

5:59Sarah Friar: Great to see you, Bradley. Is it enough self-policing, a White House accord, a superintelligence czar?

6:05Bradley Tusk: Probably not, simply because if you could believe that the companies and the frontier models all have full control over their own work, and then yes, self-policing arguably could work, but we keep seeing every day now, at least out of open AI, oh, this thing went rogue, that thing went rogue, we're sorry this happened, we should have disclosed that. So when you fundamentally can't control your own products, how do you effectively police yourself? It is worth noting that Dario Amadei, when he was called upon to speak, really did not go along with the president's presentation that everybody here agrees that we don't really have to do anything in terms of slowing things down.

6:42She said, I'll say what I always said, which is we have to pursue this in a safe manner. And there's clearly from those companies a little bit of unease about whether they can keep it controlled or whether their incentives are leading them in a direction to allow things to get out of hand.

6:57Bradley Tusk: Right. I mean, you saw about two weeks ago, almost all of those same CEOs say we should be regulated. And I think it's not because they fundamentally believe in the power of the state. They want something that sort of creates an equalizer for each other to say, OK, we can only go this far and we don't have to worry about limiting ourselves in any way. because everyone else is limited, too, and therefore it's a fair playing field. Once you're just saying everyone's on their own and, you know, we'll see what happens, the only incentive is to keep pushing as hard as you possibly can and things go wrong.

7:28Bradley Tusk: And I think the real risk they're taking politically is if there is something really hugely tragic, right? An air traffic control system goes down, a nuclear power plant, whatever it might be, then the regulations may be 10 times worse than what they could have right now.

7:43Sarah Friar: Right. I mean, I think that's where the discussion sort of ends. in terms of thinking about AI as AI agents, AI agents who can go into companies' systems, et cetera. But in terms of moving into the world of physical AI, we are talking about control of self-driving cars, of robots on the factory floor, of, as you mentioned, power grids. I mean, the physical damage that could happen from rogue agents is tremendous.

8:08Bradley Tusk: Yeah, and also consumer confidence in all of this, right? So, for example, you know, OpenAI had their development today as well. And when they're asking people to pay a subscription fee to them, they're in part saying, trust us. Trust us with your data. Trust us with your privacy. I'd have a really hard time trusting OpenAI with anything right now. And then every additional thing that goes wrong just compounds that mistrust. All the polling data shows how unpopular AI is, how unpopular data centers are. Of course we need data centers. That's not really even a question. But you've got to figure out a way to build some level of public trust in all of this.

8:45Bradley Tusk: And if you just do what Trump did and say, don't worry about it, it's all going to be fine. I don't know who believes that. He clearly views this as this privately financed mass development of big, expensive buildings and computing capacity. And he sort of in general embraces that, thinks that that's a way to kind of keep this industry where it is, as opposed to losing industries to other parts of the world that we did in the past. Every time the question came up, but what about the unpopularity of of A.I. in the in the public? Like Leader John, Speaker Johnson would say, well, of course, we're only going to do this in a managed way where it's supposed to be.

9:19One guy is up for election in six weeks.

9:22Bradley Tusk: Or has a lot of members who are. Yeah, right. Yeah. I mean, that's part of the thing is most of the anxiety that you see from the public about data centers is not about data centers. Right. The only two issues would be who's paying for the power and where is the water coming from? Those are both solvable things. I don't know any data center company that doesn't think that they should have to provide that at this point. So it's really just this larger angst that people have because ultimately they see the world changing so rapidly. They don't quite know how to keep up with it. And the angst has to manifest itself in some way.

9:54Bradley Tusk: So that could be MAGA. It could be the DSA. It could be AI and data centers. So if you want that to go away so that you can get the permitting and zoning you need to actually build data centers, you've got to find ways to alleviate those concerns and build trust, not undermine it.

10:08Sarah Friar: So the obvious takeaway of no federal regulations on AI would probably be that this was a win for the industry. But really, maybe they lose in the end. Maybe they're worse off.

10:19Bradley Tusk: Yeah, be careful what you wish for.

10:21Sarah Friar: Yeah. I mean, in terms of the, I mean, if they said, yes, we're going to come out with strong federal regulations and guardrails, do you think that would do it in terms of solving for the lack of trust?

10:29Bradley Tusk: It would at least help because I think people right now, every day they see on this network and everything else, because you guys report the news, that these things keep going wrong. And it seems like no one's in control. And when no one's in charge, people get nervous and their natural response is shut it all down. We don't want to shut it down. We want to build it up. But that means that you've got to build some level of trust and confidence. And there's got to be something of confidence in. And what Trump just said, like, basically was just a lot of words that said nothing. And I don't see how it's going to solve the problem.

10:59I mean, this accord was signed in five weeks. If there's a Democratic sweep in Congress, you know there's going to be a push to either just have hearings or have some kind of regulation. It's not going to become law, but it's going to stay an issue.

11:12Bradley Tusk: Well, they're going to hang this on Vance and Rubio, right? And they're going to say, OK, Trump is your president. You're the two leading candidates on the Republican side. You're going to own this thing. And they're going to run this thing through for the next two years. And what that's not going to do is build any level of confidence in AI, in data centers. So if you are the industry of which I'm an investor, not in the hyperscalers, but in the industry overall, I want all of this to happen. We can't just ignore reality. I mean, I saw a poll the other day that said that people prefer prisons in their community rather than data centers.

11:43Bradley Tusk: I don't think it's actually true if they had to pick. But nonetheless, what it says is you've got to address the underlying concern, and he's not doing it.

11:50Sarah Friar: To be fair, though, OpenAI just announced today that they would hold back their planned latest model in October without any push. They said, we're going to do it ourselves. We will throttle ourselves.

12:01Bradley Tusk: The push was how many days in a row of article and story after story of something that went wrong. They hacked the U.S. government, Australia. Like, so many things keep hugging face. Like, it's the product of them realizing we can't possibly get away with this thing. And maybe even behind closed doors, them saying, we don't even control our own products anymore. I mean, iterative deployment means that the AI trains the AI. and ultimately there gets to a point where you don't really know what's going on anymore and they've clearly lost the plot. You know, you hear Dario and Anthropic saying that constantly publicly.

12:35Bradley Tusk: You see less of that from OpenAI. But it may be, it's not that they did, they didn't release the new Astra model because it was for the public good. It was to protect themselves. It's, you know, I look all day every day at what the market is trying to express about these things. It's not showing a lot of nervousness about the duration or pace of this buildout, right? Right. Semiconductors are having a strong month. Microsoft's been good. It's kind of an open AI play. So obviously these two of these big companies are going to be trying to come public with a lot of this hanging over them. I mean, I would really worry about that.

13:05Bradley Tusk: Right. So I was just doing some back of the envelope math earlier on open AI. So they've got a 40 billion dollar run rate right now. If they go public at$1.3 trillion and they've got$1.4 trillion in CapEx commitments, just to have a 25 % year-over-year return on the stock, they've got to grow from$40 billion to$260 billion in three years when they're competing with everyone else who's at that stage just there and public sentiment against AI and China and everything else. People like me are venture capitalists. We can keep pumping everything up as much as we want. Eventually, companies go public and market reality starts to set in, unless it's an Elon Musk company, I guess.

13:42Bradley Tusk: And in that case, like, eventually the bill comes due. If I were the CEO's opening an anthropic, yes, I understand everybody wants liquidity, but there's plenty of ways to get liquidity. I would hold off until, one, you had some ability to actually justify your valuation so that you don't just see your share price, like, plummet, you know, six months after the IPO. And two, if you are truly worried about the safety of your models and your own ability to control it, is the best thing to then subject yourself to all the pressure of the market, too? Like, once you have a fiduciary duty to shareholders, you have to maximize profits.

14:17Bradley Tusk: That just means cut as many corners as you can.

14:19Sarah Friar: But is there really a fear that all of this stuff will dent the valuation? Because they have continued to raise money throughout this whole thing with every single headline that is crossed. and they still are able to raise money at higher and higher valuations.

14:34Bradley Tusk: Yeah, but keep in mind, a lot of the people who are now investing in those either have already invested and they have to maintain the value of that. They can't see these companies fail. Or, you know, if you're a giant private equity fund, and we're past even venture fund money at this point, right, and your business models effectively have as much AUM as possible, collect the 2 % management fee and get very rich off of that, then you're very happy to write massive checks into big logo names because you just raise more money. And so, you know, part of the problem, I would say, is oftentimes now the interest of giant funds aren't really necessarily aligned with the interest of their LPs because the economic incentives are totally different.

15:15Bradley, really appreciate it. If they end up naming you superintelligence czar. Yeah, I'm available for the job. Bradley Tuss, thanks very much. Now let's get more on the other big AI event today. OpenAI's Dev Day. Kate Rooney speaking to both CEO Sam Altman and CFO Sarah Fryer. Kate, break it down for us.

15:35Sarah Friar: Yeah, Mike, well, it really does segue from what you guys were talking about. Sam Altman speaking here at Developer Day. This is the next generation of startups and companies that are going to be using their technology at a time when safety is such a massive issue. And they've had to answer a lot of questions about keeping these models safe at a time when they are trying to gain traction with this group. We asked Sam Altman about that and how he's walking that tightrope. Here's what he said. Everybody wants great models. Well, actually, not everybody.

16:04Bradley Tusk: Many people want great models. We want great models. But we have to do these in a way where we can make very confident safety cases and claims so that people don't have a bunch of anxiety and can rely on us for the models we're putting out into the world.

16:20Sarah Friar: It does in some ways speak to what President Trump was saying, that the industry will be self-policing. Sam Altman taking steps in that direction. We also confirmed that they did pull back one of the models that they had planned to release because there were safety issues. Altman did confirm that. We also spoke to Sarah Fryer. She's the CFO of OpenAI. We got to talk to her after the keynote and after a lot of the news was released. One of the big headlines was this DOTS AI agent. In some ways, it's similar to what Meta had announced with Muse. It's more proactive. So these AI agents can do things autonomously behind the scenes.

16:52Sarah Friar: Here's what Sarah Fryer said about those capabilities. Dots is now proactivity. It's the agent that can tap you on the shoulder and remind you that you forgot to do that LinkedIn post for tomorrow. I was just telling you about that. We think it's going to be very powerful in the enterprise, particularly because of all the ability to plug into the apps that matter most to you. And guys, we also had some reporting earlier that OpenAI was in talks to raise $30 billion at a$1.4 trillion valuation. Fryer wouldn't comment on that specifically, but did confirm that they've seen about 70 % growth quarterly or quarter to date, quarters ending at the end of this week, in terms of their revenue run rate.

17:34Sarah Friar: That would take them to about$68 billion for that revenue run rate. Said that they are seeing that momentum. A lot of it has to do with their new models, some of these new products. Wouldn't comment on the fundraising in particular, but we talked about the rate environment, too. We've seen IPOs get pulled in the last couple of weeks here. One interesting thing, I mean, they've raised more than$100 billion just this year. She talked about the potential tailwind of higher interest rates in terms of what it means for their cash. They may end up earning a little bit more interest on cash going forward, but obviously complicates the IPO story a bit, guys.

18:05Sarah Friar: All right, Kate, thanks. Kate Rooney in San Francisco. It was big news when the 10-year yield broke through 5 % after the Fed meeting. Now it is sitting at 5.25. It's not just how high it's gotten, it's how fast it's moved, How big of a concern should that be? That's coming up next on Overtime.

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20:23Treasury yields continuing their march higher, although the two-year did pull back a bit this afternoon after some dovish comments by the Fed's John Williams. But for equities, it is not just the level of yields that matters, it's how quickly they're moving. So let's take a look. The 10-year yield has jumped around 50 basis points this month. That's its biggest monthly increase since September of 2022. The two-year is up about 55 basis points in September and a whopping 140 basis points so far this year. And rate-sensitive parts of the market are feeling it. Utilities are down 17 percent from the recent highs, while homebuilders are off 21 percent.

20:57So how much more can stocks absorb if yields keep climbing? Joining us now is Lori Calvasina. She is RBC's head of U.S. equity strategy. Lori, good to see you. Thanks for having me. I keep He pointing out parts of the market are absolutely noticing and feeling the pressure from what's happening in the bond market and oil and whether that's going to pinch financial conditions. I guess the big debate as to whether the index succumbs, whether it has to be a broader pullback. Right. And, you know, look, we've been looking for a five to 10 percent drawdown. I think technically mid-August is still the high, but we're really not down all that much.

21:28So it's almost like sideways. It has been what's replaced what we thought was a pullback. We're still making that pullback call. I will say when we go through our list of concerns, interest rates, the Iran war, the midterms, and we also point out we think 2027 earnings growth forecasts need to be, you know, maybe a little too frothy, may need to come down. I do get a lot of pushback from investors saying, well, most of those are pretty well-known risks. The thing they actually want to talk about is the 27 earnings growth forecast comment. But especially on midterms, you know, people, I will say, kind of push back and they'll say, well, you know, if there's this, that or the other risks, Trump still has veto power, even if you get a Democratic sweep.

22:02So it does look like, you know, people are trying to make excuses for this market.

22:06Sarah Friar: We were just listening to you, President Trump, and a lot of the top tech CEOs at the White House. And the message basically was no federal regulations on AI at this point. Does this give you any sort of signal, any more confidence that this CapEx spend is on? So, you know, I will tell you, Melissa, what honestly gives me confidence in the CapEx cycle is that we've really got two CapEx cycles going on. We've got the biggest market cap names where the CapEx spend is near peak levels year over year. And then you've got the rest of the market or the Russell 2000 or the Russell Mid-Cap Index. And you're in the very early innings of CapEx growth.

22:37When we look at things like ISM, ISM new orders, industrial production, those also look like early innings indicators for a CapEx cycle that's underway. So to the extent that, you know, AI spurs other spend or companies simply feel like they need to catch up, that gives me some confidence that this can elongate. You know, I think on the regulatory side, you know, what I what I also, you know, frankly, hear from clients as well. More of the regulation is done at the state and local level as opposed to the federal level. So, you know, I think, again, investors are concerned about that CapEx cycle.

23:09They want it to continue to be strong, but they're not necessarily convinced that there's any big regulatory push coming. If you still think that we should be alert for a risk of a five to 10 percent pullback, by definition, I guess it means that the big growth stocks have to give way a bit. Yeah. And I think that, you know, what we're seeing is if you look at U.S. versus non-U.S., and this gets back to growth versus value. But and we've been in the camp of our data is all really murky. We're not seeing strong signals. We're still in the growth camp. We're still in the U.S. camp, but it's not strong.

23:40What we noticed in our update this week in our weekly was that U.S. non-U.S. was basically back to the five year average on relative P.E. Now, U.S. has tended to really take off when the U.S. has looked cheap relative to non-U.S. global developed markets. That matters because U.S., non-U.S. and growth value tend to move together. Not really seeing any problems on valuation on the growth side, you know, versus value or top 10 versus rest of market. But that U.S., non-U.S., it's not that the door has closed. It's just that it's not wide open arguing for U.S. leadership like it has been at a couple different points in time earlier this year before the growth in U.S.

24:13trades took off.

24:14Sarah Friar: So does that all mean that you think that there will be that pullback in tech in order to get to your pullback call? So I think if the broader market declines, everything's going to go down, right? And I will say that I think that tech is still very reasonably valued. Now, remember, tech and communication services are not the same thing. So a lot of your internet companies are sitting in comm services at semi-software. Software valuations have already been decimated. What's really interesting to me on kind of the AI rotation trade or the AI picks and shovels trade, industrials and utilities have been underperforming.

24:45Those were very expensive sectors in the market. And frankly, even after the underperformance we've seen, they're still looking pretty pricey. And as you mentioned, Mike, utilities also has some interest rate challenges. All right, Lori, great to see you. Thank you. All right. Up next, the CEO of BetMGM joins us in a first on CNBC interview to discuss the outlook for online gaming and why his company is not getting into the increasingly popular prediction markets business. It has been a rough go for gaming stocks year to date. MGM Resorts off by 14 percent. DraftKings down 42 percent and Flutter off by 65 percent.

25:19And moments ago, Canary Capital ringing the closing bell at SIBO in Chicago, ending the regular trading day for options. Closing bell over time. We'll be right back.

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26:37Sarah Friar: The gambling industry is facing increased competition from prediction markets like Calci and Polymarket. That's a big focus at the Global Gaming Expo in Las Vegas. And that's where we find CNBC's Contessa Brewer, along with the CEO of BetMGM. Contessa. OK, hi, Melissa. And Adam, thank you for joining us today. The talk of this biggest gambling conference for the industry. I cannot get away from prediction markets. Everyone is talking about it. You have set a very ambitious goal, and you're sticking to it, that you can reach$500 million in EBITDA in the years to come. But you say this regulatory uncertainty is a problem.

27:17Sarah Friar: How are you factoring in the challenge that is Cal, She, Poly, Market, and some of your sports betting competitors? Absolutely. Look, the answer for BetMGM is in two parts. Number one, the surprise to me has been the resilience of our sports business. And really what it highlights is that the primary volume that the prediction markets are enjoying, if you like, or exploiting, some might say, are with institutional participants, shops who can't play in the OSB markets, 18 to 20-year-olds, which frankly is not a good outcome, and states where you can't otherwise get online sports betting. But those are big states.

28:02Sarah Friar: I mean, Texas, California, Georgia. They're definitely big states, but all to my mind, that represents the opportunity what I colloquially refer to as the good guys. That's the opportunity for our states, for our lawmakers and our policymakers to achieve the objectives that we've achieved in our OSB states. Meantime, you mentioned the 18 to 20 year olds. I'm looking at Novig, this upstart prediction platform. and they have Sidney Sweeney as their new spokesperson, you have Jon Hamm. When you look at that, how do you think about the fact that 18 to 20-year-olds are being trained to sports bet on platforms that are not yours?

28:48It's not a good outcome for the regulated industry, for sure. because as you say, you know, you get familiar with a product for a young and impressionable mind. That's not a good outcome. Yeah.

29:02Sarah Friar: Let's talk a little bit about iGaming because it gets very little attention, and yet the profits to be made there are real. How does that compare as a piece of your business? iGaming is where you are gambling in casino games online. Yes, that's right. It's only legal in seven states. That's right. So we are an iGaming first business, and we enjoy the heritage that we've received from the MGM relationship, where MGM are known worldwide for premium gaming-centric entertainment-led experiences. And so our brand resonates with those type of players. We were talking earlier today about an article in The New York Times about DraftKings using AI to target losing gamblers.

29:48Sarah Friar: DraftKings has said it's absolutely inaccurate and say, look, this is marketing 101. We're feeding our customers marketing and promotions that they will actually enjoy and will take advantage of. How are you using AI in your marketing? And how would you address a question about whether you can use AI to target those most likely to lose? So this notion of targeting gamblers who are losing is really just a spin, I think, by the media outlet. Optimizing our marketing efficiency is, as you say, marketing 101 for every consumer-led business in the world. The conversation is really about responsible gambling.

30:37because making every dollar that you invest in growing your business always makes sense. But in our category, what we also have to take really seriously and very sincerely is how we look after our more vulnerable players and for players that need support. And in our business, we've got tools in our product that allow you, you know, all the things.

30:58Sarah Friar: I love having you on. Thank you for giving us a few minutes of your time. Appreciate it. Melissa, it's been a really exciting conference here, but what's dominating it is predictions everywhere. Clearly. Yeah. No surprise there. Contessa, thank you. Contessa and Adam Greenblatt of BetMGM. All right. Up next, we'll break down the pattern of returns of stocks versus bonds over the last decade and why they're nearing historic extremes. Cozy Bell Overtime will be right back.

31:36Well, we all know stocks have been really leaving bonds in the dust in terms of returns over the last years. Yields have been climbing and the S &P still up 12 percent. This chart shows that it's been the case for a decade and counting. So every line on this chart, every point on this chart shows the trailing 10 year return of S &P 500 minus treasuries. So right here, it's almost never been higher in terms of that performance spread of stocks versus bonds, except in the late 50s, actually. 15 percentage points annualized better for S &P versus bonds. Now, why? We started at 0 % yields. The Fed just started hiking 10 years ago.

32:13Obviously, inflation, all the rest of it have contributed to this. Now the question is, do you bet on mean reversion? Do you bet that, in fact, stocks can maybe give up a little bit of ground to bonds or at least that bonds are a good hedge cushion balance to a stock portfolio? A lot of folks saying with a 5 % entry point for even three - and five-year treasuries, it's starting to get there.

32:34Sarah Friar: I mean, for a two-year treasury. It's just about five. Right, exactly. It's just about five. So you're not really getting paid much more for going out on the curve. Exactly. You'd have to count on some kind of growth scare or something happening, Fed cutting down the road to make those longer-term bonds pay off. Up next, what to expect from a key inflation reading tomorrow. Closing Bell over time. Be right back.

32:59Sarah Friar: The September Consumer Confidence Index falling to its lowest levels since 2014 today. Respondents to the survey cited concerns over the labor market and inflation. That survey comes just a few days after Pepsi announced plans to raise prices on some products. Remember, the company said back in February that it was cutting prices after consumer backlash. While Pepsi is raising prices, Target says it's lowering prices on nearly 2 ,000 products ahead of the holiday season. And Sheehan hitting an all-time low after reporting a 67 % fall in quarterly profit in its first post-IPO results. Sales dropped sharply in Europe after the company hiked prices.

33:35Sarah Friar: So obviously for Sheehan, it's very thin margins, input costs including shipping going higher, consumers under duress. So that's sort of its own story. But it's interesting, this consumer confidence number is so remarkably bad. Yes. Bad. It's deteriorating along with what the University of Michigan Consumer Sentiment Survey has done already. It's capturing something about the public mood and obviously discontent with this next wave of inflation. I'm not sure it links up with overall spending levels. You keep hearing these consumer companies say, oh, they're, you know, lower income households are resilient.

34:06Well, they're resilient because they still have jobs, but you're still fighting over what's left over after the gas station and all the rest.

34:12Sarah Friar: And it's less and less. And Pepsi and Doritos isn't necessarily first choice in many places. Yeah, that is true. All right. Let's get you set up with tomorrow's trade today. Micron is the big name on the earnings calendar, but we'll also get results from Conagra, CalMain Foods and Jabil. And it will be a big day for economic data with the August PCE price index. Economists expecting prices to rise by 3.7 percent year over year, while the core PCE is seen rising 3.3 percent from a year ago. Also on tap, the September ADP jobs report and the final reading of the second quarter GDP. We did get the job opening labor turnover survey today.

34:52A little bit of a softness in job openings. Didn't really change the equation. PCE, people are braced for this well over 3 percent number. We mentioned earlier New York Fed President John Williams said maybe we have time to wait. We don't have to hike in October. It's unclear if that's going to carry the day because we do have obviously the inflation numbers plus the jobs report on Friday. that's going to inform that. Plus, I think he's also on the dovish end of the spectrum at this point anyway. So it's not necessarily new news, but yields did soften up on that.

35:19Sarah Friar: Yeah, it'll be interesting to see what the yields do in response. I mean, today we saw a day in which yields still went higher, even though oil prices came back. And I thought that was an interesting dynamic to start the session. It is. That equation, I mean, that interplay is getting a little bit looser. It has on several days. And when it has loosened up, it's almost always been And yields have managed to go higher even when oil is not, as opposed to the other way around. So, you know, it's not just that, you know, interest rates are purely an oil story, but they're connected enough that I think people are a little uncomfortable with how it's all going to work from here.

35:50All right. That's going to do it for Overtime today.

35:51Sarah Friar: Fast Money starts right after this quick break.

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