Closing Bell Overtime: Markets Close Out September With AI in Focus 9/30/26

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1:17The Dow closing at the lows of the day, down more than 400 points. The S &P 500 just below the flatline. Tech taking the lead with the Nasdaq composite rising about two-tenths of a percent. There was initially some relief in bond yields as PCE data showed a smaller-than-expected increase in inflation in August. But on the longer end, yields did rise later in the day. Now, this wraps up both the month of September and the third quarter. In both cases, the Dow was lower. But for the quarter, the S &P 500 and the Nasdaq Composite were higher than Russell, down 7 percent, though, hit by those rising rates.

1:53And Microsoft leading the way during the third quarter, having its best quarter since 1998. Amazon also a gainer today. We'll talk to an analyst who's raising his price target on that stock, saying the perceived risk of disruption from AI is overstated. And speaking of the risks from AI, we'll talk to the former White House AI czar, David Sachs, about yesterday's big meeting and how these companies can develop a safer AI. But first, let's get more on the stocks making big moves today. Seema Modi has that for us. Hi, Seema. Well, Mike, a fascinating read on the AI infrastructure build out from HP Enterprise, the company's investor day in which it boosted its networking and server outlook.

2:31It also won a big order from AMD over a billion dollars. That stock hitting a record high of 4 % on the day. Semiconductors as a whole did well, with NVIDIA back above$230 a share. This as we await Micron. Take a look at Synopsys, though. Rallying after signing a multi-year agreement with OpenAI to develop a specialized model for chip design. That stock up by around 5 % on the day. On the flip side, Jabil Circuit beating street expectations, but analysts were left debating the size of the beat. The electronic manufacturing company did end the day down by 10%. Cyber security stocks resuming their rally just one day after that White House AI meeting in which Palo Alto Network CEO Nikesh Arora was present amongst many other CEOs.

3:13The market sees this lighter touch from Washington on AI as an opportunity for these companies to specialize in threatening cyber attacks for the enterprise customer. Lastly, Northrop Grumman, that stock falling after the U.S. Navy selected its competitor, Boeing, for a$20 billion contract to build its next-gen stealth fighter. Boeing shares initially moved higher but closed down about a percent. Mike? Seema, thank you. We'll talk to you again in a bit. Now, while the S &P 500 closed out the month in the green, market breadth has remained weak, With more than 70 percent of stocks lower, the only two sectors to close higher are both led by mega caps, communication services and technology.

3:50Meantime, Treasury yields trading at multi-decade highs this month, driven by concerns around inflation and longer term growth and Fed policy. So can the indexes keep making upside progress with breadth so weak and rates so high? Joining us now is Janice Henderson, head of global portfolio management, Seth Meyer. Seth, good to see you. Nice to see you. Thanks for coming in. And so, yes, there's some staticky messages inside the stock market, at least. And even really when it comes to Treasury, some debate as to what is keeping yields levitating like this. What's your essential read on the interplay of what the bond market and stock market are doing right now?

4:24Seth Meyer: The interesting part about it is I think if you just peel back the onion very, very little on the S &P 500, you are seeing the rate-sensitive markets actually under pressure, right? REITs, small cap, biotech, utilities. We're starting to see some of the even banks, even banks starting to flow through as far as performance is concerned. So I don't think it's more about that. We're not seeing it in the equity market. We certainly are in equal weighted underperformance market cap weighted again. So you are starting to see it. I think the bigger question is, where are we on rates and how much further do we have to go?

4:58Seth Meyer: One of the ways you can think about it is, you know, stronger than expected earnings growth, stronger than expected GDP growth, inflation coming down a little bit. You can make the argument that maybe we'd be peaking there. It's really tough to tell right now. I mean, as you mentioned, it is static is a great way to describe. Yeah. So 10 year yield pushing five point three percent. A lot of folks thought maybe that was going to be a little bit of an upside objective on a technical basis. It's also been interesting to see how oil's down 15 bucks in a couple of weeks off those highs. You even had, you know, the cooler than expected PCE inflation this morning did not restrain treasury yields.

5:33So it seems like it has a little bit of momentum of its own. On the other hand, it's not as if longer term yields are out of whack historically relative to Fed funds rate or nominal GDP.

5:45Seth Meyer: Yeah, I think that that's actually more of the point. Right. If you were to just break it up into three buckets, fundamentals, technicals and valuations, fundamentals. We just talked about it. The economy looks OK. Things are working. Right. The numbers we saw this morning were encouraging. Absolutely. Technicals. The market itself is under significant supply pressure. It's not just from the governments, right? We are talking about a$400 billion CapEx budget that will be coming to corporate bond markets in 2027. Right. After$300 billion in 2026, which doesn't stop in 2028. So where is this supply going to be?

6:20Seth Meyer: You know, you have to find a clearing level. Finally, on valuation, and I heard your last guest talk about real yields. it's really hard to ignore what you're seeing right now in rates as far as real yields are concerned as far as treasuries. So it is kind of playing that interplay. Fundamentals look fine. Technicals look really tough. Valuations, I think you've got to step up from a client perspective and be like, this might be a really interesting opportunity. Let's take one second. We do have Micron earnings out. Seema Modi has them for us. Seema. Hey, Mike. Fourth quarter earnings are out for Micron, which did come in better than expected.

6:50Earnings of$33.42, well above the estimate of 31.61. Adjusted revenue at$54.23 billion. Analysts were looking for 51.0. We are seeing shares up about 0.5 % here in overtime. We'll just look at guidance, which also came in better than expected. And that gross margin number, Mike, that analysts have been deliberating over ahead of this release for the fourth quarter came in at 87%. Remember, the street was looking for 86.3, so it's a slight beat there. And looking ahead to the gross margins it predicts for the first quarter, that's at 86.3. That's slightly lower than the 86.6 percent the street was anticipating.

7:31But overall, a strong report, and the guide looks good. Now I think some deliberation over gross margins will continue as we await that earnings call to begin at 4.30 p.m. Eastern. I remember going into the support, the story was, you know, how good can this be? And I remember the analyst note from Joe Moore at Morgan Stanley, Mike, really resonated. He said it's not how good can it be, it's how long can it stay this good, given the incredible growth it's seen in sales, given this momentous time we're in the memory cycle. Mark it more once the earnings call begins. Yeah, and no doubt about it, Simi.

8:04It's the duration of this boom that matters a lot for how this stock's going to go. Thank you for that. I mean, Seth, this is not to get too granular on Micron, But the earning story is done more than a share for this market. And so, you know, and the AI theme in particular, what's really interesting is that, you know, a stock like Micron peaked back in June. So we're having a rethink about the, I guess, the duration of the AI hardware boom. At the same time, non-tech parts of the market, as we talked about, are getting depressed. What does it mean for you tactically or how you would sort of rearrange a portfolio right now?

8:40Seth Meyer: Yeah, I mean, it actually boils down to what you want to do with duration. and not duration in the sense of bond duration, but do you want to extend in equities? So talking about the longer duration assets, small cap, biotech, utilities, longer duration assets that are contingent on financing to a certain degree, if you want to extend duration in your portfolio or you think we are peaking in terms of rates, this is a great opportunity for you to take advantage of what we believe to be dislocated value in small caps specifically. Now, granted, they had quite a run going into this month, so it's difficult to say, oh, one month creates this trend, but it's a really unique opportunity, we think, to re-engage.

9:16The debate continues to be among the debates. Is the bond market sort of begging you to just lock in these real yields at this point, at least as an offset to equity risk?

9:27Seth Meyer: I don't even know if you need to lock in the 10-year real yield. Why not 4.85 percent on the two-year? Or why not some front-end credit and clip a 5.5 % type return, we would be screaming for these type of yields four or five years ago. And now they're right in our face and we're all worried about the outcomes of what we're going to see. That being said, yeah, it's difficult for me to sit there and say there isn't value at a 5 plus percent tenure. I think you have to reevaluate it and think about it. I mean, the other point about longer term debt, it's not that you would want to own some because you're getting paid today for it, but because you simply don't know how it's going to be beyond the two years that you get paid that 4.8 % and what the rate outlook is going to be at that point.

10:11Seth Meyer: Yeah, for sure. And you can eliminate the hand-wringing a little bit, right? Just don't worry about what the Fed's going to do or not do. To be pricing in as aggressively as the Fed, the market already seems to be convinced that the Fed's going to be doing its work for it. You are talking 4.8 % on the two-year and 4 % on Fed funds. That delta is pretty high. Do we think the Fed's going to be doing that over the next two years? It's a really that that's really the question. No, exactly. Can it sustain? The market has definitely gotten to some degree maybe ahead of things there. And just finally, on the leadership segment of the stock market, where it's been this kind of defensive AI mega cap growth bid, is that something that you see as being vulnerable at this point if we do get some relief in the rest of the market?

10:54Seth Meyer: I don't think it's necessarily vulnerable. We saw it first half of the year where it was underperforming the traditional MAG-7 or whatever you want to describe them as. They were underperforming the rest of the market. I think if you get some rate relief, you could start seeing some of the broadening that we saw in the early part of the year. That would be really healthy. And I would actually, from the perspective of kind of diversification away from that, I think that's your opportunity to reengage, whether that be in international markets, whether that be in small cap or something like that.

11:23Seth Meyer: I think you have to think about getting cheaper valuations at this point relative to what those stocks were performing. Do they have to underperform from here? I don't think so. I think you just have a broadening. Yeah, we'll see if it's a seesaw or if everything can maybe benefit for a little while. Seth, good to talk to you. Thank you. Yeah, thank you. Let's see. We have a news alert on Alphabet. Mackenzie Sigalo has the details. Matt. So, Mike, Google just released Gemini for Argonne, what it's calling its most advanced AI model with major improvements in coding cybersecurity and complex professional work.

11:56Now, Gemini 4 was expected back in May as part of their IO developer conference, but was delayed as Google chose to focus on faster, cheaper flash models before making a major push at the frontier. Now, Google tells me the model set a new record in real-world software engineering, ties with rival models from OpenAI and XAI for first place in cybersecurity, and then leads another benchmark measuring performance across finance, law, and other professional work. Now, Google telling me a short time ago that they're already using Argon internally for the past few weeks, including to optimize its data centers, potentially freeing up hundreds of terabytes of memory without having to spend more CapEx dollars on additional hardware.

12:36But as with many other cutting-edge models, Google is initially limiting access to select cybersecurity defenders and some enterprise cloud customers while working with the U.S. government on pre-release safety evaluations. This, of course, coming a day after CEO Sundar Pichai signed President Trump's voluntary AI safety accord at the White House. And as Sam Altman tells CNBC, OpenAI is holding back its latest astro model over safety concerns. Mike. Yeah, I mean, obviously the progress just keeps racing ahead. Mackenzie, thank you very much. Micron earnings just out. The stock slightly higher at the moment after beating on the top and the bottom lines.

13:15The company's saying guidance for revenue and EPS better than expected for the coming quarter, but gross margins for the first quarter could be lower than anticipated. Joining me now is Matt Bryson from Wedbush. So, Matt, obviously kind of a high bar, you know, even as the stock has kind of bounced around it last few months, earnings estimates and expectations have been strong. What's most relevant from the report? I would look at the guidance around earnings. So they're looking at north of$38. I think that's roughly in line with where buy side had been. I've heard anywhere from$36 to$40. So we're right in the middle of that range.

13:55I think that's the most relevant number from my perspective. Just the slightest downtick in anticipated gross margin for the current quarter. I guess that's just something that is going to keep in the air some of these questions about exactly how long the pricing power, the supply constraints, and the demand story are going to carry through? Yeah, I mean, it really depends upon the details there. So for instance, if the downtick is tied to them shipping more high bandwidth memory, so supporting AI, I don't think that's a negative. All of my price checks have suggested that pricing is still moving up.

14:35It's at a little bit slower pace. So I think the why depends a lot here. Sure. And then, you know, as much as the forward-looking earnings expectations keep going higher, obviously, on that basis, the stock continues to look cheaper than it has been recently. I guess the question is, are we inching closer to the point when the market's going to be concerned about whatever capacity additions are coming in the out years and whether, in fact, we're going to see a little bit of a stutter step in the data center build out and the macro drivers of all this demand? Yeah. So I think there were certainly concerns around supply coming on, right?

15:16Supply is always what ends these cycles. It's late 27, 28 that we get that supply going on or coming on. The thing to remember, though, is that we're getting huge estimates for accelerator builds and CPU builds. So when you think about Brockhop, for instance, talking about demand doubling and then doubling again, and the amount of memory for each of these compute chips or accelerators is the same. And the big growth is nowhere close to that. So as long as you have this strength in AI, even if you get more supply coming on, it's really unclear to me that supply catches demand. And then in terms of capital return, I know that maybe there was some expectations that Micron might update how much it's going to share of this bounty that it's pulling in and free cash flow.

16:05Yeah, so I think their preferred way of returning capital to shareholders is going to be buybacks. And they're locked up until December 9th because of the the chip sacks funding that they got. So I'm not sure that we get a ton more on this call, but I would expect them to be buying back a lot of shares, given how much cash they've accumulated once we get past that December 9th date. For sure. Yeah. And at least on paper, would be some accretive activity given the valuation. We'll see how it goes. Matt, really appreciate you jumping on. Thank you, Matt. Thank you. The biggest names and brightest minds gathering at the White House yesterday to discuss the path forward for AI.

16:47So what was said and what was agreed to? We'll talk to someone who was in the room where it happened, Special Advisor to the President, David Sachs. He joins us after this break. Stay with us.

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18:34A significant day at the White House yesterday where President Trump hosted top tech leaders from NVIDIA, Meta, SpaceX and others to sign a morally binding document that calls for self-regulation in AI. The president adding that the administration is considering creating a person or committee to oversee the industry. But for Anthropics CEO Dario Amadei, there is more left to discuss when it comes to reining in AI risks.

18:59Seth Meyer: Whoever wins AI wins. I think that's very important. But I think the technology has very real risks. And, you know, the mechanism, how we address those risks is still under discussion. But we all need to work. We all need to work together to make sure that we can win and we can win safely. If we if we do this right, we work with the president and everyone here. We can win. Joining me now is David Sachs. He's founder of Kraft Ventures and advisor to President Donald Trump. He was at yesterday's meeting at the White House. And David, thank you for for joining us. Appreciate you coming on today. It's a fascinating setup in the sense that I know that you and the administration have said no need for kind of novel.

19:40or greater regulation of this emerging industry. We have consumer protection laws. We have, you know, obviously product liability statutes and things like that. But this is an industry that some of its leaders, as Amadeh just said, have been conveying what they perceive to be the risks or how fast things are moving and that there's a window where more must be done. What was yesterday's agreement solving for in that context? Well, Mike, I think there's a spectrum of views in the industry on what exactly we should do. And it's hard to basically get everyone on the same page. But that's what President Trump did yesterday.

20:15First of all, he convened all the leaders in this industry from the chip companies to the frontier models to the data centers, the hyperscalers. They were all represented there by their CEOs. It was a gathering that really only President Trump could put together. I call it the Bretton Woods of superintelligence. And coming out of that meeting, you got the first White House accord on superintelligence where the frontier labs agreed to a series of commitments to ensure the safety of their products. First of all, they accept the responsibility. They understand that if they're going to be developing superintelligent products, they have to do it safely.

20:52That's their corporate responsibility. That's their fiduciary duty. And then they agreed to have a series of robust internal controls and to have external audits on those internal controls that then report into a committee of the board. So this is a whole new level of transparency and accountability for these companies that President Trump was able to extract. And again, there's, I'd say, a wide variety of views in the industry, but everybody signed this agreement. Everyone got on the same page about this. And I think that's a major accomplishment. And frankly, we didn't have to wait for a new piece of legislation or some agreement, you know, with the United Nations that's never going to come.

21:30So really credit to President Trump for making this happen. Well, you certainly correct. There's a wide variety of views, including really throughout the industry, about some of these incidents that the companies themselves keep reporting when these sort of models potentially go rogue. On the one hand, you have the folks who say, look, this stuff is it's got it's got a kind of an energy of its own. It's got a momentum. It's jailbreaking these parameters. On the other hand, it's saying that these are kind of badly designed training systems. And basically, there's a sort of a human element or instructions that are badly engineered.

22:07Where do you fit along that spectrum? And I guess, does it matter if the users are going to be concerned about the outcomes? Well, I think we want to be careful in the way that we speak about the technology to not anthropomorphize it, which is to say, make it sound like it's a human because it's really not. And there's two ways of describing the same event. You could say that the agent escaped the lab, which sounds like it's its own actor. Or you could say that the lab had bad security. The lab did not have control. That's the way I think about it, that fundamentally these are engineering problems.

22:41problems. Engineering problems can be root cause. They have bugs and they can be fixed. And I think it's very important that we don't use language that deflects responsibility and accountability away from the corporations that are developing these products. Again, when you speak about the agents as if they have their own mind, it sounds like it's not the company's responsibility. And it is. It very much is. The companies who are developing this technology have to make sure that it's safe and they are liable if they don't. There's product liability. There's liability under statutes. There's civil, criminal, and administrative sanctions.

23:19This is something that actually former Democrat FTC Chair Lena Kahn has said. She's had an article in the New York Times today talking about this. These companies are liable if they don't develop their products safely. And I think we need to hold them accountable. That's what this statement that and this accord that came out of the White House did yesterday, everybody understands they're responsible for developing their product safely. And I think they want to. They clearly do. They have a fiduciary duty. It's what their customers want. Remember, no customer, no enterprise wants to buy an AI agent that could leak their data or hack a competitor.

23:55They want the product to be reliable and predictable. That's what being safe means. So I think everybody is on the same page here. And I think the Trump administration is certainly willing to use that liability to hold these companies accountable if they misbehave. Well, and we did get reports of the Federal Trade Commission under the current administration opening an inquiry of sorts into opening I-Anthropic today. Who knows exactly what the focus of that is? But it feels as if the industry wants rules of the road, perhaps wants some kind of cover to come to these kind of mutual agreements and not be accused of anti-competitive behavior.

24:35And it's unclear, perhaps, that they know whether they've gotten that as the technology itself continues to be developed so quickly. Well, I think they have rules of the road. We just put in place a structure yesterday that actually looks a lot like Sarbanes-Oxley, right, where you first you have a separate internal team that basically has to codify its controls and monitor and ensure that those controls are being followed. Then you have external audits of that system, of those internal controls, to make sure that the company is doing what it says it's going to. And then there is a committee of the board that that reports to.

25:13And then all of that is backed up by agencies like the FTC, and it could be the DOJ. There's lots of liability on these companies. And remember, they have a market incentive to develop products that are safe and predictable. So I think we have rules of the road. What we don't want to do is waive product liability or waive antitrust laws so that these companies could potentially collude with each other. That's something we're not going to do. I'd also say one other point, which was agreed to yesterday, I think is very important, is that when it comes to best practices around developing these products safely, these companies have agreed for that limited purpose, which the DOJ allows, it's not collusive, to share best practices around security.

25:56So they're going to be sharing methods and techniques that help make the industry safer. And I think that's a positive and good thing. And then just, I guess, quickly, this idea that, you know, we have product liability laws and things like that, where you would be able to go after a company that put out a defective product. Are you personally not concerned that those harms, the potential harms, would be so great that it sort of would have been better to get ahead of them? Well, Mike, what's your alternative? I mean, you know, I think what a lot of people are saying is that we need an FDA for AI.

26:30And I can tell you that if we do that, we will lose this AI race to China. So first of all, if you look at regulatory agencies like the FDA or like the FAA, which have these approval processes, in other words, in order to release your product to the market, you have to go get the approval of the agency. In both those cases, they take a minimum of five years to approve new products. Now, we have a situation in this market in which the frontier lab companies are releasing models every two or three months, and our Chinese competitors are releasing them every few months or every few weeks. Just in the last two months, there's been six releases of Chinese models.

27:09So I would tell you that if you want to set up a process where the government has to approve the release of these models, first of all, the government does not have the technical capabilities to do that. And this industry is moving too quickly. It is too dynamic. And if you do that, we will simply lose to China. So look, we have rules of the road here. We're going to have internal controls. We're going to have external audits. We're going to have committees of the board. Again, that is a model very much like Sarbanes-Oxley. Then on top of that, you got this FTC investigation that was just announced today.

27:39You got the DOJ behind that. You've got the Trump administration behind that. Remember, this administration actually sent a letter to one of the frontier lab companies forcing the rollback of a model when the administration received a credible report that that model was not safe. So we have safeguards here. And I think it's just fundamentally wrong to try and pretend that we are bereft of laws, bereft of safeguards. I understand that we're a month before the midterms, but this is very much a narrative that's being created falsely. It's really a fake narrative for election purposes, is to try and make the public scared.

28:15And the reality is we have layers of protection here. We have layers of policing. And the Trump administration has been extremely willing, starting with President Trump saying, listen, we're willing to stick the DOJ on down on these companies if they're not doing the safe thing. But look, we cannot lose this race to China. We got to stop talking about this as if it's only downside. There's tremendous upside here for our economy. Already a million new jobs created by AI. Already, we have the biggest infrastructure buildout ever because of AI and superintelligence. This is according to the Wall Street Journal.

28:50Bigger than the railroads, the canals, and the electric grid all combined. It's a 3 % tailwind to GDP, over a trillion dollars each year of infrastructure investment. And do we want to derail that? Do we want to wreck that? Do we want all this fear and paranoia to derail what is so manifestly good for the U.S. economy? If that happens, it will be the Chinese economy and Chinese national security that benefits from super intelligence rather than the United States. And I think that would be a tragic mistake. David Sachs, appreciate the time today. Thank you. Thank you, Mike. All right. We want to show you the CBO closing bout, which happened from the Hood Summit in Houston a few minutes ago, ending the regular trading session for options.

29:33Well, coming up, a new CNBC documentary exploring how Chinese spies use love and betrayal to target the Federal Reserve. Closing bill over time. We'll be right back.

30:03If you like YouTube, you'll love YouTube Premium. Hi, I'm Sean Evans from Hot Ones, and I want to tell you about YouTube Premium. It has offline downloads, so you can watch without Wi-Fi. Background play, so you can lock your phone, and it still plays, baby. Oh, and it is completely ad-free. Yes, I said it, ad-free. Try YouTube Premium for two months free at youtube.com slash premium. Trial eligibility varies. Terms apply. cancel any time. To every clinician finishing notes at 9 p.m., there is a faster way. Whisperflow is a voice-to-text app. You talk, it types in your EHR, your email, anywhere you type.

30:45Say the progress note, the referral letter, the patient instructions, and it comes out clean and formatted with your terminology spelled right. Four times faster than typing and HIPAA ready. Whisperflow is free. Get it at whisperflow.ai. That's W-I-S-P-R flow dot A-I. A new CNBC documentary details an aggressive plot by China to infiltrate the Federal Reserve. Eamon Javers joins us now to explain the story. Eamon. Yeah, that's right, Mike. The case of the alleged Chinese spy at the Federal Reserve shows us just how important the Fed is as a target for Chinese intelligence. Beijing is so eager for even basic information about the Fed that one Chinese intelligence official, was allegedly willing to spend more than a decade of his career worming his way deep into the personal life of a senior Fed economist named John Rogers.

31:38Now, we've obtained exclusive photos, text messages, and audio recordings detailing the whole case. But I want to play you just one snippet of it. This is the man accused of spying for China inside the Fed, John Rogers. He's talking to investigators from the Federal Reserve's Inspector General's office, and he's talking about his relationship with this alleged spy. Listen to just how close he was personally with this man. I love the guy. Don't get me wrong. I do. I owe everything to him. The relationship, my wife, wouldn't have happened, despite the fact that we met online. It just would not have happened without him.

32:14And I love him like a brother. I actually asked him to be the best man. And he said, dude, your brother is here. Awkward. But I thought it was weird at first. And then listen as federal investigators press Rogers, that Fed economist, on his interaction with the alleged Chinese spy. What's incredible here, Mike, is that Rogers acknowledges that the Chinese are eager to learn about the Fed, that they conduct espionage to do it. But then he dismisses the idea that he himself could be the target of spying, which is, of course, exactly what the U.S. government said was really going on here. Do you think his generosity and kindness was genuine?

32:56Totally genuine. Look, there's something in it for them, too. But, you know, and I did have to be careful about my role in the Fed. And boy, the Chinese are watching everything that the U.S. does. I don't mean that in an espionage way. I'm sure they are doing espionage, but I don't confront that. They just want to know what's the Fed thinking. Now, the whole thing fell apart because at the same time Rogers was allegedly being targeted by Chinese intelligence, he was also caught up in a sextortion case with hackers in Africa threatening to send nude selfies that he took on his Fed cell phone in the Fed's gym to the vice chairman of the Federal Reserve.

33:36But Rogers' defense attorney argued at trial that he never knew anything that was all that secret about the Fed because of the nature of his job. and he never did anything wrong at all in his interactions with the Chinese. In fact, a jury agreed with that argument and acquitted Rogers of a charge of espionage. They did convict him in the end, though, of lying to federal investigators. It is a wild story. There's a whole lot more to it, which we lay out in the full version of the saga, which is on CNBC.com right now. If you click on that QR code, you can go directly to the story, Mike. Yeah, Eamon, I mean, fast hitting across so many fronts here.

34:13You mentioned his own lawyers say, look, he didn't really have that much interesting to say. The jury did not convict him of divulging anything, I guess, of too much importance. Was he targeted, do you think, or did investigators find just in an opportunistic way they stumbled upon this one economist at the Fed? Or maybe he was one of many targets and he's the only one we know about? Well, we talked with a former CIA station chief who's dealt with Chinese intelligence a lot over the years in the documentary. And he says he's convinced that the Chinese are continuing to try to get inside the Fed to this day with this kind of operation.

34:45Also, we've seen hacking operations and all sorts of intelligence ops by the Chinese related to the Fed. So the idea is that the Chinese intelligence service has such an important demand for information about the Fed because of its role in the global economy and because of the sort of geopolitical struggle between these two countries, that they're willing to spend enormous resources and devote enormous amounts of time, time that would seem to be kind of totally out of whack to us when you look at the value of this particular target. I mean, you're right. The lawyer here argued that Rogers never really knew anything that was all that secret.

35:19He was an economist. He was a researcher. He wasn't really in the room for the FOMC meetings and all that kind of thing anyway. And so the documents that he turned over, the lawyer said, weren't that big of a deal. And that was the crux of the case. Did the Chinese waste their time? here? Or is this indicative of a much bigger effort? Yeah, it's quite the long game. If nothing else, Eamon, great stuff. Everyone should go and check out the doc, Eamon Javers. Time for a CNBC News update with Julia Borsten. Hi, Julia. Mike, Israeli Prime Minister Benjamin Netanyahu and President Trump are expected to speak today about an attack on a fly Dubai plane headed for Israel.

35:58That's according to our sister network, MS Now. Netanyahu says the pilot of the plane was stabbed, but still opened the cockpit door so passengers and crew members could overpower his attacker and land the plane safely in Saudi Arabia. Defense Secretary Pete Hegseth announced a new Pentagon initiative led by Elon Musk, Andrel Industries co-founder Palmer Luckey, and former House Speaker Newt Gingrich. He says the three will head Project Meridian, which will help identify what technologies and weapons the U.S. should prioritize. Hegseth made the announcement during his State of the Force address today.

36:33And Senate Democrats voted today to block a House-passed bill that would keep members of Congress from buying and selling stocks. They said the measure did not go far enough to curb trading. Democrats also opposed a provision added to the bill by Republicans over the summer that would require people to present valid voter identification when voting. Back over to you. Julia, thank you. Coming up, a new consortium is teaming up to get us closer to 24-7 trading. We'll look at how it works and if the market really needs it. Closing bill over time. We'll be right back.

37:12The push to make stock trading around the clock is getting another boost. Robinhood says it plans to let customers trade a select group of U.S. stocks and ETFs throughout the weekend, pending regulatory review, expanding on its existing 24-hour market. The weekend trades would run through Bruce Markets' alternative trading system. NASDAQ technology will power the market, and Apex is set to handle the clearing and custody behind the scenes. Joining me now is Matt Hulseizer. He's Peak Six co-founder and managing partner, along with Bill Capuzzi, Apex Fintech Solutions CEO. Peak Six is the lead investor in Bruce Markets.

37:46Good to see you guys. Good to see you. Matt, set it up for us in terms of, I mean, the question is always why, right? If you're a big institution, you want to kind of trade where everybody else is at the highest depth and concentration of activity. Why is the weekend a time we should be trading stocks? I think events are happening on the weekend, just like they do during the week. Like the world spins seven days a week. I think it's an anachronism to think that, you know, hey, we should trade from Monday through Friday, 930 to 4 Eastern. And so people have been able to buy houses and groceries and invest in prediction markets now on the weekends.

38:25So there's like stocks seem to be it seems obvious that stocks should be added. Is it mostly do you imagine something that like U.S. retail investors will be interested in doing? Is it mostly for overseas investors to kind of link up with their timing of trading? I think everybody's going to be interested in this. I think this is a change moment for the world. I just I think you're going to have CNBC running with a ticker over the weekend. Yeah, I think you guys are going to be working a lot harder. Well, hopefully that won't be part of it. Maybe the ticker will work harder. Bill, what's the I guess the logistical piece of this?

39:00What has to happen in terms of, you know, approvals? And really also, how do you ensure that you're going to have, you know, a market that's going to be robust enough that's worth having on the weekends?

39:11Seth Meyer: There's a lot that goes into it. So today you think about the markets, 930 to 4. things have to change, right? There's a lot of technology that has to go into supporting, you know, Saturday, Sunday. First part is the tech, right, running 24 hours a day. The second part is the team around it. You know, the third part is liquidity providers. To your point, right, there has to be a buy and a sell, right? People actually want to buy it, to Matt's point. There has to be someone on the other side to, you know, buy and sell that. So lots of work that goes into the infrastructure. And then the second part you mentioned about regulatory approval, So the SEC needs to sign off on this.

39:46Seth Meyer: That's something we're working on. We expect that to happen in the next 30 days. And do you think, Matt, that, I mean, market makers, a lot of the other market participants that really are there every day to kind of grease the gears of the market, are they going to be active? I assume you're not going to have options trading. I'm just imagining the whole parts of the ecosystem that exist at, you know, 10 a.m. Monday morning that may or may not be in play over the weekend. Yeah, look, I think we know the market makers. They're currently doing this overnight. They're doing it in the prediction markets.

40:19It's not like Jane Street and Citadel and Susquehanna aren't participating in that. So they're staffed for that. Peak Six has a market maker. We're staffed for that. So I think there'll be plenty of liquidity there. And I think there's plenty of events. I just think this is just it's going to look Saturday is going to look a lot more like Tuesday, except for the fact that it's Saturday and, you know, you're going to have CNBC meets SNL. Well, that I might be able to get on board with there a little bit. You mentioned prediction markets. Obviously, there are these other, you know, kind of innovative or emerging platforms, things like Hyperliquid where you're trading the indexes at least and some other things like perpetual futures.

41:01It feels like everyone's trying to push the line. It also feels kind of supply driven. In other words, is the world crying out because they need this?

41:09Seth Meyer: So we have about 42 million people that Apex supports, all retail clients. About a third of those folks are outside the U.S. The amount of demand for U.S. stocks, greatest market in the world, right? The amount of demand, just let's take Monday through Friday, the overnight market, 8 p.m. to 4 a.m. It's growing. It's 25 times the size it was a year ago. And it'll be 25 times in a year from today. And it's almost exclusively coming from outside the U.S. So the world continues to shrink. You have your phone next to you. People can access the markets through their phone today, through platforms like Apex.

41:48Seth Meyer: And the demand is there from a retail perspective. Do institutions, you started by talking about hedge funds, hedge funds want to start working on Saturday, Sunday? Probably not. But the demand is certainly there from a retail perspective. Yeah, I mean, I guess if it's there, some people will trade it and it won't necessarily be doing things on Saturday that they would otherwise have done on Monday. They'll do it because the quotes are live. Well, the other part is, like Matt said, is a 24-hour news cycle. Sure. Think about CNBC. Yeah. Things happen during the weekend. Yes. If you want to express your investing thesis when something happens.

42:24Seth Meyer: Right. So this weekend, if there's a peace treaty and it's Saturday, you want to be able to express that on Saturday. Why do you have to wait until 930, you know, on Monday morning? I mean, there's a world in which you've got Tom Brady talking about the game and taking the Telestrator out and showing you his portfolio. Right. Well, you keep trying to make it more interesting over the weekend than maybe just the, you know, just trading Micron. But we'll see how it goes, guys. Thanks for coming in. Great. Thanks for having us. All right. Up next, an analyst who thinks fears that AI shopping agents could threaten Amazon's business are being overblown and just raised its price target on Amazon as a result.

42:58We'll see a bell over time. We'll be right back.

43:04Amazon has been under pressure this month amid fears AI consumer agents could put the company under existential threat. But one analyst thinks it's a false narrative, raising his price target on the stock as a result. Joining us now is Rosenblatt, senior research analyst, Scott Devitt. Scott, good to see you. I mean, first of all, do you think this is really a prime reason that Amazon has had this little bout of underperformance? is people think the e-commerce business, the advertising business is vulnerable to these agents? Hi, Mike, and thanks for having me on. I do think macro has been a bit of a factor with higher oil prices and rates, but there's definitely been company-specific dynamics here.

43:43The whole e-commerce industry was affected when Muse did launch. And the narrative or this core debate around the advertising business is just that AI agents compress the purchase funnel, A, which gives less space for advertising, and B, that possibly agents can pull transactions off of sites like Amazon as well, so the transaction is conducted on the agent's service and outside of Amazon's ecosystem, and they can't monetize that as well. Our view is that you've already seen evidence with Google's AI overviews in terms of incorporating advertising into AI leads on its site. You've seen evidence from Amazon with Alexa Shopping on Amazon.com.

44:25And I think that if Amazon is going to participate in these networks, they're going to have an ad unit that possibly is cost per action driven instead of cost per click driven that gets them paid regardless of where the transaction actually happens. So we think the advertising piece for Amazon is a neutral to a positive and that the rest of the business is exceeding expectations that the pullback is unwarranted. So this is something where you don't think that, for example, Amazon's business of kind of elevating certain products because of an advertising relationship is all of a sudden going to be obsolete.

45:00No, I think that they I think that Amazon thinks of its business in terms of an implied take rate, how much it costs to sell through the marketplace. And they have different levers for monetizing that. One is a transaction based take rate. The company charges for logistics storing product in their fulfillment centers, and it monetizes through advertising. So it either figures out alternative ad units or it tweaks the other components, the other levers of the overall take rate such that it's a neutral effect on the business. And because AI agents in general are going to lower friction, it's going to lead to an acceleration in e-commerce.

45:36So the e-commerce business can grow faster than it would have otherwise. And, of course, the web services business is doing better because of AI workloads as well. And so you have two pieces of the three that are beating and one that we think is kind of a neutral. And, you know, you get a better outcome and a higher stock price. That's why we lifted our price target today. Yeah, you would think, I guess, if one e-commerce player was going to be able to figure this out now to engineer it, it would be Amazon. Yeah, lifted the price target to$360 from$330,$335, actually. So that would be a pretty good upside from here.

46:08Scott, Freddie, we've got to leave it at that. Thank you very much, Scott Devitt on Amazon. Thank you. Micron's call is underway, and the company's management is making headlines about demand. Details from Closing Bell Overtime return.

46:28Shares of Micron slightly higher after the company reported earnings. Seema Modi has some color from the conference call. Seema. We've been listening in, Michael, and Micron CEO Sanjay Mahothra addressing those supply concerns. He expects much tighter memory and storage supply demand conditions in fiscal 2027 and 2028. He also added that he does not have any line of sight to when this whole supply demand imbalance will sort of peter out. In the meantime, he did say that demand remaining strong, with demand remaining strong, CapEx, he does see the CapEx increasing in 2027 from prior plans just because demand continues to outstrip supply.

47:07So that seems to be the takeaway so far. Stock is higher, Mike. Yes, higher by a bit, though. Not a 7 % move as the options were implying before. So it seems like it came pretty close to on target to what folks were expecting. Seema, thank you very much. That does it for Overtime tonight. Fast Money begins right after this quick break.

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