Closing Bell Overtime: Stocks Take A Breather to Start Week 9/28/26

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0:43That's 5 % cash back at different places each quarter, like grocery stores, on gas, and at restaurants. It pays to Discover. Terms apply. See discover.com slash 5 for details. The Bells bringing in to the trading day at the NYSE. Total Energy is ringing the bell and at the Nasdaq. Arrow Financial 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 starting the week lower. The Dow down about 350 points. S &P 500 off by three quarters of a percent. Biggest losses for the Nasdaq indices. The Nasdaq 100 losing more than a percent.

1:18NVIDIA, the only MAG 7 name in the green after its huge buyback increase. Meta continuing to give back some of its muse bump. However, much more on both those names coming up. And once again, bond yields moving higher all across the curve from the two year out to the 30 year. Those higher bond yields weighing on metals, gold and silver, both off more than three percent. Let's get the first take on the close right now. Mike, it's an interesting session because finally we're seeing a little bit more of the weight being borne by equities in terms of higher oil prices and higher yields. For sure. And in the case of today, you didn't see this sort of wholesale safety bid in the mega cap growth stocks, as we said, just NVIDIA did manage to work.

1:59So it seems as if the pressure is building. It's still trying to distribute the pain around the lower reaches of it. And you've already seen a lot of damage done there. You have the eco-weight 6 % off its highs, small caps 8 % off, you know, banks 12%. They were down another percent and a half today. So it's not as if we're ignoring what's going on with yields and oil, but trying to minimize it. And every time you get even a faint de-escalatory headline about Iran, you know, maybe there's talks, maybe there's progress. You see this sort of just a little bit of a half-hearted rally. So it just shows you that the market doesn't want to get too far away from that idea that we would rip if we got a true resolution.

2:36And there's so many oversold stocks that it would probably be a strong rally. But we're just we don't have the ingredients for it yet. The continued weight, though, on a sector like the financials. I mean, that is really worth noting. I mean, some would say that the glass half full of it would say, you know what, we're going to have a much better setup for earnings season. Because the banks had been on a decent rally and then we're seeing a pullback here right in front of earnings season. Although we did have some of the cautious commentary out from conference season. So it'll be interesting to see how that all shakes out.

3:05It's a fair point to make for sure. I mean, in theory, you should be getting some quarter and rebalancing in favor of stocks because they've outperformed bonds by such a dramatic degree. not really seeing too much evidence of that right now. And we are a couple of weeks away from the heart of earnings season. So maybe a lot can happen in between. Now let's get to more on today's movers. Seema Modi has those for us. Hi, Seema. Mike and Melissa, tech was a notable lagger. Semiconductors remain weak throughout the day, despite NVIDIA's outperformance. Look at Qualcomm, Intel, AMD down between 3 % to 7%.

3:36It does follow five weeks of gains for the broader sector. The performance overseas was also notable. South Korea memory names like SK Hynix and Samsung were down about 5 percent. But the stock of the day, you could argue, was in the software world. MongoDB seeing its worst day on record following the abrupt departure of CEO CJ Desai, who will now head up Meta's new enterprise platform. Analysts calling it disappointing as Desai has been credited for bringing a number of enterprise wins to MongoDB. Attention now turns to the company's investor day tomorrow. Elsewhere in software, sort of a notable divergence between SaaS and security names.

4:12We had ServiceNow and Salesforce lagging, but CrowdStrike and Powell outperforming. Take a look at financials. Yields remaining a big story. And we saw Goldman Sachs, J.P. Morgan down about 2 percent on the day, while health care and consumer staples bounced back from what we saw on Friday. Automotive stocks did not fare well. We'll take a look at Tesla, which even with today's 4 percent move lower, is now down about 28 percent from its most recent high, Melissa. Thank you, Seema. Crude oil prices flat today, but the attention is on diesel and whether an export ban would help or hurt. Pippa Stevens joins us here at the NASDAQ with more Pippa.

4:48So President Trump said over the weekend he is still very seriously considering a potential diesel export ban. Now, people I've spoken to in the industry seem to say that we're not going to see any type of full diesel export ban, but there could be some sort of quota system, voluntary system. But Goldman Sachs, they'd look to kind of quantify what this would mean. So they said a full export ban would lead to a 25 cent per gallon drop in the price of diesel every single week. But then once storage is exhausted, we'd see a 30 cent rise per gallon in gasoline each week. The next question is, well, how quickly will storage be exhausted?

5:17So they say between nine to 10 weeks. But the reality is it could be a lot actually faster than that, given the majority of the available storage is on the U.S. Gulf Coast, since that is where the export hub is. Now, we could also see potentially European leaders decide to tap into their strategic diesel reserves. Right now, about 40 percent of global diesel reserves are in Europe. And, of course, about 14 percent of U.S. exports are going to the Netherlands, 7 percent to the U.K. Very damaging there. If they do do that, Citi said that could buy us about six months in terms of, you know, a decline in diesel prices and kind of tying over the market.

5:48But whether Europe decides to do that, that will be kind of the next step and could be very much in focus here. In terms of those Goldman Sachs numbers, is that a global view of diesel or is that a U.S. view of diesel? because there is the idea that it'll raise prices around the world, but not, you know, here in the United States. Yeah, so that's for the U.S. specific. But kind of the idea here is that while it's temporary, it will then lead to all these refinery cuts. And then also, if you think about refiners making investments into the U.S. system, it's going to cap their, you know, their desire to do that looking forward.

6:14Since the entire system was built on being an export hub, we are the world's largest diesel exporter. And it's been floated and contemplated for all these weeks, and yet it hasn't happened. But I wonder how the market even deal with it if it assumes now that it maybe is less likely. But thank you very much. Well, Nvidia shares moving higher today after the company announced plans to boost its stock buyback plan by one hundred and fifty billion dollars, the largest increase in history. The company also launching a new software platform to stop A.I. agents from going rogue. This comes after a series of hacking incidents from companies like OpenAI, Anthropic, Meta and Google.

6:49NVIDIA CEO Jensen Huang telling CNBC this morning that we are going through the largest infrastructure build out in human history. Here's what he said. I want the world to know that this industry has the technology, it has the maturity, has the responsibility to do it right, and we will do it right. And so that's number one. I think we're going through the largest infrastructure build out in human history. And we have the benefit of being a very central part of that. We're generating a lot of cash. We're going to generate a lot of cash in the coming years. And every single year as we generate more cash, we like to be able to return it back to the shareholders.

7:33NVIDIA's valuation has dropped to a decade low of less than 17 in terms of forward P.E. on potential concerns that it may not be able to maintain the speed of its profit growth. Joining us now is Milius Research, head of technology research. Ben writes us. Ben, good to see you. I mean, obviously, a lot of folks expected that you get a nice bump in a share buyback. Companies due to make a trillion dollars in free cash flow, I think, over the next three fiscal years. So this is a good chunk of it coming back at two hundred thirty five billion dollar now total buyback authorization. Does that change the picture from an investor perspective?

8:09Jared Isaacman: No, not really. I think that it was a signal because they're seeing a lot of investors this week. So they wanted to say, hey, look, we're going to be buying at least 40 bill a quarter for the next six quarters. And you can count on us to be buying our stock. You know, there's been a lot of criticism around potential circularity, them investing in other stocks rather than their own. So this is a good way to kind of get on the road and say we're confident in what we're doing. I think it can get a lot bigger than what they're saying, too, in terms of the buyback long term. Do we need, though, to rethink NVIDIA?

8:43Maybe this is what the valuation is reflecting, Ben, because, you know, Mike cited an interesting stat, an eye-popping stat, actually, when it comes to NVIDIA's projected growth. But according to their investment slides, they're right now an investor in 13 public companies, 229 privates, and they say the ROI for those entities is three times the amount they put in. Should we discount NVIDIA for that or should we add some kind of premium if they're this amazing investor?

9:11Jared Isaacman: Well, I think the thing with NVIDIA, look, is if you're benchmarking against the Russell 1000, it's really hard to be overweight this name if you're a long only. And the dynamics of a company this large getting larger is tough. I think there's a lot to NVIDIA's multiple just in terms of its size and these folks being able to buy incremental shares. I mean, if you get over 15 percent of your portfolio as a manager, I mean, that just gets you a lot of, let's just say, nervousness and whatnot. And the company deserves to be higher given its growth rate. I think buying back stock in a bigger and bigger way is going to really help it solve that problem and get a better valuation.

9:57Yeah, I mean, obviously it won't hurt, although I would note that the 235 billion is like 4 percent of market cap. You know, when Apple announced 100 billion in 2018, it was like 11 or 12 percent of its market cap. So, you know, again, it doesn't hurt. They have more than enough to make it happen. But the fundamentals, Ben, obviously, you know, Jensen Wang is out there wanting to kind of preserve this idea that we should be kind of going all out, building as fast as we can. There's no reason to slow down. But if we can do it more safely using, in part, its own platform in terms of guardrails, all the better.

10:33Is this a real, I guess, change in how these these models might behave or is it just a gesture?

10:41Jared Isaacman: Well, I think that Jensen, you know, has a lot of great points here. He's he's kind of saying, you know, look, you shouldn't put out a product if it doesn't work right. And if it's a risk and we have laws in this country that are enforceable. So I think what's really great about what NVIDIA did today is they talked about OpenShell. They had talked about a product like this when OpenClaw came out. Now it's really coming of age. And then Sentry, where they can shut down agents that are misbehaving. And somebody needs to take the leadership here. And I think not only is NVIDIA going to do it, but all the cyber companies that popped today.

11:18Jared Isaacman: and hopefully all these guys can make us have a safe environment. I really think what NVIDIA is doing is pretty neat with regard to how it gives away software, which is kind of like a razor, and then it sells the blade in its infrastructure stack. And it's doing that with open models too. By proliferating open models, you actually create a more secure environment because open models can help defend you against rogue agents and AI systems. So NVIDIA has really put a lot of this industry, if not the whole industry, on its back and trying to lift it forward. And, you know, no one better to do it than Jensen.

11:55Jared Isaacman: I mean, you guys saw his energy this morning. And I know that he's frustrated probably about the valuation. But, you know, I want to see this. I think they could buy back a lot more stock, like 100 bill a quarter in two years. So that really is a much bigger portion of the market cap that could really help this thing. Ben, we've got to leave it there. Great to speak with you, as always. Ben Reitzes. Oh, yeah, it's great. Have a great afternoon, everyone. You too. We have a news alert here on AMD spending$8 billion to buy an AI lab. Kate Rooney's got the story. Kate. Hey, Melissa. So this AI lab is called World Labs.

12:32You mentioned it. AMD agreed to buy this company. It is founded by one of the AI pioneers, Fei-Fei Li. She's an extremely well-known researcher in the space. $8.2 billion deal. Looks like this is an all stock deal. And this is a bit different from some of the other AI labs in terms of what they do. It's spatial intelligence. So generating sort of these 3D environments important here for robotics and some of the simulations and what a lot of people are calling physical AI. In this press release, AMD CEO Lisa Su talks about how understanding AI models is crucial to designing hardware and designing chips.

13:09They are trying to close the gap with NVIDIA, which has also been moving more into sort of the software ecosystem as well. World Labs also helps get that expertise in-house. As I mentioned, Fei-Fei Li, one of the biggest names in the space. She will join as executive vice president. Transaction, they say, is expected to close by the end of this year, subject to regulatory approval. Last thing I'll just add, we did report earlier that AMD was actually looking at one point to buy Hugging Face, which was acquired by NVIDIA. We reported that earlier, according to sources familiar with the matter. So clearly, AMD was on the hunt here for deals, guys.

13:45All right. Kate, thanks. Kate Rooney. Well, markets getting bogged down again by higher yields. This comes as Wall Street is on the lookout for this week's economic reports, the PCE report for August, as well as a jobs number for September. If that data comes in higher than expected, could that test the market's resiliency? Joining us now, Stephen Parker. He is the co-head of Global Investment Strategy at J.P. Morgan Private Bank. It's even great to have you with us. Good to hear. Do you think that this jobs report is going to sort of change anything? It sounds like there are a lot of expected forecasts for rate hikes, et cetera.

14:18And you say that there's no danger in investing in all-time highs. No, actually, if you go back and look historically, investing in all-time highs has been a good strategy. And I think at the end of the day, you've got this battle going on between scary macro top-down headlines and really strong bottom-up fundamentals. And so, yes, I think we need to look at this jobs report because investors are going to use this as a signal in terms of how aggressive the Fed may need to be. But I think the bigger thing that we're watching is the upcoming Q3 earnings season because that's been the thing driving stocks.

14:45And that's what we think is always where all the momentum is. I mean, there's no doubt earnings have done more than their share. But if we look at things like bank stocks, industrials, consumer cyclicals actually now starting to lag, flattening Treasury yield curve. I mean, does that speak to a later cycle environment or is this just kind of a lull along the way? Well, no, I think it is a challenge, but I think that's where there's the big difference between the stock market and the economy. Right. The economy is much more cyclically oriented, much more consumer driven. Most of the stock market is really a production story.

15:20It's the tech story. And that's the part that's been a lot more impervious to this move higher in rates. I do think that the pressure that we're seeing on some of the more cyclical parts of the market are an indication that investors are worried about the direction of growth. But we also have to remember that we could get a resolution, lower oil prices, lower yields, and you could get that reacceleration. So you're not worried about the sectors that have had trouble over the past couple of months? I mean, I think only four of 11 sectors are up over the past two months. That shows you just how concentrated this rally is.

15:50I mean, there is a point at which higher rates will pressure those other sectors into not spending on AI, potentially. I think you're right. But what we've seen throughout the course of this year has been a story of evolving leadership. Yes, recently it's been very concentrated in the tech sector. But think back to the start of the year when the MAG-7 was underperforming, when software names were under pressure, and you saw the industrials and utilities pick up the slack. And then over the summer when you saw the rotation out of semiconductor names and you still got a good story in the financial sector.

16:22So I think that the broader market is a lot more resilient and a lot more diversified than perhaps people are concerned about. And the way it's translating into at least a perception of Fed policy, actually central bank policy in general, is kind of interesting because you have those very resilient parts of the economy that seem to be voraciously consuming capital, helping to drive up longer-term yields, maybe helping to get projections of long-term growth higher, and yet higher rates themselves pressure the rest. So it seems like it could be a kind of an exacerbating factor as opposed to helping out.

16:55Well, I think your point is the right one. And the challenge the Fed is facing is that the parts of the economy that are driving some of this overheating are a lot less sensitive to moves and rates because the return on their investment is so high. And so that's the challenge and why I think that the moves we're seeing from the Fed right now is a lot more focused on gaining credibility, giving markets the confidence that they are going to address inflation. But we think that you're more likely to see just a reversal of the cuts that you saw last year rather than the start of a new hiking cycle, which is what took markets by surprise in 22.

17:26Because that would be an acknowledgment, basically, that you can't stop the inflation or the hotness of the economy right now because that's all AI. If you do so, you're risking just killing the rest of it. Yeah, and that's why as much as we're watching rates, we're also watching credit spreads, because even though rates have moved higher, financial conditions broadly are still pretty easy because rates are tight, volatility is pretty low, equity markets are strong. And so if we start seeing this higher rates creep into things like credit spreads, that would get us more nervous. Stephen, good to see you.

17:57Thanks. Stephen Parker. Financials among the worst performing sectors today and this month, and now one firm is bringing up a potential threat to the banks from AI. And if you feel like the cost of everything is going up, you are probably right. It's even more expensive to have fun these days. We'll have those details coming up.

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19:12That's why Citi created Citi Sky, a secure AI member of your Citi Wealth team, built with the Gemini platform on Google Cloud. Whether expanding your portfolio or planning your future, you'll be able to access tailored wealth guidance on your time. Start building with Gemini at cloud.google.com. Citi Wealth investment products and services are provided by Citigroup Global Markets, Inc., member FINRA and SIPC. Something amazing is happening in networking. Organizations are scaling with less stress. That's because CDW is designing and implementing intelligent HPE Aruba networking solutions that simplify and secure operations.

19:52With automation at the center of your data center, growing pains can be a thing of the past. HPE Aruba Networking and CDW. Make amazing happen. Learn more at cdw.com slash aruba. The latest industry potentially threatened by AI. Big banks, according to Apollo's Torsen Slock, if everyone used an AI agent to optimize the interest rate on their checking and savings accounts, it could create a huge problem for the banks. FinTech companies such as SoFi have accounts yielding between 3 % and 5%, according to Slock, whereas banks pay about a tenth of a percent on some accounts. If that money moved, it would give the big banks a lot less money to lend, which would be, of course, a problem for the entire financial system.

20:37According to Torsten, how he's trying to sort of go to the extreme case, obviously. A lot of questions about, you know, a lot of times these are teaser rates and how active you want to be and shuttling your money all over the place. But it's a fair it's a fair question as to how much it would mobilize money more than the big banks are accustomed to, because they hate competing on deposit rates. It's a very large expense. Yeah, and I think for certain products, it makes a lot of sense. Things like CDs, for instance, those things are very easy to move around. But when it comes to savings accounts and checking accounts, I think there's a lot of comfort for a lot of people in having those big banks still.

21:12Everybody knows that they don't pay a lot. That's right, yes. And yet you still see a big chunk of the money still parked in those big banks. It's not going anywhere. So I think there's going to have to be a lot more. But I thought it was a really interesting exercise sort of applying that, you know, the lazy sort of people didn't want to cancel anything. Like getting those people to activate, apply that to the financial system. It would definitely, you know, get rid of some frictional costs out there for consumers. On the other hand, how many times do you want to change your direct deposit? Exactly.

21:43I don't ever. Yes, exactly. Cost of everything, by the way, is going up, including fun. A new survey from the Bank of America shows spending on hobbies is rising much faster than the total number of transactions, which means we're having a little bit more fun but spending a lot more money to do it. For the purposes of this study, Bank of America defining fun as spending at arts and crafts stores, hobby shops and outdoor activities, including hiking, skiing and scuba diving. But the funflation goes beyond hobbies. Streaming also getting more expensive. Last week, Disney said the cost of its Disney Plus without ads would rise 13 percent per month.

22:19And Apple increased prices for its streaming service just last month. Now, Mike, we know you define fun differently. The cost of your financial time subscription. That's right. That was not included in the Bank of America study. So does that mean it's not going up? I'm not sure. You're going to have to check your own tab. I don't think it is going up. Or you can ask an AI agent. I define fun as delusion because I don't believe in it. But, yes, that is true. I did find it interesting. There's something else maybe going on here with the people in terms of age that are spending more on the sort of analog hobbies.

22:49It seems like the age where you have kids and you would want to enforce non-digital screen-based activities. But still, it obviously is going to have to pay up to do it. Yeah. And obviously, input costs going to this too. That's true. Just like basic things like that. But I agree with you in terms of the generational. Checkers, plastic, oil. Yeah, it's all connected. All right. All right. First, Meta introduced news and then held a big event showing off a pocket-sized version of its AI agent. Now, Meta making another big move. We'll tell you what it could tell us about the company's plans. And don't miss Squawk Box, live from Washington tomorrow.

23:24A big lineup of guests, including NEC director Kevin Hassett and SEC chairman Paul Atkins. Closing Bill Overtown. We'll be right back.

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25:07Thank you.

25:37is down about 18 percent, while MetaShares are down nearly 5 percent today. The MetaShares are still up about 24 percent in the past month on the rollout of its Muse AI agent. Now, Meta's hiring of MongoDB's CEO solidifies its commitment to the enterprise software space, where it hopes to capitalize on the millions of businesses that use its platforms. Meta CEO Mark Zuckerberg saying that the enterprise business will, quote, use our strengths that few other companies have. Advanced models, leading agents, large-scale infrastructure, and years of working closely with many businesses. Baird with an outperform on the stock, writing, quote, we see this as another step towards commercializing products and business relationships Meta already has, potentially adding billions of incremental high-margin revenues.

26:23Now, one reason the stock might be down today is that Meta has tried unsuccessfully to sell enterprise software in the past, and now it's going head-to-head with established enterprise software companies. Melissa? You know, Julia, that was exactly the point I was going to get at. The market seems impatient at times when it sees Meta getting ambitious in an area where it is not showing a core strength. And that would be enterprise and the willingness to pay up for no less the CEO of a public company to do it at this point. Is that a sense out there that people would prefer that it just let Muse proliferate the consumer ecosystem of Meta and then just sort of reap those benefits?

27:02Well, here's why I think this does make sense for Meta and why I believe they're doing it, Mike, is that if you look at Meta's strength, it is with consumers. They have massive consumer reach. Billions, literally billions of consumers use Meta's platforms every day. What they also have is reach to small and medium sized businesses. You have hundreds of millions of small businesses who are on the platform. Maybe they use a Facebook page as sort of or an Instagram page as their website. And maybe they use WhatsApp to message with with their customers. So there is this built in potential for Meta to lean into the enterprise because it already has relationships with businesses.

27:39This would just be a different type of relationship. Instead of just selling ads, they would also be selling enterprise tools. So I think the question here is, can they convert those advertisers to also be these enterprise customers? And we still need more details from Meta on how exactly they're going to go about doing this. But we also have to remember, just Mike, the stock is up so much in the past month. It doesn't really sound, though, Julia, like what they would offer these small, medium-sized businesses would be that much radically different from what Muse could potentially do already if you link Muse to those same accounts.

28:11You know, it's interesting that this happens after we get a glimpse of Microsoft's, you know, better, more improved co-pilot, where they say they can go into Excel spreadsheets and they can have full functionality within the Microsoft suite of applications, And yet we don't really have much of a sense of what Meta's product could do for business. Yes. What we've seen so far with the Muse, the Muse app, this AI agent, is that it can link to things like shopping. You could give it access to your Gmail, to your Google Calendar, to do scheduling, to make purchases, to make a restaurant reservation.

28:44The question is how it actually has the enterprise offer play out for those potential consumers, how it might be different or similar to that Microsoft offering. And remember, also, tomorrow is OpenAI's Developer Day, and we'll have to see what comes out of that as well. Another potential rival for that. Oh, for sure. Yeah, it doesn't stop. Julia, thank you very much. Time for a CNBC News update with Brandon Gomez. Hi, Brandon. Hey, Mike. A New York prosecutor has reopened a probe into gang rape allegations at Cornell University. The renewed attention comes two weeks after a woman filed a lawsuit against the men, their fraternity, Cornell, and others for undisclosed damages.

29:19The local prosecutor said he initially didn't consider charges because the woman's statement to police did not include claims that she was drugged or raped. The Trump administration is asking the Supreme Court to allow a new policy that would cut off transgender medical care in federal prisons. It stopped surgeries, hormone therapies and social accommodations while allowing mental health therapy to continue. A lower court blocked the policy in a ruling last month. And crews began work on the first new rail tunnel beneath the Hudson River in more than 100 years today. The Hudson Tunnel Project will build a new connection between New Jersey and New York, one of the nation's busiest rail corridors.

29:57The milestone comes less than two weeks after the Trump administration dropped efforts to block federal funding for the project. Mike, send things back to you. All right, Brandon, thank you. One exciting moment earlier today as SpaceX's Starship rocket reached orbit for the first time and deployed new Starlink satellites. Up next, we'll talk to NASA Administrator Jared Isaacman about this launch and about a new deal between NASA and Boeing. We'll be right back.

30:26NASA announcing a deal with Boeing today to help bring its Starliner astronaut capsule online for missions to the International Space Station. Starliner hasn't flown since stranding two astronauts aboard the space station for nearly 300 days in 2024. For more on the deal and the future of space exploration, we're joined by NASA Administrator Jared Isaacman and our own Morgan Brennan. Morgan, take it away. All right, Melissa, thank you. And Administrator Isaacman, it's great to speak with you. Let's start right there. NASA's reengaging with Boeing. You're going to continue developing the Starliner capsule.

30:58Going to be flying, potentially, hopefully, flying crew as soon as 2028. Why reengage now? Why is now the time?

31:06Jared Isaacman: Well, it's not really reengaging, Morgan. And by the way, it's great to chat with you, especially with such a busy week in space ahead. I mean, today was obviously an incredible day. We had a Starship launch. There's many more exciting milestones later this week, including NASA sending more astronauts to the International Space Station on Crew 13. All that said, when the initial commercial crew program was established, the idea was always to have two providers that be able to take our astronauts to and from Earth orbit to the International Space Station and maybe future commercial space stations.

31:33Jared Isaacman: Dragon's been a wild success. No one's doubting that. But we were always committed to seeing it through with the Boeing Starliner spacecraft. We had a press event earlier this year where we released the findings of that incident where we had to transfer crew from Starliner to Dragon to bring them home safely a couple years ago. But that report had a series of recommendations. We've been implementing that. Boeing is cooperating really well. And now we're going to get back in the business of flying the Boeing Starliner spacecraft. uncrewed Starliner one before the end of the year and then within two years.

32:04Jared Isaacman: Ideally, before then, we'll have crew back on board. OK, so maybe not reengaging, but in terms of what this looks like now with Boeing to get Starliner flying here within the next couple of years, Boeing has locked billions of dollars in charges tied to Starliner over the last couple of years. So what does a deal today look like and what does that mean financially from NASA's standpoint? point. So we're on top of a program that's existed for a very long time, as you know, it was about 350 million of incremental dollars. And that goes to redesigning the SM prop system, some enhancements to the service module prop system, some enhancements to the parachute system and the batteries.

32:44Jared Isaacman: And there's a laundry list of other things that was part of the pit report that was disclosed earlier this year. So there's some dollars associated with that. a substantial portion of it is crew rating the Starliner spacecraft on Vulcan. So that's ULA's kind of next generation vehicle. That's very important because the Atlas V that it's currently certified to is out of production. It has some life limited components that you're not going to be able to address. So for the future of Starliner, there's some cost that's being allocated to certifying it to a new vehicle. And then we have some options available for a fifth and sixth mission should we be happy with the performance.

33:19Okay. Speaking of new vehicles, you just touched on it. Starship, huge milestone launch this morning, successful mission, albeit cut short a little bit here. First time that SpaceX's Starship actually went to orbit, a commercial flight as well as it deployed its own Starlink satellites, next-gen satellites. What was your response? What is your takeaway from today's flight?

33:39Jared Isaacman: Well, I think the Starship mission today reached a very critical milestone, which is they got to orbit. And I think overall I'm just pretty energized right now when we're on the topic of potentially crew transport systems to space and to the moon. Again, we talked about Starliner update today and getting that one ready. You've got Crew Dragon that's going to take the next four astronauts to the International Space Station later this week. And now Starship, which is going to be a critical capability for astronauts to Leo, for astronauts to the moon, building a moon base, going to Mars, new telescopes, national security reasons, had a great mission.

34:16Jared Isaacman: So there's a lot to be just excited about right now. And I have no doubt they're going to be pushing the next Flight 15 out to the pad in the next, you know, probably weeks, a couple months, and they'll be flying again. And we're just, we should expect that cadence to constantly increase until they get in a rhythm, which is going to be important for our lunar objectives in 2028. Yeah, speaking of Artemis timelines, there's been some reports that perhaps a 90-day delay here for Artemis 3 come next year. SpaceX and Starship is going to be a part of that. Blue Origin is going to be a part of that mission as well.

34:44What can you share?

34:46Jared Isaacman: Oh, I thought that was honestly hilarious, Morgan. And I know because you cover the space sector, you saw it too. So that was like an internal memo I sent out to it. Well, it went to 55 ,000 or so NASA employees and contractors. So I should always assume it's going to get out in public. But actually, it was a confidence-inspiring update. There was no Artemis 3, you know, six, seven months ago. Now we've got the vehicle being stacked here at Kennedy Space Center and Vehicle Assembly Building. The Artemis 3 astronauts are in training. They just did water survival training. We've got NASA personnel out in the field driving outcomes at our vendors.

35:16Jared Isaacman: And I was saying, hey, we're only broken 90 days to schedule in 2027, and there's opportunities to pull it in. I think anyone who follows the aerospace industry very closely knows everything that goes into a mission as complicated as this. I mean, the three most powerful rockets in the world are going to launch in summer of 2027, and you're 90 days broken the schedule this far out, that should be a confidence-inspiring message that America is on track with its lunar program. I mean, speaking of, we have a lot of launch capability coming online here, whether it's Starship with SpaceX. You mentioned ULA, which is a joint venture between Lockheed Martin and Boeing with their Vulcan rocket as well, Blue Origin with New Glenn, which I know they're hoping to return to flight before the end of this year, potentially, and others that are going to come online too.

36:00what is your expectation around this launch market, especially since NASA is a key customer here and there is an anticipation that you're going to see the Falcon fleet retire at some point from SpaceX and a lot of the capacity that Starship brings online actually going to that own company's own endeavors.

36:18Jared Isaacman: Well, Morgan, I'm out in the field talking to folks across industry quite frequently. And for sure, I mean, people's nerves are up that there is going to be some volatility in the short term as Falcon 9 winds down before Starship's capacity fully comes online. And is the rest of industry going to have an opportunity to step up? Well, that's the thing. It's an opportunity. This is what ULA has been waiting for for Vulcan. This is what Rocket Lab's been waiting for. Rocket Lab's got their new Neutron that's coming on. You've got companies like Stoke that are out there. You know, there's a lot of capacity, not to mention Blue Origin with New Glenn and their uprated version that they're working on getting the pad ready for here at Kennedy Space Center.

36:59Jared Isaacman: So the whole commercial space economy starts with launch. Everything begins there. There's no doubt about the demand. The question is, is industry going to respond to it? I think they will. I think they've been waiting for this opportunity. And SpaceX is obviously making a lot of good progress with Starship. All right. Administrator Jared Isaacman of NASA, it's great to have you on over time. Appreciate it. Thank you. Good to chat, Morgan. Take care. The other piece of space news we're going to be watching this week is going to be Project Suncatcher from Alphabet and Planet Labs, too. They're going to be sending their first TPUs to space so that orbital data center conversation continues to evolve and it's not just a SpaceX one.

37:36Wow, that's fascinating. Morgan, thank you. Morgan Brennan. All right. Up next, we'll discuss whether bonds are starting to look more attractive at these levels or if there's more downside ahead for debt investors. Closing Bell Overtime. We'll be right back.

37:56Welcome back to Closing Bell Overtime. Live from the Nasdaq market side, stocks starting the week on a down note, the Dow losing 347 points, S &P 500 down three quarters of a percent, Nasdaq 100 losing more than a percent. Treasury yields rising once again, putting pressure on stocks about five basis points on the 10-year yield and the 30-year. Vail Resort slightly lower following its results, a company posting a big loss, not unusual for a ski company in the summertime. Guidance for the full year 2027 revenue is slightly above the current estimate, saying fiscal year 2026 was hurt by one of the most challenging winters in history with snowfall in the Rockies at historic lows.

38:32Dragging on the Dow today, Boeing, the FAA is delaying certifying Boeing's latest 737 MAX model due to a software glitch officials worry could be a safety risk. Yeah, I mean, investors giving no reason or given no reason to start to sort of trust the process at Boeing again. Sometimes you wish that, you know, there'd be kind of like, all right, bad news, a little bit of a hang up on the next generation. And then the market ignores it, It hasn't been able to. Stock is kind of where it got to first like nine years ago. Nine and a half years ago. I mean, all the sort of the bulk case, it'll get better.

39:08It's going to correct all these quality issues. It has a duopoly. None of that has really helped it get up. For that matter, global flight miles only keep going up. And that was considered to be the big push behind the free cash flow story. But, you know, we continue to wait at this point. While investors continue to watch global bonds as yields in Europe and Japan remain elevated, Stateside, of course, the 10-year yield is at levels last seen in 2007. So is the bond market flashing a warning about sticky inflation at a tighter Fed? Or has this latest move in yields gone too far too fast? Joining us now is Mark Dowding.

39:41He is CIO of Blue Bay Fixed Income at RBC Global Asset Management. Mark, it's great to have you. You know, obviously, it's been tough to sort of decide that the bonds have gotten cheap enough, so to speak, to really wade in in a big way. But how are you viewing it right now? Investors are gun shy, but then also are being given pretty good yield cushions up front. Yeah, look, I think we need to understand that yields have gone a long way in a short space of time. We've actually seen the front end of the curve sell off 75 basis points over the course of the last month and a bit. And that seems excessive.

40:17When you think about the reality, the economic backdrop hasn't really changed ever so much. And when we're in a situation where you're pricing, you're discounting 100 basis points of rate hikes now in the coming 12 months, we think that that is bordering on excessive. I certainly can't really imagine the Fed needing to do more than that, particularly noting that although core PCE inflation is elevated, the core CPI measure is only standing at 2.4 percent today. So I don't think there's any great panic about inflation in the way that perhaps there was back in 2022. So what, in your view, is a key driver for understanding this yield move higher?

40:59I mean, is it the economy is so good? So here, the one thing I would like to say is often we see moves in prices and there's a real temptation to try and fit a really precise narrative to the price action. I actually think what we're seeing here is actually a move which is as much about the technicals as it is about the fundamentals. and from that point of view there has certainly been a lot of anecdotal evidence of a lot of closing out a lot of stopping out of established long positions over the course of the past month there have been hedge fund pods that have closed there have been people who have been exited from rolls after accumulating losses having been long and wrong all year and so that really explains some of the price action that we've seen but from that point of view that the market technical now should be looking somewhat clearer.

41:49And so we'd be inclined to think that we should be entering into more of a period of stability ahead. So we're more hopeful for the outlook for treasuries here than we have been for a very long time, actually. And we're within the Treasury market at this point, the five years giving you 5 percent and you're not getting a tremendous amount of yield premium much farther out until you get toward 30. So does that mean there's value in the shorter end or do you sort of still want to own duration, because who knows what could happen economically in the macro? Well, here I'd actually argue that there's more of a case for the intermediate part of the curve.

42:26That five-year point to us looks like a good point to be allocating towards. Ultimately, in this move in the bond market, there's been a great best flattening of curves. So if we do see the market bounce back, we'd expect the market to be snapping back somewhat steeper if some of those excessive rate expectations start to get corrected. And I think the one other thing that we'd say in terms of the long end of the bond curve is that we continue to see a lot of issuance, a lot of issuance coming from not just the government sector, but importantly from the corporate sector. A lot of that is long duration.

43:03So it seems like every day we will wake up with another big jumbo bond deal hitting the market, hitting the tapes. A lot of that is adding to a lot of duration. So I'd be cautious further out the curve because I think all this supply is going to end up adding to term premium over time. But when you're looking more towards the front end of the market, it really is what the Fed is doing, which will really be anchoring those levels of yields. And from that point of view, I think that the Fed expectations, as I'm voicing, have gone too far. Mark, great to speak with you. Thanks. Mark Dowding. Thank you.

43:38Up next, we're breaking down some big news in the pharmaceutical industry today, including what is behind the massive gain by Kodiak Sciences. That stock up 178 percent. That's just today. Closing bill overtime live from the Nasdaq markets. I'll be right back.

44:01Shares of Eli Lilly modestly higher today, continuing the stock's strong run since the beginning of May. JP Morgan raising its price target on the stock to$1 ,500 from$1 ,400, citing strong trends in the obesity and diabetes drug franchises. Meanwhile, Lilly's CEO, Dave Ricks, saying in an interview that he is planning to pursue more large deals to expand into new therapeutic areas, similar to its nearly$8 billion acquisition of Centessa Pharmaceuticals. Ricks mentioning psychiatric conditions and women's health as potential opportunities. He sounded particularly aggressive in speaking to European Diabetes Conference today saying that they're going to look for white spaces in science as to where the opportunities are.

44:40And it sort of also underscores the difference between what Eli Lilly has done with its lead in obesity versus what Novo Nordisk has, or I should say, has not done perhaps with its lead when it had it in terms of diversifying the pipeline and going aggressively into new areas. Yeah, mobilizing quickly to do that. Of course, it's going to take a lot to move the needle. It's like a trillion dollar market cap. It takes a lot of $8 billion deals to, I guess, reorient the overall story there. Yeah. Well, still with health care, check out shares of Kodiak Sciences, nearly tripling in today's session.

45:13The biotech company announcing its experimental eye treatments for wet age-related macular degeneration met their primary goals at a late stage trial. Shares of Regeneron, which has a treatment for wet AMD already on the market, falling nearly 4%. That's an addition of, you know,$2 plus billion in market cap for Kodiak. So clearly the market just immediately saying they're going to own a tremendous share of, you know, pretty good growing market. Even a smaller share of a huge market is big for Kodiak. For Regeneron, though, you know, you sort of wonder, is it being written off in terms of ILEA and its sort of presence in the market?

45:49Citi's analysts are saying, you know, you take a look at long-acting ILEA and there's a comfort level among patients. There's a comfort level among doctors. And we still don't really know the sort of the real world durability is what they call it of Kodiak's treatment. So don't write off Regeneron quite yet with ILEA. We're going to see how this all plays out. There's always a lot of inertia in prescription patterns. We know that. So I'm sure the market overshoots in the short term. See how it sorts it out from here. Well, let's get you set up with tomorrow's trade today. Carnival and CarMax are the only names on the earnings calendar.

46:22And on the economic front, we'll get the Case-Shiller Home Price Index, the Job Openings and Labor Turnover Survey, and the Consumer Confidence Report as well. Of course, JOLTS is one of a couple of previews we're going to get to the jobs number on Friday. We were saying on Friday, last Friday, it's unclear how much the bond market's going to be able to relax until it gets some kind of sense we're maybe not going to get a super hot jobs number on Friday. And then the CarMax and Carnival earnings, hard hit part of the market. Oh, yeah. Rate sensitive, consumer levered companies. Yeah. And you take a look at a lot of sort of the travel stocks.

46:55The hotels have been trading horribly up late. And so if that sort of sets the tone for those earnings reports, then, you know, that's going to be tough. For tomorrow, though, we're going to watch very carefully, you know, 5.3 percent. We talked about that level. It's technically, you know, a level that people are pointing to at this point. A round number. On the 10-year yield. On the 10-year yield. Exactly. And we are a whisper away from that. That's right. It feels like just as it was with 5 percent, we kind of like tack up in that direction. It feels like it'd be strange if the market didn't attempt to sort of check it, see if it held or not.

47:27Didn't see a lot of let up in the bond selling today. That's going to do it for overtime today. Fast Money starts right after this quick break.

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