Markets End a Wild Week With Nvidia in Focus 11/13/26

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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 five for details. The Bells bring you an end to the trading day at the NYSE. Revity ringing the bell and closing out the week here at the Nasdaq is VHAV acquisition. 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 closing out a wild week on a down note. The Dow closing near the flat line. S &P 500 down 0.4%. The Nasdaq losing nearly 1%. Given all the headlines and drama this week, you might be surprised to know it was a pretty good week for stocks, especially the Nasdaq 100, which gained 3.5%.

1:26That's largely because AMD and Broadcom balanced out the big losses in NVIDIA. Both of those names up 18 % this week, while NVIDIA lost 12. NVIDIA closing at$163 a share, the lowest close in about a year and a half, and it lost nearly a third of its value since the high on October 6th. Money continuing to find safety in Staples, Costco, Johnson & Johnson, Procter & Gamble, all hitting all-time highs today. Apple seems to be carving out a new sector as a tech staple. That's also hitting a record today. We've also seen some big moves in bonds this week. The 10-year yield ending the week around 5.15 percent.

2:02Let's get the first take on the close on this Friday. It's interesting because since before the election, we've had so many hills and valleys, and yet here we are pretty much flat from those levels. Pretty much flat. Actually, a little bit down from the day after the election. It sort of depends on where you count from. I do think, as I keep saying, we benefited this week from sort of how washed out tech got at the end of last week. So that was sort of bounce mode almost no matter what the news was. What was fascinating is how it executed that with NVIDIA, obviously, the big drag. By the way, NVIDIA shares, we mentioned yesterday, the open yesterday, it was under 150.

2:38It was like 148 and change. And so we'll see if that matters, that it's created that distance between those levels. But I do think that it's still a noncommittal market. We are still at levels. We got to five or six months ago. And I think it's all a matter of kind of how you're framing this. Earnings have been great. Are Semi still a bellwether group? I think that's worth asking because they're 30 percent below their highs. And yet the S &P is not far from its own. And you talked about the market cap transfer from NVIDIA into AMD and Broadcom. And AMD is one of the top 10 stocks contributors to the S &P 500's gains year to date.

3:13And so we have been riding this market without NVIDIA anyway. But here we have today finally question marks about whether or not AMD will actually be a true beneficiary. Not only is it maybe not a like-for-like substitution for an NVIDIA GPU, but also AMD sells a lot into Singapore. I mean, it's like 12 % of total revenues. Yes. So if there's tighter export controls, and that's sort of the next layer of the story that we have, tighter export controls will have an impact on technology at large and especially semiconductors. You can see that rethink happening in the markets. It was a little bit of a sloppier trade in semis.

3:45It was not as if others offset the losses in some of the hardest hit ones. And I do think it's been very hard in this market to tell pure mechanical rotation from a macro or fundamental message that's being sent. Exactly. We got some breaking news in the Fed. Let's get to Steve Leisman, who's got the details. Steve. Melissa, the Federal Reserve out with its semi-annual financial stability report, in which it makes very clear it is closely monitoring just what you were talking about, and that is the financing in the AI world. They say the complex data center financing and all the linkages pose risk, quote, that need close monitoring.

4:21They go on to say that bank credit commitments to other financial institutions surpassed$2.8 trillion in the second quarter. Included in that was private equity, BDCs and private credit accounting for about a quarter of that. The largest U.S. bank holding companies have a trillion dollars of exposure to tech. AI-related debt issuance was up$680 billion through October, up five-fold from 2023. Total debt estimated at$1.1 trillion now. The Fed is unclear how much debt there is in the private credit markets. Moving on, combined debt, leases, guarantees, all of that stuff. A little bit of apples and oranges mixing here, but it's$3 trillion for the major hyperscalers.

5:02The Fed looking closely at the 10Ks in the Qs of Amazon, Alphabet, Broadcom, Meta, Microsoft, Nvidia and Oracle and coming up with that number. The firm's economic exposure to future downturn may be larger than implied by what's on balance or on their on balance sheet liabilities. The largest tech firms, however, they could absorb losses of smaller firms, the Fed says, in the event of a financial downturn that would lessen the overall impact on the financial system. They did a survey. They do this every time now with the survey market contacts conducted by the New York Fed. So this is not the Fed's opinion.

5:37But those survey respondents sharply raised their concerns for artificial intelligence and financing. If you look at the responses, 87 % said it's a risk out there. That's up 37 points since May. 52 % said the risk correction and risk asset price is up 17 points. Overall, across the board, you can see there risks are higher among those respondents contacted by the Fed, including the debt risks as well as cyber attack risks are also a major concern for the report, up 13 points for fiscal debt sustainability. That's one issue out there. Just a couple other ones they normally do are forward PEs, well above historical median.

6:18But household debt, well, that's pretty good. It's below the historical range. Investment grade corporate quality was strong. Hedge fund leverage, however, is at an historical high, the highest since 2013. The banking system, this is the important thing that they end up evaluating, is sound and resilient. There are vulnerabilities associated with the financial leverage, however, they remain notable. That's a word they use, kind of a euphemism. Finally, near-term risks include disappointing returns on U.S. business investment, cyber attacks, and a rise in geopolitical risk. So a lot there, guys.

6:52It's a long report. But What you see overall when you step back is the Fed is taking a close look at AI financing and what's going on with all those linkages. Not clear what they're going to do about it other than saying they are monitoring it as well as most closely what the Fed does. As you know, Mike and Melissa, they monitor the regulated financial system. So they're monitoring that closely in that connection there. And Steve, that trillion dollars, was it, of kind of AI-related exposure among the large banks? commercial bank assets in total like$25 trillion or something like that. I'm just trying to scale it.

7:28Yeah, I think that's a good point. It is a piece of it. It's a growing piece of it. And we also don't know the terms of that. Mike, you and I both know there are times when there are covenants and times when it's covenant light. And the extent to which these banks have equity and other assets in front of that debt, that changes things. So the Fed is watching this. It is still calling the banking system sound and resilient. I guess the one area of concern that I think the Fed has and everybody has about the financial system is how much visibility they have into the non-bank sector. And they're kind of acknowledging they don't see everything there.

8:04They're trying to count up what's in the private credit market. They're trying to count up the bank's exposure to that market. But that's an area of opacity that creates financial risk and that nobody can really ever fully answer because it is outside the regulated system. Yeah, but that's the rub. That's the problem, Steve. I mean, I don't think many people think that banks, just because of all the regulations that have been put in place since the great financial crisis, were ever at risk in this. But it's all the circular financing. It's all the debt that's issued, private credit. That is the concern here.

8:35So rewind to when Michelle Bowen was talking about risks to financial stability. What do you think she was talking about if there's no risk to the regulated entities? Well, the risk is this. First of all, I think, Melissa, you'll remember that we all learned during the financial crisis, we all thought they were in these SPVs and these remote vehicles. Well, guess what? It did come back to the financial system or to the banks. So that's the first thing is, are there connections there we're not aware of? Are there hedges out there that will, when things go to hell, essentially, that the correlations go to one.

9:13Those are concerns out there. She's monitoring it. And when she was talking, she was looking at what's happening to the market last Thursday. And maybe some of the survey was done around that time as well. So it's an area of concern, Melissa. Yeah. Steve, thanks. Steve Leisman. Breaking news from the FAA. Phil LeBose got the details. Phil. Melissa, there is a nationwide ground stoppage that has been issued by the FAA. We don't have any details as of this moment. We're waiting for some more information, which we expect shortly from the FAA. They say that this is due to rolling frequency outages in multiple centers.

9:47So as a result, they are having aircraft hold at their point of origin before they take off. And we will have more information hopefully shortly. Melissa, I've got a call into the FAA and they are working on a statement. Perhaps we'll get a little more clarity as to exactly what has caused this outage. But again, a nationwide ground stop issued by the FAA. Guys, back to you. Phil, thank you. Keep us Post it. Phil LeBeau. All right. Well, stocks, they're wobbling today, not breaking despite a volatile week marked by the NVIDIA fallout and fresh questions around the A.I. trade. The S &P 500 is still only about three percent below its record high, though, at levels first reach more than five months ago.

10:26So where to from here? Joining us to discuss is Keith Lerner, Truist Wealth Chief Investment Officer and Chief Market Strategist. Keith, good to see you. We caught up with you a week ago yesterday. It was like when the tech stocks were making their lows on a tactical basis. You said you thought they were overdone to the downside. They were ready to bounce. They've done so. So how do you assess what we've seen since then? Yeah, well, great to be with you. I'm glad we at least did see some green this week. But it was one of those weeks where it was like, hit me with your best shot, right? If you would have given me the news ahead of time that Jensen resigned, right?

11:02The Michael Jordan of the AI trade. And then that interest rates, the 10-year, jumped about 30 basis points. I think all in all, I'll take the win, at least for this week. I do think it's a low conviction market, Mike. There's obviously a lot of different crosswinds right now. All in all, though, our tagline really hasn't changed. We're still giving the bull market the benefit of the doubt. I would say when we look back historically, even though it's been a month or two now, when the Fed has raised rates for the first time in a while, the next three months tend to be a little bit negative, and we're seeing that.

11:36But at this point, as we start looking into next year, we've reset valuations. We saw this week's sentiment get a bit more negative. The AAII bears up to about 51. We still think earnings move forward. So all in all, we still think the path forward is higher, somewhat bumpier. I think we're all looking for what the catalyst is right now. It's just a lot of back and forth in the near term, and that's likely to continue. Okay, so what's the biggest risk to the downside, Keith, at this point in your view? Yeah, well, it's a lot of what you all talked about. I think the two main risks are the AI trade and interest rates.

12:13Those are front and center. I think on the AI side, from our perspective, at least kind of what we talked about last week, I mean, we've seen a reset in valuations of about 45 % from the high we were in the technology sector as far as valuations a year ago. And so I think at least we're embedding a lot of more negative news. I'm not a full washout, but I think that's a positive. And on the rate side, the 10-year Treasury yields at 515, I think if we started to punch above that 535 level, which seemed to be a pretty good local top, There was a lot of negative sentiment about bonds going much higher than.

12:52I think those are the two key risks that have been with this year that remain. But all in all, like I said, let's see what happens the next week or two. And as you think about this bull market, we've been through an ongoing carousel of concerns. And we've come out the other side. And that is our base case that we will. Though, like I said, it's a bit of a grind right now. Yeah, I mean, you know, in addition to the 10-year yield moving up, as you mentioned, we did get talk of a potential, you know, half percentage point rate hike next month. That was only one Fed Governor, Christopher Waller, talking about that.

13:28But I just wonder if it sort of gets in the market's head about the potential for, you know, either a policy mistake or the fact that we have to chase inflation a little bit here. And you saw Bitcoin down on the week. You saw gold down 5 % on the week. And the dollar actually have very strong weeks. I just I'm trying to assimilate the macro message there as well. Yeah. And throw one more at you, more on the negative side. Dr. Copper just broke below this 20-day moving average for the first time in over a year. So that's also another message as well. So, again, I don't think this is, I mean, if I look at a T-chart, the bull bear case is pretty close.

14:05We're still siding with the bull case for the factors that I mentioned, I guess, going into the Fed meeting. I guess the good news is the market's talking up 50 basis points. If they only go 25, the market actually may look at that as a positive because they're fearful that we may go more aggressive as well. So if you look at the late 90s, one component of the tech bubble popping was the Fed becoming more aggressive at 25 basis points. And the market sent that out. I think the last rate hike in April was about 50 basis points in 2000. And the market sifted that out about a month ahead when it popped.

14:39But again, those are all concerns. We always have concerns in here. But again, I think from our perspective, you mentioned we haven't done anything in this market for about five months. We've reset valuations. We reset sentiment. Our base call into next year is the economy continues to chug along, move forward. And we think earnings will also continue to surprise to the upside because we're seeing 2027 estimates actually buck the trend, meaning they tend to go down this time of year. They're moving up as well. So, again, the tagline, what are you using? So we're still giving this bull market the benefit of the doubt.

15:11It's earned it. But the composition of the market is interesting, Keith. And I wonder if there's a message in and of itself. I mean, the new highs that we're talking about, you know, it seems like for days on end, Coca-Cola, Costco, Johnson & Johnson, Eli Lilly, and all of these trade at multiples higher than the MAG-7. Most of the MAG-7, I should say. And a lot of the AI trades. I mean, in your view, what does that say about this market? we're sort of turning sideways, but these names, these kinds of names are grinding higher at high valuations. Yeah. That leadership is not what you want to see in a rip-roaring bull market.

15:44I think you can look at that half empty that, hey, the market knows something we don't know. Or you can say, as I think about the next year, if we do avoid a recession, do I want to buy a consumer staple stock trading at 22, 23 times earnings with 4 % or 5 % earnings growth? Or do I feel more comfortable buying technology where there's a lot of uncertainty, but it's at a 17 multiple with 40 % earnings growth potentially next year, even if it gets haircut a bit. For us, at this point, until the evidence in our work shifts, we're saying we'd rather be in the tech trade and maybe have a bumpier path forward.

16:18People feel comfortable paying a high price for that safety as far as stability with consumer staples. We just don't think the risk-reward is that great. On the other hand, I think healthcare still has upside. We're overweight healthcare. That is a sector that has underperformed by a lot before this year, and also benefits from AI innovation and also some of the cost-cutting as well, and also some innovation in drug development. So I think you can hedge. You don't have to be all in on one sector. You can go tech. Healthcare tends to be the anti-tech, and then we're still overweight energy as a hedge against some of the geopolitical uncertainty, which still had a good week despite energy prices actually being down this week.

16:56Yeah. Key, thanks. Have a great weekend. Keith Lerner. Thank you. NVIDIA trying to move ahead with life after Jensen Huang. Seema Modi's got the latest in the company's efforts to replace him. Seema. So, Melissa, NVIDIA's board telling CNBC earlier today it has not chosen a search firm to identify potential candidates to replace former CEO Jensen Huang. This, as speculation, has swirled around who the board will select to permanently succeed him. The Financial Times reporting that arm holdings Renee Haas was approached, but this statement from NVIDIA's board suggests it has not engaged with any candidates at this point, Melissa.

17:29Question now is whether this means the board is looking internally before evaluating external candidates where it would then perhaps need the help of a search firm. This, as Elon Musk posted just a couple of minutes ago on X, that a petition is underway to reinstate Jensen Wang as CEO and that he has signed it as well. I've also been told that there are two petitions, one internal that has about thousands of signatures from employees, and that there's an external petition that I believe he's referring to, standbyjensen.com. All this as NVIDIA executives and interim CEO Colette Kress prepare for quarterly earnings.

18:05Next Tuesday, the street expecting sales to double on a quarterly basis, but the focus will arguably be on the verbiage. What is said about the company's CEO search? Then after earnings, the company hosts that all-hands meeting Wednesday morning. Seema, I mean, we're a couple of days into this process, And given that there was no kind of standing succession effort or search going on, I guess I wonder how expectations are being set for how quickly this might move. Maybe we'll get more color on that in the call after their results next week. But it feels pretty early. For sure. I think when we first learned about the resignation of Jensen Wang, which was, by the way, yesterday morning, it feels like a long time since then.

18:49But we would expect this process to take some time, a very thoughtful and holistic approach. Given that, to your point, Mike, there wasn't really a clear succession strategy prior to Wang's resignation on Thursday morning. Seema, thank you. Seema Modi. While the board is working through its new CEO decision, Congress is focusing on China as calls for tighter export controls grow louder and louder. In an interview on Squawk Box this morning, Treasury Secretary Scott Besson criticized the lack of control surrounding NVIDIA chip exports to China. Take a listen. There is a lot of leakage in the system, and we are constantly working to close that down.

19:31And one thing here is that the story has been thus far on Jensen Wang's personal foibles. The real story here should be, did NVIDIA know their client? And was there a robust effort at NVIDIA to make sure that there was no leakage and that they were selling to what were obviously passed through shell companies? And I think it's important that anyone at the company there be held accountable for that. Joining us now is Dmitry Alperovitch, CrowdStrike co-founder and former CTO. He is the co-founder and chairman of think tank Silverado Policy Accelerator, which focuses on U.S. national and trade security.

20:16Dmitry, great to have you back. I think Treasury Secretary Besson makes a lot of good points. I mean, it was sort of like an open secret. I mean, there is no way to explain the dollar amount of chips going to countries like Singapore and Malaysia without believing that they are going to be funneled or used in some way by China. It seems like what is clear out of all of this is that China policy will be tightened. We've already heard China sort of fire back, saying, stop making up all these narratives about what is going on with the spy, etc. I mean, what's your take on what this does to U.S.-China relations, particularly on the tech front and export policy?

20:52I think the sector is absolutely right. These export controls need to be tightened up. There are efforts in Congress on the way right now. there are several bills the match act the overwatch act they have a number of bipartisan co-sponsors i think those bills will move forward this year as part of the national defense authorization act and uh the administration has been lukewarm on these proposals in part because congress kind of takes some of the authority away from them to regulate on the on these things something no administration really likes but i think at this point the momentum is so strong that these bills will pass.

21:29It'll be much, much harder for China to receive chips, but hopefully both directly into the mainland as well as to access it via remote access. But the bigger question I think is, what happens to the trade truce that we've had for the last year? And that expires in January. And I think it's very likely it won't get renewed, not necessarily because of this, but because the Chinese are cheating on their rare earth commitments. We at Silverado tracked that the rare earths that China is exporting to the United States are down about 50 % from two years ago. So they're not delivering on their promises to provide us these critical minerals.

22:02They're important, of course, for semiconductors, for EVs, for defense purposes. And that's something that I know aggravates both Secretary Besant and USTR Jameson Greer. That being the case, Demetri, does the tenor of whatever new export restrictions might come end up being just a bargaining chip in that potential renewal in January? I mean, it would seem as if, you know, some of the same kind of hard stances that each side took going into this original agreement are going to remain on some level. Yeah, I don't think it will be a bargaining chip in part because Congress now wants to be in the driver's seat to some extent here.

22:43So it'll be much more difficult for the administration to trade this away. And again, if you're making the case on national security grounds, as Secretary Besson has done, where he says nothing else matters if we lose the I-Race. And he believes, as I do, that you cannot provide ships to China if you're going to make sure that they don't win the EI race. So at that point, you're not really going to be trading these export controls for errors. It seems like when it comes to China policy, there's always a pendulum. And so I'm wondering how much ammunition this whole incident gives China hawks on the Hill in terms of maybe even reexamining, for instance, the blacklist.

23:22in whether or not we allow blacklisted Chinese companies to supply components into the United States, which happens everywhere. I mean, when it comes to self-driving cars, there are all sorts of components supplied by blacklisted Chinese companies into the U.S. system. And I'm wondering how far we will go now in terms of examining our technological sort of relationship with China in terms of who gives what to whom. I think that's a great question, Melissa. And what's interesting is that in basically a week's time, less than a week's time, we've had Democrats turn into China hawks because of this issue.

23:57I can tell you that I've had Republican congressmen reach out to me a few months ago asking for help with getting more co-sponsors on some of these bills. And they were getting some, but not many. And now you have Hakeem Jeffries coming out saying we need these export controls. Elizabeth Warren put out a statement with Senator Jim Banks on this issue. So you have Democrats now realizing that this nexus of, you know, what was the Trump Commerce Department doing with regards to this is an opportunity for them to potentially score some political points, maybe against the administration. So their sort of lukewarm attitudes toward China may harden because of some of these political calculations.

24:36Dimitri, we've got to leave it there. Great to see you. Thank you. Dimitri Perovic, excuse me. We want to get back to Phil Lebeau for some more on the national ground stop imposed by the FAA. And I've had people ask me, how widespread is this? Well, this is nationwide, Melissa. And we have a statement now by the Transportation Secretary Sean Duffy saying the FAA has issued a nationwide ground stop for all U.S. airports following a communications issue impacting all air route traffic control centers. There are 22 of those in the United States. The FAA technicians are investigating the issue. We will provide an immediate update as we have them, or they will provide immediate updates as they have them.

25:19That again is from the Transportation Secretary, Sean Duffy. So this is a nationwide ground stop. Still unclear what has happened at the traffic control centers that has mandated them saying, you know what, hold flights at the airports where they are at. Don't take off. Obviously, those that are in route will finish to their destination. But that's the situation at this point, Melissa. Again, this started, I want to say, about 24 minutes ago. We're still waiting to find out a little bit more about the specifics of what is the issue impacting communications with these air traffic control centers across the country.

25:54Remind us, Phil, didn't we have this issue before in terms of communication systems being down and there'd be a ground stop, even if it was a partial one? And there are no redundancies in communication? Well, there's redundancies, but, you know, Now, when you have something we again, this is pure speculation. Listen, we don't know exactly what has caused this. When you have something this widespread, the prudent thing to do, the first thing to do, if you're the FAA, is to say, hold these planes before they take off. Now, the planes that are in route, obviously, they continue on their way to their destination.

26:25But until they can get a better sense of exactly what has happened, is this a software issue? Is this something more malicious than that, which nobody knows at this point? That's what everybody is trying to determine. So, yes, while we have seen these outages from time to time, usually they are isolated in a specific air traffic control center. Perhaps there is an outage and something has happened there. But we rarely see it nationwide. It does happen, but not very often. Right. Phil, thank you. Phil LeBeau. And it's interesting, Mike, to see the stocks. At first, no reaction. Yeah. But now as we sort of go into the 20th minute of this ground stoppage, we see it decline.

27:02Right. Without any real answers or, you know, any suggestion of what it might end. Yeah. Well, NVIDIA's problems grabbed all the headlines this week. But the thought other chip stocks can capitalize helps send the stocks up 9 percent. It's best week in five months. But even with that gain, it is still down 20 percent since the beginning of October. Up next, we'll try to make sense of these volatile charts.

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28:15Visit IXL.com slash 20 to get the most effective learning program out there at the best price. Which NHL teams are scoring big off the ice? CNBC Sports' Michael Ozanian has the numbers. If a dot margin in the NHL is right there with the NBA. Official NHL team valuations. See the full list at CNBC dot com slash sport. Welcome back to overtime. Stocks have bounced hard off last week's lows, but the repair job isn't done. The S &P 500 is still below its 50 day moving average and macro pressures are building with a dollar near a 19 month high. The two year yield surging this week. So did this week do real technical damage or did the market just absorb a major shock.

28:54Here to discuss, Jonathan Krinsky, VTIG chief market technician. Jonathan, good to see you. What do you make of it? Because it seems like we've absorbed a whole lot and we're pretty much where we were pre-election. Yeah, so it's always eye of the beholder, right? You could view the market shrugged off a lot of bad news and did pretty well. You could also say that we have not really done much to alleviate the downward pressure. And really, all the S &P did the last five days was kind of claw back the losses from last Thursday. And I think if you told a lot of people last Thursday that you would have a chance to sell the S &P back above 7 ,600, I think a lot of people would take that bet or would take that gift.

29:43And I think here we are back around those levels where we see difficult overhead supply here. So we're more cautious at these levels, As you mentioned, you have a number of macro headwinds, namely the dollar breaking out of a multi-year base. Interest rates are continuing to push back up. We're seeing areas like Bitcoin break decisively below support. So that tends to be a good liquidity tell as well as the precious metals market. So there's just a lot of cross currents that don't really sit well with us here. Jonathan, the standard line, I think, coming into this week was focusing on these other inputs that sometimes suggest, you know, maybe you've got a recovery lining up.

30:21Mostly, I think, about the reset in positioning, whether it's hedge fund positioning going down toward neutral or below, a lot of deleveraging that happened, you know, seasonal tailwinds that are supposed to kick in before too long. And, you know, I guess sentiment, depending on how you look at it, has also moderated. moderated. So are those invalidated by the way the market itself is behaving or could they kick in here? You know, look, I think, again, there's different ways to look at sentiment and positioning. We're certainly respective of the hedge fund positioning that seems to have de-levered a lot.

30:55But, you know, when you think about the fact that Apple's at all-time highs, financials have actually come back, you know, there's, you know, more than 60 percent of S &P 500 stocks are above their 200 days. So, you know, that doesn't scream washout to us. If anything, there's kind of rhymes with, you know, that 2000 period when, you know, after the dot-com bubble burst in 2000, you actually had, you know, seven or eight sectors were up over 10 % over the next year, even though the NASDAQ itself fell. So, you know, you can have rotation. It doesn't necessarily mean that we've seen the all clear.

31:33And I think ultimately, it's tech and semis that really are the key aspect to what most investors care about. And those still look vulnerable to us here. Basically, if you go back a week ago, semis and tech were very oversold. We've now alleviated that oversold condition. And so you don't have that support moving forward. And that's what we think is vulnerable. And you saw a little bit of that today. So when you say vulnerable for semiconductors, John, I mean, we're already down like a third from its high. So I'm wondering, you know, how vulnerable could that be since we managed to get out of that oversold condition this week?

32:09Yeah, so, you know, one of the studies we looked at historically, when you break under the 200-day for the socks for the first time in three months, what happens historically? You know, that generally is not a good signal either way. It's kind of a coin flip, but we've been saying all along that you need to fully kind of retrace the parabolic advance that semis, we believe, started in early April. And so getting back to kind of the breakout point from April would apply, you know, anywhere from 15 to 25 % downside from current levels. We got, you know, fairly close last Thursday, but we don't quite think we're there.

32:41You know, we'd call it 60 to 70 % of the way through this pullback. So we're getting closer, but we don't think we're fully there yet. Yeah, and I guess if we were to get closer still, we'll see how the overall market can handle it through this rotational effort or not. Jonathan, great to see you. Thank you very much, Jonathan Krinsky. Thanks, guys. All right, the market's counting down the days to what could be the biggest IPO of all time. What's Dario Amadei's pitch to the big banks in the final few days before going public? That's coming up on over.

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34:03Visit IXL.com slash 20 to get the most effective learning program out there at the best price. AI is here, transforming how we work, live, and lead. And the women I talk to aren't waiting for the future, they're shaping it. I'm Julia Boorstin, Senior Media and Tech Correspondent at CNBC. This is CNBC Changemakers, where I talk with the female leaders transforming business as AI reshapes the world. Follow and listen to CNBC Changemakers, Women Leading in the Age of AI, wherever you get your podcasts.

34:41Next week could bring one of the biggest IPOs of all time as Anthropic gets set to go public on Thursday at a valuation of more than$1.4 trillion. Kate Rooney has the latest details ahead of that debut. Hi, Kate. Hey, Mike. So we are expecting Anthropic to start trading next week. From what we're hearing, it is set for Thursday. CEO Dario Amadei, in the meantime, has been meeting with investors on the so-called roadshow. Earlier today, he sat down with J.P. Morgan CEO Jamie Dimon in New York. It was this onstage fireside chat. JP Morgan is an underwriter in the deal, also helping lead the retail investor push.

35:15Amadei did make the case, guys, for Anthropik's strategy on compute. He called the$900 billion they've committed to spending a large amount, but he does say their move has been to overall buy relatively little compute, at least compared to competitors. He said if things go well, then they have an opportunity to go out, buy more compute on the spot market, which he thinks will continue to be available. Amadeh pointed to what he called a buffer of cash on the balance sheet, says they, of course, plan to raise more through this IPO, and they do want to under-promise and over-deliver on the deal. The deal does come amid a lot of turmoil in tech, as everybody's been talking about this week.

35:53NVIDIA is one of the key anchors of the overall AI ecosystem. It's a major investor in Anthropic as well. It's put in about$10 billion in private markets. That's also a part of the$26 billion private placement in the IPO. Talk to a bunch of tech investors this week who don't see an immediate NVIDIA threat to Anthropik when it comes to the IPO. Overall, in the long term, there may actually be a net benefit if open source ends up suffering because of NVIDIA's issues here. Some are also hoping there could be a little bit of a rotation if money frees out, if people are leaving NVIDIA. Could help Anthropik as it debuts, but we'll see how that deal goes next week, guys.

36:27Yeah, Ken, I feel like that was one of the prevailing bits of conventional wisdom that started to fly around here, that, you know, anything that that sort of either loosens NVIDIA's grip on the overall, you know, supply chain or the dominance in terms of where it decides gets compute or perhaps less availability for the Chinese, you know, open models. it does get net to the benefit of Anthropic to the point where conspiracy theories were like, oh, maybe these guys are behind the leaks. That is definitely a conspiracy category at this point. I think you're right, though, that they even have their own chips business.

37:07So Anthropic, despite getting money from NVIDIA, having them be a major backer, they have a competing custom semiconductor business internally. So one of the takeaways, too, from folks I talked to is that OpenAI, Anthropic, any of the up-and-comers that want to create an NVIDIA competitor, you could also put Amazon and Microsoft in that category, may have a window here. There's, of course, the open source side of it. Jensen Wang has been one of the biggest boosters of open source, which does include a lot of the Chinese models that are cheaper. It showed up in Anthropics S1 as a big threat to margins going forward if enterprises go in that direction.

37:45So much of this is long term, I think, for the deal itself. It really will be up to market conditions and kind of invest your appetite. But it's been interesting. I mean, there's just been such a big uptick in retail buying of NVIDIA this week. So it doesn't seem like at least the retail crowd has been put off by what's going on and has bought the dip, at least from kind of the data that came up today. They've been buying the dip for a week and a half. So we'll see if at some point they catch the low. Yeah. Thanks, Ian. Yeah. Time now for CNBC News update with Mackenzie Cigalos. Mac. Hey there, Mel.

38:20Water rescues are underway in New Orleans after a tanker crashed into a riverboat cruised on the Mississippi River. NBC affiliate WDSU says that at least 12 people needed to be pulled from the water when the tanker hit the paddleboat as it was docked at a pier. The riverboat is now completely on its side in the water. Authorities have not yet confirmed any injuries or what caused the collision. Europe will send a team of diplomats to Ukraine peace talks. That from the president of the European Council today after a summit in Ireland on how Europe can play a role in Ukraine. Diplomats from the UK, France, Germany, Italy and Poland will participate.

38:57French President Emmanuel Macron said that there is no more U.S. support and that Europeans must be the ones to define and decide their future security. And Vice President J.D. Vance is reportedly still weighing whether to run for president in 2028. CNN reports that it spoke with about a dozen allies of the VP who say he is wondering whether it's his time to run after the huge GOP losses in the midterms, fractures within the MAGA coalition, and the demands of fatherhood. Guys, sending it back to you. Mac, thanks. Mackenzie Cigalos. Take two interactive shares up 20 % this month ahead of next week's release of Grand Theft Auto 6.

39:33Up next, we'll discuss Wall Street's massive sales expectations for the video game and why it could disrupt the entire entertainment industry. Closing Bell Overton, we'll be right back. The entertainment industry is set for one of the biggest launches ever next week, and it's not the latest Hollywood blockbuster. Julia Borson looks at the massive expectations for Take-Two's Grand Theft Auto 6. Julia. That's right. Pre-orders for this video game are through the roof. Censored Tower currently estimates that over 12 million copies are already sold, amounting to about$1.2 billion in revenue. And that's the same number that Roth estimates the game costs to develop.

40:13Morgan Stanley expects 40 million copies will be sold by March. Now, analysts are bullish on Take-Two ahead of this game launch. 94 % have a buy rating on this stock. The stock has doubled since 2023, despite multiple delays for this game. Bank of America saying, quote, we recommend being long take to Interactive through the GTA 6 launch remains cheap on the long-term growth we believe will soon become apparent. Meanwhile, shares of Roblox ending the day down 3 % after Citi downgraded the stock to neutral, citing competition from Grand Theft Auto and concerns over slowing engagement. That stock is now down 50 % in the past year.

40:53Now, PricewaterhouseCoopers' PwC expects the impact of Grand Theft Auto 6 to be wide-reaching, saying movies and TV shows could see a decline in viewership as people hunker down to play in the week after the launch, though they do also project an increase in food delivery. Guys? It's incredible. Yeah, the shadow that this casts over so much of the consumer economy. Julia, thank you very much. So as Julia just mentioned, this game's release is shaping up to be a major cultural event. Another measure of just how big. Time off requests for the debut day are up 13 % versus the same day in the prior two years, according to Bamboo HR.

41:34But the road to launch hasn't been smooth. Two delays announced in 2025 sent Take-Two shares down 6 % and 8 % respectively. Now, Sony and Microsoft say GTA 6 is the most pre-ordered game of all time on their platforms. So is the market already pricing in a hit? Or is there still room for the stock to run? Joining us now is Lightshed partner and media and tech analyst Brandon Ross. Brandon, great to see you. You say it will undoubtedly be the biggest entertainment launch in history. So scale that for us. How big a launch in terms of units, you know, dollars, all the rest? I mean, this thing could be upwards of$2 billion of retail sell through in the first three days, in the first weekend.

42:18There is no movie in history and no video game in history that has done that. So, yeah, it is the biggest entertainment launch of all time. There had been talk that Take-Two or a company like Take-Two could be a target, takeover target. Brandon, I'm wondering if now that the roles could be reversed once it gets this cash from GTA 6. yeah look um i think you could just see it from the wall street uh earnings estimates and free cash flow estimates you you have um the financial profile of this company is about to dramatically change once this gets launched and once you have gta online kind of have recurring uh revenue and earnings from this title ended on their levered balance sheet so i mean i think strauss elnick who has a lot of experience, not just in M &A, in the video game space, but in the broader entertainment world, could look to be an acquirer here.

43:22It's fascinating. I mean, just the scale of what it took to develop this game, right? So the expense, the time, the sophistication of it. And, you know, when they dropped these, I guess, trailers or previews of the game, they themselves became a huge event. And given all of that, is it correct for people to worry longer term about how AI can compromise the franchises of these types of video game studios? Look, I mean, this stock is actually down for the year, right, despite the very recent run up, because there have been fears that AI is eating software, and that includes entertainment software.

44:05So you've seen reverse engineer anything where games have been completely recreated within a couple of hours by AI. And you see you brought up Roblox a little bit earlier. The ability to create games on Roblox is falling fast. So the fear is that the big publishers are losing their moat. Now, is that the case? Our belief is for big titles like this, big franchises, you're going to continue to see consumers rally around them as there is a sea of other content out there. You need something to pull the zeitgeist together and to connect people. Like the movie business, right? The IMAX movies, they still have the draw and, you know, everything else can get kind of streaming vertical video wherever you want.

44:57Brandon, good to talk to you. Thanks very much. Brandon Ross. Thanks. Take care. Bye. All right. Nike shares have fallen nearly 25 percent since 2017, which was the last year the company held an investor day. Until now, up next, a look at what's at stake for the retail.

45:16We're continuing to monitor the big breaking story this hour. The FAA has imposed a nationwide ground stop. No planes are taking off right now. The issue impacting air traffic control centers. The FAA calling it extraordinary circumstances and for reasons of safety. It is only the second time this has happened since 9-11. The last one was in 2023. Reports saying this stop could last several hours. We'll have much more in the story and fast money at the top of the hour. But in the meantime, you can see the airline stocks trading lower. Just taking a peek at the cyber stocks because, of course, that's what your mind sort of goes to.

45:47What can cause is breakdown in communications. We are seeing those stocks trade higher as well in the after-hours session. Yeah, and 2023, the last national ground stop. But as you mentioned, I mean, I think it was about a year and a half ago when there was sort of regional same issues with this kind of antiquated FAA system. Meantime, we'll see if next week is, you know, any less rich in news. But we have the Anthropic IPO. I think there was a case to be made that maybe some growth investors were making some room to put in their orders for that deal. We'll see if that affects the trading leading up to that.

46:18And, of course, NVIDIA earnings as well. We'll tune in for sure. We'll be there for that. That does it for overtime. Snoring, gasping for air during sleep, daytime sleepiness. I'm Shaquille O 'Neal, and this shouldn't be anybody's experience. Ask your doctor about ZepBound Terzepatide, the first and only FDA-approved prescription medicine for moderate to severe obstructive sleep apnea in adults with obesity. ZepBound is a prescription medicine used with a reduced-calorie diet and increased physical activity to help adults with moderate to severe obstructive sleep apnea, OSA, and obesity to improve their OSA.

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