Meta’s Muse Ripple Effects… And A Coiled Spring In Google 9/22/26

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0:46How? By combining deep sector experience with AI-powered technology so you can reimagine your business for tomorrow while building it today. Shape your future with EY Parthenon. Learn more today. Live from the Natsac Market Site in the heart of New York City's Times Square, this is Fast Money. Here's what's on tap tonight. Muse has given MetaShares a spark, but some other key sectors of the market aren't feeling so inspired. We'll break down the ripple effects of true agentic AI and what it could mean for how we do business. Plus, the chartmaster says it is time to buy Alphabet. Reports of the deal talks lift Capri shares, Viking Therapeutics soars on his latest trial results, And AI in action, a new movie created entirely with the technology by one person in just a few months.

1:33All the details on how it got done and what it could mean for Hollywood. I'm Melissa Lee, coming to you live from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Karen Feynerman, Diesel Dan from San Francisco, and Guy Adami. We start off with some possibly surprising ripple effects from the rollout of Meta's Muse AI agent. Shares of Meta itself largely holding on to yesterday's gains, closing down less than a percent. They're still up nearly 20 percent since it launched Muse two weeks ago. But take a look at some big brokerage stocks. Charles Schwab sinking more than 6 percent. Its worst day since April.

2:05Fear is rising that agents transacting on behalf of investors could disrupt traditional trading platforms. Even money center banks taking a hit. JP Morgan down over 3 percent, hitting its lowest level in more than two months. Online travel companies getting hit, too. The potential for Muse to bypass sites like Expedia, Booking and Airbnb, putting pressure on all of these stocks as well. But can agentic AI really disrupt these industries as much as markets seem to fear? And this reminds us, I think, of when software just traded lower and lower and lower again and again on this fear that it's going to be disrupted.

2:40And yet we have we had those industries as well trade lower on fears that they would be disrupted. And here we are again. Here we are again. So I think the reaction this time will be more muted because we've seen some of those software companies that have come out of it. They're doing fine. So I think we'll see that here. I don't mind this setup going into bank earnings, which are only a little, I guess, three weeks from today. I think JP Morgan reports. I think that, you know, they've had a huge run and, you know, some concerns about the health of the consumer and are we going to start to see credit issues?

3:13Is the IPO market slowing? I'm not so worried about all of that. And I'm not so worried about this either. I think that we sometimes we've seen these things end up being a big deal. And I really don't think this is one of them. I think it could be the kind of thing where they work sort of together. I mean, if you would ask Mark Benioff, what would his reaction be to this? He would probably say very muted. Right. You know, we've known a lot. Listen, we talk about AI every night here. So it's not like this is coming out of the sort of the woodwork. So the disruptive nature of this technology is across a swath of industries.

3:48I don't know why all of a sudden over the last couple of days it's made its way into banks and some of the travel stocks. I'll say this, as important as maybe AI is to the disruptive nature, comments out of Brian Moynihan, I think, September 16th or so. I think that's contributing to some of this as well. Flattening yield curve probably as well. But Brian Moynihan, who is overwhelmingly bullish since his tenure at BAC, said some pretty concerning things. And that stock has obviously sold off pretty significantly since. J.P. Morgan rolling over a little bit. And Goldman Sachs has been right at the 150-day, 200-day moving average now for a while.

4:21So I think it's more than just the AI concerns that banks are sort of selling off on the back of. All of those things rolled up into one. I believe so. Well, and if you look at the performance of bookings versus Expedia, there's a 45 % spread between those two companies. I'd make an argument this is more of a booking story than it is the entire space. As someone that's in the asset management and wealth management business, you know, as Dan would as diesel would say, have at it. I mean, you know, look, I don't think I think for at least platforms like Schwab and Fidelity, where it really is a little bit more robotic and it really is a little bit more, I would just say, mechanical and self-directed.

4:59I don't think the disruption for the overall wealth management world and therefore feeding into the banks who have core businesses. I mean, be clear, JPMorgan, Goldman Sachs and the like have had an incredible run in wealth management when you consider the move in markets. I think the move in banks, I think it's what Karen talked about, it's what Guy talked about. We've been getting information from the banks for the last three weeks that it's just not the quarter that it was, even though it was an incredible quarter. And it's about the relative performance to second quarter, the trading volume and the volatility and the banking deals.

5:30These numbers, Wall Street's never, I mean, I need to check these numbers. I would just say it's probably never been more profitable in aggregate, right? Of course it is. It's a bigger pie than it's ever been. But Wall Street's had an incredible couple years, and the banks have had an incredible years. They're not cheap, and this probably is a great setup in earnings. How does a Schwab or Morgan Stanley Wealth Management, how do they make money? On assets. On assets, right, and then also on products that are sold, et cetera. So to the extent that this time around could be different, if we can borrow that, because I hate that, but still, if we can say that this time, because you have an agent who can shop around, who can reduce the friction to switching, who can find the best product yielding the highest rate or whatever it is.

6:16Should we be worried? I mean, Dan, this agent seems to be able to do a lot more than what we knew it can do back in February, let's say. Yeah, you know, I see it more as intelligent assistance rather than that's that's the I. Right there. And, you know, Tim's point about replacing, you know, sort of skill sets and the sort of things that, you know, we've become accustomed to in a lot of different industries. I just don't think it's going away anytime soon. I mean, your point about software. I mean, the jury's still out on that. Right. And so when I think about the ability for these sorts of agents to assist a whole host of different sort of activities that individuals use, I mean, to me, I've been using this instinct for the last few weeks or so, and it really has been very useful.

7:03But it's not going out and doing the things that I think the market cap, you know, sort of destruction that we've seen today or is anything that's coming anytime soon. You know, so, again, I've been using Gemini and some of the Gentic sort of behavior there across a whole suite of products that I think is very useful. But I do not see the ability to kind of go into, let's say it's Expedia or let's say it's Amazon right now. and basically do the sorts of things that I'm comfortable with doing. Think about how long it took for people to do things, you know, commerce-wise on the Internet. Now, I know a whole heck of a lot of things have changed since then, but as the silver lining guy on the desk, I just think that the market cap destruction that we've seen because of Metamucil, and, Guy, you'll kind of figure out, you can get what I'm talking about here.

7:50I think that there's a lot of folks that are going to try this thing out. It's been at the top of the App Store download. It has displaced OpenAI. Just think of that. You know, OpenAI has been, you know, thought to be the leader in this space. Now, maybe on a personal level, the agents there are not doing the things that we've seen at Amuse in such a short period of time. But I just think that, you know, again, the market cap gains by Meta and the losses today, I don't think make a whole heck of a lot of sense this quickly. It's interesting. First of all, Metamucil, notwithstanding, by the way, I'm a fan of their product, Melissa Lee.

8:26At my age, it's something— Keeps you regular. You know what, Tim? It does keep me regular. Regular way settlement for you. For a regular show. There's nothing wrong with that. People know that. The move has been staggering, but the volatility in the stock has been also staggering over the last couple of years. So if you think this is going to be a one-way train to the upside in perpetuity, I think that's wrong. I think we've done a decent job saying it could get to the levels that we're trading at. We'll see what it does from here. I think given the run and given now the news flow, a back and fill is coming to a theater near you and meta.

8:57Let me just add one more point about some of the big money center banks. Let's just take a JP Morgan, for example. So their asset wealth management is huge. Mary Erdos runs it. She does a phenomenal job. However, it's only about 12 percent of their overall business. And, you know, so this has been a pretty big reaction in the stock. And it would be not really fair to penalize them for this potential without also thinking about the incredible efficiencies to come from AI to an institution like a J.P. Morgan or any of the big money center banks. So just to sort of put a pin on that, I agree with what Guy is saying on Met.

9:35I think, though, the story of we don't know where it's going to be in three weeks. Was it going to be number one? Is it not? They all sort of change around. That doesn't much matter as much as, oh, they do have a horse in the race. Right. They haven't really, they have products, but they haven't really. And so that, I thought, too low versus the market multiple, that gap has closed a lot. One of the things you remember about AI assistants and AI agents is that if they're doing things on our behalf, they're going on to bookings and Expedia to do exactly what we would be doing there. So, I mean, I don't know that this necessarily takes away from the transaction volume and therefore how they're getting paid or even the ad business that's attached to their business.

10:15So, you know, bringing it back to the banks, this has been outside of owning memory stocks and probably on a standard deviation. So risk adjusted returns. Banks might have been the best place to be for the last year and a half. I mean, there's a lot of reasons that there were tailwinds here. And I just think this is a pause. But I think this is a pause that's not based upon a change in the backdrop. The regulatory tailwind, the capital give back tailwind, the investment banking capital markets tailwind. And I mean, these are things that aren't changing. Everything we're talking about, unless there's a credit cycle that we're not able to see now, that's always there.

10:50I think you're buying weakness. Meantime, the CEOs of OpenAI and Anthropic expected to brief the U.N. Security Council this week. Its concerns over AI safety and regulation reach a boiling point. Kate Rooney's got the details here. Kate. Hey, Melissa. So this AI safety debate right now is going to a global stage this week. OpenAI CEO Sam Altman and Anthropics CEO Dario Amadei are expected to brief the United Nations Security Council on Wednesday. This is during the U.N. General Assembly meeting in New York. The Hugging Face CEO will also be there from what we're hearing. It does come at an important time right now with this ongoing debate about whether the pace of AI development is going too fast for the industry's ability to keep up and keep these systems safe.

11:32Amadei got a lot of attention around this. He called for pacing the development of the most powerful AI models. Altman endorsed that because this was last weekend now, but both AI labs just today released new models. So pacing clearly does not mean pausing. We did see those new releases from OpenAI and Anthropic. Earlier today, they were focused on cost efficiency and speed at the same time. OpenAI this week did also call for the U.S. to lead this international effort and try to establish common technical standards for frontier AI labs, including some standards around things like model safety, incident reporting, and then the possibility of these systems improving themselves.

12:10That's called recursive self-improvement. It is becoming a political issue as well for these AI labs that really have to juggle this. The Trump administration has made its stance very clear, pushing back on the idea of slowing down AI development, arguing here that any U.S. pause can allow China to pull ahead and called safety fears a hoax. At least that's what the president said. Also said the DOJ and other law enforcement agencies could also be a backstop. Oh, Dan's got a question. Hi, Kate. Right next to Dan. Look at that. You and I have spent the last hour talking about a whole host of things as it relates to what you're just reporting on.

12:43And, you know, what do you think? And I think it's a bit of a cynical take that this whole idea of regulatory capture. Right. So if you think of what the lead and enterprise that, you know, we see from Anthropic or in consumer and the push that OpenAI are trying to make. And the idea that they're really trying to push back, you know, some of these startups, some of these, you know, that's right. What do you make of that? Like, what's the word on that? Yeah, no, it's a great point, Dan. And I think it is actually something that people talk about. So it would be probably the more cynical view on this, but it is a mainstream view.

13:12It's not, you know, a fringe one in 10 people say this. It's real legitimate companies say this, including the CEO of Cohere, who we talked to the other week on this. He's a Canadian CEO and said, well, yes, I agree with some of the safety issues and says they do. They're on to something with that. You know, we need some sort of international standards. He's saying I don't want it to be the A.I. labs out of the U.S. being the ones controlling this and making the rules. I think that is where you do have this friction on a global stage. It's not only China versus the U.S. It is the American labs saying we want to put out these safety standards.

13:46It's almost a lack of trust from the smaller companies saying, even if it's not necessarily regulatory capture, which has been the big criticism, there is a real pushback saying we need more voices involved here. But it also does speak to just the difficulty of getting not only the AI companies on the same page, the AI companies in China on the same page. I'm also told that DeepSeek is going to have a representative there, too. So that'll be interesting to hear some of the rhetoric between Sam Altman and whoever's representing the companies from DeepSeek. All right. Kate, thanks. I didn't know that was a nickname.

14:17I love it. I didn't either. Come to the rest of the night. There was a rumor, guys, that Guy Adami was going to be here. We're told it was fake news. Fake news. It's good to report in this live, but good to have Dan. Yeah, no. Guy's here. Right here. Thanks to Mel. We think. Could be AI. Could be AI guy. Hallucination. AI guy. That's a good nickname. What's interesting is that this comes on a day, all of this comes on a day, when BABA has unveiled its newest, most powerful chip that has three times the power as its previous iteration of chip. So it's right there. So it really underscores the sort of notion of competition between the U.S.

14:59and China and how much they can catch up with us. Yeah. And the news flow around BABA and adoption of their models and their open source and lower costs is certainly with Apple, where they've they've you know, they're a customer, they're a user. It's part of the interface. So, you know, Alibaba is a frustrating name to own because the fundamentals say own it. And the fundamentals that are also include the history of the Chinese government and Alibaba management being at odds is also, I think, been solved. So I think this is a market dynamic. I think a lot of you investors talk about skeptical and trust.

15:34I think there's a lot of question about China tech. And I think while that's fair enough, Some of that comes from this side where you could wake up tomorrow and there could be some kind of a ban on Chinese ADRs or so we have had that threat. But Alibaba is very cheap on multiple and I think is well positioned as any tech company in the world. For more on what is next for the markets, we are joined now by Brett Ewing. He's a chief market strategist at First Franklin Financial Services. Brett, great to have you with us. Want to get your take first on what happened today. And that's the notion that the Muse AI agent or an AI agent still has the power to disrupt industries.

16:11Do you find that there is some validity to that? It may be that the pendulum has swung too far. But should we think about industries still that could be disrupted? Yeah, I mean, thank you for having me on, Melissa. I appreciate it. But look, I think that any time a new look at how AI is going to work and its capabilities comes out, you're going to have some short-term reaction in that. I think the move in meta was pretty powerful, no doubt about it. And, you know, it looks like it's going to be, like I think Dan was saying earlier, number one download here recently. But it looks like any time that comes out, I think that that is going to be a continuation.

16:52We're going to see this over and over. This record is going to play as we move through the next few years, no doubt. At the same time, you think that what we saw in terms of the rally that got sparked specifically by Meta, that we can continue those gains through the election. So we will. I mean, that sounds to me like we're going to hit new new highs here. Look, our call beginning of the year was eight thousand on the S &P. We raised our target, believe it or not, in August to eighty two hundred by year end. And I believe there's a path to get there. And that path is going to revolve around a few different things that need to work out, obviously, overseas geopolitical stuff and get the straight and oil flowing.

17:35Right. So the other component is rates. And going into this Fed meeting, we saw Deutsche Bank bond positioning measurement as one of the most extreme levels. It's only happened a few other times in recent years, dating back to 2018 and 2022, late 2018 and 22. too. Whereas when it hit this level, the fifth percentile, what you had the preceding following three to five months is basically a fade in the 10 year treasury. And that's the camp that I sit in right here. I believe that trend is going to be intact. We've peaked out on the 10 year. Brett, Tim, thanks for joining us. So help us understand what maybe you just articulated this, but go further post Fed.

18:21Was that a game changer for you between now and year end? Yeah, I mean, look, I was kind of in the camp where they could just kind of stay where they were at this moment. I know the inflation stuff, but I don't believe they control energy prices. I don't believe they control the AI build out. That's where I believe. I think there is a path that the Fed could have cover if this war in Iran de-escalates quickly here, plus or minus the midterms. And energy prices, I think, would drop dramatically. I think it could buy them some cover. You know, it's never happened in history where a new Fed chair comes in and does one hike and they're done.

19:03So the you know, the probability of that's very low, but there could be a chance of that. I know the market's priced in one more hike. So, Brett, since you brought up the midterms, we're going to wake up. They're going to be here. Is a 15 VIX not taking into consideration what could happen in the midterms? Yeah, the VIX is pretty calm considering everything that's been happening here recently in the news, right? So you've got a hawkish Fed. You've got, you know, peak interest rates, energy crisis going on. Iran war still geopolitical. And the VIX is sitting around 15. I mean, it's pretty surprising to me.

19:40But I do believe around midterms, to answer your question, I believe that the market's really not that concerned either way. I think if you look back at the last 19 midterms dating back to 1950 and you look from November to April, the market has been positive 19 out of 19 times during that six month period. And the median return was around 15 percent. And we believe that that's going to be kind of what we're expecting as we move forward. That'd be huge. Brett, thank you. Appreciate it. Thank you. You think that we're not going to see more volatility? I mean, he didn't say no more volatility, but I mean, a path higher through the midterms.

20:26Well, midterms are clearly there could be outcomes that are market negative. And as we talk about the certainty versus lack thereof, then, you know, that's kind of where I think coming out of that will actually be somewhat positive. I think equities have done almost nothing for three months until now. Suddenly, the Nasdaq's at all time highs. I think markets are largely set up for a year-end rally if we can get oil prices under control. And that means you don't solve – I don't think you solve Iran in the next three months. But I think if you keep oil contained, equity markets will rally. There are positive steps today.

20:57Three-hour meeting with Iran on the sidelines of the U.N. general meeting. What's amazing? Commodity volatility, currency bond volatility, single stock volatility, no volatility in the VIX. So that's been – by the way, that's been a theme now for a while. If you had told me all the things that wouldn't happen, I'd say the VIX is at least 23, and clearly we're not. But I do think it's going to happen at some point over the next few weeks. Coming up, we are watching shares of KB Home after earnings. The details on the numbers in the quarter next. Plus, a heavyweight in biotech. Shares of Viking Therapeutics surging on new weight loss data and how rival Novo could be leaning into some M &A to help revive growth.

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23:02Every weekday, only at KFC. It's finger-lickin' good. Prices and participation for your well-supplies last. Not available on third-party ordering platforms. Tax Extra. Welcome back to Fast Money. We've got an earnings alert on KB Home. Shares are sharply reversing into the red, despite the home builder beating top and bottom line estimates. The conference call started at the top of the hour. Diana Olick is here on set. How long have we been doing this show? Jaw dropped. 20 years in January. And this is a first. Come on. Yeah. Hold on. Can I go the other way? I'm just like, where have you been?

23:36Where have you been? I mean, what took you so long? I haven't been invited, maybe. I've been on the show. Oh, interesting. Standing invitation. Anyway, KB Home. You want to talk about KB Home. OK, and the reason the shares are falling now is because on the conference call, there was a bunch of talk about margins, which they lowered their guidance on margins because it's such a rough market. But let me get to the important stuff. It was the opposite of what we saw with Lenar last week, which missed across the board. KB beat on all the metrics, most importantly on gross margins for this quarter, and just eked out a win on delivery with four more homes than were expected.

24:08So, yay. We're focused a lot on the margins because it's harder and harder to make a sale given mortgage rates today. They are much higher than what we started the year at. And, of course, that's why KB and most of the homebuilder stocks are down year-to-date. Builders are aggressively buying down rates and lowering prices. That's the one that KB actually missed on, the average price. It came in$700 lower than expected. So, again, lowering. In the release, KB's chairman Jeff Metzger said, We are operating in a housing market that continues to be challenging with conditions weaker since our June earnings.