Alphabet AI Sell-Off, EQT-Range Deal and Big3’s Public Market Plans 10/29/26

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1:01Trouble in the tech trade as the market starts to get a bit spooked about AI. Welcome to Power Lunch, everybody. Contessa, Contessa Milwaukee Brewer is here with us today. You got it, baby. I am Brian. All right, we'll get to that in a second. Alphabet's quarter, though, scaring investors, selling off double digits. Service now losing a quarter of its value. Both stocks headed for their worst day ever, plus a monster deal in natural gas earlier this week. EQT buying range resources for more than$50 billion, including debt. We are going to ask CEO of EQT, Toby Rice, why? And a stock that's soaring on earnings, Kroc, is raising its full-year outlook.

1:39It says it's had strong international sales, and it's really looking at that direct-to-consumer growth. CEO Andrew Reese joins us coming up. And then we've got Ice Cube, who wants fans to own a piece of his Big 3 basketball league. It's slated to go public soon, making it the first publicly traded pro sports league in the United States. You're going to hear from him. Can't wait for that one. So you're saying it's going to be a good day. It's going to be a very good day. Because we even saw the lights of the Goodyear blimp. Let's start with the big tech elephant in the room. That is Alphabet. Alphabet stock is down 12%.

2:17With that move, swiping out$480 billion in value today. That is more than the entire market caps of, say, a Chevron, a Coca-Cola, or an Oracle. Now, this is after Alphabet reported a larger-than-expected free cash flow shortfall, which has reignited some concerns about its AI spending. But your next guest remains bullish, maintaining her buy rating and$450 price target. That is about a 40 % gain from yesterday's close. Joining us now, Laura Martin, senior internet analyst at Needham. Laura, this is great. And investors, they need to hear from you right now because people are obviously hitting sell and thinking later, what are they missing right now by selling Alphabet?

3:04The thing we like the most about the Alphabet earnings yesterday is their pivot on TPUs, which are their own sort of AI chips. They are now bundling them with other Alphabet services and selling them as a system. So you can't just buy a TPU anymore. You got to buy a bunch of Alphabet products bundled with that scarce resource. And that gives them pricing power. Secondly, they have told us they're going to build a platform, not a product. As we know, Google is best in class at creating platforms like Android, like the Chrome browser, like YouTube. And platforms have much more economic upside than products.

3:42And then also they've created an internal competitive layer for compute. So they're up against compute. And all these internal employees at Google want to use this scarce compute. And now the chief financial officer can say, look, unless you can give us revenue in the short term, at least as high for the compute you want as what we can sell it in one of these TPU systems to an external party, you can't have the compute. So we're about to get better capital allocation against the compute constraints at Alphabet. Do you think it changes the relationship with NVIDIA? And what does it mean for the returns of the billions it's spending on AI?

4:24Right. So the answer is everybody is up against way too much demand for supply. So NVIDIA can't keep up with its demand. And so Amazon and Alphabet have the chance to have their specific chips. stole, too. Everybody wants every chip. So no, Noviti is not suffering. It can't meet the demand it has. The stock is, I'm sorry, go ahead. No, no, go ahead. The stock is. I was just going to say the stock is down because Google came out and said, hey, we missed our search revenue growth numbers by 250 basis points reporting 12 % growth. And it was because AI Answers monetizes lower than traditional search, which is a storytelling they had done the opposite of for the last three quarters, saying that they monetized equally.

5:10So it's down because suddenly they put themselves in a position that their core business that's funding all the AI growth is actually not growing as fast as we thought it was because of AI disruption. Off 13 percent right now, our data team is pointing out that Google has formed a death cross where its 50-day moving average is below its 200-day moving average, and a close below that level would be its first since July of 2025. One more. This is, again, from Jeffries. It's the first time that Google search is less than 50 percent of revenue. There's some real trend changes happening with this company.

5:50But I think what we're going to see in all of these AI. So in the quarter, the Google Cloud grew 100 percent to 30 billion. Search, which you know is their core business, 15 years old, is only$60 billion in the quarter. So cloud, if it keeps growing at this rate, will be bigger than search a year from now. So we are getting a shift, but the question is whether you like the cloud business as a valuation metric than you do the search business. I mean, I think that's the question. Meanwhile, they're additive. Meanwhile, they're just adding to one another. Even if search is slower than we thought, it's still got enormous free cash flow that's able to fund this generative AI build-out.

6:29Laura, thank you very much for joining us today. Laura Martin of Needham. Let's continue the conversation with our markets panel now. With us on set, Keith Lerner, who's the CIO at Trust Advisory Services and Jay Peters, Portfolio Manager at New Edge Health. How do equities keep climbing here when you're seeing some big earnings misses, not just from Alphabet, but from Caterpillar as well? What's your expectation about what this means in our cycle? Great. Well, first, great to be with you. Great to be with Jay as well. So the big picture is this. We have a love-hate relationship with tech. If you think about this bull market since it began, the S &P is up about 115 percent.

7:10Tech is up about 240 percent. Semiconductors are up 400 percent. During this cycle, though, we've seen five double-digit pullbacks for tech as these concerns resurface as well. So what's interesting today, or I should say if we take a step back last month, we were all talking about how narrow this market was. There's only one sector that made a new high with the market last month. That was tech. This month, there's only two sectors that are down this month, which is tech and communication services. Everything else is up. And today, you may look at the market and say it's relatively flat. Beneath the surface, we're seeing the eco-weight index at the highest level since early September.

7:44We're seeing good action from financials, industrials, and small caps. Small caps are up over 1.4%. So to answer your question is what's keeping this market up is money is rotating as opposed to leaving the market. We think that's actually a healthy underlying development. Jay, Keith may have a love-hate relationship. It sounds like you've got a love-love relationship because when I look at your biggest holdings, I see a lot of big cap tech names. Are you a buyer of Alphabet today on this weakness? Yes. I mean, we are. So we've been in these large cap tech names for several years, Brian. And you made a fortune.

8:19We've done well. We did trim Alphabet back at the beginning of the year to get sort of a neutral weight position in our large cap portfolio. But I'd say the core operating business for Alphabet continues to look healthy, you know, 40 percent year-over-year growth. Yes, the search is clearly, you know, navigating a transition here where they're trying to figure out how to monetize the AI mode, which is showing good traction. Talk about a couple billion users of AI mode every day. Total queries hit a five-year high, as they said on their earnings call. Well, I think in addition with Alphabet, you do have a really healthy cloud business.

8:50Not only is cloud compute incredibly scarce today, but the economics are improving. You're seeing more efficient compute drive greater profitability for these segments. And I think at the end of the day, the valuations are still reasonable. The earnings growth is for Alphabet. Even though you trimmed at the beginning of the year, you'd still be a buyer on weakness. Yeah, I think so here. I think you look at the valuation, you look at the scale of these businesses. They're hard to be too far underway, Brian. I think you want to be opportunistic around some of these pullbacks. I was looking up one of the other names that you said doesn't get a lot of attention, but maybe should.

9:21Hewlett Packard up almost 150 percent year to date. Why do you like it? Yes. So this is a company that is having a great year kind of under the radar a little bit. But if you think about where where the AI ecosystem, where the cycle goes in the next couple of years, enterprise adoption is going to be key to that story. And Hewlett Packard Enterprises, I mean, this is exactly where they focus. They sell primarily hardware and software, all the equipment that goes into building a private cloud. And you think about the adoption trends we're seeing, in addition to the emphasis on safety and security around AI, a lot of big companies want to bring those cloud networks in-house.

9:53And Hewlett-Packard excels in that space. It's a reasonable valuation, around 13 times earnings, sort of a mid-single-digit free cash flow yield. So we think the story there is just getting started despite the strong start to the point. You know, Keith, I don't want to muddle up this beautiful show with politics, but we have to. I mean, next week is the midterm elections. I'm not going to ask you your political views. But, you know, listen, your Truist is based in North Carolina. I'm sure you guys see political ads every commercial break or whatever version of commercial break that you might stream these days.

10:21How much, if at all, does the outcome of the midterm elections matter to your macro market view? Is it zero? I wouldn't say it's zero. The way we would frame this, Brian, is elections matter, but other factors matter more. We've done a lot of work on this over time. The first thing I would say is the conventional wisdom is often wrong around what happens to sectors and markets around It's too conventional. It's too conventional. It's often not wise Often not wise he's good. He's on a roll today. Yeah, it's a live audience. You should just go for it. That Brewers So we looked at the last four administration as far as the stock market itself And what may surprise people is the market has has had above average performance under each of the administrations.

11:04What also may surprise folks is technology sector, the one that Jay likes over here, has been among the top sectors throughout each administration. Why is that? That's where the growth is. And then you look at things like energy and financials where the policy is a lot different. The returns are inconsistent. So all in all, I would say that elections matter, other factors matter more. I think what's most important as we move into next year, we're moving to the third year of a presidential cycle. I'm going to jinx this, Brian. Uh-oh. It's been up every year in the third year since 1950. Now, the reason for that is— Say that again?

11:36Just so we can get, like, the Sports Illustrated cover thing. It's like, this athlete will—and then the next day, like, they get hurt. They twist their ankle. Well, then I'm definitely jinxing it. But since 1950, the third year of a presidential cycle, which is next year, has never been down on a total return basis for the S &P. Now, we looked at it and said, why is that? We've never had a recession in that third year. So it will come back to the economy, but that's one reason, at least on the margin to be positive into next year. Jay, Keith, it's great to have you here. Thank you for coming in.

12:05Thank you for having me. And the Brewers have never won a World Series. There you go. And the market has never been down. They have now. Can we just bring out the hat? You got the, I mean, you know. Contessa lived in Milwaukee. Her name is Brewer. It's the Brewers. Can we give a, can we give a. Why don't we, don't cheer her. She won the game. She's doing great. I did not win the game, but I did want cheering on the team. But by the way, Mizorowski, a kid 24 years old, looks like he's 12. He could throw. All right, it's time now for the bond report. Now, yesterday, I happened to sit down with Treasury Secretary Scott Besson after the Federal Reserve held rates steady.

12:38It's a wide-ranging interview. See the whole thing on cbc.com. But I did ask the Treasury Secretary whether a future rate hike would be a monetary mistake. That's not necessarily so. The Fed, I believe, raised their terminology today in the statement. They seem to insinuate that they believe that the economy is accelerating. Now, he wasn't wrong. The American economy grew at a 3.4 percent pace in the third quarter, and that was faster than expected. So what will the Federal Reserve do next at its December meeting? Well, according to the CME FedWatch tool right now, and it can change, traders are pricing an 80 % chance of a rate hike in December.

13:29What was that? We'll have to look up and see what the prediction markets are saying about that. We are just getting started. Two huge earnings movers, but in different directions here. Plus, Ice Cube joins the show later this hour on his latest business venture that will soon come to the public markets. First, the CEO behind a massive$13 billion natural gas deal announced earlier this week. EQT CEO Toby Rice joins us next.

14:15global economic news, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com slash market update podcast or find Schwab Market Update wherever you get your podcasts. This holiday, all plans, even unlimited, are just$15 a month. A holiday deal this good obviously deserves an enormously expensive holiday song, like all I want. Right. Okay, we can afford that. You know what? Forget the music budget. We're going to stick with whatever's in the public domain. Give it a try at mintmobile.com slash switch. Upfront payment of$45 for three months,$90 for six months, or$180 for 12 month plan required.

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15:30Taxes and fees apply. All right, let us talk about a major energy deal that happened earlier this week. Pittsburgh-based EQT buying range resources. It's an all-stock deal valued at$13 billion in transaction, but$50 billion if you include all the debt and the enterprise value. The huge natural gas deal brings together two of the biggest producers in Pennsylvania and parts of Appalachia and easily creates the largest natural gas producer in the United States. Joining us now with a CNBC exclusive is EQT CEO Toby Rice. Toby, good to have you back on. Appreciate you joining It's been a busy week. Why the deal?

16:08Why buy range resources? Yeah, so the question is what happens when you take America's natural gas champion and you bolt on one of the highest quality asset bases right next door with range resources. When you combine those entities, you create America's undisputed natural gas champion. Even with this premium that we've paid, we've still been able to present the deal that is accretive on value metrics like free cash share and nav per share. But most importantly, we've created a higher quality business that regardless of what metric that matters in creating value and energy, EQT is on the top of the charts across the board.

16:45Whether you're talking about cost structure, balance sheet strength, inventory depth, marketing platform size. And this is a company that is positioned for really tremendous sustainable growth potential. I know they're headquartered in Texas, but their operations are kind of in your backyard, right? Southwestern Pennsylvania and the Appalachian region. I could imagine there's huge economies of scale and synergies available to you now with the combined once the deal closes. Yeah, absolutely. This is a this is an asset we are very familiar with. We have been watching Range Resources since they pioneered the Marcellus Shale 20 years ago, and they've been a world class operator ever since.

17:23And because of the industrial logic of our asset base, this is one of the reasons why people have been asking for this deal to take place. We're happy to be able to bring that today. But that industrial logic really drives a lot of the synergies that we've identified. These synergies are going to supercharge our ability to continue to grow on our free cash flow per share journey. The synergies that we've announced would be over$625 million. About half of those would be from base operating synergies, things like capturing corporate overhead. And then the other half are going to be really what the deal is all about, which is capturing long-term upside.

18:00This is going to be about optimizing midstream infrastructure, but most importantly, capturing this tremendous demand that we see shaping up in the Appalachia Basin. Yeah. Two more quick questions. Busy day. First one is this. And I know you're not a pure AI company, but your gas powers the plants, which powers a lot of AI. Are you seeing, Toby, you're the sort of front line of it. You see any slowdown in AI power related demand? Yeah, Sully, actually what we're seeing is this momentum continues to grow. When you were looking for energy in Appalachia, you were calling Appalachia's natural gas champion EQT, and we've assembled that demand.

18:37And alongside this deal that we've announced with Range, we put that forecast out there. We're seeing what was 20 BCF a day of demand in Basin has now grown to over 25 BCF a day of demand. Now, admittedly, that's across a range of probabilities. But when you look at what this deal does for EQT, combining range resources, which produces about 2.5 BCF a day with a productive capacity of almost 5 BCF a day, and EQT, which is producing 8 BCF a day gross with a productive capacity of 12 BCF a day, you put those two together, we have a productive capacity of over 17 BCF a day. relative to this opportunity set, we're not just positioned to take a piece of this demand.

19:20We're looking to take a significant majority, and it's only going to happen with a world-class marketing team, great midstream growth team, and the ability to leverage the infrastructure that we have in place that we can build in the future, and a continued dedication to providing the cheapest, most reliable energy to our customers. Next week, I'm telling a story I've been following for five years, Toby, and that's about Europe's reliance on American natural gas to keep the lights and the heat on, especially after the Nord Stream. Somebody just randomly blew up the Nord Stream. We still don't know who, but either way, how critical is your gas, American natural gas, to Europe right now?

19:56It's absolutely critical. I mean, just look at the price action that we've seen since this Middle East conflict occurred and where we saw 20 percent of the world's LNG be prevented from entering the market. We've seen international natural gas prices move from about$10 to now they're over $30 per million BTU. Now, what's most important for viewers at home to recognize is thankfully, thanks to our energy independence, thanks to the great work that pioneers like Range Resources and EQT have done to bring energy independence to America, we have safeguarded Americans from these geopolitical shocks when it comes to natural gas.

20:29And while prices internationally are$30 in the US, they're about$3. So that is giving a tremendous economic advantage to American consumers, something we're incredibly proud of. But America's energy security is dependent on global energy security. And we need to continue to unleash U.S. LNG to provide energy security to the world while also creating more economic stability for this country. Toby Rice, CEO of EQT with a big$50 billion deal for Range Resources. Toby, we appreciate you taking some time. Thank you very much. Coming up, a double earnings block. You've got Caterpillar getting hit hard after earnings.

21:06And And then crock stock going the other direction here. Those yours? We're going to talk. These are size six. Women's eight. They're not going to fit me because my feet are the size of my brain. We'll be right back.

21:27This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Schwab Market Update, an original podcast from Charles Schwab, provides an information-packed daily market preview on stock updates, U.S. and global economic news, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com slash marketupdatepodcast or find Schwab Market Update wherever you get your podcasts. This holiday, all plans, even unlimited, are just$15 a month. A holiday deal this good obviously deserves an enormously expensive holiday song, like All I Want.

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23:02Let's drill down on a pair of earnings movers. They're completely unrelated, except they both start with the letter C. The first one is Caterpillar. Caterpillar's stock is down 9.5 % amidst Wall Street's revenue expectations. Tammy Zakaria is head of construction equity research at JPMorgan Chase. She has an overweight rating on CAT and a$1 ,100 price target on the company. So, Tammy, welcome. So, what happened today? Why are investors selling Caterpillar? Good afternoon, and it's lovely to join you today. An underwhelming day for Caterpillar and quite the bifurcation between financial results and price movement.

23:40To start, Caterpillar results were actually relatively in line with what the company guided, But investors wanted a bigger beat and raise to feel assured about the sustainability of AI investment field growth. Some of the hyperscaler tech giants that reported today and over the past week have also been somewhat underwhelming, which is also plouting investor sentiment around the whole ecosystem today. Well, it wasn't just investors. the analysts had loftier expectations as well, which is why it missed expectations, even though it was in line with guidance. And look, I looked up one of the event contracts.

24:19This one was on offshore polymarket. But yesterday, 85 percent of the probability was that Caterpillar would beat. So there was widespread expectations here. How much of that is driven by our knowledge that data centers are fueling demand for this heavy equipment with CAT? So what I would say is I absolutely agree with you. Investor expectations were for a larger orders number and backlog number. But one needs to take into account the law of large numbers. A company of caterpillar size has been growing orders at a 60 percent clip on average over the past four quarters. So these order numbers would eventually normalize.

25:04And it comes down to the execution and ramping of capacity to meet these orders over the next several years. And as a reminder, Caterpillar Management told investors earlier this year that they're tripling engine capacity and more than doubling turbine capacity. And so they're working toward that. But I agree with you. Expectations were higher. And even though the backlog reached a record of$78 billion, at the end of the day, it wasn't enough to impress investors. Tammy Zakaria of JPMorgan, thanks for joining us today. Caterpillar down 9 % right now. Well, from one of the worst stocks on Wall Street today to one of the best, we're looking at shares of Crocs surging nearly more than 25 % now after the company posted record third quarter earnings and raised its full year outlook.

25:53Joining us fresh off this earnings call is Crocs CEO Andrew Reese. And thank you, Andrew, for sending us Crocs that actually already have the CNBC gibbets on them. I was really hoping. Yeah, gibbets. And I was hoping that we would see one with Milwaukee Brewers. I saw that you got asked on the earnings call by Baird's analyst, Baird, which is located in Milwaukee, about, you know, are you selling out of the Brewers gibbets? How are you breaking records for the third quarter when Nike and Dick's Sporting Goods are struggling? And we've heard it from even higher end retailers as well. People are prioritizing experiences over stuff.

26:34Yeah. So I think there's a couple of things here. There's a story around the stock and there's a story around our actual business. I think the story around the stock is we've given investors some real reasons to be far more confident in our mid to long term growth. Right. So we've turned around Hey Dude that was shrinking and being repositioned over the last 18 months. We've returned it to growth in this quarter. and we're very confident about future growth. From a crock's perspective, we've yielded a strong double-digit growth rate in our DTC channels internationally. We're growing overall around 4%.

27:06And again, we have confidence about the future growth. So I think that's the story around the stock. The story around the business is actually more straightforward, which is I think what we're doing is we're bringing to the table for consumers, both in this country and in many markets around the world, innovative new product at a great value. A lot of our products sell at a$50,$60,$70 price range, relatively affordable, still when people are under pressure. And we're bringing new products, new innovation, exciting new stories to the market. So I think those are the two things that are allowing us to flourish in this marketplace.

27:41In the earnings call, you highlighted the strength of ballet flats as being able to capture trends, fashion trends, in a way that appeals to the core Crocs customers. Are you winning over new customers? Absolutely. Yeah, as you're holding up our ballet flat there, that's been a huge hit this year. You know that's a fashion trend around the world. You see that silhouette from lots of different brands, whether it be top-tier luxury brands, to our product, which we sell at sub -$50, right? So we introduced that earlier this year. And I think the thing that we've done really well is we've chased that silhouette and brought many iterations with very different colors, graphics, versions, and also personalization options to the table, which gives the consumer the opportunity to buy multiple pairs.

28:29That has been particularly popular, I would highlight, in Asia. And you also said on the earnings call that, hey, dude, is going to return to growth here. I'm curious how important social media is. How important is TikTok to your success as a company? Yeah, it's incredibly important, right? So as I look at the history of the Crocs company, we've been very, very focused on social and digital advertising and social and digital selling for some period of time. So we feel like we have a bit of an advantage here, Senrina. We also have a big business in China, and Doyon and social selling over there is really huge.

29:07And it's two or three years ahead of where it is here in the United States. So we leaned into TikTok selling. As soon as they opened their shop here in North America last year, we have the number one and number two top-performing footwear brands on TikTok shop today. And we also participate with TikTok in almost all of their markets. So we're the number one here in North America, in the UK, in Malaysia, etc. So we think it's really important. And what we see is when we engage the consumers on TikTok, We introduce an exciting new product. We see immediate sales on that platform using the creators that sell on those platforms.

29:46But we also see people looking for that product on our own website, in our stores, and in our wholesale customers. Andrew, it's great of you to join us today, giving us a look at some of your new products and giving us an explanation about the quarter. Thank you so much. Again, that stock up more than 25 % now. Andrew Rees, Crocs CEO. And another big earnings mover here. You've got Norwegian Cruise Lines Holdings. Those shares are now up almost 14 percent. The company reported higher than expected third quarter earnings. It's raised its 2026 outlook. The incredible thing to note here is that normally you have people booking cruises months and months out.

30:23They book it and then they wait maybe six months or eight months or even a year out. In this case, they saw their customers booking soon in this quarter. Those close up bookings lifted the whole year's outlook. So they say if that trend continues, the first half of next year will be looking pretty fine. Coming up, businessman, actor, rapper and soon to be CEO of the first publicly traded professional sports league. Ice Cube will join us for more on his latest venture right after the break.

31:01This is it for the championship. Yes! Jeremy Pargo, the MVP! That was the big shot that won the Big Three championship this season. It's a half-court, three-on-three league featuring former NBA stars, international players, and anybody else who proves they have the chops to get out there on the court. Now the league is eyeing an even bigger stage, Wall Street. The Big Three looking to go public with a reported valuation of$290 million. dollars. For more on the league's plans and what's next, let's bring in Big Three co-founder and CEO Ice Cube. Cube, it's great to see you today. Hey, thanks for having me.

31:43Okay, so you told our colleague Scott Wapner about four months ago you thought that it would be next quarter, the end of the year, that this would go public. Has the timing changed? Just slightly, you know, may, I mean, you can actually get T-O-N-T right now, which stands for three on three. But it's really going to go through the merger. It's going to go through early 27. So it's slightly off, but usually we're on time. I'm curious, why take the big three public rather than go the route that seems to be working for NBA, WNBA, women's soccer, any franchise that you can think of is now seeing their valuations rise with private investment?

32:38Yeah, well, you know, when we started in 2017, we promised we was changing the game for the better. And so that doesn't just go for our players, our coaches, but it goes for our fans. You know, it's a league that's, you know, grown over nine years, proven itself. And, you know, now is the time to let everybody get some of the upside. You know, those other leagues were started and maintained with an exclusive club. And, you know, the fans, all they get to do is buy some merch, you know, go to a game, try to find it on the streaming service, but they can't be part of the upside. Why not? You know, that's why I'm glad we're the first league to do it, the first professional league to let the public actually contribute in the growth of the league.

33:36And anybody with vision can see this is a once-in-a-lifetime opportunity because we are the next emergent sport. We've proven ourselves over nine seasons going into our 10th season that fans, even through a pandemic, that fans want the big three. I was going to say, why are you so bullish and optimistic about the growth prospects for the league? Because the, I mean, the vision is global. We can own three on three, not only in the pro space, but in the youth space. There's so much room for growth. There's so many, you know, like revenue streams that's out there that we can really tap into, you know, with with the right with the right capital and the right people in place.

34:31As far as we want to hire more people. We've been a lean and mean organization for nine years, which is great because it made us, you know, really calibrate the business model. But now it's time to put some fuel to the fire and grow this league. We want to have a bigger footprint. You know, 10 weeks in the summer is not enough. We want more teams. We want a global game that's, you know, you've just seen the World Cup. We can do the Big Cup. You know, we've been talking to Australia about a big three Australia, the NBL out there. We've been talking to the East Asian Super League about a big three Asia.

35:13And we can create what we call the big cup of three-on-three all over the world, getting together to see who's the best. Speaking of the other football, you're an L.A. guy. Anything you can do about my Chargers? Can you buy the Chargers? Maybe put together a group. Maybe put together a group. I mean, they're right there in your backyard. Why not? Help us out. I'm the president of Raider Nation. You know, I can't do that. But I heard they're going for cheap right now. Please, somebody take them off LA hands. That's sad. Why does he got to go there? I mean, I get it. Okay, fine. Raiders finally, I think I have a winning record for the first time in 50 years.

35:55Yeah, I mean, you know, we're actually three and four. So I was wrong in a good way. We have fixed that next week. Chargers are 0-7 Sunday. Chargers, they need their own city. Don't they have it? It's San Diego. What's that? Yeah, exactly. Well, that's a fair point. All right. Go back down to five. Thanks, Ice Cube. All right. Bye. Take it easy. Thank you very much. Big three going public. All right. Let's get now to Julia Boorstin for a CNBC news update. Brian, Brazilian presidential candidate Flavio Bolsonaro is reportedly staying in Florida on a temporary status ordered by President Trump. The New York Times says he will likely be granted permanent residency later.

36:39Bolsonaro fled Brazil after losing the presidential runoff. He faces multiple criminal probes in the country. An Egyptian man is already serving life in prison in connection with an attack on demonstrators in Boulder, Colorado last year. He entered a guilty plea today on federal hate crime charges. Authorities say Mohamed Suleiman yelled, free Palestine, and threw two Molotov cocktails at a group marching in support of Jewish hostages in Gaza. Kentucky Republican James Comer says the House Oversight Committee is investigating Democratic Senate candidate Mary Pelota's campaign. It follows a probe launched in Alaska into allegations her campaign recruited candidates with a nearly identical name to her challenger Republican Dan Sullivan.

37:24Comer says he is seeking transcribed interviews with two people linked to the alleged effort. Brian, back over to you. All right, Julia Boorstin. Julia, thank you very much. All right, sometimes you got to think small to go big. At least that's what our market navigator thinks. And he'll explain with some picks for you next.

37:52All right, time now for your Market Navigator segment. And small cap stocks are still kind of the stars of the year. The Russell 2000 Index is outperforming both the S &P 500 on a year-to-date basis and other indexes. But over the nearer term, that has not been the case. So can small cap stocks get back some of that momentum? Your next guest says, yeah, and he's got some ideas where. Chris Tessit is a CIO at Acuitas Investments, and he joins us now. I love this, Chris. It's like sometimes there's like this weird TV synergy. Contessit has talked about Crocs. You like another shoe-related company.

38:28This is a retailer, Boot Barn,$4 billion market cap. I know Jim Cramer on Mads talked to the CEO, but what do you like about the Boot Barn? Yeah, I guess Boopar represents a lot of what we like about small cap, which is good valuations, great opportunities, a lot of broadening of the market beyond just sort of space and AI. You know, they posted good earnings. They've been able to grow their store base. Stores have been more profitable than expected. And there's a great valuation opportunity, which the company recognizes because they're buying back stock. Yeah, and it's interesting, though. Retailer that specializes in boots.

39:04How did this one even land on your radar, Chris? Yeah, well, we're a multi-manager investment firm. And so our underlying managers hold Boot Barn, and we hold it in our portfolio. And really the opportunity set of just looking broadly at the market for valuation opportunities that have great growth prospects. And that's kind of the story of small cap, which is small cap has led year to date. It's led notably since the market bottom in 2025, the Liberation Day. Small cap's up about 60 % since then, and has led the market, but still underrepresented in client portfolios. So names like Boot Barn tend to get overlooked as people look towards the larger names, the technology names, the things that were really leading, especially in 2025 in the most narrow market.

39:47So this is indicative. The small cap's been crowded out. To your point, Chris, all the money is going in to the large cap technology stocks though. But how reliant are small caps on interest rates? Feels like interest rates go up, small caps go down and vice versa. Yeah, I think small caps are a bit like Rocky. You know, they kind of take it on the chin with the initial rise in interest rates, but they're going to go the distance. The valuation opportunity is still there, and it's really an earnings story. Earnings are really what drive returns, and the forecasted earnings are higher in small cap than in large.

40:18So, yes, initially there was sort of a reaction, but it is not the case that small cap always lags in rising rate environments. And we've yet to see if this rate environment really has lags or if it's a short-term reaction to more geopolitical events. All right, we like it. Listen, I like talking about small caps. We talked about Boot Barn. Chris Tesson, always happy to talk to you of Acuitous Investments. Chris, thank you very much. Thank you so much. All right. Polymarket says trading is halted on its platform. It's experiencing a major outage. Polymarket says one of its third-party providers was compromised and that the issue has been referred to law enforcement now.

40:55The company says it has identified and fixed the issue affecting its international platform, but that trading is still halted out of an abundance of caution. I'm looking at it right now. It says the exchange is currently in cancel-only mode and that relayer actions have been paused while it's investigating. We have reached out to Polymarket and to law enforcement. We'll bring you any updates as we get them. Brian? All right, we're going to have more on the WNBA Finals and the scheduling scramble that came with Game 6. Wrapping up as we speak, I mean, Why is there a daytime game in the finals? Alex Sherman is up next.

41:41Game six of the WNBA finals between the Golden State Valkyries and Atlanta Dream wrapped. The Dreamer up as time is expiring to force a game seven. Huge scheduling scramble, though, just to get this game even to tip off today. Joining us, CNBC senior correspondent Alex Sherman. What does it tell you about where the WNBA is in its growth trajectory, that its final game was at lunchtime? Honestly, I liken it to where the NBA was in the late 1970s or so, where the whole world or the whole country kind of knew that this league was taking off. But the infrastructure wasn't quite there yet. I was just looking before I joined you guys here at the different venues of all the WNBA.

42:26teams and most of them now play in either literally the NBA arena or an NBA like arena where capacities you know 15 ,000 something like that but there are a few teams that still play in what Steve Kerr referred to as glorified YMCA is this week and the Atlanta Dream happens to be one of those teams where their regular season arena the Gateway Center only seats 3 ,500 people but wait, then sell out crowd every night. Yeah, like Duke, Cameron Indoor. It's small, but mighty. Small, but mighty. Well, at least for these playoff games, they've been selling out State Farm. So their argument is that, look, we have star power.

43:08We've got Angel Reese on our team. What happened here then? Why is the game in the middle of the day? Well, because they wanted to keep playing in State Farm, but the Hawks have a game tonight, the Atlanta Hawks, which normally play at State Farm. They should have made the Hawks play it. Many people have said that. But unfortunately, the NBA collective bargaining agreement does not allow that because there needs to be a 22-hour period in between games. And the Hawks played last night. So they couldn't move the Hawks game to 1230 and keep the WNBA game at 8 o 'clock. So they were throwing out a whole bunch of different scenarios, trying to shift the venue, shift the date.

43:42None of it really worked out that well. And so they landed on this kind of bizarre solution to play the game at 1230 in the afternoon, which, as you said, just finalized. Fortunately, Atlanta won, so there will be a Game 7 at a normal time on Saturday. Unfortunately, it's Halloween night, so that's not the greatest of timing. And wait a minute, what about the media rights? Because, hello, we were PR. I mean, it is not ideal for our parent company, certainly, to have a game played in the middle of the afternoon. You're definitely going to have lower viewership than if it was for primetime. Perhaps all of the buzz around this will have picked up viewership.

44:18We won't know the ratings for a couple days, but maybe all of this talk around this game moving to 1230 actually helped the ratings. I stole your hat. I see that. And I'm dirtying it up with the filth that is my hairspray. Your head fits better in that hat than mine does. Barely, and the ears are popping. Any early indication? Because you were all nasty about the TV ratings because the Rays and the Brewers. Look at her. She loves the Brewers. Give me that back. Her name is Brewer. Yeah. She lived in Milwaukee. They have been better than estimated, I think. Because people want to see the underdogs.

44:48Certainly not as good as when the Dodgers played the last two World Series, but better than 2023 and 2022. We just came out with preliminary ratings that I reported late last night. Over 13 million people watched the 12-inning game four. They were late. You know, that's a really strong rating. That's a big number. People said baseball's dead. Half the audience, okay, we were showing you that you can watch the replay of the women's game tonight on CNBC. By the way, half the audience in Tampa Bay last night, Brewers fans. Strong but mighty. Yeah, the rating for just Milwaukee was outrageous. It was like almost every person in Milwaukee was watching the World Series.

45:28Yeah. Never underestimate big sausage. Yeah, exactly. Obviously, first time ever. Power Lunch also on during the day returns after this. Yeah, it was great to be here, even though you tried to steal my hat. I didn't steal it. I gave it back. Closing Bell starts right now.

46:12Member NYSC SIPC.