10AM Hour: Steph Curry from Beth Page Black, OpenAI Discloses more ‘Concerning’ AI Behavior, Worst of the AI Sell-off over? 9/17/26

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1:05Good Thursday morning. Welcome to Squawk on the Street. I'm Sarah Eisen with Carl Quintanilla and David Faber. We are live, as always, from Post 9 of the New York Stock Exchange. Stocks are making a comeback right now after a Fed-driven sell-off late in yesterday's session as oil and yields both come off the boil. We'll talk about what comes next for the Fed and what it all means for your money. Plus, we've got a Camden's exclusive interview coming up with Palantir CEO Alex Karp right here at Post 9 weighing in on the AI safety warnings as OpenAI discloses six more instances of what it calls concerning model behavior.

1:38Also, NBA superstar Steph Curry will join us this hour live from Bethpage Black on Long Island to talk about golf, business, and much more. All right, let's get some breaking news on pending home sales. And Diane Oleg has that for us. Diana. Well, David, pending home sales in August were essentially flat month to month, up 0.3%, but down 4.7 % year over year. That, according to the National Association of Realtors, that's right along expectations. Now, this count is based on signed contracts on existing homes. So it's people out shopping in August as the average rate on the 30-year fix was holding pretty steady around 6.75%.

2:17Definitely higher than the spring, but not at all where we are today, which is well over 7%. Regionally, home sales increased in the south and west, but fell in the northeast and midwest, where prices are rising most. Compared with a year ago, sales were down in all regions. The NAR's chief economist, Lawrence Yun, called the market sluggish due to higher rates, which are offsetting job gains and income growth. Nationally, contract signings today are running about 30 % below where they were in the years leading up to the pandemic. And just a programming note, I'm here at the annual Zellman Housing Conference in Boston, and I'll have reaction on all things interest rates and housing from Walker & Dunlop's Willie Walker later on the exchange, and then a live interview with Ivy Zellman herself coming up this evening on Fast Money.

3:02Sarah? It'll be good to get their thoughts, especially after that Fed hike and mortgage rates on the rise. Thank you very much, Diana Olek. And that's where we begin today with the Federal Reserve and the reaction. Stocks sold off yesterday. They're rebounding today. And bonds are also going the other way. The big takeaway from Kevin Warsh, the chairman, from his news conference, from the statement, is that it was more hawkish than expected. Put together a little montage of all the places he was most hawkish. Listen. Our predominant focus is on the price stability side of our mandate. I would be hard-pressed to describe broad financial conditions as restrictive.

3:43This view was widely shared by the committee. So we removed a dose of accommodation. Inflation risks are to the upside, while labor risks are roughly balanced. Underlying growth is higher. Inflation is the problem. So you made it very clear that they're focused on inflation. It's not where they want to be. And, you know, that removing a dose of accommodation line that he repeated a few times, That was, I think, a signal to the market that they do not think policy is restrictive, which is a debate, right? It continues to be one, but that there's more work to do. So it doesn't look like a one and done, as Mike Santoli said, and it looks like they potentially want to do more.

4:28That was certainly the reaction of the market. If you look at the pricing for where the market thinks that the Fed funds rate is going to be at the end of the year, this year. So there's only two more meetings left. There's one in October right before the midterms and then one in December. Right now, we're just above 3.75 on the rate. So the market expects one more hike before the end of the year, likely in December, just because of the midterm pricing or midterm timing, although Goldman Sachs says October is the thing. You know, some of the street reaction, it's pretty unanimous. Morgan Stanley, the communication turned hawkish.

5:02Citi, Chair Warsh sounded slightly more hawkish than we expected. J.P. Morgan, Chair Warsh talked tough. Barclays. Warsh's press conference was quite hawkish. Bank of America Fed chair. Warsh's press conference drove home the Fed's hawkishness. We also appreciated the brevity. It was the shortest presser, I think, in the modern era, right? Yeah, I know. I used to host the 3 p.m. show, and we would hope for short pressers to get more of the show in. So they got that this time. Goldman Sachs, the meeting was more hawkish than we expected. So for a guy who doesn't want to give forward guidance, I think the message was received loud and clear that they are very fixated on this higher inflation.

5:40They're not really worried about the impact on the economy at this point.

5:46There's UBS compared with the preceding three and maybe all chairs of the Board of Governors and Federal Reserve. Chairman Walsh's reaction function appears more sensitive to financial conditions, less sensitive to the labor market and sets a higher bar for what might be considered restrictive. That's really, that's the point. You know, looking at the stock market, looking at some of the economic data, they're concluding that things are in a good place and they're not too worried about what's the other side of the mandate, what they've done. Put it all together, retail sales, barn burner, NFP, barn burner, CPI, PPI, kind of warmish.

6:21Today, Philly Fed, you see delivery times, I mean, way elevated, and that ostensibly leads to more price pressures. The question is, does this Fed action do anything about that? If the price pressures are largely driven by supply issues around oil, I mean, we've talked about this, and around some of this AI build-out stuff, is it going to have the desired impact? Or is it going to put more pressure on the low-income middle consumer, which is who he's trying to help by trying to tackle the inflation problem? because it's not like we have very strong wage growth, right? Usually, you know, the Fed hikes, it's a reaction to an overheating economy where you have a wage price spiral.

7:06We don't. We have inflation that is higher than wages. So I think the question is, what will the impact be on the economy right here? For more on the Fed and the market, we're joined by former Federal Reserve Governor Randy Kroszner and Barclays Head of U.S. Equity Strategy, Vinu Krishna. Nice little commingling here of both Fed policy and what it means certainly for earnings in your note today, Vanu. But, Randy, let me begin with you. Sarah raised a great question earlier this morning about what? I don't know what's going on. Yeah, I'm getting a little bit of audio difficulty, Vanu. Let me begin with you.

7:45You do write today about the second derivative of earnings, right? and whether or not some of these tougher comps are going to make equities vulnerable as a result. What did you write? I think our overall view is that earnings are going to decelerate, but it's going to remain meaningfully higher than long-term median levels. So to give you a perspective in terms of numbers, last year earnings were 14.5%. This year we're expecting 31%, among the strongest in almost two decades. And then next year we see about 13 % to 14%. And what's unique is in the past, when you've had peak earnings, that's what people are concerned about, it's typically been preceded by a big collapse in earnings because of COVID or, let's say, the GFC or something like that.

8:29This time, that's not the case. So we have a truly strong earnings pace. Things are going to decelerate because to keep this torrid pace of earnings growth is tough. But we still end up in a very, very healthy environment. And that's the reason why we remain optimistic. So the combination of strong and accelerating earnings and multiples compressing because of increased macro risks, that is what we see playing out. Right. I mean, in general, historically, when you have earnings above trend and decelerating, isn't that a liability for stocks? It is, but if your multiples are also coming down. So the way to think about it simply is this year, multiples have come down, rates have gone up, but S &P is still returning 10 percent plus.

9:13And why is that? Because the rate of earnings growth is much faster than the rate at which multiples are compressing. That's a phenomenon you saw with big tech last year. Outperform the market when rates, their earnings are stronger and multiples lower. It's the same trend this year. It's just that it's broadened beyond tech to the overall economy. Today, we're trading at about roughly under 19 times with the whole market. We started the year three handles higher. So that has been the trend. And what earnings is what's holding up the market. Yeah. And we'll talk about how the Fed plays in all this in a second.

9:44We do have Randy Good. Randy, just your reflections on yesterday and whether or not this talk about Warsh being truly hawkish rings true to you? Yeah, I mean, people talked about it being a sock puppet. I think that has to just disappear now. There's just no way that people can say that. He worries about his reputation. He worries about the reputation of the Fed, worries about Fed credibility. And so he has said inflation is the number one priority, and he's acted on it. So what do you think he'll do next? Keep hiking? So I think, although he doesn't want to talk about the bumps and wiggles in the data, I think it will depend on what happens.

10:30We're going to get a couple of reports about inflation, whether we see inflation coming back down a little bit, whether we see energy prices coming back down. The economy seems to be basically fine. And exactly as you said, his focus, I think, is much more on the financial conditions rather than on the labor market right now, because the labor market seems to be just moving along quite steadily. Do you think that the rate hikes will have the desired impact? Well, they're certainly not going to have any impact on providing more oil. This is classic supply shock. The Fed can't do anything about that.

11:04But I think he wanted to make sure to get ahead of any concerns about inflation expectations moving up. So, so far, the intermediate to long run expectations have not moved up at all. And I think he wanted to just make sure that he and the Fed stayed credible as inflation fighters. And so I think that was, in some sense, was a risk management decision based on that rather than on really trying to fight the high oil prices. And the other question I keep bringing up and raising this morning is, do you think it will have an impact on the economy? In other words, will it harm this rosy growth outlook that they provided?

11:42I mean, I don't think a quarter percentage point one way or another has that much of an impact. If it's part of a series that we go up a percentage point, then that has an impact. I think one in and of itself, and maybe even a second one later in the year, is unlikely to have a major impact. But it helps to make sure that inflation expectations stay well anchored, that he and the Fed maintain credibility, and I think he's earned that. How many hikes are you pricing in, Vinay? I think as a firm, we are factoring in two to three hikes to the end of next year. I think the market can absorb that quite reasonably at this point in time.

12:22With no diminution to multiples, for example? Multiples will be slightly under the pressure, right? But it's the earnings story which is overpowering. And the way to think about it is, you know, like it was alluded to just now, you know, 50 basis points increase is not going to have a big impact on the primary engine, which is the AI narrative, right? And particularly the CapEx cycle. That's the single biggest question people ask. What can cause that CapEx to fall off pretty fast? So we do expect the CapEx levels to sort of moderate in terms of pace, but the absolute level is high enough to keep a very broad-based recovery in earnings going.

13:01So that's not going to be negatively impacted. Similarly, you know, oil is an issue because of the Middle East crisis. So the rates increase over here, again, is not going to impact that, which means that lower-end consumer and some impact in consumption is to be expected. But this is a K-shaped economy in which the higher-end consumer has been a bigger factor in driving consumption patterns. It doesn't mean that the lower-end consumer is not important. But that mix is something worth watching. But overall, I don't think that the rates going up are such a dramatic concern if earnings are holding up and accelerating, which we do expect.

13:37Yes. Finally, Randy, Sarah raised a great question. What do you think would prod them to pause again? I think if we started to see energy prices coming back down, if the next few prints on the inflation front looked benign, I mean, you know, the CPI was a little bit higher. It was 0.3. People were expecting 0.2, but it was rounded up from 0.26. So, you know, it's I think reasonable people could disagree on whether they need to take the next hike soon. and if I think that the inflation numbers are benign, they probably will wait until later in the year. Interesting. Randy Vanu, good stuff as always.

14:19Mark, it's really wrestling with some of this. Good to see you both. Thank you. Let's give you a roadmap for the rest of the hour. Still ahead, Rockefeller's Rasheer Sharma. He told us a few weeks ago that a 5 % level on the 10-year could pop the AI bubble. He's going to join us again now that yields have hit that level. NBA superstar Steph Curry is with us live from Bethpage Black talk some basketball, some golf, and his global business deals. And later, a big exclusive interview with Palantir CEO Alex Karp. His thoughts on warnings about AI safety and whether or not AI slowdown and advancements is warranted.

14:54Squawk on the Street will be right back after a quick break. Legacy credit scores only look at a brief snapshot in time, and that limited view often leaves millions of qualified credit seekers out of the picture. Vantage Score is changing that by modernizing credit scoring. VantageScore uses 400 % more credit and alternative data to create a fuller picture of financial behavior, including trended credit data, rental payments, and timely utility payments. VantageScore safely broadens access to the credit economy and brings 5 million mortgage-ready borrowers into the market. That's why top lenders like Rocket Mortgage, as well as nine of the top 10 banks, rely on VantageScore 4.0.

15:35With higher predictability and greater access to credit, Everybody wins. Get started at VantageScore.com. Welcome to The Circle. In this game, you never meet the other players. Your goal is simple, become the most popular. But should you play as yourself or catfish as someone else? With the new host, celebrity contestants, and this time, audience voting will influence the game, you decide who has what it takes to win. Watch the Hulu original series, The Circle, on November 17th, Streaming on Hulu and Hulu on Disney Plus for bundle subscribers. Terms apply. This holiday, all plans, even unlimited, are just$15 a month.

16:15A 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 a 12-month plan required. $15 per month equivalent. Taxes and fees extra. New customer offer for initial plan term only. Greater than 50 gigabytes may slow when network is busy. See terms. Welcome back. As calls grow for an AI slowdown, or pacing at least, in terms of the training of the frontier models, OpenAI is disclosing more incidents of what it's calling concerning AI behavior.

16:55Kate Rooney has more of the, I mean, they just get crazier and crazier, some of these details, Kate. Yeah, David, we do have some new examples. So OpenAI overnight revealing six new cases of its AI models behaving in unexpected and concerning ways, as they put it. The most striking examples involve AI agents trying to conceal mistakes and behavior. So OpenAI found that agents were communicating with each other through unauthorized message boards and file sharing services. In one example, they also uploaded files to the internet so they could cite those as evidence when actually answering human evaluators.

17:33And then important context here, guys, these were discovered in research environments. So OpenAI isn't necessarily saying that six public-facing models went rogue out in the real world. The company, as part of this, is also rolling out a formal process for employees to flag these incidents, investigate them, and then disclose them publicly. But there is a common thread here that goes back to the hugging face hack from open AI agents earlier this year. In each case, the models did really find an unintended way to accomplish a goal or get around a constraint. That is a pattern that we're seeing.

18:05And the disclosure does put some more concrete examples behind some of the recent safety warnings that we've heard from the industry. It does also show the unexpected behaviors that these companies right now are already seen as their models become a lot more capable. It's also a look behind the scenes at what research researchers mean when they talk about misalignment. So essentially a model doing something that the researchers, the companies didn't actually want it to do. It does also, of course, come at a critical time in the industry right now. The AI safety debate has been heating up. OpenAI says it actually doesn't believe that the industry has solved alignment, as I mentioned, and monitoring well enough to keep scaling AI at max speed.

18:45And definitely, we heard from CEO Sam Altman over Over the weekend, he agreed with Dario Amadei, other AI leaders, about slowing the pace of model development. But it's unclear what that means. The industry is split right now. And you had Mark Zuckerberg, Jensen Wong as well chiming in. They're a little less enthusiastic about industry coordination and regulation to a certain extent, guys. Yeah, I mean, Kate, OpenAI and Anthropic have been the leaders in many ways in introducing models, one after the other after the other, that are more and more powerful. Is it your expectation, based on what you're hearing and what they're saying, that we can expect a slower release schedule from both these companies?

19:26It's interesting, David. After those weekend comments, both CEOs have talked publicly since then. And I feel like they've walked back and tried to clarify some of the pacing discussion. Darya Ahmed, in particular, a dream for saying, oh, it doesn't necessarily mean that we're slowing down or we're not going to be building new models. So that has left this void in and this gap between saying that you're pacing something, but also saying that you're not slowing down at a time when it feels like, yes, you're right. Every other week we get a new model. The other companies want to jump in and sort of one up each other to have the best version of this.

20:00And both companies have confidentially filed to go public, need to grow revenue. And so there's this disconnect between the idea of pacing and what the CEOs have said publicly, which is we're not going to stop building, really, but they need more oversight. oversight. I thought the Elon Musk example of, hey, we need to grade each other's homework might be the solution here, where your biggest competitor might be the one calling out vulnerabilities, which seems like a powerful thing, given the amount of competition. If they get the chance to go behind the scenes at a competitor and call out each other's weaknesses, maybe that's the biggest motivating factor.

20:36And that's the solution here. Because, yeah, it doesn't feel like they've all aligned on a solution, right? Is it competitor reviews? Is it third party reviews? Is it congressional regulation or regulation from the administration? I feel like there are risks and warnings and pros and cons with all of them. In the last five days, Sarah, exactly. I think coming into the Newsweek on Monday, we had this consensus, at least from the industry leaders saying, OK, this calling for more regulation, they're calling for sort of a slowdown in industry collaboration. in the few days that have passed since it's gone in the opposite direction.

21:15I would also say the big complicating factor, too, is that the president chimed in and shared his thoughts on it, meaning that anybody that commented on this after the fact was also running up against this becoming a more divisive political issue. So, therefore, we heard from Mark Zuckerberg after the president spoke. There is more pressure based on not wanting to go against the administration necessarily. and that's another big thing that's changed this week is that D.C., the White House has chimed in. They clearly do not want more regulation. Jensen Wong would be in that camp, too, saying, got enough laws.

21:49OK, Kate, Kate Rooney, quite a week. A lot more coming up on these A.I. fears when we speak exclusively next hour with Palantir CEO Alex Karp about all this. And coming up after the break, Rockefeller's Roushear Sharma on how rising rates could end the current bull market. That's when we come right back. Welcome to The Circle. In this game, you never meet the other players. Your goal is simple, become the most popular. But should you play as yourself or catfish as someone else? With the new host, celebrity contestants, and this time, audience voting will influence the game, you decide who has what it takes to win.

22:25Watch the Hulu original series The Circle on November 17th, streaming on Hulu and Hulu on Disney Plus for bundle subscribers. Terms apply.

23:03Work is busy. See terms. If you're a parent and want to help set up your child for success, then IXL is a right for your family. As an effective and affordable online learning program, IXL covers math, language arts, science, and social studies using interactive practice problems for kids from pre-K to 12th grade. Listeners can get an exclusive 20 % off IXL membership when they sign up today at IXL.com slash 20. Visit ixl.com slash 20 to get the most effective learning program out there at the best price. Welcome back. Treasury yields, you can see, easing a bit. Still up sharply, though, over the last few weeks.

23:43Our next guest recently warned on this very show about the ramifications for the tech trade overall, tech stocks, if the 10-year yield did hit 5%. And now that it has reached that level, let's talk again. Roshir Sharma, founder and CIO of Breakout Capital, chairman of Rockefeller International. Roshir, where are you on this? Do we think that this 5 % having been broken, not now, but certainly right around there, is going to present a more negative consequence for many of these AI-related names? Well, yes. I mean, I think if we do move into a new interest rate regime where we decisively break 5 % on the 10-year, which even as Kevin Walsh yesterday said in his press conference is the most important asset in the world, I think that that will pose a problem for equity markets in general and the AI trade.

24:36Since we last spoke, David, I've done some more work on this topic. And there are a couple of interesting data points that show up here. One is that historically, if you look at it, that once the 10-year crosses 5.25%, 5.25%, the equity bond correlation becomes positive, which is very interesting, which is that for any yield above 5.25%, equity prices go down. So that's one very important takeaway. Plus, there is the larger picture, which is the fact that over the last 300 years, every single boom or bubble has ended only one way. It is when interest rates go up and you get a major monetary tightening.

25:21And now above 5 percent, the fiscal arithmetic also gets problematic. So therefore, I've been very focused on the 5 percent level. But as I said, we need a decisive reach of that to suggest that that's going to be the floor going forward rather than the cap that it has been for the last 20 years. And we are sort of bordering on that. But yeah, we haven't quite broken out as yet. Yeah, well, I mean, listen, I was obviously around reporting during the last boom that most often is cited as correlating to what we're seeing now, the dot-com boom in the mid to late 90s. Rates were higher, Roshir, than they even are now.

25:56And that didn't stop the boom. You know, a number of other things did over time. Why isn't that a correlation that we should look at now as well as not necessarily being something we should be concerned about? Well, because back then, there were two important differences. One, that if you look at the debt levels, they were far lower. So I know a lot of people have said that, listen, in the 1990s, we had 5 % to 6 % interest rates, and that signaled a strong economy. Well, this time is different in one very important way, which is that the debt level, if you look at the government debt to GDP, it is three times higher compared to back then.

26:34Back then, government debt to GDP was barely 40%. Today, it is above 100%. So the debt servicing costs are a lot higher. The interest expense that we are paying every year as a share of GDP is more than double what it was back then. So, therefore, I find these comparisons with the 1990s to just be misleading. And the second reason also for that is that if you look what's happening around the world this year, that the single biggest reason why yields have gone up is because of the fact that it is very correlated to debt levels. A lot of people have made the point that maybe yields are going up because the economy is strong.

27:12Well, Japan, Europe, everywhere yields have gone up. So this is a global debt reset which is happening with investors demanding higher yields. And I think that once we decisively cross 5 percent, then the competition begins for those funds. And this is happening at a time when the AI companies are issuing more and more debt. So that's a very important difference to the 1990s. That government debt was just not that high and was not that competitive with what's going on today. Yeah, but the quality of the companies that were issuing debt in the 90s was far below the quality of the companies that are issuing that debt right now.

27:49I mean, you didn't have the likes of a Meta and an Alphabet and Microsoft and their cash flow characteristics differ markedly. than a lot of the crap, frankly, that was allowed to issue into the 1990s. Absolutely true. So I don't think that the problems this time have to do with the AI debt issuance as yet, at least so far. They've flipped from being net cash to net debt. But I totally agree with you that the corporate balance sheets today are in far better shape than they were in the 1990s, where the problem today is on the government's balance sheet. And so therefore, I'm so focused on the tenure, which is that if the tenure gets unhinged and gets into this new territory, that's when you end up getting problems because the government's balance sheet today is three times as bloated as it was in the 1990s.

28:35So you're completely correct in saying that it's not the corporate balance sheet which will cause the problem, and it's the government's balance sheet which we have to be focused on. The other thing that people point out, Rishir, is different from the 90s is back then we were globalizing, we were constructing NAFTA. Today we're de-globalizing and tearing down whatever, replace NAFTA. I mean, people are pointing to import prices yesterday. We have core import prices eclipsing core CPI. I mean, we're importing more inflation than we did back then. Yes. So the inflation environment is changing because some of the factors which you identified for low inflation in the 1990s are reversing, deglobalization being one of them.

29:16So therefore, that's the other argument that we could be in a stickier inflation environment this time. And so therefore, the central bank may have to hike interest rates more than what's currently priced in. Because even yesterday, it's interesting that they raised rates by 25 basis points, but the committee still sees inflation remaining above the target of 2 % until 2029. That's a long time. And especially if you end up getting a big change in the regime after the midterms, where cost of living is identified as the really big issue, then is there more pressure on the central bank to be increasing interest rates?

29:53So yes, inflation dynamic is different. And so therefore, with the 1990s, you can have some parallels, but not all. I think David pointed out one positive, which is the corporate balance sheets aren't that stretched, which is absolutely true. I say that the government balance sheet is much more stretched. And what you are saying is that inflation back then was likely to come down because of globalization, inflation compared to the deglobalization that we currently have. So, yeah, so there are many important differences with the 1990s. For me, the single most important thing is to watch the tenure, because if you enter this new regime of the 5 % being breached decisively, and that ends up becoming the flow rather than the cap, as was the case for the last 20 odd years, I think that is a real problem for the equity market.

30:38And it's always been so. It's been nothing new, because five and a quarter percent, the equity bond correlation turns positive. Yep. We will keep an eye on that 5.25 percent level as well. Rashir, thank you. Thanks, David. When we come back, workday is moving higher today. David will bring us the latest on his reporting on the potential take private. Plus, four-time NBA champ Steph Curry in just a few minutes will join us live from Bethpage Black on Long Island to talk about his latest foray into Gulf with the Dow up 288. Shows have worked at about 5 % this after I reported earlier in the last hour of Squawking the Street that the efforts to find the financing to take the company private continue and are making progress.

31:23Sources familiar with the situation tell me financing packages are being put together. It's an equity check that could exceed the likes of$25 billion given the overall size of the company. Nonetheless, as well, I'm hearing that that has gone fairly well. There There is an expectation or hope that there would be a significant percentage of shareholders who would roll into a potential go private as well, led by Silver Lake. Remember, it was Reuters that first reported, let's call it mid-August, on the possibility and the talks around a go private, given how beaten down many of the stocks in the overall software sector had been.

31:59It was certainly seen as a ray of light, so to speak, by many investors, given the perception of value there. But there also had been a thought that, man, that is a big number and it could be very difficult to get the financing overall together. So they continue to work on that. It does not mean that a deal is going to happen in the immediate future. But people close to the situation tell me they're more optimistic, certainly, than they were, that, in fact, it could be financed. We'll keep an eye on it as it moves along, Sarah. They kind of missed the bottom. I mean, this was a$122 stock, I think, in May.

32:35Remember when economics of seat-based software models were just going to be completely disruptive? Completely under. And, right, I mean, and by the way, it may still change, that is, to outcomes. That is something I'm sure you hear about as well in terms of how it would be priced, the services they provide in terms of outcomes as opposed to seats as the seats potentially go away. Right. But then the company's rebuttal and what it's shown with its results is that AI is actually a big revenue driver for them. For many of these companies. And that's what we're seeing now, and hence the rebound. moving also on your reports today, 5%.

33:06Time now for a CNBC News update. Brandon Gomez has it for us. Morning, Brandon. Good morning, Sarah. A new warning this morning about the future of the Kennedy Center. Democratic Representative Joyce Beattie made a new filing today telling a federal judge it is at risk of demolition. She said the president warned it could be, quote, ripped down if his name is not added to the building. She also cited pictures of a placard in Air Force One, which appears to read Kennedy Center demolished. The Trump administration has once again denied visas of a high-level Palestinian delegation to attend the United Nations General Assembly in New York next week, including President Mahmoud Abbas.

33:42The State Department says the officials failed to live up to their commitments to seek peace with Israel. This is the second year in a row the Trump administration has prevented Abbas from attending. And Health Secretary Robert F. Kennedy Jr. is scheduled to give a keynote speech today at a conference hosted by an anti-vaccine group he founded, Children's Health Defense. Kennedy also served as the group's chairman. He resigned from that role in 2024 after President Trump selected him to become health secretary. Carl, send things back to you. All right, Brandon, thanks so much. When we come back, four-time NBA champ Steph Curry is coming up after the break, live from Bethpage Black on Long Island in just a moment.

34:20Welcome back. Steph Curry teaming up with KPMG for his underrated golf tour, looking to provide opportunities for athletes from diverse backgrounds to show off their talent. Our Alex Sherman is at Bethpage Black Golf Course and joins us this morning with Curry and KPMG's National Sports Industry Leader Sean Quill. Morning, Alex. Hey, Carl. Yeah, we are here at Bethpage Black, the culmination of the underrated golf tournament. This is a series of events. Why is this so important to you, Steph? This tour is built out of passion and just the I lived the experience of how much golf has impacted my life in terms of competition, the fun, but also the network that you've been exposed to.

35:04And for me, the underrated golf tour is a way to create equity access and opportunity through the game, hopefully make the game look like the world does, and give these kids a platform to achieve their highest potential. We know we need more representation in the game, and for us to be able to provide that platform for these kids and be a small part of their journey, it means the world to me, so we're excited. So there's 24 kids here today, age 13 to 18. This is the Curry Cup. Again, it's sort of the culmination of your tour. So these are the best golfers of the 100-plus that participate. What's in this for KPMG, John?

35:40What's the business case? Yeah, Alex, when we evaluate a sports sponsorship, we think of does it elevate our brand, does it fit with our culture, and can we make a positive impact with it? And when we evaluated this opportunity of underrated golf, the answer was clearly a yes. And for us at KPMG, we're really focused on adding the leadership skills that these kids need, especially in this AI era to have those human-centric leadership skills. In fact, tomorrow we'll be in New York at KPMG Leadership Development Day, imparting some of those skills, having training for the kids. And we're just so honored to be part of this and the important work that Steph and his team are doing.

36:11So you're hoping to actually develop a relationship with these kids outside of this tournament? Well, it's important beyond this. Like, some will go on to play college golf. In fact, the numbers are amazing. It's 85 % to date have gone on to play collegiate golf, which is unbelievable. But if they don't make it pro, you know, they're going to have an option to pursue a career. And we'd love them to have all of those skills that they're going to need in order to be successful. Steph, I'm looking at what shoes you're wearing. What are those today? These are my fresh new leanings, you know. These are the new leanings.

36:38So the last time we spoke, which was last year, you still had your long-term deal with Under Armour. You haven't really talked about that in length about what happened there. I just wanted to ask you, why exactly did that partnership end? I think it was a great run. And I know when you get into business, Under Armour had a great experience over the 12, 13 years I was there. Developed Curry brand underneath. Under Armour was able to take my brand out and search for a new partnership that for me is looking at the longevity and legacy of what I think is possible, not just here in the U.S., but globally across basketball, golf, lifestyle, and training.

37:24Leading's been an unbelievable partner. It's a long-term scope of what we're trying to do. It's kind of crazy just from a product perspective. I got to try out a bunch of different shoes. Yeah, you were a free agent. I lived up to the free agent tag for sure. I tried literally everything, and there was a reason that Leading stood tall at the end because the product kind of reigned supreme. And so Dwayne Wade, Jimmy Butler, two guys that have been with the brand for a very long time that kind of set the stage. So I'm excited. We're five months in. I just got back from a tour the last week. So I'm excited about the opportunity.

37:59So it was your call to end the partnership with Under Armour? It was mutual. But I think the idea to the point of, you know, sometimes good things do come to an end. And making sure that everything, the way that the business is set up is in benefit of both sides. And, you know, like I said, I don't have any regrets about anything happening. And everything does happen for a reason. I stand by that. And just the idea that I was able to take Curry-Brandon and, you know, our mission to change the game, not just on the court but off, and all the ways that I know I can authentically do it. Leaning has been a great partner.

38:32All right. Speaking of free agency, you have one more year with the Warriors and then your contract ends, and you have a chance to become a free agent. We just saw your buddy LeBron James go through this process. Is that appealing to you at all? Not at all. I've always stated that I want to be a lifer with Golden State, what we've built there, the fact that I get to run it back this year with Draymond and Coach Kerr. So all the contract stuff, this NBA thing from year to year is so crazy. Things change really fast. But I do know my interest and mission to stay in Golden State and be competitive is there, and the contract stuff will take care of itself.

39:11You know, I thought LeBron was going to go to Golden State when he started this free agency process. Did you? I wish you should have called him. You should have called him. Don't put this on me. It was a good time for the NBA, obviously, with a guy of his stature, his notoriety to be in that position where he got to chose where he wanted to go. Did you try to actively recruit him? If anybody didn't, I think they'd be a fool, so yes. Yeah. One more thing with LeBron. He recently signed this deal with Polymarket that's reported, I think, today at$15 million deal. Is that something that might be appealing to you?

39:47A betting partnership? I have the right partnerships and deals for me right now. So I kind of stand on that. The big basketball business news of the offseason has been this punishment for the Clippers for salary cap circumvention. I'm curious to hear your thoughts on the punishment and if you were surprised by it at all. I wasn't surprised. I think the reason the investigation took as long as it did and the idea that I know Steve Ballmer, who I've gotten to know and know he's a great guy, who's standing by the punishment. So there's a reason that's all happened the way that it has. And at the end of the day, you know, Adam Silver had a job to do.

40:33And I think the punishment makes sense and we all move forward. You're a big investor in women's sports. The WNBA now is going to have a new commissioner. Curious to hear your thoughts on the job Kathy Engelbert did and who you think should replace her. Asking the wrong guy on the replacement, but I'm happy about where the league is considering years past in terms of obviously the CBA and the amount of money that they're able to make now and just the brand itself and the amount of talent on there. I think the biggest thing that I'm concerned of as a fan and a supporter of women's sports is that we focus more on the athletes, the talent, the product that's out there.

41:13I don't think it's been better ever. And the leadership, whoever the new leadership is, will be taking over a league that's headed in the right direction. So I'm sure it'll be a coveted job maybe compared to years past. Now, is today's Curry Cup televised? It is not right now, but that is something that, to the point of what we've done in the first five years of establishing what we do and how we do it, that we're excited that hopefully in the future, I know we are my media company, Unanimous, and Golf Channel are in an early look development deal. Ah, there we go, breaking news. Our sister company.

41:48Yeah, to hopefully have next year's Curry Cup broadcast live. So that's the goal for next year, and hopefully we put these kids on even a bigger stage and platform. So next year, the hope is Curry Cup on Golf Channel. Absolutely. At a championship venue, hopefully ready to open its doors for us. And I assume KPMG is still there. Absolutely. We're committed to be a part of this. It's been an awesome four years. And, you know, we see just the results of it, that it's really making a difference. These kids are getting the opportunity that Steph talked about and what they're doing with that. They're capitalizing on it themselves.

42:22And so, yeah, we stand by it. It's going to be a great long-term partnership. Steph, you look like you're ready to play. Sean, I think you need to change. I hear there are some good golf shoes that he's got. I hear the course is very difficult. This is the reputation I've never played. Absolutely. Both you guys, thank you for joining us. Carl, back to you. Thank you. I'll take it, Alex. Great. And a beautiful live shot to boot with Steph Curry there on the golf course. Up next, why the options market is signaling the worst of the AI-related sell-off could be behind us. That's next. Welcome back.

42:55worth noting the Nasdaq up over 1.5%. Of course, the market is digesting new headlines about AI fears. But key question, given that performance, of course, is the worst of the sell-off behind us in some of these names. I'm looking at Oracle, for example, up over almost 5.5 % and on from there. Oliver Rennick, there he is. He's at the SIBO in Chicago. What have we seen in the options market, Oliver? David, arguably some signs, bulls springing back into action, and they're going for some names that give some all-clear vibes. It's also pretty loud here this morning, suggesting market makers are chasing the rally.

43:32Traders bought more than three times as many calls as puts in NVIDIA, and the single biggest trade was a buyer of almost 700 275 strike calls, $1.4 million worth expiring in December. Next year, 2028 actually, and another$1.5 million expiring Jan 2029. These are two huge bets that NVIDIA more than doubles over the next couple years. We are seeing tons of elevated activity in Intel and AMD as both those charts turn higher towards two-month highs. Intel volume is three times the 30-day average and on par with some of the biggest names in the market today. $90 million of premium there was likely tied to call buying this morning compared to just$15 million in put buying.

44:16In Intel, they're buying the calls expiring tomorrow, and so far, the top four most popular trades are all in the money. In AMD, tomorrow's calls are flying off the shelf with the most popular purchase, the 550 strikes that still need another 3 % to pay off. Traders are even coming back to first-half favorites like SanDisk and Micron, the memory trades that everyone loved but got torched in the summer sell-off. Traders are going back in there with both hands this morning, guys. Oliver, what do we make of VIX with a 15 handle? And what do we need to know ahead of Triple Witch tomorrow? Great point, Carl.

44:53Busy day tomorrow. It does add on a little emphasis to what happens here. But today, really, the key message is that the setup coming into this session today, VIX had been overpricing the S &P 500 swing for about a week. With VIX at 18, we were staying under the implications that we were supposed to be having a move of 1 % plus. So you kind of had to get a sell-off right at the open today to keep VIX down. Because in theory, you can get markets up and VIX up, but that doesn't really happen at VIX 18. So this is a very nice reset to a level of normalcy that seems to set us on path for a pretty good restart when all those expires go off tomorrow and people put on new positions.

45:33Yeah, going to be one of the few big days of the year when it comes to that stuff, Oliver. Look forward to hearing more. Oliver Rennick over at SIBO today. When we come back, Palantir's Alex Karp, in just a few minutes, he'll weigh in on the recent calls for an AI slowdown. As we're losing some of the opening high, Dow's up 174. Few more sectors are red like financials and staples. Stay with us. All opinions expressed by Squawk on the Street participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet, or another medium.

46:07You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Such opinions are based upon information Squawk on the Street participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Squawk on the Street disclaimer, please visit CNBC.com forward slash Squawk on the Street disclaimer. Which NHL teams are scoring big off the ice? CNBC Sports' Michael Ozanian has the numbers.

46:38The dot margin in the NHL is right there with the NBA. Official NHL team valuations. Revealed Friday in Squawk Box on CNBC.