AI Stocks Rally, Meta’s Muse Moment, Nike’s Swoon 9/21/26

0:29Weren't agents supposed to take things off your plate? 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. You're listening to The Exchange. age. Here's today's show.

1:03And welcome to The Exchange, everybody. Probably saw Kelly on Squawk on the street earlier. She will be back here tomorrow. A monster market day, kind of coming out of nowhere. Big tech getting bigger. And once again, the AI trade leading the way. The MAG-7 ETF hitting a new high. Meta, marvelous, up about 9 % earlier. It's AI agent Muse leapfrogging ChatGPT to claim the number one spot in the Apple App Store. In the meantime, Apple reportedly blocking Muse from its own retail site. We'll get more on that. Semis also higher. AMD up 9%. And with those big gains, welcome to the$1 trillion market cap club, AMD.

1:44You are our latest entrant. Helping sentiment, oil is down, taking bond yields down with it. Tenure yield back below 5%. WTI down over 4%. No quick relief at the truck pump, though. Diesel hitting an average of$6.50 per gallon nationwide, creeping closer to its 2008 inflation-adjusted record high of over$7 a gallon. All this as the U.S. gearing up for a high-stakes summit between President Trump and President Xi. Energy, Iran, AI, safety, tariffs, critical minerals, a lot is at stake. And so that is where we will start. Megan Casella has the latest from the White House. Yunus Yun live in Beijing.

2:26And Eamon Javers also in D.C. with the latest developments on the White House versus some big news organizations. We've got a lot to do, but Megan Casella, let us start with you and the expectations for this summit. Brian, high expectations here. All of those topics that you just mentioned on the agenda when President Trump sits down with Chinese President Xi later this week. Again, ahead of that, the Treasury Secretary spent yesterday meeting with his Chinese counterpart, hammering out some policy details. He told CNBC a core focus of those talks was on establishing a safety dialogue around AI.

3:00Here's how he described it. We want to open a communications line, an incident line, so that we have constant communications, especially in the event of some kind of an incident. So now the focus is on what sort of big deliverables we'll get from the leaders meeting later this week. Now, I'll caution expectations are not super high for actionable items here, but we are looking for a possible extension of that Busan trade truce, a board of trade that would lead to reduced tariffs on about$30 billion worth of U.S. imports from and exports to China, and then a further fleshing out of that AI dialogue.

3:35All of that to be discussed around what will be a jam-packed visit for Xi. Some highlights here, the president will greet Xi and his wife on the tarmac on Wednesday. That's an honor that most foreign leaders do not get. The bilateral meeting then between the presidents will be on Thursday, followed by a state dinner with a number of tech CEOs expected in attendance. Elon Musk, Tim Cook, Sam Altman, to name a few. So, Brian, lots of time for policy talk this week. And impossibly what they're saying now could be two more meetings for these leaders this year. Brian. You know, the Treasury secretary caught my ear when that little sound by Iran.

4:06He said we have an open line of communication in case something happens. I mean, that's kind of a sign that to me that there are still tensions here. Like the relationship has not been defrosted, for lack of a better term, in the past couple of years, has it? It's an interesting point. You know, everyone that I've talked to so far ahead of this visit says the real focus for this, I just talked about the deliverables that we might get, but the real focus for this visit is on managing the relationship, maintaining the status quo that we're at because it had to be kind of hard fought. This trade truce is still fairly fragile since they established it last November.

4:41There's questions about whether or for how long it will be extended. And on AI as well, Besson did speak on CNBC this morning about how less opaqueness and more clarity between these two major leaders on AI, the number one and number two in the world. He said the more communication we can have, the better. But as you say, his posturing was certainly that they do want there to be a hotline or an incident line to be established in case something does happen, because they are thinking that something does happen. I'll just say the other thing that Besson said about China was that he said, of course, they do have safety incidents like the ones we've been hearing about in the United States in recent months.

5:15He said, yes, of course, they have those as well. We just don't know about them because they're not sharing them. That's what the U.S. is trying to fix here. All right, Megan Casella at the White House. Megan, thank you very much. All right. It is not, of course, just a one sided meeting. China has much to gain or lose as well. So how is the sentiment in Beijing coming into the summit? Eunice Yun is live in Beijing with more on that angle. Eunice. Thanks, Brian. Well, the Chinese have finally formally announced President Xi's state visit to the U.S. As Megan has said, he will be arriving on Wednesday and staying until Friday.

5:51And from the Chinese perspective, at the invitation of President Trump, the tone so far has been very upbeat about this China U.S. meeting. the Xinhua News Agency, which is a state news agency, had described these talks on Sunday as candid, in-depth, and constructive. The Chinese negotiator, also on the ground in New York, had told Chinese reporters that the talks went well and would continue into Monday, and that that term, the talks went well, has been trending on social media here. Xinhua also confirmed what The U.S. side has said that the talks had centered on trade investment as well as AI.

6:34But what's unclear is whether or not any progress was made on issues that were discussed here in Beijing back in May. For example, the Boeing purchases, agricultural purchases, or the extension of that Busan trade truce that Megan was talking about. And in particular, what all this means for rare earth curbs. And in fact, over the weekend, we also learned that the Chinese have been holding back a little bit on the rare earths. Shipments of magnets to the United States fell by 21 percent in August from the previous month. And Brian, one other thing that has been discussed here quite widely is whether or not there's going to be a business delegation that travels with President Xi.

7:20There have been a lot of names that have been raised, and they tend to be companies that potentially have issues in the United States or who are eyeing entry into the United States. It's a lot of names around the auto industry, such as BYD, Xiaomi, CATL, Goshen. These companies have either not confirmed with us or have told us, in fact, that their chairman, for example, with Goshen, is still here in China. Of course, that doesn't necessarily mean that he won't be able to travel later in the week if necessary. You know, we're talking obviously here a lot about China's relationship and oil buying with Iran.

8:01Younis, you're there better than anybody. You read the media. You watch the media. You mentioned the talks went well. Is there any talk at all in the local or national media there about Iran, about the Iranian war? Well, there has been some admission on the Chinese side that there could potentially be some help coming, that they might be involved, just because the Saudi factor, that the Saudi have actually looked for help and that the Chinese have started to make some initial noise that maybe they might be willing to step in and try to put a little bit more pressure on Iran. Not exactly clear exactly where all this is going to go, but we are starting to hear more conversations about that, which then, of course, could be a factor that we would see in the discussions with President Xi and President Trump later this week.

8:51Eunice Yoon, live in Beijing. I guess I would say good morning, Eunice, since it is tomorrow morning. Eunice, thank you very much. All right, so your next guest says, keep the expectations for that Trump-Xi summit on the lower side. Tobin Marcus, the head of policy and politics at Wolf Research, just put out a new note called Five Things That Won't Happen. And number one of those five things, I feel like it's a game show, Tobin. Number one on those five things that won't happen, China is not going to force Iran to end the war or force Iran to force the Houthis to end the war. Why do you think that?

9:30Thanks for having me, Brian. Well, to start with, it's really not their way to insert themselves into these kinds of international diplomatic situations that way. I do think they are hearing the entreaties from the Saudis to try to get more involved. But it seems like what's happened so far is essentially they asked the Iranians, would you consider cutting it out a little? And the answer they got was no, not really. We need to resolve this diplomacy with the US. So that's what we're expecting. I mean, back in February and March, there was an idea that the The Chinese would pressure the Iranians into capitulating.

10:01That, of course, didn't happen. And back in 2022, I remember this was the thing that was going around when people were hoping that the Russia-Ukraine conflict would be quick rather than the protracted mass it's ended up being, that perhaps the Chinese could get involved to pressure the Russians to, you know, trim their sails. And it didn't happen then either. We're four and a half years into that. We're about six and a half months into Iran. And to your point, Tobin, China has not gotten involved, at least on the public side. I mean, maybe they're doing it privately. We don't know. Is there any sign?

10:32I know you've been writing about this as well, that that the Iran U.S. conflict slash war, whatever you want to call it, is going to come to some kind of real resolution anytime soon. I don't see it. Yeah, I wouldn't say anytime soon. But I do think that the diplomatic track is warming back up after months of just complete stasis. In general, I think that in the period since the MOU, most of that time, the White House has felt that they could apply economic pressure in a largely costless and sustainable way. If oil was not going to get above 90, if we didn't have these acute problems with diesel and yields and just hope for the best.

11:08I think that calculation has changed and it's led to that diplomacy sort of restarting. I think it's not an accident. We're hearing the same kinds of messages from President Trump. We were hearing in May that, you know, maybe he'll escalate or maybe he'll make a deal. I think that escalation is not realistic based on where we are with weapons stockpiles. Yeah. All right. So let's talk about the other expectations from that meeting, which you say, keep low. We're going to get some kind of a big deal on trade. Do you think we're going to get some kind of a big deal on cars? And what do you think about sort of Europe and Canada not to insert another country and continent into the story, Tobin?

11:42What do you think about their relationship? Because the U.S.-Canadian relationship, at least from the top, top levels, does seem frosty. Yeah, from a U.S.-China perspective, I mean, look, we are, it seems, headed for some minor bilateral tariff relaxation through this Board of Trade. That's welcome. I think that's good. I'm glad they're doing that. But beyond that, we've been getting lots of questions from investors based on President Trump's comments about U.S. auto market access for Chinese OEMs. And I would be very, very, very surprised if we get anything concrete on that dimension. You know, there's no evidence that staff work has gone into that.

12:15I think it's extremely politically fraught. There are real security concerns as well. So I'm putting very little weight on those comments. He's been musing about that publicly since 2024, at least, and nothing has happened there. In terms of Canada, I mean, ultimately, I think we've seen a revealed preference from this White House that they're not willing to just blow up the North American trading zone in the structure of the tariffs they've actually rolled out on Canada and Mexico, both nationally and from an auto sector perspective. And so we have this trade dispute going on. We have a lot of bad blood, but we're only tariffing 5 % of each other's goods.

12:46And so I think ultimately that's still contained. And we do still want to land a renewed and extended USMCA at some point. All right. And finally, this it's September 21st. Tobin, I saw Halloween decorations at a store. So it's it's not too early to talk about the midterm elections, which are a couple of days after Halloween. Do you think the Republicans, which have a very real chance of losing one or both houses? We don't know, but certainly the polls are just razor thin. And do you think they're going to try to go out with some kind of a bang, like some huge fiscal package, some kind of thing where whenever we see one party in charge, they like to pass giant bills, spending bills, all their stuff, because they're worried that they may not be in charge in a couple of months?

13:28Right. So the thing that changes most clearly after the midterms, assuming that Republicans lose at least the House, which certainly is our base case, is that they lose that ability to pass fiscal packages on a party line basis, because that's what you can do with unified government. And so we have been getting some questions about whether or not they're going to go out either with a big defense spending package, maybe with some stimulus to kind of continue the tailwinds of the economy from the one big, beautiful bill. And if you think of them as monolithic, it does make sense to use their last opportunity.

13:54But it is not a monolithic party. I think when you actually look at who's in Congress, there's a lot of fiscal concern and there's a lot of disunity about some of these priorities. And so I strongly suspect they're not going to have the votes to do something very big. Maybe a small defense spending package, but nothing, nothing. Base case, they lose the House. What about the Senate, Tobin? I think the Senate still leans slightly Republican, which, you know, is a different. The betting markets now are 60 percent Democratic. And the polling has Democrats up in enough states to get to a 52 seat majority in the Senate.

14:24So it would not be shocking for them to win the Senate by any stretch. I think it's, you know, a toss up leaning left or a toss up leaning right. Could there be a senator? Could there be a senator from a pretty well-known state that rhymes with Pennsylvania that flips? Yeah, Democrats have been actively worrying about that. I think if you end up in exactly the 51-49 scenario where Fetterman could kingmake by switching to the Republican Party, it's a live possibility. One of the reasons that I'm not convinced Democrats are going to take the majority, although not the strongest one. He said he won't do it, so I take him at his word for now, but it's definitely a possibility.

14:59Tobin Marcus, Wolf Research, love your stuff. Five things that won't happen, maybe some things that will. Tobin, appreciate it. Thank you. All right. Staying in Washington on different news, the three news outlets that President Trump says he is banning from the White House are now banning together to sue. And they've got a federal judge trying to reverse the president's move. Eamon Javers at the White House with the latest on this story. Eamon. That's right, Brian, that lawsuit dropping this morning. Here's the statement, an unprecedented statement that we got from the network TV pool today, suspending pool coverage of the president.

15:31And we'll see how long this suspension lasts. The Fox News producer in charge this morning writes, this is to advise that effective today, the TV pool will not be covering events designated as pool coverage of the president. This follows the White House's position preventing CNN from fulfilling its assigned pool duties. There will be no replacement pool put in place. All other pool coverage will continue as normal, including Congress, VIPs and selected events in Washington and around the country. We will provide updates as this situation develops. Now, guys, there's been continuous television pool coverage of the president since the Kennedy administration.

16:09Today will be the first day that the networks have been unable to cover the president with very limited exceptions in that entire time. And the reason is that CNN, which is one of the five members of the television pool, was banned by the president from the White House grounds on Friday. CNN was scheduled to provide travel pool coverage today, meaning they would film the events that the president has during his trip to New York this afternoon. Normally, all of that video is fed out to the other networks and aired to the public. And today, it appears that at least for now, that won't happen. The president issued a social media post after the lawsuit was filed today.

16:43What he said is the White House is not instituting an assault on the free press, something which I cherish. It is instituting an assault on the fake news, something that has grown like cancer in our beloved United States of America. It is corrupt, purposeful, pervasive, fully coordinated, and totally out of control. It is a threat to our national security and must be stopped now. Brian, we should note that MSNOW is owned by the same parent company as CNBC, which is called Versa Media. Back over to you. All right, so for our viewers that are not in this business, right, they hear the term pool, maybe they think it's something in the backyard with water in it.

17:18Explain how this works, right? Right. Alternating news organizations are on like a rotating schedule to provide the mass coverage. Like what would be a better name than pool for the overall audience to understand why even shutting out a couple of news organizations, to your point about Fox, can shut out everybody because that schedule of coverage is altered. So what you see on television of the president of the United States is largely provided by the television pool. That's five TV networks, the big ones, that rotate each day covering the different presidential events. They'll go into the Oval Office.

17:53They'll go on Air Force One. They'll shoot the president if he's giving a forum somewhere, speaking to a group, meeting with a world leader, all of that for that day. That is an enormously technically complicated and expensive thing to do. Requires a lot of staff. We, the media, pay for our own seats on Air Force One, which is a very expensive thing to do. So all of that travel and logistics is handled by the television pool. And that's why you can see images of the president wherever he speaks, whenever he speaks. And they rotate. They take turns doing that. And what the networks are saying today is that because CNN was scheduled to be the travel pool today, they're not going to step in and fill that slot because they're not going to do it.

18:35Solidarity with their colleagues. Even if sometimes there seems to be, you know, a political difference between the networks, whatever. Here's the reality, right? Like in our building in D.C. where you work every day, Aiman, pretty much all the networks are in the same building. There's a lot of camaraderie between the news agencies, even if the viewer doesn't see it. And a lot of people like on the camera side, they'll bounce between companies. These are people that greatly respect others, even amongst networks that viewers may think have some sort of ideological difference, right? This is a small industry that is getting smaller, but I think there is some still band of brothers type thinking in this.

19:16I think so, Brian. I mean, look, all the networks, you know, it's NBC, CBS, Fox. You just list those three and you can see three different sort of perspectives on the news. Right. And they're all agreeing today that they do not feel that it's appropriate for them to step in and pick up the slack for CNN, which has been banned. What they want is the president to reverse himself. We'll see whether he does. You know, the tendency and temptation for White Houses for years has been, you know, they want to cover themselves. They'll hire their own crew, film it themselves, put it out on social media, put it out wherever they want to put it out and try to do an end run around the media, which they don't like because it's independent and asks prickly questions and rolls video that they don't necessarily approve of.

20:04They want to control it. And we'll see with the technological changes, the changes in the business models that you've seen recently, there might be no better time for a White House to try to do that than now. And we'll see whether that whether they do it and whether that effort is successful or not. Eamon Javers at the White House. Eamon, appreciate it. Thank you very much. All right, folks, coming up, the NASDAQ may be up 2 % right now, but your next guest says the market is likely to retest the recent lows before the end of October. We'll find out why next.

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21:23Whether expanding your portfolio or planning your future, you'll be able to access tailored wealth guidance on your time. Start building with Gemini at cloud.google.com slash AI. Citi wealth investment products and services are provided by Citigroup Global Markets, Inc. Member FINRA and SIPC. This 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.

22:00Download the latest episode and subscribe at schwab.com slash marketupdatepodcast, or find Schwab Market Update wherever you get your podcasts. All right, welcome back, everybody. Stocks were at session highs right now, or not at session highs. But earlier today, the word session highs, the Nasdaq is up about 2%. Today was up 2.5 % earlier today. That would put it, by the way, in a top 10 day for the Nasdaq 100 ever. We're not there right now, but it's doggone close. A drop in oil prices. Oil is down about 5%, bringing yields down. Both of those things helping sentiment as well. And that combination is one reason that your next guest sees a short-term relief rally, but the emphasis maybe on short term because he also thinks we could retest the lows soon.

22:45Lows of when is the question. Let's find out. Sam Stovall is chief investment strategist at CFRA. Sam, welcome. First off, what's going on today? Like this monster move in tech. I understand it's Jom Kippur. Volumes might be a little bit light, but this kind of monster move seems to have come out of nowhere. Yeah. Hey, Brian, good to talk to you. Well, what's the old saying? sell Rosh Hashanah by Yom Kippur. So from a cycle or seasonal perspective, that has something to do with it. I think also technicians feel that we might be in the process of confirming a bullish flag breakout. And so right now, since we have four weeks to six weeks between now and when we'll get more data in terms of Q3 earnings, in terms of inflationary information and the next FOMC meeting, I think investors are going to be rotating, trying to jockey for position with sectors and also looking very closely at the charts.

23:49But you obviously don't think that the all clear medium term has been sounded. Not necessarily. I think there is still the possibility of volatility because investors have to decide we are now in a new rate tightening cycle. It's most likely not going to be a one and done like in 1997. So I think that's going to be increasing the likelihood of volatility. So we have to see what kind of earnings growth might likely be maintained. But I'll end this on a positive note, that being from October 31 of midterm election years through October 31 of the year after, the S &P has never declined since World War II, and the average total return has been in excess of 20 percent.

24:37Those are pretty bullish stats, Sam. But you're worried or no? Am I worried? No. I'm sharing what could go on because I want to make sure that our readers, your listeners and viewers don't allow their emotions to become their portfolio's worst enemy. So, yes, we're seeing a breakout now. It might end up being sold into. However, if you look longer term, it actually would represent still a good buying opportunity. Well, that's that's good news. I mean, listen, you look at it like I know you're not a meta analyst. Don't worry. But Meta is adding one hundred and eighty billion in market cap today.

25:13A lot of these stocks where people were kind of like, well, it's time to move on. The market's broadening out. Let's just buy small cap value. Guess what? Not today. Many of the names that were hot in the summer that kind of got left alone for the last two months, they are back today? Do you think it's like a one-day wonder, Sam? Well, I think it's because the earnings have yet to disappoint. Expectations are that while we saw 75 % growth in earnings in Q2 for tech versus 60 % expectations, we've seen upward revisions to Q3, to Q4, and all of 2026. And at the same time, we've also seen improvements in earnings expectations for communication services and in particular for Meta, which we still have a buy recommendation on.

26:01Yeah. Also, you like Cardinal Health. Speaking of broadening out, let's get a pick on this Monday quickly. Why not? Sure. Cardinal Health. Well, tailwinds from, you know, this oncology and biopharma developments. This company also recently bought the diabetes health segment of Adapt Health. And so our belief is that good momentum behind it that has a ways to go. Sam Stoball, CFRA. Sam, great day to have you on. It's always a good day to have you on. But today, especially Sam Stoball. Thank you. Thank you, Brian. All right. You're welcome. On deck. First, it was Anthropic and OpenAI who are kind of going rogue and hacking into companies.

26:39Now, apparently, Gemini did not want to be left out. But there's a big difference in the way that Google's AI model handled the hacking. I'll tell you what that is next.

27:34Thank you. at G-O-O dot G-L-E slash workspace with Gemini. Weren't agents supposed to take things off your plate? Building another to handle the others is a bit much. Don't make more work out of work. Gemini is the one agent that knows all parts of your business and actually gets stuff done. You give it a project, close your laptop, and when you come back, the job's finished. No matter your industry or role, your agent has the skills to help every team stay in their flow. Seriously, make work less work with Gemini on Google Cloud. Check response, subscription required. Introducing Fidelity Trader Plus, the next generation of advanced trading from Fidelity.

28:17Customize your tools and charts and access them seamlessly across desktop, web, and mobile. For faster trades, anywhere you go. Try the all new Fidelity Trader Plus. Learn more about our most powerful trading platform yet at fidelity.com slash trader plus. Investing involves risk, including risk of loss. Fidelity Brokerage Services, LLC. Member NYSE SIPC. All right, welcome back. Google's Gemini becoming the latest AI model to break out of its testing environment and hacking into three other companies. Doesn't sound good. Let's find out exactly what's going on. Mackenzie Cigalos has more in today's Tech Check.

28:56Mack. Hey there, Brian. So Gemini is now part of an AI safety debate that Google had largely managed to stay out of. The company telling me that during a cybersecurity test, Gemini was supposed to target fake companies. But because of a flaw in that test, the model was able to get onto the open Internet and then ended up breaking into the systems of three real companies. But Google says once Gemini realized that it hacked its way inside of actual enterprises, not the fake targets that had been assigned, it stopped on its own and didn't try to cover its tracks. the company telling me that's one reason it treated this more like a traditional cybersecurity incident and didn't publicly disclose it when it learned what had happened this summer.

29:37Now, Google has reason to want to stay out of the rogue agent narrative. Its cloud business is growing 82 % year over year, with enterprise demand for AI and Gemini helping drive that acceleration. Alphabet's Sundar Pichai has also been notably absent compared to other tech CEOs in this debate over whether increasingly powerful AI should be slowed down. But he will be in Washington this week as that safety conversation moves into bilateral talks between the U.S. and China. They are looking at a mutual notification system for out-of-control AI agents. And this news from Google really underscores the multiple calls for action from the likes of Elon Musk and Dario Amadei.

30:17What kind of action? Calls for action. That could mean a lot of things. Do we have an idea as to what that might mean? I mean, there's been this entire debate about whether or not you can actually implement a coordinated slowdown across the labs. And so on one side of this, you have NVIDIA CEO Jensen Wong along with David Sachs. And for the most part, the White House, we got some fresh comments from Trump not too long ago saying that the DOJ would get involved if they had to another U.S. law enforcement. But on their side, they're saying that a lot of this narrative is overblown. We don't really know where Google stands on this.

30:49We've heard from Demis Asabas, who recently moved into more of this chairman role over their AI lab. So less direct control. We have not heard from Alphabet CEO Sundar Pichai. But then on the other side of this debate, you've got names like Dario Amadei, Sam Altman, even Elon Musk kind of coming together with this idea of we need to slow things down. But of course, the question is that only works if you have a coordinated effort with China as well. Of course, they've had some of the biggest advancements on the open source front. And so there's this question of if you force a slowdown in the U.S.

31:19but not in China, then do we just ultimately fall behind? That's a concern of the White House. Unless it is pull a fleet with Mac and go their own way. Speaking of Mac, Mackenzie Sigalos, appreciate it. Thank you. Thanks, Brian. All right. Now let's go to Christina Parts of Nevelis with a CNBC News update. Well, after years of lawsuits, Tesla is headed to court today in Oakland over a lawsuit filed by the California Civil Rights Department back in 2022. The agency claims black workers at Tesla's Fremont, California plant were subject to harassment and that Tesla failed to prevent or stop it. The company denies any wrongdoing and says it does not tolerate discrimination.

31:57German Chancellor Friedrich Mertz vowed to continue his reform agenda today after his conservative party suffered its worst election defeat since 1949. The far right AFD party took first place in elections in what Mertz called a disaster. He was elected last year on the promise of returning Germany to growth. And the FAA is expanding a ground stop it issued earlier for Newark Liberty, Philadelphia International, as well as Teterboro Airports because of an equipment outage affecting air traffic control. The agency has now expanded that ground stop to include New York's JFK as well as LaGuardia along with Logan Airport in Boston.

32:35The FAA says the problem started when a backup fiber line in Philadelphia was accidentally cut by a construction crew. So I want to get this straight. The busiest airports in America, New York City, right, have a partial ground stop on UN week. This is the busiest week of the year in New York City. If you want to stay in the bed bug in in Manhattan this week, it's twelve hundred dollars a night, maybe on the cheap side. And now we have a ground stop at Newark because somebody clipped a fiber optic line at Philadelphia Airport? The bed bug in. Yes, that is the case right now. It's not a real place.

33:12I just made it up. Yeah, I'm assuming it's going to just take a few hours. But perhaps it doesn't affect all of the private jets flying in, though. Just a minute. Teterboro is going to be busy. I know that. Private jet airport. But wow. This is not. You never want to have ground stops. I basically live at Newark Airport. This is not good. Christina Partsinevelis, always know where you're digging. Thank you. All right, on deck. Nike hitting its lowest level in more than 12 years, and now they're losing one of the world's biggest athletes as one of their names. Why is Kylian Mbappe, one of the biggest global soccer stars in the world, leaving Nike?

33:52We'll talk about it coming up.

33:57Meta is on the move. Meta stock, the parent company of Facebook, is up 10 % right now. It's up to its highest level since January. You got 26 million shares trading hands today. That is well above average. Companies adding$180 billion in market cap today. I just did the math. That's like adding 18 Snapchats of value today. There's a lot of excitement around the release of its Muse AI agent. Shares of Meta now up 28 % in September. That is on pace, folks, for its third best month ever. Joining us now is Tom Champion. He is Senior Research Analyst at Piper Sandler. I feel like your name is appropriate because Meta is a champion of investors today.

34:43I mean, is taking number one in the Apple App Store worth$180 billion in market cap added today, Tom? That does sound like an awful lot of dollars in valuation. But I think there's no question that Muse is off to a great start. It's being very well used, as we can see in the App Store. The ratings are very high. And so the market is coming to terms with the fact that maybe Mark Zuckerberg's investment plans are fairly rational after all. I think he's getting a lot more credit deservedly. What is this going to do for their business? How is this going to add to earnings? How is this going to expand the multiple?

35:25Well, Meta has, over the last two decades, become just one of the dominant media franchises where people spend their time online, right? I mean, it's 3 billion people daily go to their apps, and there is a new use case in AI and agentic applications. And what we can see is that in the early going of this new space, Meta has developed a very potent product. I would say, and some people don't like Meta's products. I get it. They don't like Mark Zuckerberg, whatever. Doesn't matter, whatever. Some people don't like Elon Musk. Some people bizarrely don't like me. Who knows? I mean, Tom, you can't claim for taste.

36:12That said, is Meta's business almost a utility at this point? Because people are like, I hate Facebook, as they're logging into Facebook. Yeah, I think it's maybe a business people love to hate because maybe it's not as productive a use of time scrolling through Instagram as, you know, maybe going to the gym or something like that. But it is ubiquitous. It is kind of a utility. And it's kind of an advertising toll road at this point, right? You can't not be there if you're an advertiser. And just quarter in, quarter out, they stack up the growth. OK, I got to pivot. Netflix, Netflix, maybe the opposite of meta here.

36:54Netflix, a multi-year low. I understand they had K-pop, Demon Hunters, they had Squid Games, they had the Stranger Things reboot or final season a short bit ago. But otherwise, not a lot of talk about Netflix in sort of the metaverse, if you will. Tom, you think the answer might lie in what you call or others call micro dramas, like three-minute clips? What is this? Yeah, look, I mean, it's not been, terrific the results of content consumption on Netflix. I don't think we're standing around the water cooler talking about the latest Stranger Things, but Netflix also is a consumer and video staple.

37:45And with the stock where it's trading right now, there is a heck of a lot of bad news priced in. And so I think that the question is whether or not Netflix can evolve and change from here like they did with password sharing and cracking down on that and spinning up an ads business, which they've done super effectively. And we think the challenge in front of them today is they need to work on the content for a mobile form factor, right? I mean, it's, you know, video viewing is not strictly done in the living room anymore. It's all day long on our phones as we commute in the subway and wait for flights at New York airport.

38:29Right. So so so, you know, we think micro dramas is kind of a a new vertical mobile format that is a lever that that Netflix can can pull. Making a business model off of multiple four and five minute segments every day. Who could have thought of that? Oh, with that, we're out of time, four and a half minutes. Tom Champion of Piper Sandler. Tom, it's a pleasure to have you on. Thank you very much. Thanks. All right. Meantime, speaking of media, Paramount Skydance's merger with Warner Brothers Discovery is set to happen. This after a California-led group of state attorneys general who sued to block the deal announced that they have reached a deal.

39:11I want to be clear about something right up front. This settlement is not a vote of support for this merger. It is not a blessing of the broader merger. Broadly speaking, we believe further consolidation in markets that are central to American economic life. Doesn't serve the American economy, consumers or competition well. In other words, it's about money. The settlement includes the creation of independent editorial boards for CNN and CBS, a commitment to spend at least$300 million on production in the United States and make at least 30 movies in the first two years and 32 movies in years three and four, making sure a lot of people are employed in L.A.

40:01All right, coming up, diesel prices. They are at a nominal record, not an actual record, but closing in on that. There is not much trucking companies can do about it either. But Phil LeBeau is showcasing how one company is cutting costs elsewhere by cutting out the driver. Wall Street sees huge potential for autonomous trucking, especially with approximately 3.5 million Class A semi-trucks registered in the U.S.

40:34All right, welcome or welcome back. Autonomous trucking, i.e. no drivers or less driver, has long promised to cut costs and help ease a shortage of drivers. But is it real? Well, Phil LeBeau got a firsthand look at that technology in action this morning. You're still there, Phil. You're alive. So I assumed this did work. It was the most uneventful ride ever, Brian. It was not a it wasn't white knuckle. I wasn't worried. You know, it was like driving down the highway in any other vehicle. Look, the reason that we're here in Palmer, Texas, is because, and this is some of the video, we went on one of the first commercial runs with no driver behind the wheel for Aurora Innovation, which has been developing autonomous trucking technology for some time.

41:20Look, these runs have been going on with a safety driver behind the wheel, not just at Aurora, with a few other companies as well. That's been happening for a few years. What is different now is that you see the transition to commercial runs with no driver. So let's be clear here. Customers are paying for these runs to happen with nobody behind the wheel. In September of this year, about 20 Aurora trucks, autonomous trucks, they expect to have by January maybe 200, roughly in that area. They've got partners with Volvo and Paccar International. We were in that truck today. Those are the areas where they expect to grow.

41:55And when we talked to the CEO who was on the run with us, he says he expects this to be an inflection point for growth. We put the thing through 15 million tests before we let it out on the road. And over the course of this year, we expect to get to 200 of them on the road by the end of the year. 200 by the end of this year. And then growing next year, we'll be producing 20 trucks a week by the end of the year. Here are the routes where currently Aurora is running autonomous truck routes between Dallas and Houston. Fort Worth, down to Laredo, El Paso, out to Phoenix. But Chris Urmson says this will expand and they expect to be testing in other weather, colder weather, snow over the next year as they work into northern regions as well.

42:41The reason we're showing you shares of Aurora Innovation, and I asked Chris Urmson about this, stock really hasn't done anything. Despite the fact that they see a lot of promise in autonomous trucking, they expect that to change. They're going to be talking about that at their investor day in a couple of days here in Dallas. Bottom line is this, Brian. Autonomous trucking is here. Now, is it going to be widespread? Will you see this all over the place next year? No, but it is going to grow from here. And Aurora believes there is a path to profitability over the next couple of years as more and more shipping companies say, yeah, I like the economics of taking the driver out.

43:16By the way, Brian, 85 cents a mile without a driver,$1.18 with a driver. That's the projection from Aurora. And listen, I know you're there to cover Aurora. Great story. Great job. So I don't want to put you on the spot, Phil. You're probably following the fact that I think every New York City airport is now either partially down or all the way down. I'm not exactly sure. But even the private airports, because of a fiber optic line cut in Philly, if you're trying to fly into New York or out of New York, LaGuardia, Newark, JFK, Teterboro, White Plains, there, I think, all the way down. Tell us what you know, and at least tell us how important is New York City airspace to the rest of the country also.

43:56Sure. Yeah, it's the most congested airspace in the country. It's the number one air market in terms of flights going in and out of New York City. So the ripple effects will be felt. Look, I know people here in Dallas who are trying to get back to New York. They're not getting back on their original flights. Everything is being pushed back. The ground stop is in place. But when the FAA, the head of the FAA, was giving a briefing just a few minutes ago and he said, look, this is because a fiber optic line was cut. That was the reason that this happened. He also said that they expect them to restore service.

44:26And then it takes a matter of time of restoring and lifting the ground stops that we see for all three of the New York airports. I think it also impacts Boston as well. Philly, I think, is impacted. But you're right. I mean, this is not just an issue for that area. It's an issue if you're flying out, you know, to the West Coast or from Dallas into New York, etc. Yeah. I guess my question to you is, Phil, where are you staying in Dallas tonight? Because it could be tough getting home. We'll see if that plane can get there. Phil LeBeau. Thanks for jinxing me. Thanks for jinxing me. That's the reverse jinx.

44:57If I say that, your flight's going to leave early. Phil LeBeau, thank you very much. All right. The Exchange is back right after this. soccer star Kylian Mbappe ending his 20 year deal with Nike he is moving to On that is the shoe company that competes with Nike it's another blow for Nike in a stock that's already down 44 % this year let's talk about it with Brian Nagel he is senior analyst at Oppenheimer I don't know if Kylian Mbappe's departure is going to hurt Nike or not Brian maybe you do he's been there 20 years as a giant global star the bigger question is sort of like where's the bottom for Nike Like, how much longer can this stock keep going down?

45:37Hey, Brian. Good afternoon. You know, look, I'll say what I've been saying to our clients here for a while is, you know, the near term remains very uncertain for Nike. You know, I think it's become clear now that this repositioning, while I think it's happened, you know, there definitely have been positive signs out there, you know, particularly in categories like casual running. But the repositioning at Nike is taking longer than initially expected, initially hoped. And look, our advice, you're asking the question at the bottom. The stock is cheap. By almost any traditional measure at this point, it's cheap.

46:09But in this consumer take, given the bigger concerns out there from a macro standpoint, elevated oil prices, ongoing trade disruptions and such, it's hard to really call a hard bottom, even a stock like Nike. I think longer term it works, but I think the near term is going to remain challenging here. What do they got? Give us the bull case. You're bullish on the stock. I know your price target's well above where it is now. So, Brian, what's the bull case for Nike? It just can't get any worse or what? Well, look, I mean, the bull case is that over any length of time, you know, when you're looking out, say, two, three years.

46:45I mean, despite Nike's troubles lately, this remains an extraordinarily powerful global brand that's very difficult to replicate. You know, so then what that basically does is it gives Nike and this management team flexibility, time to figure it out, time to get that sales growth, that earnings power back. Now, that could take time. But that's the bull case. So here we are. We're sitting here two to three years from now. We're looking back and saying, look, Nike was struggling, but the management team figured it out. They figured, you know, they reinvented, they reinvigorated products. They reestablished relationships with their key wholesale partners.

47:20The product is once again selling well in the United States and elsewhere. And you're seeing this reestablished earnings power. That's the bull case. It's just right now. And I want to make the point really clear. It's Nike is turning around. And I've said I watch the stock and the story very closely. Nike is turning around in a very, very difficult macro backdrop. I know. Yeah, Brian, I hate to cut you off, but I know a lot of Nike bulls out there certainly are investors and employees. Hope you are correct. I've been having this Brian Nagel. Brian, thank you very much. Folks, we are done here.

47:51I will see on the other side of this break a power lunch. The markets are higher. Oil is down. And if you're trying to fly to New York City, you're not. We're back with all that right after this.

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