Closing Bell - Closing Bell: 10/1/25

Episode Date: October 1, 2025

From the open to the close, “Closing Bell” and “Closing Bell: Overtime” have you covered. From what’s driving market moves to how investors are reacting, Scott Wapner, Jon Fortt, Morgan Brennan and Michael Santoli guide listeners through each trading session and bring to you some of the biggest names in business. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to Closing Bell. I'm Scott Wobner, live from Post 9 here at the New York Stock Exchange. This make-a-break hour begins with a new quarter for stocks and what feels like a one-sided argument, with most making the case that stocks are heading higher from here. We'll ask our experts over this final stretch, whether they agree with that or not. Here's the scorecard today with 60 to go in regulation. We've been mixed throughout much of the day, though we have a little bit of a build here. NASDAQ, good for about a half percent. S&P, not too far behind that, above 6,700.

There, of course, the Dow in the green as well. Yes, we're watching the government shutdown today. ADP was much weaker. The Supreme Court today saying the White House cannot immediately fire Fed Governor Lisa Cook. So that saga continues. How about Nike today? It's a standout following its better-than-expected earnings report. Chart looks good up 6% today in what's been a much-needed burst for those shares.

We have top retail analyst Matthew Boss coming up in just a bit. Looking forward to that. Healthcare names. They're big winners today. Merck, Pfizer, and Moderna, among the biggest names today to watch, and we will. It takes us to our talk of the tape, the risk and rewards in these markets as we begin the year's final quarter. Let's welcome in now our closing bell headliner. He's Mark Lazary.

He is chairman and CEO of the Avenue Capital Group, and he is, as you see, back with us at Post 9, and we're so happy to have you. Nice to see you. My pleasure. So I want to talk to you about a lot of stuff, but I want to start with credit, okay? Your wheelhouse, private credit, okay? There's a bankruptcy of first brand. It's an Ohio-based auto parts manufacturer, but a lot of stories being written about it. People are talking about it, wondering whether it's the canary and the coal mine, so to speak, of private credit.

They borrowed a lot of money away from banks. You've had talk about the so-called shadow banking system for a very long time. Then there was another, a subprime auto lender, tricolor holdings. They filed in September. They had strong credit ratings, and then all of a sudden, here they go. these things to worry about in what people have been talking about as one of the hottest and fastest growing asset classes out there, private credit? Look, it's an issue, and the reason it's an issue is pretty simple.

What ended up happening is you were able to borrow money very easily, so you borrowed more than you needed, and you did it on aggressive assumptions. So if anything ended up happening that was bad, you were going to have a problem. And that's what's happened with these two companies. So if you look at what's happening in the market, what's happening is the economy is slowing down. So because of that, you're going to have less growth. You're going to have less earnings. So you're going to have more issues.

So this could be the beginning. But the one thing that you've got that I think could save everybody is if the Fed keeps slowing rates, because then the cost of that capital is going to keep going down. Okay. So Jamie Diamond has been one of the more outspoken voices about private credit. thinking about what might happen down the road because of the explosive growth in the space. He's called it a, quote, recipe for a financial crisis. The size of that market's now $2 trillion. His point was exactly yours. It hasn't really been tested in a moment of economic, either weakness,

or any level of distress. And some are saying, well, maybe this is the first sign of that. Another expert I read put it as private credit quote is built on optimism and opacity. You hear that kind of stuff and you think what? I don't disagree. I think it's definitely built on optimism because you've had sort of 10 years of just positive growth. So people assume things are going to keep working out. If anything slows down, that's going to be a problem. And do you have enough to cut expenses?

So on all the companies we're seeing today, able, what we're seeing is there's a greater need for capital. And the simple reason for that is because people are having issues, right? So I think if that continues, you are going to have a mini recession, but I think the fact that the Fed is lowering rates might end up staving off that recession. The issue in and of itself, and you alluded to you smiled when I read it, it's like the opacity of that market. I mean, you've seen a lot of markets come and go.

You've seen a lot of things in these markets over the decades that you've been doing this. I mean, when you have opaque markets like shadow banking is, you open yourself up to potential issues down the road that people don't foresee. That's the problem. I totally agree. Here's the issue. If you told me everybody who's lending money at four times EBITDA, I would tell you it's not an issue. If you're telling me it's happening at six times or seven times, then it's going to be a problem.

And that's the opacity that you're talking about. So since we don't know at what level people are lending, that's why you could have problems. And that's why Jamie's saying what he's saying. You're a lender, right, to people who come to you. You have a specialty lending business. We've talked about it almost every time that you've been here with me. I mean, how are you thinking about it? What's the status of it?

Is it still robust? It's very robust. But, again, we lend money when people have no choice. right so we can dictate the terms and that doesn't mean we can lend out a trillion dollars but what it does mean is you can lend out a billion dollars or two billion and that's what we're doing and we're doing it at a three multiple or a four multiple so we think we're more than adequately covered what's happening on the private credit side is nobody really knows what's happening there and is this the beginning or of the end i don't know because i don't know at what

levels they let money. One of the caveats, of course, in some of the concerns here, and you mentioned it a couple of times, is if the Fed continues to ease rates, what are your expectations there now that they've started cutting once again? I think they're going to have no choice and keep cutting. I think you're going to see it happen faster and quicker, because if the consumer slows down, then you're going to have less risk for inflation, and you've got more risk for a recession. And I think that's where we are today. I don't think we're going to be as worried about inflation. We're going to be more worried about a recession. So, I mean, they've had, you're sort of speaking to the tension that has existed within the Fed. You know, and inflation's still

above target. Now you're worried about the labor market growing weaker. I mean, ADP today, not that it's the gospel by any means, was decidedly weaker than expectation. But the Fed certainly feels like it's made it clear. It's going to err on the side of the labor market falling apart, and it can deal with inflation north of 2% if it has to because it has to look out for the other first. It does, and I think right now the Fed's been very worried about inflation, but now you're going to see it be very worried about a recession. So you'll see rates coming down, and as rates come down, it's going to make it easier for companies. So you think they'll cut two more times this calendar year, or how do you foresee it? They should.

They should. I know they'll cut at least once. You think they should have gone 50 basis points last time? I think they should have. I think it's, You always want to air on the, like, be more careful. Like, why not make sure there's no issues with the economy? And to me, you need lower rates because you're going to find that things are getting worse out there right now. Wow, so this might be one of the few things that I've ever heard you and President Trump agree on. He's a good man. I hope he's watching.

Seriously, though, like, you know, he's been making the case that rates are way too high. The housing market is stuck with zero activity. Do you think that he and the administration are on to something there? That rates need to be much lower than where they are? I think rates do have to be lower because if you look at the average American, the biggest asset they have is a home. So the more you're spending on interest for your home, the harder, you know, the less dollars you have.

So I think lower rate, you're going to find more people buying homes. I think you just need lower rates to sort of fuel the economy. So I'm a big believer that you want to have lower rates. What about the idea of Fed independence? How do you feel about that? That I actually believe you do want Fed independence. I think ultimately at the end of the day, you want the Fed to be able to do what they think is right

without worrying about sort of pressure from a president. You worry that we're on the precipice of losing that independence? I don't think so. I think the Supreme Court just said, right, that the president couldn't fire the Fed governor. And I think ultimately at the end of the day, presidents do pressure the Fed. I think President Trump has done it more than others, obviously. But I think going forward, the Fed needs to be independent because that's how markets want to feel that there is that independent.

Okay, so we talked about credit already, but I want to talk about what you're really leaning into now. You've just closed a billion dollars for your sports fund, and you're going to deploy that capital now, principally where? What's most attractive out there to you now? So you've got huge opportunities in the sports landscape today. So we've already invested about half a billion dollars of that billion. We've invested in bull riding. We've invested in sailing. We've invested in baseball.

We've invested in NASCAR. We actually are investing in women's sports. We're trying to buy women's soccer teams in Europe. We're looking at investing the same thing in the United States. We're trying to do things in minor league baseball. You've got just huge opportunities everywhere. WMBA is also, I think, a pretty large opportunity. You've got to compete there.

There's another bidder for the team of the Connecticut Sun, right? Yes, there is. So you guys are in people of competition. How do you think that's going to play out? Well, I would ask them to pull away. They may ask you to up your bid. They may ask me to up the bid. Like, I think ultimately what we're trying to do is get involved.

It is going to be a question of price. And a big part is also, where's the location? You know, are we going to stay where they're playing today, or are we able to sort of play in Hartford or in different jurisdictions? Speaking of upping bids, I mean, the amount of money that is now being spent on sports teams and the valuations where they're going is, incredible. I love your thoughts. It feels like it's just going up, up, up, even when people tell me they just don't go up forever. Well, they sure as heck appear to be. Yeah, they've been

going up quite a bit. I think part of the reason is you're seeing that the demand for live entertainment is actually the one thing that is holding up in the whole media landscape. So you're seeing with football teams today that there's a huge amount of demand for that. You saw the Chicago Bears. You saw the New York Giants. A lot of the football teams and sort of the owners are selling pieces of that. We've been looking at trying to get involved in that. So hopefully we'll be able to participate. Oh, so you still want to do that, right? You were talked about maybe doing the Giants until someone from the Koch family came along with really deep pockets. Deeper than us. But you're still looking. You're still interested in the NFL.

Yeah. I think it's a phenomenal franchise. That in the NBA and baseball, to me, are the three franchises were, or the three leagues we're very focused on. And then I think hockey is something we keep looking at. Man, the time goes too fast. I can we're 12 minutes in. We've got to go. Thank you for coming by. I know. We'll talk to you again soon. It's horrible. We could have stayed all day. We could have. Mark Lazaree, ladies and gentlemen. It'll be here all week. We'll see you soon. We have big news out of the White House within the last hour relating to China. Our Amen Javvers has that. Amen. Scott, that's right. President Trump says he's going to be meeting with Xi Jinping of China in the next four weeks. That's expected to take place on the sidelines of the APEC summit, the Asia-Pacific Summit, in South Korea at the end of this month. And the president here taking to social media to say that he's going to use some of the tariff money that he's taking in to bail out American farmers, saying the soybean farmers of our country are being hurt because China is, for negotiating reasons only not buying, We've made so much money on tariffs, they were going to take a small portion of that money and help our farmers.

I will never let our farmers down, the President says. It's all going to work out very well. I love our patriots, and every farmer is exactly that. I'll be meeting with President Xi of China in four weeks, and soybeans will be a major topic of discussion. So that's the leverage point, one of the leverage points that the Chinese side has in this ongoing trade war, Scott, is to put pressure on American farmers, a lot of them located in red states.

president's political base by not purchasing the expected billions in soybeans that they would typically do every year. That's putting pressure in states like Iowa, where the president is popular and the president eager here to take some action to try to mitigate some of that political pressure, Scott. You know, when I heard this story, Amon, I couldn't help but think to the controversy, if you want to call it that, over a prospective bailout, to use that word of Argentina. Yeah. Because one of the issues raised there by some critics was the fact that Argentina had cut its export taxes on soybeans to China, ostensibly making them cheaper for the Chinese to buy their soybeans rather than American farmers, which was a point of concern that was certainly raised in certain corners. You know, therefore, you still may get the bailout of Argentina in whatever form it takes, but now you've got a way to appease the farmers in Iowa and elsewhere over their soybeans,

but blame the Chinese for it and take some of the money that's come in from tariffs related to China and take care of it that way. Right. I mean, look, Scott, you just put your finger on why geopolitics is hard, right? I mean, the Trump administration, their impulse last week was to stand up and back, stop Argentina's stock market. Secretary Besson came out and said, you know, we stand ready with a big and fulsome response. If that's required, they were in discussions for a $20 billion swap line between the United States and Argentina. But that never quite got over the finish line, and it might be because of some of these concerns you're talking about. Elsewhere in Washington,

people are saying, hey, wait a second, if Argentina is selling soybeans to China, they're undercutting our farmers at a time when we're trying to do this negotiation. How come we're bailing out their stock market? So there's real concern over whether that bailout was the right thing to do. And that may be why those negotiations are sort of still ongoing, haven't crossed the finish line yet for that swap line. It's something that the Argentine government wants, but they also want to sell their soybeans. So, you know, what do they choose? What does Trump choose?

What does Secretary Besson choose? You know, all of it is extremely complicated, and each thing kind of depends on the other thing. And it's like a circular domino setup, right? And, you know, it comes around full circle eventually. Hard to say direct lines in any of these directions, of course, but dotted, dotted perhaps, as you maybe take a look at both scenarios and say, well, that's interesting relative to a question that was raised about what could potentially happen with Argentina. Amon, thanks so much for your reporting.

Amon Javis on the North Lawn of the White House for us. Let's get more now on that big news out of the Supreme Court today on Fed Governor Lisa Cook. Our Steve Leesman joining us with the latest there. any what is a another big story of the day steve yeah just another one scott the supreme court keeping in place the stay on fed governor leads cooks firing where president trump at least until january where they now are going to hear oral arguments in the case the administration is saying in response to that ruling it believes the firing of cook we found it have been lawful cook's camp praising the decision saying it allows her to continue in her role as governor that

clears up the membership of the fed for the next two meetings through january just as the Economic data is about to get real clouded. The absence of government data because of the shutdown means the Fed flying more blind than usual. One proxy for government jobs data, ADP, and it wasn't pretty today. Total private payroll is coming in minus 32K versus a forecast, a plus 45. Good sector down, service sector down more, non-farm payroll estimate for the report that won't come out on Friday, $51,000, including government and private sector. Just a real quick note on this. The numbers were uglier than normal because they revised it to basically take account of the big benchmark revisions that the BLS issued.

So you can see what they would have been there without the revision. August was revised down on minus 3, 70 down on minus 32. The market responded to this bad ADP data by pushing up probability of rateups in October and December. Now darn near confident that both will happen this year. Jobless claims will be published giving data on firing, though not hiring. Michael Ferroly of J.P. Morgan says you take continuing claims put together with the Conference Board's employment data. It's a good proxy for the unemployment rate. Claims have been elevated since May, but have only recently trended a bit lower. But a big missing piece of all this data, government jobs. Federal worker layoffs, they were going to show up this month and next.

Now we're not going to know how big a hit that is until the government resumes publishing jobs data. I'm not sure when, Scott. All right, Steve. None of us are. Thank you very much. Steve Leesman, our senior economics correspondent. And more now on what to expect in this new month and quarter with Stratigas head of technical and macro research, Chris Verone. Good to see you. Great to be here. How you feel heading into this last stretch of the year? Well, I think this dichotomy between what some of the data says, what the bond market looks like and how stocks react is really the key setup as we move into the final months of the year. Going back to what Mark was saying, I am very much in the same camp that the Fed should cut here.

And I think the two-year yield is telling you that the Fed should go here and twice. The market just thinks that it's going to. Yeah, I mean, you look at the two-year yield, it's still. 75 basis points below the Fed funds rate. Who needs the policy rate when you have the market rate? I think the Fed is at risk of getting behind the curve here. And maybe in this spirit of private capital, I would note the publicly traded private capital stocks have not acted well here, the Apollos and the Owls. Why is that? Is that about concerns? I think it's one of two things. In that arena? Right. It's either the market tipping its hand and exposing where some of the

vulnerabilities may lie, or it's the more pragmatic view that if we're going to deregulate money center banks, you'd rather own Bank of America or Citigroup than you would APO. So I think it's a little bit of both right here. What I'm comforted by is public credit has not deteriorated here yet. So if you look at double B spreads or even triple C, go way down the quality ladder. Credit conditions still largely remain pretty good. Discretionary is okay. Banks are still pretty decent. So I don't yet see the setup that would scream big problem. Do you see it in time? Is the question, right? Do you do you always see the setup or as though it's in front of your face,

it's like right in the windshield before you have a chance to react to it? Like are the warnings that I raised with Mr. Lazarie in private credit. More people are talking about it. Are we paying enough attention to it? Are we too complacent about it? I'm just very reminded. Go back to the real crisis. Go back to 06-7.

Banks peaked in late 05. Homebuilders peaked in early 06. I mean, this was two years early before the real problems exposed. themselves. So I think at a minimum, if we look at how the next six or 12 months play, if something really sinister is out there, I would at least expect some more durable rotation into the market's more defensive corners. Now, there is a shot of life out of healthcare here over the last couple of days, as we've seen. Note that's not being picked up with statements. Staples remain very, very poor here. You have not seen that defensive.

It feels idiosyncratic rather than defensive. Of course, with the announcements in the Oval yesterday, you know, with Pfizer and then Merck and Moderna are obviously going to move. Yeah, and I'm comfortable that that has not extended to any other defensive group. And when you look at health care in particular, remember, it's still pretty bifurcated here. Biotech's been improving for months and months. I think that rates down. I don't think that's anything idiosyncratic. Pharma shot a light the last several days, but still largely in weak trends.

Equipment quite poor, services quite poor. So there's a lot of work to do, I think, before health care is the leadership. It may be on the come, but it's not the leadership here. Overall, I hear you saying, like Mark Lazre was, sort of, you know, earnings are good, and we expect them to continue that way, and the Fed is embarking on this easing cycle. You think they're going to cut. The market thinks they're going to cut. It's hard to be negative on that.

It's like the David Tepper point. Do I love valuations where they are? No way. But you want me to get in front of that? No way. Especially in October, November, December. We've done a lot of work on seasonality. As you know, Scott, you don't want to stand in front of a tape that has new highs on.

on its mind this time of year. Actually, the real valuable signal is if the market defies 4Q seasonality, if you have a down market in the fourth quarter, one Q and first half the following year really tend to struggle. So if you're looking for a signal, it's not what happens in 4Q,

it's does the market defy the very traditional seasonality? Well, I mean, the mega caps are gonna have a lot to say about that, right? Absolutely, and listen here, we're here with NVIDIA at new highs today. Four and a half trillion in market cap. But also, the Equite S&P is right there as well. Now, is that leadership, no, but is it at least still involved?

It is, I take some comfort in that. This is not the broadest market I've ever seen. But when you look globally, Japan is still involved, China is involved. Frankly, Europe just broke out after three or four months of pausing here. It paused all summer. Europe back involved. Latam still trades pretty good. So when you include the-EM doing well.

Exactly. When you include the global picture, I think it's difficult with the straight face to say, this is just 10 stocks or five-stock driving this thing. That's fair. We'll talk to you soon. Thank you. Yep. That's Chris Verone.

We're tracking a big move in shares of Intel late in the session today. Let's get to Christina Parts of No. Well, Scott, Intel and AMD may be longtime rivals, but the reportedly in early talks for AMD to use Intel's manufacturing facilities, this according to Semaphore. The market is definitely seeing it as a symbolic win for Intel as it tries to rebuild credibility in chip manufacturing, and hence that's why you're seeing the stock up about 6% right now. But AMD is essentially indirectly calling this just a rumor.

saying, quote, AMD does not comment on rumor or speculation. The potential deal fits a broader pattern where Intel's been, let's call it endorsements from Nvidia, the White House, reportedly Apple and TSM for potential investments just last week. The commonality, though, with all of these headlines, is they're dubbed early talks, which means none of them may pan out. Well, we know Nvidia may be, but it doesn't really answer whether Intel's star-studied investor lineup can really translate in financial firepower into.

technological credibility that Intel desperately needs, Scott. All right, Christina, thanks for that. Christina Parts and Nevelos. We are just getting started here on the bell. Shares of Nike getting a big boost after reporting results is a turnaround in store for that stock. Finally, star retail analyst Matt Boss, he will tell you the answer coming up. We're live with the New York Stock Exchange.

You're watching closing bell on CNBC. We're back. Nike shares sharply hired today following the company's earnings report. So is that stock finally making a turn? Let's bring in the top-ranked retail analyst on Wall Street, Matthew Boss of J.P. Morgan. He just raised his price target, in fact, on that name. It's good to see you. Good to see you, too.

You were a believer before many, right? Because the last time you were here, you had just upgraded the stock to a buy. That's right. Maybe 10% lower than where the stock is now. What gave you the conviction to do it then? And do you feel like you're getting the payoff now? Yeah. So, look, the conviction and the call at the time was after two and a half years.

I felt like the stock was tied to the P&L. and this was the first time I felt like the P&L had bottomed, meaning the income statement metrics, the top line, and the gross margin. I feel like you had hit a troth after multiple years. And most importantly, the last 12 months under new leadership, really taking defensive actions, cutting inventory. I think what you had last night in terms of the print is much more of a move to offense now.

And I think that sets up the next leg in the story. Okay, so you go from 93 to 100, right? You did that today. That's the latest move. How does Nike go to offense when you've got more players on the field who think they can take more of the game away? Like On and Hoka and all these other names that have obviously had an impact on market share. Right. So there's a company dynamic and then there's a stock dynamic. At the company level, at the more micro level, the most interesting thing right now that's changing is in September,

from a micro-merchizing perspective, they've put a new team on the field at a micro level that's now at every one of their point. partners assessing opportunities, inventory, new product development. That's what they had really walked away from in the last couple years. It seems like it would be table stakes, but that was when they were operating more for profitability, moving more online, and if anything, they alienated a lot of shelf space. That's what I think they're coming back to take. At the stock level, really, the call is pretty simple. 12 to 13% margins is $4 plus in earnings power.

If you believe Nike can sustainably grow revenues going forward, this stock's actually trading nine turns below where it was before this all started. So it's obviously not going to be a 100 meter dash, so to speak, for Nike to get it back. The question is, is it a marathon? Is it going to take a long time? What's your best guess? So I think it's a marathon, but Nike's running the marathon at the pace of a sprint. And that's what I think was most important. They're at one quarter ahead when they said they're inventing. inventories would be clean, they're clean today at a global level. There's still pockets region by region, but by and large, this was earlier than expected. They are now 85% of regions are in positive territory for revenues. That was earlier than expected. They beat the street by 600 basis points from a revenue perspective and beat the street by 100 basis points in gross margin.

So the gross margin recovery, I think, is happening more tied to the inventory cleanup. The product perspective, that's where I think this move to offence. and being more on the ground at every one of their partners can lead to greater full price selling. And that's really the recovery of a 400 basis point margin shortfall over the last three years that they've suffered. Is the story recovering at the same time that the consumer may be weakening just a bit? You know, Nike price points aren't exactly inexpensive. How do you view that? I'm glad you asked about the consumer.

So there's a lot being made of September relative to August and what we saw in July. So we look at Chase credit card data. The two-year stack, meaning looking at what happened last year, plus this year, is actually unbelievably resilient. You have seen zero change. You've actually seen the trend line from July, August, and September on a two-year stack that's 400 basis points above the trailing 12 months. So I actually think the consumer continues to be resilient. August and July had the benefit of favorable weather on top of the catalyst for early back to school. When it's all said and done, I think the consumer now has the catalyst. as we head into holiday, and the new stip bill is actually stimulus-wise positive for the higher and middle-income consumer. That's, I think, going to be another opportunity for the consumer as we move into the early part of the year. And if rates really come down, that is another opportunity, particularly for big-ticket items. I've got to go. Leave our viewers with your best-in-class name right now is what? I would take that one or two. Best-in-class names, Ralph Lauren, Tapestry, Birkenstock, and then Nike

for turnaround opportunity. Well, okay. Matthew Boss. Good to see again. Great to be back. All right. We're getting news from Capitol Hill right now. Emily Wilkins has it for us. Hi, M. Hey, Scott. Well, as I mentioned earlier, it did seem like they were going to be done with votes on that stopgap today. Now we can confirm. I just saw a couple senators leaving the door,

leaving Capitol Hill. They're going to be out tomorrow for the Jewish holiday, which means that the next time they're going to be able to have a vote on this will be on Friday. That means that unless senators are going to wake up very early, which I don't think I've ever seen them do, we aren't going to be getting job numbers at least not on Friday morning. Now, I have been told that the job numbers for September are set, and so when there is a stop gap and the government does reopen, we should be able to get those numbers. But remember, the longer this shutdown goes, it's going to actually begin to impact the collection of data

on jobs, CPI, PPI, and that, of course, could all have a big impact on the data that's collected in October, and how really accurate that data is, which, of course, is important for the Fed, it's important for economists, it's important for a lot of us who are trying to understand the economy. Scott? Emily Wilkins, thanks for the latest. Appreciate that. Coming up, automakers, getting a boost today on some fresh sales numbers. We've got the details, of course. We're back on the bell after this break. Welcome back. We're headed for another record closed for the S&P 500 today. just as we kick off the fourth quarter.

So what is in store for the rest of the year? Let's bring in Charles Schwab's Kevin Gordon and wealth enhancements. Ayako Yoshioca for what they are watching now. It's good to see a boat. Aya, you first. I feel like everybody's on one side of the boat as we enter the last quarter of the year.

Seems everybody's bullish, expecting gains in the remainder here. You? We are. It's hard to imagine what's really going to derail this train. I mean, we've had tariffs thrown at us. changes to fiscal policies, tax changes. And, you know, tech has continued to roll forward and power the market's higher. So we don't know if anything really comes about that really changes that narrative. Is that what you're in agreement with all that? Yeah, I mean, I think when you look at

certainly what's driven, the index is higher, over the past month, there's been, you know, a little bit of that weaker skew just towards the mega caps at the expense of everything else in the market. I will say, you know, positive development, I think, of the third quarter, really interesting is that you had two of the opposite styles of large-cap growth and small-cap value actually doing the best in the third quarter. So it was really the middle part of the market that was sort of left out. But you got a lot more of an upturn from more of the cyclically sensitive parts of the market, presumably because I think, you know, the turn in monetary policy, the expectation that rates are going to move a little bit lower provides

some of a benefit and a boost to them. But I do think that considering everything, as I just you know, mentioned and laid out, you still have two-thirds of the S&P 500 above their two-to-day moving average. Anything to disrupt that and pull that lower when the indexes move higher, that's when I think you have more room from concern. But right now, it's still a relatively healthy setup. What could go wrong here? I mean, literally everybody's on the same side of the boat. I hardly have anybody. If anybody come on and say, you know what, I'm negative. This valuations are too high. Yeah. It's a one, you know, one group of stock show here, is the earnings momentum and the rate cut momentum just too powerful, and thus

all of that optimism is simply justified? Yeah, I mean, a lot of this does come back to earnings momentum being relatively strong, and it's really not just momentum for one particular group. I mean, the breadth has been pretty healthy, and I will also point out that as we go into this next earnings season, you know, one of the things that's been, I think, a really solid boost for this market has been that expectations have been really low going into each turning season. We're probably going to see the third consecutive quarter where it is the case that as you move throughout the reporting season, estimates continue to improve and really outpace

what analysts we're expecting. I think, you know, they're not in the wrong for that in having estimates so low going into each season because there's still so much uncertainty as to what companies are going to do regarding tariffs, how much of the labor market slowed and is actually real, more so due to demand, not as much to supply. So there is still a lot that could wobble the economy, I think, especially on the labor front. I mean, there are, you know, myriad concerns that you can go through. But at the end of the day, from the market standpoint, trading off of corporate earnings health is still, you know, where it's been sort of the strongest place to be in this market and probably where it's going to be, you know, moving forward.

Aya, is there something that would upset the story beyond the obvious? I mean, if earnings disappoint, obviously that's going to be a problem. But I don't think anybody expects that they will. No, and I think, you know, it's really going to be a sentiment issue, right? just in terms of what are the expectations going into earnings, what are the expectations around inflation data, around the labor market data, and how does the data sort of evolve over the coming months? I think expectations have always been a little bit more conservative in nature, expecting sort of the worst, whether it was with, you know, the impact of tariffs on inflation or the labor market cooling faster than people had expected. But it's been relatively manageable

on both fronts, on both the inflation side, and on the labor market. side. And I think the market can take that just given that it's been relatively slow in nature. I let's read a no yesterday, Cab that was like everything rally is is going to continue for the time being just stay high in quality. I think it was from Morgan Stanley who put that out. Is that pretty much you see or stay high in quality? Yeah. I mean, we haven't adjusted that thinking because you're still in an environment. I mean, even if the path of least resistance is for rates in the monetary policy sense, you know, for rates to move lower. you're still probably going to be in relatively restrictive area, in a relatively restrictive zone.

Plus, you layer on to that the fact that, I mean, there are cracks in labor. So I don't think that anybody should dismiss some of the weakness that is in the labor market. No, but that's why the market thinks the Fed is going to cut twice between now and the end of the year. Absolutely. But I think that this is also not a monetary policy situation for labor. I think this is very much other forces that the Fed cannot necessarily fix. We have to remember we're in a supply-driven environment, not a demand-driven environment, when it comes to, you know, everything inflation related, but I would also argue everything

labor related. So, you know, I wouldn't dismiss any of those concerns. I will say, though, that yes, there probably is still a benefit at the margin, especially up the cap spectrum, and certainly up the quality spectrum for the Fed continued his policy and providing a little bit of a benefit to companies there. I got to run. I got more news to get to. Keb, thanks. I will talk to you soon. We are hearing from the first ratings agency on the impact of the government shutdown. Amon Javers has that story for us now. Amen. Scott, it's Fitch, which is weighing in now, and here's what they have to say. They say a brief U.S. government shutdown is unlikely to affect most U.S. public finance credits.

However, they say a prolonged shutdown could have negative credit ramifications for U.S. P.F. issuers, that is, you know, governments, local governments, municipalities, and others. So a couple more assessments here from Fitch, they're saying that the U.S. government shut down. The macroeconomic impact of that, they say, is limited in the near term. They say a prolonged U.S. government shutdown could have negative ramifications for issuers that are the most dependent on federal health care, housing, and higher education funding. They're also saying here that a protracted disruption could slightly slow U.S. economic growth, and an extended federal government shutdown would exacerbate existing pressures on tax revenues and create additional service demands in the District of Columbia. So a sort of muted assessment here, I think you can call that, Scott, from Fitch, in terms of what it means, for. for people who are looking to borrow money in the municipal space and also for the overall U.S. economy.

Amen, thank you very much for the latest there. Amen Jabbers. Up next, the biggest movers as we head into this close, which could be another record setter. Christina Parts of Nevelos is standing by with that. They could, and let's start with the insurance IPO that's riding high on day one. There is trouble, though, for social media giant as AI search habits shift. And lastly, the government doubles down on domestic lithium. I'll have all of those stock movers right after this short break.

We're 10 from the bell. Let's get back now to Christina Parts of Nevelos for a look at the key stocks and she's watching. Top of your list. Today's what? I have to start with Neptune because that's the nation's largest private flood insurer and they jumped today about 25% since its debut in the New York Stock Exchange, which happened today. Shares open to 2250 each compared with a $20 issue price and you can see it's at $25 right now. Meantime, Reddit plummeting today after new data shows chat GPT's citations for the social media platform dropped by at least 8 percentage points from the beginning of September.

That's still up, you can see Reddit down about 11.5% but still up about 25% year-to-date. Last but not least, Lithian America is popping after the Department of Energy said Tuesday it plans to take a 5% equity stake in the lithium miner. The government will separately take a 5% stake in the miners' Thacker Pass project. according to the energy secretary, Chris, right? This is why you were seeing Lithium America is up 24% right now, Scott. Yeah, huge mover. Christina, thanks, Christina Parts of Nevelas.

Coming up next, we'll tell you what has shares of Draft Kings under some pressure again today. That and much more in the zone next. We're now on the closing bell market zone. CNBC senior markets commentator, Mike Santoli, breaking down these crucial moments of the trading day. Phil Aboe is tracking new sales numbers from the automakers and Contessa Brewer on another Draft King's drop. Phil, we start with you. Tell us more.

Well, we got a solid quarter for the third quarter. About 16.1, 16.2 million vehicles. That's the expected pace of sales. We haven't gotten the final number yet. But keep in mind, Scott, there was a time when people were expected the third quarter to be down in the mid-15 million range. That's not the case. And when you look at all of the numbers from the automakers today,

they were all solid in terms of total sales, anywhere between 7 and 16 percent in terms of an increase. but it's the EV sales because of the expiration of the federal EV tax credit. That's why you saw EVs up more than 100% from GM at 100% for Hyundai and then Ford and a 30% increase. And that's year over year. One reason why the stocks have been steadily moving higher over the last couple of months. We'll see what happens in Q4. Do not expect good numbers when it comes to EV sales in Q4, Scott.

Phil, thank you very much. Phil LeBow, two contessa Brewer now with Draft Kings dropping again. What's going on? Okay, down 6% today, about 17% over the last two days because Kalshi launched a parley product. This is a product that gamblers love. Fandu was really leading the way, and then everybody got into the action. And once Kalshi on Monday came out with what they call Make Your Own combo, then it really made investors wonder whether it's going to take some share away from the giants in the space.

We saw Fandul drop yesterday, too, though it recovered some of that today. It's down about half a percent right now. So why is it hitting Draft King so hard? Draft Kings is all a U.S. business. Fandul's parent, Flutter, has the big international business. It's more of a hedge say. But interestingly, the CFTC, which is the regulatory agency that oversees these predictions markets, wrote a letter yesterday, warning Kalshi and others that this is not a done deal.

They say that there's real risk of the tribes and the states. that are suing Kalshi saying, you have gone in and offered gambling without having a license and saying that the CFTC regulates it isn't enough. There is a state's right and tribal right to offer and regulate this gaming. They said these platforms need to educate their consumers and their investors about the risk and have contingencies in place in case it gets reversed. The market seems to be voting on where it thinks it might be going, though, even though it's not a done deal. That's absolutely right.

What we've seen is Needham saying, we think that Cal She got 7% of the market share in football. Are they getting that from people who otherwise would be gambling offshore? For instance, California, Texas, Utah, Florida, you can only bet on the Seminole's Hard Rock app. So is it those people? Is it underage betters who can go on if they're 18, 19, 20, and use a prediction platform and make a wager? We don't know. We'll see. Contessa, thank you. Contested Brewer. All right, Mike Santoli, first day of the final stretch, the final quarter. What do you make of it?

You know, it's a bit of a magic trick, Scott. The market has these days, but 40% of all tickers are down. You obviously see some leaders like meta leading to the downside, and it sort of translates into this opportunistic rotation into things like health care that's burst higher from very oversold levels. And then just enough strength in some of the high beta. The beta chase is absolutely a signature feature of this phase of the round. The high beta ETFs up well more than 1%. It's helped the S&P clear that 6,700 level. You have these names like Bloom Energy that was killed last week, and it's already at new highs of 29% this week. Aerovirman, it's up 14% this week.

So the point is you got the go-go money in one channel of the market. You have rotation around the mega-caps. It's okay with the Fed cutting rates, even into a soft labor market because they don't think the overall economy is buckling, and it translates into this orderly uptrend in the S&P 500. Something will come along to derail it. We just don't know kind of when or how. Yeah, whether the shutdown gets especially messy, messier,

then maybe the market will deal with it, but right now the market doesn't seem. Or anything on either side of the Goldilocks line starts to threaten things, then I think that we have an issue. But right now, everyone is pretty satisfied. The Fed's doing what it's doing for favorable reasons. All right, good stuff, Mike. Thank you. That's Mike Santoli. So you're going to hear the bell because it's going to ring in a new record high for the S&D 500 and the Dow Jones Industrial Average.

And that's where we'll leave it.