Closing Bell - Closing Bell 10/13/25

Episode Date: October 13, 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.

And welcome to closing bell. I'm Mike Santoli in for Scott Wapner today. This make-a-break hour begins with a reflex rebound on Wall Street as buyers show up to nibble on stocks at a slight discount to their recent highs after the index's sharpest drop in almost six months. With President Trump walking back some aggressive trade rhetoric toward China and another wave of deals to excite the AI trade, the S&P 500 and NASDAQ have recouped, call it, 60% of Friday's decline. decline at this point. Semiconductor giants, Broadcom and Invidia in a familiar spot leading this rally. You see Broadcom up nearly 10% on the day, while Gold shows no quit, melting up another 3% as risk takers embrace the ultimate risk off asset. You see gold at 4121 an ounce, which

brings us to our talk of the tape. Was Friday's gut check a one-day wonder to refresh the rally or a warning of some fragile conditions lurking under the surface? Here to weigh in is Brian BEMO Capital Markets chief investment strategies. Brian, good to have you on. I think I pretty much can guess where you come down on whether this was a viable dip or not. But tell us what the market was registering on Friday and maybe what we're looking past now. Well, thanks so much for having us. I think this actually is the Duran Duran Snapback. If you remember the song, The Reflex, that just came to me. But I think it was, oh, no, here we go again with respect to the tariffs, and we knew that China was kind of the remaining story. We also know as investors

that there's been so much emphasis, not just on AI, Mike, but also with respect to NVIDIA Broadcom and some of the big leaders in that. So of course, we took some air out of the wind there in the sales in terms of the ship that is the bull market. You know, when we talk about markets, they're rarely linear for long. This has been a very exciting bull market, the cyclical bowl market that started in October of 2022. We actually started to talk about that cyclical bull in November of 2022. And people thought we were too early on that. But look what's happened. But I do think that what's happened here today is a logical kind of recovery from, oops, I'm going to overreact again. And I think we're in one of those markets that until we get into

earnest, heavier earning side of things, which we ultimately think are going to be the least leading us kind of out of this, I think you're going to continue to see more volatility. Plus, it's Columbus Day, so there's some people that are off. Yeah, and of course, bond market is closed for that holiday. I guess the one way to think about it, too, Brian, is, you know, maybe the market over the course of this really kind of lockstep, low volatility grind higher, had gotten to a point where it did price out, you know, a fair number of the macro risk. Maybe it wasn't about, oh, no, this, you know, tariff situation is going back to early April

panic condition. but just about, you know, we got to a place where we didn't, we're not being bothered by a government shutdown. Obviously, you talk about the AI trade. Nobody's too worried about the Fed anymore. And even the economy with jobs being weak, people are seeming to build in an expectation that that's not reflective of the underlying GDP trend or, in fact, that we're re-accelerating from here. So I guess the question is, you know, how much more might there be in the way of noticing the potential risk that we've been ignoring? I think it's a great way to frame it, Michael, because let's be clear, macro investing

has been wrong, wrong, wrong, since the March 2009, a bottom, aside from a couple of points. That was fall of 2011. We had a situation in July of 2012, and then, of course, the fourth quarter of 2018, and then I'm not going to count COVID because that was an exogenous event. But what I will say is this, I still think that fundamentals will lead the way. I think it was a shot across the bow in terms of, oh, no, now we have to focus on macro again. And I think you have to go back to the premise that I said here in the beginning of this of my interview, meaning that macro's been wrong. And I think it's going to continue to be wrong, especially considering that stocks are led by

fundamentals. And so I do think that people overreacted. I do believe that the market obviously is up on stilts. To me, the move to gold and new highs doesn't make a lot of sense. If you said it best on the top of the show, it's a risk off asset that has become now a risk asset, anytime that assets kind of change their colors and just go up because everything else is going up or is going up because momentum and investors are trying to chase that asset because they missed it, that's troublesome to us. So that's why we would continue to stick with equities and U.S. equities in particular.

You mentioned that fundamentals ultimately are what lead markets, and, you know, that's the beacon down the road. I just wonder, though, in terms of this episode we've been in for a little while, where it's low-quality leading, right? I mean, you've had earningsless quantum computing stocks, and the Russell 2000 has been way outperforming the S&P 600 small cap because it's been kind of whatever you have maximum leverage, you know, to something getting better over time or less better. and that seems like it's stocks with the least fundamentals can be the best trading asset. Is that indicative of the environment we're in or is that just off to the side? I think that's off to the side. But on a short-term basis, you know, people feel better about markets. They do go down in quality and that's exactly why.

But you're absolutely accurate in terms of the Russell 2000 versus the S&P 1000, which is the 400 and the 600 combined. The 400 and 600 combined are much more fundamentally structured in strong names with great balance sheets, pretty decent earnings. some of them actually pay dividends, or there's several parts of the Russell 2000, not all of the index, but several parts of the index that don't make any money. So that makes sense. But anytime you have this kind of low quality exasperation at the end of a rally, it's probably not going to last. So that's why I think going back to what's even happening today,

investors are going back to the high liquid stocks. What are the high liquid stocks? Well, the big tech stocks, not just because of what's going on with Broadcom, but because because of a fundamental perspective, they're the best. Now, I think what's going to end up happening is we're going to see earnings growth broadening out. We're seeing it in our models that we've looked at for over 30 years in terms of revisions. So I think financials are going to continue to surprise the upside. I think you're going to have very strong consumer numbers. And then tech is going to lead the way in terms of earnings consistency, Michael, because a lot of the analysts drop their numbers too much and we've been playing a game of catch-up here. So I think that's why earnings are going

to surprise to the upside on this third quarter and kind of set the pace for another very strong quarter with respect to performance for the market in the fourth quarter. All right. We definitely will get further into that. Brian, stick with me. We are also watching shares of Broadcom. That stock soaring after a fresh deal with Open AI. Christina Parts of Neville is here with all the details. Christina. Well, Mike, that partnership with OpenAI will deploy roughly 10 gigawatts of AI compute capacity, starting late next year through 2029 using Open AI design chips, essentially aiming to bring compute costs down. But this is big because it's actual chips that Open AI is wanting to build. Wall Street had speculated that Open AI was.

Broadcom's mysterious fourth customer behind that $10 billion custom chip order reported just last quarter, but Broadcom's president of Semiconductor Solutions said on CNBC this morning that OpenAI is not the mystery $10 billion customer disclosed in the report. I bring that up because that means Open AI appears to be a fifth major customer, potentially Broadcom's largest. So who's number four? Some analysts are pointing to Anthropic. But this is a 10-gigawatt deal matching the NVIDIA opening I announcement and bigger than AMD's six gigawatt packed. If NVIDIA gets roughly about $35 to $40 billion per gigawatt and AMD gets roughly 15 to 20 billion, this is just based off a few analysts reports, Brodcom likely lands in between but closer

to NVIDIA, according to Wells Fargo. So that means well over $150 billion in revenue just over four years from Open AI alone. CEO Hock Tan told analysts last week he could quote, easily hit his $90 billion AI revenue target with four customers. Now there's potentially a fifth. So street estimates may actually be too conservative. And that's why you're seeing the stock pop almost 10 percent, Mike. Well, that is great color. And I was actually wondering about that as to whether we've been kind of double counting or discounting the same news twice with the mystery customer and now open AI. So if those are different, very interesting. On the other hand, 10 billion no longer seems like that big a number. I mean, how many are we talking about

Is that an annual run rate? Is that multiple years' worth of orders? It's kind of amazing how everybody is getting used to these massive sums. Which, it's a rhetorical question because we just keep throwing out these billion-dollar numbers, and when there's a lack of detail in terms of how much will be deployed, where are you going to get the power? So I think when we're speaking about these big deals, I was told from Chip guys that you should really just speak in terms of gigawatts, because that has a bigger sway and the impact will be on the market versus just saying, hey, I'm going to give you 10 billion, you 10 billion. I sound like Oprah, but you get my point.

No, no, exactly right. And obviously, these are not kind of contractual dollar amounts. It is just, you know, ballparking for a certain amount of capacity. Christina, thank you very much. We'll talk to you again in just a bit. Let's bring an Abby Yoder of JP Morgan Private Bank and CNBC contributor Malcolm Etheridge of Capital Area Planning, Brian Belski. Also, still with me. Welcome to all. Abby, you know, we are at the third anniversary of this bull market. it's virtually the third anniversary of chat GPT, no coincidence there. Where has it taken us, do you think, in terms of the market's reliance on that part of technology and what else is going on as we figure out if we're in for something more in the way of a pullback?

Well, I mean, there's no arguing that over the past couple of years, the biggest component of earnings growth in the S&P 500 has come from the Mag 7 and the tech-related names. Now, I think we're at a point where going into next year, because we've seen, such like increased development and increased efficiency and capabilities of this technology that you start to see it broaden out in terms of, you know, the sector use cases across the board financial standing out as a very, you know, big proponent of using it and implementing across the businesses where you can start to see, you know, the overall market therefore having, you know, a better margin profile, right, because you're, in theory, increasing revenues

and decreasing costs and therefore also garnering a higher multiple because if you're a higher margin business, you get iron multiple. So I think going forward, that's the bull case where you see that, you know, broadening of use case for AI that extends beyond the current incumbents at the moment. And is that kind of at the core of your market case for next year, or what else is going on in terms of the fundamental underlying economy that you're looking toward to kind of guide us in tonight? Well, I mean, it's certainly part of it. I think that, you know, seeing in 2026, right, because 2026 is just a year away, seeing businesses, you know, instituted and implement effectively AI over the next year, 12 to 18 months, it's going to be a slow grind,

right? There's a J-curve experience in terms of that implementation. So I don't know that we're going to necessarily see all of that in 2026, but what we will see is a lot of growth-positive policies coming through from the reconciliation bill that'll feed through to the rest of the economy. And if we get more clarity around tariffs, notwithstanding, you know, what happened on Friday, I think you can also see more confidence from CEOs where they start to, you know, invest more, and that could propel the economy faster, too. Malcolm, we've been in this deal maybe for a couple of years, probably as we get into the fourth quarter, of there being a case to be made that there will be a broadening out of earnings

growth and a more kind of comprehensive increase in not only earnings, but just general growth and maybe even have the market reward a broader group of companies. Are we in for that, or are we still, you know, in your mind, driven by these big growth platforms. Well, I would argue that the market has already started rewarding that the different diversification across the different sectors still touching AI, right? So if we think about energy in the year that it's having, if we think about infrastructure in the year that it's having, all of those things are tangentially aligned with AI, but they're separate and apart in their respective sectors. And so that broadening is happening. It's just that the AI narrative is so

loud and dominates everything else that that's the only thing that we can really focus on it being the hypers scalers themselves, but I really think that the economy has diversified, or the market, I should say, has diversified what the winners are solely based on the AI narrative carrying everything else with it. Well, I think you could say the market has determined what the winners will be in this buildout phase, right? I mean, it's sort of like, you know, every time people get a sense that they've gotten their arms around exactly how big this investment phase is going to be, we get more

these partnership announcements, whether it's on the energy side or on the chip side, and all of a sudden people have not been ambitious enough in their estimates. I just wonder if it's the kind of thing where we can still deal with maybe 60% of households struggling a little bit under a weaker labor market and still high inflation if those other things are going right. Yeah, I share your concerns that we might be papering over a bigger problem, the fact that, you know, the economy seems to be stalling, if not slowing. Every single month, we get new data points. And the stock market itself tends to keep on going up and to the right. And so, yes, I take your point that the AI narrative, again, is so loud that it's kind of glossing over what could be a bigger deal

underneath the surface. However, the question is really, the question we've really been asking for days and days is how much longer can the AI bubble continue to expand or the tech sector continue to go on this run than it's been, you know, smacks of 1999 all over again and everything else. And the answer really is how long will it take Sam Altman to get through all of the announcements that he and Open AI can make with regard to the infrastructure investments that you're talking about? And how long do we have before we have to start to show productivity gains, as Abby was alluding to, where the AI now has started to make us more productive as companies, more productive as people, as employees, everything else, and whether or not that can

filter through the rest of the economy to start the recovery underneath the surface with the AI build out being the cloud cover to get us there. Yeah, I mean, we also probably have to wait for Sam Alton to come up with the money to meet all these commitments, but nobody seems to be too worried that that's going to be the case. And Brian, maybe we could focus it in a little bit on, we're going to start getting big bank earnings coming out. I guess if there were going to be significant issues in the underlying economy,

they would show up in bank results. We haven't really seen that to this point. What are you expecting out of the financial sector? I think the financials continue to be very strong, especially the bigger banks with the multi-divisional lines of business that have wealth, commercial banking, the consumer, and of course the capital markets. Capital markets, again, had another great quarter in the third quarter for the majority of these banks.

And remember, they're the ones that are trading. But really the real return on equity, return on invested capital with respect to these bigger banks are within the wealth platforms. The wealth people are the ones that are driving a lot of the growth. And so that's why the multi-divisional line of business banks, meaning of the big banks, including Morgan Sachs, and remember Goldman Sachs, that's a massive wealth management business. Who would have thought that 20 years ago? But at the end of the day, that's what's really driving.

And I think really the small banks, the really, really small banks with excessively clean balance sheets and great cash flow, are going to do really well. That's why the mid-sized banks, what we used to call the regional banks, are going to suffer relative to the large and the small because they can't compete with the scale of the big and they can't compete with the relationship base of the small, Michael. So I think you're going to see more consolidation there. And as we start to see deregulation,

that's really what's going to drive this. But I do think earnings are broadening out across, if you take a look at earnings revisions for the small midcap sector, they're amazing. And their earnings continue to go up. So I think those companies are going to continue to be rewarded from that perspective, as well as we believe, actually, that 2025 is setting up Goldie locks in 2026 and 2027.

So growth's going to be pretty good, maybe lower than this year. But lower growth doesn't mean negative growth. And I think that's a big, big misnomer right now that people are getting too bearish on a pullback in growth. Doesn't mean it's going to be negative. It just means it's going to slowing. And, oh, by the way, that's pretty normal. Yeah, I mean, that's obviously pretty hard to have an outright economic downturn when you still got federal deficit 6% of GDP and you still have companies spending

so heavily, Abby. I wonder how you're talking to clients about how they should set their expectations for investment returns from here. I mean, it is as an entry point. It's obviously, you know, you've already seen some good stuff priced in. Valuations aren't necessarily all that attractive, but valuations tend not to bite, really, when you have the economy hanging in there earnings growing and all the rest. Yeah, and I think the conversation on the economy is a little bit, well, obviously, we don't even have any data at the moment. We're going to get a lot information, I think, from the banks, like, that's what we're going to be thinking about, like, what's our alternative source of consumer data, and that's going to come from the banks.

But, you know, I think for the most part, consumer spending is actually fine. It's between 2 to 3%. What's been the question mark is what's happening with the labor market, and that's really difficult when you have all of these cross-crashirings in terms of immigration, right? It's very difficult to underpin that. But when you're thinking about the market going forward, it does come back to the, like, what's happening with productivity, right? Because that's from the margin profile, what's going to get it going.

And again, that's going to come down to technology and implementing technology in a productive way that gets companies to be able to grow their revenues and keep their costs contained. But again, also going back to like, it's really important that these companies now in the S&P 500 can immediately expense like CAPEX and R&D. That's huge in terms of innovation and spending

from these companies, which has, you know, CapEx has generally been on the AI side. So that broadening out in terms of CAPX will be important. But I think the way that we get a more constructive outlook is you have a higher multiple, for longer, which feels somewhat uncomfortable, but also higher earnings growth. Right now, we're at 11% earnings growth for 2026. The street's at like 13 to 14%. So it's definitely doable. And Malcolm, you know, you mentioned a couple of those adjacent themes to AI. And it obviously

makes sense. There's a lot of money in motion. A lot of companies are going to be getting a piece of this for a while to come. I just wonder about, you know, the way the market gets over-excited about certain things. You know, Oaklo today is up 18, 19%, it's up 700% this year. There's a lot of these businesses that are, you know, they're positioned eventually to kind of serve the AI ecosystem by way of energy, but they're just not there yet. The rare earth metals are flying today because of the China stuff, and they don't have any real production to come through. So I guess what I'm asking is, are investors so over-eager to play this trend that, you know, we're kind of creating, extremes and a little bit of distortion within the market.

Yeah, I completely agree with the spirit of the question. I think that investors have definitely tried to find the next Nvidia, the next broadcom, the next everything else in an attempt to sort of replicate what we've seen in those names so far this year. And I think to your point, the real opportunity still lies in those companies that more than likely have the capital to actually invest in developing this technology. So, NVIDIA, for example, has a free cash flow problem. It has to spend the dollars that it's spending investing in its next customer

simply because of the free cash flow that it throws off because it's become so productive. I think $4 million per head now is what their revenue numbers track out to. So I think a company like that, and one similar to it, have to spend these dollars in this way. But you think about the smaller companies that haven't really started to turn a profit and haven't even shown a path to profitability yet that investors are starting to glom on to. really just an attempt to find the next dot, dot, dot. And that's probably the first place that starts to show cracks when the AI bubble does start to let that air out and burst. Yeah. I mean, that's, to be clear, the good kind of cash flow problem that Nvidia has.

But it is a challenge nonetheless, Malcolm. Thank you very much. And to Abby and Brian as well. Appreciate it. Let's send it over to Christina for a look at the biggest names moving into the close again. Hi, Mike. Well, let's start with shares of bloom energy soaring about what? almost 30% right now and hitting a record high after announcing Brookfield asset management will spend up to $5 billion to deploy Bloom's fuel sales in AI data centers. The two companies are actually looking to build what they call AI factories, something that we know Nvidia, CEO has spoken about. They're going to be building it all around the world.

Shares up 414%. Shares of Siena Corp, up about 6.5% after BNP upgraded the stock to outperform from neutral. analysts also increasing their price target to $185, definitely higher than that 166 it's trading at right now. The firm highlighting Sienna's position in the expanding data center market. It seems like everyone's linked to data centers. Sienna up 96 percent so far this year. And let's end with shares of Fassanol dropping about 7 percent right now after the industrial supplier reported Q3 earnings below Wall Street expectations. Fastenol's chief sales officer noting the industrial economy right now remain flat.

their quarter. Despite the dipto, though, shares are up about 19% so far this year, Mike. Yeah, the company used to be really watched as an economic bellwether. We'll see if the rules have changed on that as well, Christina. Thank you. We're just getting started. Up next, your big bank setup, top analyst Mike Mayo standing by with what he'll be watching when earnings kickoff tomorrow. He'll join me at Post 9 just after this break. We are live from the New York Stock Exchange. You're watching Closing Bell on CNBC with the Dowell up. One of the percent. Welcome back to closing bell. J.P. Morgan, Wells Fargo, Goldman-Saxon City kick off a massive slate of bank earnings

this week. All four names, performing well to start the week. Our next guy says, these reports will show that Goliath is winning in the financials. Wells Fargo Security Senior Banking analyst, Mike. Mayo joins us now, Mike. We'll give you a pass on Wells Fargo. The rest, though, just in general, what themes matter for this quarter? Well, let's pull the lens back. You had a couple years of negative earnings growth. Last year was flat earnings growth, and now you've inflected not only to positive earnings growth, but double-digit positive earnings growth. So this is a multi-year inflection. The bank stocks have reflected that only partly. We think they still have

ways to go. I think the most important theme for tomorrow is you're going to see Wall Street banking, propelling earnings higher. If there are surprises, that's likely to be the reason. And you've had a lot of pent-up demand over the last two to three years. You may have some pull forward of activity. And I think what's underappreciated about capital markets is the scalability, the profit margin on those new revenues. It's not just, you know, Main Street. It's Wall Street, especially, you know, do more with less. Well, you'll see. that, I think, in the profit margins for those extra revenues from these guys. Yeah, I mean, obviously, you know, when investment banking fees fall to the bottom line,

when trading activity is heavy, you know, obviously more volume through the same pipes, I guess, is the rule. But what are we going to see in the way of credit? I mean, I know on the smaller bank side or maybe some of the consumer lenders, there's been a little bit of attention on that as a weak point. But is that going to infect the bigger guys? Well, I think the big banks are protected by Wall Street banking, but I think Main Street banking won't be as strong. It's really more about growth and traditional commercial lending. There still is a tariff overhang. That's what the banks have been telling us. So your traditional relationship borrower hasn't been there that much yet, and we think that still may be a ways off. In terms of credit quality,

it's still pretty good. I think you'll see a good story. But there have been some losses here there that's, you know, people like myself will be asking about. You've had a couple of recent bankruptcies allegedly due to fraud, but they're coming all at the same time. So that's certainly a question worth asking. Right. And then obviously things like, you know, auto lending delinquencies just in small areas of consumer, I guess, as well. You've seen a little bit of maybe the stirrings of an M&A cycle happening, too. How much is that going to play in this Well, let's go. I mean, I think this is the biggest deregulation for banks in a generation. I lived through that in the 1990s. You've seen some of the biggest deals in a few years. So that's

another question for the big banks. Okay, you've seen some mergers. What are you planning to do? Are people talking? But it takes two to tango. Yeah. So I think a lot of the consolidation is likely to be in the midcap space, as opposed to the largest banks. Having said that, if you are going to have big deals. This is the time to dream the dream and think about what's possible. So I think it's fair game to ask a lot of questions. And for like J.P. Morgan, we estimate they will have $200 billion of excess capital over the next three years. $200 billion to potentially spend or grow loans or buybacks or dividends. But they could do big deals with that. So I think for them and other banks, that's another question. The news today from J.P. Morgan, just kind of, you know,

saying that they're going to have this commitment of a trillion and a half over 10 years to invest in businesses they feel are kind of in the national interest. Is that material? Is it sort of just them sort of shining a light on business that they may otherwise have done? What does it mean to you as an analyst? That's not unique to Jake Moore and the business isn't unique. But Jamie Diamond has said repeatedly over the last, you know, one to two decades, no matter who's president, he's going to pick up the phone and say, what can I do to help the country? And J.P. Morgan's already been a leader with environmental and climate efforts. They've been a leader with human talent. They've been a leader with governance. And I think this is an extension of those efforts to go ahead and it falls under the umbrella,

sustainability. And they want to be at the forefront. Now, they're being at the forefront by giving a concrete target, a 10-year time frame to say, hey, this is something we're going to focus on. And to some degree, while everyone else is doing it, you need to measure it to manage it. and they're measuring it in a very public way. All right. And in terms of, you know, the names you cover, what now looks ripe in terms of where you would put money and what? I know you've liked City for a while.

It's also had a great move. The city is by number one pick over the next year. Still, it's Citigroup, City Group, City Group. It's not about the quarter. I think the quarter should be fine. But as City puts one quarter after the other, one year after another, they build a track record to help repair. their hideous prior 25-year track record.

Now, having said that, into the quarter, I think, you know, J.P. Morgan and Goldman, you're going to see the capital market. I think they are the leading investment banks in the world. I think you should see some of that when they report their results. All right. We'll catch you after we see it.

Mike, thanks very much. Thanks for having me. All right. Still ahead. We'll tell you what's driving the action in the casinos today. Those details coming up. Closing bell. I'll be right back.

A big show coming your way tomorrow. Scott Wapner is live from the Case Alternative Summit in Beverly Hills. He's got a big slate of guests lined up across both halftime report and closing bell. Be sure to catch full coverage tomorrow starting at noon Eastern. Up next, charting the market, technician Paul Sianna standing by with his forecast for stocks following Friday's big drop. Closing bell will be right back. We are back on the bell. Stock's bouncing today following Friday's sell off. But our next guest caution is the S&P 500's uptrend channel is at risk.

Let's bring in Paul Sienna, head of technical research at B of A securities. Paul, good to have you on. So maybe not a one-day blip. What would you be watching from here to figure out if it's vulnerable to something more on the downside? Sure. So the S&P, the NASDAQ, the Dow, the sell-off on Friday, definitely took out some of the, you know, medium-term supports that have been guiding this up move over the last about five months. So I think markets are focused on likely 50-day moving average.

and trailing lows over the last month or two. So about 6550 was the lows on the last two dips in the S&P 500. So I think coming into the, you know, the full sessions over the next few days, if those levels are holding, it could be a little encouraging for the bull market to reestablish itself here. But if we start to roll over and break through that, then there's likely some more tactical pain to come. I know that you've been focused, too, on maybe some of the indicators in the market, even before we got Friday's self. In other words, the breadth of the rally, whether momentum was really holding up.

And what does that look like right now? And I guess, how should we monitor things from here on now? Sure. So the breadth looks terrible, right? It's an AI boom, and that's what's carrying the S&P 500 to higher highs. If you were to look at the New York Stock Exchange advanced decline line, you would see that that cumulative line has not made a new high for many months, which means there's fewer and fewer stocks carrying the industry to higher highs.

Same thing goes with the percentage of stocks trading above the 50-day moving average for the S&P 500 members. That's been declining. So when we see breadth that's weak like that, we know that the support for the index overall is being driven by less stocks, and that's discouraging. That's why we've hinted at, you know, buying some tactical hedges into new highs in the S&P because days like Friday can materialize. And October is one of those months where it just kind of tends to happen. Right, exactly, yeah. Eventually, you're due for something that the market can't quickly rescue through rotation. You know, I'm interested in you're looking at maybe a bit of a relevant analogy to the market right now, which would be this kind of 2015 through 2018 period for stocks, which would place us somewhere late 2018, right?

We had like an early year nasty sell-off. We also had one of those in 2018. Talk to me a little bit about what that would indicate. Sure. So one of the analogs that we compare this particular bull cycle to is 22 to 2025, right, to that of 2015 to 2018. And in 2018, at the start of the year, we had a big drawdown, excuse me, a smaller drawdown of about 10%. Then we had a rally to new highs, and then we had a big drawdown at the year end of about 20%. This particular year, we had that big drawdown in the early part of the year, a rally to hire. highs greater than 2018 in percentage terms. And so the risk is the rule of alternation in technical

analysis where the size and, you know, sharpness of corrections tend to alternate, which would mean the risk is a 10% correction, let's say, into year end or early Q1. Got it. That's something that is appealing to maybe hedge out a little bit. Yeah. Real quick, I do want to get you to weigh in on these absolutely high velocity moves in gold and silver and whether, you know, They look like they're worth chasing. You know, at this point, you know, Bank of America, we like to say responsible growth, right? And it is not responsible, in my view, to buy any chart with an RSI on a monthly basis that's above 90. Right.

So these are not trends really anymore. They're parabolic, right? Silver, gold, platinum, we talked about a number of times on the show this year going higher. Right. So, you know, in that vein of thinking, you're trailing your stop. You're trying to stay long for as long as you can, and you're fighting essentially every statistic that says the likelihood of a correction, at least in the short term, is very high. If you can weather a dip with your trailing stop-like strategy and continue to ride gold, let's say, to 4,500, all the better. But when momentum, you know, distance from moving averages, systematic signals, wave problems.

process and all of these things are lined up in a way that say, let's go find the next chart where the monthly RSI is going to go from 50 to 90 because that's likely an easier place to be than in a chart that's already there. And less irresponsible, I guess. All right, Paul. I really appreciate the time. Yeah, sure. Thank you.

All right. Up next, we are tracking the biggest movers as we head into the close. Christina has those for us. Hey, Christine. Hi, Mike. Well, one beauty giant getting an upgrade. a tech platform being called, what else, an AI winner, and a ticket seller that analysts say is the clear industry leader. I'll tell you all of those stock movers and names when we get back.

Under 13 minutes till the closing bell, the Dow up 600. Let's get back to Christina for a look at the key stocks to watch. We'll start with shares of Este Latter jumping right now. About almost 6% after Goldman Sachs upgraded the stock, the new price target of 115, higher than the 92 right now, as well as a buy rating. Analyst there believe the Beauty Giants Consumer First Approach and Quick Innovation makes it a much more agile company.

Shares up about 23% so far this year. Yelp, getting a good review. from Evercore, upgrading the stock to outperform and raising its price target to $45 analysts calling the company an AI winner. Evercore noting Yelp's AI adoption, younger audience, and strategic partnerships really for that upgrade, shares up 11%.

Finally, shares of Stubhub. You can see them raising about 4% rising 4% after JPMorgan analysts say Stubhub is the clear leader in secondary ticket sales. J.B. Morgan also expects accelerated revenue, improved profits through 2026. Shares, as you can see, up, but down about 16% since its IPO.

Mike? All right, Christina, thank you very much. Up next, star strategist, Ryan Dietrich, is standing by to break down the critical final moments of the trading day. That and much more when we take you inside the market zone. We are now in the closing bell market zone. Steve Kovac breaking down a bearish call today on Apple. Plus, Contessa Brewer is tracking the action in the casinos.

And Carson Group's Ryan Dietrich is standing. to break down the final moments of the trading day. Steve, Apple up a little bit, but underperforming and down for the month. So what the analysts have to say? Yeah, this comes from a note from Jeffries this morning, Mike, slightly trimming their price target from 205 to $203 and change. Now, the reason behind this is the iPhone margins are at risk, according to them. And there are a couple factors behind that. The first one being the popularity of that base model iPhone 17, the cheapest version, especially in China. where government subsidies are giving customers a nice discount and driving demand.

The second one is the cost to make the iPhone 17 Pro Max. That's on the other end, the most expensive version, is likely higher than the same model a year ago. And then, of course, there's the wildcard, President Trump's threat on Friday to put an additional 100% tariffs on imports from China. Jeffrey says that would impact about 9 million iPhones still imported to the United States from China as opposed to India with that lower tariff rate. However, we all saw the president over the weekend cooling his language around China. Apple shares today, they're up a little over 1% as that tariff risk sort of fades away, Mike. Yeah, don't always see price target 20% below where Apple's trading. So it's notable for sure.

Steve, thank you very much. Contessa, a little bit of pressure on the casinos. Yeah, we are seeing shares of the Macau facing stocks down today. You've got Las Vegas stands down more than 6%, as is when resorts, Melco off 3%. Only MGM is hanging in the green here. Disappointing Golden Week results. Remember, I told you last week, this is their big holiday, and visitation was slightly higher than last year,

but still 7,000 people short of the government's expectation of 150,000 per day. And those visitors are apparently spending more time at, you know, basketball games and concerts than the Baccarat tables to my thesis last week, that those non-gaming amenities are a draw, but not quite as profitable. Jeffrey's analysts out with a note today saying there were fewer big gamblers there for this week. So you've got all of those Macau facing stocks under pressure right now. The real question here is, can they turn it around? We had seen that upward trajectory in terms of gambling.

And so we'll see what happens. There were some typhoon disruptions for visitation as well. What's the next kind of opportunity in terms of an event, a holiday for them to turn it around if they're going to? Chinese New Year. But until then, what they're doing is they've taken a page right out of Las Vegas's playbook, and they're scheduling these massive K-pop concerts. And the bigger the name draws, the more it draws in the visitors. And the casino operators say it draws in those big gamblers as well.

But the proof is in the pudding, right? When they announce earnings, we'll find out whether those profits are really in store as well. Yeah, and whether the players show up. All right, Contessa, thank you. Karen, let's get your diagnosis of what we've seen. Now, Thursday, Friday, S&P goes down 200 points. We're up about 105 today. So what do we make of this seasonal pullback?

Yeah, first off, thanks for me back and happy Monday, everybody. You know, you think about it, Mike. We went 33 trading days in a row without a 1% move, either up or down. That was the longest streak since before COVID. So to say we were due, it's probably an understatement. You know, you look just at the last two days. Yes, probably two days now of 1% moves. Just October 13th, a little history fair by.

At 89, the SMP dropped like 6% on the UAL-LBO deal that fell apart. And then in 2008 this day, October 13th, gained 11%. Mike, I'm not sure why, but there are more 1% moves in October than any other month. After the, I guess I'll say we've been spoiled with this rally, maybe some October spookiness and volatility is perfectly normal. Certainly normal. I guess the question is, did it kind of break the market stride in any notable way. I mean, essentially, you know, once you've got the people who are in it because you can't

get the market down, and this is a low volatility grind higher, and there's no real use in waiting for a dip to say, okay, maybe we're going to get a deeper pullback. You're right. I love the discussion with Paul a little before I came on and talked about some of the internals that are weakening. You know, I look at things like regional banks. Those are lagging big time. Housing's lagging big time. Look at a high yield credit, right? That's starting to crack. So by no means are we saying and there's this big monster under the bed. But, Mike, there are some little things that have me concerned. And the last one put to call ratios, you know, they're quite optimistic.

And from that contrarian point of view, I just think it makes sense after a 36% rally in six weeks. Maybe we're due for just some, I guess, a Charlie Brown shirt type of volatility. You know, you mentioned 35% up in six months, right? So I wondered if we were also suffering from a little bit of anniversaryitis in the sense of, wow, look at this massive six-month move. obviously also just hit the three-year mark of the current bull market with some great gains, although maybe not, you know, I mean, kind of middle of the pack on the three-year anniversary, but what can we expect from here as the bull market matures? Yeah, we're still pretty optimistic, have been for a while.

You know, you look at it. There's been five other times. We've gained more than 35% on the S&P in six months. One year later, higher every single time, up like 13% average. I know some other guests have pointed this out. I'll just mention it. Once you get a bull market that gets to this point on its third birthday, there's been five other ones back to 1950, all right? The shortest any of those other bull markets went was five years.

The average, Mike, was eight years. So listen, the reality is this is a strong bull market still, and I think it's just going to be over because we're here and it's 1929 or stocks are over value. We're not minimizing that. earnings are still strong, profit margin strong, a doveish fed. There are still reasons to think that this bull market's alive and well, and it might last longer than a lot of investors expect. Yeah, I mean, now granted, that's what the math says, although it owes a lot to two very, very long bull markets, right? I mean, one that began in 87, the other one, oh not. Fair enough. I guess the question is, where within the market, I mean, are you looking for some leadership transitions, large to small, away from growth to value, or stick with the winners? We're sticking with who brought us to the dance, I guess we'd say. We still like industrial, still like cyclicals, financials. And we do like larger of small. No small's coming back today.

We just think the fed's probably not going to cut quite as much as what the market's expecting the next 15 months or so. I mean, there's still a lot of opportunity, right? When in doubt, diversify it out. There's been a great year to have a diversified portfolio. We're not changing that at all. We'd still just be overweight equities with a little bit specifically of developed international. We've liked that group for a while. Still I think that one's over as well.

Yeah, that's right. So it has obviously been a global move as well. Quickly, Ryan, earnings growth for this quarter, probably not as underestimated as prior quarters. It sure isn't. You know, you look at the pre-estimates, right? Actually, a positive pre-estimate on average. You haven't seen that since, like, I think, late 2021. So a lot of good news is out there. So that's something maybe the bar is a little bit higher. But once again, I think earnings will probably come in better than expected. It's just how much better, because there is a little more optimism this earning season than really the last several years. Yeah, low hurdle past couple of quarters, beat by six, seven percent, maybe a little less this time.

Ryan, appreciate the time today. Thank you very much. Thank you. to the close, you have the S&P 500 up about 1.6%, roughly 85% of all volume is in advancing stock. So it is a broad rally after a very broad sell-off the other day. Among the leaders, we're among the hardest hit on Friday. The high beta part of the S&P 500 up 3%. We have had a pretty sharp pullback in the volatility index as well. It is down two points off those highs from last week when it did close above 20. And the Dow is going to be up just under 600 points for the day.

So we recaptured about half of those losses. That's going to do it for closing bell. We're going to go ahead with overtime with Morgan & John.