Closing Bell - Closing Bell: 11/26/25

Episode Date: November 26, 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.

Hey, welcome to closing bell. Thank you, Brian. I'm Mike Santoli in for Scott Wapner. This make-a-break hour begins with stocks on a four-day sprint higher into Thanksgiving after a three-week setback. Take a look at the key indexes with 60 minutes left to go. The S&P 500 surmounting the 6800 level once again, rising more than 4% since last Friday's intraday low. And the Dow back to within 2% of its former peak. Take a look at the NASDAQ as well, up almost 1% on the day. have the small cap russell two thousand outperforming once again as wall street locks into the rate cut playbook two weeks ahead of the next fed decision the a i trade is participating though

with another round of rotation within it as alphabet takes a breather following its blistering run and we see uh microsoft and oracle they have been recent laggards they are now to the upside today which takes us to our talk of the tape with the s mp 500 threatening to go positive for the month after a 5% reset, has the all-clear been sounded for a year-end ramp, or is it time for investors to protect their gains? As a rewarding year, draws to a close. Here to weigh in on all of it, FundStrat Managing Partner and CNBC contributor, Tom Lee. Tom, great to see you. Great to see you, Mike. So you had been saying, you know, let's say a few weeks ago that we could get some choppiness in the first part of November, but you were still kind of bullish looking

beyond that. What in your view has the market been contending with in recent weeks? What do we learn and how does it set us up for the outlook here? Yeah. Well, I think the market's been struggling with the same things that it's grappled with all year, which is a monetary policy direction that's not completely clear. As you know, the odds of a December cut have really jumped around from as high as 60 down to 30 back to 80. And the second is, of course, policy volatility, because the administration does make proclamations and statements that are sometimes head fakes,

but confused investors, and it's all done, it's all resulted in really suppressed enthusiasm for stocks. You know, sentiment has been bearish. And then that, you know, led to a five plus percent pullback in the S&P 500. A lot of the more aggressive parts of the market took on a lot more pain than that. Where does it leave us in your mind? I mean, you know, as I mentioned, four days, this market has barely even flinched at pretty much all the hurdles that were along the way, the moving averages. We got above last Thursday's high. We know it's kind of an upside bias the Wednesday before Thanksgiving and the Friday after. But beyond that, where do we go? I think we're set up for a really strong rally into year end. And I know we just came out of a pretty terrible grind.

I've talked to a lot of PMs that have said it's one of their worst six-week periods ever in their career. So we know people have lost money. They've de-risk. But we know into year-end, we have the positive seasonals, especially given how strong October, the made October was. You know, it's really a five or six chance that we're going to be up five percent into your end. Right. The second is monetary policy, I think, is going to shift doveish. Even if Fed Chair Powell is hawkish, we know it waiting in the wings is now a shadow Fed that's doveish. The third is we know sentiment is going to have to chase this rally because 80 percent of fund managers are trailing their bench.

mark. And then I think the fundamental story is pretty intact. You know, as we're doing work into next year and I think earnings visibility is going to be really good. So I don't think I'm questioning if earnings are peaking. It's more just it stocks, price in, and correct enough. Now, you've been, I think, pointing toward, let's say, 7,000 in the S&P by year end. Now, that's only like 2.5% up from here. We made some progress. But a year ago, you also thought we'd hit 7,000 in the first half of this year. So what happened along the way? And I guess What might you think about in terms of impediments looking into 2026? Yes.

I mean, we're almost through this year. And I'd say looking back, this was five years of history compressed into one year because we had a major bear market, the biggest tariff hikes ever. And that, of course, killed any hope of any 7,000 in the first half. But miraculously, stocks went into a waterfall decline and recovered every single point of that decline symmetrically. So it really speaks to the resilience. But I guess as we're thinking about next year, I bet you it's going to be very similar in the sense that we'll get a policy shock. Maybe whether it's monetary or from the administration, it could lead to a big drawdown of 20% again.

But it's a replay of this year. And maybe that's, we've now had three 20% bare markets in five years. I mean, that's a lot of history compressed into a five-year period. Now, you mentioned obviously the confusion of. over the path for the Fed as contributing to this recent pullback, as well as some policy flux in there. What role did the violent shakeout in crypto have on all that?

Because a week ago, that's all we were talking about, was Bitcoin can't stop going down. The NASDAQ wants to follow it, or people are concerned about how that's going to knock other things loose in other financial assets. So it's stabilized, but it's not exactly sort of participating to the upside in this balance. Yes.

So crypto had been a lead to. indicator for actually most of the last five years. But on October 10th, crypto had what I would call Armageddon, you know, a flash event, but it led to a liquidation that was never seen in the 15 years history of Bitcoin. You know, about a third of the market makers went out of business that day. Almost two million accounts went to zero. Yeah. And it was because of a pricing error, what I would call a glitch, you know, and it led to what they called auto-de-leveraging. We just made that case that it definitely seems as if there was something in the kind of market maker functioning that got fouled.

Now, that being said, the reason you can have all those accounts auto-liquidated is because there were that many accounts with that much leverage that got Bitcoin up to where it was above 120. Yes. Right? I mean, so it's not as if it happened in a vacuum. Yeah. So in a way, it means crypto represents really a very precise measurement of risk appetite, because

there's so much more leverage. And that got wiped out. Right. Last time it happened in 2022, it took eight weeks before people sort of know, you know, touch their toes back in. I think that's where we are. We're near a bottom. But now I don't think crypto leads, crypto is lagging because it's really the AI that's going

to be leading. Okay. So it's no, so basically that is kind of sideline the idea of what, Bitcoin 150, $150,000 you were thinking before? Well, I think it's still very likely that Bitcoin's going to be above $100,000 before year end. and maybe even above one to a new high. So Bitcoin makes its move in 10 days and every year,

I think some of those best days are still going to happen four-year end. We're watching it right now at 89-5, firming up throughout the day. Tom, stay with me. Let's bring in New Edge Welts, Cameron Dawson, and Obermeyer's Allie Flynn Phillips. Thanks to you both for joining us here today. Cameron, you know, it's coming into this period, it would be common to hear the complaints.

Look, this market's too concentrated in AI. It's not a broad enough rally, and maybe we're complacent about the Fed. I mean, have we taken care of those things? Where does that leave us? I think that Tom Stad about the underperformance of active managers is where a lot of this sits because we can see that positioning is still underweight this market. Deutsche Bank updated their consolidated positioning. We're in the 34th percentile.

That's underweight. And discretionary managers are in the 18th percentile. So there is still a large cohort of capital that has sat on the side of the side. lines of what has been a very monster rally. So we think the best case for an end-of-year rally is that more people get dragged into this market. And I think the best fundamental support for that is that earnings estimates continue to be revised higher.

So as long as earnings estimates are going up, GDP estimates are going up, it gives that cash on the sidelines a reason to chase into the market. And has the character of the market, in your view, changed over the course of this moment? I mean, you know, that sometimes does happen. The market doesn't usually pass the baton. on a full run. So where are we now? We can look at non-profitable tech

as a really great capture of this, is that it had a 65% rally through October 31st, and it's down about 14% in the month of November. It's bounced back a little bit, but that really captures this notion that beta has been the key leader of this market coming out of the April lows.

So the big question is if beta, low profitability, low-quality names can continue to lead. They certainly love having a Fed that looks to be easier and more doveish. So it really is dependent on what the Fed delivers. But to Tom's earlier point as well, we think as well that you're going to get Fed cuts in 2026

once you get the new Fed chair. So even if they come a little bit later or slower than what was initially expected, you're still getting cuts because you have a new person leading the Fed. Got you. And Ali, over the course of this period, there's been a really dramatic switch in the AI narrative

in terms of the perceived winners and losers. We're kind of re-ranking the ones that are best positioned. And I wonder what it means for the general segment of the market, considering that for a while there, it seemed as if the investors are going to be happy to see everybody invest to the max against this theme. Yeah, well, first thing, I think we should talk a little about the current environment. And as Tom mentioned, it's been painful, but that's actually to us been really healthy and somewhat controlled. You've seen some nice rollover within the MAG7 or the AI sector, and investors turning to sectors that people have left for dead.

Just doubling a little bit. So if you look at the past six months, only 18% of S&P 500 constituents had outperform the index. Or the past five weeks, that's actually doubled to 36. Not a huge number, but it really does remind us that the market's more than just a handful of companies. And you've also seen actually the S&P outperforming the NASDAQ. To answer your question in terms of within the AI sector, we think investors are really focusing on opportunity, but with execution risk. emphasizing that even profitable platforms can be poor investments if they overpay for that growth. So to us, leadership is more shifting towards business models that pair AI exposure with

visible monetization, those strong balance sheets. And that to us is in terms of why Alphabet, for instance, is outperforming some of its more capital-intensive peers in the most recent days. Sure. Now, the thought that it's a positive that so many stocks have been underperforming the S&P 500, because I guess as a stocks picker, you have a lot of hunting to do in terms of things that are down a lot. Do you think the market's going to start to reward a broader list of stocks? I guess is now the question.

I mean, the equal weight S&P is obviously lagged badly, but it's closer to its high than the overall market cap weighted indexes are. In fact, it's within 1%. Yeah, I mean, the reason why we should really reward a broader market, it's not just in terms of broadening, but really in terms of the healthy earnings picture. So, for instance, this most recent just third quarter earning cycle, you actually saw earnings growth 13% year over year, which is the fourth positive consecutive quarter in terms of increase. But also, it was actually broadly distributed across different sectors, 10 of the 11 gig sectors, for instance, double-digit returns and things such as financials, materials. So we are seeing the broadening in the market because we're seeing a broadening of the earnings space. Tom, you mentioned that it probably wouldn't be Bitcoin leading, but AI.

I guess we've got to be more specific in terms of AI, or do you think that the full leadership of the first half of this year where the open AI orbit and everything else can participate? Yeah. Well, I know stocks have been sort of trading pole position, Nvidia and Alphabet. it. But to me, the bigger story arc remains that AI is a mega trend. There's a lot of resources and spending, and it's a big contributor to growth. And we know there's a shortage of both power and silicon. So I do think it kind of, it's going to ultimately move in the next 12 months kind of as one cohort. I don't think valuation sensitivities is important as people think.

We're actually studying this now. We're going to be publishing it soon. But if you look back 10 years ago, the most expensive stocks at the end of 2015 continued to be the best stocks over the next five years. Right. Yeah. I mean, it's interesting because I don't even know if it's really a valuation story in terms of what's taken a step back. It's a matter of, you know, kind of who's got the current lead.

Yeah, whose model works better. Or the clearest path or something like that. Yeah. Cameron, in terms of the macro, I mean, everyone has been able to say, okay, we had this rhetorical doveish pivot from Fed members. We can now price in a cut. that it looks like we have a glide path toward 3% in short-term rates. Are those still going to be insurance cuts?

Are there still going to be like the economy doesn't really need it, but we could use it because we just had the beige book come out an hour or so ago, and there was a lot of commentary about softness in labor markets and companies finding ways to do more with fewer people? Yeah, that is the biggest question because cutting because you can is a very different story for risk assets than cutting because you should. If the context of the cuts is because the labor market needs the support, that the economy needs to support, what you would see within things like equities or credit is a lot of weakness because equity valuations would be too high and earnings estimates would be too high.

But if you're cutting because you're just trying to get to neutral because you don't want to be too tight in the future, that's when equities can very much rally and enjoy it. Now, the beige book has been painting a very sour picture about the economy for quite some time, as has all soft data been painting a much. much more sour picture about the economy. So we continue to go back to this notion of what is the equity market telling us about things like the U.S. consumer. Equal weight discretionary versus Staples is still in an uptrend. So to us, the equity market is still arguing that the aggregate consumer, of course with big weights to high income consumers, is still in a fairly good position. So we'll continue to monitor that for any kind of change.

Yeah. I mean, I do think that the outright inability of Staples companies to actually perform is helping that. But you're right. In a real recessionary scenario, those stocks would probably start to work again. Allie, we mentioned, I guess, you know, what's happening in terms of the Fed, which feeds into yields, the 10 year down below 10%. I was just looking earlier. You know, the 6040 portfolio total return has actually kept pace with the S&P on a year-to-day basis. Where are you thinking about those types of allocations and what are you telling clients in terms of the fixed income side? It's so nice to find it to be rewarded.

with attractive yields on the fixed income side. To us, fixed income, it's one of those, it's the steadfast, it's the ballast, it's to protect against the unexpected. And so particularly if you're able to be high quality in terms of focusing on whether it's treasuries or corporates and stake in intermediate duration, that to us is more appropriate. But as I said, it's really just nice to see cautious investors no longer punished. Yeah, yes, for a change. All right, really appreciate it, guys.

Everybody have a great Thanksgiving, Tom, Cameron. and Allie. Thank you. Let's send it over to Christina Parts in Evelas now for a look at the biggest names moving into the close. Hey, Christina. Hi, Mike. Well, shares of deer right now, they're sinking almost 5% despite beating quarterly estimates. The problem was the full year forecast. It just came in weak. Tariffs are squeezing margins and farmers are just pulling back on big equipment purchases. Let's switch on to Dell's shares climbing about almost 7% right now on strong AI expectations. The company did miss on revenue, but it's forecasting a monster fourth quarter with $9.4 billion in AI server sales for a total of at least $22 billion

for their fiscal year. And lastly, shares of Z scale are dropping roughly 12% right now after beating on both the top and bottom lines with a solid full year outlook, but the cloud security company posting an operating loss, which really spooked investors despite shares being up about 40% year-to-date. Mike? Christina, thank you. We have some breaking news out of Washington. Amon Jabbers has the details for us. Amen. Mike, we're monitoring reports now of a shooting incident, just a couple of blocks from the White House here in Washington, D.C. This happened just about 20 minutes ago, and what we know is that, according to the Department of Homeland Security, two National Guardsmen

have been shot. Their condition is unclear at this time. D.C. police say they have a suspect in custody already. Now, this took place within a couple of blocks of the White House complex itself, adjacent to it or at the White House complex. This is somewhere around 17th and I, 17th, and 8th Street. So that's somewhere between Farragut Park and Lafayette Park here in Washington, D.C., if you know the area. We're also seeing a report now, Mike, that DCA, Ronald Reagan National Airport,

does have a ground stop due to security. No additional information on that ground stop just yet. But we are seeing reports as well that a MEDAVAC helicopter landed on the ellipse at the south of the White House and then took off bound for medical facilities. So we don't know the condition, as we say, of the National Guardsmen. There are conflicting reports now of how many casualties there were in this incident. Were there two or three, two National Guardsmen and maybe somebody else, as I say,

this happened just about 20 minutes ago, Mike. And so information is just coming in. And now I see the Associated Press just within the past couple seconds is reporting that the two National Guard members are in critical condition after the shooting near the White House and the suspect was also shot. So a little bit more information coming in here in real time. So that might account for that third person that we'd heard might be headed to the medical facility. Mike, back over to you.

All right, Amen. Thank you. All right. As we go to a break, NASDAQ at session highs and the S&P up almost 1%. Closing bell. I'll be right back. We're back. It's retail's biggest week of the year with the holiday shopping season officially kicking into high gear here with her top retail plays into year end is Bernstein's Anisha Sherman. Anisha, great to have you on. Before we get to some of your favorites, I wonder what you're hearing from some of the companies that are recently reporting the retail industry about the tone of spending, the pace of discounting and things like that into the final four weeks here.

Sure. Thanks for having me on. So we are in the thick of retail earnings at the moment. We've had a lot of big prints. We've got a couple more coming in the coming week. And the common themes have been, actually, comps and traffic have been better than expected. We've seen some nice Q3Bs. But in particular, those comp store growth numbers are coming from pricing. So retailers across the sector from high end down to value have taken pricing up in response to some of the tariffs. And they are not seeing a ton of resistance. They're seeing less price elasticity than they anticipated, and that's been a nice boost to cops. But they are being cautious into the holiday season, especially retailers looking at a middle income or lower income consumer, are looking at the uncertainty ahead, seeing the consumer sentiment data declining, and their Q4 guidance has been fairly conservative. And there certainly within the group are plenty of stocks that have seen their share pressure over the course of the year. And I know you're picking through some of those.

Talk about Burlington stores in particular in terms of what's happening there on a kind of a company-specific basis. Yeah, Burlington within the off-price sector is the smallest and lowest quality of the three off-pricers. It's two biggest competitors, TJX, which owns T.J. Max and Ross stores are much hard quality, more mature players. And Burlington is the turnaround story. And so that gives you a lot of upside. and on a multi-year basis, there's a lot more upside in Burlington. But on a short-term basis, with a consumer that's struggling, where your buyers have to get it just right, Burlington is the one that is more likely to have some risk there with lower-quality buyers,

lower-quality brands, a lower-income consumer. And that's exactly what we saw in this print, where Burlington did a plus one comp, and Ross and T.J.X did plus sixes and sevens in the same quarter. And in that context, I mean, T.J.X has been unstoppable as a stock. It seems like kind of the consensus quality pick, but of course, expensive. You still think it's worth owning here? Yeah, I think in the next couple of months, going into the holidays and waiting for those Q4 prints, the market is going to be biased towards names that are safer in terms of consumer risk and

consumer pullback risk and that cater to a higher-income consumer because we are seeing that consumer sentiment bifurcation between higher and lower income. And so T.JX checks the box on both of those. So I do think that it will continue to be crowded. It will continue to be well appreciated in the next couple of months into the next print. So, yeah, I would continue to be positive on that one. And then finally, where does On Holding fit into that setup? Yeah, it's a great question.

So that is, you know, so sportswear in general is a sector that's been growing since COVID and on as well positioned because it's higher income. The price points are $150 plus. It appeals to higher income consumer. But it's been, and the performance has been really strong. But the market has been nervous about names like On, because we've seen other peers like Hoka, which is under the Decker's ticker, underperforming.

And so there is this fear that because SportsWare is getting more competitive, some of the names that have been really successful, like On, might falter. We haven't seen that happen yet. I really like the stock. I think the management team is solid. The strategy is solid. They're doing well. The performance is good.

So that would be a good pick for me as well into the new year. All right. Anisha, thanks very much. much. Good luck into this busy, busy period. We'll talk to you soon. Thank you. Happy Thanksgiving. You too. Thanks. Up next, Fair lead strategies, Katie Stockton, on the key levels she's watching as we head into the final stretch of the year. Closing bell, we'll be right back. We are back. The S&P 500 on pace for its best week since June. So are we setting up for an even bigger year-end rally? Let's ask Katie Stockton, a fair lead strategies. Katie, good to see you. You too, Mike. So market obviously kind of held up at this kind of widely watched support late last week.

We've responded pretty well to, I guess, some oversawed conditions. So as the market kind of did it do enough in this downturn to refresh things in your mind? I don't think we're quite there yet. We're looking at this as a B wave in an ABC corrective phase, meaning that it's interrupting the correction, not marking its culmination. And we say that because there's been a pretty meaningful loss of intermediate term momentum that's reflected on the weekly bar charts of all the major indices. And yet we're, of course, welcoming this oversold bounce, which is in reaction to a short-term oversold condition near support on the chart. The support that we're watching for the S&P 500 and a lot of market proxies is based on the daily cloud model. It's currently around 6550 for the S&P.

The hard part is that below that cloud-based support, the next support is about 6 to 7% below. So we'd really love to see this cloud continue to hold, and yet, based on our longer-term gauges, it's unlikely. So is it your thought, at least you're kind of working assumption that this rally will fall short of getting back to the old highs and then, you know, have to retrench again? The short-term indicators do point higher over the coming days. So I'm not quite sure if that's going to be enough strength to get it back above the final resistance, which is right around 6910. But if it does, and we see a decisive breakout, that would certainly be a bullish development. We never want to fight against breakouts in uptrends. And indeed, it still is a bullish long-term setup. So if we see new highs, that would be good. And we'd want to see it hold up there for a few days to confirm. But yes, I would say in general, we're already not a near overbought territory, but certainly above neutral. So I think there's probably a better chance that we see a lower high versus that recent high. And that, of course, will make things look a little bit worse. So what we've been recommending is that folks use this relief rally or oversold bounce to perhaps reduce any of the high beta exposure in stocks that have seen a loss of momentum that you can tell by that 20-day moving average that we've been.

been focused on for so many months now. When there's 20 days roll over, that tends to be a good indication of a period in which it's probably nice to be lesser in your exposure. Yeah, I mean, I guess that is the question, right? Some of the more aggressive parts of the market, higher beta, did crack pretty hard. Maybe they're getting a lift right now. We'll see if that can continue or run into a wall. And now, in that context, what about the groups that have started to act a bit better, like health care? Is that something that you think can extend? We are overweight in our short, intermediate term, recommendation for health care and also for utilities. And, of course, those are more defensive areas of the market.

But we're seeing some good action there in absolute terms as well. So the relative strength is positive, and we're seeing more positive catalysts on the charts in stocks in those sectors. We also have some other spots of strength. There's a lot of technical diversity in the market right now. So if you look at the retailers, which I know you were just speaking about, There are some really interesting setups there, medical devices, home builders, insurers. So you can certainly find spots of strength, although I don't think it's in the technology sector right now. The tech sector did exhibit upside leadership, but this month has really sort of rotated out of favor.

And I think that's the one to avoid in the near term. Interesting. And, you know, I guess the other piece of this, of course, is this come around when yields have taken another leg lower. We're thinking about perhaps more rate cuts on the short end. Where does that leave you with regard to things like the tenure? The tenure, if you zoom out, you'll see this big triangle formation. I'm sure you're well aware of it. The support is basically in line on the bottom boundary of the triangle.

It's a neutral formation. Looks like the bottom boundary is being broken probably. So that would put next support for the 10 year around 367. And I wouldn't rule out a decline at that magnitude. but it's certainly no rush to really go anywhere, frankly. It's more neutral to lower, if anything. Yeah, it has been relatively narrow bent. And then finally, small caps.

It's been kind of this similar story with the Russell 2000. A lot of head fakes higher. I guess it is above those levels that were first reached like four years ago. So where does that set us up? Well, it is kind of exciting because the Russell 2000 is poised this month to close for a second consecutive month above that final long-term resistance of that 24. And you'll see on the chart of big cup and handle formation, it's just a bullish long-term setup that we like to see. The catch is it doesn't really have any implications for the short term. So I wouldn't think that small caps, while they might outperform, given the so-called January effect in the coming weeks,

I don't think that they'll avoid a pullback if indeed the S&P 500 does enter a C wave. Yeah, it would seem hard to think those would be insulated from any. downside chop. Katie, great to catch up with you. Thanks so much and happy Thanksgiving. Yes, same to you. All right, thanks. Up next, sounding the alarm on OpenAI, Y-CQG, GQG's Brian Kirschman says the model is not sustainable. He'll make his case. Closing bell will be right back. A reversal in fortune for Alphabet and NVIDIA today, with Alphabet's record-breaking rally, taking a pause and NVIDIA bouncing. The two going head-to-head for AI-chip partnerships with NVIDIA customer META,

reportedly looking to strike a deal with Google. Joining me with his take on the entire AI space, CQG, partners portfolio. manager, Brian Kirchman. And Brian, it's great to have you to check in on this take of yours where, you know, I think you've guys have believed that the market was overexcited about the AI opportunity for a while. Now the market's been rethinking certain aspects of it, maybe penalizing the open AI area of this growing market.

Are we being rational about this at this point or is there more to go? I think it's an interesting dynamic that you're seeing right now. And with the Gemini 3 launch that happened recently, and folks getting really excited about that, I think it just shows that the barriers to entry within large language models are a lot lower than people really originally anticipated. The fact that, you know, Google,

which was kind of seen as being the, if you will, the buggy whip supplier a couple of months ago, people saw them, and saw it lagging extremely far behind, all of a sudden taking the lead and becoming sort of the leader in this process, that's kind of what we argued in our recent white paper talking about the barriers to entry these large language models are actually pretty modest.

Even if you look at the Chinese models that have come about as well. The fact that you've had a lot of these open source models coming out of China that are competing head to head even with Gemini 3 and Open AIs models and things like that, I think that you're seeing that there's a lot more competition in the space and what's even more interesting about the Chinese models is that they're doing it with a lot less compute power. So they don't have the access to the GPUs or even the TPUs that we're talking about from Google's side of things. So I think that is very interesting.

And I think people are underestimating that, to be completely honest. So if it's going to be that much more competitive, and yet these companies still feel compelled to invest at a massive rate, I guess there's one line of thinking that says for a while, that means demand should hold up for the NVIDias, for the infrastructure hardware companies. I'm guessing you don't think that's necessarily the case. Yeah, so I think over the, maybe the near term, you have some of the demand that continues to roll through, but we have seen within, you know, the third-party distribution channels that there is a little bit of softness that's happening within the pricing of some of these

GPUs, and I think that's going to continue to carry through. And eventually the channel does get a little bit sort of oversaturated, if you will. There seems to be some volume there. And if that continues, then you're going to see that weakness trickle back over to, you know, the likes of NVIDIA. So, again, spending last in the near term, and maybe the next quarter or two, you can continue to see that. But on a longer-term basis, there are questions of headroom where this spending continues on a longer-term basis. And if you see cracks, for example, in the Open AI thesis, and you see this competition starting to build and come through, well, what does that do for this greater flywheel effect that we're seeing within the AI ecosystem, where

NVIDIA is really sort of a linchpin of that, open AI is a linchpin of that, and is driving a lot of this AI investment, that grinds the whole thing down and slows that whole flywheel down to a large extent, limits the funding, and then that limits what then goes back into even the hyperscalers. So most of the incremental demand that has come through to the hyperscalers in terms of these cloud platforms is actually that incremental AI venture capital driven type of demand, and that really curtails back how much growth is left there. So really it's a question of headroom and the durability of that growth even beyond, you know, this year and next year and things along those lines. That's the concern that we have, that there's a massive overshadow

appellation of that. Now, you mentioned Alphabet, you know, kind of going from seeming victim of AI to now maybe in a lead position somehow. Do you agree with the market's assessment in that regard? In other words, that the incumbent is going to make this more of an evolutionary change and they can monetize it more clearly, or is the market also giving Alphabet too much credit here? I think this is that dynamism of the market trying to figure out who's going to take the lead in this jockeying back and forth. And I think it's far from over. So if the barriers to entry are fairly low in LLMs, what's to say that a Kimi 2 from Moonshot isn't going to come out with a Kimi 3 that's even more competitive? Or you have

Kwen from Baba, which is being used by Airbnb in terms of their enterprise sort of platforms and how they're sort of integrating in that into their AI. What's to say that these, you know, folks aren't going to continue to jockey back and forth? So I think this is far from over in terms of the race in terms of who takes the lead. And I think it's way too early to call sort of a Victor. And on the other side, there is a lot of spending that is happening on the other side of this and a whole lot of capital intensity. And I think people are misjudging what that capital intensity actually means. Because even if you look at Google, Google, you look at capital intensity, CAPX to sales, that's based on the whole advertising platform, YouTube and everything else. But

if you look at a capital intensity of Google Cloud, how much they're spending against just the Google cloud side of things, that is an exceedingly high number and exceeds prior cycles in the past where you saw and people getting, you know, nervous about that cap intensity, excuse me. And then quickly, in terms of putting a portfolio together, as you have to do, are you just underweighting a lot of these names that have been inflated by these hopes, or are there other things to do to capitalize on what you think is going to happen? Yeah, it's an actually question because we're long only equity managers. We don't short stocks, so we don't necessarily make money off of shorting in any way.

So what we need to try to do is fine. where can I drive high single-digit, low double-digit returns that are away from some of these riskier areas where you could be over-extrapulated. What I think is interesting is if you draw some of these parallels to what you saw during the dot-com, for example, the areas that were leading up to that dot-com, that really high sort of inflated environment, the areas that underperform are the things are maybe a little bit more boring. They're still putting up high-quality, resilient types of returns, things like staples, things

like utilities, maybe insurance types of businesses. But what was interesting is after you started seeing some of those cracks in the dot-com and the tech names and the market overall sort of rolling over, those names actually performed well on an absolute basis. And I think that's what you've seen over the last couple of weeks. That's what we're positioned at this point in time, where some of these names could actually perform well on an absolute return basis, not just driving and protecting you better during the outside volatility regimes.

Yeah, value and quality did certainly emerge out of that period. Brian really appreciate it. Thank you very much. excellent thanks so much happy thanksgiving all right you as well up next we are tracking the biggest movers as we head into the close here's christina with those and we have an hr software maker that slides despite its a i push a pet retailer jumps on better margins and a chip equipment maker actually getting a wall street upgrades today i mean we don't often talk about those moves next eleven minutes to go until the closing bell let's go to christina for a look at the

to watch. I'm here, yeah, and shares of Workday also here, but down, 8% after the HR software maker revised its full year subscription revenue forecast. Multiple analysts today lowered their price targets after the report. Stevell analysts say growth from its subscription revenue backlog will continue to slow even as customers sign up for Workday's AI products. Petco shares, those are popping 13, almost 14% right now. After the retailer hiked its full year earnings guidance, it reported a year over year. Net sales decreased in line with its outlook, but improved its gross profit margin and operating income. The stock, excuse me, down about 10%, I just got so excited about Petco that I just choked.

And last but not least, ASML, seeing a bump today, about 4% higher after Morgan Stanley named the semiconductor equipment company a top pick and also raised its price target. Analysts say ASML continues to see strong demand from the DRAM cycle, that would be the advanced memory or dynamic memory, and they estimate a less severe decline in China demand than what management predicts. Keep in mind. And Smell makes these really expensive lithography machines. Lots of stumbling. But Mike, it's Thanksgiving, and I'm almost done. Back over here. Yes, and enjoy it. Thank you very much. Up next, how the Thanksgiving travel rush is impacting the airlines. That are much more when we take you inside the market zone.

Getting more news out of Washington, Amon Jabbers here with an update. Amen. Mike, some very sad news to report now in the wake of that shooting incident here in Washington, D.C. last hour. We now have a statement from the governor of West Virginia, Governor Patrick Morrissey, who says it is with great sorrow that we can confirm both members of the West Virginia National Guard who were shot earlier today in Washington, D.C., have passed away from their injuries. He goes on to say, these brave West Virginians lost their lives in the service of their country. We are in ongoing contact with federal officials as the investigation continues. What we know of this incident, Mike, is that two National Guardsmen were shot just outside of the Farragut-West metro station. That's just a couple of blocks from the White House itself. And another individual was shot.

Emergency helicopters were brought in, landed on the ellipse just south of the White House, and evact at least one of those people from the scene. the D.C. police have said that there is a suspect who is in custody now. We don't have any information on that suspect's name, but now we are getting confirmation here of the deaths of those two National Guard officers. Back over. Amen, thank you very much. Well, we are just five minutes away from the close.

Let's get into the closing bell market zone. Courtney Reagan with a check on retail ahead of Black Friday. Philibault here with a check on the airlines during this busy stretch for travel. NHSBC's Max Ketner is breaking down these crucial moments. of the trading day. Court, what can we expect? Yeah, you know, Mike, it's been a very busy 10 days for retail already, with most of the biggest retailers reporting their third quarter results, many better than expected, coming up perhaps retail's most important five-day stretch of the year.

So shares of coals up another 9% today, 55% week to date. This comes after a better-than-feared Q4, a Q3 rather, in an upped forecast, as well as naming its interim CEO now permanent. Urban Outfitter shares up about 13% after its earnings report. Consumer confidence was disappointing, right? But the XRT, it's up 6% week to date. That is well above the performance of the S&P 500. And while most stores are closed tomorrow for Thanksgiving, like the market,

there will be doorbusters online. And that's how that Black Friday Bonanza is going to kick off again this year. So Black Friday does still matter. It's expected to be the largest in-store shopping day of the year, still, even if it's smaller than what it once was, and growing online. The NRF expects more Americans to shop between Thanksgiving and Cyber Monday, online, in-store, or both than ever before at almost 187 million. Mike?

Courtney, thank you. Phil, how are the skies doing so far? It's a little slow today, especially here in the Upper Midwest, because of some weather, Mike. But this is not a bad day. Fewer than 100 cancellations. The important thing to keep in mind, this week, $31 million. passengers will take to the skies. That is a record of 1% compared to last year, with Sunday being the busiest in terms of the most people who are flying. As you take a look at the airline stocks, they all moved higher today. Why? Their Q4 guidance remains unchanged, despite the

government shutdown. If they have a solid week this week, Mike, that portends that they will probably have a solid fourth quarter, and that's what investors are banking on. All right, for sure. We'll know you'll keep an eye on it. Thank you very much, Phil. And Max, I know you hadn't wavered during that pullback period in the markets with your bullish view. What should we be watching most closely here as this recovery rally gets moving? Yeah, I think we should be looking at actually all of these sort of shorter term sentiment positioning indices. Because when we look at a lot of those indicators, they've actually been increasingly flashing oversawl territory and oversawed conditions and, in fact, buy signals. So things like short-term hedging demand, the VIX futures curve going full on into backwardation last week or things like technicals.

When we look at, for example, the put-call ratio in equities, but also in rates, all of those things really have been flashing quite oversold conditions. One other thing that I think we should look at in the next couple of weeks is how systematic strategies are faring, at least according to our estimates. In fact, when we look on aggregates, CTAs, risk parity, volatility, volatility. target strategies. They have been quite stretched in terms of their equity positioning in terms of their equity longs just about two months ago. On our estimates, it was almost hitting the hundredth percentile. That's now really come off for about the 50th percentile. So I would argue positioning now after the last couple of weeks of the little bit of a wobble, positioning really much lighter. And that really should pretend quite a bit of a solid potential for a year-end rally

in the next couple of weeks. So the dry power. piece of the story certainly is cooperating in terms of what you're saying that that buying ammo is there. But what about going into next year, the fundamental setup? It seems like people are putting pretty heavy earnings growth already in the books already. Yeah, I think that it's probably the case, but probably more for like sort of Q2, Q3 onwards. In fact, when we look at the last couple of weeks, what has changed, the only real fundamental thing that's changed, apart from positioning and sentiment on the technical side. But fundamentally, what's changed is that when we look at the Q4 reporting season

that's coming in January and February, when we look at those Q4 earnings expectations for the S&P 500, they've been downgraded even more. We're talking now about minus 1% quarter over quarter. So bottom-up consensus is now saying that earnings will see a sequential decline in earnings in the fourth quarter. That is way, way, way to bearish. And if we exclude tech from there, then actually bottom-up consent is saying earnings are going to drop by almost percent quarter of a quarter. And with such a low bar to beat, that's a great setup. Max, really appreciate it. Thank you very much as we hit into the close. We're a little bit off the highs, but the S&P 500 still looking for a 0.7% game. It is also a very broad rally,

about 70% of all volumes, to the upside. That's going to do it ahead of Thanksgiving for closing down. We'll send in to overtime with Morgan and John.