Closing Bell - Closing Bell 1/14/26

Episode Date: January 14, 2026

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.

Thank you, Kelly, and welcome to closing bell. I'm Mike Santoli in for Scott Wapner today. This make-a-break hour begins with investors rushing out of tech and into last year's losing sectors in many cases while trampling the major indexes along the way. Here's a look at the scorecard with an hour left in regulation to the S&P 500, down about 8 tenths of a percent, a little more than that, had been down more than 1 percent, and in fact reached levels that were first attained in late October. So it's been pretty much sideways for over two months for the headline index. The NASDAQ is really the main downside driver of the day. It is down a percent and a half. Semis are weak today alongside the struggling software group, which is deepening its losses.

The latter down almost 3% today. Bank stocks being sold on generally good earnings reports, yet the broader tape continues to hang in there. The Russell 2000 is now up by one third of 1%. That continues a outperformance trend. The Equalweight S&P 500 also is doing very, better, it is now actually positive on the day. So previously neglected groups such as consumer staples and energy, they're benefiting from this relentless rotation that has so far been the

prevailing tone in 2026. Which takes us to our talk with the tape. Is all this churn creating a lasting leadership shift for the market? And what does it say about the path ahead for the economy? Here to take on these questions is Jim Karen of Morgan Stanley Investment Management. Jim's good to see you. That's good to see you. So in your view, what is the market trying to express here How are we kind of repositioning for this new environment? Okay, so there's a couple of things that are taking place. When we started last year, we thought about tariffs, taxes, and deregulation, right? We got tariffs right out of the gates.

Now we're seeing the benefit of the one big beautiful bill act, the taxes and also the deregulation. To me, this is the big driver of the broadening of the market and the cyclical leadership that we're seeing. And I think it's going to be very, very durable because these are structural forces that are here to stay. But talking about the structure and the structural forces, we are going through immense structural changes right now that you see maybe one or two times in a century. And this puts a lot of money in motion. We're seeing it. Foreign policy, tariffs, trade, everything's being renegotiated. And this creates four very important themes for us to invest in.

The first one's de-globalization. The second one is re-industrialization. So if you're not going to buy stuff from China, you have to make it at home. And you're seeing that not only in the U.S. but also in Europe, on-shoring. Third is technological innovations, so we're going to be smart about how we re-industrialize. And the fourth is how we fund all of this stuff, how we pay for it. And a lot of this is really coming through fiscal policy, what I call state capitalism. Fiscal policy, deregulation, in addition to like your standard stocks, IPOs, bonds, and

private markets. But all of this is creating a broadening because there are going to be winners and losers. There's going to be creative destruction, which creates the winners and losers. And this is what gives us an opportunity to think more thematically about markets, and that's why they're going to broaden. So as you lay that out, I mean, they can think of a few implications if we're just going to look inside the market and say how this is influencing things. Obviously, I mean, industrials as a group have been very strong. So that kind of reindustrialization as well as the building of the, I guess, the AI future is part of that story. But I could also look at commodities and say, that's a de-globalization story in a way.

Everyone's kind of stockpiling and scarce resource. What does it mean more broadly for either the pace of overall economic growth or, I guess, inflation, and whether it's going to be a stickier kind of high nominal growth world for a while or any of those macro implications? Yeah, so the inflation aspect of this is we have to really start to think about the productivity, right? So we are getting a boost of productivity. So that should help. Right now, labor is in a soft spot primarily because of the tariffs. The labor is the lagged effect of the tariffs.

So everybody thought that tariffs were going to create inflation. And right now we're not really seeing that. But what tariffs did do is they did soften the labor market as companies braced for higher prices and they reduced labor. But all of that's going to start to fade away starting in the middle of this year. So I do think that labor starts to come back. But inflation with higher productivity and all this CAPEX and investment should be there. Now, ultimately speaking, you know, if we think about the Fed,

we think about policy, and we think about the just, is just the broader context of inflation. Sure, it's always a risk. But right now, I think we're in kind of a sweet spot. We're not seeing it. Yeah, I mean, obviously, the bond market's not really expressing a lot of concern about longer term inflation. The dollar is kind of in the middle of a six-month range. So all the things you might look at to say, okay, something's getting out of balance is not really evident right now. As you invest alongside these themes, where does the AI trade as it's been defined fit in? All right. So it's a great question. because where we think it fits in is really, oddly enough,

it's in the value sectors of the markets, odd, right? Because what AI is going to do, for companies that adopt new technology, what they're going to do is become more efficient, more productive, and you're going to unlock a lot of economic value, and these are better priced stocks, better valued stocks, parts of the markets, that actually have a lot more upside. Healthcare is one of those. Very inefficient sector, right?

You start to adopt AI technology just in terms of how, their business practices go, you get a lot of operating leverage out of that. You're seeing it in things like Caterpillar, the number one stock in the Dow, right? It's a construction company, but they're building the data centers. And they're using AI to run their machinery better and more efficiently. Again, more operating leverage. So therefore, you can screen for these things and you can build baskets of equities, which is what we're doing, a policy basket, a deregulation basket, a defense basket, an AI basket, and actually create a thematic portfolio. and that's our approach.

If that is where the benefits are going to accrue, and that's where the value is in your view, what does that mean for an S&P 500 that walked into this year, like with 40% of its weight in just the stuff that's building the large language model? Yeah, so it's also a very good point. So at the index level, if I'm just looking at the S&P 500, and I'm betting on where that's going to go for the end of the year,

I think it's not very interesting. But I think the broader the 493, right, because we always talk about the MAG7 leading like 40% of the equity markets. I think it's really about the $493. But we have to be smart because what I said earlier, creative destruction, there were going to be winners and losers, and there's going to be fragmentation. So it's going to be very key to use these themes to figure out where the money's going so we can lead the money and not follow the money.

And that's part of our strategy. All right, Jim, stay with me. I want to bring in wealth enhancements, I.O. Yashioca and CNBC contributor, Odyssey Capitals, and snipe as well. Welcome to you both. And Iya, as you listen to this, I mean, obviously it fits in with the market action we've seen this year. What have you been expecting out of the market? What is the early run of earnings and economic numbers told you in terms of whether that's holding up? Sure. Hi, Mike. So, you know, I think from an economic standpoint, the economy remains relatively

stable. I mean, we all know the story. Inflation has been stickier than we all wanted to be. But underlying all of this, corporate earnings remain relatively strong. And I think, you know, we continue to believe that 2026 is going to be really powered by earnings versus any sort of multiple expansion from here. And when you say that and it makes a lot of sense and the consensus has held up really well for 2026 earnings, I know it's only the front edge of the reporting season, but we've gotten to sell the news responses on the banks so far. And we've actually had something like that the last couple of quarters in general. So where is your sense of how high the bar is, Aya? Sure.

So, you know, the valuations always mean that, you know, at least at these levels, the bar is relatively high. And we can see some short-term disappointments just relative to expectations. But we think that these are all buying opportunities because the economic backdrop remains relatively stable. We all know we're trying to figure out. where the labor market is headed, but we think it's relatively stable, and we haven't seen any rampant layoffs at a pace that the market can't handle. Jason, with all of this kind of shifting sands under the market, just in terms of what's working, what's not. I mentioned earlier, some of these lagger groups from last year have just gone straight up, like staples and

basic materials. Sometimes that's just a January phenomenon. But I wonder what you're finding to do in terms of either surfacing new ideas or doubling down on things that maybe have back. No doubt about it, Mike. I think it's obviously somewhat of a mean reversion trade. And, you know, from a positioning standpoint for us, I mean, we have looked at, you know, some of the laggards that have not done well that didn't do as well, let me say, as many of the, many other sectors did last year. So energy, obviously, being one of the leaders and hitting all-time highs the other day, the XLE, up 8% this year, materials, industrials. industrial has obviously had a good year this year.

And to your point earlier on financials, I mean, this has been more of the same. We've seen a lot of these sell-offs, these sell-the-news events. And I think it creates an opportunity not only in the big banks, but also as well in the regionals, whereas as I watch this yield curve continue to steepen, you know how accretive that could be for loan demand for some of those smaller banks. So these are some of the areas that we're taking a look at, remaining to our core, on some of the other sectors that have obviously done well in the Mag 7 and semis. But I think the broadening trade is alive and well, and that's healthy for the market at large.

You know, one of the interesting aspects, Jason, of this year has been, you mentioned the Mag 7, and you maybe want to have that at the core. But if I look at where the money and excitement is flowing behind the AI buildout, it's Asia. It's the Korea market. China Tech is working. That's where all the IPO is. have started to flow in this world. Now, I don't know if that's something that's really just, you know, sort of a phase or just a handful of stocks that are moving more than ours over here.

But how do you think about that as we figure out how this is going to settle in terms of AI leadership? No, I think it's very interesting. I think when I think about it from a broadening standpoint, it's not just U.S. It's also XU.S. And to your point, I mean, China names have done well. There's parts of the Eurozone that's done well. Brazil is also an interesting opportunity. Latin America. Right. So I think this is a year where you definitely want to spread the goods into other areas. Not to say that the 22 plus percent earnings growth that will potentially see in the Mag 7 will go away. I think that will remain consistent, but I think this is an opportunity to kind of spread the wealth into other areas, including XUS.

Jim, you said off the top that this is the year when kind of the positives of policy change might flow into the economy and the markets. Well, we've been here for a couple of weeks, and, you know, investors have had to, you know, play goalie as we get all these shots about, you know, which companies and industries should buy back less stock and whether there should be caps on interest rates, you know, you know the whole story, but it just seems as if you mentioned state capitals, and that's like kind of where the money is going in terms of investment, but what do we make of this idea that the affordability push and the effort to run the economy hot might, on some level, come at the expense of some companies?

Yeah, so look, it's an election year. This is what happens. This is anticipated. Presidents become more populist during midterm elections, right? This is the whole game that we're playing. So ultimately, healthcare sectors, housing sectors, all of these things become really at the crosshairs of what people want to start to look at. How do you play for this affordability?

How do you do this? So is it the homes themselves or is it the home builders or is it the or is it the home depots of the world that play into the. this whole thing. But ultimately what we're seeing is that the deregulation that's taking place, it's impacting the financial sector. That's going to be here for a while. The mid-cap banks, the regional banks, all of these, I agree with what Jason was saying. These are positives, right? These are segments of the markets that have been a little bit more dormant. They did have some pressure in the private market space there earlier in, well, in 2025. So there might be some good valuation

there that we think is very, very interesting to seize upon. And the funding, component of this is if you want to get mortgage rates down, this is another aspect of it, too. So there's a fixed income like to this as well. One second. Guys, we are getting some breaking news out of Washington. Amon Jabbers has that for us. Hi, Amen. Mike, President Trump, giving a de-escalatory signal here in terms of Iran.

Take a live look inside the Oval Office. The president is speaking with reporters at an unrelated event about whole milk. You see the whole milk there on the desk. But he just said a few moments ago, and we're seeing oil move on this, that the Iranian government has signaled that it's not going to hold executions of protesters. Now, that's something that the president had warned the Iranian government about, and the president said, just a short time ago, we've been told that the killing in Iran is stopping. There's no plans for executions. I've been told that on good authority. So that is a de-escalatory signal on a day in which

it had been reported that the president was considering possible military action in Iran. Doesn't take military action in Iran off the table necessarily, but it does send at least. a signal that the oil markets are responding to. Separately, the president signed two executive orders here, Mike. What we're told by an aid is that one of them is an executive order on trans-shipping of chips, a 25% tariff now on chips that are trans-shipped through the United States and outward. And the other one is an executive order that's focused on critical minerals and the U.S. government's determination to obtain an international supply chain of critical minerals.

So both of those, obviously important in those sectors as well. But I think the big news here is that the president, at least for now, appears to be pleased with what he's seeing from the government Iran today. Yes. Well, that does help explain the two bucks that came off, the crude price I was seeing and wondering what happened there. And you did actually also get a little bit of a bid in equities alongside that. Amen, thank you very much. Appreciate that.

Aya, your thoughts on this? I mean, this is kind of the, you know, the environment. we're in, right, where you kind of escalate and de-escalate, and then you try to figure out what's going to actually stick in the way of economic impact. Absolutely. I mean, I think 2026 has started off with a lot of geopolitical and new macroeconomic headlines that have impacted markets. But, you know, for us, we want to go back and look at corporate earnings and how is this really going to translate over the longer term. And typically, some of these headlines do impact for the short term, but over the long term, but over the long term, they end up being a little bit more noise than anything else. And do your clients go along with you on that?

Or are they saying, you know, is it time for us to take risks down after three great years, I think from our client standpoint, they're very cognizant of the fact that, you know, there is some downside risk from here, at least on the equity markets. But a lot of our clients are in balanced accounts. And so their fixed income side is providing some of that hedge when it comes to the overall volatility in their portfolios. Yeah, there's no doubt. Bonds have done their job, actually,

in this last little run. Thanks very much, Jim. I know, Jason, you're going to hang with us for just a little while here. We have SEMA. Yeah, well, you were just talking about tech. I want to continue that conversation just around cybersecurity, where we're seeing a number

of these names move lower on a Reuters report that Beijing is essentially asking their domestic companies to stop using cybersecurity solutions made by U.S. and Israeli companies. Now, that's pushing all of these cybersecurity names lower today on this very report. Now, you know, analysts across the sector really voicing in on the fact that a number of these companies do not really have exposure to China. I think they point out Fortinet, which has about 1% of billing, billings from China. Yet you still are seeing these names move lower. I think because over time,

Mike, China is seen as a growth market, a growth opportunity for these companies. And as you know, despite the sell-up we have seen in software over the past few months, cybersecurity has remained one of the bright spots. In fact, names like CrowdStrike up about 30% over the past 12 months, Mike. Yeah, for sure. You almost wonder if that's the reason that, you know, that this group was a little vulnerable here since it had outperformed the broader software sector by so much. Seema, thank you very much.

Jason, how are you thinking about these names? Yeah, no, Mike. So Palo Alto is our pick here. We continue to like this space. I think as you look at the ongoing advances of AI, I mean, the importance of cybersecurity is only going to be more ever, that's in for us going forward. You know, it's interesting to see, obviously,

a lot of these names kind of fall in this kind of software sell-off. But Palo Alto has been a stalwart for us, 19% EPS growth in the last course, 16% percent. revenue growth. So we continue to like this. And I think SEMA makes a great point here. A lot of these names have very little exposure to China. Palo Alto in particular. So I think this is just a headline. We're not going to do anything with this position. If any opportunity, we might continue to double down here. So we continue to like this space broadly. And we think there's a lot of opportunities here. All right. Jason, I appreciate it. Thanks very much. Talk to you

again soon. We are getting some news on Open AI. Let's get to Kate Rooney for that. Hi, Kate. Hi there, Mike. So Open AI is striking. What I'm told by a source is a $10 billion chip deal with Cerebris, the AI giant, just putting out a blog post on the deal. They're agreeing as part of this to buy up to 750 megawatts of computing power. That's going to be over the next three years. Open AI, not putting a dollar amount behind this or commenting on the price. But I am, again, told it's roughly $10 billion by a source. Cerebris. As some background here, designs specialized AI chips. This does add to Open AI's current partnerships with Nvidia. They're also working on a customer. with Broadcom. They've got deals with AMD as well. It does help Open AI eventually reduce some of its reliance on NVIDIA and add to the mix there. The move does highlight, though, this all-out race we've seen for compute and for infrastructure. ChatGBT, TBT, has more than 900 million weekly users, Sam Altman, the CEO, has talked about access to fast, affordable computing and computing power is one of the biggest constraints on growth. So another big deal in the AI space, Mike. Absolutely. Kate, I know you probably have like the spreadsheets and the flowcharts

to say exactly where Open AI is with all the partnerships and commitments, but we'll get to that another time. Yeah, exactly. Another day. Very good. All right, we are just getting started here. Up next, falling financials, the sector having its worst week since August, our Leslie Picker is standing by and following the action as the big banks report. We are locked in New York Stock Exchange. You're watching Closing Bell on CNBC. We are back on Closing Bell. Stocks off their lows, but still under pressure as the banks roll out their reports. Leslie Picker joins us with the Hi, Leslie. Hey, Mike, yeah, we're about halfway through now. The read-through so far is that the fourth quarter numbers and guidance were fine, but kind of failed to impress. And given the recent run-up in many of these names, investors just needed more. The three firms that reported this morning, Wells Fargo, Bank of America, and Citigroup, the biggest laggards among their peers today. Efficiency really in focus with concerns about higher expenses. Bank of America said its first quarter non-interest expenses will be up 4% year-over-year. An investor day a few months ago, B-VA said it expects return on intangible common equity to be between 16 and 18 percent, and that figure stood around 14

percent in the fourth quarter. So analysts on the call were trying to really decipher how the firm plans to get it closer to its targets. Wells missed on the top line and net interest income, the profitability metric for loanmaking. Its bottom line, though, was impacted by $612 million worth of severance costs. City Group's operating expenses were up 6 percent driven by higher compensation and benefits expenses, although management mentioned on the call that it expects to continue reducing headcount and automate more processes. Mike? Leslie, thank you very much.

Let's bring in KBW's head of U.S. Bank Research, Chris McGrady. Chris, great to have you on. It's really interesting because maybe a big consensus trade was to own the huge banks coming into this year. Not a lot to really get too alarmed about at all in the results, but it seems like it's been an excuse to rotate because I'm looking at the regional banks up more than 1% on the day. Well, hey, Mike, thanks for having me back.

I would agree with you, strong results, but high expectations. And so what you've seen this quarter is really good capital markets. We've seen really good loan growth. We've seen pretty good credit. But the expectations were high into the quarter. And then on Monday, you saw the sell-off begin in the banks, given some of the political risk that's happened over the weekend. And do you think that this is just kind of a stutter step in the big banks, the universal banks? Or are we going to have to be a little bit in wait and see,

Just to see if, for example, the deal calendar gets much busier, how the trading environment evolves? Yeah, I think we're really confident in the capital markets calendar. Banks this week have talked about the pipeline for investment banking being materially higher year-on-year. Trading revenues are normalizing, so that rate of growth will slow. But the outlook for the economy is pretty good. Now, to the regional banks that will start reporting later in the week, the real big picture there is net interest income growth. And what you see, I think what you'll see this week is you'll see pretty good loan growth, pretty good margin expansion, and top line growth.

And you mentioned political risks. I mean, are these real risks in terms of, you know, some kind of attention on credit card rates or other things? Or is it jawboning that the market will be able to get past? It feels like the latter. You can never dismiss, you know, macro and political risk. But if you think about the proposal, right, everything is supposed to be helping. the consumer and affordability. We understand that. We think that's a good outcome. But the economics of the credit card lending business at a 10% interest rate, it don't work. So what will happen is

banks will stop lending in credit card. And so you'll see a pullback in credit extension, which I think will have the opposite effect of what the intended consequence will be. And that will be slower growth and some economic concerns. Yeah, I mean, I was looking at just some of the pure play card issues like a capital one. I mean, it's not as if they have just massive, you know, margins and returns on capital necessarily that you would think that they're kind of over-earning in this world. So where does that leave you with regard to your preferences in terms of the names that are moving today? So we're sticking with the Universal Banks. We understand this week's headline risks. They were the top performers last year. They outperformed by 25, 30 points.

We think the fundamental backdrop for the Universal Banks is still quite strong. They're delivering high teams return on capital. They're returning a lot of capital to shareholders. And they're still benefiting from deregulation even with this week. But we are being more sympathetic, Mike, to the broadening out of the financials trade. And so what we like to see is the net interest income growth, the stories there. Companies like Citizens and Key Corp, they have really baked in net interest income growth stories. We'll start to see those results. And we also want to see the broadening of capital return. So beyond buybacks of the biggest banks, we want to see dividend increases. If you want to see buybacks, we want to see mergers. And that'll flow through

the entire banking spectrum. when it comes to deregulation manifesting in this industry, are you modeling it out? Is it really in just in terms of buybacks can be heavier? You can liberate some capital in that way? Or are there other things in terms of more loan growth or things like that that you think is really in hand here? Yeah, the easy way to put it through the model, like, is to step on the buybacks. And that's what you've seen with the largest banks. You've seen capital requirements come down. We still think there's more to go there. But you go down cap, you think buybacks, dividend increases, but the preference is to grow your company, right?

That's the thing you're going to get a multiple for in long-term earnings growth is from growing your bank and growing your company. So we are seeing positive signs of loan growth, right? If you look at the H-8 data in the fourth quarter, loans are up about 10% annualized. We're seeing it, the largest banks lean into the balance sheets more. I think what you're going to see over the next few days into the next week, you're going to see pretty good loan growth. And that's a good use of capital, too, especially since capital levels have been fully re-bibed. from 2023. Gotcha.

Chris, really great to catch up with you. Thank you. Thanks, Mike. All right. Let's get back to Simomodi, this time for a look at the biggest names moving into the closed. Seema.

Hey, Mike, Ravin, shares sliding on a downgrade to sell from neutral at UBS, the firm citing fewer near-term AI-related catalyst and the potential for downside risks involving the anticipated launch of the EV-Maker's new line of R2 SUVs. You're looking at shares down over 7.5%. I want to draw your attention to intuitive surgical,

also in the red after reporting preliminary fourth quarter results, the medical device maker reporting better than expected revenue, but its forecast slowing growth for its flagship surgical robotic system this year, the stock down about 3%. And lastly, Tesla shares are lower after CEO Elon Musk said the company will only sell its full self-driving software as a monthly subscription starting in February. The one-time price of $8,000 will no longer be available. The monthly price starts at $99, stock down about 2.6%. Mike? Seema, thank you. Well, coming up, is it the year of the mega IPO?

Wall Street's awaiting the possible debuts of SpaceX and Anthropic. We'll speak with Harbinger sports partners, Rishon Williams, an investor in bolt of those names about the road ahead. Closing ballots back after this break. As our country celebrates its 250th anniversary, CNBC spotlights the leaders, driving business and the nation forward. I grew up in the small town in western Tennessee. When I say small, I mean about 10,000 people, and I'm the middle child of seven. I tell people I won the lottery with two winning tickets.

I was born in America, and I was born with two great parents. My parents taught us a couple of fundamental things, and that is you couldn't allow your surroundings to limit your vision of your future. Because I can stand in my front yard and I can look to the north, south, east, west, and nothing looked like success. My parents encourage us about the power of education, the power of believing that you could be anything you want to be. And so I look back at that and I'm incredibly fortunate. My dad is my ultimate role model.

It's great that in one generation, he can go from Jim Crow segregation to seeing his son be the chairman of two fortune 500 companies. That can only happen in America. Welcome back. Will 2026 be the year of the largest tech IPOs ever? All eyes are on SpaceX. Open AI and Anthropic as they gear up to make their potential trillion-dollar debuts. Joining me now to discuss at Post-9, his venture capitalist, Rishan Williams. He is Harbinger Sports Partners founder.

He is also an investor in SpaceX and Anthropic, as well as in a variety of sports assets and lots of other stuff. Rishon, good to see you. Good to see you. Thanks for having me. I mean, I guess the big question is just how big the appetite for the public is going to be to capitalize these companies at what they're now contemplating. 10 years ago, when liquidity started to dry up a little bit, the secondary market started to really build in tech.

There are trillions of dollars of pent up demand for these big tech companies, and mostly most people are kind of going right into the private markets to get it. When these companies go public, there will be an insatiable appetite for these companies because it's already leaked into the private markets. It has, although I guess that's the question. I mean, is there a risk at some point of one of these companies kind of waiting too long and you've exhausted the demand? because so many people had access in the private markets. If you can go somewhere else and find a company that goes from $1 billion to $5 billion in $9 months, go find it. But for now...

And that's anthropic? It's anthropic. Companies like SpaceX, Anthropic, Open AI, even the newcomers like Sierra AI. These guys are crushing it. And they're doing annual reoccurring revenue. And some of them are growing at 500% every six months. I guess the question is how big the pie ultimately is. Because you see the public stocks, they're kind of give and take.

Right? There's somebody's in, somebody's out. We're not really sure it's going to be all winners. Yeah. So where does that leave you thinking about like an anthropic, although anthropic seems like right now is that they've kind of, you know, got the ball? I think we're at this inflection point right now. I feel like every time I come here to talk about IPOs, it's some really big IPO that some people are questioning. I was here to talk about Coinbase before I went public. Robin Hood, Dropbox, Lyft, Airbnb, Draft Kings. It's the same theme. Five years ago, it was about software. Right now was all about AI. Three years ago, it was about cybersecurity. Two years from now, it's going to be about quantum computing.

Do you think quantum is going to be ready? I think quantum is on his way. That's the next thing. How should we think about the business of SpaceX at this point? You know, it's kind of a threat to some of the telcos, so there is that piece of the business that just looks like, you know, it's users, its subscriptions, et cetera. And then there's the going to Mars thing.

I think the business of SpaceX is you're making a bet on Elon Musk. When we first invested years ago, it was probably 10 years ago, we were thinking we were getting a rocket company with government revenues, which is a very safe bet. And they still shoot rockets out there. Now 70% of their revenue is internet access. How crazy is that? So it's a great company. They're changing.

They're taking over the world, and they can do whatever they want because Elon just has an open checkbook to do whatever he wants. Now, you do hear people say that, you know, you've got to continue to kind of spend to keep the satellites in the air. Like, in other words, longer term, it's unclear if it, you know, if it quite scales at high return. Yeah, they have the money to spend. Yeah. All the money in the private markets is flowing to AI, is flowing to big tech.

Look at the money to the top 20 VCs raised last year alone. Probably 90% of all the money that was raised in the private markets. It's going to series DENF late stage tech companies. Sovereign wealth funds, mutual funds, retail investors. Money is not a problem. Okay. We'll see if that remains the case. Do you want to talk a bit about the sports.

market right now because it feels as if that's one where big public pools of money have also been directed at what used to be, you know, these kind of one-off bespoke assets, like a sports team. So where is this heading? Similar theme. Yeah. So the thing that makes tech really popular right now is annual reoccurring revenue and high growth rates.

The thing that makes sports popular right now, same two things. Annual reoccurring revenue from media contracts, the Disney's, the Amazon, Netflix of the world. Except their annual reoccurring revenue isn't growing at 500 percent. and it may be growing at 15 or 20, but it's on 10 to 15 year contracts where an anthropic or Open AI is on a monthly contract with retail investors. Also, they have moats around their business and is non-correlated to the equity market. So it's a little bit of a hedge against the AI trade. It makes sense, and that's obviously a pretty good pitch.

I guess the question is, you know, the valuations ever take a break. I remember 10 years ago I was watching you guys on TV and people were talking about how the tech, the private tech company valuations are too high. What they weren't contemplating was how revenue is the thing that's driving growth. Multibles are flat in sports teams and in tech companies. Actually, OpenAI is trading in like, or SpaceX is like 88 times revenue. That's the exception. But in general, you're talking about a 10 times revenue multiple for sports teams, and that's flat. Revenue has tripled for the Atlanta Braves. They're publicly traded company. $250 million in revenue 10 years ago, $650 million in revenue now.

Now, you've also seen just a lot of action in upstart leagues, new sports, right? Women's volleyball, things like that. I think everyone has the WMBA in their head, right, which was everyone thought of dismissed it, and now it's actually got huge value. You're interested in that type of thing? No. You want to establish one. Listen, I'm an early stage tech investor.

I made 175 investments. Literally 90% of them went to zero. Wow. The difference is in tech, you have infinite upside and scale of it. In an early stage startup league, you don't have that upside, but you have the same downside. So I don't touch it. Private equity and other investor money in college sports. Does that make sense?

I think that's an emerging industry within sports that is getting some interest. There's so many things that can change. I personally am going to wait and see how it works out. I'm sticking to the big three. Okay. Hasn't let you down so far. Thanks a lot, Rajan. Great to see.

A new season of Shark Town. I'm on tonight, man. Excellent. Thank you. Keep an eye. Thank you very much for coming by. All right, up next, we're tracking the biggest movers as we head into the closed. Seema Modi standing by with those, Seema.

Hey, Mike, software stocks getting hit hard. We will assess the damage and share where investors are starting to hunt for opportunity. That's next. 12 minutes until the closing bill, let's get back to Seema for a look at the key stocks to watch. Well, Software front and center today, Mike, and Apple-loven shares down about 7% despite Evercore analysts initiating coverage with an outperform rating the firm expects mobile gaming, e-commerce spending to drive 30% plus revenue growth. Shares, though, still down today. But up about 90% over the past year.

The stock just getting caught up in this software sell-off. Let's also talk about Oracle. Bondholders today launching a lawsuit against Oracle, claiming the company was not transparent around the amount of debt needed to build out its data centers. Oracle declining to comment. We are looking at shares down over 4%. And Salesforce continues to sell off on these concerns

over rising competition from Anthropic after releasing Codd Co-work and agentic AI tool that allows users to automate tasks, delegate, and file documents. We're looking at CRM now down about 10% so far this year, Mike. That would be the worst start to a year since 2022 for the company. Wow, yes, and busy times in your world. Seema, thank you very much. Coming up, Bitcoin bouncing today. We'll tell you why when we take you inside the market zone.

That is next. We are now in the closing bell market zone. macro risk advisors, John Colovus, is here to break down these crucial moments of the trading day. Plus, Kate Rooney on the big bouncing crypto. Dan Oleg is sweeping up the data, moving housing stocks today, and Pippa Stevens on gold and silver's record-breaking rallies. And Kate, we'll start with you, kind of a long-awaited bounce in crypto. Yeah, it's interesting, Mike. We see Bitcoin topping 97,000 today. It's been extending this week. We've seen a momentum of about 7% on the week. And it has been a roller coaster. So it dipped, if you remember, back around 80,000.

$85,000 in November peaked around $120K last fall. This week, though, appears to be a win for the camp that really sees Bitcoin as a safe haven. So it doesn't always behave this way. It's often seen as a risk proxy and over the long term has really tracked the QQQ. This week, though, it has been diverging from that tech trade, splitting from the queues. And this week's Bitcoin boom does coincide with the safe haven trade amid the DOJ investigation into Fed share Jerome Powell. Pipp is going to talk about this, golden silver, some of the biggest winners. But analysts are over a glass note. pouring a little bit of cold water on that safe haven theory, saying the push to 96,000, and that region was mechanically driven by a derivatives-led short-squeeze on comparatively thin

futures volume, so a little bit more mechanic there. And institutional balance sheets, they say, are starting to stabilize after some de-risking last year. As I mentioned, crypto-related equities also higher, especially those that hold cryptocurrency on their balance sheet. Big one there, strategy formerly. Of course, Kate, thank you very much. Diana, I guess a little eye of the beholder in terms of interpreting this housing data, but tell us what it's at. Yeah, and it was kind of a double dose of data that we got first. Big demand for refinances and mortgages last week, up 40% for the week after mortgage rates dropped sharply.

And that drop came after President Trump posted on social that he was going to make Fannie and Freddie buy $200 billion in mortgage-back bonds. Well, then we saw a big beat on September existing home sales, up over 5% for the month. price gains are shrinking, but inventory is also shrinking down 18% month to month, which is not great for the overall market, but could benefit the builders, along with lower rates, but still the builders weren't all that happy today. Names like Lenard, D.R. Horton and Pulteal, lower with the broader market. Mortgage rates didn't move at all today, zero on Mortgage News Daily, but they were higher yesterday and definitely off the lows of last week,

so maybe that might be part of it with the builders, but as you said, it's kind of hard to personal right now. For sure. Diana, thank you very much. PIPA, I mean, we can keep trying to call the top and silver. It's not listening. That's right, Mike. But let's start here with oil because President Trump's comments just now that the Iranian government has no plans to execute protesters

did send oil lower after closing at a three-month high, as the market views this as de-escalatory. But turning over to the medals, as you said, another record for gold and silver as this blistering rally continues with investors looking at hard assets. Now, the potential for lower rates, the weaker dollar, and geopolitical risks all driving interest. But silver is also benefiting from its role as both the precious metal and industrial metal.

Momentum is playing a role here. Saxo Bank noting that it took just 10 days to go from 60 to 70 and even fewer days, just six to go from 80 to 90. With trend followers, options hedging and fear of missing out reinforcing that reflexive move, city is among the firm's calling for more upside saying silver will continue to outperform gold and can top 100. But at current levels, we could start to see some industrial demand destruction. Mike? All right. Pippet, thank you so much. John Clovis, you've been here. Waiting this out, now, we had a breakout in the S&P 500 to a new high, at least a temporary one. And I read that you were looking at this sort of like line in the sand of 6,900, let's hold above that, and then the

trend is in good shape. We did break below it today. I mean, what do we make of that? Yeah, we tested that 6,900. I would say that's just the first warning that the short-term trend is deteriorating. we'd have to break down a little bit further down. The December lows are more important from a risk management standpoint, but that is a short-term tell right now that we touch that $6,900 level. And then in general, where do you think we're headed?

It's been fascinating to see, you know, the S&P itself kind of unable to get escape velocity, but so many parts of the markets are kind of accelerating high. Yeah, I think for the S&P, my base case is around, you know, the 7600-ish-so level, and I would say it's up there a little bit. But really this year is more about getting the rotations right.

It's really about getting the risk management right. The midterm elections really do worry me and the volatility that tends to bring with it. And so what are we looking for there? Because it feels as if the textbook says, you know, expect some kind of downside chop weakness in the middle chunk of the year. Yeah. So what I'm threading the needle is I think it may happen sooner rather than later. It may be an early part of the first quarter, 15, 16 percent, maybe even a little bit more. and then we push up higher.

So testing that $6,900, back to your point earlier, it's catching my attention a little bit of it. Again, we just can't break those December lows. We break the December lows, and I think we're starting the topping process at that point. That's one of those rules in the first quarter's rarely been wrong if you break the December lows, right? In terms of these rotations, I mean,

if we're going to get that kind of a significant correction, presumably tech looks vulnerable. Yeah, tech looks vulnerable. I would say in this rotation, you're going to want to diversify. You're going to spread out, right? you want to have a concentrated portfolio, right? You're going to want to pick up some low beta.

Right now, low beta on a rate of return basis, is that actually at a negative two standard deviation level on a one-year basis? That tells me I want to start picking up some low-beta stocks. Now, what do they look like? Are you really buying ugly-looking staples? Well, if you're long-only, you might have to just to kind of diversify. Other ways you might want to look at is lower beta tech. Like a lot of those high-beta tech stocks are starting to wobble.

The sea gates of the world, the sienas of the world. They're starting to get hit a little bit. I worry that those trends are a little bit extended. Yeah, and I mean, some people are buying the washed-out staples. You saw it in the action the last couple of days at least. What do you make of the parabolic movement in something like silver now? Well, this is what they do, right? And technical jargon, this is a wave three advance on gold and on silver.

This is what they're supposed to do. They melt your faces all the way on the top. But to me, I think this is more of a wave three advance, meaning they're going to get hit, they're going to get hit hard, they're probably going to go down 50%, that you're going to want to buy those pullbacks because you're going to make another higher high. At that point, I believe the commodity run would be done, but I think that's in a couple years from now. Yeah, playing these commodities is not for the timid. And then for oil, is this real, this bounce?

You've got to see a build value above 61. Then I start maybe thinking a little bit about it, but I think what's key here from a macro standpoint is what the dollar does going forward. The dollar is at a major support level. If it breaks down, then I think market's going to rally. But I have a sense here that it's going to start to rally and with it brings oil mire as well. Interesting. John, always straight, Trump, and thank you so much as we hit it to the close. S&P 500 is still down more than half a percent, but it was down. I was in some of those Iran headlines a little while ago.

That's going to do it for closing valve. It said it into overtime.