Closing Bell - Closing Bell 11/7/25

Episode Date: November 7, 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.

All right, welcome to closing bell. I'm Scott Wapner, live from Post 9 here at the New York Stock Exchange. This make or break hour begins with a very tough week for tech. Whether that trade has more downside to go, we will ask our experts over the final stretch. But we do have a turning market picture as we enter the final 60 here on Wall Street for the week. There it is. That's not how it looked for much of the day to day. So the Dow has gone green. S&P is still negative, as you see. as is the NASDAG, but the NASDAQ was down about 1% early on. It was going for a streak that it didn't want to get either. It was in danger of posting its third 1% decline in the past six times, the past six sessions. So we're going to watch all of that, and the market is moving on maybe an olive branch in the government shutdown down in Washington, D.C.

We're going to have the very latest on that in just a moment. We're following Tesla, of course, the aftermath of that vote, the trillion dollar pay package for, Elon Musk, it passes. The stock nonetheless is still down. Banks are mostly red. They have been for much of the day, but what I say now may be irrelevant because of the headline that I was talking about. J.P. Morgan is now green. Banks are off the worst levels. We'll show you the airlines, too, relative to the news of the day. Hundreds of flight cancellations by now, you know that story well. A fallout from the government shutdown, and the airlines are actually green. Let's just bring in Emily Wilkins now to give us the breaking news on what we're learning.

out of the nation's capital as this stalemate has continued. Emily, what do we know? Scott, we just saw a brand new offer on the floor from Chuck Schumer and Senate Democrats, basically telling Republicans that they will vote with them to reopen the government as long as Republicans can agree with them to provide a one-year extension of those Affordable Care Act tax credits that have been keeping premiums low. Democrats are also asking that there's a bipartisan group that'll work together, figure out some of the reforms that Republicans have said they wanted to see on those tax credits.

Important to note here, Senate Republicans have actually shown a lot of openness to finding some way to extend these tax credits. They do want some caveats, some limits on them, but they do overall seem to be supportive of making sure that those tax credits are in place to keep health care costs and premiums low. Of course, the question is what can you expect over in the House? You have seen a couple of moderate Republicans, rather, though, who have made this similar pitch, give a one-year extension and time for them to work out something. So now the ball's going to be in Senate Republicans' court. This all just happened. So we're going to be watching to see if Republicans think this is an offer that they can take.

If it is, there could be a way to actually end the shutdown. Maybe today, maybe a little bit later this weekend. But we're going to have to see what the counterproposal is now that Democrats have come out with this brand-new ask. but certainly a major shift from the stalemate that we've been stuck in for weeks and weeks now. Scott? Yeah, leading to that shift in the market that I was just talking about. Emily, thanks. Keep us up to date.

Any response from the Republicans will put you right back on as we continue to follow that developing story. We have even more breaking news at this moment, this time from the Fed. Steve Leesman, our senior economics correspondent joining us with that. What do we know here, Steve? Interesting comments from Stephen Myron, the new Fed governor, who is on a little. leave of absence from the administration about stable coins with the potential effect on monetary policy. He calls stable coins. It could be the multi-million trillion dollar elephant in the room for central banks. Stable coins, he says, could reach one to three trillion dollars by the end of the

decade, the uptake of it, that is. And stable coins will reduce barriers to dollar use around the world, including, he says, giving access to dollars to the, quote, financially repressed around the world. Now, here's where we get to this issue is a range of different factors, he says, putting downward pressure on the neutral rate. You know that he's dissented several times for more rate cuts. But he says, widespread user stable coins could reduce interest rates by as much as 40 basis points. He compares it to the global savings glut made famous by former Fed Chairman Ben Bernanke. The growth of stable coins could increase the supply of loanable funds into the economy,

putting that downward pressure on interest rate. The neutral rate, he says, if it's lower, the policy rate should be lower. Of course, Scott, the context is necessary. He's been arguing for this for lower rates for a long time. This is another reason. But it's an interesting, compelling reason about the broader impact of stable coins on the uptake of dollars around the world. Scott?

I mean, it's been, stable coins have been growing so unbelievably fast over the last 18 months. I mean, the number, the dollar amount of those issued has doubled in just 18 months. Some expect $2 trillion by 2028. That may be a little optimistic. we'll have to see. To what degree are stable coins regulated currently, and what role does the Fed play in that? So this is a big part of Myron's argument, which is this idea that the Genius Act has created a regulatory structure for stable coins, requiring them to be essentially backed up one for one by very stable and secure assets. Now, he does go through this interesting argument

in the speech that he's giving, which is, will stable coins take dollar assets out of other places and put them in here? So there's no actual growth in the amount of loanable, fundable dollars around the world. He says, no, that's not going to happen because stable coins don't pay interest. You wouldn't take your dollars out of a bank or out of a T bill in order to put it into a stable coin. But if you're in a place around the world where you don't have access to the dollar system or otherwise it's more convenient to use stable coins, you might do that. And that will, by extension, increase the demand for dollars. So it's an important development for sure.

The Genius Act, which was passed recently, does create, I would say, the regulatory backbone for this industry to grow. And then the potential effect on the economy and then on monetary policy is one that, as Myron says, needs to be studied further and the Fed needs to be mindful of. All right. These are interesting headlines. Steve, thank you for those at Steve Leesman, our senior economics correspondent. So we'll follow that.

Just a touch on the market, the Dow is still green, on the headline that Emily Wilkins was bringing us just a few moments ago. This offer from the Democrats to end the shutdown, and we're waiting on a response to that from the Republicans. You can see a mixed market picture right now. Let's bring in Jeremy Siegel. He is of the Wharton School, of course, the professor of finance, Wisdom Tree, chief economist. Good to see you. Welcome back. Good to be here, Scott.

We'll get to the story of the week, which is obviously a little anxiety over AI, if you will. But the news that we just got, not related to stable coins per se, but from Emily Wilkins about a potential breakthrough, or at least an offer to try and end this government shutdown. What do you think it means to stocks? Well, I mean, about 20 minutes ago, I saw the Dow go up 150 points in about 30 seconds. and I said, something's a foot here. And, you know, I didn't know at that time, and I was thinking it could be an offer.

That's why it's so dangerous to be short in this market because, you know, you're going to get a pop if it reopens. You know, very honestly, I think the Republicans would be very smart to take this offer. I don't think the government shut down has worked to their advantage at all, certainly in all the polls that have been taken.

It hasn't worked to the... their advantage, even though they're the ones that have voted to keep it open, the public thinks, hey, the Republican control Congress, they control the presidency, you know, I'm going to put the responsibility on you. This is a way off. It's a lot less money than the trillion and a half that was brooded, you know, by Schumer early on. You know, we wanted this and this and this. And as has been said, a lot of Republican districts, you know, are not really prepared for some of these increases because, I mean, the tax break is probably only 15 to 20 percent, but health care premiums are going up so much that anything that can help moderate those, especially for the lower income groups, which are a lot of Trump supporters. as we know, I think the Republicans would be wise to take it. I think they will. Professor, I appreciate you reacting so quickly to the news of this moment as we see it obviously

impacting how this market is trading with less than an hour to go in the week. I want to steer you, though, to what I think has really been the story of this week. And that is anxiety over this AI trade. I'm wondering what you make of it. The fact the NASDAQ has certainly come off its worst levels, but it's still down more than 3% on the week. Many of these big AI-related stocks have obviously been extraordinarily volatile this week. What do you make of it? Well, you know, two weeks ago, for those two weeks, they shot up. And relative to the market, I often chart the tech stocks relative to the market.

It was sort of shooting up and shooting back down. And now it's right back at the trend line. And the trend line is still that these stocks, over the last six months, over the last year after two years are still moving up relative to the next, to the rest of the market. You know, that trend certainly can't continue forever. What I think, though, Scott, whenever anyone says it's the beginning of the end, and when everyone starts saying it's the beginning of the end, I begin to say, hey, no, that's not the way it works. It's usually when everyone is totally optimistic that you see the market begin to crumble. So I still think the AI

trade is on. I mean, I hear the arguments against it. You know, meta is having a particular problems because of all its, you know, capital expenditures. And, you know, it is true because I've done the research for firms that do out too much capital spending actually have underperformed over decades in the market. And we'll put meta in that category. But the rest of them are generating those profits with that expenditures. I'm interested to see how the market does if the Republicans take this and it reopens. I think then once that cloud is out of the way,

I think we're going to get a truer look, then we're basing stock prices on the state of the economy. I think this shutdown could shave one and a half, maybe two points off of GDP this quarter. Certainly if it goes on and they don't take this offer, We saw a consumer sentiment, anything, it could be three. You know, I can't, I would say that it has to end the week before Thanksgiving because that's usually the earliest that everyone travels to their family.

Sure. No one wants that to happen. But I think that, as I say, I think the Republicans will be wise to take it, and I think you'll get a bounce. But then look, next week, if we get a settlement over the weekend, I want to see, now we've got to look at the effect. of, you know, what's going to, you know, happening on the slowdown, the layoffs, whether the tariffs are going to affect the Christmas buying.

When people see the prices, complaining about those high prices, I think we're going to shake out what the real economy looks like. Well, I mean, on that note, were you at all alarmed by some of the information this week related to layoffs, job losses, Challenger? That information raised a lot of eyebrows. as Rick Reeder, said to be in the final five in quotes of the next potential Fed shares is suggesting in an interview that the labor market is softening to the point interest rates should be lowered down to 3%.

So the layoff announcements that we've gotten have been quite substantial, the highest in some time. Are you worried? Well, yeah, I mean, the Challenger announcements was a shock. Now, that was October. What is puzzling, I think, Scott, is, you know, why are, weekly job with claims holding up. They're not showing deterioration. It was a mild increase, but still well within the range. I know they're put together, you know, not from the federal government, but we still have a very, very accurate number. I want to see whether that

deteriorates or not, but probably more important than that is if we do see that deterioration, then no matter what Goolsby and everyone's saying about inflation, the deceptive. rate cut is a slam dunk. I mean, I think the Fed has, I think the Fed basically is going to have the back of the economy there. They're just waiting to see the actual data news that confirms, if it confirms, that that will happen. That will be something I think that supports the market. Listen, you know, I've been on this show for a long time. I think the Fed funds rate should be in the mid-3s.

Given the 10-year, I mean, you might want to go down to 3-0, but I think that that would be a normal term structure of the interest rate, 409 for the 10-year, 350, 340 for the Fed funds. That brings back normality to the curve. Oh, interesting. Okay, bear with me for a second, Professor. I'm going to bring you back in in a moment, but I do want to turn now to that story of the week.

Big tech, big spend. I think it's one of the reasons for investor unease this week. But what about where some of that cash is actually coming from? Sima Modi here with the debt boom underway and what it means as we got another headline just before we came on the show today and said, hey, take a look at this because it's yet fitting to the story. On Oracle, I think the big picture here is investors are waking up to the intensity of these capital expenditures and figuring out how much risk is big tech taking on. Here's a chart that is making the rounds this morning, Bank of America calling it the AI bubble metric to watch, flagging hyper-scaler bond spreads, widening by 50 basis points. in September. So not a crazy amount, but notable that investors are wanting a bit more yield above treasuries for lending money to big tech. And it comes as meta, Google, Oracle, are going

to the debt market to raise billions of dollars. I can confirm Oracle's raise is around $38 billion. Separately, Bloomberg is reporting. Banks are loaning $18 billion to Oracle to fund a new data center in New Mexico. As it looks out to really build about three gigawatts of data center power for open AI. That includes that big project in Stargate. now trying to answer the question. How much do gross margins depress in the near term, given the amount of money it's spending on its artificial intelligence build out? The key number to watch for Oracle's cloud infrastructure is 30 to 40 percent. That is what they outlined at their Investor Day. Will they be able to meet that? We'll continue to follow this story. Thanks for the

latest on that. That's Sima Modi. All right, let's bring in requisite capitals. Brin talking to now in JPMorgan, Stephanie Aliaga. Brin's a CNBC contributor. Of course, the professor is still with us as well. Bryn, do you care about these ever-growing numbers of, you know, debt being raised to spend on the AI build-out? I think you have to be mindful of them. Obviously, we talk about private credit. This is going to be into the public market that we all get to enjoy all of this debt issuance. As a company, it's smart to do that. I think where company specific, like an Oracle, Oracle is now, I believe, negative free cash flow.

So Oracle, even though they have a $670-plus billion market cap, they're going negative free cash flow to fund this. And so I still question, I question meta. The next two years is going to have 40% of cap-ex to revenue on this build-out. And so I think you really want to start looking company specific because Apple is only at 5% cap-x to revenue. Microsoft and Google and Amazon are still much lower. And so I think a small amount of bond offerings makes good sense from a company. perspective. But clearly I feel like Oracle is the poster child because it's almost close to giving up that full gain that it got the day it did that. Big announcement with Sam and them.

It pretty much did. I'll come back to this in a minute, but I do want to get back down to Washington and Emily Wilkins as we're hearing now from the White House. Emily. Hey, Scott. So yeah, hearing from a couple different folks here, number one, I am hearing from a couple Republican aides, that this offer now made by the Democrats, that they will vote to reopen the government if Republicans provide a one-year extension of those Affordable Care Act tax credits is not going to be accepted by Republicans. I was told that this offer was actually made several weeks ago, that it was rejected by Republicans.

We're also now seeing a statement come out from the White House on this, a White House officials saying that Democrats are making clear they're holding the American people hostage for other spending. This is a huge climb down from their initial position. shows they're under massive pressure. They go on to say that Democrats should reopen the government today, and the administration then will meet with them on the tax credit and work on it. So going back, really, Republicans sticking with their initial position,

that they are open to talking about these health care tax credits, but only after Democrats provide the votes to reopen the government. So if this kind of continues, this breakthrough might not be much of one at all, and we might be kind of back to where we were, where both sides are really dug in front. And remember, for Democrats in particular, I am, I do know that there are some more moderate Democrats out there. They want to find a way forward. They want to reopen the government, but they are getting pressure from maybe more centrist or more progressive Democrats who are saying,

look, we just got big wins on Tuesday. The American people are telling us that they want us to hold out and really fight for health care, and we need to do that. So I think undetermined yet exactly if there's going to be a vote today, what that vote is going to be on, and how much longer this shutdown is going to go. Scott? All right. Emily, thank you for the latest. Emily Wilkins. So much for that, Professor, apparently. Well, it's interesting. The market hasn't gone down, maybe a couple ticks, anywhere near as much as it went up when this offer was given.

So maybe this is just a Trump-GOP bargaining position. No, you know, we don't like this, but, you know, as an opening, I think that it still could be one. I don't think it's slammed, you know, slammed shot at this point. I think they may give a little bit more on each side, but remember Trump's strategy is always, you know, take an extreme and go in and bargain down from there. So, yeah, we're going to reject this, but behind the scenes, maybe there is talk.

Again, listen, I'm not a comment. Congressman, if I were the GOP, I would be doing that, but, you know, I'm not in the government. How much stuff does the market do you think really, really truly care about this issue right now? I think there would be a minor side of relief just given the fact that you do see it's having an impact on consumer sentiment today. And also a small impact on consumer spending as well. But, you know, markets are most focused on what's really driving earnings and overall market momentum right now, which goes back to the AI bubble debate that we were talking about earlier. And on that point, I think one of Jeremy's comments was really key where if you were afraid of a bubble,

I mean, you would want to see the kind of action that we're seeing right now, where we're all debating, the quality of CAPX, how much we're tapping debt markets. And I think we need to continue to watch this activity, but also relative to the last time we actually had a bubble, most of that spending was all leveraged financed, and they were all scrappy startup companies. And so I think the reality is there are still really powerful, strong incumbents powering this AI wave. The AI wave is broadening out to companies with inferior fundamentals, and we need to be cautious. But investors need to also have a long-term perspective and maybe write out some of this entry week volatility. So you have nothing else feel as though this week sort of turned up the scrutiny of the dollars that are actually being spent from these companies

and maybe even, you know, in the case of a Palantir, for example, knock the ball out of. of the park earnings, but a valuation that makes people a little uneasy. Valuations are absolutely key here. And I think the challenges we're investing for AI, for business models that are still so nascent. We don't know the pricing mechanisms behind them all. We don't know what the end user demand is going to be. ChatGBT, BT, for instance, only converts about 5% of its users into paid subscribers. So the uncertainty is warranted given that you have spending on this exponential curve.

compute costs and compute needs are on an exponential curve, needs not costs. And I think that all warrants caution, but what we're seeing is really strategic long-term planning. And a lot of the spending commitments that are being made right now, they're not all being spent this year. And they're not even ironclad commitments. They are arrangements that over the next five, ten years, we need a lot of data center capacity. And in order to do so, we need to align incentives across the value chain. What do you make of the pickup in volatility this week? Is it last something that's going to last?

I think, you know, we're bullish on AI, but we're buckled up. And I think given how much these names have run and also how concentrated markets are, because that's the risk here. It's concentrated and still robust fundamentals, but that concentration means any kind of disappointment. You're going to really feel that in portfolios, particularly if you're just sitting passively. All right, we'll leave it there. Stephanie, thank you. Bryn, thanks. Professor. As always, we'll talk to you soon. Look forward to our next conversation. We do have another developing story. It's been a busy news day for sure. Tracking U.S. Airlines, the cancellation of hundreds of flights due to the government shutdown. Phil Aboe with the very latest today from Dallas and DFW Airport, Phil. Scott, let me give you the latest numbers from Flight Aware in terms of cancellations and delays. Cancellations now up over 1,300, delays now over 3,200. By the way, those cancellations, that includes 750 that were pre-announced by the airlines because the DOT has said, you got a drawback.

your flight schedule. So this brings up the question. What are we noticing in terms of an impact? Basically, it comes down to three things. First off, close-in bookings. If you have a flight or a trip that might come up next week, airlines have already said, we've heard this today from the CEO of American. More and more people are like, you know what, I'm going to hold off. That affects corporate travel. Holiday trips, many are already booked. But you know there are still people out there who are considering going somewhere in early December or mid-December who might be rethinking whether or not they should be doing that. Quickly take a look at the airline stocks today.

Yes, they all turn positive, especially after the news that there may be some type of discussions about a resolution in Washington. They're still hanging on to those gains. Bottom line is this, Scott, so much of reporting is anecdotal. I can tell you there is a growing sentiment of people when they are walking by talking with me,

whether they're doing corporate travel or leisure travel. And they all say the same thing. I'm not real crazy about flying right now. And I wish I wasn't flying. And I guess, you know, I just have to hope. And that means increasingly people will not book. If they can't, if they can avoid it, they will avoid it. That's what we're going to see over the next week.

Yeah. Well, I think people have learned, too, that they can carry out their business via one of the, you know, whether it's team, Zoom or whatever else. So maybe they revert to that rather than go to the airport and risk a long delay. Phil, thanks. Appreciate that. Phil Lebo. We're just getting started here on the bell.

First marks. Rick Heitzman, he is back. We get his take on this week's pullback, and if he thinks the AI party is winding down ever slightly, he'll join us right here at Post 9 next. All right. Welcome back. Worst week for the NASDAQ since those dark days of April

and the president's Liberation Day sell-off, is the AI trade still intact? Or did something fundamentally change this week? week. Let's ask Rick Heitzman. He is first Mark Capitals founder and partner. I mean, that's good to see you. That is a question. What do you think about that? Partially true. I think the AI trade is going to continue to go. It's taken a little bit of a breather. But I think as we've talked about before, we're in a moment where things are getting sorted out. So the companies that are really implementing AI and driving ROI are getting rewarded,

and we've seen that so far. And the companies who are just increasing expenses without a real case cited show for it, META, we're getting punished. Is that, it's interesting you, you raise that issue as sort of close, as close as you are to what actually happens in technology. You think that is the real issue with META. The expenses are going up, like we've seen this movie before. Yep. Right?

And we're kind of wondering what the end game is going to be with them more so than some of the other hyperscalers? Much more so. I mean, because you think about Google and Gemini, there's a natural product extension that makes a lot of fun. sense for them, even think about Oracle and investing in the infrastructure or even the service now, where they have a clear ROI, they have a clear product expansion into their enterprise customer base, whereas META isn't as clear, they want to participate so

they might be spending a catch up as opposed to drive immediate ROI. What do you make of, you know, we showed this chart and we list the amount of money being raised in the debt market. Seema was on earlier talking about yet another raise for Oracle on top of what's already been from a lot of others. What do you make of that? You can't start about it at all? Well, it's starting to sound a little bit like, you know, the late 90s.

It is. And we've talked about that before where, you know, you're starting to exhaust the equity. You're going to debt. You're not going to capitulate. Instead, you're doubling down against maybe not even a strong hand in certain cases. But I think a difference this time around, these guys are still generating so much cash flow in their core business. That will enable them to continue.

to play and not bail out for a long time. Well, that's why even as we've seen, you know, the hyper-scaler spreads widen a little bit. I mean, what are you talking like, you know, I don't know, 75 to 80 basis points? There's not a lot of alarm because of exactly what you said. They have pristine balance sheets. They're, you know, resilient at the best company. They're becoming more efficient, even Meadow, which is on the edge of that group, is becoming more efficient in terms of revenue per employee, profit per employee.

They're implementing some AI to get some benefit on the customer service side. So the businesses are running pretty well. It's just the capital expense. And what's the return on that? Do you feel like something's fundamentally changed about the way investors are going to view earnings? Like if you look at, let's say, Palantir had great earnings, AMD had good earnings, Qualcomm had good earnings. Obviously, the stock reaction wouldn't have you believe that, but it was in fact the case.

Now, you obviously have a different valuation. equation than you do for Palantir relative to the others. But the market seems to be punishing companies unless you really knock the ball not only out of the, you know, over the fence, but you've got to get it, you know, Otani style. Oh, no, that's the expectation is everyone's Otani because you're paying them like you're paying Otani. And you're paying them so much. The valuation is so high. You're almost expecting perfection and a two-way, a two-way player that you have to show revenue growth and earnings growth in terms of pitching and hitting. And you also have to be efficient. So to be able to thread that needle is very, very difficult.

And even though Palantir beats earnings, you know, are they beating it enough given where that valuation is? Let me turn you to a topic that I think is getting a lot of interest and a lot of excitement prediction markets. Yes. You took draftings. You're early there, right? Yes. Okay. So they're talking about, you know, that's coming soon. Yep. How much is that shaking up companies like that and just the space in general? I think it's shaping up a lot because it's much more broad, right? You're thinking about the New York mayoral race or you're thinking about how long the government shut down. I'm constantly looking at it because I think there's also an implied wisdom of crowds to those markets.

They've proven to be pretty accurate over time and pretty efficient. So I'm interested in it not only as someone who wants to see what the outcomes are, but hey, what is the wisdom of crowds? So Draft Kings participating, they made an acquisition to get in that market. I think that sports betting is somewhat limited in that you need to really have licenses, you need to be regulated, that's going to be there. But I think it's one of those things that wants the genies out of the bottle. Regulators are going to be chasing down prediction markets. I think that's definitely a wave of the future.

I wish we had to have been in on Calci or Polly Market earlier and seen that happen. Sorry for the Dodger reference to a Yankee guy, but it just worked out that way. Next year. There's always next year. You got enough anyway. Rick Heitzman's good to see as always. Great scenes, Scott. Thank you. Coming up next, restaurant stocks are facing some serious pain. We'll tell you which names and why. Closing bells back after this.

We're back. Stocks are still well off their lows on that news that Senate Democrats have an offer to reopen the government. If health care subsidies are extended by one year, a source, though, telling our Emily Wilkins the offer likely to be rejected by the GOP. Let's get fresh reaction now from Chris Toomey of Morgan Stanley Private Wealth. It's good to have you back. Thanks for having. Have you been thinking at all about the government shutdown? I don't really feel like the market has at all. It's been so overwhelmed and consumed with the AI trade. Yeah, I think it's been consumed but the AI trade and now it's digesting it. And so I think if you think about it, equity markets are up probably 30 to 40% since Liberation Day. If you look at some of the main drivers for this, the higher beta, higher vol stocks have all done exceptionally well.

and we had a really big October, particularly in that. So I think you're starting to see some people taking some profits. I think there's a little bit of concern with regards to Powell, 100% expectation with regards to Fed cut in December. It's still two-thirds. But I think if you have that kind of run, everyone just expects this is going to continue and you get a little bump in the road. People are going to start to pull back a little bit on risk.

I mean, I hear you, you know, but the labor market data, at least we're not getting government data, but the challenger numbers we got this week were concerning. Despite what Powell says about it's, you know, far from certain or far from it or whatever, their hand may be forced to cut rates. I think that's put a little bit of a floor under stocks too. Absolutely. No, and I think that's something to think about with regards to once we get through this kind of settling, what are going to be the things to drive it next. I think Fed policy is definitely going to be a part of it. We also haven't talked about fiscal policy, the big, beautiful bill starting to flow into the economy. The other thing is M&A activity up over 40% year over year, IPOs coming into markets.

So you're going to get those animal spirits. Plus, you're going to start to see people chasing for that year end, doing a little bit of window dressing on the active side, managers wanting to show that they own the stocks that have done well. So you'll start chasing that, as well as just trying to kind of just catch up with the FOMO trade. So we think going into the end of the year, maybe you still get a little bit more of a pullback here, but we should finish pretty strong. Did anything fundamentally change this week in your mind about the AI trade?

Not necessarily. I think, look, earnings in general, which I think are the major driver of this, they were two times over what they would normally be for beats. And if you look at what's driving this, earnings look really good and demand is still relatively strong. I think when we start to see supply catching up to demand, I think that's where we start to get worried. I think everyone's starting to make the comparisons with regards to the 90s and now. You look back then, tech was probably trading at it at 60 times. We're at about 30 times right now,

at twice the return on investment. I think a good kind of comparison is Cisco versus Nvidia. Cisco was trading at about 100 times with mid-teens growth. Invidia trading at probably about 30 times, with almost 80% revenue growth. So I don't necessarily think we're there. I think history is going to repeat it, though. At some point, we're going to over-invest.

But we do that on everything every time. But I don't think it's now. I don't think right now is the time where you start to see this pullback. I still think we've got room to run. So then you lean into that trade still. It's like the Paul Tudor Jones thing of two weeks or so ago, where it's like, yeah, is it a bubble?

If it walks like a duck and talks like a duck, it's probably not a chicken, right? That's what he said. And he said you have no choice, but to get in on this trade, even if it's going to end badly, you're just going to have to have some dancing feet and happy feet to get out. Right. Because I think, look, I think the AI transformation is going to happen. So I think the key beneficiaries are going to be these bigger companies that have great cash flow. I think the other opportunity that you can look into is the buildout on the infrastructure side.

You look at an area like energy, it's up only about 5 or 6 percent, trades at a very good multiple. haven't really seen that infrastructure move into the energy side, like the way that you've seen in utilities which are up about 20%. So if we really have to double capacity in the coming year, not just for AI, but also onshoreing and near shoring, I think you're going to start to have to see that also do well. What's your favorite part of the market right now? I mean, our favorite part of the market, honestly, is probably on the private side. That infrastructure trade, as well as looking at some of these smaller companies that aren't necessarily public yet. If you look at what's happening, I think it used to be that they had a term called

unicorns. If you were a company, private company that was over a billion dollars, you were a unicorn. You didn't exist. You were a magical thing because you went public. And now it's become a trillion dollars. Right. Well, I mean, there are now. Because we're getting there. Well, at least one of them. Yeah, somebody's getting a trillion dollar payday. But there's over 1,500 private companies now that are unicorns. And so getting access to that part of the market, I think is a key part of what is going to do well in the company. All right. We'll talk later about whether you think there's a bubble in the private market with that many unicorns allegedly out there. I'll see you soon. I got to run. Chris Timmy. Morgan Stanley. Up next, we track the biggest movers as we head into the close. Seema Modi standing by with that. Hi, Seema. Hey, Scott. One video game maker is tumbling after delaying a highly anticipated title. We have more on that story right after the short break. We're back. Let's get to Steve Kovac. He has a market flash for us, Steve. Yeah, Scott, President Trump just posting on his true social site.

that he's asking the Department of Justice to investigate the meatpacking industry. He's saying that they're driving up the price of beef. I'm quoting here through illicit collusion, price fixing, and price manipulation. Also saying that this is being done by companies that are owned by majority foreign-owned meatpackers. And you can look at shares of JBS. That's a Brazilian meatpacker. It shares are coming off the lows, but it was down quite a bit. And Tyson, we saw take a dip before recovering as well.

Of course, we know beef prices have been in focus, especially after that deal with Argentina, Scott. Yeah, okay. Steve, thank you for that update. That's Steve Kovac. Let's get back now to Sima Modi as she tracks the biggest movers into this close. What do you see? Hey, Scott, let's start with Take 2 Interactive. That is the biggest laggard on the S&P 500,

despite strong earnings after the video game maker delayed the release of its highly anticipated Grand Theft Auto6 video game. Shares are down about 8%. Meantime Expedia is leading the S&P today after it reported better than expected results on the third quarter, raising both its current quarter and full year guidance. That stock up about 18%. And then there's Akamai technology surging after posting better than expected third quarter results,

improved full year revenue guidance and some upbeat commentary from their CEO. That stock is up 16%, Scott. Okay, Seema, thank you. Seema Modi. Coming up next, the crypto crush. Will there be more pain ahead? That and more inside where else? The market zone, and that's next. We are now in the closing bell market zone.

Mackenzie Segalos is breaking down some big moves in the crypto space. Kay Rogers looking at restaurant stocks, they are failing to heat big time this week. And 314's Warren Pyes is helping us close down the countdown into the close. Mack, we start with you. Scott, crypto markets are rebounding to close out what has been a choppy week of trade that saw Bitcoin slip below that key $100,000 threshold midweek. as macro uncertainty weighed on risk assets. Now, on the institutional side,

ETF trading volume has been light. Net inflows into spot Bitcoin funds are net negative for the week. Still, some investors stepped in to buy the dip. Those corporate treasury stocks are rising today. ETHZilla, backed by Peter Thiel, Tom Lee's BitMine immersion, and Sharplink gaming, they are all ether proxy trades,

and they are breaking higher after a down week. As is strategy, still the largest corporate holder of Bitcoin. Now, longer term, some are rethinking Bitcoin's role in the financial system. Arks, Kathy Wood, told CNBC that stable coins are starting to eat into the use case that she once expected Bitcoin to dominate, especially in emerging markets. Scott? All right. Mackenzie Segalis, thank you very much for that. Kate Rogers, tell us about food stocks because they are feeling the pain.

What a week for the restaurant, Scott. We'll start with McDonald's and Wendy's. They're up on the week. McDonald's, of course, seeing momentum in U.S. same store sales. Wendy's U.S. sales declined, but not. as much as anticipated. The company is planning to focus on closing some of its underperforming stores in its portfolio and investors liking that news. Meanwhile, Sweet Green, Kava, Jopole, all seeing big drops for the week. Those three names, of course, all typically a hit for the younger,

more health conscious consumer. But Jopoldly and Kava noting a pullback in that demo, Sweet Green CEO Jonathan Neiman saying last night, quote, I think it's pretty obvious that the consumer is not in a great place overall. But that's not necessarily true at Starbucks or Dutch bros. still seeing momentum from the younger consumer this quarter. The stock's moving in different directions on the week. Starbucks likely getting a boost due to the buzz around its holiday launch yesterday. Scott, back over to you. All right, Kate, thank you.

Let's bring in Warren Pyes now. I mean, Warren, what a difference a few hours makes. Price action is really interesting. Maybe the market's just trying to suss out any kind of talking between the two sides is good news down in D.C. And maybe we'll get a resolution to the shutdown. So let's go positive and see what happens over the weekend. Yeah, I mean, I think that it's a reverse that usually you don't want to, if there's potential for bad news over the weekend, you don't want to be long. I think the potential is for good news over this weekend. So people are closing out their shorts. And we'll see what next week brings. I think this has been a market that's really all about growth at this point in time and how that interacts with the Fed. And so you've heard a lot about the restaurant stocks there. And just we've seen those types of consumer cyclical stocks really trade in a bad way post the last jobs report back in early seven. September, while AI has driven everything in the market. And so it puts the market in kind of a

vulnerable spot. And this recent pullback has happened right after the Fed meeting. So the market topped when Powell last spoke. And I think the market is really needing more Fed support. And so the Fed tried to do that hawkish cut. And I think the market's throwing its tantrum. And this is really all about the bottom half of the K in that K-shaped economy needing more stimulus, ultimately. And so it's all I read it, it's going to do in the market. That's what you think this sort of the unsettled market as a result of, not so much sort of questioning anything about the durability of AI or the spending amounts, the valuations of some.

I think it's about the Fed. So I think the Fed is, so they're in a conundrum where they have to, they have this case-shaped economy, the bottom half, the real estate market, restaurants, consumer cyclical. anyone not in the top 1% really doesn't own assets, they're struggling. And then you have AI and the super wealthy or the ultra wealthy up in the top half of that K. So what they're in this position where they have to stimulate to help the bottom half of the K, but when they do that, they also blow this bubble or kind of encourage a bubble behavior in the top half of the K and AI. And so I think it is all related and it is back to the Fed. If you look at price action,

I don't think that we're in an AI bubble yet. And so it's just a matter of the fact that the AI basket we track is up 20% since early September. I mean, these things have to take a break. And obviously, even stronger earnings results weren't enough to power the group here recently. I got 30 seconds left. The Challenger data this week was obviously concerning. But under the theory that you're telling me, that probably just means that the Fed is likely to continue cutting. and maybe December isn't dead just yet.

Yeah, no, I think they'll cut in December. It's a matter of what's the path going to look like through that. And I, you know, when I zoom out because of that, because of that Fed's support, and what the data is looking like, the data we have, the Challenger data, in all ADP data, private jobs data, I think the Fed's going to cut, and it's going to be ultimately an upward drift for the market. I'd say bullish through your own. All right, man, it's good to talk to you.

Have a good weekend. We'll see you. Bell's going to ring in just a second. and we've got a pretty good comeback. NASDAQ is still going to be in the red, but it's a far different story than, let's say, you know, two, three hours ago. As the Dow and the S&P have come back positive,

we'll look for some headlines potentially over the weekend on the government shutdown, and we'll see what it means next week for the market, and I'll see you on the other side and overtime.