Closing Bell - Closing Bell 12/16/25

Episode Date: December 16, 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.

Guys, thanks so much. Welcome to closing bell. I'm Scott Wobner, live from Post 9 here at the New York Stock Exchange. This maker breakout begins with anxious markets, partly over the AI trade and now a new variable, the state of the economy and the jobs market. Just when run it hot was all the rage. Well, ask our experts, what it all means coming up. Here's the scorecard with 60 to go in regulation today. A good amount of red on the board, as you can clearly see, NASDAQ trying to go positive, though, all of it following that jobs print today, the unemployment rate to 4-6. It's key to watch. Cyclical areas of the market, as you're probably not surprised, are lower as a result. And then there is core weave. It is throwing off fresh concerns about the AI trade today.

We'll have more on that coming up in just a bit. It does take us to our talk of the tape where this market and where this economy are going. Let's first get some more clues from another Fed member who is making comments this afternoon. Senior economics correspondent. Steve Leasman joins us with more. Steve. Hey, Scott. Yeah, outgoing Atlanta Fed President.

Raphael Bostics, not too concerned about the jobs numbers, saying he expected them, but he was opposed to the last rate cuts, says the Fed's credibility is on the line with five years of above target inflation. He's concerned rate cuts could anchor inflation expectations, could unanchor inflation expectations. The surveys that he does from the Atlanta Fed show firms will continue to increase prices into 2026. The Fed, he says, should keep policy restrictive to hold the line on inflation. and gets a little colorful when he says the Fed should not be too hasty to call to kill the beast, sorry, to call the beast slain.

He prefers to wait for additional government data, Scott. So, of course, he's retiring early next year, so he won't be voting, but perhaps reflecting some of the hawkishness on the Fed board as it exists now. I mean, willing to take the risk on the labor market. He might not be concerned about the numbers we got today that he expected them. However, 4-6 gets the attention of a lot of people today on the unemployment rate and the hopes that it's not going in that direction from here. That is true, right? But remember, Scott, if you take a risk on the employment side by cutting rates, you take a risk on the inflation side. So I think it was Powell who said there are no riskless choices here that there's a risk at either side.

And Bostick did talk about the risk on both sides of the mandate here. There are just some who think, you know what, it is important for the Fed to put their inflation house in order before moving forward with this economy. There's also a lot of talk, Scott. We had somebody on Dan Clifton this morning talking about, or this afternoon talking about the idea. There's a lot of stimulus coming next year. There's, you know, the depreciation is going to kick in. There's refunds are going to be higher. There's Fed cuts that are in the can already.

And so a lot of stimulus coming next year. And so that's something the Fed has to watch out for. One thing I've heard concern about, Scott, is with these refunds coming next year, producers and retailers might use that opportunity to pass along more of the tariffs. We shall see. I mean, so much for run at hot, at least in Bostick's mind. You have a big interview tomorrow from somebody who's getting an interview in his own right, correct? Yeah, we can confirm that Governor Chris Walter will do an interview with the president.

I believe that's tomorrow as well. But before that, he'll be able to warm up with me, I guess. the idea. I'll be talking to Chris Waller tomorrow morning at the Yale CEO Summit. That'll be on Squawk Box at 815. But he is, and you can take a look, Scott, take a look at the, I'm wondering how much money you had on Waller, but you made a little money this afternoon after that story came out. It was first reporter in the Wall Street Journal. We can confirm it. He's up to around 15 now from five, but still you have a asset in the lead kind of coming back from Worse. I guess we were talking about this yesterday. Worse was in the lead. It's a little bit of back and forth. And now

Waller at 15%. You know, I've heard a lot of positive comments about Waller from people on Wall Street. And I think it's the idea that they know Waller. He's a known quantity. And he's a monetary policy expert. Yeah. All right. The Kevin's will duke it out. And then Waller says, hey, don't forget about me. So we'll see it. We'll look forward to you interview. Thanks, God. That's big. And we'll pay attention to that, of course. Steve, thanks. That's Steve Leesman. Let's welcome it now. J.P. Morgan's head of Global Market Strategy, Gibralcoecoe. It's good to have you. It's been a minute. It's good to have you back. Thank you for having you, Scott. Let's just play off of what we just got from Bostic, and he's not going to vote. So it's sort of moot unless he represents a more hawkish side of the Fed.

You suggest that you're bullish for next year that if the Fed eases further on the back of improving inflation dynamics, S&P could go past 8,000 next year. That's pretty bullish outlook. Yeah. So we're thinking of that more as an upside scenario, and that would be contingent upon the Fed easing more than just one more time, which is part of our base case. And that's why we sort of put in 7, $7,500 as our base case, driven by a Fed that eases one more time,

and then basically goes into a prolonged pause. If inflation dynamics do come in better and expected or better than feared, I think in that case it does open up the left side of the distribution for the Fed in a bigger way, and I do think that risky assets benefit from that. Are you not a big believer in the whole run-at-hot trade that the Fed is going to be cutting,

whether it's one or more times, into a strengthening economy, not a weakening one. Thus, the market should be primed to do pretty well. Your 7,500 base case, a single-digit return next year. Yeah, I mean, I think the economy should be in good shape next year, but I also think it's a K-shaped economy. So I think there are certain segments that are running very hot, but I do think at the same time there's other segments

that are actually quite lackluster. And I do think that interest rates could help ease various parts of the economy that are under stress. What do you make of the whole broadening idea, this, you know, obviously what's taken place lately, there's anxiety over AI, and then all of these other areas of the market have been doing well. Is that a moment in time, or does that persist? I think the AI trade is going through a bit of a digestion and a pause, understandably so, because it has been so hot, you know, throughout much of 2025. I do think that you're seeing definitely pockets of broadening out recently, and we do think the broadening out could continue to run its course, but really only tactically short. term into one queue. You could have some of these like positive seasonals as in sort of bottom

fishing beginning of January. You guys just talked about like a bit of a, you know, fiscal thrust kicking in from the OBBA side that could help the consumer. So I do think there is a number and then I think various parts of cyclicals, if you will, or value, are trading trough and trough when you think about multiples and earnings. So you could get a bit of a lift. Like what? So let's say parts of consumer, like low-end consumer has been really beaten up a lot of these place. You think about cruise lines, restaurants, the Las Vegas trip, you know, so. Oh, yeah, those stocks have been up a bunch lately, right? Recently, yes, but they're coming from very low levels. So that's what I'm saying, like,

you know, home depots of the world, like you think about like home improvement, parts of housing. So I think these areas could see a bit of a lift, but I would argue it's probably more of a tactical lift. Q1 story. As we think about the medium term 2026, we still think the big story remains centered around AI, where we think big tech hyperscalers remain very well position, utilities we continue to like, big banks we think are pretty large beneficiaries of AI, and then certain parts of health care like pharma. I mean, you do like large parts of the market which still are going to somehow not deliver that robust of returns. That's interesting. Right? I mean, you like these big groups, banks and tech and other areas that would fall

into that category as well. What are the what are the big risks to your outlook then? So I would say the risk, the big one I would say is basically the Fed. If the Fed basically closes the door to future easing earlier rather than later, I do think that markets will have a bit of a hard time digesting that. And I think this call it broadening out trade, I do think could hit a wall in a pretty hard way in that case. And you go back into a very, very narrow leadership. Energy sector is, for instance, one area that we think is becoming increasingly decoupled from weakening oil prices. and we think we'll be under downward pressure.

And then there's pockets of staples, there's parts of industrials, there's other parts of financials outside of banks that we don't think necessarily fare well in this environment. What do you make of something like a fund manager survey today from Bank of America that shows the most bullish of the past three and a half years? It's hard to find many bears out there, to be quite honest with you. So I personally struggle a bit with these various sentiment surveys. And again, I go back to the case-shaped economy.

a lot of bifurcation, and I think we're just basically living in an environment where certain surveys will read positive, other surveys will read negative, because, you know, markets, the economy, things are very divided, and not everything is benefiting in a uniform manner. Are you doubting the degree to which the upward arm of the K, if you will, can continue to carry this stock market? Do you feel at some point it starts to droop? I think you're seeing probably a gradual decoupling between the S&P 500 index and the big picture economy. The S&P 500 index has been effectively shifting out of old economy sectors and into new economy sectors. The AI 30 make up basically 45% of S&P 500 index.

And frankly, when I think about everything that's ahead of us in terms of this technological evolution, the AI, the disruption story, I'm afraid that the key economy only gets more amplified and not less. Where do you come down specifically on the AI trade? Do you have similar concerns like others do? Spending getting too high, debt levels growing too big, balance sheets of more companies fall into question. What do you think? I think it's tough to have all the answers. At this point, time will only tell.

I personally do not see this as a bubble. I'll give you just one very simple reason when I travel the world, talk to a lot of the investors, both domestically and abroad, I just see still way too much skepticism to call this a bubble. To me, bubbles are typically correlated with euphoria and not with skeptics. I feel like investors are constantly looking for, hey, what could go wrong, what could go wrong, and that's not bubble. I think on the sort of, in terms of the sustainability of the AI CAPEX cycle, I would say that the CAPEX side would have probably been even stronger than what it is. It hasn't been for a number of the constraints that these

companies are facing on the labor, on the sort of input side. And I think in terms of financing, you know, the Cappex wave, 26 is not a concern. Twenty-seven is not a concern. Twenty-eight, twenty-nine is going to be tougher, but we need to get there first. So it seems as though all roads obviously lead to and from the Fed for you in terms of you go higher than the base case or maybe you finish below. What happens if next year they, what happens if they don't cut next year? I know it sounds outlandish at this point. But I mean, they only have one penciled in. We, I mean, our house call from, from our economists is calling for one more cut and then followed by a prolonged pause. You know, I do think that the index in that environment

does go through a bit of a struggle, but I don't think the market goes down because it has a very large weighting in low-volve-quality stocks. I think what struggles in a big way is going back to what we talked about broadening out. I think leadership, value plays, cyclical plays, high beta, speculative growth plays. They won't do well in that type of environment. All right, J.P. Morgan Research, number one, by Xtel. Congratulations on that. Thank you, Scott. It's good to have your views and get your outlook to Brofco Laco. We'll see you soon. All right, now to our panel. Let's bring in SOFize Liz Thomas, New York Life Investments, Lauren Goodwin, Morgan Stanley, wealth management's Ellen Zettner. It's great to have everybody here on the desk with us. All right, Liz, you first of what you think about what Mr. Lacoz had to say. Base case 7,500, bullcase 8,000.

So when I look at in 2026, first of all, to your point, not a lot of bears to be found. And I think that's war. There aren't a lot of really strong reasons to be bearish into 2026 aside from looking at the market right now and realizing, okay, the chase that we all expected into the end of the year maybe didn't materialize and maybe isn't going to materialize. So everybody saw the opportunity for this big chase back into a lot of those AI names, back into a lot of large-cap tech. And we thought that this rally would just kind of get unhinged through December 31st. Perhaps not. The broadening out of the sectors that are now participating in the market rally, if we're going to still call it that, I think is very promising. And I think that will continue into 2026. DeBrovco's point about that being more of a tactical short-term broadening out, I would maybe respectfully disagree with. I do think that there's opportunity for other sectors

to really step into the limelight next year. Well, I think it's dependent on, you know, in his mind, if the Fed cuts rates and the economy remains, strong enough, then clearly the cyclical areas of the market are going to do well. If something upsets that story, you can easily see how those areas that are more geared towards cuts and economy aren't going to do great. Yes. We're trying to front run this now, right? Yeah. This is what people are positioning for that so-called run-at-hot. Yes. Well, run-at-hot can't become not, or it's not going to be good. I think in the first half of the year, it actually can still be that way. We're positioning for the Fed chairman to change.

in May, and we're expecting that that chairman is going to be friendly to the administration from a dovish perspective. We're going to probably expect that maybe they hold off on making a lot of big rate moves until after the new chairman is in the seat. So I think that we still have a decent amount of runway January through May of expecting there to be still dovish support from the Fed, not to mention we just got an announcement that they're buying $40 billion a month of treasuries until probably mid to late April. So the support is, there from the Fed for at least the first few months of the year, and we've got the stimulus coming. I think that the rotation can continue to stay the way it's going. I think that we can

see a lot of strength from other sectors, and I am pretty bullish going into 2026. Sound good to you? It does sound good to me. Do you agree with it? I do agree with it. Oh, it sounds really good. Is it true? Can it happen? I think it can. We are especially given some of the data that we're finally seeing this week. We're seeing the reality of a little bit of a growth soft patch in Q4, and the market is necessarily going to be digesting and reflecting that. As we turn into the first half of the year, I agree. We expect that the Fed is going to be cutting, albeit slowly.

We agree, actually, that we'll probably only see one cut in the first half of the year because growth is resilient. But we're seeing fiscal support ahead of the midterm elections. we're seeing a geopolitical backdrop and an AI backdrop that's fueling investment. This is a pretty good story for the economy and markets. Ellen, does that make sense to you? Yeah, well, I'm going to respectfully disagree with the gentleman. Okay.

So I don't think it's a disaster for the market. This one or that one? Well, your present company excluded. Thank you. You know, I don't think it's a disaster for the market if the Fed does not cut next year, because if they don't cut next year, it's because they don't. They don't need to. And you've got cuts in the pipeline.

There's still going to be impacting financial conditions. They are still sterilizing Treasury's T-bill issuance by investing the $40 billion back into the short end of the yield curve. And there are myriad ways the economy can have really nice, robust growth next year, even if the Fed does not cut further. We need to worry more about the term premium and helping mortgage rates come. down that way. The more cuts from the Fed is not going to impact that. You can have a nice recovery in housing. Well, which Jay Powell himself. If you can start to address that national emergency affordability crisis. So do you agree with the whole run-at-hot idea that investors

clearly have been trying to position in front of? That's like what Bank of America's Fund Manager Survey suggests. You see the level of bullishness. You see the area of the markets that have been doing well at expensive AI and technology and comm services, for example. That's trying to get ahead of something that people think is going to happen, which sounds like you're kind of telling a similar story. No, I think that the run-at-hot, if you can perfectly time the markets, then run-it-hot is a great strategy until you fall on your face. And the fall on your face is when the Fed actually, if you do get a leader at the Fed that is cutting when it's not warranted, then that run-it-hot immediately turns into, oh, my God, inflation protection and downside protection.

Is that the biggest risk you think into next year? I mean, picture a scenario in which, you know, president is going to speak about the economy, right? And then you're going to get closer to them. And he's trying to get off of the, he's trying to tell his own economic message, not so much focus on this affordability issue, which seems to be out there a lot. Then you're going getting a new Fed chair in May. And then you're going to have the midterms in November. A very friendly Fed chair tries to have a rate cut potentially into that. That's plausible scenario, isn't it? Yeah, it is a plausible scenario. It strikes fear in the hearts of economists that you might

lose that monetary policy independence. That Fed chair will need to build consensus still. There's one vote, right. It's only one vote. It's one vote. It worked for Greenspan, though. He, it was a one-man ban then. Well, it's been, we're just pretty persuasive, right? By the point. That's why there's a chair. Yeah. And I think that it's natural that we would, you see the markets respond in a way you would expect anytime the frontrunner for Fed Chair is someone that the markets think would be friendly to a president that wants a 1% federal funds rate, regardless of whether it's warranted or not. And you see markets respond. I do think that sometimes we can see expectations. blown, because when you're in the actual seat and you're faced with that role and doing

what's right for the economy, which ultimately would be right for the president and everyone at large, you know, then that tends to supersede. And so I do think that we kind of can go down a little bit of a, too much of an expectation that the next Fed chair could just be a lap dog. I mean, there, Lauren's an idea put forth, even like a Tom Lee, for example, who's pretty bullish, obviously. You get off to a good start in 26. You could actually go into a bare market because you could have some of these issues crop up. The market may not like it. Maybe you get a backup in rates or some other things happen, but then you finish the year strong. But maybe

it's not the straight line that some hope it is. Right. And that's more or less what happened this year, right? We came into the year feeling really optimistic on the back of a new president, pro-growth policies and we had a super disruptive middle of the year. Well, because we had unforced errors from the very administration that investors were so bullish about, i.e. Liberation Day and a tariff list that was like this long with numbers that were this long. And so it's very reasonable to expect that something like that could unfold in 2026. I think for investors, that tension is already building, even if there's not a bear to be seen in this panel or this market, valuations are high. And so as investors are starting

to set up for really what is the best allocation for 2026, the reality of moving into the bets that we all believe are strong, so AI, the tech, the utilities that we are hearing about earlier, that's a big part of the story. But what else? How do you diversify? I think that the cyclical beneficiaries like financials, like industrials, are a part of that. A little bit of international exposure can help you get that sort of, that value-based boost, let's say.

We're also looking at gold and other alternatives to balance a portfolio. It's boring and relatively stable, but with valuations where they are, that type of diversification from my perspective, even as a bowl, makes sense. Not with a chart that looks like gold does. That ain't boring. Ladies, thank you. I got to go. I got to get to some

developing news here, but we'll talk to you again soon. We are getting some news on the IPO front our Leslie Picker joins us now with the very latest. Hey, Les. Hey, Scott, yeah, I wanted to give you an update on the Medline IPO. I am told that bankers, the sponsors, the company are currently huddled together discussing pricing options for this deal. I am told that they're considering and discussing potentially upsizing the offering. However, at this point in time, they're unlikely to price at the high end, that $30, that high end of the range that they had been marketing. As we discussed earlier on halftime report, this is likely to be the biggest IPO of the year. It's a

big watershed moment for the private equity firms that took this company or purchased this company back in 2021 and are now taking it public at a likely higher valuation. So it's incumbent upon them not to necessarily push the price. I'm told that they want to make sure that it goes smoothly. It goes well because of its importance for both the IPO market as well as the private equity market. So the discussion right now is to potentially upsize the deal, upsize the number of shares being offered, but not to price at the high end of the range to price at that $30. I'm told that that decision is not 100% at this point in time, but it's looking likely that they won't be pricing it at that $30 a share level. Scott.

All right. Good stuff. Good reporting. Leslie, thank you. Leslie Picker. We're just getting started here on the bell. Coming up next, more AI anxiety. Wall Street grappling with fears of a possible bubble. Goldman Sachs' co-head of public tech investing, Sung Cho. He weighs in here next. And later, what one firm is calling, quote, literally the worst thing in the world for investors. We will explain, of course. We're live with the New York Stock Exchange. You're watching closing bell on CNBC. CoreWeave shares down more than 20% this week alone. And yet another example of AI anxiety gripping this market.

The Wall Street Journal focusing on that company today, there's the tear. Coreweave's staggering fall from market grace highlights AI bubble fears. So for more on where the AI trade is heading, let's welcome in Sung Cho. He is co-head of Public Tech Investing for Goldman Sachs. Good to see you. Welcome back. To see you as well. So I feel like this market is. is focused on debt, depreciation, and doubts.

That's a really good way to put it. How do we get out of that? I mean, is that just how it's going to be for a little bit? I think it's really important to think about where the funding is currently for the next couple of years. So if you think about the aggregate level of spend that we need probably over the next couple of years, we think it's about $700 billion to a trillion. And what you calm fears is that 90% of that is being funded by operating cash flows. It's really only 10% that's being funded by debt.

And do you know that majority of that debt is actually going to be issued by META, which actually has a rating that's better than the U.S. government, and the bonds are trading inside of U.S. treasuries. So we're talking about Corweave, we're talking about Oracle. We're talking about 2 or 3% of the debt market of the entire funding picture. And so the vast majority is that the funding shape is actually in really, really good shape. It's just we're talking a little bit about the tails where there's a little bit of concern right now. So you think that those two,

specifically are sort of drowning out the story that the others are trying to tell? I don't think funding is going to be an issue going into 2026. And if you think about CoreWeave and Oracle, I think what they're also, what you have to realize is that they're not facing a demand issue. There's a little bit of supply chain backup issues that they're dealing with. And so that's leading to a little bit of concern. And then there's also a little bit of this open AI with Google Gemini being the leading model now. A little bit? So, yeah, so Open AI, you know, they're a little bit more levered to Open AI's ecosystem, right? And so you're seeing a little bit of depression from that as well.

Part of the problem is everybody's kind of levered to Open AI's ecosystem to some extent, right? Certainly. That's part of the problem. We're sitting here wondering whether they're going to be able to meet all their obligations. You know, they, of course, suggests there's nothing to see here. Of course we will. Look at what we've done here and there and everywhere else. but we're nervous that if one little thing goes wrong, you got problem.

Look, and think about how much sentiment has changed around the different frontier model players over the course of 2025. If you look at the beginning of 2025, Betta was considered to be the dominant model. Betas Lama was the dominant model. Six months later, Open AI was viewed as the dominant frontier model, and they were able to do around that $500 billion and could take in capital from multiple different sources. And then more recently, Google is taking the lead in the eyes of investors. And obviously, do you think that? Yeah, totally.

You do? Yeah. They've leafrogged over. You mean they've leaped over Open AI? Yeah, from a capability perspective. That's why they've gained a trillion dollars in market cap over the last three months. It's because of this perception that Gemini is now taking the lead. But we think that the model volatility is likely to continue to persist, right?

The first AI models that are trained on Blackwells are about to hit market in Q1 of 2026. So I wouldn't necessarily write the obituary on Open AI's leadership quite yet. No, but the mere fact that somebody with the, certainly with the corporate stature that you have at Goldman Sachs, the co-head of public investing, if you're sitting here and saying, you know, all those worries that were in the market, all those months ago about alphabet, and, you know, you're worried about them losing market share and they've lost this big race. You're saying not the case at all. I think it's just a very, very dynamic market. You know, it's a new market. We don't know who the winners and losers are going to be yet. But what we do know is that the CAPEX is going to likely continue to be spending at a very, very high rate, right?

And I know there's been a lot of guests on your show that have been talking about AI bubble concerns. And certainly there's a lot of AI bubble concerns. But ultimately what the investors are trying to ask is, is the water level around spending in the future likely to be higher or lower than the current rebel of spending? And we don't really know the answer to that. But what we do know is, like, what are the leading indicators of a potential slowdown? Right? I don't think that question is being asked enough. Like, what are you looking at to say, okay, is this bubble going to slow down or not?

And I think the two things that you really want to think about. One is the rate of model progression, right? So Gemini was able to leapfrog opening eyes, as I talked about. I think other models are going to continue to push the envelope. And as long as you have the ability to be able to continue to leapfrog, the spending is going to continue to persist. The second is whether these companies are going to be beating and raising earnings expectations. From investor perspective, you can spend all the capbacks you want when you're beating and raising earnings estimates, but if that starts to slow down, then you start getting a little bit more nervous. So at the beginning of this, the whole wave, if you want to call it that, we were suggested that, well, there could be many winners.

There are going to be many, many winners, and everybody's kind of fighting it out in this arms race. Is that how it's going to end, or there are only going to be a few winners, and you're not going to be able to figure. that out for a long time? I think investors seem to misunderstand that this is not a zero-sum game, right? If we have companies that are scratching the surface of developing artificial general intelligence for the entire world that will drive productivity gains for the entire world, what is the market cap of that company worth? And so it's not a race between Google, OpenAI, Meta, Lama in some ways, like, they all

can win. Now, there's not going to be five winners that comes out of this. but what the market fails to appreciate, this is a really, really big opportunity. Yeah, great to catch up with you. Sung, thanks. All right. Sun Cho, Goldman Sachs coming up. Top-ranked financial advisor Richard Saperstein is with us.

He'll tell us how he's advising his clients heading into the new year. Closy Bell's coming right back. All right, coming up next, the NASDAQ's plan for near-round-the-clock stock trading. Not everyone's convinced it's such a good thing, though. for investors, we debate it coming up. day, five days a week. Well, the NASDAQ is pursuing just such a plan, which is subject to SEC approval. Is it a good idea, though? That is the question. CNBC contributor Ron Insana joins us now with more. It's good to have you. We're glad to have you in this conversation.

So the so-called global trading hours, Ron, which start at 4 a.m. each day and at 8 p.m., followed by a one-hour break for maintenance, testing, and clearing. Is this a good idea? I'm not sure. I would lean towards no right now, Scott. I mean, if you go back to the origins of the New York Stock Exchange in 1792, they posted price prices twice a day. When I got into the business in 1984, the market opened at 10 a.m., closed at 4. And when they expanded a 9.30 a.m., there was an enormous uproar on the floor. Now, since then, of course, we've added after hours, before hours, night sessions, and the like. I think the key questions around this expansion, if indeed it takes place, is what liquidity looks like, what staffing looks like,

what the level of, if you will, gamification looks like with respect to how people trade stocks. I think those are some important questions that regulators will have to get their minds around. I mean, you're channeling what some of the harshest critics seem to be suggesting today. This from Wells Fargo's trading desk, which really got us talking today, quote, this is literally the worst thing in the world. I cannot think of an action that single-handedly gamifies the stock market, even more than it has already become. This is the epitome of making trading even more like gambling.

Is that too much? It's probably close. It may be a little too much. I mean, I'm thinking about the evolution of digitization, decentralization, gamification, and tokenization, all of which will be fully, I think, in place in 2026. And that's part of this evolution that the market's going through, maybe even revolution. I do think it would engender behavioral changes among investors to trade even more than they're already trading because the window just simply doesn't close. There's no way to shut off the machine, if you will.

If you go back, again, to the time in which I started in the business, 4 o'clock was a hard out. There was a 15-minute session on the Pacific Coast Exchange that Jeffries ran in case there was a tape bomb that you could trade, but very thinly traded. And I suspect we might see some of that in the wee hours of the morning where there's not a lot of liquidity and you start to get very wide price swings that could be, you know, not just increased volatility, but actually hurt investors in the process. Yeah, I mean, markets evolve, though, right? I mean, things have changed, T3 to T2 to T plus one, right?

We clear and we settle trades faster than we ever have. And by the way, this NASDAQ plan is not like they're out on an island, pardon the pun, by themselves. If you look at round the clock trading that already exists, at least in some fashion, Schwab, Robin Hood, interactive brokers, Weebel and E-Trade for ETFs only, as we're showing our viewers here on this wall. I mean, the genie's out. Yeah, look, I'm not saying I'm entirely opposed to it. I think I do think it has to be, you know, well handled. And I think, again, the considerations around liquidity, around staffing for the major brokerage houses who are going to, you know, effectively be working 23 hours a day in some fashion or another. And obviously, a lot of this is going to be electronic.

And I assume that blockchain type trading, peer-to-peer trading, will come into play here because that's one way to facilitate these transactions without having intermediaries have to stand in. So I think, you know, look, I do think it's coming, how it's dead. dealt with how it's handled and what the regulatory framework around it is going to be important, as will be the concerns, as I said earlier, you know, about liquidity, about volatility, about spreads, which, you know, as you know, if in an ill-liquid environment, which could happen in the middle of the night, could get very, very wide and become very difficult to trade. I mean, there's the impact on investors that we've talked about on market structure and the like, but also on the companies themselves.

I want to read you something that Jay Woods, who's a frequent guest on this network, He's a floor broker, a specialist down here on the floor said, quote, listed companies need a time to break and release news events and to have meetings where they're not moving markets. And now we're taking that away from them. You're opening up a new can of worms. What do you make of that argument? Well, yeah, I mean, we may not be taking it away for them.

We may be giving them windows in which to bury, you know, adverse news that's coming out. Do it at three in the morning. You know, do it at two in the morning when there are fewer hands on deck, if you will. The same way that, you know, Friday afternoons used to be the sinkhole for bad news. They may find other ways in which to put that out. And again, increase volatility in an illiquid environment. And you've got, you know, huge gaps in the way in which stock prices will move. So that's something that needs to be thought through as well. Your corporations do have, you know, an obligation to inform their shareholders. The question if it's 24-7 or

23-7 is when will that news come out, how will it be dealt with and how will it ultimately affect the price of the stock in question. Yeah, you make good points. Ron, thanks for being here. Pleasure to see. Scott. be continued. That's Ron and Sana. Up next, what to watch for when Linar reports in overtime. We're coming right back on the bell after this. All right, we're about 10 from the bell.

Let's get back to Simomodi now for a look at the key stocks that she's watching. Tell us what you see. Hey, Scott. This street will be looking at Linar and its upcoming reports after the bell to better gauge the health of the first-time home buyer. And if sale incentives are needed to lock in new deals, It comes as the National Association of Home Builders announced on Monday that builder confidence remains in negative territory. The stock down 2% ahead of that report.

And then there's Humana, dropping 6% after stat news published an investigation into the firm's internal research on care delivery that alleges patients at its clinics actually had much higher rates of hospitalizations than those who went to similar non-humanic primary care practices. Shares are down 6%. Tesla, a name that we're going to watch as well, hitting in high, on track for a record. close, Scott. All right. Seema, thank you. Seema Modi. Up next, one of the nation's top ranked financial advisors is here. Richard Saperstein with his playbook for 2026. That's next in the market zone. We are now in the closing bell market zone. Treasury partners, founding principal and CIO, Richard Saperstein, is with us and CNBC Senior Markets commentator. Of course, Michael Santoli is here as well to break down these crucial moments of the trading day. It's good to catch up with you. All right, heading into a new year. How do you feel about this market? What are you telling your

clients? I feel good. We have a good backdrop of conditions with moderate inflation, strong employment, strong growth, deregulation, permitting. Stocks are high multiples, but there's still excellent opportunities now in the market. Wow. What if the Fed doesn't cut next? I mean, is the Fed a risk at all in your mind? If that is neutral to accommodative, I don't think they're going to have an impact because stocks are going to, earning is going to be up 13, 14% next year. Half of that is going to be large cap tech. Roughly 10, 12% will be financial.

So if you want to swim where the fish are, you just want to focus on those industry groups. Well, some people are trying to swim in a different area of the pond now, right? Everybody was swimming in the same area, got kind of crowded in tech, and now they're trying to to find out where the fish are going next. We've been hearing that for years. And you don't buy it. No, because for the last three years, we've been in a tech bubble. It's been overpriced.

But if you look at some of the companies, take Amazon, for example, their multiple actually dropped 20% year over year, because their earnings were up 28%. And there's two other tech stocks that actually have not had an increase in multiple, large-cap tech. So I'd focus on the hypers and the peripheral companies around them. What is this then in the market?

market the last week or so. What is this showing? We've had setbacks with Deep Seek, with Liberation Day, with the credit crisis of large cab tech. So all these setbacks present investment opportunities relative for a long-term investor. I know, but aren't you telling me, though, that more cyclical areas of the market are going to do well next year for the backdrop that you just painted for our viewers? They will, but I would focus on where is the growth, I'd focus on financials, and of course, my favorite, independent power producers. Still? You're still on that trade? We are underpowered in this country. And the demand is only going to increase. So for a long-term investor, keep in mind, I've owned the large-cap tech stocks

for 10, 12, 14 years. So it's been a great way to build wealth. It will continue to be in setbacks like this. Your listeners should be adding in periods like this. Well, let's bring Mike into the conversation, too. It's like, don't believe the hype of all these other areas. What do you say? I mean, look, everything at a price. And I think the market even saw that today. You know, in the middle of the day, I was saying, maybe, you know, we get through this period. Everyone says, oh, we have the old mega-cap leaders on sale. It almost happened in the last two hours, okay? That's what kind of rescued the indexes from this other test, the S&P of the 50-day moving average. Tesla makes a new high, and it's Mag 7 again. So the market is finding a way to play a little bit of defense using those

stocks. We do have a little bit of a sense out there with the soft economic data in the very short term. I'm talking tactically that maybe the industrials and the banks and the consumer cyclicals did what they could for us up to this point. So I don't know if that means we're not going to have the big broadening rotation or it means it's just going to be this sort of constant churn. But today it did seem as if, you know, the majority of the Mag 7 are double digit percent below their highs. So in other words, except for Tesla, you're not kind of buying the peak. So we'll see. I don't know if we're going to get past the kind of Cappex vigilante story, the overinvestment fear, and all the rest of it. But at the moment,

it felt as if the market felt it had gone far enough, that rotation. How do you address that and those concerns around AI? I think that we've had different types of bubbles. In 08, we had a leverage financial crisis. Banks were leveraged. They created leverage products. borrowers were leveraged, that was an unproductive bubble, and it led to the crisis. Here, we're talking about a bubble in multiples, yet we're still reinvesting free operating cash flow into this new technology. Companies with two-and-three-quarter backlogs now have two-and-three-year backlogs, and that's going to continue. I'm not talking about the Oracle, OpenAI financing bit. I'm talking about the large hypers that have the operating cash flow to fund this build-out.

I know, but what if we have a spending in the build-out itself, I mean, a bubble in the build-out itself and in spending in general? Key word is fungibility. If you listen to Microsoft's last call, Satya Nadella, talked about the fungibility. Remember, roughly 45-50% of data is on-premise. That can go to 80% in the cloud. So fungibility of these data centers is key to this build-out. I mean, I don't think we have to be in a bubble for the market to say, we're going to take a break for a while from the expensive tech side.

I mean, and that has happened multiple times. So I try to sort of sidestep, you know, the argument maybe the risk rewards better elsewhere is not answered by, yeah, but it's not a bad bubble. Okay, because you can still be outside of a bubble or in the bubble in the making or two years away and still have the risk reward not look great. We weren't in a bubble at the beginning of 2022, NASDAQ went down 30%. It can happen. So it's just one of those things where you can kind of, you know, kind of use semantics to talk around the edges. I do think the market's very fully subscribed for the idea we're getting an economic

pickup in the first part of last next year. I don't think there's a lot to say that's going to be wrong at this moment. I do think the Fed is getting some ammo in oil prices cracking hard to four and a half year lows and inflation expectations being subdued in the uptick and the unemployment rate for them to be on the mark. and say we're ready to ease further if we have to. You sound, by looking at your mix of where you want people to be, that you're pretty close to 60, 40.

You may be 50, 40, 10 in terms of ALTS, but you're not leaning heavy in any way towards ALS. You're like 0 to 10%. Right. We have very, very low exposure as per the industry to ALS. They're illiquid, they're expensive, and they're not very transparent. I want to have liquidity here.

I want to take advantage of current opportunities. And, as I mentioned previously, we have the ability to buy municipal bonds at 4.5% tax freight. Man, you're one of, like, the few financial advisors of your caliber who is telling that story about ALS. Everybody's, like, running their clients into them, and you're actually willing to call it out. Yeah, we go the other way. Pitch and Saps. That's it. Well, I mean, I guess you've got to be a contrarian bonds.

30 to 40 percent? Yeah, we've been pairing equity because it's grown. Over the last three years, markets are up 100%. We've been peeling back some equity and adding to tax-free munities. All right. And that we could take to the bank every day. All right. Well, it's an interesting story.

That's why we like talking to you. Not afraid to go against the grain. That's why he's one of the top financial advisors in the country, I guess. Rick Sackristin, thanks for being here. Mike, thanks for you as well. So we'll go red, obviously, today. However, so as Mike was saying, this nibbling in the Mads guy, right, trying to buy some of those double-digit decliners of late, it's working about a fifth of a percent. I'll see you tomorrow.