Closing Bell - Closing Bell 12/2/25

Episode Date: December 2, 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.

Thank you, Kelly. Welcome to Closing Bell. I'm Mike Santoli, in for Scott Wapner. We are live from Post 9 at the New York Stock Exchange. This make-or-break hour begins with stocks churning higher within sight of record highs as rapid rotations within and around the AI trade allow the indexes to hold on to most of last week's rebound rally. That's after Monday's modest pullback in the indexes. Take a look at the major benchmarks heading into the final hour. S&P 500. It's not too far from the highs of the day, up about one-third of one. 1%. We had a little bit of a downside test. Amazon news kind of got some selling in there, but now we are solidly green. The Dow getting an extra lift from a pop in Boeing shares,

and NASDAQ has been outperforming all day up 3 quarters of 1%. That's thanks in part to a bounce in Nvidia. As stocks associated with Open AI find some relief after they were out of favor for a few weeks, we'll try to track it all. Crypto is trading firmer, which has set the stage for a calmer tone in equities today. You see Bitcoin, up. now more than seven and a half percent to almost 92,000 per coin. It takes us to our talk of the tape. Does the market hesitant start to December offer any hints about what's to come throughout the month and into 2026? Let's ask our panel. So far's Liz Thomas, New York Life's Lauren Goodwin, and B&Y Wells, Alicia Levine, all here. It's great to see you all. Liz, so we had a pretty

emphatic 5% rally off of this first 5% pullback in several months. Is it convincing? Does it that we are on, reasserted this upward trajectory, and maybe what's been learned in the process of that sell-off and comeback? Yeah, well, first of all, I think a lot of what underlays the comeback has been the fact that rate decision, certainty came back into the play, right? We've had 30%, I think, likelihood of a cut at some point in November, and now we're back up above 90%. I think that's helped.

What's comforting about this most recent rally is that it started in different places than really what got us here all year. So it started to spread out into other places. Investors looking for alpha generation in some of the laggards of the year. And for a long time, we've been waiting for a broadening out that would actually be durable. And we wanted the market to come in from a broader place and have some of the other sectors pull their weight. So the strength in health care, although I would expect maybe a little pullback, it's been really strong. But the strength in health care is promising.

And then even things like discretionary coming off the mat have been promising too. So I think investors are looking ahead to 2026. some of the concerns that we've had and the soft patch that we sort of went through October and November because of a lack of economic data or even economic data that showed weakening concerns that's slowing down and maybe we've gotten a little more certainty and a little bit more optimism into the end of the year. Lauren, I've been interested in trying to figure out from the market's perspective what kind of macro picture is being painted because, you know, as Liz mentions, we did have this

soft patch, really a confident shock as well during the government shutdown. and we were afraid that the Fed was going to be hawkish in the face of an economy that needed help. Where do you see it going in terms of the underlying economy and how the market is pricing it? There are a few key pillars that for us underpin a relatively constructive setup, at least for the first half of 2026 and certainly through the end of this year. One is that it's a midterm election year. And so already we have the one big, beautiful bill act coming in with tax refunds for everyday purchases. I think that will be a major support for the story in 2026.

We have a monetary policy zeitgeist, which, though, we might have some ebbs and flows in what the market's pricing day-to-day, is moving more doveish. We have a geopolitical context that's fueling an AI space race that I think will last through 2026. That's a constructive backdrop for earnings, and I think should underpin just enough stability in the labor market as well to really be a constructive story. And Alicia, I mean, I think you also believe that, you know, we have a pretty good earnings growth path and that the economy, should also get a little bit of help in a month or so. So, I mean, I guess how would you characterize the level of the opportunity next year after we've had three years of pretty good returns? So it's a great question.

What we've been telling clients is that the market conversation is too concentrated on concentrated risk. Because if you just look at the MAG 7, for instance, this year, only two of the 7 have outperformed the S&P, and yet we're up 16% year to date. So that's already telling you that other sectors and other companies are pulling their weight. So the other thing is you start seeing in December, investors positioning for the year ahead. So we still like financials, health care. We like discretionary because of the support, $160 billion coming from the one big beautiful bill through the tax code in February, March, and April as refunds. So we think that will support the consumer and discretionary.

And tech earnings, even with the spending, are still moving. higher. So with that, those are the sectors we like, and you just see a broadening out. And that also means mid and small cap as well. You know, we've been waiting for small cap to do well over the last three years and the fits and starts. But this time, we do see earnings moving higher in small caps, and we think that is likely to do well next year as well. It feels, I mean, all of that fits together. I do wonder about whether we are putting some kind of additional multiplier effect on what everybody now knows is going to be this little bit of a windfall in tax refunds? So that's your, that's your risk. The risk is that, is that, you know, the downside

is not quite priced in. So you can find many very smart commentators very negative, but overall, the market itself is not pricing and risk. I would expect for next year, much more of a two-way trade, much more volatility. We're at 22 times forward earnings. That means there's a lot on earnings to move and not the multiple to get us higher. This is what happened last this past year. Last five years since COVID, I mean, the S&P's trading at 20 times. It has not gone back to 16 times, which was the previous five years. So multiple is higher, but the earnings really have to carry it, and a lot of news has baked in. So that's the risk here that everybody's sitting here thinking it's going to be terrific. Sure. And I guess, Liz, as I look at the way that

the consensus is starting to come together for 2026, just look at, you know, sell side projections. and I think the average for the S&P target next year is like 7,600. It's low teens returns, and literally nobody is on the record as saying we're flat to down. So that was also the case last year, and we had a very good year. But what happened between people putting their 2026 outlooks out there and eventually getting to a good year was a flash almost 20% crash. I just kind of wonder what we're building toward here.

Yeah, I mean, I think a lot of the consensus right now, if you even just look at what happened in 25, and how everybody had to sort of chase their target down in spring and then chase it back up into the late part of summer and into fall and then sort of chase the market along with it. And now here we are at the end of the year and the chase continues to be on. So I think in 26, a lot of those targets

are assuming an average type return, right? An average price return on the S&P and healthy earnings growth. And I think the hope and the healthier place to be is that the multiple doesn't actually move that much. If you've got earnings growth that still supports it, and you've got price return that's moving, maybe a little bit less than earnings growth, then you keep multiples in a reasonable place. And it doesn't feel too frothy. It doesn't feel euphoric.

We don't have any of those fits and starts where people are saying, well, it's too expensive, so I'm going to sell, and then everybody else follows them. So I think that's a lot of it is we're taking a safer approach, and we, the collective we, a safer approach at saying, okay, we've had some really great years. Those are not normal. We're not going to get used to that. but we do still expect bullish activity. We expect an economic re-acceleration because of some of the stimulus that's coming

and because AI spending is likely to continue just at a slower pace and that's supportive of economic activity. So the expectations, I think, are reasonable, but I also would expect that we have to chase targets around as the year begins, yeah. And then, Lauren, when it comes to the Fed, you mentioned, you know, yeah, we're going to have a give and take about exactly the pace of cuts, but we get a new Fed chair within six months or so, and presumably there's going to be a downside bias.

The market's not all that confident pricing in much more than like 3% ultimate destination for Fed funds. Does that seem right? To me it does seem right. To me it does seem right, and that aligns with our expectations. In fact, we might be a tiny bit on the hawkish side of market expectations, and that's because the relatively constructive backdrop that we have is one in which inflation is likely to be sticky. Now, we're not forecasting a major problem that results. in a rates-related event, but it is one where the Fed moving back to neutral and some range

of estimates of neutral makes sense, but moving much below, that's going to be difficult to defend. Now, in my travels, my conversations with investors, one of the key things that folks are worried about is, do we see, whether it's Lisa Cook being fired, a Fed chair, lots of changes in the second half of the year, whatever the case may be, do we see a circumstance where the Fed's inflation fighting credibility starts to see hits. Now, my read of the markets pricing right now is that that's not the base case. I think we'll all continue to be focused on it, but pricing for that would be inappropriate at this point in my opinion. Yeah, markets is pretty unbothered by the inflationary threat,

right or wrong. I agree. Stay here, guys. We want to get to another big element of the outlook. Open AI CEO, Sam Altman, reportedly declaring code red as Google's Gemini steals the spotlight. McKenzie Sagalas joins us now with more on this, I guess, renewed effort, McKenzie. So Mike, this leaked internal memo cited by the journal is essentially OpenAI CEO, Sam Altman, betting the house on being the most advanced AI model on the market. He's telling staff to pause work on ancillary businesses like shopping agents and ads, which have been key to their forward-looking monetization strategy in order to get all hands on deck to fix the day-to-day chat GBT experience, making it faster, more reliable, and more

customized with souped-up memory features. And this comes less than two weeks after Alphabet launched Gemini 3 to stunning acclaim, and within days of DeepSeek unveiling two new LLMs that they say match or surpass the latest models from both Google and Open AI. Meanwhile, rival firm Anthropic is gaining traction with the very lucrative enterprise buyer, so Open AI is losing ground on both fronts. Now, at the same time, Open AI is committed to spending $1.4 trillion on compute, so Altman very clearly gambling that if they can reestablish an unquestive,

an unquestioned lead on model quality, the business model will follow, which is essential to keeping this aggressive product roadmap on track. And Mike, I just got off the phone with someone close to the company to take the temperature of employees there. And what I was told is that this near-term goal of just delivering for customers on their core product is reinvigorating, that sometimes getting back to who you are and what made you successful can be a real relief. And keep in mind, the company has grown from 750 employees to 4,000 in the past two years. So getting all teams aligned on this core mission

has actually been really well received internally. Yeah, it seems, I don't know, Zuckerbergian or something. There have been times when that company, Facebook and META, have had to kind of reorient everybody in the same direction to get to the next step. Mack, thank you very much. Alicia, you mentioned there's been too much concentration on the concentration of the market and maybe economic activity.

Where does the AI theme fit into that? because it's been really fascinating to see everybody's sort of giving everyone credit who's involved for we're going to spend as far as the eye can see and maybe there'll be a lot of winners to now feeling as if there's potential downside to either being slow or spending too much or misallocating capital. So how does an investor think about these things? So look, I think the theory that all these hypers and the beneficiaries right now are working under is that there's a first mover advantage, which is why we're seeing an enormous increase in CAPEX for this year

and next year as well, that there's a fear of missing out. I think next year you're going to see a dispersion really in the other sectors of the market, the industries that are really using the uptake to get productivity. If you look at the estimated margin of the S&P next year, it's over 14%. And that is a over 5% walk over the last 20 years and what the margin of the S&P is. And it's really accelerated in the last few years. Some of that is in AI and just doing things better and faster. But isn't it also the companies with the heaviest weight are those big hugely profitable companies, right?

In other words, it's not like a given company has raised its margins by 5%. We're starting to see that in the industrials, actually. You're actually starting to see an aerospace and industrials. And we expect this to happen in health care also and the financials as well. You're going to see a dispersion of this. If you get that operating leverage where costs are growing slower than you're revenue, you're going to see a net inflection and earnings pretty quickly because the scale and the scoping of that happens to be very quickly. Who the winners are, it's impossible to tell

here. But let's go back to the fact that the market did quite well this year with not all winners coming out of those top 10 stocks. Well, that is true. And I guess, Liz, we can sort of talk ourselves into it being an AI bubble that either already peaked is two years from peaking or is not really operating with bubble dynamics. And again, how does that work its way through into the here and now of the investment case? Well, first of all, I think at this point, you have to just befriend the bubble, right? Whether you believe it's a bubble or you want to use that term or not, if you haven't befriended it yet, you've missed a lot, especially this year. So how does it work its way into the investment case? I think the semiconductor piece is pretty obvious. The

cap-ex spending and the hope for future revenue is pretty obvious. The part that's getting is we've been talking for a long time about the spending needing to turn into revenue, needing to turn into profit. And in 2026, I think there's an opportunity. We've already seen some productivity gains at certain companies. There's an opportunity to continue to see productivity gains, but then watch it start to spread out into other sectors and see other sectors, particularly health care, start to benefit from that productivity gain and just the enhancement in technology. So I think that's where the investment case gets really interesting and actually gets more bullish, but not so concentrated. That would be the best case scenario.

And Lauren, just to sort of wrap it up with this other element, which is the credit piece, again, it became a crescendo of concern around are we relying too much on debt and these kind of novel structures to do the buildout. How does that stand in your eyes? There's two things I think are so important with respect to this question, especially for next year. The first is that we're all talking about a relatively constructive backdrop, where we see policy rates moving lower in an economy that's doing pretty well, that is an environment where we are likely to see leverage build. That doesn't mean that it is a major risk or a major problem for 2026.

We believe we're mid-stage in the credit cycle, that there is room to run. And so we expect, especially with policy rates coming lower, that actually spreads could continue to tighten or remain in their tights. And so we anticipate that harvesting yield and even some high yield, and private credit structures can make a lot of sense. The second thing I think is so important is that as we consider the tension in this market where we're all looking at high valuations and wondering where the risk is, despite good fundamentals, it's a year for diversification.

We're all talking about the broadening of the AI trade into the bigger economy. We're talking about sort of expanding U.S. exposure globally. We're aware of sort of the broader geopolitical context. I think that diversification is always smart, but it has not been in Vogue, and I anticipate 2026 will be that year. Although arguably this year, it didn't hurt you. Started to be, yeah. So see if it continues.

Really great to have you all. Liz, Lauren, Alicia, thank you very much. We are just getting started. Up next, a shake-up at Apple as the company vets big on its AI future. The details of what it means for Apple's place in the AI arms race. We're live from the New York Stock Exchange. You're watching Closing Bell on CNBCL. Welcome back. Apple hitting a fresh all-time high today as the company shakes up its AI unit.

Steve Kovac has the details. Hey, Steve. Hey there. Yeah, there's a big changes up here at the top of the executive ranks. First of all, John G. Andrea, he's stepping down as AI boss and will be replaced by former Microsoft. Microsoft and Google executive, M.R. Supermania. But this is sort of a demotion for the role. Now, it's reporting directly to Software Chief Craig Federigi instead of CEO Tim Cook. Meantime Apple also confirmed Federigi has been in charge of Siri for much of the year. Following reports, Cook took the project away from Gianandrea this spring. Now, those are the shakeups there, Mike. Now, let me tell you what all of this means.

First of all, Apple has been struggling to find the right AI talent to meet its ambition. We've been talking over the last several months about that brain drain of AI executives going to meta and elsewhere over the last several months. Also, some executive turnover on Tim Cook's leadership team. I'm showing you some here in recent years. This is actually the third major executive to step down in the past year. That's after COO Jeff Williams and CFO Luca Maestri. And the most important thing here is Apple is really framing this as a setup for the AI version of Siri to launch next year. Remember, they have to get this one right. Apple's kind of framing it as a

reset, so to speak. John Jane and Andrea, he was in charge of this whole project. It didn't launch on time, and now they had to delay it a year. But Apple says they are ready to get it right this time. And the press release, they say, quote, Apple is poised to accelerate its work on AI with these changes, Mike. All right, Steve, thank you very much. Let's bring in CNBC contributor and big technology founder Alex Kandrewitz. Alex, good to see you. See you. So we, I guess we're taking as a premise that AI has been, you know, something that Apple has not gotten right in some respects. Let's back up for a second and say, you know, what would success by this point have looked like for Apple? Maybe aside from just delivering this version of Siri on time, considering that Apple's not in the arms race for, you know, a core large language model. I mean, I think at the very basic level, delivering on the Apple intelligence promise that they made a year and a half ago. If they have the world's best data, I mean, if you think about it, people do everything in their phones and Apple has a way to say, hey, we're going to be able to make sense of that in a privacy-aware type of way, the way that many other companies can't do, so you can trust it, and it's just going to make your life easier. Something as simple as, you know, writing to Siri, when's my flight coming in or is my flight delayed, and it tells you, you know, it looks in your email and it says actually, you know, cross-reference to that and says your flight is on time.

It hasn't done that yet. It hasn't done the very bare bones, and that's sort of why they're in this problem right now. So do these moves seem like they're pointed in the right direction in terms of whether it's to raise the urgency level or get a new set of eyes running things? It feels a little bit like a capitulation to me where the ambitions have scaled down in a very big way. Now, the new head of AI within Apple, Amar Subramagna, he spent 16 years at Google, 16, including eight as a research scientist. And so I think that what he's going to be doing is managing the integration of Siri with Gemini. You're going to get somebody who knows the deep intricacies of the Google models, bring them in, and make sure that that integration works. Because when they do release the new Siri, they can't afford another mishap. They want to make sure that it works.

They're not going to develop the models in-house, or at least not the most important ones. They need to integrate well with Google, and this guy's going to do it. And is that going to be enough longer term? I mean, I know there's a school out there that says, you know, they have the devices through which many people will interact with AI, whatever that looks like. whatever chatbots, whatever apps seem like they make sense, they will, in some respect, Apple will be sort of taking its toll on all that activity. It could work out that way. There is a view out there that this technology will commoditize.

You already see the chat chippy T and Gemini aren't all that difference. So maybe Apple looks good and sitting it out. The one thing is that you do give up a lot of control if you turn over the models to somebody else. And if AI becomes a sea change and a magnitude to which that many are expecting, you can really be operating from behind trying to integrate somebody else's models into your core products. There would be the argument to go in and build your own. Clearly, that's where Apple started. They've made a change.

I think for now it's fine. But long-term, it is a vulnerability. Is it the biggest vulnerability in the world? Time will tell, but it is a vulnerability. And then really quick, you said, you know, maybe, you know, Gemini and Chad GPT are kind of not that different at this point. Do you think that Google's been getting a little too much credit for being in the lead in the last month or so? A little bit. Gemini is a good product.

Chat Chip-T is a better product. Chad Chip-T developed by OpenAI from the beginning three years ago, a couple days ago. It is amazing. And Gemini is good, but it has its faults. It thinks a lot. It's very safety-oriented. Chad-C-Gy-T. A startup is able to do a little bit more.

Go out on a limb in a way that Google won't. And the models within Gemini are good. people are using it. They're spending a lot of time there. But ultimately, there's no way that Gemini has the lead over chat GPT right now, but it's catching up and that matters a lot. Yeah, it'll stay interesting for a while, I guess. Thanks, Alex. Thank you. Appreciate it. All right, coming up, the president giving a new indication of when he's going to announce his pick for Fed chair.

We've got the details. Closing Bell is back after the spring. Welcome back. President Trump says he's made his decision for the next Fed chair and plans to announce his selection early next year. National Economic Council Director Kevin Hassett being widely seen as the frontrunner in the Fed chair race, according to recent reports. Joining me now to discuss is Alianz's Mohamed Al-Aryan. And, Muhammad, I guess one question would be, how high are the stakes here in terms of which individual is chosen, if it is presumably Hassett, in, you know, in terms of a potential change in orientation relative to what we have right now, which is a Fed about to cut again? So we definitely are going to get a change, and we need a change.

Look, all five on the short list are highly qualified. Most of them are economists, and I think people will welcome the notion that a train economist is back at the helm of the Fed at this stage. I think there's an overestimation of what a new chair can do in the United States. short term, because it takes them time to impose their authority on the committee. But what they can do over the longer term, Mike, is consequential and it's really needed. This Fed needs reform if it is going to contribute to economic well-being. Right now, unfortunately, it is contributing more to volatility than it is to stability.

And you heard this previously at the beginning of the show when one of your guests noted that The market expectation of a Fed weight cut in December went from 92% in the end of December, end of October, all the way down to 30, all the way back to 92%. That shouldn't happen if forward guidance were credible, and if the Fed officials weren't play-by-play commentators. Is that not, though, Mohammed, simply a reflection of the moment we are at, right? If the Fed is not at its target on either part of the mandate, it does come down to kind of the eye of the beholder and what emphasis the leadership and the committee is putting

on various factors. And that's what's going to change is that this Fed has been excessively data dependent. It has lacked a unifying forward vision of the economy. You don't hear it talk about will the productivity impact of AI be significant or not. What does the change in the trading system mean? We need to have a Fed that has a unifying forward. looking vision. I think they tried to have a forward-looking vision in 2021 with a transitory inflation call. It was a huge mistake, and they've gone back into their corner. So when you

become overly data dependent, and when the data is mixed, patchy, let's not forget we're not back to full data releases, you get a very confused Fed. And what you need is a leader willing to take a view on where this economy is going. That is what was done by Volker. That's what was done by Greenspan. That was what done by Bernanke and by Yellen. So if, just for the sake of this discussion, Kevin Hassett's view is we are going to have

a disinflationary supply-side boom in the economy that can allow for far lower interest rates than we thought possible, even though PCE inflation is above 2.5%. If that's the premise, how long do you go with that call if the data don't cooperate? So I think first that will be the premise of at least four of the five,

and they've been public about this. And I think that is the correct premise. How long do you go with it? You go with it when you see what the forward-looking elements are. And there are basically three elements here, Mike. One is do we continue making progress on AI, life sciences, and robotics? Two, do we focus not just on who's working on AI, but who's working with AI, meaning on adoption?

That's going to be clear, we need an adoption policy, otherwise we don't get the productivity gains. And third is the mindset of companies. You have a few companies like Accenture that are thinking of AI as labor-enhancing. Most of them are still in the cost-minimimization phase, labor displacement. And that's not where you get the productivity impact.

the productivity impact. Where you get the productivity impact is when you have the mindset of labor enhancement. So you judge the forward-looking indicators and you don't just rely on backward-looking data. So if, presumably, next week, we get the 25 basis point cut and it sort of comes along with no promise of anything further and, you know, kind of a data dependence or the committee is a little bit conflicted, you think that is a misstep? Yeah. And that's what the Markets are expecting, if you look, the probability of a December cut, the implied probability of a cut on December 10th is about 92%. Look for January and the next two, it's around 30%.

So the market thinks you'll get the cut. They think it's going to be what they call a hawkish cut, and the Fed is more likely to be paralyzed until a new chair comes in. Yeah, which would be five months or so from there, five or six months. Muhammad, thank you very much. Appreciate your time today. Take care. Up next, ready to run

why Carson Group's Ryan Dietrich is calling for a year-end rally. He'll make his case coming up next. Closing Bell, be right back. We're getting some breaking news out of Washington. Let's get to Emily Wilkins on Capitol Hill for that. Hi, Emily. Hey, Mike.

Well, yeah, a major AI provision that both the White House and AI companies were pushing for doesn't look like it's going to be able to pass this year after Majority Leader Steve Scalise told a number of us that it will not be included in a major defense package. Now, this, of course, is that. AI provision that would have basically preempted a number of states' AI laws in favor of one federal standard. It's something, again, that a lot of AI companies have been pushing for, have been wanting to see. We know the White House, David Sachs, have all been wanting to make this happen. However, Scalice told me that for this particular bill, you need a particular coalition, and there just

wasn't enough support. We know a number of Democrats, and even some Republicans were a little skeptical about this. But Sclis says it's not the end of the road that he's going to continue to see if there can be a way to have one national standard on AI, something a number of lawmakers support. But at this point, we don't really have a piece of legislation at the federal level that could soon become law and would address a number of the AI provisions that states like Texas and California and Utah and Colorado have all addressed. Mike? Interesting. That's something else that perhaps gets kicked into 2026. Emily, thank you very much. We are now in the final trading month of 2025, and our next guest says, all systems are go for a strong year-end rally.

Ryan Dietrich joins us now. He is the chief market strategist at Carson Group. Brian, good to see you. Hey, Mike, thanks for me back. I appreciate it. Sure thing. You look, we've sort of heard the recitation of what the broad seasonal tendencies are, right? You had a strong year coming into December. Usually that does mean you get followed through to the upside in the month of December, although, of course, didn't quite work last year. So how are you seeing it? Well, you know, I want to touch base on something you said earlier on the panel. Your panel was an awesome discussion. You mentioned how can stocks really do well next year?

You know, we've done great for three years. Well, just think about this, everyone. If you don't have a recession, the S&P 500 is up double digits 80% of the time. If you don't have a recession, the S&P 500 is up 20%, 40% of the time. So we don't see recession next year, Mike. So those are some reasons why next year probably can still be pretty good. Now I hit rewind and get to this. You know, you've got new highs in the S&P 500 advance the Klein Line.

We have a more doveish fad. You just talked about that before I came on. It's a broadening out rally. But one thing that I think is really cool. So December is usually strong. Everybody knows that. This is the first year of a presidential cycle. You go back 40 years, Mike.

December has been higher nine of ten times in a first year of a presidential cycle. And layering on to that, you're on at least 5% going into the last month again in a first term presidential cycle. The SP500 has never been lower since World War II in December, higher 12 out of 12 times. There's a lot more to it than that, but I think that's important with some of the other concepts like 80% of fund managers are missing their benchmark. There's reasons to think we had that freak out this time, a week and a half, two weeks ago. Now we're probably going to keep going higher. If we're going to lean on all of that history about, you know, presidential cycle and how markets have behaved, what is that going to be telling us when we're making our way

through the midterm election year next year. Yeah, that's a great question because everybody's going to be hearing this one, right? Midterm years have a 17% peak to trough correction. That's the largest correction out of a four-year presidential cycle. And layering on again, check out what history does and you have a new Fed chairperson. The market tends to test them, right? You tend to have volatility around a new leadership at the Fed. So those are things to think about, but what have we seen for three years? The market gets beat down quickly. Yes, volatility is the price we pay to invest. We say that the Carson team. But we come back nearly just as quickly. And again, with so many people underperforming, doubting this market, I mean, just two weeks ago, we're, you know, seeing

an op-ed piece is about its 1929. Everybody's a market breadth experts and how bad breath is. And now we just had all these different breath thrusts that came in. So I like to see that constant skepticism. I think we'll have more volatility next year. And it was cliche for a strategist to say expect volatility. But it's probably true. But still, this fiscal market is not over is one thing we're really trying to hammer home. Sure. And what about, I guess, the character of leadership or what parts of the market are better and worse position in that environment? Yeah, what's so nice about, I mean, you talked about this before I came on, but this is broad-based rally. I mean, last month, the S&P was flat. That's what we know

barely I get it, but let's just say flat. Eight out of 11 sectors outperforming the S&P 500, and most of them are up well over 1 to 2%. So it is a broadening out theme, but that doesn't mean we're going to go all in the small. We still like large caps here. Look at market history. During bull markets, large caps do a little bit better, and that whole real broadening out, the rest of the globe, we were coming on with you earlier in the first quarter saying look around the globe, but when it's popular then, we still think developed international is a really nice place to diversify portfolio with a little bit of EM. We'd avoid some of the defensive things. I mean, I'm still more optimistic about the economy, so we still think, you know, like metals and mining, industrials, parts of technology are still areas that are probably going to do pretty darn well into next year. Ryan, thanks very much. Good to catch up.

Appreciate it. Thanks, Mike. All right, take care. We're tracking the biggest movers as we head into the close. Christina Parts of Nevelas is standing by with that. Hey, Christina. Hi, Mike. A database stock extending its rally. An aerospace giant soaring and an AI cable maker surging after tripling revenue.

Those movers next after this short break. 13 minutes to the closing bell. S&P up four-tenths of 1%. And Christina has the key stocks to watch. I do. And let's start with shares, the database software provider, MongoDB, because those shares are popping over 22% right now after posting strong third quarter results and raising the guidance for the full fiscal year.

That's on top of yesterday's 25% gain. The company said it's Atlas Cloud database grew roughly 30% from a year ago and really accounted for 75% of total revenues for the quarter. Boeing shares also higher by roughly 10% after the aerospace giant CFO. gave upbeat guidance on deliveries for the 737 and 787 Jets. The company also issued positive free cash flow guidance for 2026. And shares of CRETO technology rising roughly 10% falling better than expected fiscal second quarter earnings. The company sells cables that help facilitate data flow,

so they help think of it like a highway for GPUs to talk to each other, posted a sharp turnaround to profitability as revenue more than tripled in the quarter. This is an AI name, and it's getting the recognition. now. Mike? Oh, yes. One of the faves for much of this year. Thank you, Christina. Up next, three big earnings reports on deck. What to watch from American Eagle, Marvell, and CrowdStrike. That and much more will take you inside the market zone. We are now in the closing bell market zone. J.P. Morgan's Tom Kennedy is here to break down these crucial final moments of the trading session, plus three big earnings we're watching in overtime.

Fon Rouge is on American Eagle Outfitters. Christina Parks and Nevelis is looking at Marvell and Sima Modi is on crowd strike. Gabby, let's start with you with American Eagle. Yeah, so American Eagle is expected to report Q3 earnings of 44 cents per share. That's going to be on revenue of $1.32 billion. Sales are expected to grow 3% from last year, while comps are expected to grow 2.7%. Shares are up about 25% so far this year, and that's after the company launched campaigns with big A-listers, like Cindy Sweeney, Travis Kelsey, and most recently, Martha Stewart.

So the big question tonight will be, were the campaigns worth it? Last quarter, the company said Sweeney and Kelsey drove foot traffic and new customer acquisition, but tonight we'll know if they're also driving sales. We'll also get a better idea on how the campaigns are impacting margins. Analyst said the campaigns are expected to drive expenses up by about 27 million year-over-year, Mike. All right, thank you very much. All right, Christina, Marvell, a pretty important piece of the chip puzzle. Yes, because this is also a custom chip maker that competes with Broadcom.

And so there's three key areas to focus on. First, the Broadcom problem. Analysts say Broadcom has won customer engagements with most of the major players, raising concerns about whether Marvell actually fits into this competitive landscape. And you can just see the difference in the stock prices over the last year. Marvell on the red, Broadcom up 129%. Second, the Amazon situation. Marvell's AWS business has been essential.

flat quarter over quarter since ramping in late 2024. Disappointing compared to peers' growths in AI projects. There are also specific concerns about Marvell's share in Amazon trading and chips with some analysts suggesting the company has lost ground to competitors. AWS did not mention Marvell today at their event. And last but not at least, third, the CEO vote of confidence. Matt Murphy bought $1 million of stock in late September at around $77. Shares have outperformed the Sox Index since then, but investors want to know what he sees that they're missing. All right, Mike.

We will look for it, Christina. Thank you. And Seema, a pretty strong stock within software, CrowdStrike. CrowdStrike, Mike, has been killing it this year. And that's reflected in its stock price, as you just mentioned. It's up over 50% in 2025 on this bet that artificial intelligence is accelerating the need for cybersecurity as bad actors get more sophisticated. So what Wall Street wants to know from CEO, George Kurz, tonight, is more evidence on new

customer wins. How its latest acquisition of Pangea technology is using to secure AI agents is being integrated into the full stack. Kurt's recently sharing that companies, agents can speed up the triage process by hunting down malware. Kurtz also added that at some point security will be fully autonomous. He didn't provide a timeline. We'll see if he does tonight. The stock is currently trading about 10% off its most recent high, Mike. Seaman, thank you. Let's bring in JP Morgan's Tom Kennedy as we head into the closed, Tom, you know, markets obviously settled itself in the last 10 days or so, but you go back two weeks, and it seems like everybody was focused on various sorts of imbalances,

right? CapEx-led growth over the consumer, obviously K-shaped economy, you know, some consumers doing well, some not. And then within the markets, you know, these kind of outsized bets towards what was working. So have we solved any of that? How does that feed into next year's outlook? I think you're starting the intro to the Fed meeting next week, right? Yeah, right. How do we balance all of these, quote-unquote, And when you look at what's driving this U.S. economy in the last, really, we only have it through the first half of the year. First half of the year was a very unique time. First time in American history where Tech CapEx is driving GDP more than consumption.

So at the headline level, growth looks really good. But underneath the hood, I think you can peel back at least two ideas where the economy is not doing as strongly as we think. The first one is what you said, this K-shaped economy. J.P. Morgan uniquely positioned to understand the consumer. At the moment, only the top 10% of income earners in America are spending in excess of inflation. So this K-shaped economy is very real. And I think that is, to the point, being supported by wealth effects, stock market going up. But also on the second side of this is that you're seeing now, how is the U.S. economy going to navigate itself when interest rates come down?

We should see a broadening happening there. But I think the Fed has a lot to unpack next week. So how do you invest knowing all of that? I guess, making educated guesses about what the Fed's going to do and how growth responds. Yeah, I think you have to assume that the Fed will make a cut next week, 95% priced into the market. The question is about what do they want to do next year? That will rely on who the next Fed chair will be.

But as you're looking here, I think from most wealth investors and asset management, institutional investors, they're heavily exposed to this AI train. So trying to find good ways to diversify. You diversify globally, Japan outperforming, changing inflation, expectations, economy there, that should filter through into wages. Also, diversification into more main street ideas. Think about infrastructure. Think about commercial real estate.

Commercial real estate, Mike, the only valuation asset that hasn't recovered its COVID losses. Interesting. So I'm not a big fan of like, oh, look at all this big pile of cash that's going to sweep into other assets. However, if you do start the Fed cuts and you get lower yields on money market rates,

presumably people will look for other ways of accessing income or at least deploying that for the long term. So where are the beneficiaries? The biggest challenge we've seen for the last two or three years is that debt yields, whether it be private credit yields or even commercial real estate yields, have been higher than going in yields for equity-like products. Now, you and I growing up, that can't coexist for too long. Can't have debt yields that high relative to equity returns. So I think as rates come down, we should see a normalization and stabilization.

So this is an opportunity now for people to, again, diversify away, from this one myopically focused trade, which is AI in tech. You mentioned that most people, you know, more wealthy people are pretty heavily invested in the AI trade one way or another already. Do you think that means that they're okay with their exposure, or does that itself represent

a hazard for returns or distortions in the economy? We have to stop saying that AI hyperscalers are spending exclusively out of free cash flow. Leverages accumulating, it's likely to get worse in the future. That should put a lid on risk premiums that people are willing to pay there. Look, I'm a big believer in the AI trade. I think everyone that comes on your show really is.

But at what point do you have to say I have enough of this single one-minded trade? I think an interesting challenge for you and I as we get through outlook season. How many of these outlooks are predicated on just AI success? Right. I think for us, we've got to diversify and find other ways. Again, it's diversification globally. Diversification into real assets. I think those are the two primary beneficiaries here.

You mentioned Japan globally? Is that kind of above other opportunities? I think it stands out. You're seeing a meaningful shift in the culture, return of shareholder capital. That hasn't existed in most of our lifetime. Wealth is now going to be tied to wage growth as inflation expectations become entrenched there. It should filter through to earnings.

So I think we're going through really a regime shift there. Yeah. Obviously also we had a little bit of a strengthening of the yen and maybe it's a source of instability macro-wise, but in terms of the companies, they've been doing pretty well. Tom, it's great to catch up with you. Thank you very much. All right, we're about 30 seconds from the close. You have the S&P 500, up about one quarter of 1%, so slightly off of its highs from the day. But volatility has bled lower as the market has calmed down. You have the VIX at about 16 and a half. Breath is very evenly mixed, so pretty much the market kind of train and stay still and turn in place

just about 1% from its former closing high. That's going to do it for closing bell. to overtime with John Quartz.