Closing Bell - Closing Bell 12/3/25

Episode Date: December 3, 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.

And 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-a-break hour begins with the market resuming its upward grind, pulling within sight of its former peak from about five weeks ago. Take a look at the major indexes. The Dow has been the standout all day up almost 1%

on a day when cyclical stocks are pacing the gains. The S&P 500 up about almost half a percent, also to within about half a percent of its old record close. The NASDAQ is leading, though it is up a third of a percent. That index held back a bit by declines in Microsoft, Nvidia, and Netflix, among others. Consumer-geared sectors outperforming, despite a soft ADP jobs report, as investors take heart in some decent retail company results and look ahead to tax stimulus after the turn of the year.

You see consumer discretionary as well as transports up on the day. We begin with our talk of the tape. Is the market right to position for a re-accelerating economy in the coming months, and how might next week's Fed meeting fit into the Bulls storyline? Let's ask Chris Heise, Maryland Bank of America, private bank, CIO. He's here. Got your 2026 outlook finished up, ready to go. So what's your plan of attack that you're talking to investors about?

Well, right now, the momentum, as you already stated, is this is an elf rally right now on the way to a Santa Claus type of rally. So we're just beginning this right now. We had a lot of... So they're working on it. You've got to finish it up. Right. They're in the workshop right now, and then ultimately delivery happens later. So why is that the case?

Obviously, tailwinds coming in the first quarter of next year. Really between February and April, you might see some good tax refunds, fiscal bill relief on the consumer side. Consumers are already resilient. Boomers are spending. They're the biggest growth area, masking over some weakness in some other areas. But then you get the actual corporate tax relief as well. Tax is probably not the right word, but just in terms of fiscal bill relief, get a couple of tailings. wins. CapEx still moving forward. But the critical point is, is when have we seen the Federal

Reserve cut rates into a growing momentum economy? Been a long time. Yeah. We know why. But at the end of the day, the third mandate, which is price stability, arguably speaking, asset price stability, is alive and well. And that gives us a very good comfort level for 26 being a proud bull, Mike, versus a stampeding bowl. What is that translated to a proud bowl in terms of, You know, if it's not stampeding, so what, it's not going to go up 20% or it's just going to hold its ground? Not going to go up 20%. We've seen that 23, 24. We're on track for that in 25.

A proud bull is more, let's track earnings growth. Let's not expect multiple expansion. Multiples, we all know it. They're vulnerable. They're vulnerable to a negative growth shock, which we don't believe is our base case. When we look at profit growth being 14% or so, that could prove to be low if all. all stars align. But there's not a lot of downside in that profit growth number. It doesn't seem like it. There's a lot of confidence in margins holding up, and I guess

just the momentum, at least in the biggest companies, because of the KAPX trade. How do you think it breaks down, though, in terms of how much faith investors are going to place in everybody winning on the AI trade and not because we've already seen the market try to sort things out? I mean, Nvidia's forward multiple is like down from 35 to 25. You know, Microsoft's down from 33 to 28 in four months because, yeah, the earnings are going up, but we're not sure what we want to pay for them. Yeah, I think that's well stated because you had significant speculation in a few pockets across the marketplace. Three or four of those pockets have basically declined into this, but yet the market held up. So what's happening is there actually is a broadening out happening.

With better growth, more people participate. So we expect better participation, but still tech just hanging in there. Their multiples are now a little bit more attractive. What people don't really look at too much anymore is Mag 7, five of them have underperformed the S&P. The terrific, too, are the ones that have outperformed. So really, the rest of the market is starting to feed into this narrative of better economic health, but it doesn't mean we're off to the races. Yeah, I mean, I feel like people want to point to that, only two Mag 7 stocks have outperformed.

But the upside to those has been huge, and most of them are also. up. It's not as if they've gotten left behind fully, but it shows you also how hard it's been to beat this index. I think only a quarter of all stocks are outperforming. Yes. And when you get November, like what happened with health care being up 9% and tech being down 4%. That tells us dispersion is still out there because there's underowned sectors. Energy is a great example of it today, being one of the leading performers, under owned, under love for a long time. We think that story is a good one for 26 and even in 27. As you said, when the separation between the big winners in the AI build out and the big non-winners, we don't like to say losers. And that big

portion in the middle, we call the maybes. We'll know exactly a little bit more information as to which camp they go into. Are we, is it time to look for the macroeconomic effects of all this spending? In other words, are we in for productivity boom or is it still wait and see? I don't think it's wait and see. We hear from companies every day. We hear from clients that run companies every day. It is switched from, is this a good thing? Are the numbers going in going to produce bad numbers coming out?

And am I going to be misinformed to all of a sudden? It's like, we're asking our teams to deploy it in ways to create that efficient use of capital. And that leads to a big productivity boom. That's not a one-year phenomenon in our opinion. All right, Chris, stick with me. Let's focus in further on the details of some of these economic releases. Our senior economist correspondent, Steve Leasman, has a closer look at today's ADP data. Steve?

Yeah, Mike, can I just say as a starter here, I don't disagree with the rosy outlook that Chris just gave us, but this data kind of leans against it, a big miss on ADP, with the payroll company saying private payrolls declined by 32,000 workers in November, the fourth negative number in the past six months for this series. total private payrolls were minus 32 the estimate was for plus 40 and you had declines on both sides of the equation the good sector down 19 service down 13 and then the real story comes in by the business size and you'll see there small business shedding 120,000 workers medium up 51 and large up 39 this has been going on for a while here virtually all of the job losses are from small business it's been negative in six of seven months since April without those losses overall job growth in 80 would have been positive. So these numbers have been lousy, at least since the tariffs were put in place, whether or not that's causation is unclear. By sectors, the two sectors that have led for a while still leading, educational services, and leisure and hospitality. But there's that hit to

manufacturing, information of business services, and professional business services as well. Down 26. Other data confirming the struggles of small business hiring home business, sorry, home base, or a payroll company, they said, quote, hours worked for 3.1%. One of the largest pullbacks in recent years are a result of businesses heading into the holiday season with a reduced workforce. The result of all this week job data confirming market expectations for Fed rate cuts up near nearly 90 percent now. Question is, why is this happening? Tariffs emerge as an explanation, but that could be just one, Michael, of multiple headwinds facing small businesses. Yes, Stephen, I guess, certainly in some surveys, tariffs are cited among many other things. And there's been a lot of commentary after these

numbers came out about how, while there really is a dearth of new startups, small businesses that are coming into existence, and whether that's been deterred by tariffs or not, I guess the question is, is it the kind of thing that another 25 basis point fed rate cut or two will address? Well, I do think there's room to provide relief to small businesses on interest rates. And I think one thing that you and I both monitor are corporate bond spreads. Big companies go into the private or go to the public markets and they can borrow at very narrow spreads. They get cheap money. That is not necessarily true when small businesses go to their banks. And by bringing down those rates, the Fed will help small businesses. The trouble is that I think all of this AI investment

on the outset before we get the good productivity stuff and the good inflation stuff that flows from AI is exerting upward pressure on rates. Because as you know, there's a whole lot of capital investment going on, and that demand for capital, along with the tremendous demands for capital to finance the debt, puts upward pressure on interest rates. So the Fed is betwixt in between here. I would love to provide a relative to small businesses, but the overall demand for capital perhaps speak to higher rates. Right. And these trends all favoring massive scale as opposed to smaller companies as well. Steve, thank you very much. Let's bring in CNBC contributors, Payne Capitals, Courtney Garcia, and Capital Area Planning's,

Malcolm Etheridge, Maryland Bank of America, private banks. Chris Heisey also, of course, still with us and welcome. So, Courtney, you know, it's interesting because you have the market locked into this mode of, we're going to get a pickup in growth, it seems, anyway. And yet the interim data don't always agree with it in terms of, you know, what's going on with some consumers and also the jobs market. Reminds me of what was going on in September where it was like, oh, the Fed's going to cut into a decent economy, and then we have a little bit of a scare.

How are you thinking about how that all fits together? Yeah, and we keep getting this data that is conflicting, and so I think you have to really look at this as an aggregate. But I think when you're looking at labor data, this is showing that you could potentially be having a weaker labor market that is different than having a weak labor market, right? I mean, I think we're in this stage. We're not having mass layouts here. And also not having a hiring spree. We're kind of a standstill. And meanwhile, the consumer, broadly speaking, though there are pockets, which we've talked about, which aren't holding up well. Broadly speaking, the consumer is holding up. You're seeing GDP for the third quarter, is tracking it 4%.

the Fed is likely going to cut interest rates. And with this report that came out, it's probably even more likely that they're going to do so next week. All of that just leads to more likelihood that the markets are going to run up further from here. And I think all of those things are really what you have to look at. It feels, it's interesting because we're in this spot

where we are forced to cite third quarter GDP. That quarter started five months ago. Yeah. You know what I mean? So we're sort of on this, in this blackout window. And on a given day, Malcolm, the market is willing to give a pass to the immediate concerns because maybe things are about to pick up.

How do you think about it? Just in terms of, you know, the earnings trends you're looking at, even how dependent is your portfolio on what the underlying economy is going to do? Yeah, so I think it's hard to separate the overall economy, as you said it, from AI and what's been happening within the Mag 7, as you guys started out talking about, because they really go hand in hand nows, right? Half of all GDP growth this year has come from those investments, all those dollars being thrown into the dirt, so to speak, to build out AI infrastructure,

that all is really building and growing the economy right now. And without it, we're stuck. And so I think it's unrealistic to be able to extrapolate out how much we expect to come from all the other sectors next year. We have to consider that this trend is going to continue into 2026 and beyond. There's been way too much investment made at this point for it not to. And I think the real question is just how productive our workers going to become next year and beyond, as you guys alluded to. And that's really where we as investors should be

trying to place our bets. Now, you do, Malcolm, look at a lot of these big growth businesses that are making a lot of these investments. So who seems better position now versus maybe a few months ago? And how actively do you have to, I guess, sort of change your thought on that? Yeah, what's interesting is up until about a month ago, we really thought we knew who the dominant players in this space were going to be. It was Nvidia. It was Microsoft. It was Oracle. It's anybody who is closely related to Open AI and Sam Altman. And you said a month ago, and I think it was exactly a month ago when the interview with Brad Gersner and Sott Unadella happened where Sam Altman sort of brushed away the questions about their spending

commitments versus their current revenues. And that's what really created this shift. And so now the companies that are closely related to Open AI are the ones that have been punished the most. And investors have been sort of lining up in other places, Amazon, Alphabet, elsewhere, trying to figure out ways to still be invested in the AI trade without having to be so exposed to open AI just in case we find out that our willingness to suspend our disbelief around what they're building there isn't going to be punished long term. That is perhaps, Chris, a risk if you're looking at how a client's position,

whether actively or just, by the way, the market's performed, you have an implicit bet if you own the core of the equity market on these trends continuing, even though, I mean, I mean, bank stocks have done great. You know, there's other parts of the market that have certainly done more than their share. So do you look to rebalance around that? Do you look to sort of lessen that bet or just assume that you want to keep participating at that level? Yeah, that's a great way to characterize it.

Just by having a core allocation, even if it's just in the S&P 500 and you're a diversified investor that just keeps adding to it, you're 44% exposed to telecommunication services and information technology. Not to mention, you know, the agentic AI movements in other sectors like industrial. So I think you have to be cognizant of that. Look for opportunities to upgrade health care. Look for opportunities to diversify to non-dollar assets. I know we've been talking about that for a while. It doesn't appear that non-U.S. developer are emerging markets are just going to have one year of our performance.

It appears that every region of the world is growing their deficit to create a domestic growth curve in their economy. that just doesn't have to close itself in one year. So we would suggest if you had a 0 to 10 diversification scale, 8, 9, 10 is where you want to be on that scale, heading into 26, 7, and 8, precisely with what Malcolm said about who are the winners, who are the non-winners. I think we shift to this cycle, Mike,

where efficient use of capital across all sectors and industry and groups is now just beginning, and the cost line is what we're going to be looking at. What's happening there and how is it helping margins? Courtney, one of the bullish talking points coming into this December in particular, especially after a little 5% shakeout we got in the S&P 500, is we've reset positioning, people aren't exposed enough to the market if we're going to get a levitation into the end of the year. Does that feel like it fits with what you're seeing in terms of your investors and how the market is acting? You know, I'd actually almost find the opposite. We've really been working with investors on taking profit just because there has been such a run-up this year, especially if you haven't made changes.

You have probably too much in AI at this point. You probably have too much in like certain areas that are over-concentrated. And so this is a great time to start to take some of those profits. And you bring up some good points like International, for example. I know we talk a lot about the SB of 100. It's doing really well, not nearly performing as well as International has this year. And I agree with you. I don't think there's going to be a one-year thing.

And so I think you want to take some of those profits. And then you have clients in places like New York City, where you have high-income tax and municipal bonds make a lot of sense there where if you're going to start to take some off the table, You look at a 4% muni yields, that's the tax equivalent of like 8.4% if you're in the highest tax bracket here in New York City. So there's a lot of really good opportunities that I don't think this trade is over, but take some profits and spread it out over everywhere else. And that's really what we're looking to do right now. Chris, I love your thought on that too, because I think a lot of it focuses on like tactical, professional investors.

Maybe they don't quite have their max allocations and things like that. But, you know, I look at data from your firm, as a matter of fact, you know, the private client equity allocation, just because the market's up, they're pretty much in. That's another good read. You know, there's surveys are surveys, right? And the day of sentiment switching based on the headline that's out there. But when we look at the real data, it makes sense that equity allocations are at all time high. And the fund manager survey that B of A Global Research splits out as well, says one of the lowest cash allocations as well.

But when you look at the amount of cash overall, it's at its highest level ever because you were earning cash flow on your cash. So what do you do? Courtney's right. You actually take the time, take the calendar, take the capital markets, when they give you the opportunity to rebalance, even though it doesn't feel good doing it at the time, take that opportunity, diversify. If you can take some profits, obviously harvesting losses, not just at the end of the year. Throughout the year, it makes a lot of sense. And that is, you're being an active investor every day, every week, every quarter, not just, like you said, you know, the professional investor who sits back and says, well, what should I own today? Yeah, exactly. And Malcolm, what about some of the rotations that have happened within the market already, right? You see this resurgence in health care, so it's not all the most aggressive, growthy stuff that's been really firing right now. Does that entice you, or you're seeing other things that are being left behind that look like they're worth a bet now? Yeah, so I have been paying attention to what's happening in health care. That was a missed opportunity for probably a decade. Any money sitting in health care was just kind of stagnating at best. And I think that investors have been looking there as that that's the place that the growth is expected to come.

That's also a sector that's likely to be disrupted extremely well by AI going forward. And so it makes perfect sense that that's a place that you will be wanting to place your bets. I have also been banging the table on cybersecurity pretty aggressively for the last couple of years. Anyone who will listen to me knows that I'm very focused on that sector because I think two things are going to happen. One, there's consolidation coming in the space. just not enough cybersecurity engineers out there to meet the demand that exists. And so companies are going to have to acquire smaller companies. But I also think the standalone cybersecurity firms are just digging in their heels even deeper.

And so with CrowdStrike pulling back post-earnings, I added shares this morning at the open. I bought additional shares of Z-scale when it sold off following their earnings. I think that's a sector that is ripe for additional growth coming out of 2025 and into 2026. because as we talked about agentic AI being a thing that we should be excited about as investors, it's also a thing that cyber security firms, I guess enterprises globally in general, are terrified of because you have synthetic AI threats now, and that has to be guarded against. So it's a great opportunity for investors in that space as well. Yeah, for sure. And they've been some of the stronger areas of software, at least.

Thanks to you all, Chris, Courtney, Malcolm. Great to talk to you today. We are just getting started here. Up next, Salesforce reporting results. at the top of the hour. We'll break down the key themes to look out for coming up. We are live from the New York Stock Exchange. You're watching Closing Bell on CNBC. Welcome back. Salesforce reporting results in overtime tonight. Seema Modi here with what to watch from those numbers. Hi, Seema. Hey, Michael, Salesforce may have sat out of the megatech rally this year, but CEO Mark Beniof did reveal an ambitious 2030 sales target of $60 billion at the company's Investor Day, raising hopes around its ability to monetize AI agents. What Wall Street

wants to see tonight is more concrete evidence of adoption. In other words, use cases as to how companies are using and deploying AI agents. Bank of America, writing that pricing is a topic of concern. Customers don't, they say, have the appetite to pay up. front for something that they are not yet certain how they will use. Their channel checks suggest that's where some of the deals are getting hung up. But as we know, CEO Mark Beniof can certainly prove the street wrong. He has done so many times in the past. We'll also look for color from him on the race between Open AI and Google after he publicly

declared he has switched from chat cheap T to Gemini 3. Mike? All right, Seema, thank you. For more on what to expect when Salesforce reports, let's bring in Oppenheimer's Brian Schwartz. He has an outperform rating on the stock, but recently cut his price target down to $300 from $315. Brian, great to have you on. What are you going to be focused most in on here? And I guess what's it going to take for Salesforce to persuade some of the skeptics? Mike, thanks very much for having me on your show. So your first question, what we're looking

for in the earnings. We're looking for the bookings to see what those numbers are. byside conversations, it seems like the bogey numbers, $29.3 billion. That's going to be the first number to see the momentum of poor business. We're going to continue to look at the free cash flow number to see if the free cash flow conversion remains strong. And then the all-important is going to be the commentary around their AI business, which is agent force. And can they give us numbers indicating that deal sizes are increasing, backlog is increasing? Okay. If you could sum up what the conversations are like with you and clients. I mean, clearly there's been, you know, a little bit of a high burden of proof placed on some of these enterprise software companies that they're not going to be victimized by the proliferation of AI. And what do people think is the likely scenario? What's being priced into the stock? People are mostly avoiding the stock. There is a big, bare narrative right now in AI that's across enterprise software.

So this is the application layer. AI is disrupting pricing models, go-to-market models, how businesses are conducting R&D, and investors are losing predictability of growth trajectories of these businesses, therefore cutting terminal multiples and lowering stocks. So what investors are looking to see is they're looking to see backlog numbers,

indications that businesses are investing heavily heavily in these AI applications to improve the conviction level of the growth trajectory for these businesses. To your first question, what's going to take for Salesforce to improve the narrative? We're going to have to see it in the numbers, in the numbers around agent force. Right now, Salesforce has $60 billion in backlog. Agent Force is a smidgen of that, less than a billion. So until we can see agent force contributing at least five percent to Salesforce's backlog, you know, we think investors are going to continue to be skeptical of Salesforce that, hey, they may be the big whale that gets disrupted by AI. And just to be clear, I guess you

do believe ultimately that Salesforce is going to be redeemed here. I mean, obviously the stock is very cheap relative to the company's own history. It's like 19. times forward earnings. It's a big discount to the market. So you're betting that they're on the correct trajectory? I am, Mike. If you take a longer-term perspective on Salesforce, you've got a business that has a richness of customer data. No one has the breadth and the depth of the customer data data that Salesforce has. So they have data gravity that should protect it from AI. They also have a legendary CEO who is focused on steering this business across this transition. So though it may take time to build up this business and give conviction for investors that

they're over this transition, we think with the cash flow multiple trading at 10-year lows, offering 8% yields, that it's too much of a posh place to be to avoid if you're a long-term investor. And then just before we go, I guess that similar logic would apply to your call on service now, which you also, you know, have a buy on? It is. You know, you look at service now, again, trading at a four-year low in terms of multiples, but the business continues to execute. You've got a durable 20% topline grower, 20% free cash flow grower. You've got a best in class sales organization, and you've got a robust AI business. What's unique about Service Now is they are likely to be the first enterprise software company to reach that 10% threshold of having an AI

business being 10% of the backlog. We think when that happens, people will move Service Now into the winter camp for AI, and you'll see new sources of funds come into this name. So that is a top hit for us in 2020 seconds in large-count. Brian, great to get your thoughts on these. Appreciate it. Thanks for having me, Mike. All right. Still ahead. It is not just Salesforce reporting at OT. We'll tell you what to watch from Snowflakes numbers out at the top of the hour as well, plus details behind the report that's sending Microsoft shares lowered this afternoon. Losing Bell will be right back. Up next, your Fed look ahead. JPMorgan Asset Management's

The CIO and head of fixed income is mapping out what he's expecting from the Fed meeting next week. And what it might mean from markets into year end. He joins me at Post 9 after this break. Closing Bell, we'll be right back. Welcome back to closing bell. Bond investors reportedly warning the U.S. Treasury that they are concerned about Kevin Hassett potentially becoming the next Fed chair. That's according to a report today from the F.T.

For more, let's bring a J.P. Morgan, CIO and head of global fixed income, Bob, Michael. Bob, it's good to have you on here. Happy to be here. This comes along. Obviously, next week we have the Fed decision. Seems pretty baked in. We get the 25 basis point cut. What comes after?

in terms of the messaging and how the markets take the messaging, given that we don't know who's next after Powell? So I think the messaging of this FOMC meeting is important. I think the Fed has to be clear that they're responding to softening in the labor market. I think they have to say that they're data dependent. They don't really get the labor market data until after the FOMC meeting. That puts them in a tough spot. And I think they also have to show that given the labor market weakness,

they're going to pull forward one of the rate cuts from 2027 into 2026. So it should be a pretty clean message. Then we're all going to roll into year end, wondering who the next Fed chair is. It feels like to us that Kevin Hassett has been floated into the market, which is why President Trump said probably early 2026 they'll make a decision. I think the bond market has gotten its head around that the next Fed chair will be a very strong advocate for lower rates. If it's Kevin Hassett, that's great. If it's wall or fine, you know, could it be Scott Bessent? Maybe. So when you say that perhaps the name was floated out there

to gauge a market response, and the market's response has been, I guess, really not dramatic, right? I mean, what would be an adverse response, longer-term yields going higher and people believing that there might be, you know, irresponsibly easy policy coming if he were there? Yeah, I think you would see the long end become un-earned. anchored again. And you would see that spill over into equity markets. I think that would concern the administration. I think certainly somebody like Kevin Hassett, that name has been out there for quite some period of time. We've had a chance to go back and study his writings when he was at the Fed back in the 90s and the things he's done with the National Economics Council. And I think we're

pretty comfortable with him. I do note, too, that last year, before he was in the administration, he thought that the September 2024 rate cut was the right decision. In other words, he hasn't necessarily felt as if, you know, his opinion wasn't based on whether it was going to help one party or another. He felt like it was the right choice. You know, we have a Fed here that has cut 150 basis points without a recession. That's not that common, you know, since the 80s, I would say.

And you're suggesting that the dot plot will pull a 2027 dot into 2026. Is that what you were thinking? Yeah, I think you have to go back to the Fed height rates, 525 basis points, which was close to a new indoor record. So some of that had to come out of the market to get to normal. Everyone had been estimating about 200 basis points was pretty standard. I think this gets you closer to normal. The Fed itself, the current composition of the FOMC, is telling us that close to 3%. 3.8% is where they're headed to, and they would expect that to be normal.

So this is all in line with that. I don't think it's anything surprising, frankly. As a bond investor, what does that mean going into next year? It's go time for bonds. Bond bear markets are not made of central bank's cutting rates, and you're going to get this Fed rate cut and probably a couple more after that. Yields will grind lower, particularly in the intermediate part of the curve. It's a good tailwind to the economy.

So recession becomes a more remote probability, which means corporate credit looks good, securitized credit, agency mortgages, all of those things look good. And if you're in a high-income tax bracket, the municipal bond market looks pretty good. So we're out there buying. So the benefits you suggest in the intermediate part of the curve. I mean, we haven't been able to get 10-year Treasury appreciably below four for any period of time yet. Does that change, or are we sticky in that area? I think it changes.

It's pretty close to the Fed funds rate. So you've got to bring the Fed funds rate down. If you can get the Fed funds rate down to, say, 3%, which is what they're telling us, is neutral, then I think you see the 10-year either side of 3. and a half percent. That presents a lot of relief to the mortgage market. It gives a lot of relief to corporate America that finances itself. That's a pretty nice talent. And in terms of the hiccups you've seen in corporate spreads, I mean, obviously very isolated, you know, some of the concerns about AI-related debt build-up, is that filtering its way through to the rest of the

market, or is it still pretty localized? We're not seeing any of that. What we're seeing is is a title weight of clients looking to get into the market in any kind of backup in yields or credit spreads and buying into, there will be funding for AI. This has a long way to go, and they wanna be part of financing it. Yeah, I guess demand is not the issue yet, or if ever will be. Bob, great to see you, thank you. Happy to be here.

All right, up next, we are tracking the biggest movers as we head into the closed. Christina, standing by with those. Mike? A streaming company makes a major bid. An AI stock disappoints despite solid results and one retailer just at its highest level

in 18 months. We've got those names. Next. Just over 14 minutes until the closing bell. The Dow up 1%. Let's get back to Christina for a look at the key stocks to watch. And let's start with shares in Netflix. You can see dropping about 5% as investors wait to learn more details

or getting more details about its bid for Warner Brothers Discovery, including the bid amount. According to a Reuters report, the streaming company made an offer that was mostly cash, and that's the reason why you're seeing this drop in the share price. Let's talk about shares of pure storage, because that company is plunging right now. Down about 27% after the data management and storage firm, so it falls within the semiconductor ecosystem.

Reporter results roughly in line with estimates. The company also announced plans to reinvest some of its revenue from sales to AI hypers, into research and marketing, et cetera, which may be weighing on the stock right now. Could be some other reasons, too. And then last but not least, American Eagle shares, those ones soaring 14 and a half percent after the company raised its full year outlook, issued fourth quarter comparable sales guidance that came in four times better than estimates. Shares hitting their highest level in about a year and a half now, now up about 150 percent from their recent low about six months ago. Everybody's just talking about jeans, Mike. Yeah, it's been tough to be short in specialty retail in the last month or so.

quite a move thank you christina thank you up next we'll run you through what to watch from snowflake and fly below and those names report in overtime had a much more when we take you inside the market zone president trump hosting auto executives in the white house this hour phil abo be with the details hi phil and mike we talked about this all day long we reported it early this morning that they would be proposing new fuel economy standards this is a live look at White House right now in the Oval Office. You see Jim Farley from the Ford Motor Company behind the president, the Secretary of Transportation. He's also there, as well as Antonio Falosa, CEO of Stalantis. Here are the new fuel economy standards that the Trump

administration is proposing. We're not going to go into all the details, but the broad picture here today, average required miles per gallon for the fleet-wide average for a company is 30.4 miles per gallon. It's up to 34.2 and 28. Previously, under the existing rules or the Biden administration rules, it would be 47.4 miles per gallon, and in 2013, one, it would go up to 34.5 miles per gallon under the Trump administration. A big difference, almost 40% less than the 50.4 miles per gallon, which is the current regulations, again, the regulations that were passed under the Biden administration. Take a look at shares of the automakers. How is the Trump administration positioning this? they are saying this will save the automakers $109 billion because they won't have to deal with certain regulations like zero emission vehicle credits. They won't have to buy those anymore. They will have more money to put into capital improvements for the vehicles.

And they're also saying that this will bring down the cost of vehicles by an average of $1,000 per vehicle. By extension, Mike, the Trump administration is saying, well, that's money that you will save. as a consumer. Does it really work out that way? Would the money saved if it's truly that much actually lead to lower prices? We'll be talking with the Secretary of Transportation tomorrow morning on Squackbox. I'll be in D.C. with Sean Duffie. We'll talk about this. And one last thing, Mike, they talked about the possibility of bringing microcars, which you do see in Japan and in South Korea, bringing those here to the United States. We'll talk about that tomorrow.

Right. See how that would sell. And Phil, just a quick note. You mentioned that the automakers would no longer have to buy those zero emissions credits. Tesla is among the companies that sells those, right? So that would be revenue for Tesla that's going to what. Correct. Yeah. So does Rivian. So all the companies that manufacture some electric vehicles, that is phased out under the new rules by the end of 27. Excellent. Phil, thank you very much. We are now in the closing bell market zone. Crossmark global investment. Victoria Fernandez is here to break down these crucial moments of the trading day. Steve Kovac, with more on what has Microsoft shares slipping today, and two big earnings report out in overtime.

Sima Modi, getting us set for Snowflake and Gabrielle Fon Rouge is here with what to watch from five below. We will begin with Steve, Microsoft, under some pressure all day, Steve. Yeah, that's right, Mike. And a lot of back and forth and confusion around what's going on here. So what happened was early this morning, the information put out a story saying that Microsoft has cut quotas for one particular AI product itself. That's its foundry product that you can use to make AI agents within your organization. Microsoft, the short time later, pushed back saying, no, we haven't cut quotas. Information basically got this wrong.

We sell stock come off of its lows of the day because of that. But it also kind of started this whole conversation, Mike, about whether or not these AI products are selling, not just that Microsoft, but more broadly. And then also it brought back into focus the way Microsoft sees its AI revenue picture. It's not just selling co-pilot and all these user-facing products. We also got to pay attention to the Azure side, which has been growing quite significantly in thanks in part to artificial intelligence, particularly open AI. That growth has been re-accelerating from all this AI activity.

I'll just point out, Jeffrey's picked up on this report and kind of knocked it down to as well. They point out something Microsoft has been pointing out to that remaining performance obligations. They were up 51 percent year over year. That gives you an idea of just the incredible demand Microsoft continues to see for artificial intelligence in the cloud, on top of that, why they really just can't meet the demand and are spending so much more in CAPEX than they originally thought they would, Mike. Yeah, pretty serious backlog. Steve, thank you very much for all the context there. Seema, help set us up for Snowflake out and overtime.

Yeah, Mike, well, several software companies are fighting this narrative that OpenAI will displace or challenge their business. So far, Snowflake hasn't had that. problem because its expertise in data warehousing in the cloud has made it sort of this important partner in the build out of software AI applications. The stock up about 71% this year. Wells Fargo calling Snowflake a compelling software infrastructure play, adding that the company has improved its top line beats over the last four quarters. Wall Street will be keeping a close eye on revenue growth following competitor MongoDB's impressive results yesterday. The bar is high Mike, analysts on average expecting Snow to see its sales grow by around 26% from

a year ago. We'll see if you can meet that. Yeah, with the stock up 70% or so this year, Seema, thank you. Gabrielle, what should we be watching for from Five Below? Yeah, so Five Below is expected to report Q3 earnings of 24 cents per share on revenue of 980 million. Expectations are really high coming into this report. The stock is up about 55% year-to-date, and analysts want to see sales grow by at least 16%. Those expectations have been coming up over the last three months because Five Below is actively growing at store count and it's well positioned for this environment. This is a company whose primary selling point is value, and that's exactly what shoppers are looking for right now ahead of the holidays. So tonight, the key things to watch for

are Five Below's holiday guidance, any color on quarter to date trends, and if it'll be able to keep growing next year, the retailer will be up against tough comparisons and, of course, higher cost from tariffs, which are expected to weigh on margins. Mike? Gabby, thank you. Well, we are just moments. away from the close. Joining me now is Crossmark Global Investments, Victoria Fernandez. And Victoria, market seems to be back to looking on the bright side, even on a day when we got some weak jobs data. ISM services was okay, but new orders fell, and yet we're rallying. So how do you feel like the economy and the markets are positioned into next year?

Yeah, Mike, I think definitely we can look and say, okay, we've gone through this soft spot in the economy. We saw that five to six percent pullback. look at things, you know, that are not doing well. We looked at weaker ISMs, like you mentioned. We look at a weakening labor market. We had concerns around credit, especially private credit, concerns around AI, breadth deteriorating, all of these elements that we've been focused on the last few weeks, especially showing us that we've had this slowdown. But all of a sudden, there's these little green shoots that I think people are trying to grasp onto. So you look at something like spread starting to tighten a little bit. Weekly jobless claims, not.

showing the same type of information that we're seeing from ADP. You're seeing seasonality components. We're seeing holiday sales start to do pretty well. The numbers look pretty good. So they're taking that and you combine it with a strong earning season out of the third quarter and looking at stimulus coming in early 2026. And I think the market says, yes, we had this time here with the pullback and with the slowdown. But going forward, there might be some elements here that tell us we've got some tailwinds to the market. And is that, I guess, a message that you would look to follow? I say, you know, that knowing that transports are up 3.5% this week, I looked at the consumer

lenders earlier. They're kind of making new highs, things like Capital One and synchrony. In other words, things that wouldn't happen if you were worried about a further soft patch in the economy. So would you be looking into those types of sectors? I think you do have to look at these sectors that are starting to make some turns. their trends are turning positive on a relative basis. So you mentioned transports.

We're seeing it in commodities. We've actually seen it in home builders over the last few days. And all of that kind of goes along with the health care and the energy that we've seen happen. The fact that we have not seen a rotation, a strong rotation, into staples as a whole, kind of tells us that maybe we're on some positive footing here. I really like financials, too. A lot of that having to do with the 230 spread. We know that the KRE goes right along with that 2.30 spread and it's steepening.

That should be good for regionals. That should be good for financials as a whole. So all of these sectors that are having some positive relative trend changes, I would look in those areas for a place to invest. Yeah, and perhaps the two-year, 30-year spread can steepen even more. We get those Fed rate cuts coming next week and maybe beyond Victoria. Thank you so much. We are within 30 seconds of the close. We have been off the highs in the S&P 500.

Still ahead by a third of a percent. You have 0.9 percent gain in the Dow. We also have the volatility in that the speeding down towards 16. That's about as low as it's been for most of this quarter. We'll see where it goes from there after the close. That doesn't have a close about. We'll finish overtime with Morgan Brennan and Johnson.