Closing Bell - Closing Bell: 9/19/25

Episode Date: September 19, 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.

Welcome to closing bell. I'm Leslie Picker in for Scott Wapner. This make or break hour starts with the race for records, all three major averages on pace to close out the week at fresh all-time highs. Here is your scorecard with 16 minutes to go in the trading session. You can see the Dow of 3 tenths of 1%, S&P up by about the same magnitude and the NASDAQ up by about half a percent at this hour. Tech utilities and consumer discretionary leading the way while energy is the notable underperformer. Treasury yields pushing higher with the tenure, holding firmly above 4.1% in the small caps, taking a breather after the Russell 2000 hit a new high. Which takes us to our talk of the tape, which is where are the opportunities with stocks at such lofty levels? Joining me here at Post 9 to discuss Vandage Rock's Avery Sheffield.

Avery, thanks for joining us today. Pleasure. So you think that both the economy and inflation are likely to run warm to hot. Yes. So does that suggest you think stocks can also go higher from here despite kind of these loftier valuations we're seeing? I think they certainly could, but I do think it creates a more opportunity for a more bifurcated market where those stocks that benefit from pricing power that aren't over levered can really shine, especially if the valuations are still low.

And those that might be in a situation where rates might not be able to come down enough to help them could have a little bit more trouble. But overall, I think that the environment is supportive because the Fed really wants the economy to do well and has a lot of opportunity to cut rates should anything be wobbly. So the goal then is to find those pockets that are maybe undervalued but likely to outpace inflation because of their ability to raise prices on consumers or raise prices on the businesses that they sell to? Yes, raise prices and also have the cost pressures, potentially from tariffs, cost pressures from their own inflation and labor already priced into the stocks. So are there specific sectors that you believe kind of fit that mold in particular?

Yes, yes. So two sectors that I think are pretty interesting here still are auto-levered stocks, as well as some stocks in consumer discretionary retail. So in autos in particular, you know, there was a lot of concern that tariffs would have a very significant negative impact on the OEMs and the entire industry this year. actually from conference commentary is recently, you know, in the past couple weeks, they're managing, the OEMs are managing through this much better than anticipated. Demand is still remained strong, you know, despite concerns over high price of autos, used car values are holding in. And so I think that

given the demand picture looks okay here, if on balance the Fed's likely to lower rates, not raise rates, that creates a nice demand backdrop. And then from a cost standpoint, I think the cost pressures are already in, and if anything, likely to get better as the OEMs figure out how to navigate even further through tariffs than they already have. And so you would have a benefit from OEMs that are strategically well-placed with products that customers really like with maybe floundering competition. I can't mention specific names, but there are opportunities trading over 10% free cashful yields.

And then in the auto dealers as well, they should benefit from a strong market, from having 40% of their volumes in parts and service, or revenues, which continues to be quite strong. still very low valuations. And then you have on the consumer discretionary side, you have multiple retailers now that are kind of in a turnaround with relatively newer CEOs. You have it in apparel retail. You have it even in jewelry retail.

Again, training it very low valuations, the tariff concerns are really in their current guidance. And so I think there's really just opportunity. The upside should the economy hold up. Yeah, all of that being priced in. Avery, hang tight one second. The CDC's vaccine panel just finished. finishing up some key votes on the COVID vaccine policy.

Our Angelica Peoples has that story, Angelica. Hey, Leslie. Well, just now the CDC's vaccine advisors are voting to recommend that basically everyone should talk to a health care provider before getting the COVID vaccine. So right now, it's recommended that all adults get a COVID vaccine and children should talk to a health care provider. And now they're saying that everyone should talk to someone first. And one of the key distinctions that came up during this vote was whether farmers,

are considered health care providers. So do you need to go to a doctor or can you still go to a pharmacy like any local CVS or Walgreens and get a shot? And they did say that under the CDC's current guidance that pharmacists are considered providers. So really in terms of the effect, I don't expect that we'll see a massive change here. Of course, any change to the recommendations could make people wonder what's exactly happening, add some more confusion, potentially cause more people to think about whether they should get vaccinated. But that is the main vote. And right now, they're voting on some other really more like policy positions. They're talking about the fact that they're about to vote on whether or not they support recommending that states require people to have

prescriptions in order to get a COVID vaccine. But that's not something that the CDC is actually able to regulate the practice of. So these are more policy positions. But we'll, of course, update you as we get votes on those, Leslie. Angelica, thank you. Going back to kind of positioning in this current environment, one of the things that stood out to me in your notes today was that you think housing-related names will actually underperform because the benefit of rates is essentially already priced in, and you think that the long end of the curve might not fall as much because inflation will remain somewhat sticky, which I thought was a really interesting. Yes, I know. It's definitely not consensus. So, look, the housing market is weakening. And as we saw in results that came out this morning from one of the public. or last night and this morning from one of the publicly traded home builders. And so the thinking, of course, is the housing market is weak.

That's one of the reasons why the Fed's really going to want to lower rates, even if they lower rates at the short end of the curve and the long end of the curve doesn't come down. Maybe next year there's some kind of operation twist to try to pull down the long end of the curve. So our thinking is that if there is enough economic weakness to justify continued rate cuts, which it feels like the Fed currently thinks that there is, When you pull down those rates at the short end of the curve, that's bringing money into the system. We think that that money is going to go to things like autos to consumer discretionary elsewhere in the economy that leads the tariffs, which could be a short-term impact on inflation, lead that to stick

because if there's money out there to pay for those goods, inflation will be stickier. If inflation is stickier, we're not sure that the Fed will be able to engineer the long end of the curve down. So it's more that this is where I talk about a bifurcated economy where housing might continue to struggle because other areas of the economy actually do quite well. And given where valuations are at, you know, the 30, 40 percent run from this summer, I think you're going to need to see a meaningful lowering in long-term yields in order to propel those types of names. I would say I would be more favorable towards turnover-driven names. So that would be names that, you know, you would say if it weren't for valuations, but home furnishings, home improvement, those should get more active. if you get any kind of lowering of yields, the home builders in particular face a dynamic where if yields come down, there's going to be more supply that comes on from existing homes.

And so will they be able to get pricing power as more supply comes on? I think it's a little less certain. Yeah, and we saw that with some economic data this week as well. Avery, stay with us. I want to bring in CNBC contributors, Courtney Garcia, of Payne Capital Management and Wilmington trusts Megan Shoe into this conversation. Courtney, I know you're focused on geopolitics today, which has been kind of the headline, one of the key drivers that we've seen for the big equity markets. Investors, of course, focused on the Trump Shee Call. Do you feel like this is, you know, the thaw that we've been waiting for in terms of the U.S.-China relations, and how bullish do you think that is actually for stocks?

You know, I think people are really hopeful that you're going to see a lessening of tensions coming out of this call. But I think we've come into these calls several times. Really nothing has come from it, so I don't think you want to necessarily get your hopes up right now. But I think something you want to realize is, I mean, U.S. markets have been doing really well this year, but emerging markets have actually been outperforming the U.S., which I don't think a lot of people realize despite all of the tensions and everybody figured, okay, with all these tariffs on China, we don't want to be investing there, yet it's outperforming. And especially if you see the dollar continue to weaken with, which if the Fed keeps cutting rates, very well might happen, that could continue to put a boost on emerging markets. So I think this is something you want to look at regardless of whatever happens with this call, but I think it's actually still a really good long-term opportunity. Megan, what do you think the impact is in terms of cutting rates and what it means for flows, particularly as people aren't able to make as much in cash anymore,

so they are going to be looking at other areas. We saw some of the highest inflows into equities, both globally and in the U.S. on a weekly basis since December. So where do you think that money goes? Does it continue to flow into equities? Yeah, I think we're seeing it flowing into equities, but also into fixed income. If you look at investment grade credit spreads, they are the lowest that we've seen in multiple decades. So you have investors sort of buying up at current yields today, expecting rates to move lower.

I think the trick is that this was maybe a little more interesting a few months ago. And now at this point, we have a market that's pricing in more Fed activity than was telegraphed in the summary of economic projections, which isn't to say much. That's not, you know, necessarily the rule of law. But the market has moved towards our expectation for more rate cuts this year, another 50 basis points this year, and then another 75 basis points next year. So I think that is all really driving flows out of short-term fixed income into maybe more credit, maybe longer duration, and then into the equity market. But you also have to remember that if the Fed is cutting that much or more, it probably is because the overall picture is weakening. So it's not just enough that the Fed is cutting. The Y is incredibly important.

And for that, I think we need to continue to watch the labor market very closely because we're getting a lot of mixed signals there. Yeah, this idea of risk management, although the equity markets so far seem to be looking through that, looking through any potential concerns of labor market deterioration given the potential for record highs today. Courtney, you've also been looking at what the rate cuts mean for deal-making appetite and risk-taking. How do you kind of square that against this backdrop of uncertainty with what's going on in the economic picture and whether additional rate cuts are going to be needed because of a deteriorating economy? Do you think that still supports the need for companies to come together if financing costs are cheaper? You know, I think when I look at the labor market, yes, it's been softening.

And I think we're getting a lot of kind of contradictory information on how the economy is doing. The labor market is one thing people keep pointing to to say it's softening. But I think we have to remember this is backwards-looking data. And so you're looking at a time where businesses are really uncertain about what's happening with tariffs. So if you think your import costs are going up, you're not going to be hiring. And I think that's what a lot of this is looking at. And structurally, when you look at the amount of baby boomers who are retiring, there is still a huge supply constraint in the labor market.

And a lot of people are actually trying to fill that with more productivity, AI resources, like in what other ways can they do that? I think you want to continue to watch out as you go forward as we get past this tariff uncertainty, okay, are people actually starting to hire again? So I'm not as focused on that. I think when you're seeing company earnings reports, when you're seeing the bank reporting and showing how consumers are doing and how much cash they have on their balance sheets,

the debt they have compared to their income. I mean, none of these are concerning levels at this point. GDP is still growing. So I'm actually still at the consensus that we're into a growing economy. If the Fed is cutting interest rates into that, that can be really stimulated for the economy. And especially as we're looking into less regulation and a more favorable administration to things like mergers

and acquisitions, I absolutely think you're going to continue to see more of that. So I think that's something you want to look at, absolutely. Yeah, it sounds like you and Avery are on the same page there. And I'm curious kind of going back to the places that you like with regard to pockets of retail, OEMs. Do you get the sense that they've been able to weather the tariffs fine at this point, but maybe in the future that could be an issue? Or do you think that if it were going to be an issue, we would have seen it already? And I ask that against the backdrop of some comments we heard from Stephen Myron earlier this morning, Governor Myron, who spoke on CNBC and talked about how, you know, we haven't seen the impact

of tariffs on inflation. So, you know, why not cut 50 basis points? Right. So we are just starting to see the impact of tariffs on inflation. And going through the earnings calls that were for retail mostly in August and actually into September, the vast majority of retailers had not raised prices at all yet. And we're looking to selectively raise prices where they had pricing power. So they weren't even necessarily just going to planning to raise prices on goods that are imported. They're like if a good was made in the United States or had very low import value, they might raise the price there because they think there's more

pricing power. They're just starting to raise them. And we actually, you know, subscribe to some some very, you know, weekly data that's showing for many retailers. Actually, you're seeing the average ticket size over the past few weeks actually start to increase, which is in line with what we're seeing. We're talking about like 1.6% or something, you know, increases at this point. Not nothing major, but it is in line with what the retailers are talking about. So I think that we absolutely have the vast majority of the impact of tariffs to come through in pricing in

imported goods. At the same time, though, retailers guided to very negative impacts, assuming that they would not be able to pass on as much as they would like to. And so I think that if they're able to pass on more, if they're able to re-engineer things more, that's where earnings might surprise to the upside. But the impact on consumers, I think, is still really to come. Yeah, TBD, a lot of inventory stockpiling and so forth that can mask some of the early effects. But interesting things to come in the remainder of the year. Avery, Courtney, Megan, thank you so much for joining us today. New reporting today from our very own David Faber that Elon Musk's XAI just hit a fresh, eye-popping valuation. David joins us now on the CNBC Newsline.

David? Yeah, Leslie, as we reported earlier, X-AI, of course, the AI company controlled by Elon Musk, is in the midst of another raise of capital. This for $10 billion that will bring its post-money valuation to some $200 billion, according to people who are familiar with the efforts that are underway. Amongst what I'm told is an investor group may also be the presence of Saudi Arabia's sovereign fund, the PIF, along with a number of other investors. of course, as you well know, tracking this kind of area in the private markets as well.

There have been no shortage of fundraisers along the last year. Most recently, it was only even what a handful of weeks ago or so that they raised about $10 billion, but half of that was in debt and half of inequity as well. And then from there on, and don't forget, of course, X, the platform, formerly known as Twitter, is also now a part of XAI, having been merged into the company last March, and roughly the value at Elon Musk purchased it at some years back around $44 billion. But, yeah, the latest raise, $10 billion, or it's going on now, raising $10 billion to bring it to $200 billion. It was only last November when I reported on a $6 billion raise at the time that would have valued XAI at $50 billion,

just to put in perspective the incredible accretion of a pay that's occurred at this company in a short amount of time. Yeah, absolutely. A great reporting there. I'm curious kind of how this factors in with the story in the Wall Street Journal. I believe it was yesterday where they cited people familiar with the matter and said that some of the executive resignation, some of the turnover at XAI was because they felt like the company's financial projections were unrealistic to meet. In talking to sources, do you get the sense that the people who were willing to put up additional equity

at a $200 billion valuation probably do believe that some of these financial projections are at least possible to achieve? Yeah, or they certainly believe in Elon Musk, Leslie, I think, is what you have to fall back on. I mean, listen, there is no doubt a great deal of competition right now, as you will know, whether it's amongst Chad CPP, which is the leader, or Alphabet's Gemini, or GROC, of course, which is a part of, which is XAI, and any number of others. And meta-spending, as we know, tens of millions, if not even more, to acquire talent as well in terms of the race going on.

But you can imagine that there are certainly some questions as to whether all of these expenditures at some point are going to bring a significant return. And when it comes to XAI, that is really focused in part on what it's building now. At least sometime back they were calling it Colossus too. I don't know what they're calling it now, but it's another data center or another almost supercomputer

that they're building in Memphis to power GROC. And as you know, again, all of these companies need enormous compute. They're spending tens of billions on GPUs and data centers, and conceivably will be for years to come. So probably not the last time I'll be raising money without, of course, the key question as to what exactly the revenue picture will look like going out and what the free cash flow picture, certainly investors now hope, will also be over time. Right. And just given the space that they're in, price and sensitivity may be more at the forefront as well.

You mentioned GROC, and in recent months, they had kind of a reputational issue surrounding some violent and anti-Semitic content on the social media platform. That doesn't seem like it was an issue in terms of investors' willingness to put over dollars. Does that suggest that perhaps they've resolved it at this point, at least enough,

that people are still willing to invest $10 billion? Yeah, again, I think you have to come back to Elon Muff. and the value that he's created in the fact that while certainly there has been a good deal of focus and some criticism as well as we know of his social media presence not to mention some of the different efforts that have been underway at grok there are going to people who simply look at the creation of value at tesla and SpaceX and believe ultimately they will end up with more money than what they put in when they invest in a must company i do want to stop for a second let's be given how closely you follow the capital markets just the marble i mean you and i have

reported on plenty of IPOs through the year, a billion dollars, two billion dollar IPO, large, large, large, right? Oh, yeah. Or significant. And to think that these companies in the private markets are raising as much as $10 billion at one time, it really is when you step back sort of a new world when it comes to these markets. Yeah, it's remarkable. I remember when Facebook raised it, what was it, $100 billion valuation right before it went public,

and everybody just thought that was the biggest thing ever, and that was right before. for its IPO, I guess that was, what, 2012, and now here we are, double that. And it's just one of a slew of companies raising at that level of valuation in the AI space right now. David, excellent reporting. Thanks for bringing us that exclusive report this afternoon. Appreciate it. We are just getting started. Up next, shares of Apple getting a boost as its next-gen-gen-AI iPhones hit stores,

with the new product launch means for a stock that's been struggling this year. We're live from the New York Stock Exchange. You're watching Closing Bell on CNBC. Steve? Hey there, Leslie. Yeah, I'm outside of the Apple Fifth Avenue store, and it is still crazy here. I've been out here for like nine or ten hours so far since 5 a.m. Eastern time, and the lines just get longer.

A year ago when I was out here, by midday or so, lunchtime, let's call it, the lines were basically nothing. You could just walk in and get your iPhone. Now you still have to wait. So this is a really good sign here and around the world of what we're seeing. That demand seems to be stronger than it was last year. We saw that in the pre-order. data early on last week when those orders started. We're going to get more and more data as

this opening weekend of sales. But so far, things are on a really good trajectory here. And it's not just me saying that. A year ago, I asked Tim Cook about this. I said, you know, how are you feeling about iPhone demand? He kind of gave me a non-answer saying, you know, it's too early to tell. He gave Jim Kramer a much different answer earlier this morning. Take a listen. Dubai is incredible. China was incredible. We are so happy with what we see. It's early going, but we're very happy. So look, Tim Cook sounds happy. Apple investors are happy today. Shares are up 3%. We'll get some more info over the week in how that looks. But for right now, Leslie, things are looking really good. Well, I'm happy for you that it's decent weather in

New York and also happy for all those people waiting in line that they're not doing so in the rain today. Steve, thanks for the 10 hours of coverage outside of the Apple store in New York City. Let's bring in CNBC contributor and big technology founder Alex Cantorwitz. What do you make of those Tim Cook comments? Sounds like very happy in China, very happy with the demand so far. That's right. Well, the first thing I would say is it's great news for Apple that there's a story about the company that is not involving Apple intelligence or AI. We are going back now to the roots of Apple, which is that they are an excellent phone maker, and the improvements that they showed for this model are coming out. People want these models because they're more durable,

because they have better battery life, and they are going back to their bread and butter, and we're hearing about the product itself, and people are responding. So I think the narrative that's been around Apple, not being able to do artificial intelligence over the last few years, that's still a problem, but they've shifted their story. People are responding. They're going out lining up to buy the phones, both in New York, but also in China, which is really important. So you think the iPhone air is a lot of hot air. I do. Why?

Well, the question is, who's the phone for? Like, if you want to have the latest phone in your hand, the most cutting edge, you're not running out and getting the air. You're going to want the pro. The pro has better battery life, better cameras. It might be more durable. The iPhone air looks pretty durable. So what are you exactly signaling?

Because a lot of the phone purchases, what I'm signaling to others? What exactly are you signaling if you have the air? The air seems like a traditional in-between product. It's about as thin as the iPhone 6. People didn't run to the stores to buy the iPhone 6 because of its thinness. So to me, it's an in-between product. And I think that what's being underrated right now is the fact that the pro is going to sell very well. Steve in his reporting earlier today talked about how the people he's speaking with online are there for the pro and not the air.

So it's going to be one of those really weird moments for Apple, but a positive one, where they introduce a new model, but the actual momentum is going to be around the current model. Now, can we go back to this concept of AI, and, you know, you say people are going back to kind of what Apple is good at, which is the hardware element of it? So do we just give up on Apple and AI, and is that just not what's going to bring people to stand in line to buy the new iPhone, or do you think that the technology itself has to just catch up? And in the meantime, people are going to upgrade and, you know, enjoy the features and durability and battery life of the 70s. I think what's coming with AI is undoubtedly on the way.

The question is timeline. And I think when Apple introduced Apple intelligence at WWDC a couple years ago, there was this belief that it was imminent. And they were going to go ahead and build for AI. And Google was going to do it. And Amazon was going to with Alexa Plus, and it was going to work right off the bat. And if it did, then it would shake up the dynamics.

It would change the type of model that you would buy. But we're sitting here in mid, almost late 2025. And we know that the product is just not there on the consumer side for anybody. which means the dynamics are still in place the way they were before this artificial intelligence moment happened. Yes, the chat GPT app is on the phone. 700 million people use that every week, but you could get that on the iPhone. You can get that on the Android. And so right now, baking that technology into the operating system isn't a game changer.

That being said, it is a real long-term story. It's a long-term liability for Apple, which has not made any progress at all, seemingly on this front. but at least for the time being, it can rest easy and say, okay, we're going to do the phone, we're going to do it as better than anybody else. We have the iPhone error this year, but we're going to bring out maybe the fold in two years or next year and then this curved glass model in two years, so a full lineup of new phones that are going to sell well. Can it rest easy, though, without a real AI product that consumers flock to?

And I ask that because it's been an industry leader ever since, what, 2007 when the iPhone came out. And now you have this week meta AI glasses introduced this week, potentially with this idea that people will maybe be spending less time looking at the phone and just looking directly into the glasses. So how do you assess the competitive posture if Apple is, you know, effectively not sleeping on AI, but just not as competitive as maybe someone like them to be on AI? Well, with AI progress, it's something like with self-driving cars that you can see the vision, right? With Waymo, for instance, everybody saw the vision for a long time. Then it took 10 years to really get it into production. Once it started working, and this year it's really happening, they were able to scale really

quickly. And now you're seeing, I think it's a real competitive threat for Uber and even for car ownership. No, for real. AI that could happen in the same way, where we now see the vision. Apple came out. They told us about Apple intelligence. Google, of course, is changing everything to bake AI in. But it is going to be one of those things that, again, doesn't happen overnight.

It's going to take some time. And the meta-glass is the perfect example. I watched them at a presentation this week. a number of demos didn't work. We can forgive them for that. But even in the demos that did work, we saw just how big of a gap there is from the current set of products to these AI first products. There actually is. Nobody's going to be ditching their phone today to wear Meta's AI glasses. You know, could that happen in five years, in 10 years, or could those glasses lessen our reliance on the phone? I think there's a good chance. But this is not

a product change that's imminent. AI has the possibility to change the form factor, change the way we interact with our devices. That's why I think investors panicked when they saw Apple didn't really have anything to show on that front. I understand that completely. I've been one of the people that have criticized them for what they've done. And it's not really hard to do to do that. But ultimately, this technology is not going to shift everything about the way we live in the next six months or year, despite the hype we might hear from some of the people trying to sell it to us. Yeah. Take some time, some conditioning of the American consumer before we see a big shift. Alex, really appreciate your time today.

so much for being here. Thank you. As we head to a break, here's a look at the major averages, all on pace to close out the week at all-time highs, three weeks in a row of gains in equities. And a programming note, don't miss an exclusive interview with Commerce Secretary Howard Lutnik coming up on closing bell over time. We're back after this quick break. Up next, 314's Warren Pines joins us with his playbook. Are the games baked in for the rest of the year? We'll discuss closing bell is back after this break. Welcome back.

Stock's heading for a winning week with all three major averages on track for another record close. Let's bring in 314 research co-founder Warren Pyes. Warren, thank you for being here. I guess you're sticking with your 2025 SMP target of 6,800. That's about 2% from current level. So do you think all the gains for the year is? or captured or reflected at these levels? You know, we had that coming into the year,

and there are times when it looked like a really optimistic target, and now it's looking a little bit less optimistic. But we're going to stick with that. We are going to stick with that. But I do think the big takeaway from the Fed this week is that, you know, there were two, I'd say big positive developments for the equity market, which at least gives you the hope and the reason why you want to stay long in a bull market. And number one is that there was conventional wisdom that the rates market, so the short-term

rates market had priced in significantly more cuts than what the Fed had signaled back in June. So this put a high bar for the Fed to clear. This was the reasoning out there among traders. And when you study those instances where we've had that before, where there's a high, great expectation for the Fed. And then what happens next? The Fed moves a little bit towards the market, not all the way. It's actually very positive for equities in the quarter ahead.

We saw that last September. We had the market rally over 8% the next quarter. And then we also saw that December of 2023. So that's the first thing, I think, that gives you hope as an equity bowl. And then the second thing is the Fed, the bottom line through all the confusion of the CEP, is that the Fed is basically lowering their real Fed funds rate. So that's the nominal Fed funds rate minus their projection for interest rates across every year. 2025, 2025, 26, 2027, rates are getting lower, given their forecast for inflation.

You don't want to be underweight equities in that environment. So then what would you be doing from a portfolio allocation standpoint to, you know, if the market does achieve that 6,800 target by your end, would you be adding to equities now? Would you be waiting for some sort of a pullback to add to equities? How are you thinking about portfolio construction against that backdrop? Yeah, that's the thing. We're risk managers. So we're always wondering, you know, we might be bullish, but we're always looking for risks.

We're paranoid by nature. And so our big, when we look out at the rest of the year, where does the risk come from? A lot of people are worried about the bond market. A lot of people are worried about inflation and a reacceleration in the economy. That's not our big concern. Our big concern is that there's some kind of a growth scare waiting out there for us. I think there's about a, let's call it a one-third chance that we hit a growth scare over the next few months. And that would be rough for the equity market.

it would probably be, if you go back and study those in history, like a 7, 8% pullback and more volatility in the equity market. And that would be offset by a rally in the bond market. And so in my mind, if you're an equity investor, you want to press your loans into year-end, which is what we're doing. You want to pair that with an overweight bond position. So that's how we're positioned. My best guess is that if we had that growth scare, you'd see the tenure get down below 3-5, which I know sounds outlandish right now. But that's not, and that's not our base case, but I think that it's a higher probability than what the market expects. And so that's how we are currently positioned in our portfolios. Yeah, 10-year-round 4-1 now. What do you mean

by growth scare? Is that a sentiment indicator? Is that, you know, specific hard data that you're looking at? And, you know, how do equities, as you've studied throughout history, how do they typically respond in instances of a growth scare? Yeah, growth scare is kind of a thing you hear people throw around. I think it's a good question because like people throw it around, they don't really define it. My view as a growth scare is when there starts to be anxiety around a recession and never materializes. Usually you see the unemployment rate pop up a little bit and then settle back down. When we study history and you have a good chart here from our report, when you study history, these kind of occur around soft landing. So we're in this soft landing muddle through economy right

now where the Fed's trying to land the plane and then all of a sudden you have some kind of fear around the soft landing not going the way the Fed wants us. We saw this in the mid-60s. We saw this in the mid-80s a growth scare. We saw it in 1995. There was a growth scare. People probably forget that. 2018, also another soft landing. We saw a growth scare. And then we had one last year. People remember, we had a big rally in the bond market, a little bit of a sell-off last August. And that is a classic growth scare type of pattern. So that's what you'd expect. You see rates come down. You see the yield curve flat. You see unemployment rate pop up a little bit, but not enough to trigger things like the SOM rule. And then you get equities. They still perform when you zoom

out, but just more volatility. So you end up having like a 7, 8% drawdown within the context of a growth scare. And so again, I think we're in this model through soft landing. But if you're trying to prepare yourself for risks, the risk is much more that we're going to worry about the growth. And I think that's what the Fed saw. There's so many, there are so many questions around the Fed SEP. And how do you square a higher inflation rate with a lower, Fed funds rate, lower unemployment next year with a higher lower Fed fund rate. I think the Fed sees a bigger left tail for the labor market. They're more worried. You heard it in Powell's comments in the press conference. They're more worried than they want to let on about the labor

market. I think you need to prepare your portfolio for that. Yeah, all about risk management right now, both at the Fed and for you, Warren. Thank you so much for your time today. Appreciate it. Thanks for having me. Up next, we are tracking the biggest movers as we head into the close. Contessa Brewer by with that, Contessa. Well, Leslie, you want to party like a show girl? Yeah, you and the rest of the world. I got a look at shares that got a swift boost today. This is what you might call a Taylor T's on Closing Bell.

Welcome back 12 minutes until the closing bell. Let's get to Contessa Brewer with a look at the key stocks to watch into the close. Contessa. Leslie, shares of Oaklo skyrocketing on yesterday's. announcement of a U.S. and U.K. nuclear energy deal. Both countries looking to build new nuclear power stations and generate thousands of jobs. Oklahoma jumped 26% on the news with its best day since July 11th. And there you're see. It's up almost 29%. And Palantir continues to climb up 3% after a 5% climb yesterday. That follows a Bloomberg report that the UK will invest more than

a billion dollars in the company over the next five years. That report says the UK Ministry of Defense is looking to expand the use of its AI software, Palantir, up almost 400% over the past year. And Taylor Swift affects the economy, once again, shares of AMC up 5% on Swift's announcement of a release party for her new single, only in theaters from October 3rd to October 5th. And it's not just the single. There's a secret movie that you get to go and see. And you only have 10 minutes to go on and buy your ticket. I know it because I went and tried. Despite today's jump, shares of AMC are down about 25% so far this year. But let's wait and see what happens when the rush into the theater

goes and we see how many times the crowd wants to go back and see that. And AMC is based in the Kansas City area, which is also the home of her new fiancé and also my hometown. There we go. I don't have much of a part here. It's all full circle. It's all full circle. Contessa, thank you. And we want to give you an update on our earlier report by David Faber that Elon Musk's XAI is raising $10 billion at a $200 billion valuation. Moments ago, Elon Musk posting on X denying the report, writing, quote, fake news, XAI is not raising any capital right now. CNBC stands by our reporting. Up next, a big week for casino stocks, plus the Wall Street call that has shares of Tesla popping today. Those stories and much more when we take you inside the markets.

zone. Welcome back. We are now in the closing bell market zone. CNBC senior markets commentator Mike Santoli here to break down those crucial moments of the trading day plus Contessa Brewer on a big week for casino stocks and Villabot with a call that has Tesla shares on the move. Mike, tech leading the way once again to record highs today. Yeah, upward, in just enough of those big cap tech names is really the story today. Just also the kind of, you know, the direction of travel and in the absence of any other influence, we definitely have an upward bias, at least into the end of this week. I think it could get a little funny next week.

It's one of the weaker seasonal moments of the year. But right now, market is really much in gear, I would say. So you have the majority of stocks down today in the New York Stock Exchange, you have small caps pulling back, and it's still enough rotational energy in there. and enough push behind some of the kind of favored names, and then you have the Palantiers and the Robin Hoods and the Teslas that are kind of the adrenaline favorites that we got where we are right now

with a good policy mix, bull-friendly, as well as the economy by all accounts, at least hanging in there. Yeah, cutting rates into a growing environment, risk on. Mike, sit tight. Let's get to Contessa Brewer with more on the big week for casinos. It's a big week because Macau is on fire, Leslie. And Wynn resorts stock is reflecting that. It's up more than 6% this week.

Win Macau up 6% just today. After the gaming capital of the world posted a new record for visitation, 4.22 million people in August, up more than 15% over last year. And the number of day trips grew by 25%. Stiefel upgraded win today. It said there's more room to run. MGM also got a boost this week. It's up nearly 4%. But if we look at the last three months where every report from Macau just keeps getting better, wins up 48%.

Las Vegas stands up 28%. Look at Melco. It's gained 51%. Meanwhile, if we look at Las Vegas, Caesar's stock is down nearly 8%. And Las Vegas demand is just limped through the summer. MGM CEO told me last week he's hoping that a major shift by the destination to highlight promotions and value, i.e., Vegas isn't all that expensive. All of that will help boost business,

but investors don't really like it when you focus on value and how cheap your room rates are. Yeah, and I guess you can't count on Times Square to make up the difference there. They're not going to be going in. They got shut down for a casino license in Times Square, so that ends those casino dreams. All right, Contessa, thank you.

Let's get to Philo with more on that big upgrade for Tesla. Phil. Leslie, what we're looking at is Baird, upgrading shares of Tesla. Take a look at the September surge for Tesla. The stock is up basically 100 bucks within the last month. And today, the catalyst was an upgrade from Bear. They've also raised the price target for shares of Tesla going to $548 from 320, saying there are a number of catalysts that are still out there over the next couple of months. In terms of what many investors will be focused on, it happens within the next couple of weeks. And that's when

we will get Q3 deliveries from Tesla. Hard to know exactly how much this will be a motivating factor, Leslie, because increasingly what you hear people talking about is autonomous and robotics. And those are both important, but there's not really metrics for those until we get to the results for third quarter, which will probably be in the third or fourth week of October. And even then, most people are wondering how much detail we'll get. Very good point, Phil. Thank you. Mike, turning back to you. Small cap, Russell, kind of a laggard here, as the bigger cap indexes approaching record highs, most likely today. I thought rate cuts were supposed to be good for small caps.

Yeah, and I think they generally are. You probably want to take it in the context of it having been a very strong week. Small caps are still outperforming the S&P 500 to this point this week. So you did get that extra push above the record highs from four years ago. I hear a lot of these bullish cases around why they're now under owned. There's been massive outflows from small cap funds. It all makes sense. A lot of chart folks will tell you there's no such thing as a triple top, which means that this last visit to this high, which is the third, should not be the decisive one. All that being said, I still think it's a pretty narrow channel

through which the fundamentals and policy have to travel in order for small caps to really roar ahead and be the real leader in this market. But so far so good. I think you take the whole week and say that they definitely did perform in line with what you might expect. I really think the question looking ahead is we've really feasted on a lot of these favorable conditions to get us to this point. And, you know, it's just going to be kind of path to leaks, resistance is higher and we continue up from here, or are we going to have to keep reconfirming that bulk case? You get personal income spending and PCE at the end of next week.

Maybe we'll look toward that. And then, of course, just a lot of the corporate-specific games as it comes to AI because it really is moving pretty quickly. I did want to make one little final note about kind of milestones, which is the S&P 500 here, going to finish above 6666, it appears, which is exactly 10 times the generational low from March of 2009. So, I don't know, superstitious folks maybe take note. Otherwise, it's just kind of a novelty item. Yeah, I was going to say that does seem a little superstitious, but 10 times is definitely. a milestone there. What do you make of the decline in energy today? Again, just kind of a give back. I think that that basically is in a pretty brutal downtrend in general. And, you know,

as we did get a little pop earlier in the week, it didn't hold. It's kind of as a complex sort of guilty until proven innocent. Absolutely. Mike, thank you. Have a great weekend. As we mentioned, information technology, the sector leader today, followed by utilities, communication services, energy and real estate and staples the lab right there. So we see the game two records today led by more of the typical stocks. That does have closed and bell. Now let's send it over to overtime with Morgan Brennan and John Ford.