Closing Bell - Closing Bell 9/22/26

Episode Date: September 22, 2026

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, Melissa Lee and Michael Santoli guide listeners through each trading session and bring to you some of the biggest names in business.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

All right, guys, thanks so much. Welcome to closing bell. I'm Scott Wapner, live from Post 9 here at the New York Stock Exchange. This maker break hour begins with tech on a tear again. The NASDAQ hitting new highs, led by the mega caps and the memory momentum names. We'll ask our experts where all this is going in just a few minutes. In the meantime, take a look at the scorecard here with 60 to go in regulation. Dow's been read all day. Not so much everything else. Nasdax, as we said, good day. Oil a bit sticky. Yields are a bit higher. Tech is one of the better groups, though, today, along with staples and materials. We're watching all of the. that over this final stretch. On holdings, a big winner as well as it holds its investor day. Of course, you know by now signs the French soccer star, Killingameh, to a long-term deal away from Nike. It is a big deal in many ways. It does take us to our talk of the tape. The NASDAX do record high and what it means for the markets moving forward. Let's ask Ankara Crawford, Aldger Executive Vice President and Portfolio Manager, as you know, you all know, you all know. you run a lot of funds and tech's a big part of all that. What do you make of this resurgence?

So NASDAQ record high, okay? Mag 7 coming off its second straight back-to-back highs since its inception in April of 2023. What's it mean? Well, it means that probably the last time I was on here, I talked about how NVIDIA couldn't stay at a 10 multiple forever. What you were seeing is that a lot of the multiples were getting compressed and there were effectively coil springs.

And some of this is that reversion to a more normalized multiple, even if it's not a fair multiple for them right now. And if you think about what has happened over the last few months, you know, we started to believe in agents. We need more demand. We need more tokens. We don't have enough tokens. And therefore, you're seeing the entire supply chain get incredibly stretched. And that means more pricing power for the entire supply chain. And that's becoming more obvious now.

Is there a disconnect, I guess, or a difference between public concern over AI and investor concern? And is that sort of decoupled to some degree? And that's what's showing up in the market. Because the public anxiety over it seems like it's only getting elevated. And yet people are putting money right back into these names. Yeah. I think actually the public anxiety, we're getting to a peak because you're starting to see more rational. arguments against why the public is kind of misinformed, whether it's the water issue and the

sound issue. And, you know, I think there's been this big focus on the negativity, especially with Darya Ahmadiyah's letter, was it last week. And, you know, there was a lot of fear about, you know, can we contain this AI? And what I would argue is that we really have to think about containing the bad AI fine, that could be a 5% scenario. The other 95% scenarios are incredibly positive for humanity. It's education for everyone. It's health care costs coming down. It's drug discovery for almost a personalized drug discovery. And that's 95% of the use case. And I think there will be more of an emphasis going forward on the positive use cases for AI. People just don't see they want to hear it. I mean, you know,

in Texas now, the governor's no new permits, right? From the moratorium to now no new permits. You can see a piece on 60 minutes last night, and sort of the anger in communities around this country about it. I don't necessarily agree that it's peaking quite yet. Yeah, so the counter to that is if you look at where Meta built their data centers in Louisiana, incredibly positive for that community. The teachers are getting a $50,000 bonus in part because the tax.

dollars in that community are increasing. The overall ecosystem and the economic ecosystem of that community is being bolstered by a data center. So look, I think for every, you can pull a negative for every positive. Really? It feels like you can pull like 20 negatives for every positive, at least out there in the public. That's not me saying that. That's just what sort of the narrative is right now. I think it's overwhelmingly like 20 negatives for the positive that you're trying to impart on people to focus on. Yeah, and that is just an education mechanism, right? So we have to educate people who are simply, you know, misinformed or leaning too far to the negative.

I do think, and even last time I was on, I am concerned that policy will impact growth rates in the U.S. That said, there is an entire globe of other people that are willing to build data centers. They don't have to be built here, and they won't be built here. and that's actually a negative for our economy. So I think in the many conversations that we've had, we haven't spent much of them on meta, but we obviously need to now.

And how are you thinking about what's happened with this stock, really in the last two weeks to this day since the introduction of Mews, the stock's up more than 20%. What's happening here? Well, I mean, the question with META is you're spending all these dollars, show me the business model.

So with Mews, they're starting to show you the business model of how their CAPEX is going to do. get used for monetization. And Muse is pretty cute. I don't know if you've tried it yet, but it's really cute. You can shop with it. You can book flights with it. You go through your Gmail and, you know, makes your life a little easier. So, you know, it's warranted. This kind of move is warranted. That said, it is not a market that they will own. There are many other players. There's Grockbot. There's Instinct. You know, there's Muse. There's going to be an open AI bot. And so this is not a market that they will.

own like they have owned their social media market. Do you think this is a little over-enthusiastic reaction? I think it's fair. You do? I do think it's a fair reaction. Even if you don't think they're going to own it. They may not own it, but it's a massive market, right? The potential for revenue just from from use is massive.

And, you know, they do own the consumer. And they own the consumer, kind of the personal insight into the consumer. So I think it's a fair reaction. I'm not sure I'm a buyer here. Because the move's been so dramatic in such a short creative time. And you have Open AI that's going to introduce some sort of a bot on their own. And, you know, it'll cause everyone will move to that. Have you, I guess have you moved meta up in your own sort of mind about where you were thinking about it in your portfolio in terms of, you know, how I'm excited you were about it from then to now?

Is it moved above other names in your portfolio in terms of sentiment, your own? Just slightly. And in part because the question I would always ask is, what is the business model with all this CAP-X? What is the business model? Why are they going for the frontier? And I would say that, you know, they in part answered that question with Muse. And they are showing some monetization a new vector for their business model and for revenue growth, that they didn't have before, and they hadn't revealed before.

So I would say, like, it is more positive than it is a negative, and the reaction is quite fair, because it's actually, it's not expensive. Like, the stock. The stock is not expensive. Will this then change the narrative overall around their spend? Now they sort of show you what the deliverable can be, so if they continue to, you know, talk about their levels of capex going up. up and up. We're like, okay, we get it now. Whereas before, we're like, what are you doing?

Right. And so it does, right? Because they've showed you the vector that they're going to grow at or the vector that they will be pursuing with that cap X. And so for sure, there's going to be less anxiety around the cap X spending that they're doing. All right. We'll come back to you in a minute. I'm going to broaden out the conversation because tech's resurgence has come somewhat at the expense of the broadening trade, which has slowed substantially. It's led to something not seen since the last days of the dot-com bubble. Our Mike Santoli joins us now with more. It's good to have you on this topic because I know you think about sort of these kinds of things as you look at the market. Here's the stat that got us thinking and I wanted your perspective on that as

we rose yesterday on the S&P to less than 1% from a new high. More stocks in the index had new 52-week lows than highs. Is that similar? Is that simple? simply the product of concentration yet again in the market, or is something else at work here? It's definitely the result of the concentration, Scott. And I think the other parameter was that the S&B had to have been up at least 1% on the day. So it was a pretty specific set of conditions, but yeah, the last time that you saw this, and one of the only other times was in December of 1999. That's according to sentiment trader that tracks this sort of thing. I don't know that it's enough of a sample that it can tell you for sure that something unstable is happening below the surface

and it's going to culminate in something particularly dangerous, in part because we have such a concentrated index with the top 10 stocks, you know, close to 40% of the index weight vastly higher than it even was in 1999-2,000, that the mathematics of it just sort of make it a little more likely it's going to happen that way. But it does tell us something about the character of this market, which is it's not an all-in or all-out market. Many people have talked about we haven't had an 80% downside volume day in a very long period of time. And so it's a little bit of the cost of having the market rotate away from danger as we went sideways. And you had a lot of parts of the market pulling back. Well, sometimes you look at a strong day and it's not comprehensively strong. There's another stat.

The Renaissance macro folks say only 6% of stocks yesterday with the S&P up a percent and a half made even a 20-day high. Right? So a basically, basically super narrow, but because the heavy weights can have such an influence on the index, you do have a little bit of this distortive view in there. So I think you can say that there are parts of this market that are feeling the pinch of perhaps some financial condition tightening. Maybe it is the 5% on 10-year treasury yields. Maybe it's the Fed wanting to snug things up.

But it's not necessarily kind of applying itself across the board or holding back the AI theme in particular. I thought Joe Ternova had an interesting thought on this during halftime where he almost suggested that the resurgence of this trade itself, and maybe even the momentum in some respects, but more so this, was that you could still have risk on in the market while being defensive. And these are the names that give you the defensive posture, but you're still so bought in on the AI trade that you're bidding these stocks higher at the same time. Yeah, I mean, actually, Joe and I had a little bit of back and forth on that yesterday, because I don't think you could look at a day like yesterday when small caps and microcaps underperformed and you had lots of pockets of cyclicals not doing anything. And the banks have been weak and say, aha, that's a risk on day. But it is, you know, kind of capturing the enthusiasm and risk appetite around certain parts of the AI theme. And I do agree that Mag 7-ish stocks have been sort of de-risk by having their value.

The valuation's compressed. Two or three of them are still well off their highs, 10% or so off their high. So they can feel as if they're defensive while still expressing a view that you have some momentum in parts of the economy and the market. It's a tricky thing to interpret at this point because the market has been very much speaking with, you know, multiple voices on a given debt. I'll see in the zone. Good stuff. Mike, thank you. That's Mike Santoli. Set us perfectly up for the next part of our conversation as we bring in CNBC contributor, Trivary. It's Adam Parker. J.P. Morgan's, Gabriella Santos, all Jericho's on Croftit, as you can clearly see on your screens. It's still with us, and it's good to have you still. So we were talking, I saw your face as, you know, Mike was going through the report, and especially the part, well, the, we haven't seen this since December of 99. Well, what was that about? I don't know. The devil's in the details. It had to be one percent, within a one percent high. It had to have a 1 percent move. I mean, what happened between 258 and 3 p.m. on those days? I don't know. No, but still, I mean, it's an interesting. A big picture.

is, big picture is the earnings for the MAG7 are going faster than the market X the MAG7. Institutional investors are either underweight because they don't have an edge or because they have 525 rules. And as we've talked about for months, it hurts them when they outperform in an up tape. I think what you said there that's interesting is that I think there's a scenario they can kind of outperform in both an up and a down tape. And mostly other parts of the market, it's very clear which one you want. You mean the risk on while playing defense too? I think there's a scenario where a lot of the MAG7 names, or I call it great because I don't understand

why Broadcom wasn't in there, but they can outperform maybe some of them in either direction. Obviously, in a big semi-sell-off, you're not going to see Broadcom or NVIDIA work. But I do think that these stocks are just going to grow their gross profit dollars, way faster than the broader market. And so if you look out 12 months, they're just not going to be that much cheaper. I mean, Encore talked about NVIDIA trading at 10 times forward earnings out in the future. Well, if you kind of look at how fast Nvidia is going to grow, or frankly, the whole tech sector, earnings are probably

be 50% higher in 18 to 24 months. I doubt that sector is going to be commensurate really cheaper. So the North Star is still tech is going to outperform. Agree? I do. I think if you look at just the pure traditional macroeconomic indicators we used to spend so much time on, there's just nothing exciting going on.

So the thing that's really driving the earnings super cycle still is this AI build-out cycle that we're in. That said, there's been super. so much churn within the AI theme and actually two recent developments since late July to us actually signal a healthier market, a healthier AI trade. The first is the fact that it's not so simple anymore to just say it's the builders versus the adopters, it's the disruptions versus the disrupted. You actually can have days where semis, hypers, hypers, and software do well, but have a lot

of dispersion within that theme. So I think you're in a new phase where it's a bit more of a nuanced story. What's so interesting to me is, you know, we heard it last week from Fed Chair Wars. He talks about the economy accelerating, right? And yet the cyclical areas of the market can't seem to get out of their own way lately. I think because of oil backing up again, rates backing up again, and the simple fact that we haven't had any earnings to focus on, and we won't for the weeks ahead. So what does all that mean? I mean, to be clear, the real economy is fine. It's just that outside of the CAPEX build out, which is contributing to some of this above potential growth we're seeing, especially in the

middle of the year, there's nothing much to write home about. And you saw that in the earnings season, if you look at pure consumer staples or consumer discretionary X Amazon, or REITS or industrial, like, it's fine, but it's growing earnings in line with nominal growth, which is more mid-single digits. And the last thing on financials is that it had become a bit of a proxy on the AI build-out and specifically the resurgence in capital markets activity. So even there, you know, it wasn't a pure kind of cyclical, clean story in financials either. Look, I don't think, I've long been 20 years plus critical of using,

any economic data to predict stock prices. I think economists should use stock price data to help them make better economic predictions. So I don't think there's anything particularly interesting happening in the economy. I agree with that. I think it's just that earnings are basically going to grow pretty strongly for the next 18, 24 months. I think the skew is probably still to the upside to 27 and 28 earnings. The caveat here, and we were just talking about a little bit upstairs, Uncle and I, is like maybe multiples have peaked for AI revenue companies. And so to own anything in the AI group now, it's just got to, you have to be confident it's going to grow. strongly through. If you look pretty much every AI revenue company had peak multiples in June,

whether you're looking at EV to forecast sales and price to forward earnings, they're down 15 to 40 percent from peak. So I want to own stuff that's going to grow through that and feel confidence in it grow, whether it's Nebius or Corweave or Nvidia or whatever. There's plenty of names there to grow through it. But I need that growth because I just no longer can pull out the old double whammy growth playbook of I'm paying 20 times two bucks. O'Corp thinks it's three bucks, it'll trade it 30 times three, that's a double whammy. I don't see that dynamic as much anymore. Isn't that sort of the more cautious, if not bearish view from those who say, well, earnings are, AI-related earnings are peaking. So that's the potential game changer is the way

you would look at those stocks? Well, I think the question is, where is the peak? And so the numbers are still going to move up. So I don't know if we differ on that aspect of it, but I think the numbers still have to move up. If you look at, you know, semi-cap equipment, the semi-trade, all of them have room for upward revisions to their numbers, even if the multiple stays the same while that happens. And so you get, you get the benefit of having better numbers that is still, you know, to come. You'll get microns print next week. The numbers, Nvidia told you they're too low. Well, I mean, you've said microns going to double from where it is. Yeah, well, that was, you know, at 900 and we're on the way. That's right. We're on the way. Yeah, we're already up a

But yeah, I think their earnings will grow a lot. And in the – yeah. If I may, Scott, an indicator that we're looking at in kind of the second more healthy sign of this is the gap between momentum and quality. And I think in the second quarter, you just had such a stretch in momentum because it just became, oh, it's about semis. It's going through the super cycle. They're all going to win. And you had momentum outperforming quality by over 30 percentage points. And that reversed really, really sharply.

And they're now trading a little bit more in line with each other. And I think it's still the AI theme, but within each of the AI-related industries, which ones can maintain that accelerated pace of growth, which ones have that durability versus not? Here's what I think I know. Okay, compute, power, and healthcare services are going to grow way above global GDP for the next five years. Those are pretty close to high probability events. The whole point of AI, and I think Goncourt beautifully alluded to it earlier, is to get people to live longer, be more productive while they're alive. That's where most of the applications are.

The political stuff could derail this. I don't think there's any demand supply dynamic that's going to wreck fundamentals in the next six, nine months. It'll just be if we get multiple contraction based on fear about policy and ignorance about the, you know, that can often overwhelm in the short term. What about, you know, I think there's been a lot of focus on the financials lately, especially with conference season happening. And, you know, we have a here right there,

Our financials lag other S&P sectors on view that profits are softening. Perfect timing, guys. So if earnings season, which begins with the banks, begins with a little bit of a dud, if it does, what does that mean, do you think for the overall earnings season, or at least how we'll get out of the gates and feel about what's to come? So I think there are two ways you could read some of the disappointment on financials. You could read it as a broader signal of the macro economy, and there we don't think anything has changed. have been saying, you know, consumers are going okay, they're resilient, nothing to see here in terms of rising reserve provisions. But the second way that I think is most important is that

perhaps we've seen the peak in capital markets activity and capital markets profitability for the banks. And that's where, you know, some of the delays in certain IPOs that were expected or some of the slowing and M&A activity can just lead to more dispersion and actual execution between the big capital markets, players within financials. Maybe a delay. I mean, you still have open AI and anthropic IPOs to come. It's one of those 19 variable problems that my mind isn't smart enough to isolate more than one, right? Like, I think rates backed up.

I think there's some banks that have, if you kind of take their tangible book and sort of intellectually honest loss adjusted, you know, based on heltermarked maturities, they're probably a half or one turn more expensive than they should be on price of tangible. Bank of America, Wells Fargo, and others, Hawaiian banks. So it could be a bit on the rate side, mismatch. I think there'll still be plenty of activity. And frankly, you know, I can spool up 50 tech deals that could happen in the next year or two as things unfold. So I think there'll still be a decent amount of activity.

I think the issue is that the big three are awesome and everyone owns them, you know, Goldman-Morgan-Saintly, JP Morgan. And it's harder to figure out after that, like, where the most upside is. I haven't seen really a lot of data showing the consumers slowing that much. 90-day credit card delinquencies. No, Brian Moynihan, the C.C. is better than most. Yeah. Because the data, and he says robust.

Yeah, it's what we talked about a couple months ago, that the case sheet thing is really balance sheet, not income statement, that people are still able to get jobs if they want them and get an okay wage. So I don't think the finances are down because we're going to see big disappointments on the prints. I think it's just the multiples expanded a lot on price to tangible, and the return on tangible

probably won't keep up in the next six, nine months. What's your favorite stock that you don't think people are talking about enough? Oh, gosh. Because, I mean, you gave a snebius before, and that thing was like, I don't know, it's been a ripper since you first mentioned it on the show. Yeah. It's been a little volatile, but is there another nebius hiding out there? Gosh, those don't come around that often.

Give me a ten-bagger encore. Give me a ten-bagger. I don't remember when you first. I know, I don't remember when you first mentioned it, but it's been a ripper. App Lovin, you pitched him a ten-bagger. I don't think she said. It's been a lot of them. But you're still looking, sort of trying to find those next big AI-related names that you don't think,

have enough focus on them. Are they harder to find? They are harder to find. And like next week, I'm going to Yoda, which is like a data center show in Vegas. In order to uncover, I mean, and as Gabriella was talking about, it's just become a little bit more nuanced than it has historically been. I mean, you wanted to own compute, and it was as easy as that. Now there are cycles within this cycle that are going to, like CPUs and why AMD and

Intel are starting to work or arm. because there's a cycle inside of the, or an architectural change inside the data center that was unrecognized. And so there are all of these smaller technological changes that are happening that are kind of driving parts of tech and not all of tech. We'll talk to you after you get back from the data center event.

Curious as to how things will be out there. Thanks, everybody. Good to see everyone. Yep, good having everybody on the show. We have a news alert on Royal Caribbean. Let's get to contest a brewer with more. What do we know? Hi there. Scott, Royal Caribbean is nearing a deal to take a 50% equity stake in Sandals, the Caribbean resort chain, for $3 billion, according to my source, who tells me that the expectation is that it would be a boost for growth for both companies.

Now, Royal Caribbean has been intent on diversifying beyond just cruise that wants to be an overall leader in vacations. The cruise company operates already several private destinations for its cruise passengers, but the cruise company has also been intent on building out destinations on land. It's doing so at a resort in South America as a waypoint for its Antarctic sailings. So now this Sandals and Beaches brand, they have 18 properties across the Caribbean. This would give Royal Caribbean a foothold in all-inclusives. News of the deal between Royal Caribbean and Sandals was first reported by the Financial Times. My reporting varies just a little bit.

We have reached out to both companies and have not received a reply. yet, but you can see Royal Caribbean stock is down by 6%. My source tells me this is not a done deal that talks are still in progress, Scott. And I just wanted to mention Royal Caribbean shares quarter to date are down 25%. They've seen some pressure because it trimmed forecast for revenue growth this year on softer demand for European ceilings. All right, good stuff. Good reporting. We'll follow it. Contessa, thanks. Contessa Brewer. We're just getting started. Coming up, the AI price wars are heating up, Anthropic and Open AI battling there. We're following the money.

We're live at the New York Stock Exchange. You're watching closing bell on CNBC. All right. We're back. The AI Price Wars, heating up, open AI and Anthropic both rolling out new cheaper models today. Kate Rooney following that, of course, and joins us now. So what did we learn about both? Well, Scott, Price War is the perfect word for that. So Price is becoming one of the biggest battlegrounds in AI.

And we saw even more evidence of that today with newer and better, they say, but also cheaper models from both Anthropic and OpenAI. The backdrop here, corporate budget. So CFOs, CEOs are starting to really rein in their AI spending. There's a lot more awareness around that. Plus, there are those open source cheaper versions out there, adding to some of this pressure. We'll start with Open AI's newest version. This adds to an existing suite of models, Soul and Luna 6.

They say, compared to prior generations, these are 50% cheaper. They describe it as a step up across the model family on cost efficiency and then is priced below. Anthropics models as well. But Scott, not even two hours before that news. Anthropic unveiled its own new model, Opus 5.5. Same headline here, efficiency and cost. It does perform at the level of its best model, they say, which is Fable, on most work, but it is 40% cheaper to run than some of those older generations. These new models also come about a week after the industry and industry leaders called for pacing, as they put it. The frontier. Anthropics says they did extensive alignment testing through this. They went through pre-release evaluations

by outside organizations and then put on extra safeguards for cyber and bio-weapons. Similar message from Open AI. They talked about alignment as well. And Open AI, for example, said they lowered the rates of misleading claims about some of their coding work, Scott. All right, some big developments. Kate, thank you

very much for that. That's Kate Rooney. Now turning to the IPO market. Another AI-related company reportedly delaying its plans to go public now. Leslie Picker following that money. Borison joins us with these details. Hi, Les. Hey Scott, yeah, SoftBank-backed SB Energy is reportedly delaying its IPO. That's according to the New York Times, which is reciting four sources familiar with the matter.

Now, this is a data center company, and it's been reportedly seeking a $50 billion valuation and investors weren't willing to pay up amid a slew of risks here. SB Energy summing up those risks saying, quote, we have limited operating history in data centers with none currently operations. are substantially dependent on open AI and face challenges in personnel, labor, and business management. Taken together, it's not too surprising that investors would take a pause here. However, the delay of SB comes on the heels of Holtek Nuclear, also seen as an AI infrastructure

play which blamed data center backlash on its postponement. But on the flip side is its Peer Westinghouse, which is unfile confidentially. And we were able to confirm last week that it will be seeking around a 50-Bosephold. billion dollar valuation in an IPO. And I asked Bruce Flatt about this last week because his firm Brookfield owns a majority stake in Westinghouse. And he said the biggest impediment to data centers is power. And that nuclear is a broader solve, not just for fueling AI, but for upgrading grids nationwide. And the last thing I'd mention, Scott, is that data center company N-scale actually disclosed its IPO, sorry, it's S-1 on Friday. So it really seems undeterred by some of the slowdowns

in the IPO process elsewhere. Leslie, thank you very much for that. That's Leslie Picker. Coming up, we're breaking down the biggest opportunities for investors heading into the final stretch of the year. Treasury partners, Richard Saperstein. He's one of this country's top-ranked financial advisors, and he joins us right here.

Post-9 next. All right, the coming into the quarter means top financial advisors are looking to the year's final stretch for big opportunities in these markets, including our next guest. Richard Saperstein is Treasury Partners, founding principal and CIO. Welcome back. Thank you. All right, so let's just try and think ahead

to this last stretch because the quarter is almost over. How are you feeling about these markets? Very positive. Yeah. I do think that there's certain risks out there, which probably won't occur, but we should all be aware of. And specifically, I think the outlook for tech will hinge on the Anthropic IPO. If you think about all the remaining performance obligations, 2.3 trillion. Anthropics roughly 330 billion of it. And a lot of the success of the tech sector will hinge on a successful idea. I mean, what do you expect? Because I'm trying to think it'd be hard pressed to think it's not going to go well. Well, first of all, chat postponed theirs, anthropic pushed theirs into November. I'm just saying that's a risk out there that we all

have to be aware of. Secondly, there's the interest rate risk. I don't believe. rates are going to go above 5%. But I think if rates move to 5 and a quarter on the 10 year, rates are like gravity to the stock market. The higher they go, the more the gravity pulls. Well, there is a thought now that for the first time in a long time, you have competition because of those attractive yields. How do you see that? And that's now. That's at 5%. Well, if you go back to 22, the rates really haven't appeared. The 10 year hasn't pierced 5% for any meaningful period of time. Yeah.

So it seems we're in a 4 to 5% range on a 10 year. Now, the big opportunity today, it's been for a while, but now it's 5% municipal bonds. You still love those? Absolutely. I mean, if you can now earn, which you can, 475 to 5% tax-free in a highly tax state, in a very safe municipal bond for investors that are concerned about the return of capital versus the return on capital. It's an outstanding return. What's most attractive? Which municipalities offer the best? So if you're in a high-tax state, there's lots of different

issuers that are safe and they offer the 5% yields. Now, the big issue I'm finding with clients today is the asset allocation, because stocks have been up 100% since, let's call it, January of 23. So that means a 50-50 portfolio now is like 70% in equities, 30% in bonds. And investors have to recalibrate their exposure to the market. And now they have an opportunity to reinvest in an attractive alternative. Although, is it harder to convince them to do so because they're still all bulled up on the AI trade and they're looking at returns. They're like 5% muni. I mean, I can get way better than that in the stock market. everybody's pulled up and they're also against taking the capital gains from the build up in the stock prices.

Right, because the money to go for immunities needs to come from somewhere if you're fully invested. You're probably not sitting in a lot of cash to deploy it there. Exactly. So that's the issue. But we're still overweight the large cap tech. And if you're looking at the operating cash flows, they keep growing quarter to quarter very significantly. So when there's the question of what is the return? on investment for the trillion dollars they're putting into CapEx, just got to look at the operating cash flows.

They're growing dramatically. What do you think about Meta? You own that name? Yeah. What are your thoughts as you see that stock come to life? You know, it's interesting because we held it all through the decline, and now this is a different application, different than, let's say, a chat or an orthropic of AI.

And it's really proving to be potentially a very strong consumer product. The issue at Amazon, I think they work it out. It's all about math. So I don't think that's going to be a real negative. I think it's a big positive for the company. Was it hard to hold it through the downturn? The funny thing is, I mean, I can't find many people who own the stock, sort of in our orbit. You go to the halftime, you know, today is like two people who own the name out of all the people who are involved in the show.

And they have every reason from here to Sunday why they don't. Well, we own all five of the big stocks. And we didn't add to, we added to Microsoft on the downturn, and we actually recently trimmed it because it became one of the largest positions as a result of the appreciation. We didn't add to meta. But look, I think the outlook for all five of them is still very positive. And we're just focused on looking at the operating cash flows that keep growing. Again, the remaining performance obligations are important to be satisfied by their customers.

So there's issues that will occur into the year end. We all have to keep our eyes open on. You're still okay with spending going up? What was it, Jamie Diamond in the last 24 hours talking about? It could be a trillion dollars worth of spending. Yeah, by the hyperscalers. Yeah. Spending's going to go up.

You want it to go up? Well, look, Microsoft is the only one that really is having some free cash flow after the operating cash flow is consumed by the CAPX. But again, if you look at the highest P.E., it's in Apple, because they're more disciplined in managing their balance sheet and return a capital to the shareholders. So that will tell you where the market's valuing a lot of this big spend. You think I've got to go, but you think Apple's too expensive here?

No. 30 plus times. Everyone should always own Apple. I mean, they've got a billion dollar, multi-billion dollar billion customer bays. They're the gatekeeper, Scott. All right. The toll. All right.

Rich Sapperstine, thank you. Good to catch up as always. Up next, we track the biggest movers as we head into the close. Mackenzie Sagalos is standing by with that for us. Hi there. Hey there, Scott. We've got a familiar sportswear name. back in the headlines, while some sizable insider purchases are sending two companies

shares higher and a potential shakeup in the fashion industry. Those names after the break. All right, we're about 10 to the bell. Let's get back to Mac for a look at the stock she's watching. Tell us what you see. Okay, so Scott, on holding soaring higher today after announcing new midterm growth and profitability targets during its investor day. The Swiss sportswear company also authorized a $1 billion share bite back and lifted its adjusted EBITA margin to at least $22. The stock is up 8% and pacing for its best day since November 2025. Shares of both GameStop and Grab Holdings popping higher today after their respective CEOs disclosed sizable insider purchases. GameStop rising 6% on the 1.2 million share purchase,

while Grab Holdings jumped 9% after the Singapore-based ride-hailing company CEO purchased 10.4 million shares. And then Capri Holdings climbing higher in trade today after a report from Women's Wear Day, saying that the company has been in contact with potential buyers. This is the parent company of Michael Coors and Jimmy Chu, and it is up 7% on that report, Scott. All right, Mac, thank you. It's McKenzie Segalis. Coming up next is set up on KB Home,

the head of earnings and overtime. Plus, so-fize Liz Thomas is standing by as we head into the final moments of this trading day. Market Zone is next. Closing about Market Zone time. So-Fides, Liz Thomas, here to break down these crucial and final moments of the trading day. Oliver Renick, standing by live from the Cibo Global Mark.

markets in Chicago and Diana Oleg, looking ahead to KV home earnings in overtime. We'll get to that. In a moment, Oliver, we start with you. What do you see? Scott, today is the calm follow-up that Bulls might actually prefer after yesterday's explosive rally. Monday's move was so sharp that it essentially turned into a mad dash for calls as VIX at one point rallied when the S&P screamed 100 points higher at midday. The volume ratio of calls to push. in SPX yesterday hit its highest since May. That same ratio for Q's this morning hit the highest in a year. When that type of stocks up, vol-up action goes on for more than a few days,

it starts to get traders worried about a blow off top. But after this flatline session for SPX today, VIX is back near year-to-date lows, and the option's balance has been reset. And where we do see imbalance, it leans bullish in key AI stocks. namely Micron, Sandisk, and DRAM, first half leaders that might just be roaring back. Oliver, thank you. It's Oliver Renick. Let's go to Diana Oleg now on KB Home, and I'm sure we're going to get a lot of commentary on the mortgage rates that you have been talking about so much lately. Yeah, thanks, Scott. Yeah, KB comes on the heels of really rough earnings from

Lanar, which missed on estimates across the board. Expectations for KBR for EPS and revenue below year ago levels, but improving from Q2. As you said, though, that might be tough given where mortgage rates have gone, which is really straight up. You can see they were in a higher range than the start of the year, rising slowly throughout the Q3 period and then, of course, shooting much higher this month. KB stock is up today, likely on lower bond yields, but not so much year to date because rates are so much higher than they were really since February. KB had already cut its full year forecast after Q1. We'll be watching to see if that gets worse. Also, margins and deliveries will be key as we know more builders are now lowering prices and adding more incentives

to offset these higher rates. KV is on the lower price side, which means borrowers will be more mortgage dependent. It should be interesting, Scott. Yeah, we'll look for you then. Diane Ollick, thank you so much. All right, let's go to Liz Thomas on how you're feeling about these markets. Tech is back. Mortgage rates, you heard that. Interest rates are up. Oil is still elevated. What's it all mean? Well, it's clear, Scott, that it's It's AI game on right now. And we've got a period of time here for the rest of September and all of October, where I think it's also clear voters are angry.

We're leading up to the midterms, and that's going to cause some jumpiness in the market and make investors a little jumpy. So I think what we're dealing with right now is this idea that we're actually in a new regime. We've got a Fed hiking rates trying to figure out what's going to happen with inflation and worried about what that means for stocks. But investors are going back to, and I talk about this all the time, their muscle memory. that when you're worried about what might happen to GDP growth, you go to the stocks that are going to produce growth. So here we are again with a resurgence in a lot of those AI names. And what I'm

thinking about for portfolio construction right now is balanced by extremes. So looking at one hand of the equation where you get really good positioning, bullish positioning in things like cybersecurity, software, and semiconductors. So be present there because I don't think this AI theme is going to slow down. But then be careful and protect the portals. from inflation with things like commodities. I started talking about buying the 10-year treasury the day it hit 5 percent, and I still like gold into your end. Do you think there is legit competition? I mean, talk about buying the 10-year treasury, because you think that the yield is now attractive, if not too attractive to pass up?

I do think it's an attractive yield. I don't expect that most investors are going to buy a 10-year treasury and hold it to maturity, but I do think it's an attractive income stream right now. And it's a good balance in the sense of if you're worried about things getting worse faster, on the chance that they could get worse faster, and actually on the chance that what if Fed hikes take a bigger bite out of the economy than we expect? And they have to back that up and start to talk about cuts. Then I think you start to see some trepidation in markets that would bring 10-year yields down. I also think that if oil prices finally fall and we have de-escalation in this war, you see that treasury market stop being so jittery. And the market just hasn't allowed the 10-year

treasury yield to stay above 5% for very long. I expect that force to continue. But you make the point that, you know, if we're going back to our muscle memory, the muscle memory takes us back to the muscle. And the muscle of this market has been the mega-cap stocks, which are certainly back. Yeah, absolutely. And about mid-summer, I started talking about, I think the Meg 7 comes back in the second half of this year, mostly for these same reasons, that we have volatility into the midterms, investors go back to those tried and true names, and the muscle of this economy, the muscle of earnings, is still AI, it's CAPEX, it's this buildout, it's the insatiable demand that investors have. We have some new threats to it because we have regulation possibility,

we have a slowdown in deal flow that I think continues to heat up. We have possible export bands and oil prices and a Fed hiking, but I still think investors are looking at this as the thing that's going to drive us forward. All right, we'll leave it there. Liz Thomas, appreciate it so very much as we count down to the close here. Getting close to it, obviously, NASDAQ 100. You see that on your screen is green today. Nasdaq is too, new record high there. So we continue to watch that. S&P is basically at the flatline because it is pretty much a tech show and everything else today, even though a pretty decent day for suckers like staples and materials. and in some respects, health care, a little bit of a defensive posture, at least as it leans towards those.