Closing Bell - Closing Bell: Forecasting the Market’s Next Move 9/11/25

Episode Date: September 11, 2025

How much of the market’s next move is centered around a considerable cut from the Fed? We discuss with Yardeni Research’s Ed Yardeni. Plus, Paramount Skydance could make a bid for Warner Bros. Discovery. CNBC’s David Faber breaks down all the details. Marathon Asset Management’s Bruce Richards tells us what he is expecting from the credit market – with a Fed cut looking more likely. And Sofi’s Liz Thomas tells us where she is finding opportunity with stocks at record highs. 

All right, Don, thanks so much. Welcome to closing bell. I'm Scott Wapner, live from Post 9, here at the New York Stock Exchange. This make-a-break hour begins with great expectations that next week will bring a supersized rate cut. Is that what this record run is now all about? Could it lead to some supersized disappointment if it doesn't happen? We'll ask our experts over this final stretch. Take a look at the scorecard here with 60 to go in regulation.

It is a big day for the majors across the board. S&P, Dow, NASDAQ, all tracking for new closing highs. We, of course, will follow that. It's broad-based, too. The banks, healthcare, discretionary, and material stocks are leading the way today. Take a look at Robin Hood. It's up nicely as it rolls out some new features for its users, including short-selling. That's an interesting one. Stocks up one and a third percent, and there's open door as well. The memes are back, some would say. It's flying. Look at that. 71%. That's right, 10 bucks a share, and we will watch that closely, too. It does take us to our talk of the tape. How much of the market's next move is centered around, a considerable cut from the Fed. Let's ask Ed Yardini. He is the president of Yardini Research with me here at Post 9. Welcome back. Thank you very much. Is that what this really is about, you think? Like 50 basis points is now what the market thinks is going to happen? I think it partly that, but I think what the market knows for sure is that earnings were much better than expected

in the first quarter and in the second quarter, despite all the turmoil we had in Washington policymaking. So I think what the market really is counting on is that earnings will continue to make new highs. The reason the markets at a new high is because earnings are at a new high, the valuation multiple is elevated, but it's kind of stuck around 22, which is fine with me. But this really feels like a rate cut rally at this point. I mean, that's partly because of the 25 basis of points. And I think that the Fed doesn't have to go 50 because the market's already easing financial conditions by having this kind of rally. And if they get disappointed, but the Fed communicates that there's another quarter point coming, I think the,

Mark will be fine with that. You raise your S&P target, in fact, from 6,600 to 68. Yeah. So if they surprise you, and they do go 50, does that make you reconsider that number? Oh, yeah, I'll go to 7,000. You will? Yeah. Next week. Yeah. Wow. Look, it's a bull market. The only question is, you know, how bullish do you really want to be? You know, I see a potential for a melt-up, and a melt-up would be that the P.E., which is a 22, goes to 25, and that would be awfully reminiscent of what happened in 1999. Well, I mean, some say we've already had that melt-up in those kind of stocks. What would you say to that? Well, I would say that those kind of stocks, you're referring to the information technology.

The same ones you're referring to when you talk about 99. Yeah, absolutely. And in those cases, a lot of them didn't have earnings or the earnings turned out to be very disappointing. That's not the case with the technology stocks so far. If you look at technology and communication services, the account now for a whopping 40% of the S&P 500 market capitalization, And they count through like 28% of earnings, which is why the Magnificent 7 are selling at 30, 31 times forward earnings. What about the rest of the market? That's what everybody wants to know.

It feels like the mega caps are the easy one to game out. But what about everything else? Well, I call them the impressive 493. I think they're going to be increasingly impressive. And they had good earnings. You know, it wasn't just a magnificent 7 earnings surprise. It was also lots of other companies. like the magnificent seminar putting together all these technologies that they have to sell to somebody

to improve their productivity and that's the impressive 493 you can get to 6800 and 7000 perhaps with those like do you need the rest of the market to get to that the way that the market is obviously it but i think it's going to happen i think it is happening you mentioned before how broad it is today and i think you know now that the fed is signaling that they're ready to cut rates they're going to cut rates and they and they might cut rates some more after after this next meeting, I think you're going to get a pretty traditional broadening out of the market. What do you think about the small caps, for example? Well, you know, I keep watching their earnings numbers, and they've been a flatlining since

2022, but I'm seeing a little bit of signs of life when I look at analyst consensus expectations. So I think they're going to perform fine. Would you buy them here? I mean, that doesn't sound that bullish, like you normally are about other parts of the market. I'm still a large cap kind of guy, you know. I still think the large caps are going to be where the action is. But on a short-term trading basis, a lot of investors are going to view them as relatively cheap. And there's a potential for the earnings to get better now that if the Fed's going to, in fact, be cutting rates more than one time. What do you think upsets your story? Like, if you say 6,800 seems reasonable now, perhaps even 7, what gets in the way of

that? Well, you know, everybody asks me about the Supreme Court overturning Trump's tariffs. you know, what that would do, and I don't know. I mean, it could be pretty confusing. But I think the market's kind of signaled that they're done with that issue, that they're moving on and thinking about how well the economy has done despite all that. That'd be a big deal, though, right? Yeah. I mean, if you have to give a bunch of refunds and you start projecting different numbers on the deficit,

bond market, you know, the bond market better than most, the bond market's not going to sit there and take that news well? I think, you know, anything that kind of brings back the deficit crisis scare, You know, right now we have a deficit crisis in France, UK, Japan, and we've actually benefited from that. Our bond yields have actually gone down while their bond yields have actually gone up. If we bring back a debt crisis scare, and part of that could be that the government has to refund half a trillion to a trillion dollars, that would be unsettling, and that could put the kibosh on a year-end rally. Maybe we're having our year-end rally now, and we'll pay the price for it later.

Yeah, we like to pull things forward in this market, so we'll see. Stay with me for a second because I want to get to some breaking news. Warner Brothers Discovery is on track for its best day ever on news that Paramount Skydance is preparing an offer for that company. David Faber joins us now on the CNBC Newsline. The first person I obviously thought of, David, of having to hear from to get your insight and your take on all this. What do you make of it? Yeah, sorry, I wasn't up there with you. A couple of appointments got in the way.

But we can confirm at this point, Scott, that the Wall Street Journal story is. correct as is a source close to the situation telling me there is a bid being prepared uh... and largely as the journal indicated of course they didn't have anything really on structure uh... though there is a preponderance potentially of cash we'll have to wait and see in terms of structure at this point i don't have a lot more to offer other than we are not going to get said bid

i am told tomorrow or over the weekend but as uh... i'm reporting probably on the screen uh... you know could be perhaps as soon as as next week at some point. So that does give you a sense as to the imminent nature of the bid that, again, has been reported on. Structure will be important, and as will so many other elements of a potential paramount bid here. As you pointed out, Warner Brothers' shares are up dramatically. I would note interesting that Paramount shares also, at least last I looked, were also stronger,

which is always a nice market check. If you are planning something like this, obviously Warner far larger than Paramount, the idea of bringing together the two studios, some would say, is that an antitrust problem? Of course, you did have Disney allowed to buy Fox not that long ago. CNN and CBS, I mean, there are any number of different things to be thinking about here that are interesting in terms of the combination, and, of course, enormous cost synergies, not to mention the scale that would be brought by putting together the two streaming services in HBO Max and Paramount Plus.

All that said, you know, hopefully I'll have more reporting as we go along in terms of potential structure, although it may be a little bit of time here before we actually, as I said, get the actual bid, Scott. But interesting day. Final thing I would note is that there was a large options trade this morning. I had missed it, I guess, at the time, 100,000 contracts, I believe, in the December 15 Warner Brothers Discovery calls. Somebody knew something, and they'd made about 30 million bucks. And so that may have been one reason why at least there was a leak, although not to me, but again, we can confirm at least that this is underway.

It kind of feels a little like the late 90s in terms of all media consolidation. So I have a number of questions. And since you mentioned somebody making a lot of money, Larry Ellison made an awful lot of money the other day $100 billion because of the pop in Oracle. Is it any way coincidental that that happens, and now we're talking about an all-cash deal supported and backed by the Ellison family for the entire company? I don't know. By the way, it may not very well may not be all cash.

I want to make that clear. It could have a preponderance of cash, but there may also be stock. And again, you know, you're dealing with so many different things in terms of structure and what that could mean. you would typically be thinking about something like this prior to that incredible accretion of value that Mr. Ellison had in his network yesterday, but to your point, and as we said during the day, you know, the $6 billion in equity check that he wrote for Paramount, he literally made in one day what, you know, 15-something times that. And so certainly it doesn't hurt. He also

had the net worth if he wanted to and believed in the strategy as the control shareholder of paramount to pursue this regardless of whether his net worth went up by $100 billion in a day. But to your point, it certainly does not hurt, given that number alone, is far more than any offer for Warner Brothers Discovery would be worth. Are you surprised in any way that it would be for the whole company? And I guess we also have to consider the large amount of debt that Warner Brothers Discovery has and how that all plays into the thinking from the Ellison's? No doubt. And, you know, that debt under a change of control typically has to get redone to some extent. And you're right. I mean, leverage has always been the issue at Warner Brothers Discovery, which, of course, is pursuing a split of its global networks and its streaming and studio business being together on the one side and then the global networks on the other. And most of the leverage, as I've reported, would be going with global networks. So, yeah, there's a lot of debt that would come along with it, unclear exactly on a pro forma.

a basis, what the combined company would look like in terms of leverage. But you are talking about Ellison here, the point you made earlier. The richest man in the world are number two. And so endless resources here to do this prior to the split certainly is something that they would want to if they wanted to own it. You know, interestingly, Scott, Warner Brothers' discovery, at least, when Paramount was in play, remember not very long ago, thought about it, but did not pursue. You know, you're still talking about putting together linear cable networks, some of which in the entertainment industry, and we know what that looks like, not good. And so there's no shortage of potential challenges, but one would think the cost synergies are also quite extensive.

And the growth potential, I would assume David Ellison sees, is also quite significant. Well, because when you talk about growth potential, we're obviously talking about scale, which in some respects needs to be the name of the game in this business at this particular time. Did David Ellison not tell you specifically about his ideas of scaling from the streaming side, which obviously this would play right into what I think he talked about with you but a couple of weeks ago. Yeah. When we did our interview on the close of the deal, I mean, you know, the question I put to him basically is Paramount Plus is still subscale. And it is. And the question is what you do to change that. This would change that. You know, as David Zaslov himself has said many

times. There's only a handful of players who really can compete in streaming. We know the names. Netflix, obviously, Amazon, and Disney. And then the next one he would hope would be HBO Max, but the numbers are, you know, there's a discrepancy there in terms of the gap. This would help a lot on that, potentially positioning them, at least to really be the true, you know, number four players, so to speak. Sort of we can put YouTube in a different area if you want. Obviously, it's a powerhouse that would be valued so much more than any of these things by farward its own public company. David, I appreciate your insight very much.

Thanks for joining us. I have a feeling it's not the last time we're going to speak about this. David Faber joining us on our newsline. Another big Wall Street story today, figure technology popping in its first day of trade. It's been a big week for IPOs. Leslie Picker knows that better than most as she follows this area. How is this one doing? Because yesterday you were standing on the floor, I believe, talking about Klarna.

Yeah, I was. I'm having a little bit of FOMO today, but you're right. The IPO train just keeps on coming. Figure technology shares jumping about 21% right now. It's the latest in a slew of crypto firms specifically tapping the public markets and finding better than expected byside demand. Another one, Gemini, which is a crypto exchange space founded by the Winkle Voss twins, is expected to price tonight. And these deals come on the heels of crypto lender karma, I'm sorry, of fintech lender Klarna, which debuted yesterday, pricing above the range. trading up from there, although some air coming out on day two, those shares down about 5.7% right now. Here is CEO of Goldman Sachs, David Solomon, talking about the IPO pipeline.

There's no question the pickup in dealmaking is really significant. This week, we will do more IPOs and have more IPO activity at Goldman Sachs than we've had since July 2021. Wow. So equity issuance this year is up about 15%. But over the last two months, it's up 40% year over year. So there continues to be an acceleration. That sentiment was echoed by Morgan Stanley's Ted Pick earlier in the week, who said it feels like the, quote, flywheel is really kicking in as it pertains to the capital market, Scott. Leslie, thank you, Leslie Picker.

And that's probably why you see bank stocks hitting record highs yet again today. Morgan Stanley up 1.6%. J.P. Morgan City, Goldman Sachs, Bank of America, Wells Fargo, all positive. on the day. Now let's bring in J.P. Morgan, Stephanie Aliyaga and Invesco's Brian's Brian, is still with us. It's nice to have you join the conversation. Brian, financials are playing right off of what Faber and Picker talked about. Deals and IPOs. Deals and IPOs, and, you know, we've heard the same thing from portfolio managers at Investco saying they're having more IPO meetings right now than they can remember in a very long time. It's a, it's a significant positive, particularly given where we were earlier in the year.

specifically around the policy uncertainty and liberation day where you really saw deals in the market slowdown pretty significantly or almost come to a halt. So this is a better backdrop. We've moved through some of the policy uncertainty. We've got rate cuts coming. The economy's holding in. Inflation expectations are contained. All of that's positive for markets. Outside of the mega caps, is this the area where you would lean into here because of what we just talked about? I would. And so what I think what investors need to think about is, is this a sea change from where we've been? We've been in this environment where we've had a flatter and an inverted yield curve. We have not seen a big pickup in leading indicators of the economy. You've needed a catalyst to unlock some value in the market. And what that catalyst starts to become is easier policy and perhaps a reacceloration in leading indicators, not only in the United States around the world.

that favors more cyclical sectors. It favors more size, perhaps even value-oriented parts of the market. You like this group? Financials? Yeah. Yeah. I mean, I think financials have a lot going for them in the sense that, you know, obviously the shape of the yield curve is looking more favorable.

And you also have a lot of really good macro catalyst in play. In terms of the IPO market more particularly, I think we expect more activity to really build up there. I mean, looking at what goes before, these companies hit IP. In the VC landscape, you've seen a significant acceleration in deal activity amongst more sector-specific applications. So a lot of the exciting AI applications, they're in VC markets, they're growing to significant size, and I think I share a lot of anticipation that we're going to see more of that hit public markets. You like the market as much as Ed Yardini does right here?

I think at these levels, you've got to exercise some caution as well. I mean, markets are making a lot of assumptions here, some of which seem to contradict one another. You know, we're getting rate cuts, but then we're also talking about resilient economic fundamentals. And you still have this risk around tariffs. If it's not showing up in inflation, well, it's going to have to show up into margins, right? So I think right now we are just emphasizing the need for diversification and selectivity. In an environment where positioning is quite high, the risk when you're sitting in pretty concentrated positions is elevated. So we like industrials, we like the broader tech landscape.

But I think really leaning into active management within equity is going to be key. This comes down. I feel like, like Stephanie's saying, they need to cut because they can, not because they have to. You can't, I mean, it would seem to contradict one another. You know, the Fed is cutting because they have to, but the equity market keeps rallying like it does. I think Americans are so used to the last, you know, easing cycles where we had to immediately go to zero. It's been a long while since we've had a gradual easing process. And if you think of a Fed at 425 to 450, you could argue that's not a neutral rate, right?

That's somewhat restrictive. And if the economy's slowing and jobless claims are picking up and inflation expectations are stable, then why wouldn't you want to move rates to a more neutral level and normalize the yield curve? The two-year treasury rate has been moving ahead of that. So, you know, the point being is that we're used to the Fed having to respond. This is a nice environment where they can gradually lower rates and seek to maintain price stability and reasonably full employment. I mean, maybe they kind of have to before the job market gets worse, but they're not running to make the move. And that's why the equity market can deal with it because it falls back on the mantra that everybody always says, don't fight the Fed.

It's a great point. And I think Brian's dead on right. When you look at past easing cycles, they were usually triggered by a financial crisis. and there's really no financial crisis right now. I know we have PTSD, though, all the time on Wall Street. Yeah, that's right. I mean, but the reality is, as you said, they don't have to cut. But on the other hand, they are data dependent.

The recent data on payroll employment's been weak. So the knee-jerk reaction is, let's cut by 25 basis points. To your point about financials, you know, we're at the point of this bull market where it's feeding on itself as the bull market keeps going, and all of a sudden you get all these IPOs. And he's to get all these IPOs, the financials go up, and everybody's bullish when the financials go up.

Yeah. What are you concerned about in the market? Because, I mean, I feel like the consensus is markets going up. Here we are, Dow's up 600. We're going to have new record highs. We already do. We may get closing highs across the board. Is there something that people aren't thinking about enough?

I mean, I think people are thinking about this plenty, but I think it is still probably one of the biggest risks, the fact that there's AI and there's everything else. And I mean, the AI theme in markets is something we've all become well accustomed to. But you can see even in this past earnings report, even though the fundamentals are quite solid, there is still, I think, this period of digestion that investors are in when it comes to AI. We should anticipate some, I think, volatility in this race. And then even when looking at the economy, you know, now it seems like it's also AI and everything else there.

AI is becoming a bigger part of the story in terms of what is driving economic growth, at least this year. And it makes, I think, macroeconomic analysis a bit tougher in this environment, too, because if it's a big part of the economy right now, well, it's not reacting the same way as the consumer does and so forth to changes in interest rates and changes in demand. This is one thing that people suggest will offset the historical September weakness is the AI trade. I mean, because if it still works, it obviously helps so many different parts of the market that you're not going to have the traditional declines that some have gotten used to. during this month? Correct, although we had a good September last year. We had an 8% up September in 2010. So I think sometimes these seasonality patterns

get a little bit overstated. Look, it's, you know, seasonality aside, if you have a reasonably decent economic backdrop and a Fed that wants to cut rates, that should typically be a good backdrop for risk assets. It's hard not to like that environment. When we think about what the risk, could be. We've heard a couple of them already. I keep coming back to I'm watching inflation

expectations. And we saw them rise out of the comfort zone in 2022. That was a problem for markets. Right now they're very stable. They've actually been coming down a little bit over the last few days. And that suggests the Fed can ease. Well, right. That's why some say they could actually go 50 and surprise some people. I would be surprised if they went 50. I think Ed's right. I think they'll do 25 and signal that there's more to come. I'm not going to even get caught that much up in how much and in which month. To me, it's the direction of travel that matters most. And so long as we can see rates move towards what I think most people would consider neutral

and don't have to worry about them dropping below neutral because the economy is falling out of bed, then that should be just fine for equities and credit. We'll leave it there. Brian, thank you. Stephanie, thanks to you. Ed, we'll see you soon. Thank you. All right.

We're just getting started here. Coming up next, with a Fed cut likely looming, where are the best opportunities in credit right now? We will ask Bruce Richards of Marathon Asset Management. He is with me next. A busy hour, more so. We have more news out of Washington, D.C. Megan Cassella has it for us at the White House, Megan. Scott, that's right.

We're just learning that the Trump administration is asking the court of appeals for the D.C. Circuit to allow the firing of Lisa Cook to proceed before next week's Federal Reserve meeting. Now, you'll remember there's been, of course, a lot of legal back and forth in this case in the past several days. But it was yesterday when the Trump administration formally appealed to the D.C. court to let that attempted firing proceed. Now they're filing this emergency motion for a stay pending appeal. and an administrative stay. And they say right within it that they're asking for this to happen before next week's meeting. They're asking the appeals court to grant an immediate, immediate administrative stay and an issue stay pending appeal. We respectfully request that the court act on

either request by Monday, September 15th. Scott, that would allow the firing to move forward if they ruled in the president's favor before that Fed meeting is set to begin on Tuesday morning. Scott? This would suggest that maybe they don't trust that Lisa Cook would be a cut vote. Absolutely. You have to think that that's what this is geared at, is that they want to make sure or do as much as they can to try to ensure that they would get a cut vote. Of course, she's only one vote on that committee, but they want to do everything they can to get as many votes as they can in that favor.

We don't know if the court will rule in this. There's a big question of if maybe they stay out of this, given the timing, not wanting to put their finger on the scale before that policy meeting. It's a good setup for our next conversation. Megan, thank you at the White House. Megan Casella, the 10-year yield hitting its lowest level since April, as the market does anticipate coming rate cuts. For more on what the Fed will do and what it means for opportunities and credit,

we're joined now by Bruce Richards of Marathon Asset Management. Good to see you. Welcome back. Good to see you, Scott. Well, that was timely for our conversation. What do you think they're going to do next week? Cut. By how much? They're cut by 25 base points.

50s off the table, 25, and it's a lock 100% probability price in the market. that they'll cut for each of the next three times this year, which is bringing rates down 75 base place. Why do you think 50's off the table? And do you think the market thinks that? Because, I mean, we're hitting record highs again. You don't think that's in anticipation of maybe 50? I think the market may be a little disappointed if they don't see 50. It doesn't matter. It'll only go on 25. It's only justified to go to 25 inflation. You know, quietly, the Fed is saying implicitly, two percent is their inflation goal, and we're looking the other way, and we're going to accept three because inflation's, firmly set at three, and yet they're going to cut and they're going to cut because they're more focused on jobs than job data is weak, but the job data being weak doesn't mean that the economy is going to be weak. There's very little to no risk of recession or stagnation because this quarter we're going to

see a 3% GDP print according to GDP now. Last quarter is 3.3%. So with 2% growth this year and inflation 3%, I believe they bring Fed funds all the way down to 3% over time, but cut in every one of the next successive meetings. It's what's in the books. Why are you so sure about the no stagflation? Because that seems to be a principal risk in this whole conversation. True. But the Fed is cutting with markets at all time highs and the equity markets are telling me growth because if there's stagflation or recession, equity markets are going down, not up. Credit spreads are also telling me, and they are at 300 in the high yield market, that there's no recession coming and no stagflation coming.

And so the markets are telling you this. I don't deny what the markets are saying. And what we see is the big, beautiful bill is going to be a huge stem package. In addition to the productivity gains from AI, in addition to the $1 trillion that's going to be spent in data centers, there's this big beautiful bill which is going to accelerate a lot of KAPEX spending, a lot of R&D, because of an instant day one tax write-off. And companies take a few months, maybe six months or a year to make those plans,

to spend it, but that's the next leg that's coming. Is this one of the last moments for your best opportunities, right? You follow me. Your last moments for the best opportunities in credit, given the Fed's going to start cutting. Well, the public markets, spreads have tightened. Rates have come down. They're performing exceptionally well, but what we see is a lot of new issuance. And so there's a lot of ability to gain alpha from investing in some of these new issues.

They're doing very, very well. So not even close, it's an opportunity as opposed to a last stand. On the private credit side, you know, there's three big legs to stall in private credit, direct lending, asset-based lending, opportunities credit. In direct lending, it's the most prolific period of time that we've seen ever at our firm. In the last week, we've approved seven deals to our investment committee, and this is direct lending for LBO shop, so private equity, spending money, and you're going to see these deals come in the next month.

month to two months when they close, and this is the busiest activity that we've ever seen at Marathon. We do one to two deals a week that come through. And lower interest rates aren't going to impact the return on that? Lower interest rates are going to help private equity get to a place where they can do more, more deals, more refinancings, more new issue activity. It's going to spur transactions as opposed to hurt anything. And what we see is the back lever coming down where banks will finance us. And so those leverage facility rates coming down, so allowing us to earn a high rate of return on these widespread private credit loans. What's your favorite, your favorite part of the credit space today as you sit here?

Well, I love what I'm seeing in direct lending, but I got to tell you, what we're seeing in asset-based lending is absolutely prolific. Financing property, plant, equipment, what's happening in the AI world, financing hard assets, and doing it at LTV of attachment points that are very, very attractive, and making tremendous rates of return. risk mitigating because we're lending at 60% LTVs, so we have a 40% margin of safety, yet we're making the same type of spread that we're making in direct lending and the same type of returns, which are low to mid-teens. And so I like everything I see in direct lending, and compared to public credit, which is also

a very good investment, it's now a 500 basis point incremental spread pickup for us in our investment program. All right. Thanks for coming by. I appreciate your time. Bruce Richards, a marathon. Up next. Alibaba's popping today. We'll tell you exactly why coming up.

Closing bell coming right back. Welcome back. A last hour surge for shares of Alibaba. Take a look at that. Almost 9% on some new news around its AI chips. Mackenzie Sagalos with those details. What do we know here? Hey, Scott.

So those shares started to jump up after the company unveiled Quinn 3. That's the next generation of its AI model. Now, Alibaba says it's more efficient, built to deliver stronger performance while cutting computational costs. This is open source, similar to DeepSeaks R1 model, and analysts say that it is a serious threat to rivals in China, as well as to the big LLM makers like Open AI and Anthropic here in Silicon Valley. Baidu shares also climbing.

The information just reporting that both Alibaba and Baidu have started training their models on in-house chips diversifying away from its reliance on NVIDIA. It is yet another sign of China's growing self-sufficiency in AI. And then China Tech overall, it has been on a tear. The K-Web ETF, which tracks the country's biggest internet names. It's up about 2% today and around 40% year-to-date, Scott. I'm looking at Broadcom, I'm looking at Nvidia, I'm looking at AMD. Now I'm not going to go all the way there and say that it's directly a result of the news you

just told us as to why those stocks are down. However, the notion, according to many, that China was just going to say, okay, you guys over there in the U.S., you're going to be number one, and we're not going to make the best attempts we can to try and be competitive in AI are misplaced. There are also expectations that Deep Seek wasn't the last stand either, and that we were going to see more instances of lower cost, more efficient chips coming out of China, much like we saw back then. Yeah, exactly. And you're also seeing rival models like Kimi K too. But on the chip front, with all of the back and forth about whether or not we can export the H20s, it just seems like a lot of these in-house players have been turning toward tech that they're developing in-house

so that they don't have to wait for Nvidia to get a verdict from the White House. And so, I mean, this is the latest reflection of that trend. Mackenzie, thanks. We'll follow it. McKenzie Segalos, all three of those stocks are down. Coming up next, so far's Liz Thomas. She'll tell us where she's finding opportunity today for stocks at record highs yet again. Back on the bell after this. yet another record close here with her best ideas on positioning at these lofty levels is so-fi's head of investment strategy, Liz Thomas. Nice to see you. Nice to see you, too. Best positioning right now in the market. Again, we're going to have record close, we think, is where? Well, I've been talking about for a while investors needing to diversify their growth

and momentum exposure. Obviously, we've had long periods of time where growth stocks, momentum stocks, have led the market higher, but now embarking on what is set to be a reignition of a Fed cutting cycle, I think this broadening out trade really does have legs, and I think it's got legs through the end of the year if we're going to get more cuts. So when we're looking into the Fed next week, first of all, the devil is always in the details, and you want to be looking at that summary of economic projections for what they think is going to happen by the end of the year. But this broadening out trade should be an opportunity in small caps, although I would use the equal-weighted S&P for that exposure because actually during cycles where the Fed cuts because they can,

large caps still tend to perform really strongly. So you don't want to walk away from that exposure. And then sectors like health care, financials, and even energy at these levels. So you don't care necessarily about 25 or 50 next week. It's the start of the trend of multiple rate cuts over time that lets that positioning work. It's right. It's the message that they're starting on this normalized. rates process again. So I don't think we're getting 50 next week. I think the market is ahead of itself by thinking that, and actually we lowered the pricing of that as the day went on today, it would be really difficult to explain 50. I think we get 25, and I think we continue to get

increments of 25 unless the data starts to really fall apart. But what we're obviously all looking at right now is the labor market. Yes, there's weakness in the labor market, but absent some sort of crack in corporate margins, corporate earnings, there's really no reason that some big layoff cycle should start to take place. So it's okay that the labor market is cooling and actually an unemployment rate at 4.3% is still below where the Fed thinks it's going to be at the end of the year. They had it pegged at 4.5%. So there's room for the labor market to cool further before I think they get uncomfortable. If Chair Powell sounds a little bit dower about the economy, certainly the the labor market, but still leads us to believe that he's cutting. Does that still work for

stocks, or do we sell the cut thinking like, well, we may have some economic period of uncertainty, if not more weakness, that we're going to have to contend with? There's always a risk that in his messaging, he talks about some sort of weakness, and the market thinks, uh-oh, they know something that we don't know. And I also think that if the market continues to hope for 50 basis points. There could be a disappointing reaction day of the Fed meeting, maybe the next day. But in reality, we don't want them to start cutting because they're forced to cut. We don't want them to send a message that they're cutting because there's weakness that they're concerned about. I don't think that that's what we're going to get from him next week. I think we're going to get a message

that's more along the lines of it's appropriate to loosen policy a little bit here because of some of the data that's come in in our dual mandate. But I still think that they want to wait for the inflation data for more in fall to really make a decision on what to message. I got you. Sorry for stepping on your toes. Last question. You suggest to buy software on dips. There's a point of contention in that. I mean, can you be more specific on that and why you think, I know you can't name names of actual stocks, but why you think you should do that, because some suggest the disruption from AI on a good portion of software could be profound.

Right. Well, so earlier this. year, when I came out with my 2025 outlook, I talked about software being the next conduit for AI. I still believe that that can be the case, and it should be the companies that help put AI into place and really bring it to life. So when I'm saying on dips, it's because, yes, their valuations are still high in a lot of these names. So you do want to take advantage of times when it's pulled back. But I think investors are looking for other opportunities and other ways to invest in AI outside of a lot of the headline names that have been mostly. in the semiconductor space.

So if you think about AI as a longer-term theme and themes being somewhere between, let's say, three, five, or even ten years long, we've still got a big runway in a lot of these other names that have not really benefited yet from the theme as much as semis have. Liz Thomas, we'll talk to you again soon.

Take it easy. Thank you. All right, still ahead. We'll tell you why Delta Stock is coming under some pressure today. Closing bells, coming right back. A reminder, don't miss, my exclusive sit down with Double Line Capitals, Jeffrey Gunlock. It's going to be this time live from Double Line HQ, downtown Los Angeles. That is this Wednesday at 3 p.m. Eastern immediately after Chair Powell wraps up his news conference.

That'll be fun. It was a year ago, if you recall, where we were there as well. For the September meeting, when the Fed did cut, rates went up, and we'll see what happens this time. Coming up next, we'll run you through what to watch for when Adobe reports in OT, that and much more, in the market zone, which is next. We're in the closing bell market zone. CNBC senior markets commentator, Mike Santoli, is here to break down these crucial moments of the trading day. Plus, Phil LeBoe, with why shares of Delta are slipping today. And McKenzie Segalos is back with what to watch for from Adobe and those results in overtime. Michael, you first.

What's this about today? Is the market getting ahead of itself on rate cuts? I'm not sure it's getting ahead of itself. It keeps racing to the point of kind of maximum positivity in terms of the combination of data and how it interplays with the Fed and the markets. And it's basically been rewarded for that. In other words, the data have not called the bluff

of the Bulls just yet. So it's unclear if we're going to be able to sustain this certainty that we're getting, let's say, three-quarter point cuts for the rest of the year. I do think today's combination of the CPI roughly as expected, and then that uptick in weekly jobless claims, which really is probably not genuinely representative of the labor market trend, it was the perfect excuse to give investors permission to look through the inflation numbers and basically cement the certainty about the Fed. So I do think in the short term we maybe are feeling like, you know, it's sort of,

again, all gain, no pain. But I'm not sure it's totally irrational based on how things are going policy-wise and data-wise. Nice and broad, too. I mean, you look at the sectors. There's a lot of stuff up a fair amount. It's pretty much the way you'd want to see it, like 80% of volume to the upside.

You've got semis making new highs. You have the cyclical groups leading, VIX below 15. So everything's locking into place, although this isn't really the beginning of any kind of rally, so you have to be aware that we're not starting from depressed levels by any stress. All right. Back to you in a minute. Phil the bow. Talk to me about Delta. What's going on with this stock today?

Scott, under pressure today, even though the company, as part of a presentation out in Laguna, California, was talking about what to expect for the remainder of the third quarter. They reiterated their guidance. They're expecting to earn between a buck 25 and a buck 75, which was the prior guidance. But they did say that the main cabin revenue, the main cabin revenue, it is still negative. It was down 5% in the second quarter. And we're talking about the part of the airplane, the seats that are sold at the most basic level to the basic economy consumer. Remember, their premium revenue, that's not been in question. That's up 5% in the second quarter. And by the way, they raised the lower end of their guidance on revenue for the third quarter today. Also take a look at shares of Boeing. Boeing CEO Kelly Orberg, also in Laguna, California, talking today about what he expects in terms of the Triple 7X and its certification process.

says they're running a little behind plan in terms of what they expect for the certification, though he has not changed the timeline for when it goes into service, which is expected to be next year. Scott, I'll send it back to you. I appreciate that. Phil de Beau very much, down 3% for Boeing. All right, McKenzie on Adobe, one of the have-nots, at least as the market has perceived it relative to AI, going into this report. Yeah, so the big question is whether Adobe can convince investors that it is on the right side of the AI trade. In recent weeks, names like MongoDB showed that AI wasn't a threat and actually additive to software growth. Salesforce couldn't do that last week, and now Adobe is in the spotlight.

Several analysts say that the company hasn't yet proven its AI tools truly excite customers. Bears point to slowing creative demand and stiff competition, especially after Canva's affinity acquisition. Adobe's 250 million AI revenue target that is going to be a key bar to watch. Sentiment is rough after that June warning that AI monetization may take longer but Firefly, Adobe's Gen AI platform nearly doubled paid subscribers last quarter and new AI agents could add automation revenue.

Still, despite 20 straight EPS beats, Adobe stock has fallen on the past four prints. Scott? We will watch it. Mackenzie, thanks. McKenzie Segalis. All right, Mike Santoli. Tell me what you're going to be watching now. Tomorrow, final day of the week

and then we look ahead to next week. I mean, look, we'll get another IPO to assess. I think the fact that it's wide open there, you have this M&A and IPO, this capital markets percolating theme. That's something that sort of fits in with everything else, basically stocks up, bonds up, gold up, crypto up. I mean, basically, not just today, but just in general, you have people feeling as if they've caught it right in a lot of different fronts. So I do grant the room for a little bit of disappointment.

The bond market still should be a focus here as we have the lead up to the Fed, next week. I've been of the mind that says you don't really want to wish for the 10-year yield to crack below 4% in some decisive, swift way that seems like panic buying because the economy's falling apart. And I think it's okay. We're hovering here just over 4%. Bomb market got to the spot before the rest of us in terms of saying the CPI and the PPI are not really going to get in the way of this doveish tilt. So maybe we can hang out there for a while, even leak higher in yield, and it probably wouldn't be too big of an end. Thank you.

All right, Michael. Thank you very much. That's Mike Santoli. So they are cheering. That's a very good reason today. We're going to have record closes across the board and some milestones at that. The Dow Jones Industrial Average will close above $46,000 for the very first time ever. That's into 500, heading towards 6,600.

Not quite there, but just about. I'll see on the other side. In overtime, it's down here. Thank you.