Closing Bell - Closing Bell Overtime: 10/15/26

Episode Date: October 15, 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.

The bell's bringing in end to the trading day at the NYSC, the Headstrong Project, bringing the bell. And at the NASAC, the go-well technology, doing the honors. Welcome to closing bell over time. We're live from Studio B at the NASAC market site. I'm Melissa Lee, along with Mike Santoli, stocks well off their lows of the session. The out-closing higher by a full percentage point, 556 points there. The NASDAQ composites sneaking into the green late in the session, S&P 500 also. They snapped a three-day losing streak there.

Core weave kicking off the tech selling yesterday with concerns about its debt at the lower the day. The stock was below $60 to share. You see a big comeback there above 69. It was down there for the first time since May of 2025 before the rebound. Also a dramatic day for bond yields, closing sharply lower despite this morning's hotter than expected PPI report. The quest for safety amid the tech sell-off seeming to outweigh inflation concerns in the near term. We also saw the safety trade in the stock market. Nearly every stock in the consumer staples sector closing higher. Walmart getting upgraded. Kimberly Clark reporting preliminary results. Health care. What a standout continues to be the best sector recently of 6% in a week.

Once again, led by Eli Lilly. Let's get the first take on the close now. And the dramatic decline in bond yields, we went down to as low as 5.04% at one point in this session. That really seemed to alleviate the pressure across multiple sectors, including technology. It did. It definitely released higher a lot of the hard hit consumer parts of the market, the leverage parts, housing, home builders, things like that. Beyond that, you had really, I think, selling panic conditions in semis that were isolated around midday. Basically, people said, look, even if this isn't the bottom, it's a bottom. And they managed to rally. So I do think you still can see this clear quality bias in all of this with the blue chips,

self-financing type businesses way outperforming. It was Lilly and Visa and all that at the top of the index. Quality ETF week to date, up 2%. Momentum ETF week to date down 5%. Okay. So now the question is, is that, did that kind of do the job of trying to discount some of the risks in credit markets and the rest of it? I also don't know if you want to see bond yields on the Treasury market swinging this wildly dated day. I mean, it is a little bit unnerving. It's volatile, but obviously, at least for now, going in the correct direction to relieve some of the pressure.

And I don't know if anything has really resolved, excuse me, around the neoclout issue in terms of the borrowing costs at all. I mean, the 5 plus percent on the 10-year treasury yield, costs are still elevated. bonds are not really trading that much better in light of the increase in the stock price that we've seen in today's session. I mean, Corrieve stock, 21% short interest. And we also had some favorable comments from Jensen Huang, who, of course, is talking his book with Invita having a 10% stake, but saying, you know, Correve, their borrowing costs are actually lower today. They're getting lower every day. And so, you know, you had them out defending that stock. That's certainly added to the sort of positive swing higher.

I don't think there's anything like an all-clear for those questions. I do think, though, it's worth a reminder that we've been in this process of questioning the assumptions underlying the AI hardware build out for four months. Semiconductors peaked in June. All of the neocloud stuff peaked around that period of time. Storage, AI industrials, all of it has been months in the making where you're kind of 20, 30 percent off the highs. It doesn't mean it's over, but it does mean it's not the beginning of things. It did remind me of yesterday's action with that Gartner report saying most of these neoclots are not going to survive independently. I mean, quite a crazy number.

Eye catching, kind of persuasive on some level, but it reminded me of the Satrini report on SaaS software from February, which was scary, caused a mini panic, but occurred closer to the low in software stocks than to the high. So always know the market sometimes get there first, I guess is the lesson. Well, of Corwee stock did rebound, as we said, after a sharp two-day sell-off that was sparked by rising yields on the company's debt, which climbed to more than 15%. Bond investors grew increasingly concerned over its heavy spending and debt levels. Correweave has taken on more than $51 billion of debt and obligations to fund its AI infrastructure buildup.

The stocks declined weight on other neocloud companies and triggered a broader downturn across the AI sector. Joining us now is Niles Investment Management founder, Dan Niles. So, Dan, great to catch up with you here on this. You heard the conversation. I think one of the debates going on, ultimately, even beyond the immediate kind of credit and solvency concerns and all the rest is, Where are the economics of the AI boom going to settle? At what sorts of companies, at what layers of this boom? Well, I mean, I think if you think out, to your point, like, where does it settle?

It'll settle at the full-stack hyperscalers. And by that I mean Microsoft, Google, and Amazon, because not only do they have the raw chips, they have the services, they have the software, they have everything to support that. where you're going to have problems, and I've been saying this for I don't know how long, is at the neocloud level, because what the Microsofts and the Googles are doing is they're contracting out with the likes of CoreWeave for that excess capacity. Because everybody, I think, agrees that AI is the most transformational technology we've seen since the Internet. If you believe that, you know that you're going to have overinvestment, because everyone knows if you're the last

company left standing. You're Google or Amazon, you're going to make a huge amount of money on the other side of this. But what you don't want to be doing is overbuilding your own capacity. And so that's why you'll contract out with these neoclouds for that excess. And I think that's where you're going to see a huge wave of bankruptcies when this ultimately implodes. So I'm not sure if you saw the report. Excuse me. I'm losing my voice. Dan, and in terms of the Gartner reports, saying 80% of these independent operators will go bankrupt. I mean, do you see the logic in that? I mean, given what you've laid out,

it does sound like you think that eventually there will not be a place for the neoclods once compute is somewhat rationalized. Yeah, 100%. And by the way, that extends out to, you've had me on the show before, and I've said, look, all the people that you think are going to win at the LLM layer,

they're going to have problems too. And I think Open AI, as I've said multiple times, is at the epicenter of that, where I think ultimate winners will be you have Microsoft on the enterprise because they've done a good job of taking advantage of all this talk about, oh, AI is going to kill 10% of us. And corporations feel safe because they've got a Microsoft 365 license. And Microsoft's like, look, you can access AI in a very safe environment. They've done the co-pilot overhaul. I think Microsoft ultimately wins an enterprise.

I think in consumer, it'll ultimately be the Android ecosystem, which is obviously Google, and it will be Apple. So for consumers, you'll either talk to your iPhone or your Samsung or whatever it is running Android, and you won't care what model underneath it's running, whether it's MetaMuse or, you know, dots from Open AI. It won't make a difference. And you honestly won't even know what's running and you won't care because those two companies will route your query to whatever is best to get the job done at the best price. So that's kind of how I think about it to Mike's question of ultimately where do you end up. It's Microsoft. On Enterprise. It's Google. It's Apple on consumer. And then you've got a whole lot of carnage, you know, on the names outside of that. Yeah, I've thought about that analogy, Dan, of, you know, Android kind of this, you know, sort of open system that is kind of seamless. And it's essentially kind of profitless, really, too, at the operating system level.

However, you know, in smartphones, in mobile, you do have one premium brand that commands more than 100% of the profits of the whole ecosystem, and that's Apple. Is there going to be a layer of, you know, premium LLMs? Is it going to be Open AI and Anthropics still able to feed the upper end at the frontier that's going to actually make their businesses sustainably good ones? I don't think of the consumer side, right? How many consumers are you going to have saying, hey, you know, vibe code me, a data. database software management, right? You're not going to get that. You're going to be, go get me a good airline ticket, give me seats to the theater. You can lose an incredibly cheap open source model to get that done, which is why if I'm going to bet on either Anthropic or Open AI, I've said this

from the start, open AI focused on consumers. Consumers are used to getting things for free, right? We use Google for free. We use Instagram, Twitter for free. You're not going to want to pay. That's why you saw Open AI switch to the enterprise market earlier this year. Anthropic from day one has been focused on the enterprise market. Why? Because businesses will pay. And so I think that's going to shake out. And I think Anthropic will make it through that.

Okay. But I have real concerns about Open AI. And let's not forget, both of these IPOs have gotten pushed out, right? Anthropic was supposed to come earlier. Actually, Open AI was supposed to come first. That's been shoved out to next year. And you've already had deals get pulled. Firmus, which was backed by NVIDIA, they couldn't get that deal done.

In Australia, that was like a $30 billion market cap. At one point, you had Aertrunk, which was backed by Blackstone and the Canada Pension Fund. That was like a $15 billion IPO in Singapore. That couldn't get done. And that reminds me of sort of, I don't think this is 2000, but you have to keep an open mind where I remember a lot of deals got pulled at the top and you couldn't get funding. And this goes back to our original conversation around core weave and where the bonds are trading. And so you do have to keep that in mind as to where are we in the process.

I wanted to unpack with you, Dan, and extrapolate it, if you do think that there is going to be a period of rationalization of compute and that these neocloud businesses don't really have a place in the AI ecosystem eventually, how do you then sort of, what is the impact on the chip makers, particularly when you have a lot of memory makers are facing increased competition from China. So you have that element as well. Are we just counting too much on those long-term agreements thinking those are ironclad when in actuality we're not going to have the demand later on? There could be force-majured, you know, called forward to break the contracts or whatnot.

Plus there's all this, you know, competition on price, et cetera, eventually coming from China. Those long-term contracts are worthless. I mean, I mean, go back to what happened during COVID. If you remember, there were a lot of long-term agreements struck during COVID. And what happens is this. The customers go back to the semiconductor suppliers and they say, well, I know we agreed to this, but we want the terms changed. If the semiconductor supplier says, nope, we're making you honor it. What will happen is exactly what happened to Microchip.

Microchip was probably the most aggressive company in terms of coming out of COVID, making their customers. And by the way, microcontrollers are not a commodity. like memory is. So it's even more important to some degree. And they made their customers honor it. They went through four quarters in a row where revenues were down over 40 percent, 4-0 year over year. The CEO got kicked out. The prior CEO got brought back in. He canceled all those LTAs and said, look, we're not going to make customers buy what they don't want. Because if you do make them honor it, a company like Apple will say, well, fine, we'll honor the contract we signed. And as soon as it runs out, We're going to give all the business to your competitors.

So these LTAs, to me, Matt, are just as good as the LTAs struck during COVID. Which are not good at all, it sounds like. Dan, good to see you, as always. All right. Thank you. Dan Niles. According to Morgan Stanley, an estimated $466 billion of AI-link debt has already been raised by companies so far this year. That's up from $101 billion year-over-year with Corweaves debt trading as a distress asset.

how concerned should investors be about the credit of the companies involved in the AI buildout? Joining us now is Seth Meyer. He is Global Head of Client Portfolio Management at Janice Henderson. Seth, great to have you with us. Thanks for having me. As you see what is happening with Corweave bonds, and granted, Corweave is very different from the credit quality of a bigger hyperscaler. But what are the implications?

What are the ripple effects of how Corweave bonds are trading to the rest? Yeah, I think it's the natural process of sort of repricing risk, right? I think one of the common themes we've been having here at Janice Anderson ever since the Fed started raising rates was the return of cost to capital. And I think what investors are starting to do is every AI dollar going to infrastructure spend isn't going to be the same. We're going to now start putting cost of capital differences between companies. And that's a healthy sign. How quickly this has happened and now we're at work where we bonds are trading. you talk about technicals or longs and shorts, etc.

But I think ultimately what's ended up happening is we're repricing the risk. Some of the uncertainty that Dan was just talking about two seconds ago, about the winners and losers and neoclouds even being needed, those are real questions you have to ask when you're lending. You think about cap-ex budgets of some of these companies. You think about CoreWeave's needs over the next 12 months. Where is it coming from? How are they going to finance it?

Is it secured debt or unsecured debt? Will it be converts? will be equities. And the whole ecosystem sort of starts hurting itself as bonds start underperforming, so do the stocks. And then there goes your equity issuance of possibility as well. I think what's been interesting, too, is this isn't just applying to what we're seeing with CoreWeave, right? You can even dig into the IG market today and just look at Oracle. Bonds there are actually significantly wider over the past two weeks, or even Broadcom, strong balance sheet. Bonds are a few. 15, 20 basis points wider there. So investors are actually becoming very discernible when it's,

when it's actually when you're deploying capital. The question now is, how do you fund that as we move forward? There's still a hole and they'll have to come to a market, we don't know which one, to fund this CAPEX budget. You know, it's fascinating, Seth, because in the last couple days, I've been saying, you know, there was this popular line out there that said, why would the Fed be raising rates? These, you know, AI CAPEX trend is inured to higher interest cars. they're going to be able to spend no matter what. And you're laying out why that's not true, right? Financial conditions have tightened, capital's being rationed, you know,

based on potential risk and payback. What do you think that means on a macro level, if anything? I mean, is it really going to slow the CAPEX push to GDP? And fascinatingly, this all happened when we got two hot inflation reports and Treasury yields are dramatically lower. Yeah, I don't know if there's any connection there. But I think to your first point, Mike, the question of what does this mean economically? Realistically, the KAPX budgets of the largest hyperscalers, right, those with a fortress balance sheets, this means very little.

We're still going to see $1.2 trillion in spend next year, whether or not CoreWeave spends their $50 billion. For all intents of purposes, you know, will that impact GDP growth in the country? will we see a buildout slowdown? Most likely not. I mean, I think you think, when I think about the buildout, it's, to me, it's really the four piece. It's power, power, can you power it? What's the local policy where you actually get it approved? Do you have the people? And then finally, where are you going to get the paper to finance it? The paper to finance it in the high yield market right now, when you look at what's happening with CoreWeave might not be available there, or not of terms they would actually like. The paper to finance it in IG, they'll certainly be able to get

those investment great deals done. So from an economic perspective, I would see very little, you know, true impact because those those cap-ex budgets will be spent. And they will over the next 12 months. On the margin, can you make the argument that other companies have a hard time with any of those other peas? I think you can make the argument that's the case. But that, to me, would be on the margin. nothing major in terms of these CAPEX budgets of $1.2 or $1.3 trillion. There's so much overlap, Seth, in terms of what an AI play is in terms of sectors. And you take a look at a lot of the power sector, the construction sector. And I'm wondering, in terms of the spillover, even for investment-grade issuers,

is it more costly for the issuers in those other tangential sectors to also raise money at this point? we haven't seen i mean to to a certain degree the entire market is level wider than was you know 45 days ago or 60 days ago particularly in high yield um the entire high yield market is wider by about 50 basis points or so um investment grade is slightly wider but for the most part we haven't really seen a trickle outside of sort of these these specific names um weakness has happened but but that it's really hard to point a finger at that with only 50 basis points in the grand scheme of things with how tight spreads have been in the high-eield market isn't all that meaningful. So we haven't yet seen it spill over to where, you know, a power company is having a hard time getting financed.

Construction companies would have a hard time getting financing. We haven't seen that yet. It's been very name specific and idiosyncratic specific. That, that to me is a pretty healthy sign. Also, you know, if we do start seeing some weakness in names that are really solid, I think that's exactly when, you know, bottom-up security selection. will really start winning, and managers that go out and pick those individual names should start seeing outperformance. Seth, great to talk to you. Thank you. Thank you. Seth Meyer.

Coming up much more on the tech credit crunch, the stocks bounced off their lows today, but is this issue going to keep cropping up? Is it time for investors to rotate elsewhere? Close the bell overtime. Be right back. Tax aging or reversal today, so do you stick with it or is it time to rotate out? Joining us now is Eric Johnson, Chief Market Strategist at Cantor-Fitzgerald Asset Management, as well as the head of equities at O'Connor. alternative investments in business. Eric, great to have you with us. You've sort of recently turned bullish technology, but you're closing out that position at this point. Yeah, a couple of weeks ago,

we decided, you know, it had a big run, and there were longer-term risks that were sort of marrying with the short-term picture, which looks pretty good. Today, we obviously saw a big de-risk, and we saw over the last, you know, six or seven sessions that, you know, you've seen a material sell-off, material de-risking, and fear levels very high. I actually think that within tech, I think semis do look attractive. And I think they are going to get a bounce from here and there are a number of catalysts over the course of the next couple weeks. Hyper-scaler earnings, I think will be a positive around CAP-X, likely hearing something around Anthropic. I think we'll just hearing that about going public will be very important. And I think the midterm elections, I think that

the AI campaign concerns that everyone's talking about will so, but we'll go away post, you know, post midterm. So I think there are some good catalyst. And of course, semis have great balance sheets. It's fascinating how you've had to kind of track all of these overlapping mini cycles inside the market. I mean, today, everything they had been obliterated and underperforming for a long time got huge balances. Yes. Right. So it's kind of like, okay, fine, we have these concerns. It seems like you have credit flaring up. But if Treasury yields come down and certain parts of the market got sold out, they're coming back. But like, what's the sustainable theme here? Right. So I think part of it is, I think there was actually in a much more correlated rally. And so, as you said, you know, rates have now started to come off. You know, the 10-year yield is only, it's 80 basis points off of the average for the last three years, which is in the scope of this economy, which is being dictated by AI CAPX. It's just not as meaningful. It's obviously very negative for housing. But I think that yields do sort of level off here. And that's been our view that there is a ceiling to them.

And that's based on, you know, the Treasury, we think, you know, don't forget about them. They're going to be, I think, active in trying to control yields. Inflation break-evens are at, you know, 5.35% over the next five years, very contained despite the move up in oil. And this term premium that, you know, everyone talks about is attractive, right? It's over 3% for the 10-year, over 3% for the 30-year above inflation. That's a pretty attractive price that I think is going to, you know, create some demand. Are yields at this level around 5%? Is that enough to continue to release some of the pressure that was felt on some of those yield-stricken sectors, like financials, home builders, discretionary, et cetera?

I think so because I think there's been a, you know, they've been really left for debt. If you look at kind of the big picture right over the course of the last year and you look at sectors whether consumer staples or utilities and, you know, and even retail, you know, they've been hit hard and they've been rotated out of. And I think if you can see yields sort of calm down and then nervousness within many parts of the tech sector, that's likely going to help other sectors in the market where it's just like, I want to be out of some of the more higher beta tech names and maybe go into safety and something with a dividend yield that's going to look more attractive if yields do come, you know, do come down further. If I widen out the picture and you kind of try to read the market's mind a little bit, the fact of valuations have come in so much given earnings growth,

has been so strong. Implicitly, it suggests the market is saying, okay, we probably saw peak earnings growth. And not only that, the earnings growth is so constituted in these areas that are exactly the ones we're not convinced have multi-year growth paths ahead of them, like AI hardware. Does that resolve? Is that just going to be like the world we're in for a little while going into 2027? I think that's the world that we're going to be in. And I think that remains a major risk for the market and for the economy, the fact that the concentration, is so heavy. You even look at sectors like retail, right, nothing to do with the AI trade, but the consumer has been held up by the wealth effect, right? And so they have the highest exposure

ever to equities. Equities have gone up 20% a year for the last four years, and that's helping the retail sector. So it all comes back to this one trade, this one theme, and I think that's going to remain a risk, and I think that it will cause a cap to the multiple because the It's always going to be afraid that, okay, if this were to roll over, if this was just to slow down, it could have a cascading effect. So I think you have to have that in your back of your mind for any portfolio that you're running. Yeah, relying on the denominator to keep growing. Yeah, all right, Eric, good to see. Thank you very much for coming in. Coming up, Walmart could be an inflation winner and Amazon hoping to create some buzz with its new

products. Those stories coming up on closing bell over time. shares of Walmart moving higher today. The stock is up 14% in October, back above its 200-day moving average. Deutsche Bank upgrading the stock, saying the setup going to 2027 looks more favorable. The firm says inflationary pressures will help Walmart's advantage as a value retailer, adding that Walmart is evolving from a traditional retailer to a technology-led marketplace. I thought what was interesting within this upgrade, though, was sort of the talk about higher fuel costs and how that will trickle down. They said if fuel, if diesel prices remain basically worth. they are and remain out in 2027 at these levels, it'll be 50 to 100 basis points in inflationary pressure. You'll basically eat up all of the tariff refund that they... Right. I was going to say Walmart is going. I obviously absorbed most of that.

There is maybe a net positive, which is that they can gain market share and grocery even more because they are a value leader in that area. And the other piece of it is arguing that it deserves an even higher valuation because the parts of the business growing the fastest should be the ones that you pay up more for, like advertising and e-commerce. I guess that's true, but it already is a pretty expensive. I mean, it's at 38 times forward earnings. It never traded above 35 in prior 20 years until a couple of years ago. So you have to still make the case that it deserves the rich value.

Right. There's also talk about agentic AI and how it impact Walmart. And I thought that was interesting too because it was sort of unclear, like, is it going to be a negative impact on advertising? And they're making the case. The analysts were making the case that actually it would be fine. They wouldn't really lose anything. They wouldn't lose access to that very valuable first-party customer data because they will own the transaction.

They'll own the customer. And then the AI agent provider will also own part of that transaction. So everybody wins is the case. I wonder how that will play out, but that's the case. And I guess arguably if the agent is hunting for the best price, greatest assortment, Walmart is going to do better than most on that scale. Well, Amazon is hoping a pair of new devices that it hopes can help generate a lot of buzz. as part of the next phase of AI hardware as it develops.

The company unveiling the B Frontier Wearable Braclet and the B Eclipse, which attaches to smartphones. Both are AI devices that record, transcribe, and summarize users' conversations can generate lists and reminders based on those conversations. Amazon says a light indicates when recording is happening. The audio is never stored, and users are even prompted to ask others for their permission to record. The products will cost between $75 and $100. You know, obviously, okay, you're warned if you're recording. What occurs to me with this is a previous generation of digital social interaction was all about ephemeral. Snapchat, the photos disappear.

Instagram story is something I've never figured out. But what? They just go away after a little while, right? And now it's like, nope, we're going to preserve everything and we're going to use that as fuel to figure out what you want next. Right. It's kind of crazy because, I mean, Amazon has always been sort of they create these devices and you actually have to prompt it. You know, Siri, do this. Sure. Not Siri. Sorry, Alexa, do this in order for it to record. And so for this to be recording 24-7, for you to be wearing it doesn't even have a watch interface. So it's sole purpose really is just to record things.

And then imagine if I, if you, every single time recorded, I would have to say, we're in a two-party state or multi-party state when it comes to privacy. Mike, do you mind if I record How awkward is that? I also have to say, I mean, I guess AI doesn't get, like, bored, and the fact that most of it's wasted and it's not going to be useful is okay. But, you know, the idea that it's preserving everything is if it's valuable. There's a lot of useless conversations that I have during the course today. I don't need to save.

Time now for a CNBC News Update with Brandon Gomez. Brandon. Hey, Melissa. The Republican donor who accused Kimberly Gilfoyle of asking him to wire her $100,000 to pay off a credit card bill sued her today for, defamation. Businessman Eric Dieters claimed she promised him access to White House officials in exchange. Gilfoyle, who was pushed out of her role this week as the U.S. Ambassador to Greece, questioned the authenticity of messages Dieter's shared with news outlets.

Meanwhile, a federal judge denied a request today to order the Justice Department to preserve all its records from investigations into former CIA director John Brennan. He was a central figure in the U.S. intelligence community's findings that Russia interfered in the 2016 election on behalf of President Trump. His attorneys said they needed the records to challenge potential charges as vindictive or selective. And a working Apple One computer signed by co-founder Steve Wozniak just sold for $1.15 million at auction. It was originally purchased in 1976. The Apple One was the tech giant's first product and was sold as an assembled circuit board. Alyssa, that's your news this hour. Send things back to you. Thank you, Brandon.

shares are higher after reporting earnings just a few minutes ago. Earnings of $1.82 a share were $0.35 a share better than the estimate, but revenue came up short. The company reaffirming its production and shipment guidance, but they are seeing some inflation. Alcoa expecting higher raw material costs and planned maintenance to hurt results by about $30 million sequentially. Up next, the aluminum giant CEO breaks down the results with us in an exclusive interview. Closing bell overtime, be right back. Welcome back to closing bell overtime, live from the NASDAQ market site. Stock's closing mostly higher after bouncing,

off intraday lows. The Dow up 556 points, the S&P 500 up a third of a percent. The NASDAQ with a small gain. The Russell 2000 up more than 1%. The NASDAQ 100 also well off its lows, but still closing just a bit lower, made for its fourth straight session in the red. Eight of the 11 S&P sectors closing higher today. Health care, once again the leader, thanks to Lilly, materials and discretionary also with nice gains. And shares of J.B. Hunt slightly lower following its results earlier this hour. The ship were missing on earnings a $1.82 versus the estimate of $1.89. The company's revenue per load was up 11% from last year, but most of that increase coming from a fuel surcharge. Well, shares of Alcoa higher after reporting earnings, EPS beating revenue missing, though,

with company warning of some inflationary pressures ahead, particularly in raw material costs. With us now to discuss the quarter as William Oplinger, Alcoa CEO, in our own Morgan Brennan. Morgan, take it away. All right, Melissa, it's good to see you. And Bill, it's great to see you as well. So let's start right there because you also reaffirm full your production and shipment guidance for both aluminum and alumina. How would you categorize the quarter and how would you describe current market conditions?

Thanks for having me on. Morgan, it's good to see you again. Third quarter was a really strong quarter for us. We had production records in six of our facilities around the world. We delivered close to a half a billion dollars of free cash flow. We're executing on our strategy in that we're progressing the large transaction that we expect to close in the first half of next year. And on top of all that, we announced that we sold our first closed site for data center development up in Messina East.

So it was a really good quarter. And you can see we delivered the earnings. And in the results, you'll see strong cost control and really strong production. I want to go back to this data center news. I mean, at a time where we're seeing both the credit and the stock markets freak out a little bit or at least get nervous about AI infrastructure buildout and future funding for that. What are you seeing in real time? As you just mentioned it, and we've talked about it in the past,

but data center demand is driving demand for aluminum. We've not, well, there's two components to that. First of all, we have 10 sites around the world that we're looking at redeveloping and selling into the data center market. So we announced our the first one of those here in this quarter, It's up in Messina, New York. That's a community that we've been in for 100 years, and it's with a mid-size developer that will convert that to a data center. That's part of a broader program for us where we're looking to monetize $500 million to a billion dollars worth of closed assets before 2030.

So this is the first one of those, and this could be as large as $320 million, depending on the size of the actual data center. in addition to that, the growth in data centers is really positive for aluminum. For every megawatt of data center capacity that's built, you need about 30 tons of aluminum. So if you think about a gigawatt, you need about 30,000 metric tons of aluminum. So it's driving some of the strength and demand that we're seeing globally. Bill, specifically in Messina, it looks like the residents there question. And, you know, there is pushback against. data center development. I'm wondering if you're encountering that in other places where you hope to do the same.

So clearly, we work with the developers who are working with the communities. In the case of Messina, this is a site that's been closed for over a decade. And what a data center will bring is it will bring some jobs and it will bring some tax revenue to the community. So our belief is that it's strongly supported by the local community. We're also looking at other sites around the country. any site that we would engage in selling to a data center, we would certainly take community concerns into consideration. The other piece of the puzzle here has been what's happening with aluminum prices, because on the one hand, we've seen a lot of supply come out of the market in large part

because of what's happening with this warrant in the Middle East. On the other hand, we've seen prices come off a little bit. So just want to get your sense of what we are seeing in real time in terms of the global picture here. And at a time where we are talking so much about crude oil production and shipments beginning to recover coming out of the Middle East. What are we seeing with aluminum? So there's a couple of things that are going on that factor into that pricing of aluminum. First of all, when the conflict started, around 40% of the capacity of aluminum smelting production

within the straight of Hormuz was taken offline. That is slowly coming back to market today. But as you can imagine, there's a massive amount of uncertainty of how quickly that can come back to the marketplace. Then if you go to the demand side of the picture, we see strong, resilient demand in both of our end markets. In 26, in North America, every one of our major end markets grew from a demand perspective, with the exception of building and construction. Same thing in Europe. And so as we roll into 2027, we see continued growth on the demand side for primary aluminum, with the exception of building and construction,

and that'll really depend on where interest rates go over the next year. And Bill, I'm going to ask you my every quarter I ask you this question, but trade and tariff dynamics. I'm not going to call it a trade war. I'm going to call it a trade row between the U.S. and Canada. What does that mean for Alcoa? So prices in the United States have risen to a level, aluminum prices, have risen to a level whereby they cover the tariff expense.

So Alcoa is paying gross tariff expense of close to a billion dollars on a run rate basis. Aluminum prices have risen to cover that. So from our perspective, it's actually a net positive for our company. We have a U.S. footprint. We have two U.S. assets that sell under that tariff umbrella. And that actually helps them. All right, Bill Loplinger of Alcoa. It's great to speak with you.

I appreciate it. It's good to you. Thank you for having me on. Our thanks to you, Morgan. Great to see you. Good to see you. Up next we'll break down the charts to see why the S&P 500 could be nearing its first sell signal since March 2025. And what that could mean for the market and your money.

Closing Bell overtime. Be right back. The S&P 500 was able to shake off the slump in tech today, but wasn't enough to diffuse the risks bubbling up in the market internals. Joining us now is John Kolovis, his chief technical strategist at macro risk advisors. So, John, it feels like you're kind of keeping the market on a shorter leash. Did today change any of that? Not too, too much. It was a good kick-saving a beauty, if you will, for the tape. But the thing that concerns me the most here right now is that the internal trends of the market are starting to deteriorate quite significantly.

So what I brought here today is one of these risks that I see in the tape is that for the first time in 18 months, we're about ready to get a cell signal with 30% of the market underneath its 50-day moving average, which is over here, and almost 40% underneath its, 200-day moving average which is denote over here. But the last time we had a sell signal was back before the bear market of 25 and before that, the bare market of 22. So when we have this configuration here, we need to take, you know, take it very, very seriously and put our risk management hat on here because, again, this could be a precursor for a deeper spoon in the equity markets. Okay. So sell signal sounds kind of scary, John, but you're saying we just

need to monitor this. So what are you actually, what is the message to investors here? And does a sell signal, I mean, because it's for the S&P 500, is it mostly a call on technology? It's a little bit of both, a call on technology, but now this is where things could start to roll over in terms of the overall market conditions, which would include technology. I think investors need to really just put on the risk management hat here, essentially, meaning like, be mindful of your level. So technical analysis, one thing that's beautiful about it, is it's not just about predicting the future, right?

It's really not that. It's really about risk management. And when we are in a downtrend, and when this gives us a sell signal, that means that volatility is going to go up and left-tail risk is going to go up, meaning the probability of some sort of market mistake. I don't want to say to see where like a crash could happen, but it's possible. And in terms of the 10-year yield, John, of course, it's also been kind of fascinating. Everyone thought it's nothing could keep it from going higher, and now we got this two-day retrenchment. Does that tell us anything about the trend? When it comes to the 10-year,

yeah, here we are. So, yeah, so what happened with the 10-year, it was projected to peak around the 515 level. It started to pull up. over how'd you get their bear sentiment? You got there with COT data and the RSIs, even some Elliott wave. Now what we've seen is a consolidation pattern. What was interesting about yesterday was that it was a bit of a selling climax after CPI. And then you got the follow through down right now. I'm interpreting that more as a flight to safety than a proper reversal in trend and also in risk sentiment. But for now, I think we have enough of a decline in consolidation to see it work its way down to about 5% before we work a way higher once more. And we saw a major reverse. And we saw a major

reversal in shares of core weave in today's session, John. I'm wondering if that augurs well for the semiconductor trade. It does to a certain extent. What we need to be mindful with the semi-trade is that this is more the higher beta part of the market, right? So when high beta is underperforming, this is where we need to be really, really careful. So the good way to measure it is I brought today the relative ratio of the semiconductor index to mag 7. And this ratio peaked back in June. When was that? That was the momentum. peak that was a speculative peak within technology and has continued to work lower. What I'm worried about here is now this ratio is testing the 200A moving average, and if they

are on the RSI basis, it's oversold. What I'm afraid of here is that this trend were to continue, it's going to create forced liquidation and a lot more of those names. So it is encouraging to see Corrieve recover and all those names recover, but again, this trend needs to reverse. So another way to think about it is I want to see this start to resolve higher before I put more risk in my portfolio. particularly within the technology sector. Yeah, still got a fair bit to prove there, I guess, John. Great to catch up with you. Thanks so much, John Koloos.

Well, data center opposition could be a major factor in one key state during the midterms in less than three weeks. That's where Pippa Stevens is right now. Hey, Mike, Ohio ranks six across the U.S. for a number of data centers, but local communities are increasingly pushing back in this battleground state. A look at how one project is dividing an Ohio city, and what it means with the midterms just days away. That's coming up next. We are less than three weeks away from the midterm elections.

And in Ohio, growing opposition to data centers is one of the biggest issues for voters. Pippa Stevens is in the Buckeye state with the details. Hi, Pippa. Hey, Mike. So data centers are top of mind here as Ohioans prepare to head to the polls in a seat that the Democrats are hoping to flip in the Senate. Now, ahead of this, data center backlash is really growing. But in local communities, the decision around these projects is often nuanced. So I'm here in Oregon, Ohio, where Vantage Data Centers wants to build a 500 megawatt facility in the fields behind me that right now is just open land.

Now, this project was first proposed a few years ago, but local opposition has really taken off in the past few months, thanks to a grassroots organization that was able to secure enough signatures to bring a measure to the ballot that we've been. would limit the size of data centers in this area to 25 megawatts. Now, this Toledo suburb is a really interesting case because they are no stranger to large energy infrastructure. There are multiple refineries, power plants, manufacturing facilities, but residents told me that this project feels different. I think we just don't know enough about them.

I mean, from the very beginning, this whole thing has been so secretive. It just gives you an uneasy feeling. You know, if it's such a great idea and they're so beneficial of the community, why didn't they just come out and say that in the very beginning? But on the flip side, it has secured support from local labor unions, as well as the Oregon City Federation of Teachers. President Ben Pfeiffer told me it would be transformational for Oregon and that it would be a needed and big boost for the school system,

thanks to direct payments. Now, this has really fired up voters, and it's a key battleground district here. This is Ohio's 9th district, and Speaker Johnson was actually in this very county just last week, saying that this is a top five race to watch and that every single vote will count. And there is no doubt here that data center, opposition or support is going to lead to much higher turnout at the polls next month. Guys?

So there's that measure on the ballot specifically about data centers. But PIPA, is this a dividing factor between the candidates? Is this a partisan issue or is this largely bipartisan? So what's really interesting is that previously, it seemed like candidates didn't really want to touch this because it kind of did. transcends party lines. And so, you know, politicians didn't want to take a strong stance because they didn't want to alienate voters on an issue that sometimes they don't exactly align with. And so what we've kind of seen is all these candidates coalesce around the same idea that it should

be left up to local communities. Now, all of the candidates here, both in Ohio's 9th district, as well as at the Senate level, have attacked their opponents based on their prior data center stances, especially given that Ohio issued very lucrative sales tax credits for data centers that wound up costing the state a lot more than previously expected. But now kind of everyone is punting it, you know, if you will, and saying that it should be up to local communities because there is clearly a lot of growing opposition. And in Ohio specifically, it's an interesting one

because Democrats have been traditionally very pro-labor here in Ohio and the data centers are using labor construction workers. And so that's another key factor. So it doesn't quite down to come down to party lines, meaning it is a very thorny issue. And everyone is just saying what's best for the community. Yeah, repeat that a couple hundred times around the country, I guess. That's what we're in for in a few weeks.

Pippa, great stuff. Thank you very much. That's going to do it for overtime. Fast money starts right after this big break.