Closing Bell - Closing Bell Overtime: 1/30/26

Episode Date: January 30, 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, Jon Fortt, Morgan Brennan and Michael Santoli guide listeners through each trading session and bring to you some of the biggest names in business. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The bell's bringing out to the trading day at the NYSC Church and Dwight ringing the bell and at the NASAC, Ether Holdings. Welcome to closing bell overtime. Live from Studio B at the NASAC market site. I'm Melissa Lee along with Mike Santoli. The breaking story of the day, President Trump naming Kevin Warsh as an ex-Fed chair after months of speculation will dive into what this means for the future of the Fed. Meanwhile, stocks ending the day lower the Dow down less than 200 points. S&P off about half a percent. The NASAC down about a percent.

The Russell, the biggest loser off more than a percent. in S&P, the only index higher on the week, but fairly. Yeah, and massive moves throughout the commodity markets today as well. Silver plunging down 30% at the lows and finished off about 28%. That's its worst day since March of 1980. Gold closed down 10%. That's its biggest drop in decades and copper losing momentum as well. We'll have more on this wild action straight ahead.

But first, let's get to Christina Parks and Nvelas with some of the other big moves of the day. And there was actually a big theme with corporate earnings this week. And I would have to say data storage and memory, long known as a boom and bus business really may look very different in the AI era. Why do I say that? Well, Sandisk, standout. The best performing stock in the S&P 500 this month up about 140%. And it added even more gains today after guidance showed demand far outpaced supply into 2026. And then you zoom out, the stock is up roughly 1,200% just over the last six months.

Maddenum was saying customers are just willing to sign multi-year agreements. That's why it's not cyclical anymore, according to them. Western Digital also backed up that renewed excitement in this one sleepy corner of technology, which shares did slip after the Seagate. You can say slip 10% down after rival Seagate issues stronger guidance earlier in the week. Supply is so tight that the Niki Asia reporting today, Micron, SK. Hinex, Samsung, are stepping up scrutiny of customer orders to prevent inventory hoarding. It reminds me of the toilet paper trade in COVID.

That tight supply is showing up at Apple, despite a strong, quarter investors just wanted a little bit more clarity on memory prices. A shares finished marginally higher on the day due to strong revenue from iPhones and specifically in China. Elsewhere, KLA finished lower after expectations ran hot following strong reports from ASML and Lamb Research. And then a sharp pivot away from technology. Charter Communications. That company jumped about almost 8% today after adding 44,000 pay TV subscribers helped by simpler pricing and, of course, streaming bundles. Guys.

All right, Christina, thanks. Christina, parts nevelas. I don't know where you want to begin. A lot of big movers there. Sandisk really stood out because it went to a new high on very heavy volume, then closed the day, not at session lows, which would have been a terrible sign, but pretty close to that. A hundred bucks off the high. Yeah.

Actually, it's where it closed, like 17% off the high. Less dramatic, but similar was Micron, had a move like that. I read it as all of these erratic flows that have been, you know, propelling things like the memory rally as well as metals. they got unwound, they got punctured, in part by 8 tenths of a percent gain in the dollar, and it creates this huge unwined effect throughout the overall markets. And the market had to kind of resort to defense rotating violently in that direction. Staples were up big. So I do feel like we got out of January with a 1.4% gain for the S&P 500.

All of the upside was done by the third trading day. Since then, we've been chopping around, chopping around, trying to rotate away from danger. So far, so good, but it's a tough way to make a living. Yeah, and by the way, Christina had mentioned the report investigating inventory hoarding. Oh, yes. That is double ordering. That is the bare case for all of these chips, whether it be Nvidia or the memory chips, are people just double, triple ordering in order to get their inventory in hand?

And what does that mean later on when those orders don't actually materialize? Exactly. I mean, not to mention the price effects. I mean, it's kind of a tax on the system. Even if it's great for these companies, the urgency with which people have to order and pay up is something that's going to come out of somebody else's pocket. Well, after months awaiting, President Trump finally announcing Kevin Warsh as his pick to succeed Fed Chair J. Powell, Steve Leesman, has got the detail. I guess the predictions market, Steve, really had this one wrong.

Unless they listen to me, I told him the reader thing was up on hot air, but nobody listens to me. The 55-year-old Warsh would take the helm with immediate expectations that they would cut rates. But the question is, how much cutting can he actually do? Here's some of the comments, things that Warsh said about policy. Turkish Fed governor was a sharp critic of Powell and the Fed. Blame them for the pandemic and the inflation from that. The pandemic inflation, sorry about that. The balance sheet, he says, can be reduced significantly.

He's praised the pro-growth policies of President Trump, suggests that they should allow the Fed to reduce rates and saying the Fed should abandon the dogma that growth creates inflation. Now, the president who we tweeted out this morning, says, I have known Kevin for a long period of time, and I have no doubt that he will go down as one of the great Fed chairman, Maybe the best. On top of everything else, he is central casting.

And he will never let you down. Now, one has to wonder if the president is reassuring himself that Warsh won't let him down, because that's how the market is priced. Take a look. Futures markets have only priced in a cut when Warsh takes office. That's why you get the 349 there in June of 26. And then another one by year, and there's your December one. And then it goes flat, sideways next year, and what would be surely be a disappointment for the president.

Of course, a lot can happen, but it seems unlikely. If the U.S. economy does as well as the president advertises that it will, that its Fed chair will give him the low rates he so desires, guys. You know, Steve, the phrasing of Kevin Worse, you know, trying to get away from this idea that growth creates inflation, obviously is kind of counseling policymakers to say that you can have this productivity revolution, you're investing on the supply side, and you don't have to react harshly to that. On the other hand, you have to kind of have an opinion about this jobless boom that we have right now.

And if everybody wants to invoke Greenspan in the late 90s, I mean, the Fed Funds rate was between 4.5 and 5.5% when inflation was here or lower. So where are we going with short-term rates? Yeah, they only want to tell part of the analogy, Mike. That's a great point. Greenspan, by the way, also didn't cut rates. The big story of green span in the mid-90s was he didn't raise rates to cut it off. And I would like to just say I'm pretty sure that not a single minimum. member of the Fed I've ever known is concerned about growth. What they're concerned about is

inflation. Growth can be a metric by which you measure are there inflationary pressures building when you gauge the potential of the economy versus the actual growth rate of the economy. And then you look to see if inflationary pressures are building. But they don't raise rates because growth is high. I feel like that's something that, I guess we call it a bubba, my Syrian Yiddish, Mike, that it's something that's really, it's nothing. It's not something the Fed does or has done. They like the economy to grow, and they love productivity. And you saw what Greasman did in the 90s. If we had another surge in productivity, yeah, the Fed could let it right if there wasn't inflation. I do think the one thing that where they make sense is whether or not there's this preemptive

cutting off. And you don't really see that very often either. No, that's right. And of course, it's worth noting. At last report, the committee saw the room for a couple more cuts here. So we'll see, you know, obviously how the data come in to inform that as well, Steve. Thank you very much. Let's get a check on how bonds and the dollar reacted to the worst pick. Rick Santelli at the CMEA in Chicago. And I guess relative to the recent ranges, Rick, not super dramatic. Well, not super dramatic when it comes to the fixed income markets or the sovereign markets,

but kind of rather dramatic for the dollar index. Look at a two-day chart and realize, Mike, right now we're basically making new highs on the dollar index. I'm pretty sure it surmounted the up 1% or darn close. Just briefly touched that. And if you add in gold, that pretty much is the whole story, in my opinion. You know, this nervousness about central banks, fiat currency, countries like Japan and the U.S. that have boatloads of debt, now going to have aircraft carriers of debt.

And I think when you throw a warship into the mix into a market that's like a tinderbox of precious metals, I think it makes sense to me that we see these big corrections. I do think that the corrections and precious metals was going to arrive anyway. And I think when you add in Roche, and he talks about reforming some of the modeling and definitely on the balance sheet, I think that's a real big positive. In terms of what's going on with the fixed income credit markets, it gets a little weird. Okay, short rates are down, long rates are up, the curve steepen.

And to me, that's the story. really want to know what the Treasury Mark's thinking, look at the dollar and look at the yield curve. That line is right on top of each other. And to me, Mr. Mark, it's always going to have a say so. So all of this talk about what Worse is going to do. Until we know what the data is, I think that's kind of a weird question. Melissa, back to you. Rick, thank you. Rick Santelli. For more on Kevin Warsh and what it could mean for the future of the Fed, let's bring in former Cleveland Fed President Loretta Mester. Loretta, great to see you. Nice to say you too.

I'm so happy to have you here and get your take on this. And I'm just wondering, you know, Kevin Warsh is a known person. He's a very qualified person. He's been on the Fed. But his views have changed. I mean, he was known as an inflation hawk. And then he switched seemingly in the past a year or so. Do you have a good understanding of what his theories are on inflation and what he might do?

Or is it confusing? Well, it's not confusing. I think people like to label people in a particular way at a particular time. But, you know, Kevin does have a lot of experience. He was on the Fed both in normal times and also through the global financial crisis. So he has that kind of experience, and I think that's a very positive thing. He's also experienced the Fed culture. So he understands, you know, what it's like to be at the Fed.

He won't have to learn that. And he's benefited from the great staff that's at both the Reserve Banks at the Board of Governors, he understands the expertise that lies there. He has been sort of critical of some of the things that went on during the pandemic, but we did mess up in certain ways. And the Fed has done a lot of good work, I think, in sort of analyzing that post-pandemic period. So I don't think anybody at the Fed would say that they put that up as being a great success, and it's good that he's bringing to the floor, I think, the idea that,

that let's look at our models. Let's look at how we do things. Let's look at sort of how the Fed does. So his view that not everything is perfect and that sometimes you have to identify, you know, what was a problem, how to fix it, I think that's all good. You know, he's going to have to prove himself

because we're in an environment now where the Fed's independence of setting monetary policy has been attacked. And, you know, as it's true of any new chair coming in, but I think the bar is much higher now to sort of defend and convince everyone that he believes in the independence of monetary policy making. He has said this. He has told us that he is a believer in Fed independence in terms of making monetary policy. But I think, you know, we're going to have to see how he performs to see that.

He's going to have to establish his credibility in that realm so that we understand. that he really is keeping the tradition of making policy, monetary policy, based on sound economic analysis, sound economic rationale, and not allowing political influencing of those policy choices. And we're going to have to see. I mean, he's up to the task. I know he can do it. I know he says he's a believer in Fed independence. And now he'll just, he'll have to demonstrate that for everyone so that we have that credibility. But, you know, I think he brings a lot to the table. You know, he's spent a lot of time at Stanford at the Hoover Institution, and he's been exposed to a lot of scholarly debate with a lot of people who have different views, and they come to the table and

talk about those views. And so that's going to serve him well as chair, because I think he will continue that tradition as well as allowing those difference of views to be explained at the FMC table. And that's all the benefit of making policy. It's an interesting moment. I mean, it's always an interesting moment in policymaking and macro. But right now, considering that the labor market, which of course is one of the two sides of the Fed's mandate, can plausibly be explained as weak by some. And so there's kind of these good faith arguments on both sides. It's not as if you have to come in with some kind of doctrine of view that says rates have to go down, rates have to go up. There are a lot of people who just

believe that the labor market has a downside risk to it. And interestingly, Vice Chair Waller, explaining his dissent in favor of a rate cut this week, basically said we may revise away all of job growth from last year, and so we should get moving on rates. So it's interesting in the sense that the views are already there within the committee, whichever way you'd want to take them. Yeah, I mean, and you're exactly right. Chris put out his statement today about how he was reading the economy. Obviously, Chair Powell gave his view at the press conference or at the committee's view at the press conference and different people can have different opinions. The labor market in some sense is in a, I've been calling it an uneasy balance between

supply and demand because usually, you know, it's demand moving around and the Fed's tool, monetary policy, can try to address that. But now it's supply moving as well as demand. And there may not be much benefit that monetary policy can do to improve the softness in the labor market at this point. It could be that this is the result of other policies that have limited labor supply. And yes, there's ways of addressing that using fiscal policy tools, but not monetary policy tools. And I think that's where the two sides really come down. And we'll see. I mean, if it turns out to be that the labor market.

market has a material softening developing, then the Fed may want to take further action, but they have to be cognizant of the fact that inflation is still above the goal, and it's been above the goal for over five years. And so I think there are different views around the table of how to approach that using monetary policy. And Kevin will have to do his job as chair to come up with a consensus path forward. And, you know, he's up to the task. He's a very good communicator. And we'll see, you know, we'll see how it plays out. But as I think Steve said before I got on, it's really going to depend on how the economy involves what the appropriate path or policy is. Loretta, great to see you. Thank you. Loretta, Mester. We've got a news alert

from Capitol Hill. Emily Wilkins got the details. Emily. Hey, Melissa, of course, we have been on shutdown watch all of today. And the Senate has just begun a series of votes that should end with them going ahead and passing legislation that will keep the bulk of the government funded until the end of the fiscal year and keep the DHS funded for the next two weeks while lawmakers figure out larger reforms to ICE and customs and border patrol. Now, of course, once this is done with the Senate, it does still need to go back to the House. At this point, they don't seem set to gather to vote until Monday. So we are expecting a very short shutdown. But again, this bill has the backing and support of Trump, which means that it seems very likely that lawmakers are going to be able to pass it. Of course, we're keeping a close high because with the narrow majorities in the House right now, any sort of dissent could have issues.

But at least for the Senate, we're expecting a strong bipartisan vote in just an hour or so here. Guys? Emily, thanks. Emily Wilkins. Precious metal prices absolutely melting down today. What is behind the wave of volatility? And will it last? That's next. Plus, we'll hear from a portfolio manager who says the tone of AI conversation has seen a big shift in the past two months.

And it may be time to return to what he calls the boring parts of the market. More on that straight ahead. Welcome back to overtime Verizon. One of the few Dow stocks in the green today after beating fourth quarter top and bottom line estimates, Verizon posting the highest quarterly wireless subscriber editions in six years. Full year guidance also coming in ahead of estimates, and the company authorized a $25 billion share buyback. Pretty dramatic move, 12% higher charter communications also up. Telecom had a moment with defensive stocks leading today.

Well, let's turn to medals, a big day for silver plunging 30% at the lows. It's worst days since 1980. Gold also tumbling, dropping more than 11% at its lows. Profit taking a move in the dollar in Kevin Warsh's nomination, all being cited as potential reasons for moves lower. Our next guest says, demand for silver is a meme investment. They cause it to fall further in the short term in silver's physical surpluses here to stay. Joining us now, George Hepel, he's the vice president of commodity research at BMO. George, great to have you with us.

Thanks for having me. You know, it's funny that we had this list of fundamental reasons why the medals would decline today. And yet the move has been sort of memeish, which is, by definition, not pinned by fundamental drivers. So what did you make of the drop today? Of course. Well, I think silver has obviously had a outsized move against gold over the last few months, and this is arguably sort of an understandable correction. I think silver really has entered kind of meme investment territory over the last week. And there were times earlier this week

when some of the silver ETFs were seeing inflows several times larger than the SPDR, S&P 500 ETF, which I think goes to show just how exuberant the attitude has gotten to silver. But there's also been really strong physical silver demand as well, especially in Asia. So especially in India and China, we've been seeing huge silver. premiums over the last few weeks and crucially that was never going to last. I mean, in the case of India, there's been a lot of buying ahead of a change to duty, basically a hike in import duties on precious metals into India. So that comes in on the 1st of February this Sunday. So obviously there was a lot of buying ahead of that. In the case of China, we obviously have Chinese New Year

coming up in a couple of weeks. And I think there was a lot of sort of panic buying ahead of that because gold and silver, precious metals are typical gifts, the investments you give during Chinese New Year. In the case of silver as well, there's a lot of pent-up industrial demand because a lot of factories tend to buy large amounts of silver ahead of Lunar New Year. Now, normally this wouldn't contribute to price in the way that it has, but you've got that physical demand in Asia combined with the sort of meme stock territory that silver has reached in the West and also being dragged up by the wider machinations in the gold market and it just created a perfect storm which sent silver to 120.

Now we've got the gold-silver ratio at around 60, I think, you know, as I'm speaking, you know, our analysis suggests that we think the silver market is likely to sort of, you know, unwind and sort of move into a physical surplus going forward. So, you know, we think there's a likelihood that silver might get dragged up by gold in the future, but generally speaking, we think silver's probably going to underperform gold going forward. So that's the relative trade, but you actually do think that gold can sort of gather itself here. and make another run higher? I think there's an argument to me that made that sort of the consolidation that we're seeing

at current levels is probably healthy for the market. I mean, you know, 55, 5600 was obviously, you know, pretty unsustainable rally that we saw. I mean, we saw gold repeatedly, you know, above its 100-day moving average for weeks on end, I think. And obviously, that couldn't be sustained. So this kind of blow off top that we've seen is probably healthy. I think the underlying drivers, which have sort of driven precious metals to their current level, stuff like debasement concerns, de-dollarization, inflation concerns.

I don't think any of that's necessarily gone away. Do I think that gold is going to have another 100% year-on-year rise? Probably not. But I think, you know, I haven't seen any, I haven't seen any removal of the initial drivers that sent precious metals running up here in the first place. Is Kevin Warsh, I mean, you know, anything that you look at in terms of seeing the flush today

and saying, okay, strong dollar because of Kevin Warsh and therefore weak metals? Yeah, I think that's also a key driver of it, as well as the sort of blow-off that we saw in the AI stocks today as well. Kevin Walsh, obviously, he's committed to a smaller Fed balance sheet, and that is inherently, you know, bearish for precious metals, because it implies, you know, less money in the system. So whether or not that's achievable is obviously a complete other thing, and I'm not qualified to comment on that. But I think that's certainly been a key driver for the precious metal bare market we've seen today as well. George, thanks. George Hempel.

Up next, why credit card, Giants Visa and MasterCard have been charging lower recently in giving up their big premiums. Plus, there could be some winners emerging from the ongoing software slum, details when overtime returns. Welcome back to closing bail overtime. Live from the NASAC market site,

stocks ending the day marginally lower, but off the lows of the day. For the month, all major indices ending with a gain, the Dow gaining 1%, the SP is slightly less than a percent, and the NASAC essentially flat in a big outperformance, by the Russell, which is up about 5.5%. In the commodity sector, gold with an 11% gain, silver had an 18% gain. Let's not forget, Nat Gas, which saw wild moves earlier in this month,

ending higher by nearly 19%. Energy materials and staples leading the month, financials in tech were the laggards. The big winners this month, though, were the memory names, of course, Sandus, with a gain of 142%. SeaGate up 48% Western Digital, also with gains of more than 45% despite today's losses. All right, Visa and MasterCard have long been the kings of the swipe. But lately, the market's been trimming their valuation premium. Concerns around regulation and rising competition are starting to chip away at their valuations. And if you took a look at the one year of Visa and MasterCard, first of all, they trade in lockstep, as you can see. And, I mean, you know, that speaks to the fact that it is kind of a duopoly.

Even American Express, after reporting decent results this morning, rolled over. It's below its highs. And part of it, obviously, is just a little bit of. concern that the business models under some kind of attack, possibly this credit card competition act, but also it seems as anything that was connected to payments and what they call fintech has been a bit out of favor. The promise of that if so-fi was really weak today, Robin Hood and Coinbase obviously had been on the downside. So just this overarching question of being disintermediated in many ways. Exactly. And you know, and that law, if it does become

law. The credit card issuers don't want it. It does create some, you know, power shift toward the merchants who can, you know, shop around for better fees. So it is interesting. I'd also say, though, was a very crowded consensus growth investor trade. They called stocks magical.

Well, they were perceived as magical. Right, because they, oh, 15% earnings growth every year. And they are, you know, they don't have any credit risk, etc. Yeah. Yeah. Well, time now for a CNBC News Update with Christina Parks and Nevel. Thank, Christina. All right, Melissa, the Justice Department today released more than 3 million pages of documents from the Jeffreyne Epstein-Epsties files.

This is the largest batch of files release so far. The DOJ was mandated by law to release all the files by last month, but has continually missed deadlines, blaming delays on the vast number of records, as well as privacy concerns over victim information. Legendary comedian and actress Catherine O'Hara has died. Her agency, CAA, said she died at her home in L.A. after a brief illness. O'Hara got her start in Canadian sketch comedy with Second City and went on to star in movies including Home Alone, Best in Show, and the TV show Shits Creek. She also appeared recently in Apple TV's The Studio and the HBO drama The Last of Us. Catherine O'Hara was 71 years old and a legend.

And Lindsay Vaughn said this afternoon her Olympic dream isn't over. Vaughn was airlifted off a mountain in Switzerland, in this morning after crashing in her final downhill event before the games. She was seen limping and keeping weight off of her left knee. Vaughn wrote on Instagram that she's discussing the injury with her doctors and will undergo further exams. We wish you well. Absolutely.

Christina, thank you. Up next, much more on the potential impact Kevin Warsh could have on the stock and bond markets if he becomes the next Fed chair. Welcome back to overtime. Check out shares of Decker's Outer. The big winner in the S&P 500 today, the UG Bootsmaker reporting better than expected third quarter earnings and hiking its full-year outlook to above analyst estimates, thanks to surging sales at its hookah sneakers brand, up almost 20 percent today, though still 45 percent below its high. Former Fed Governor Kevin Warsh has been officially nominated by President Trump to be the next Fed chair of replacing Jerome Powell. So what does Warsh's appointment mean for the markets going forward?

Joining us now is HSBC Global Private Banking Wealth Management, CIO, Jose Rasko, invited on a national. knowledge founder, Adam Chrisafouli. Gentlemen, good to have you here on set. Thank you for braving the cold and being here. Adam, I'm going to start with you in terms of what you said in your note was very interesting in terms of being a net negative, that there is that risk. What does he do at the Fed in terms of the shakeup? How does he deal with rates?

Yeah, I think there are two big areas of uncertainty, one of which is on quantitative easing. So there's been a lot of talk about how, you know, he's made a lot of commentary in the recent past about. He's quite hawkish when it comes to deploying the balance sheet, which has become a critical part of the Fed's toolkit ever since the financial crisis. So I think getting some clarity on that, the Fed now is expanding its balance sheet again. They're not calling it quantitative easing as kind of reserve management purchases. So hearing some clarity from him, clarifying comments about how he views quantity

of using, I think it's going to be crucial for the market. On the funds rate, he's dubbish, and I think that's kind of expected that you're going to see further cuts going forward, but it's on the quantitative easing that there's a lot of uncertainty. Yeah, what's your take, Jose? Yeah, and look, if you're going to cut the, if you're going to cut the size of the balance sheet, this is the time to do it, right? We were talking in the green room that you've got growth at four and a half percent. And while we could see weaker labor markets than people expect, if you're going to do it,

this is the time to do it. But I think he also, the good news, I'll be the glass half full guy. The good news is he did make the point that the Fed would stand ready to expand the balance sheet or help in times of liquidity needs and all that. So, yeah, uncertain times for sure. Yeah, and I guess the market hasn't seen fit to sort of price out a little bit more rate cutting for this year, Adam. I just wonder, you know, there's also this thing that goes around that every new Fed chair seems to get some kind of a test from the markets, right?

I mean, it's not exactly statistically significant, right? It's like, you know, half a dozen going back 50 years. But it is true that there have been these little mini crises. It seems to me that's one of the things that just in the shadows out there along with midterm election year, we're probably going to get some kind of correction. How do you think the market is hanging in there one month into the year, given all of this stuff swirling around? You know, I think the underlying economy, the data has been relatively healthy, and so that's definitely a big help. This earnings season so far, there's still a lot to go. But the earnings results have been pretty healthy, notwithstanding some pretty sharp declines as weak in stocks.

The actual fundamental results have been strong. You're seeing very strong capital return, buybacks and dividends. And, you know, the Fed is in a stimulative mode right now. They have cut rates last year. They're spending the balance sheet. You have a lot of fiscal stimulus that's coming at the economy. Even Fannie and Freddie are adding to the stimulus with their MBS purchases. So you have some pretty powerful tailwinds that are held.

helping to prop up the market with amid all this uncertainty. And Jose, in terms of what parts of the market have worked and not worked, you know, everyone wanted a broader market. We got a broader market. It's also kind of a flattish market on the headline index level going back a few months. So how do you play that? Well, I mean, we've been saying for a while, if you look at Mag 7 earnings, they're going to slope precipitously from Q4 of last year to Q4 of this year.

And that's what we want to see. We want to see that breadth in the market. So from the equity perspective, the forgotten 493 is going to go from 6 to, I think, like 18% in terms of growth from fourth quarter last year to this year. So that's our hope. And it's going to be led, we think, by the same materials, industrials, utilities, where the electricity pricing is going up. So we think those are the lead in addition to tech. But tech outside the Mag 7, it's somewhat a value play, right, looking for those values relative to multiples where they are today. Right.

The action in tech this week has been fascinating, Adam. I mean, the software's dead narrative continues with a vengeance. Meta really showed that the return on investment is there in terms of AI. What do you take away from the action this week? Yeah, it was a very interesting week. You have memory stocks trading extremely well. And like you said, software has been kind of in this death spiral now for several weeks. And the results, you know, the XAP service now on Microsoft reports, the actual fundamental results were not horrendous at all.

Certainly not as bad as the price action would suggest. So there's this kind of existential fear hanging over that group right now. that the companies are having a difficult time refuting. Service Now in particular spent a big chunk of their call, pushing back on this narrative about legacy stats not being relevant in an AI world. You know, I thought the CEO made a convincing case that it is. You know, and I think when it meta definitely came out and reversed itself from last quarter where there's a lot of uncertainty around spending,

show that the top line is actually showing some benefit from all of the investment on OPEX and CAPEX into AI infrastructure. We had two big mega caps next week with Amazon and Google. That will be watched very closely. but definitely a very mixed earnings season for attack so far. Yeah, you're overweight, overweight equities globally. How about U.S. versus elsewhere? Well, if you look at EM, I mean, it's been a great year so far this month, right?

So I think we want to stay with that barbell approach, focus on EM, in particular Asia. We're looking at Latam as well, but the U.S. We still like it. I just think with the AI trade, and I agree with you, I think it's going to broaden out. But more importantly, we have to reevaluate the earnings momentum, which we think is going to sort of flatten out here as we go forward, which means you want to see a longer, more elongated cycle. And so AI gets repriced a little bit.

That gives the other stocks an opportunity to rise. All right. Jose, Adam, thank you so much for being here. Appreciate it. Thank you. What's happening. Up next, we'll hear from a portfolio manager who thinks boring is beautiful right now when it comes to investments in why he is shunning tech stocks in this market. Closing bill over time, live from the NASDAQ market site, and in Times Square, back right after this.

Welcome back to closing bell overtime. AI disruption fears are shellacking software stocks down roughly 14% so far this year. But some software companies may be emerging as winners. Sima Modi's got the details there. Melissa, you know, artificial intelligence may in fact display some software names, but not all. Case in point is snowflake. Bank of America calling it the king of enterprise data in the cloud. It essentially dissects incredibly complex data for businesses that are embedding AI into their workflow,

While competition from hyperscalers, that is seen as a risk for now, analysts see this name as the top software pick. Similar story for Datadog and Dinah Trace, as similarly they aggregate data, making them seen as AI beneficiaries. Palantir, now Loop Capital coming away from meetings with management, and they believe the defense software company will crush earnings estimates in its report due on Monday, touting strong commercial growth, calling it a premium asset to own. But again, not all agree. Rishi Julleria says Palantia's valuation is unjustifiable. He's really advocating for names like Microsoft, Intuit, HubSpot, and MongoDB. Julleria thinks the sell-off in those specific names are overdone. In general, RBC's tech team, they think the deal-making environment continues to accelerate, given the recent sell-off, pointing to names like Asana, which they say faces this

existential threat from AI. That stock now down nearly 60% from its high. They also highlight call center name 5-9, and pager duty as potential acquisition targets. Melissa and Mike. Seema, thank you. This week brought us the first batch of tech earnings, Microsoft, Meta, Tesla, and Apple, all reported a beat on the top and bottom lines. But despite those beats, AI spending remains a concern to some investors, which is why our next guest is shifting away or has been shifting away from tech and into areas

some would call boring. Joining us now is GQG Partners portfolio manager Brian Kirshman. Brian, great to have you. So several months ago, your firm kind of publicly started to question the AI theme, essentially saying it was kind of a bubble in the making, you didn't really want to play. Now that there has been this rethink and a lot of these stocks have struggled, where does that stand? Yeah, I think what we're seeing right now is that the tone has changed over the last several months. So if you go back to maybe, you know, October, November of last year, companies or investors, rather, had stopped. you know, really rewarding a lot of these businesses for unbridled capital spending for these

AI initiatives and said, okay, well, what are we getting in return for this? And really what they're being rewarded for right now is that revenue growth. So if you're showing some sort of revenue growth in response to that, you're being rewarded for that. So you saw a little bit of that from meta. You saw a little bit of that from Alphabet previously versus Microsoft get a little bit more penalized. Well, we believe, though, is that there's another phase of this yet to come, which is show me the earnings growth, show me the free cash flow growth on the back end of this because that's really what is going to be the thing that sustains a lot of this investment on a go-forward basis and allows them to continue to invest on a longer-term basis.

So do you think that this is the kind of thing where market-wide risk is bound up in exactly how this capital spending cycle goes and all the leverage that's attached to it? I mean, that was the story from a lot of bears a few months ago. Now it just seems like picking winners and losers. People love alphabet, even though it's sacrificing near-term free cash flow. And meanwhile, the likes of money. have gotten a lot less expensive as a stock. I think what we're seeing right now is you almost have to ask yourself the question, why do we believe that these companies that are supporting a lot of this CAPX growth,

a lot of this free cash flow that's going into semis, equipment, and all these data center types of applications, why do we believe that these are so cash rich anymore? I mean, if we look at in the cumulative sense, and I take the hyperscalers plus meta, and I look at the CAPX, I'm sorry, the free cash flow they're going to generate next year in 2026, or this year rather, you're looking at about, 75 billion cumulatively across the board. I mean, that is de minimis compared to the amount of

spending that's being promised out there. And it's also de minimis compared to even their market caps. You take this a step further. You look at like a meta. We talked about meta having a good beat on the top and the bottom line. If you actually look at meta's EPS numbers, they went down 2% year over year. So yes, the revenue growth is really strong, but meta's actual earnings went down. And they talked about profit, you know, growing quote unquote, year over year versus this year, that sounds to me like a low single-digit-type earnings growth or a low-single-a-profit growth. I can find a myriad of businesses out there that can grow at that level without nearly that level of cap-ax intensity. Yeah, and so you would rather go to the asset-light businesses

to invest, Brian, is that correct? Yeah, and I have a little bit of a smirk on my face, because when you think about some of these asset-like, quote-unquote, businesses I'm about to talk about, telcos, energy, utilities, consumer staples. Now, you may not think, of these as asset light, but when I compare them to the hyper scalers and meta, they have about a third the cap-x to sales, or third the cap-x intensity, if you will, of these other businesses. Again, it goes back to my point that these things are so intensive in terms of the capital structure, that these other businesses actually look a lot more reasonable. If they're generating free cash flow, they are actually generating decent earnings over

the course of time. So we think that is a more interesting area to be playing the market in the coming months. Yeah, so they have heavy assets, but they're mostly paid for, I guess, is kind of the the rule and they're earning off of them at this point. Brian, great to catch up with you. Thank you very much. Excellent. Thanks so much for having me. Up next, we'll hear from Eli Lilly's CEO as a company announces a new manufacturing facility in Pennsylvania where plans to produce its next generation weight loss drugs. Overtime is right back.

Eli Lilly, a bright spot on Wall Street today after the pharma giant announced it will build a $3.5 billion manufacturing plant in Pennsylvania where its next generation obesity drugs we made. CNBC's Anika Kim Konstantino spoke exclusively with Lilly's CEO David Ricks about the plan and the market potential for the upcoming expected launch of its weight loss pill, which will go ahead to head

with Novos-Wagovi pill for new patients. Actually, almost all of the early starts on the novo product are new to the whole class. So it's expansive. It's reaching more patients, and that's great. We'll compete in that segment. We'll see

which is the best product when patients get chance to to use it, but we're really confident in our capabilities and we're preparing for a full launch. And as you may know, we expect to have government access in the Medicare segment immediately following that launch. And that will change the game a bit too. Attica joins us now with more. And Attica, so where does this leave the race? Obviously, this is not the only big investment Lily's going to be making in this area. That's right. So I got to talk to Bricks today about the upcoming launch of its obesity pill or for Glypron, and that's really next on the docket for Lily. Obviously, this facility that they announced today is going to be

working on some next generation obesity drugs that are farther along sort of in this pipeline that probably won't enter the market for a few years. But all eyes are on this obesity pill. So, you know, as you've mentioned, the Wagoe pill is already on the market. It's already off to a strong start. It has 26,000 prescriptions on just its second full week on the market. But, you know, Lilly's CEO today emphasized that, you know, we're ready to compete against this pill. They pointed to, you know, some of the convenience factors of Lily's pill, which it has fewer instructions than Novo's pill. It does not have the same dietary restrictions as Novo's pill. And he also emphasized that, you know, this launch of Orpherglypren the pill

is going to coincide with Medicare trying to cover obesity drugs for the very first time. And that's through, you know, the deals that President Donald Trump struck with both Novo and Lilly. And so he really thinks that's really going to expand the market here for the pill and also there are other obesity treatments. Did Ricks confirm the timeline of a approval for Orpher Glypron, Anika. And I'm asking this because they got the National Priority Voucher review for Orfer, and then it got delayed to the second quarter. Are we still on track for that timeline?

Thanks for asking that, Melissa. So he still said second quarter. He did not give any more specific timing from there, but he has all eyes on that second quarter launch there. And again, he does think it's going to pretty much coincide with the launch of Medicare coverage for obesity drugs. No additional timing there yet. All right, Anika, thanks.

Annaika Kim Constantino. Let's get a check on the huge week ahead for earnings and economic data. On the earnings calendar, we'll get results from Disney and Palantir on Monday, Merck, Pfizer, AMD, and Chipotle out on Tuesday. Alphabet, Qualcomm, Uber, and Lilly, the highlights on Wednesday. Amazon meantime hitting Thursday and Friday brings biogen, auto-nation, and underarmor. On the economic front, we'll get the ISM manufacturing construction spending reports on Monday. Tuesday brings January auto sales. The ADP Jobs Report, ISM Services, and factory orders are the headlines on Wednesday.

Jobless claims will be released on Thursday, and the week closes out with January, jobs report and consumer sentiment. So still in the thick of earnings season, still a lot of econ debt. Yeah, there's plenty. I mean, obviously at jobs report, we didn't even mention we had a hot PPI inflation report this morning. It kind of didn't matter. It got lost in the shuffle. But you definitely fixated on Pallenture, and the response to Pallenture's numbers on Monday,

the stock's been awful. It's way off the highs. It's kind of right in the middle of the software plus the kind of speculative type names. And so we'll see if you get any relief there. Exactly. And of course, Alphabet will be the next one to watch when it comes to the AI spending. Does the market reward the span this time? Will they boost the spending?

Will we see the return on investment? Yeah. Or as the great run that Alphabet has had, essentially priced a lot of that in because they have been the declared winner outside of the Open AI ecosystem. All right, new month. We'll see how it goes. That's going to do it for overtime. Thank you.