Closing Bell - Closing Bell Overtime 2/6/26

Episode Date: February 6, 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 an end to the trading day on this Friday at the NYSC, the I Have a Dream Foundation ringing the bell and at the NASAC. A go-mob therapeutics. Welcome to closing bell overtime. Live from Studio B at the NASAC market site. I'm Melissa Lee, along with Mike Santoli. A huge market rally today. The Dow up 1,200 points crossing the 50K mark for the first time ever at first close above 40K in May of 2024. Big gains for the S&P 500 in NASAC as well.

The Russell 2000 up more than 3%. The weekly numbers show a mixed picture. with games, the S&D modestly lower. The NASDAQ still down 2%. We also saw a huge bounce in Bitcoin, up more than 10% on the day, but still down for the week. We'll be talking to longtime Crypto Bowl, Anthony Scaramucci, about whether this bounce means the bottom is in or is just a moment of temporary relief. But we begin with today's big gains for stocks. Christina Parks, Nevelos, is looking at some of the big winners. Christina. Yeah, it was a big afternoon rally after a brutal week for

tech and crypto. You mentioned Bitcoin bouncing from overnight lows, lifting proxies like Coinbase, Robin Hood, Micro Strategy. Look at your screen. Double digits all across. Bitcoin, though, and software have actually been moving in lockstep on this sell-off, both catching a break today. The software ETF IGB closing up about 3%. But not everyone participated. Amazon sold off after missing profit estimates despite or maybe because of its massive AI spending plans. Google Parent Alphabet also closed lower today. The Sleeper Apple, which actually managed to close higher for the week. You can see up, well, roughly 7% on the week. All that AI cap-back spending means one thing. Chip spending and the entire semiconductor complex did rally hard. SMH up 5%.

InVIDIA, AMD, both jumped about 8%. Chip equipment makers, KLA LAM research followed suit, memory names, including Western Digital, Micron, closed the week higher. An optical chip provider, Lumentum, actually hit an all-time high today, closing up 8%. Essentially, the AI infrastructure trade is back on, at least for today. Guys? Christina, thanks. Christina Parts Nevelace. How did this feel to you?

Did it feel lasting, durable, or was it just sort of a, you know, here we are. It felt a little bit grabby, you know, because people didn't want it to get away from them on the upside. And we can quibble a little bit with the makings of this rallying the Dow to 50,000. For example, Caterpillar and Goldman Sachs for about half of today's move. For a year to date, Dow's up 4%. It's up like almost 2,000 points. Caterpillar itself is half of that move.

So, of course, that's the quirks of the Dow construction. But I think if the S&P 500 is going to be flat for the week and essentially flat since late October, this is like the best possible scenario in terms of what else is going on while the S&P does nothing. We had, you know, every sell the news on a Mag 7 stock was absorbed. And so we did see it. And the doubt does reflect the rotation toward heavy industrials, financials, and value. I mean, if there was a question of whether or not the markets could advance without AI, without the Mag 7, you sort of got that answer this week because we saw the leadership of Staples this week,

of 5% on the week, despite software being down about 10% for the week. Without a doubt. Now, it feels, again, a little bit like this is this forced activity, this mechanical stuff with hedge fund, just grabbing further stuff. stuff that hasn't worked like consumer staples. But yeah, to your point, it's so far as held the market in there, although I guess it's your definition of is the market advancing or not. If the market is the S&P and the aggregate value of the index and the market, it's kind

of holding its value. And a lot of – close to highs, though. And most stocks beating the market, which a lot of people would enjoy as well. Right. So why did sentiment see such a big reversal today? Let's bring a New Burger-Burman's senior research analyst Daniel Flax. Daniel, great to have you with us.

Great to be with you, Melissa. So what did you make of it? Because you're a big AI, hyper-scaler, mag-7 kind of bull. What did you make of the declines this week? So there's a lot of disruption going on. There's clearly a lot of innovation. Industries are being transformed. If we look at the cloud market and certainly the CAPEX spend out of Google,

out of Amazon, these numbers are enormous. But if we step back and think about what's going on, they're monetizing it in their cloud business. AWS saw acceleration. I think the 200 billion KAPX number will actually generate strong returns for Amazon over the next two years. And when you look at Google, they're transforming search with AI overviews, AI mode. And so they have a cloud business that is also seeing extraordinary growth at nearly 50%.

So when you pull all of this together, the market, I think, will grapple with these enormous expenditures. but I believe we're in an expansionary moment and that when we look back on this period will have seen an explosion in new workload growth and ultimately businesses like Microsoft, Amazon, and Google, they're becoming more durable, and I think that is a good setup

to create additional shareholder value from current levels. Daniel, you know, it's sort of remarkable. We've sort of done some of these calculations that the total amount of CAPEX from last year in the next two years anticipated from the Big Five hyperscaler, it's about $2 trillion, which is exactly as much market cap has been lost by the S&P software sector since the high in October. So the market has made this determination that there's going to be displacement of profit streams out there.

It's coming out of software. Does that make sense to you? And how do you treat that as an investor? I think there are a lot of changes going on in software, Mike. But if you think about core systems of record, if you think about the, the information and the data that sits inside the enterprise, in my view, that becomes more valuable with AI tools over the next few years. And so if you think about companies like Salesforce,

if you think about service now, you think about the addition of agents on top of these bodies of data and information, I think these companies in particular are going to be able to transform the experience for their customers. I think this will create additional value. I think Microsoft's doing it as well. And so I appreciate the reasons for the disruption. Growth for a couple of them hasn't been quite as strong as the market expects. And certainly there's cyclical dynamics at work.

But I think the transformation of the software sector will enable some of the companies to create a lot of value from here. Yeah, and Jensen Huang, the CEO of NVIDIA was talking to Scott Wapner earlier today and actually mentioned that AI agents using software tools. for instance, like Excel. So it doesn't go away. The need for underlying software does not go away. But you mentioned transformation, and that doesn't happen quickly.

So in the meantime, when we're trying to figure this out, do software companies, do we see pressure on revenues, for instance, in the short term, at least? I think in the short term, the businesses actually remain quite healthy. We saw service now results the other day, which I think were solid. I think over the next several months and indeed through the balance of this year and into next year, what we're going to see is these companies investing to add and expand their offerings. And certainly, when we talk to customers, what's interesting is that they are, of course, grappling with the changes that are going on, but they're looking to their partners.

They're looking to Microsoft, to Oracle, to ServiceNow, to Salesforce, to help them transform. And so if these companies are able to harness a lot of the new technology, work with the models that are out there, both from companies like OpenAI, Anthropic. Google, of course, has had a lot of tremendous innovation with Gemini. If these software companies harness these models continue to evolve the experience, I actually view this as an expansionary period, and I think when we look back, this will be an additional growth driver for some of these companies as we think about the next 12 to 18 months.

Yeah, it was interesting to see the real damage outside of pure software, but in things like financial data providers and areas where there's some kind of wall for some proprietary data or analytics that maybe AI can do better. So we'll see how that all shakes out. Daniel Flax of Newberger, thanks so much. Thank you. As we mentioned, it was a big market day after a very volatile week. The rally was broad-based with nine out of 11 sectors higher, industrial staples, and energy hitting record highs, materials and health care less than 2% from their records as well. And the bank ETF hitting an all-time high. This is this telling us that the week's volatility was just a tech trade problem?

Joining us now is Dirk Willer. He is City's Global Head of Macro Strategy and Asset Allocation. Dirk, good to see you. Thanks for having me on. I think coming into the week, you sort of saw the possibility maybe for some U.S. equity, volatility or at least maybe some excessive sentiment coming into the week, and you thought that the earnings and reactions to the earnings were going to be key. So what is the week told you?

Yeah, no, indeed very interesting. We have one indicator that gives us a bit of a warning. when people are ahead over their skis and it did trigger two weeks ago. So we were prepared for a little bit of volatility and we indeed wanted to check, you know, what are we learning from this earning season? And I think we learned that, yes, the market will punish excessive, or in their mind, excessive CAPEX.

However, I think today we saw the market also understands excessive CAPEX means excessive revenues for chip manufacturers. And so I think this divergence that we saw between the chips, and software, in a sense, might well continue because we're back on track, on the chip side, at least. Now, again, I mean, we think we are in a bubble. We will overdo it. We will, you know, overcapitalize the opportunity, as the saying goes.

And the bigger the innovation, the more we do it. So whenever we get negative signals, you know, we take them somewhat seriously, put some hedges on here and there, but we think the bubble is not over yet. So given that assessment of the U.S. markets and the tech trade which drives, of course, the U.S. markets, how does the U.S. look relative to Europe? I mean, the I shares Europe ETF, for instance, 11th straight week of gains there. Yeah, I mean, we always treated taking DFX as a separate bet. If you take the dollar out, of course, the U.S. held on much better last year, for example, compared to Europe. I mean, I still think in the end, everyone wants to diversify.

We are not against diversification. But I think people have to realize when the AIBOR. bubble bursts, it doesn't matter where you hide. I mean, maybe consumer staples and healthcare will be fine, but no matter which country you're in, markets will go down. So yes, you should diversify. It makes it less risky, but be

aware that you have some component of risk to the overall U.S. market wherever you go. And the one thing I would just add is Asia is interesting, because Asia has almost only hardware and software, right? So in a sense, that explains part of the outperformance, and so we still

like some Asian markets as well. Yeah, that's been a pronounced trend, obviously. So you can take the currency out in order to analyze exactly how the underlying equities are doing. But there has been some, you know, pretty profound moves in the currencies themselves. So what is that informing us of with, you know, the dollar weakness, but then this little bounce that we've got? Yeah, typically dollar weakness benefits in merger market equities. In general, emerging market assets, not just equities. And so if you get more dollar weakness and if you don't want to take the dollar out,

then obviously, yes, the interesting opportunities outside of the U.S. And we are actually still in the dollar weaker camp. We think the Fed will cut three times this year, so that gives you some cyclical dollar weakness. We also think the structural dollar weakness is not yet fully behind us. So broadly speaking, we are positioned for both emerging market of X strength, but also for your strength right now. And that would indeed be another reason to maybe diversify away. You use the B word when I came to AI, DERC. So I have to ask you about AI bubble and how you think that plays out.

and where you advised people to go right now to prepare for that? Yeah. So we have a metrics that we track to determine whether something's in the bubble or not, and it's probably, I don't need to go into details, but essentially the main takeaway is they can last for a long time and they can be very profitable till the very end. I mean, NASDAQA went up more than 50% in Q4 of 99, right? So you don't want to miss it.

So our preferred approach is actually to be slightly late rather than slightly early. because you don't know how much money you leave on the table if you get out early. Yes, stay in the bubble. Of course, as I mentioned, we do have hedges. For example, credit, I think, is a very good hedge for equity longs. That's partly the case because the story this week was, of course, it also gets it aggressively by the software issues, especially on the private credit side. And so we think credit has much less positive, much less upside potential, much more downside potential.

for example, one good hedge against the equity performance. Is there a possibility that in the last few months, I mean, we did see the peak performance in terms of the Big Mag 7 a few months ago, that we could have a bubble in the actual CAPEX, in the actual economic effects of it, and yet the stock market is not really granting the super premium valuations to those businesses, that it was in 99 for the NASDAQ. Yeah, 99 is a high bar, though, right? Yeah, of course. I always say that.

You know, what keeps me awake at night is that. we build a smaller bubble. And then I will not be able to tell this is the peak of the bubble because you don't go as crazy as we did in 99. So, yes, you're right. That obviously can happen. I think the important thing about our bubble metrics, which triggered in the middle of last year,

is essentially that you give back probably half or two-thirds of the money that you make value in the bubble. So I do think some hedges make sense. Even now, although, again, as far as we can tell, we are not there yet, and one of the reasons is liquidity, right? usually bubbles need liquidity. We have not seen any contraction liquidity. That's why the announcement of Mr. Walsh

caused some of the pullback because there are some liquidity fear surrounding that nomination. Excellent. Dirk, thank you. Dirk Willer. Bitcoin investors breathing a sigh of relief today as it bounces back 10%, but still down 25% in a month.

Are there real concerns about its future? Or will it once again recover to new highs down the road? Anthony Scaramucci is about to join us. You're watching Closing Mail Overtime, live from the NASDAQ market site. Welcome back to overtime. Let's get a check on some big outperformers this week. DeVita, the big winner in the S&P 500 with nearly a 30% gain.

Terodyne, Tapestry, Hershey and Corning, also posting big rallies. And here are a few notable winners in the NASDAQ, NFAE, Energy, JetBlue, Blumen, Brams, Sonos, and Old Dominion. All take a look at the moves in crypto today. Bitcoin, Ether, Solana, and XRP, all moving higher, along with the major averages. Bitcoin recovered some losses today after plunging to six. 60,062 overnight, but it's still down double digits in one week and at one point lost half its value from the all-time high back in July. Now people are asking how low it can go. Here's what strategy CEO Fongli said. First of all, I don't think Bitcoin will go down to $10,000. I think it's extremely unlikely.

What's happening with Bitcoin right now is the government's fully behind it. We have a Bitcoin president. We have a Bitcoin head of the SEC, head of the Treasury. Bitcoin headed the CFTC. So the regulatory issues that I think five years ago, people worried about Bitcoin are gone. But yet with all those positives, he listed on the regulatory front, it is still tumbled to 60K, of course. For more on Bitcoin's drop and its rebound today, let's bring in Anthony Scaramucci. He is founder and managing partner of Skybridge Capital. Anthony, it's good to see you. Nice ride we've had in the last little while here. You know, it's interesting to kind of list the fact that we now have a favorable regulatory regime. That's preceded by the fact that, of course,

institutionalization has occurred. The ETFs are everywhere. It's almost as if crypto, Bitcoin Bulls got most of what they wanted, and I don't know what to do with it. Well, listen, there was a moment of euphoria last fall when Bitcoin got to its all-time high. I turned to one of my partners and said, we'll likely get to 200,000, but my guess is we'll test 70,000. before we get there, and he looked at me like I was crazy, but that's the nature of Bitcoin. This is still a very early-adopting asset. I've been on CNBC for the last five years

talking about Bitcoin, never calling it an inflation hedge, never calling it a dollar substitute or digital gold, but calling it an early-adapting technical asset that has money-like characteristics and gold-like characteristics. But if you look at the demographics around Bitcoin, Michael, they're still young demographics. And so when you had debasement fears coming into this year, you saw the rally in gold and silver, that's because the older people have the money and they believe in gold and silver,

and they're still not quite there with Bitcoin. And so one of the real gatekeepers here is the Clarity Act. I think there's a lot of fence sitters, institutions, commercial banks, and otherwise that are really not going to move on Bitcoin until they get clarity from the U.S. government. And so I think it's a coin to us now, whether or not that gets approved. Some of the Democratic senators I've spoken to say that it will. But I think that's one of the big gating factors here. And this is typical volatility for Bitcoin. Anthony, why is it, though, typical volatility for Bitcoin?

When there's been so much change to theoretical change to who holds it with institutions coming in, with ETS, with the rise of digital asset treasury companies, why isn't there more stability? Why does this look like a run-of-the-mill Bitcoin pullback that we've seen over the past, you know, 10, 15 years? Well, you know, Melissa, I actually think it's been masks somewhat. You know, I actually think the declines, if you look at the four-year cycles in Bitcoin, the decline could theoretically be deeper. If you just did a map of those four-year cycles, you were looking at a retest somewhere at the 38,000 level. Now, it did hit yesterday the 200-day moving average, and it seems to have held there.

I also like the fact that the Fear Greed Index, which is from zero to 100, you're at five right now, which is like one of the lowest indicators that we've had in the history of Bitcoin. So there's overwhelming fear. But I think we've actually had a softer, believe it or not, Bitcoin correction as a result of strategy, the ETFs, some institutional buying. But remember, this trades on its last trade based on liquidity or illiquidity. And I'll take you guys back to October 10th. Lots of circuit breakers tripped at Binance. There was something like $28 billion liquidated very quickly. And it does look like somebody got blown out or margin called over the last week. I mean, you had a 25% drop in Bitcoin.

and today a 9 or 10% rise. So, yeah, it's a garden variety correction for Bitcoin. We're still bullish. I frankly bought more Bitcoin yesterday. I intend on buying more Bitcoin next week. But it has been muted. And so this is the thing I always tell people about Bitcoin. If you don't like this level of volatility, this is an early adapting asset.

Amazon went down 50% eight times in its first 15 years of existence. that's sort of what Bitcoin is doing. If you don't like this volatility, you have to stay away from this asset. And to be clear, you know, there've only been four four-year cycles. We act like this is something, you know, written in a big book somewhere that the four-year cycles have a defined pattern. But also, Anthony, I mean, you know, you talk about this de-leveraging event from October, and it's described as if it's like this act of nature. Like, it just happened. Well, what it was, like long-term holders, a lot of them, were willing sellers at the, those prices. And there were too many people that had bought on leverage that got wiped out. And

here we are four months later. And the market has barely gotten its feedback under it. Yeah. Listen, but let me go to the four-year cycle for a second, because if you really understand Bitcoin and the hash rate and the halving cycle, what ends up happening as you get to this point in the cycle, it makes it hard for miners to make money, the result of which they're typically selling their incremental Bitcoin. What you just brought up, I think, is a true thing. Once Bitcoin cleared the $100,000 hurdle, I think a lot of the original people, a lot of the OG saw that as an opportunity to take some money off the table. Michael Saylor has been on our, I'm sorry, Michael Novogratz has been on our air talking about a $9 billion seller last year. So I think

there's a lot of different things that are going on from a technical basis here. I think the real question, Michael, is the fundamental narrative for Bitcoin over? I believe that it isn't. I believe that this is a long-term option on the currency system that we're currently running off of. This fiat-based system, which we all know is faltering. Gold can be a partial replacement for it, but in the age of AI, we're going to need an electronic one. And so for me, Bitcoin is that asset, and we remain bullish. But if you're saying, hey, this thing went down a lot, everybody should run for the exits because it went down a lot. I would say go back to other technologies, particularly Web One technologies like Amazon or even the introduction of Google or the original IPO of

Facebook. Look at the volatility and the jagged edge of those companies. And as they grow in size and people get more comfortable and there's more adoption, the volatility gets muted. We are not there yet with Bitcoin. So other people will come on and say it's digital gold and an inflation hedge. I am not saying that. I'm saying that this is a great asset. If you really understand, it's technical properties. And this is something you want to hold in your portfolio for a very long period of time. But you know, Michael, you know this, I know this, Melissa knows this. Everybody's a long-term investor until they have short-term losses. And when they have short-term losses, they set their hair on fire and they run around in a circle. I wouldn't do that

here. If anything, I would take this as a very positive entry point. Anthony, it sounds like you're calling a bottom. We've seen the bottom here in this pullback. I'm too humble, Melissa, I'm too humbled by life and markets to call the bottom. But I'm hoping that that's correct. I am buying like I think that this is a bottom. Let's put it that way. All right. Fair enough. Anthony, good to catch up with you. Thank you. Good to be on guys. Have a great weekend. You too. Coming up in overtime, we'll take a look at some of the names leading the Dow to a new milestone above 50K. And as tech tumbled this week, other sectors took the lead,

staples and industrials, old economy names, the top performers. So is the broadening here to stay? We'll dive into that when overtime continues. Welcome back to overtime. Historic Day for the Dow crossing 50,000. Five names in the index hitting record highs today. Coke, Travelers, Honeywell, Johnson & Johnson, and Amgen. One Dow component did hit a 52-week low.

Salesforce caught up in the software sell-off down 10% this week. and at its worst levels in nearly three years. And Mike, you have more on the old economy picking up the slack here. Absolutely. That's been the story of most of this week, which is investors are selling 21st century tech companies to buy 19th century businesses like transports, railroads, things like that, as well as banks.

Here you see the MagSavent ETF has done essentially nothing since September, while KBE, that's the big banks ETF as well as IYT, that's the S&P transports, has completely caught up, to that move. So that's been carrying a lot of the weight. Obviously, investors positioning for re-accelerating economy, a broadening out of earnings growth. It's also visible in the equal-weighted S&P relative to the headline market cap-weighted S&P, not quite caught up on a one-year basis, but obviously has made a big run at it. I think the issue for a lot of investors who've been rooting for this type of activity is, if you don't have the heavy weights of tech participating,

are there, is there enough support and enough valuation support for the rest of the market to actually carry things higher, S&P values at 19 times forward earning? So it seems as if some of that's been played out, but, you know, we'll see how it goes. And if you dig into the specific names, Mike, I mean, some of the moves are stagger. You take a look, for instance, at a Coca-Cola, which is trading close to its levels back to when it IPO. I mean, it's trading at a greater forward PE than meta at this point. Yes, exactly, which in a weird way is going back to, the 90s as well because some of those

blue-chip brands did have towering valuations. I would also put in something like FedEx. I think it's up like 25% year-to-date. So, I mean, clearly the market has laid very heavy bets on this idea that we're going to get this kind of spring higher in broad earnings growth. We're going to run a hot economy. I guess the question is whether we've priced

that in or not. Yeah. Time now for a CNBC news update. Steve Kovacs got that. Hey, Steve. Hey, there, Melissa. Yeah, the man accused of killing United Health Care CEO, Brian Thompson on a Manhattan sidewalk. He'll face trial on state charges starting June 8. The judge set the date today for Luigi Mangione. He has pleaded not guilty, and a separate federal case is due to go to trial in October. Mangone spoke today as he exited the

courtroom telling the judge, quote, it's the same trial twice and said it was double jeopardy by any common sense. A federal jury found Uber liable to pay an Arizona woman who said one of its drivers had raped her $8.5 million. This is first of thousands of lawsuits alleging. sexual assault and misconduct by drivers on the ride-sharing platform. Uber says it will appeal the decision. And the EU threatened to find TikTok today over what it called addictive feature, saying its infinite scroll feature must be changed to comply with online content rules. Regulators also suggested TikTok implement screen time breaks.

The social media platform says it plans to challenge the findings. Guys, set it back over you. Steve, thanks. Steve Kovac. Stocks rebounding strongly with tech leading the way today. but some of the biggest tech stocks still had a very rough week, and the markets make new highs that the concerns about big tech persist. Overtime is coming right back.

Welcome back to closing bell overtime, live in the NASAC market site. A big milestone for the markets today as the Dow closes at 50,000 for the first time. The SNB 500 and NASAC both gaining around 2%. Both, though, still lower on the week. The Russell 2,000 up nearly 4%. Today's gains coming despite big losses for Amazon and Alphabet, which both surprised the market with huge KAPX numbers. Companies, which could be beneficiaries of all that spending,

such as Nvidia and Broadcom, both up 7%, and the memory names also with big gains for the day and for the week. Consumer Staples also continuing their run, Walmart, Hershey, Pepsi, all higher by more than 10% this week. So is today's rebound rally for real? And if so, where should investors be looking for opportunities? Let's bring in 1.BFG wealth partner's chief investment officer, Peter Bookbar and Bespoke co-founder Paul Hickey. Welcome to you both guys. Thanks for coming in.

So Peter, it was impressive this comeback. Was it persuasive to you? Well, we'll have to see if there's carry-through because the Friday ended as Monday began. But I think under the surface, there's a clear bifurcation going on. And ironically, it's no longer the Mag 7 that's leading the way. That trade, to me, is broken. The trade that works so well, since early part of 2023 on this entire AI buildout is now reversing. And the market is now leaning on other things to work, which I think they can, and they certainly are. The question, though, is how long and how sustainable that can be.

Paul, you guys have made the case many times that this is the AI bull market, right? It started when Chad GPT was launched, and typically a bull market is not going to necessarily kind of change lead horses midway. So how are you thinking about it? So I think, as Peter was saying, the Mag 7 trade as a monolith is dead. You know, there's definitely bifurcation in there. But what we saw this week, the panic after the anthropic news and what's been going on with that is similar to last year with the Deepseek, the whole Jevin's paradox, when you get more, when things become cheaper, people are going to use more of them. So it's going to disrupt the software group without a doubt.

But there's going to just be more software run. And then when there's more software run, that all runs on the rails of semiconductors. So I think semiconductors are, it's a perfectly rational move that you saw them rallying today. The breadth of the rally in semiconductors has been really impressive since the fall. You've seen, even as Nvidia has been relatively flat, most semis are up by double-digit percentages. So it's been a very strong rally there. and it's the market just looking at, okay, who are these winners and losers going to be? There's going to be some losers in the software group.

But outside of that, we're seeing more, we're seeing the semis rally, and we're seeing the broadening of the rally. You saw the equal weight S&P up 2% this week, and breadth was positive four out of five days. Peter, though, in terms of evaluation, I mean, what do you think is more stretched, semiconductors or consumer staples? I mean, which has the more durable rally at this point? Well, I'm in the camp of consumer staples. They have gotten killed over the past year to the point where valuations in the low to mid-teens

with dividend yields that are similar to bonds of 4 to 5 percent. To me, that's one of the cheapest areas of the market. It's certainly the most boring, and it's not as exciting as tech and semis and so on. But I think over the next year and so far year to date, it can be one of the better performing sectors. And we're long in that group as such. Paul, I'll pose the same question to you. So, I mean, I think if you look into the outside of tech, you can certainly look into the health care sector. You can look into industrials.

The health care sector is one of the most inefficient sectors of the entire U.S. economy. It's an area that's right for disruption. And you look at companies that can harness AI to, improve testing, improve genetic testing, improve and streamline processes, there's a lot of, you know, fat to be taken out of that system and a lot of efficiency to be put in there. So I think you can look at these companies that are going to take the AI and use it to their advantage and increase productivity. Peter, we're going to get a monthly jobs number next week.

A lot of what's been going on in the market has almost been kind of stocks reacting to themselves and reacting to very specific corporate things. We did have this premise coming into this year that the economy was going to re-accelerate, and yet there'd be room for Fed rate cuts. And we've become, I guess, somewhat okay with the idea that the labor market can stay weak with GDP strong. So can all those things work? Well, it's a very strange economy because to me there's only a few things that are powering that GDP growth. It's, of course, the data center build out.

It's upper income spending. And it's any beneficiary of a $2 trillion budget deficit. Outside of that, the economy is still really running in place, manufacturing, housing, low-to-middle-income consumers. And the labor market, to me, is more slowing because the demand side, not the supply side, even though supply side is certainly an issue with very little population growth, but it's the demand sign. So it's a very bizarre sort of cocktail of economic activity. And I think you can't just look at the headline GDP number. You really have to look at under the hood to see what's driving it. And I do think overall, this does complicate the Fed's job.

Yes, you can look at the labor market saying, okay, we're barely seeing any job growth. The Fed should cut. But there are other offsets, particularly on the inflation side as well. Paul, in terms of next week is a big week for earnings as well. So which sectors, which sort of stocks are you looking at the most in terms of we've been through the part of it in terms of the MAG 7. So what else out there are you looking for? You know, I mean, I think the big test is going to be we're going to get some, you know, data on employment. next week, and so we'll see how that comes in. The economic data, that's going to take on an added

focus just because we have seen this disparity in the tiers of the economy. But what we're, you know, what are talking about Fed rate cuts and stuff, you know, our point is always that, you know, we'd be perfectly happy not to see a Fed rate cut because that means they don't have to cut. And if they don't have to cut, that means the economy's doing well. We'll see how that plays out. I'm not sure, you know, what the Fed's path is going to be going for. but ultimately, I'd much rather a scenario where the Fed doesn't cut because it doesn't have to rather than it cuts because the market is a sick, the economy is a sick patient. All right. Peter and Paul, thanks. Great to see you.

Thank you. Once upon a farm surging after going public today up next, the co-founder of the firm that is the late, the company's largest shareholder, he'll give us his IPO market outlook and how the recent troubles and tech impacts companies going public. And despite today's big rally, there were some big losers. Molina Health Care at its lowest level since the start of the pandemic after an earnings miss and a week and then expected guidance. And Stalantis sinking after announcing a charge of 22 billion euros tied to the scaling back of its EV plan, shares hitting 20-20 lows. It's been a busy week for the IPO market with once upon a farm capping off the organic kids food brand back by actress Jennifer Garner jumping nearly 17%.

But the IPO market has been a bit rough recently. Five of the seven U.S. deals which raised more than $100 million last. month are now trading below their issue price, some deep in the red. So what is the state of the IPO market right now? Joining us is Brett Thomas, co-founder and managing partner at Kavu Consumer Partners, which holds a 28% stake in the company. Brett, great to have you with us. Congratulations on the exit.

It's interesting because for you, you've got two components going, the health of the IPO market, which is a little bit rough, as we said, but also the interest in consumer brands. We were just talking about consumer staples stocks and consumer staple sector doing so well this year. So sort of put the two together for us in terms of your niche in how you see that IPO runway. 100%. And thank you for having me. Very big day in consumer, especially for Betterfew CPC companies and health and wellness businesses. You know, if you think about it, health and wellness and better few is not a cute niche category. It's now a $7 trillion economy, and the consumer is shifting more and more that way, millennials, Gen Z, et cetera. And so when you find a brand that has a massive TAM, like a Once Upon a Farm,

children nutrition is a $50 billion category. And you have an unbelievable operator and management team in John Foraker, who's done it before with Annie's, and a co-founder that has an incredible brand and authentic. It really makes for a great entrance into the public market, even when it's volatile. I mean, I don't think anyone expected the volatility of the IPO market and the markets in general. I think it's interesting. You guys have reported a lot about the AI Eat Software Trade. I think consumer brands, challenging brands, like a Once Upon a Farm, they're actually

the AI to big CPG. And I don't think you can, AI can't come and disrupt CPG. They can aid it and make it better, but they can't alter what you eat and put in your body or how you treat your body. I was thinking a lot about annies and its IPO and its path as a public company, you know, when I saw the deal this morning. Now, they eventually sold, right, to General Mills or somebody? Yes.

What's the durability of these brands as challengers? Because, you know, beyond meat, which, of course, had its boom bust. Yes. I think you have to, the hard thing about consumer is what's a fad and what is a real secular shift. And if you look at children nutrition, that's not a fat. I grew up being fed gerbers. And the original thesis at Kavu, when we invested, it was doing a million sales, was that the food in the jar should not be older than the constituent.

or the consumer eating it. And there was actually more fresh pet food available at the time. We made our investment than there was actually fresh human-grade baby food. And so for us, it's really what's a trend, what's a fad versus what is a long-standing business. Children nutrition, now as parents are smarter about what they're feeding their children, they know they're more aware of the impacts of it. They're going to be making better decisions and upgrading the diets for their children. And that's why we're really excited about the business and why we partner with them.

As you think about deploying capital and making investments, where does the GLP1 trend fit in? Do you see that as a fat, or is that something lasting that you think will be here and changes the way you look at certain companies? I think the world has gone from treating disease to now prevention of disease. And because of that, I think things like GLP1, if you're overweight or having health issues, I think those things will continue to stay for a long, long time. I think you look at the rise of protein. proteins everywhere now, the diets have shifted. Look at alcohol consumption, right? More people are wearing whoops and aura rings and trackers.

And so that is playing a massive role, especially in things like drinking and eating and desserts, where I think the consumer is getting healthier because those foods don't resonate the same way when you're on those type of... Does that implicitly, though, reduce the total addressable market? I mean, all of it is about consuming less, right? It's consuming less than food,

but I think the bigger impact is actually on alcohol. Yeah. Because people who run GLP-1s and according to studies, they don't seek it anymore. And so then they're going to alternatives. So you think about the non-elk movement and non-alc beer or we have a brand called recess, which is a mood drink for relaxation. So we think it's actually going to open up a wider door for more and more functional brands, especially in beverage. Brett, thanks for stopping by.

Thank you for having me. Appreciate it. Retail a big winner today and all week, despite Amazon's plunge up next to stocks that are driving the retail rally, closing bell overtime live from the NASDAQ market site. Be right back. Welcome back to overtime. Amazon dropping more than 13% this week following its earnings, but the retail sector has quietly been a big winner this week.

Courtney Reagan's got the details here. Court. Hi, Melissa. So the retail ETF, the XRT, it's up almost 4% this week versus the NASDAQ 100, which is down to the S&P 500, also down slightly the Dow up, but 2.5%. Now, Staples, they're leading the way. The strongest S&P sector for the week up 6%

led by Hershey and Parenthood. Hepsico, both on earnings beats. Walmart crossed the $1 trillion market cap for the first time this week. It's up more than 10% during its first week with John Ferner and the CEO's seat. It's target CEO's first week, too, that stock gained more than 9%. However, the consumer discretionary sector, that is the weakest group for the week. It's down more than 5%. And it is dragged lower by Amazon, which is down about 13% on bigger than expected Cappex spend for AI. It's retail business, though, For the holiday quarter, that was really solid. Plus, you've got booking holdings, Expedia, Airbnb.

Those were also down-markedly, and they're part of the discretionary group, but again, not really in what I consider retail. Still, athletic names, Under Armour, Columbia Sportswear. Those are discretionary for sure, up 21% and 16% respectively in one week. Under Armour had better than expected results, along with Coach and Kate Spade Parent Capistry, which gained 18% this week. Macy's, Contour Brands, Bootbar, Victoria's Secret, Those were all up more than 12% and a week.

And I felt like we hardly talked about any of this. So I had to tell you before the week was up. Back over to you. It's all software, court. Thank you. Courtney Reagan. It's interesting, Courtney had mentioned within the discretionary sector some of the travel names. And those really got swept up in that AIEAT software.

AI eats a lot of things out there, including travel names. Yes. Anything, again, that's just kind of like information or data distribution could be displaced. I would also suggest a lot of those stocks. that did work well, somewhat heavily shorted, some of the chain retailers, and you had this massive kind of rebalancing among hedge funds. Interesting with Amazon, because investors seem to think of the e-commerce retail side as almost a nuisance. You know, we don't really want to pay that much attention. We'd rather have leverage to the cloud business purely, but the retail side is doing

pretty well and the advertising and all the rest of it. So, you know, they're kind of allowing it to slip by the way, said. By the way, we have another big week of earnings. It begins on Monday, with On Semi and Cleveland Cliffs, Coke, Ford, Robin Hood, and Lyft the highlights on Tuesday. Cisco McDonald's and CBS on Wednesday. Thursday brings Expedia, Airbnb, Coinbase, and applied materials. The week closes out with Moderna, Wendy's, and Advanced Auto Parts. And on the economic front, we will get wholesale trade on Monday, December retail sales and import prices as well as the employment cost index that will be released on Tuesday. January CPI out on Wednesday. The report was delayed until later this month because of the brief government shutdown.

weekly jobless claims, existing home sales that will be released on Thursday. And shares of hymns are watching. This hymns and hers falling after hours, the Department of Health and Human Services, referring the company to the Department of Justice for an investigation into potential violations of the Federal Food, Drug, and Cosmetic Act will continue to follow the story for any specific allegations of wrongdoing. Of course, earlier this week, they announced a copycat version of the Wagovi pill. Nova Norda said that they're going to take swift action in regards to. that and so did the FDA Commissioner last night. That's right. Yeah, they think they're operating,

you know, within the legal, you know, kind of gray area and obviously there's no vote doesn't think so. So we'll see if there's buyers for Dow 50,000 on Monday. You have your Dow 50K hat? You know, I think there's one waiting for me at the New York Stock Exchange. The 10K with the I was trying to think where the Dow was when I started covering the markets. It's 3,300. 3300. Yeah, everybody can do the timeline and figure that out while we go for the weekend. That's for over time. Fast money begins right after this quick break.