Closing Bell - Closing Bell Overtime: “Avocado & Garlic” Market Catalysts; Goldman’s Biotech Playbook for 2026 12/19/25

Episode Date: December 19, 2025

Scott Wren of Wells Fargo Investment Institute on global strategy and positioning, plus Steve Liesman wraps his key interview with Fed Governor Christopher Waller. Apple’s outlook with Craig Moffett of MoffettNathanson. The Goldman biotech outlook with Salveen Richter of Goldman Sachs. Next week’s market catalysts with Adam Crisafulli of Vital Knowledge. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

That's the end of regulation, Orla Mining, ringing the closing belt, the New York Stock Exchange, Bowman Consulting, doing the honors at the NASDAQ, stocks ending the final full trading week of 2025 in the green this Friday. The Dow up about 150 points, and the S&P 500 is less than 1%. The NASDAQ with a 1% gain for the week. The SNP 500 squeaking out a slight gain, it looks like, as we settle here, the NASDAQ also higher for the week. Losses, though, for the Dow and the Russell 2000. Heavy volumes as well. well, as today was the largest options expiration in history. This is a quadruple witching event, a record shattering $7.1 trillion in notional value expiring today. As for the big individual movers, Micron having a good week continuing to rally after strong results Wednesday. It's been bringing the broader AI trade with it. Mike Santoli's going to join us with more

on that coming up. Oracle also getting a nice boost. It's part of a group of investors who will lead TikTok's U.S. operations after that deal was finally inked. And it's not just stocks rallying today either. Oil, gold, Bitcoin, all moving higher. Also, keep an eye on copper because that's continuing to flirt with a new high as well. And that's a scorecard on Wall Street. But winter stay late. Welcome to closing about overtime. I'm John Ford alongside Morgan Brennan. And for the second straight day, Apple's basically flat while most of tech rallies. Maybe a microcosm of the whole year. Apple up 8 percent. The NASDAQ up 20. Can Apple investors hope for a better 2026? We will discuss. Meanwhile, one of the, best stocks in the S&P 500 today is Moderna. The stock's jumping on news. It's getting funding from a global partnership to work on a bird flu vaccine. Earlier this year, the U.S. government pulling funding from this project. Coming up, we'll look at biotech's prospects in the next

year. And you know is Christmas is coming Thursday. The goose is fat, but do you know what's happening the rest of the week? We're going to get you ready for a shortened but still busy trading week. And keep us ready for the AI trade, which keeps shipping. Let's get to senior market commentator Mike Santoli right here in studio with us, Mike. Yes, John. You know, it remains a rotational bull market, which is to say it hasn't been everything going up at once and pulling back at the same time. This is a gauge of that.

This is the NASDAQ 100 relative to the equal weighted version of the Standard & Poor's 500. And so you see these periodic accelerations higher when it's all mega-cap dominant, and it's the AI trade that is really consuming all the oxygen. And then these sharp drops, this was in the summer of 2024, by the way. It's a two-year chart. And it's been these sort of multi-month phases when the market so-called broadens and the rest of the tape kind of takes over or at least doesn't go down as much as the NASDAQ does. So this is really the third one of those major peak phases.

Perhaps now you see at the other end there, we may have hit a little bit of a near-term low in the NASDAQ to equal weight ratio. We'll see if it still has to kind of rebase and consolidate. from now. I always say, be careful what you wish for in a broader market. If you don't have the real big bellwether leaders in the lead and driving things, sometimes it's a sloppier tape. We saw that for times the last couple of months. Here, take a look at a couple of these areas, I think, are kind of guiding beacons to how the market's going to go. That's semiconductors and banks, it is a two-year chart. On this frame, banks outperforming, so, you know, semis have some work to do to get back there. Big picture, a market that still has banks and semis outperforming is one that's

tough to be outright bearish on. So we'll see if those things kind of can have some follow-through, particularly semis after a strong couple of days today. Why does it look like some of those types of stocks that have been strong throughout the year are flagging a little bit heading into the end here, even though, you know, S&P in general, though I guess you were comparing it to the NASDAQ 100, weren't you, is still pretty solid up above 6,800. Yeah, I think that just you got, the divergence got pretty stretched at the recent highs in October.

you've had obviously the rethink of the AI trade. And so there's two things the market can do when you're seeing some of the big, leading, expensive stocks sell off and have people decide that they need to lower the valuations. The whole market can go down or some other things can step in and pick up the slack. We've seen mostly the latter. The S&P, you know, even though it's been kind of stuck for a couple of months, it has not really gone below like a 3% pullback from the all-time high. So so far, you know, kind of holding together there as the pendulum swings.

All right. Mike Santoli, thank you. And step right up, because we're going to talk to you a little bit more in just a few minutes here, right on set. In the meantime, we're going to get to the bond market. And Rick Santelli's in Chicago with the breakdown of what we saw this week, including today. It was pretty busy today, Rick. Yes, Morgan, indeed it was. We had the University of Michigan out, consumer confidence, a December final read, and all the metrics deteriorated from mid-month. And if you look at the headline number, it was the third lowest going back to the 70s. Current condition? At 50.4 is the low going back to the 70s, and the inflation metrics seem rather inflated. You know, back at a time when University of Michigan sentiment used to correlate with equities, seems it doesn't do that anymore. If you look at a week-to-date of twos and tens, you can see, as we sit right now at 348 in a two-year, it's up two on the day, but it's down four on the week. If you look at a 10-year currently at 4-15, it is up three on the session,

put down for on the week. And we have been mostly in a range, but the long end still is much more sticky to the upside in terms of yield, holding onto some steepness that we garnered about a week and a half ago and we've held on to. Now, we know the Japanese raised their overnight rate to the highest level in 30 years at 0.75%. However, we would think their currency would do better. That's not the case. Look at a year today to the dollar index, hovering very close to fresh highs for this year. If you look at the pound verse, the yen. It closed at a 17-year high. All these in favor of the other currency, the pound in this instance. And if you look at the euro versus the yen, the euro closed at a 34-year

high, another fresh 34-year high against the end. We need to pay close attention to this not only because of the issues with the foreign exchange, but of course what's going on with their sovereign debt and how historic some of the moves to the upside are in their interest rate complex. John, back to you. All right, we'll keep an eye on it. Rick, thank you. Now let's look at the Fed as well. President Trump calling Fed Governor Christopher Waller. Great, after interviewing him for the job of Fed chairman

and New York Fed President John Williams saying technical factors likely made the November inflation picture, the consumer price index there, look better than normal. Let's bring into your economics reporter Steve Leesman for that. Steve, particularly on this technical factors thing, how much better you think this might have made it look? It's really hard to know. John Williams thought it might be just a tenth that was back of the envelope. I think, you know, Rick had this in his report today.

I had it yesterday. If you call up the 10-year note or the two-year yield on the two-year, what you see is the market didn't factor it in at all. It wasn't a factor. Had it been real, the market would have done two things. One is it would have reduced inflation compensation that it requires. And the second thing it might have done, And you can see that right there.

Look at that part to the left of Friday there. That's where you see yields actually rising. Had the market really believed, John, that this was a lower than expected inflation rate and one that was something that would continue, then the market would have rallied and yields would have fallen. That was not the case. We'll have to wait and see.

What is probably true, John, is that this will be with us for a while. These are zeros or a lack of change that they filled in for inflation because they didn't have the data that they probably won't get around the fixing for several months now. You take this, Steve, and you factor in what's happening on the policy front on the other side of Washington as well as we see this horse race, if you will, for who the next Fed chair is going to be. And how is the bond market weighing in on that? Because it certainly has been making its voice known here in recent days. I mean, I think so. I don't see a huge reaction in the bond market per se to this whole Fed sweepstakes race,

which is playing out in an unusually public way. You did have what looked like a bit of a rise relative to the idea that it was going to be HACET, but now we're in a situation, Morgan, where there looked to be four legitimate candidates. We report this morning that the Chris Waller interview was a strong interview. We can also report that Rick Reeder from BlackRock will be interviewed at Mara Lago in the last week of the year. So I guess that's what, 10 days for now or so? And the market seems to sort of be trading at least the long end with this notion of, hey, 415, 420 is a top here. And I'm not especially worried.

And by the way, it's probably significant that Hassett started talking more about independence and kind of distance himself from this notion that he was somebody who was. just going to listen to the, rightly or wrongly, if that notion, I'm not saying, but it was certainly out there that Hassett was just going to listen to what the president said and cut rates no matter what. He's distanced himself from that. So I guess what you may have, Morgan, is this notion that, hey, we have reasons for high rates, but not necessarily reasons for concern about a reckless Federal Reserve. All right. Steve Leesman, thank you. And what was another gangbusters week from Steve in terms of Fed speak and some of the interviews that were

conducted there. Santa Claus rally time frame doesn't officially begin until next Wednesday, Christmas Eve, but stocks are making a push the last two days to get the party started early. The S&P 500 and the NASDAG both posting positive weeks, consumer discretionary, led by travel, chips, boosted by Micron. Those are the leading groups this week. Joining us now is Wells Fargo Senior Global Market Strategist Scott Wren, along with our senior markets commentator Mike Santoli. We asked him to come back on set. He did it. I obeyed, yeah. I'm going to start with you on this one, and we touched on it at the top of the show, but the fact that you had the largest options expiration in history signals what about this market?

Well, first of all, just on a basic level, it signals that the size of the market is bigger than it's ever been, and therefore all the derivatives activity around it are very dramatic. But what it could mean is often once you sweep away all those options that are either expiring or getting offset, that it's a massive volume day. There's index rebalancing going on. So you have a lot of kind of clearing of the decks that can happen here. And perhaps it frees the indexes to kind of move a little bit more away from some of these kind of round number clusters of exposure.

I think a lot of folks were saying $6,800 was really sticky over the last couple of days. I don't think it's necessarily directionally that relevant, except again, I think we're getting cleaner positioning at this point, especially also because so many of the high momentum stocks have come off the boil and that sort of reset positioning for a lot of these a lot of institutions and that what that all can mean is you know maybe the market has a little bit of a clearer path ahead it could be bullish if in fact we've essentially gone sideways for two months and people are no longer overextended. Scott what do you think of this market here and how would you be positioning in light of that? Well you know Morgan first on this massive options

expiration. I think, you know, over the last few decades, I mean, people don't wait for the last minute to do these options like they used to, especially, you know, on what was, is normally, you know, thinly traded days here around the holidays. So I was a little surprised the market was, there wasn't much back and forth today, but, you know, the traders and everybody else are, they're squaring up and doing the things they need to do, you know, well in advance of that. Now, as far as the market goes, you know, really we're ahead right now of the mid-point. of our year-end target range that we've had out there. It feels like the market wants to go higher.

I wouldn't be surprised at all if it did. And, you know, as far as the rotation goes, you know, we've, back in August, we took communication services from an overweight to an even weight. About four or five weeks ago, we took information technology from an overweight to an even weight. And so we trimmed back a little bit there. You know, you're still carrying a huge load. I mean, that's almost 50% of the market cap of the S&P 500.

We've been buying financials with the funds we've trimmed from there. We've been buying financials. We've been buying utilities. We've been buying industrial. So, you know, we're still in the AI theme, but we're trying to do it from a little bit different angle, John. Okay, okay. Scott, thanks. Mike, this is a year, looking back in 2025, that the supposed smart money got

it wrong, the institutions, started betting against the market, if I recall. Retail investors in risky stocks got rewarded, buying the dip, et cetera, except arguably in Bitcoin. I think we're almost exactly flat with 12 months ago right now there. How does that set us up kind of attitudely, emotionally in the market for next year? I've been trying to puzzle over this as to whether, in fact, we've loosened up the linkages between Bitcoin and the overall performance of the market. I mean, that's been the case. Nasdaq used to track it, hasn't in this last downturn with Bitcoin. I would also argue that the buying of the dip by retail after this 5% pullback that started in October was not as aggressive as it was in prior episodes when we pulled back

and Bitcoin fully participated in it. So it could be that it's blunting that effect a bit. I did note today there was a lot of life. I mean, Bitcoin was up 3%. Of course, it's not been able to get escape velocity out of the 80,000s. But it was up good today. And at the same time, you saw a lot of the speculative stuff running. So the meme stock ETF was up 10%, as I pointed out, and a lot of the stuff that are like kind of on the fringes of the AI trade and all the rest of it. So it's still there.

There's still life in that trade. And by the way, talking about the options expiration, that's mostly how things are executed. If you look at the options volume that's sourced in retail, it just goes up constantly. And also the assets in leveraged ETFs relative to those that bet against the market are at an all-time hot. So people are participating even if it's not in exactly the same way. So, Scott, what's your read on the market's mood ring as we head into 2026, given all

of that? Is the emotion mostly reflected in the retail investors by the dip pro-risk stuff with the valuation? Or is there enough doubt to support the optimism that so many seem to feel heading into next year. Well, you know, I really think that retail investors, I can speak for, you know, for the retail investors that we're dealing with, they have a lot of cash in their accounts, and it's cash that they want to have in the stock market, but they've been very cautious here. So, you know, it's, I think that people are getting in better spirits. Are they going to actually take money from their accounts and buy stocks with it? I'm not really sure. We might have to travel a little bit higher before people start to really chase it a little bit. But when you look at what's going

on out there, breadth in terms of sectors and earnings growth is going to broaden probably pretty meaningfully next year. The economy is going to be better next year. We're going to have moderating inflation. And so I think the setup, John, is pretty good for next year. And like I said, I think we're likely, or at least it feels to me anything can happen in 10 days, but it feels to me like we're going to be higher at the end of the year than we are right now. And then we've got a 7,500 target out there for a year in 2026.

So we're optimistic. I think we'll see a broader market. Maybe it won't be broad, but it'll be broader than it has been in 2025. All right. Scott Wren. Mike Santoli. Thank you both for kicking off the hour with us. We have a whole lot of green on the screen

this Friday afternoon for the major averages. Well, troubles from China and tariffs proving to be a double whammy for Nike's earnings. Stock's getting punished as a result. Up next, we will break down whether there's any hope for a turnaround on the horizon. And later, top Apple analysts on whether the risks in Apple's business outweigh the rewards next year, overtime's back in two. Welcome back. Shares of Nike tumbling more than 10% today, that's following earnings, falling to its lowest level in more than six months. Now, this adds to its years of underperformance. The stock is down 8% over 10 years. Compare that to the S&P 500, which is up more than 240%.

For a closer look at the company's problems highlighted in its latest report, let's bring in Gabrielle Fon Rouge right here on set. I mean, it wasn't so terrible. North America is certainly showing signs of a turnaround here, but China. China seems to be the issue. And what I found particularly interesting here is it's coming in a week where President Xi and China is basically saying he is going to double down on the consumption part of the economy there. So is this Nike specifically or is this more a reflection of China? You know, it's a little bit of both, but I would say it's definitely more Nike. It's interesting because I talked to all of the CEOs in the athletic apparel and running space, right?

Just a few months ago, I spoke with Martin Hoffman. He's the CEO of On Running. And he said China is on fire for them. The China consumer is strong. They're doing very well. So that tells me this is very much a Nike issue. And what Elliott Hill said on the call last night is that this is a region that they have not been investing in, which is a mishap, right? Because this is one of their most important regions.

They have cut staff. They haven't been investing in the stores. And for the Chinese consumer, that store experience is incredibly important. They don't like to go to a department store. This is what they call a mono brand environment. You need to have awesome stores in Shanghai and Beijing. You need to have a great website experience. If not, they're going to go to the zillion other competitors that are there.

All of Nike's competitors are here, and they're also in China. In a way, this seems like good news to me. For people who at least believe somewhat in the possibility of a Nike turnaround. Because, I mean, North America actually pretty strong. Inventories didn't look so bad. There's the discounting issue. But if you put all that together, maybe with a CEO who seems to know what the problem is, does it make total sense that it's down below where it was right before the Trump tariff announcement?

I mean, you know, they've really been punishing Nike on Wall Street, right? Because a couple of quarters ago, we had the CEO say that this is kind of the worst of the pain is behind us, right? There was a big move in the stock. investors really thought, okay, it's all upside from here. But then what they said last quarter is that progress is not going to be linear, and that's what they said again this quarter. But I agree with you, if that's your biggest problem that you need to fix your stores and invest a little bit more in a region, Nike's very well suited for a turnaround there.

They have all of the budget, they have the scale, they have the ability to do that. You know, what they said last night is Elliot, he said he's going to focus on retail fundamentals. Those are the building blocks. If anybody can do that, Nike can. Well, see if investors believe. Gabrielle, thank you. Thank you. Well, it's been a roller coaster year for Apple, which recently hit a record high,

but our next guest thinks the stock is starting to look expensive and reveals a major red flag for the stock heading into 2026. Plus, a very bullish call on some names in the aerospace and defense industry. We've got those details when overtime returns. Welcome back to overtime, a huge day for space stocks after President Trump signed a sweeping executive order last night focused on U.S. space superiority. Among the goals, and there were many, get Americans back to the moon by 2028, begin building a permanent lunar outpost by 2030,

and target at least $50 billion in new space investment by 2028. This, as NASA finally gets its new administrator, Jared Isaacman, he was sworn in earlier this week, and take a look at some of these names. This is just today, Rocket Lab, Intuitive Machines, Red Wire, Firefly, Aerospace. The list goes on. The moves are even bigger, by the way, months and then. date. We're talking 60% plus, 50% plus moves. But these names, along with others like AeroVirement, Cratos, and Carmen, are also being initiated today by KeyBank as part of a big 244-page report

on aerospace and defense. KeyBank saying geopolitical tension support growth in defense budgets. We've certainly been seeing that this year. And that what, quote, lies ahead for the space defense tech sector could be as significant as the industrial revolution. So all of this, as Investors and industry prepare for a possible SpaceX IPO next year. That's also given lift to some of these names, particularly on the commercial space side in the last call it two weeks. The latest news on that SpaceX IPO possibility, Reuters reporting that Morgan Stanley is currently seen as a frontrunner to be lead underwriter for what would be the largest IPO ever on Earth. Or even in space. Yeah.

Well, turning now to Apple, it hit a record high recently, but the stock has lagged much of the year compared to Mag 7 piers. So, will it break out or lag again in 2026? Let's ask Craig Moffitt from Moffat-Nathson. Craig, isn't what really matters here if Apple comes out with Apple intelligence this time and if it delivers as expected? Hey, John. I'm not sure about that, actually. Look, it lagged for a lot of reasons during 2025. five. But there were a lot of risks in the stock. We opened the year, actually. I remember you

had me on back in January. We had a cell rating on it. It's not a cell anymore. It's sort of neutral. It's a fairly valued stock, I think. But I think looking at it going forward, I think the big question is really about services. I don't think we're going to get the kind of giant super cycle of iPhones that we once thought we were going to get maybe 18 months ago when they came out of the WWDC and everybody thought that AI was going to make you upgrade your device to a more capable device. I don't think that narrative is really what's relevant to the stock anymore. I think people have come to terms with the fact that that's probably not likely. So instead, you're looking at a company that is really, really good at what it does. It's a relatively

expensive stock. And the swing factor might actually just be services and the general growth of the services revenue for the business going forward more than it is actually on hardware or specifically on AI. Let me throw another idea at you. Apple has not been spending nearly as much as a percentage of revenue on AI infrastructure as any of the other names in big tech, arguably because they don't have to, but I guess you could come down a lot of different ways there. Since we're talking about potential performance in 26 relative to peers, doesn't some of that depend on how optimistic investors remain about the potential return and how soon on all of that AI infrastructure investment?

You're dead right, John. In fact, I'll say it even more bluntly. Apple is seen as the safe choice. So the biggest determinant of what Apple's relative performance is going to be is not how well Apple does, it's how well the rest of the Mag 7 does. In a big rally for or continued rally for AI, Apple is going to underperform. In a pullback, Apple is going to be, I would suspect, by far the best defensive of the Mag 7. So it is rightly seen, I think, as the safety choice of the mega-caps, because it's not capital-intensive and not really dependent, on the AI story so much. So let me put a spin on that then.

If the rest of the big tech players continue to do well because there's AI optimism, aren't people going to have to access those AI-driven services on something like, I don't know, iPhones? Sure. Yeah, the question is, so let's parse the AI opportunity for Apple a little bit more finely, right? When they came out of the WWDC,

DC 18 months ago, the assumption was that everything Apple was going to do was going to be on the device. And by virtue of doing it on the device, you were going to need more memory, you were going to need a neural processor in the device. That meant that the bulk of legacy phones weren't capable of doing AI, and so there was going to be a big upgrade cycle and so on. We're now looking at a future where it's much more likely that you're going to be doing a big upgrade cycle, that processing in the cloud, which, by the way, is what Chad GPT does. It's what Claude does at Anthropic. It's what Gemini does. So Apple was going to be the outlier anyway, and Apple's looking like less of an outlier. It looks like more of that will be done in the cloud. That's fine.

It'll work well, and you'll be doing it on your device. But it's not clear that that actually generates any incremental revenue or anything like an iPhone cycle, because you can do that today. You don't need any particular new capabilities in your phone in order to do that. Well, the bar is set. We'll see if Apple can still surprise us. Craig Moffitt. Thank you. My pleasure.

Well, it's time now for CNBC News Update with Christina Parts and Avelas. Hi, Christina. Hi, Morgan. Well, federal investigators right now are sending a cockpit voice recording from NASCAR driver, Greg, Biffel's plane to D.C. For analysis after it crashed yesterday, killing all seven on board. They say the plane went down less than 10 minutes after taking a plane. off from Statesville, North Carolina. Authorities are investigating why it returned to the airport so quickly.

According to People magazine, Biffle's wife texted her mother, quote, were in trouble just before the crash. Biffel, his wife, two young children, and three others died. Congresswoman Elise Stephanie just announced she's dropping out of the New York governor's race and will not run for reelection to the House. It comes after a fellow ally of President Trump,

Bruce Blakeman, entered the race against incumbent Democratic Governor Kathy Hockel. And another political shakeup, Senator Cynthia Loomis, announced today she will not seek re-election after just one term in office. The Republican senator from Wyoming has been a big backer of crypto in the upper chamber. She had already earned President Trump's endorsement for another term, but it seems like she wants to go on her own. Back to you guys.

We'll have to watch. Okay, Christina Parts-Nevilous, thank you. Up next, Mike Santoli's back. He's breaking down a potentially bullish signal for the economy. and what it could mean for the market and for your money. Plus, the lead biotech analyst at Goldman Sachs gives us her top picks for next year and what has become a red hot sector recently. We'll be right back.

Welcome back to overtime. Stocks higher today. The Dow up 183 points, the S&P 500, up a little less than a percent. The NASDAQ, the best of the bunch, up one and a third. Micron's still rallying after earnings. InVIDIA up 4%. Oracle is shaking off its recent doldrums. And look at CoreWeave.

more than 20% after a bullish note from Citigroup and a partnership with the Department of Energy. Another driver of the markets this week, consumer discretionary, particularly travel. The cruise names floating big gains, so did Airbnb and Expedia. Well, Mike Santoli's back. He has a look at how investors are positioning ahead of a reflation phase. Mike. Yes, this seems to be the consensus trade right now, which is essentially dependent on the re-acceleration of the economy. You hear from a lot of the strategist.

This is from Bank of America's Michael Hartnett plotting the net percentage of professional investors in the Global Fund Manager Survey who are overweight equities plus commodities against the ISM manufacturing index. So you see in the past it's had a pretty decent linkage, these two things, not necessarily a fully leading, lagging relationship, but definitely they moved together. However, would point out it didn't work last year. We were pretty much set up for something very similar post-election in 2024. everyone thought we were going to get a little bit of an extra boost to growth. It was going to necessarily benefit things like manufacturing and a reflation trade. That obviously got short-circuited by the tariff scare and the reset that we had in prices. So we'll see if this follows through.

I do think that it sort of suggests that the bar is relatively high to please investors in terms of the pace of growth. But we do have, of course, a doveish-leaning Fed into what seems like a couple of tax stimulus tailwinds coming around. Yeah, it's super interesting looking at this, especially when you do think about things like financials trading at or near record highs right now. I think one of the other stealth movers we haven't really talked about very much, and you know I always pay attention to this, is the transports. Sure. Because it is, it is the outperformer, like significantly over the past month, over the past three months. I mean, it's up 12 and a half percent in three months. And even just this week, you saw some freight data that was promising. And then you did see those

FedEx numbers yesterday, and I realized stock traded lower on it. They're pretty constructive on North America specifically? They are. I also think, you know, the truckers, there's some of idiosyncratic stuff there where capacities coming out, you know, the crackdown on some sort of immigrant truckers and things like that. But there's no doubt about it. And airlines are a big part of that as well. And that's part of that generally cyclically geared theme that is working pretty well. You're still not quite back to, you know, sort of record levels in terms of the relative performance of transports. But it is part of this story, absolutely, that people sort of think the metabolism of the economy has a chance to go higher next year.

All right. Mike Santoli, thank you. Got some breaking news now on Elon Musk. Phil LeBow has the details. Phil. Well, it's seven years after he was first awarded a record pay package back in 2018. And Elon Musk has been told today by the Delaware State Supreme Court that that pay package must be reinstated.

It was worth $56 billion. Remember, there was a chancellery court in Delaware that had. had invalidated that pay package, even though it had twice been approved by shareholders. But now you have the Delaware State Supreme Court saying, yes, that pay package should be reinstated to Elon Musk. Again, the value $56 billion. Guys, that seems quaint compared to the pay package that was approved just a couple of months ago by Tesla shareholders that potentially, potentially could be worth close to a trillion dollars if you think about that. All right, you hit that half-court shot.

You get your check. Phil LeBoe, thank you. Well, biotech stocks have been bouncing back after a rough start to the year. Up next, Goldman Sachs lead biotech analyst tells us why the sector could boom in 2026. And talk about French fried. Find out why shares of frozen potato giant Lamb Weston are getting shredded when overtime returns. Welcome back to overtime. Check out shares of Lamb Weston.

Bad. by four, the worst performer in the S&P 500, closing at its lowest level in five years. The frozen potato and French fry company stock getting mashed despite better than expected earnings, but full year guidance disappointed because of pressures from higher manufacturing costs and discounting. Well, earlier this afternoon, nine of the largest pharma companies struck a deal with President Trump to lower drug prices. This includes names like Merck, Amgen, and Gilead. Despite pressure from the administration, a rough start to the year, biotech has seen a rebound this year. Our next guest is betting that that recovery will continue into 2026.

So joining us now, Salveen Richter. She is the lead U.S. biotech analysts at Goldman Sachs Research. And Salvin, it's great to have you on the show. Welcome. Thank you for having me. What's interesting to me is that these names of these, you know, these stocks of these pharma companies that did ink this deal with the president just today, all traded higher despite the fact that they're bringing prices down in line globally.

Why? Why did we see that trade go that way? I think it's because it's an overhang removed for the group that was essentially trading lower ahead of the uncertainty of what would play out. And now that we have the certainty, you can price it accordingly as needed for these companies. And also, in some cases, by bringing XU.S prices in line with U.S. prices, there's added upside for some of the revenue potential here. Are we going to see more of these types of deals get struck? Because they've been kind of coming out in increments. I believe there's a couple left from the original group that that plan to strike a deal with the administration.

And then we should see that filter down into smaller biotechs and pharma companies. And, you know, we look to seeing all of this playing out on Trump RX as we as we look to 2026. You got reports crossing and continuing to cross even in this hour that RFK is poised to make some changes to the vaccine schedule. for childhood vaccines. You've also had Moderna just today popping up 9% on funding for a bird flu vaccine. How do you navigate that piece of the market? I think there's some uncertainty on the side of the vaccine businesses. We look at a company like Moderna, while they do have a respiratory vaccine business, they also have a cancer vaccine business, and we'll look to some of that play out next year. But I think we are, you know, what we really have right now,

in biopharma is we had a trifecta that played out. We had after almost three years of negative earnings revisions that stabilized of anything you're starting to see potential upside for this group as you had to 2026. You also had the drug pricing overhang, which now with these agreements being signed with the Trump administration, you know, allows these companies to kind of work

because you understand, you have certainty around their business models. And we've had a bit of a rotation away from the dominant AI trade. And so as we look to these companies, they can now start to, A, work around their business models for 2026. But I think also we will see a second derivative trade, which is that of M&A that plays out broadly for the group. And, you know, while I think, as you just pointed out, we still kind of don't fully understand how certain parts of the regulatory framework may work, maybe with regard to vaccines. I think that have been somewhat appreciated in the stocks of some

these companies. All right. So in light of all of that, what are your picks for 2026? So in the large cap side, I think we're looking at Amgen and Regeneron here to have upside on numbers, but the laggard trade on the large cap side would be biogen. And on the smid cap side, we're watching some of the innovation trades, but even more broadly, and we're looking at cardiovascular disease to the evolution of the obesity trade, as well as the evolution of I and I and obviously M&A to be some of the big themes that play out next year as well as as cancer. Cancer is going to be a key focus. Okay, Salvin Richter, thanks for joining us.

Great. Thank you for having me. Coming up, we'll hear from someone who thinks the most significant market catalysts in the first quarter of 2026 could be avocado and garlic. Plus, investors slamming the brakes on Lyft today. Wedbush downgrading the ride chair company to underperform from Mutual, cut its price target from $20 down to $16, The analyst there believes lift is the most at risk of the autonomous vehicles disrupting its business model.

Overtime, we'll be right back. Welcome back to overtime. We've been sailing rough seas lately. A carnival helping buoy cruise stocks today after beating profit estimates issuing stronger than expected full-year guidance. Company's CEO saying bookings are at historically high prices in Europe and North America. As you can see right there on your screen, Norwegian, and Royal Caribbean, both trading higher in sympathy. Yeah, and CNBC today unveiling its second and. annual official college sports valuations.

Topping the list, University of Texas at Austin worth nearly $1.5 billion up 16% over last year. That took the crown from the Ohio State University, the runner up this time. Texas A&M, Georgia, Michigan, rounding out the top five. CNBC ranks the top 75 athletic programs in the country. Their combined worth this year is $51.22 billion. It's up 13%. And coming up on fast money in just 10 minutes, they're five. Following the big money in college athletics with sports attorney Jason Belser, publisher of athletic director, you.

Up next, we will break down all of the big economic data out next week because there is some economic data next week and which ones could potentially move the market. And don't forget, you can catch us on the go by following the closing bell overtime podcast on your favorite podcast app. We'll be right back. Let's get you set up with next week's holiday shortened training week. There are no earnings on the calendar, but there are some key. economic reports he needs to know about. On Tuesday, we will get the first reading of third quarter GDP as well as the latest durable goods and industrial production reports. On Wednesday, we get an abbreviated trading day for Christmas Eve, but investors will be waiting for the

weekly jobless claims report as well. And make sure to tune into a special Christmas Eve edition of closing bell overtime. That kicks off Wednesday at 1 p.m. Eastern. And now let's unwrap what to watch in the next two weeks into January. And avocado and garlic are terms you need to remember. Joining us now, Adam Chrysafouli, vital knowledge, founder, and president. Adam, we're not making guacamole here. It's AI.

Yes. AI, you know, is still the most important theme trend in this market. And so garlic and avocado are the two frontier LLM models that are due out around Q1. For Open AI, it's garlic and meta's

avocado. And this is really going to be probably the next major event for the entire industry, which is why they're going to be so crucial. What about the factor of whether that expected tax-related stimulus, in effect, continues to drive consumer activity? Yeah, that's also going to be very important to watch. You know, tax refunds are going to be very large next year, just giving them withholding schedules for this year.

We're not adjusted for the one big, beautiful bill, and that should provide a tail-in for the consumer. And, you know, also, we're also going to get some incremental Fed stimulus in Q1, probably one more rate cut, along with ongoing asset purchases of T-bills, which had been. help keep at least the short end of the yield, yields at the short end of the curve suppressed. So that stimulus will be important also, definitely. Yeah, how do you weigh that coming out of the Fed versus what we're seeing from some of the other major central banks, including, by the way, Bank of Japan just earlier today?

Yeah, definitely you're going to see monetary policy globally will be less devish next year than it was this year. So the Fed is probably going to be cutting fewer times in 20206 than 2025. ECB is probably finished with their easing cycle. The BEOE, the cut this week had some hawkish components to it. And like you said, the BOJ is in tightening mode. They probably do at least one more hike next year. So monetary policy globally will not be as supportive as it was this year, but there still will be a monetary tailwind for the market and for the economy.

Much nearer term here, Santa Claus rally kicks off in earnest on Christmas Eve. We know typically this time of year tends to be seasonally very strong. Your expectations here in the final trading days of 2025? Yeah, I think this week ended on a positive note. You know, I really think probably if there's one event this week that drove the markets more than anything, it was Micron, which really helped tech. You know, tech had a couple of rocky earnings reports with Broadcom and Oracle. The space traded very poorly at the start of this week. That all turned around, you know, largely because of micron.

So it's likely that will continue at least the next week and a half. You know, it's given that we don't really have a lot of major events on the calendar. We're in a seasonally favorable period of the year. And so I suspect you're probably going to see. will be so Thursday and Friday continue. Tell me how you think the whole facts versus feelings debate in the economy has evolved over 2025. For a while, we're saying people were feeling really bad, but the numbers look pretty good. Now it seems more to me, people are feeling bad. And for the working class, the numbers are starting to look not so great. And we've got this

case-shaped economy question. What needs to be resolved in 26 to determine how the market it handles it. Yeah, I mean, definitely, I think, you know, that's been a huge trend this year and it likely will continue. You know, I think some of the affordability challenges in 2026 might ease, you know, housing is likely to be a major source of disinflationary pressure in 2026. I think employment is really going to be the major wild card. You know, companies have been relatively sanguine as far as margins and their own outlook,

but a big part of their margin outperformance is the fact that they are not adding to headcount. you know, AI is probably contributing a little bit to that at the margin, but I think employment's going to be the real kind of wild part. So I think the narrative will flip in 2026. This year was all about affordability and inflation. I think in 2020, I'm sorry, in 2026, it's going to be very much employment dominating as you see kind of the unemployment rate. Free Pire, and like you said, within the unemployment rate, you know, more vulnerable part of the economy are probably going to experience more job stress. Adam, I just want to go back to this AI trade for a moment because some of the names that have been hit the hardest in recent weeks like core we for example have

also all of a sudden been spring loaded to move higher more dramatically more quickly into the end of the year core we've i mean 23 almost percent moved today just on an announcement that it's joined the u.s department of energy's genesis mission how to think about what we've seen in terms of the pullback and the resetting of that trade yeah i think um you know i think the a i trade is going to stay fractured. So we kind of have these two camps emerging of Google and Open AI. And I think in the last couple of days, you've seen the Open AI camp rebound. A Corwave is probably the most important, followed by Oracle. Both those stocks had very large rebounds today, although they have experienced a lot of pressure earlier in the month. So, you know,

I think you probably could see a little bit more of a relief rally in those names. But again, those big model release, HG1 will be crucial. All right. Adam Krista Fooley. Great to speak with you. Thank you. With an update for the major averages, that does it press here at overtime.