Closing Bell - Closing Bell Overtime: Fed Decision, Oracle Earnings Loom 12/9/25

Episode Date: December 9, 2025

Steve Sosnick, Chief Strategist at Interactive Brokers, and Brij Khurana, Fixed Income Portfolio Manager at Wellington Management, break down cross-asset signals and rate expectations. Earnings include AeroVironment and key retail and consumer names including Casey’s General Stores, GameStop, Dave & Buster’s and Cracker Barrel. Patrick Moorhead, Chief Analyst at Moor Insights, dives into Nvidia and the AI trade. Ben Silverman, Chairman and Co-CEO of Propagate Content, unpacks the Warner Bros. battle between Paramount and Netflix. Northrop Grumman CEO Kathy Warden weighs in on defense spending and growing competition. Braze CEO Bill Magnuson talks the latest quarter.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Well, that's the end of regulation. Remitly ringing the closing bell at the New York Stock Exchange. And Atlantic Union doing the honors at the NASDAQ. It was a mixed day for the markets. As you can see right there on your screen with the Dow, down about 150 points. The S&P finishing basically flat and the NASDAQ with a fractional gain. But the real standout here was the Russell 2000.

Jumping to an all-time high today, it's the first new high in nearly two months. Smaller cab retail names like Abercrombie Gap, American Eagle were the big gainers there on the S&P 500 today energy the top sector that was led in part by Exxon with some news out of that company today that even as oil and that gas fell gold and silver higher today a new record for silver above 60 bucks an ounce also big gains for cryptocurrencies ether up 6% in this market and that's a scorecard on wall street but winners stay late welcome the closing bell overtime I'm john ford alongside morgan brennan

and as always on overtime we are on earnings watch today we're going to hear from Air Environment, Casey's General Stores, and GameStop, also get you ready for tomorrow's Big After the Bell Report, Oracle. And we will also hear from the CEO of Northrop Grumman on how defense contracting is changing what it means for the maker of the B-21 bomber. Plus Ben Silverman on the Netflix Warner Bros. Discovery deal. We've heard a lot of concern about potential negative impacts who could actually benefit. And let's get straight to the markets.

Invidia falling despite getting approval to sell its H-200 chips to China. Christina Parts Nevelas is at the NASDAQ with all the latest for us. Hi, Christina. Hi, I'll start with tech since you mentioned Nvidia, but there's been no big directional moves today as the market really waits for Wednesday's Fed decision and some key AI events this week. Oracle earnings tomorrow, Broadcom earnings Thursday, and this new Open AI model as well. Speaking of Broadcom, Broadcom's historically avoided positioning itself as a direct

Nvidia rival, but CEO Hawk Tan got a little bit more aggressive last earnings in September saying custom chips would progressively take share from Nvidia, GPUs. I bring that up because Thursday's report could be a catalyst for NVIDIA stock, which, by the way, you can see close barely in the red today, but lower, despite getting the green light from President Trump to ship more advanced chips to China. Speaking of China, ASML fell after a Dutch media outlet alleged at least one of its customers has links to the Chinese military. Sticking with tech, Google, closing at least 1% higher after winning a defense contract, the Pentagon chose Alphabet's Gemini model to deliver AI

capabilities to roughly 3 million civilian and military employees. Outside of tech, private equity names like Apollo, KKR, Blackstone, F performed after Jeffrey said fundamentals are improving with increased capital market activity and risk-on sentiment. But within financials, J.P. Morgan, really, closing in the red about four and a half percent lower after saying it expects expenses to climb to about $105 billion in 2026. Those comments came from a Goldman Sachs conference. John? Well, yeah, a lot going on. All right. Now to the bond market as yields continue to rise ahead of Toronto's Fed rate decision expected to be a cut. Rick Santelli is in Chicago. Rick, what's it mean?

Well, I'll tell you, if you look at a two-week chart of tens, John, you can clearly see. That hooks in the last day of November. December's just an uphill fight. Interest rates are moving higher. Now, we always look at the December of this year contract for Fed Fund Futures, and, of course, the meeting for tomorrow, pretty much fully baked. in the K-quarter point cut. But let's take a big view. Let's look at December of 26.

That's December of 26 Fed Fund Futures. And it is going down. And when it goes down, it is taking out the intensity and number of eases. Don't get caught up on how many, but look at the direction. Now, let's open that chart up. And if you look at the big picture, it's ready to close at the lowest level since the end of July. We'll call that more than four months. Now toss in tens, and you can, A, see the negative correlation there, but more importantly,

the big down-moving Fed fund futures and the big up-moving yields. This is sending a message that we can all talk about what the Fed's going to do, how it'll affect the short end. But ultimately, the long-end stickiness, and should it close it, 418 or a higher yield in tens, that would be a three-month high-yield close going back to the first couple of days of the first couple of days. September. Morgan, back to you. All right, we'll be watching. Rick Santelli, thank you. The S&P 500 is about 1% from a record high as investors price, uh, price the possibility or a bet, I should say, on a rate cut tomorrow. But one of our next guests sees the S&P 500 falling next year with a target of 6,500 joining us now, Steve Saznick, chief strategist at Interactive Brokers and Bridge

Corona, Wellington Management, Fixed Income Portfolio Manager. Great to have you both here. On sets, we have a full house. I'm going to start right there with you because you are a bit out of consensus here with what you expect for stocks next year. How much of this does hinge on what we are seeing right now in the bond market and as we do away to Fed decision? A lot of it, Morgan. And part of it is because my target for the 10 years around 445. And the reason I say that is I think we're going to move away a little bit from being concerned about inflation at the Fed level. And that will cause inflationary expectations to rise. At the same time, there's a lot of tricky precedents

that happened in the mid-year election cycle. The last two of them have been actually, the last two bear markets we've had in 15 years, we're in 2022 and 2018. Also, there's this uncanny coincidence that a new Fed chair tends to get a test early in his or her term. And so we have this confluence of the tricky second year presidential cycle coinciding

with a new Fed chair and one who is probably going to pay less attention to inflationary expectations at the expense of lower short-term rates, as Rick was alluding to, that's all getting priced in. And that's where I see a little bit of a possibility of a pullback. And just part of it is I'm a natural contrarian. Bridge, want to get your thoughts on this, especially since you're the fixed income strategist here at the table. What's the bond market telling us and where are we headed here? Yeah, I think today's price action is actually quite interesting in that you had long end yields staying relatively unchanged,

but then the front end yields are moving higher, as Rick was talking about. And I think there is this recognition that growth in the first half of next year is going to be quite strong. You have the fiscal stimulus from the one big, beautiful bill coming in. You know, you have less tariff headwinds that we had for most of this year. And I think the bond market's dealing with the fact that we may not get as many cuts. You know, I think they're going to cut tomorrow. But I think the Fed could even indicate, you know, tomorrow's meeting that they're not going to cut at all for next year. And so I think it's a very tricky environment next year where the first half of the year is very strong.

But then the second half of the year, to Steve's point, you're going to be dealing with an election. And what comes up, we do see a change in the House, is going to be fiscal contraction in 27 and 28. And so when is the market going to front run those expectations? That's going to be tricky to time that. But I do think it could be the next year will be the year of two halves, almost strong growth, stronger inflation in the first half, and then we're talking about weaker growth and almost disinflation in the second half. When does the baton handoff happen between the first half and the second half based on what either companies are guiding or what economic indicators are indicating or perhaps even what polls might

show about how the midterms are likely to shape off. That's really, it's sort of going to be a process. You know, it's not going to, I wish I could say, you know, wake up on March 1st and this is all going to happen. I wish you could tell you. Now, I will say February 18 when we came into a situation like this, there was Valmageddon in 2018, which is one of the things that as a long-term option trader, I can't get out of my head. But we have basically the situation where, you know, I want to hear what the big, what the Mag 7 and friends say, you know, starting this week, but really in January in terms of what their outlook is going to be about spending. Do we start to continue to see investors more concerned about return on investment than just the fact that they're in that companies are investing in AI?

The JP Morgan News, actually, their expenses are going up. I thought they're supposed to be getting more efficient from all this. So there are some issues here, and I think that's kind of the push-pull. And I think, you know, the timing of that, I wish I could sort of put a number on it. I think it's going to be a process, not necessarily a flip of the switch. Bridge, if you think you can feel free. But I'll ask you, the intensity and number of ease is being in question for 2026 is a bit odd to me. Because, I mean, if we assume that President Trump gets the Fed chair he wants and it's cuts no matter what, does that potentially backfire?

Well, I mean, I think it does in terms of higher inflation expectations. but the market's already pricing in a very doveish Fed. So I think it's already pricing in Kevin Hassett. You have the Fed getting down to 3% or a little bit above that by the end of next year. And what's been striking to me is the comparison to the rest of the world. So if you look at countries outside the U.S., most of the cutting cycle is already done. And now the market, if you go to countries like Australia and New Zealand, is pricing in almost 100 basis points of hikes.

And so this is a very weird environment where the U.S. is actually projecting further cuts, the rest of the world is projecting hikes now, and yet the dollar has been relatively stable. And so I think that's where, you know, I'm not sure how that's going to play out. It could be that the U.S. just catches up to the rest of the world, but it really seems if that is actually what happens, it's probably a weaker dollar environment. All right. Bridge, thank you. Steve. Thank you as well. Thank you. Well, we've got a news alert on G.E. Vernova. Sima Modi has it. Sima. John, G.E. Vernova kicking off its investor day by revising its financial targets to the upside. announcing a bigger dividend and increasing its share buyback to $10 billion from $6 billion.

First of the forecast, 2025 revenue guidance trending higher and even looking to 2028. The company is projecting margins of 20%, which is up from the prior target of 14% and higher than Wall Street consensus. As demand continues to rise for gas power, and the company says that it did sign 18 gigawatts of gas turbine contract so far this quarter. Shares of GE-Vernova popping here and after hours, and they've been on a tear this year as the company emerges as a key player in the build-out of energy equipment needed to run and build data centers working with every hyperscaler across the market, even open AI. CEO Scott Strazik telling me that GE-Ronova is well positioned with the company's large install base and platform of advanced solutions to serve this growing long cycle market. He will join CNBC's squawk on the street tomorrow morning. stock up 4%. All right. Powering higher. Simomodi. Thank you. Air environment earnings are out. Meant time. The military drone maker missing on EPS coming in at 44 cents per share. That's versus

estimates of 78 cents per share. Revenue beating the street though. 473 million. That was a record for the quarter versus expectations of 468 million. The company raising the lower end of full year revenue guidance. Air environment posting record second quarter contract awards, bookings of $1.4 billion, funded backlog of $1.1 billion, an unfunded backlog of $2.8 billion. Those shares, though, under pressure down about 2.5% right now, largely because of that profitability miss and what that means for forecasts as well. Don't miss Jim Kramer's exclusive interview with Air Environment's CEO, Waheed Nawabi. That's coming up at 6 p.m. Eastern on Mad Money.

Coming up, Nvidia gets approval to sell its chips to China. We'll look at all the hurdles still left to jump in this kind of. complicated, highly political environment and why the stock fell today. And shares on Netflix. Those are down for the fifth straight session as it wins Warner Brothers. For now, if the markets don't like this deal for Netflix, who actually will benefit? There's a lot to dig into right there. Overtime is back in two.

Welcome back to overtime. Chinese tech stocks getting hit today. The K-Web BTF having its worst day in nearly a month. down about 1%. Baidu and Alibaba were among the names falling the most. The concern here seems to be that Nvidia chips are superior to Chinese made ones. If, big if, they are allowed to be imported, it would hurt Chinese chip makers. That's leading to a broader sell-off beyond just the chip companies when you look at China Tech ecosystem as well.

Yeah, and as for NVIDIA, the stock initially popped yesterday on that decision to let the company sell its H-200 chips to approve customers in China. as part of the decision the U.S. government will get 25% of the sales. Today, the stock is down about a third of a percent. Could this decision backfire and help China in the AI race? Let's bring in more insight in strategy CEO, Patrick Moorhead. Pat, these ships are a couple years old, a generation two, depending on whether you're counting what's about to come out or not. Is this about securing NVIDIA and American technology space, place in the global,

AI ecosystem, or does it perhaps end up accelerating China? So, John, I've been pretty clear on this and consistent. We need to sell as much technology that cannot create the best frontier models out there. We need to export our technology to do this. And I do think that it's a net positive for the U.S., because these aren't powerful enough to build the next generation of models. that need to be out there, and it keeps Chinese developers on Kuda. And that's good for the United States overall, particularly if you look at where

Huawei technology is typically exported to places like South Asia, places like Latin America, where strategically it's better to have U.S. technology there than Huawei technology. Our smartphones and electric cars, in a way, a cautionary tale here, and I know AI is way different. But if you look at Europe and Android's presence there, and even Chinese OEM Android presence there, it's pretty strong. And then electric cars, there are a lot of Chinese electric cars flooding the European market. I mean, if the U.S. isn't aggressive enough about making its technology available, could that be the AI landscape 15 years from now? Yeah, could, John. I'm glad you brought up Western Europe because for the telco space, that was a

big battleground. And what ended up happening is the EU decided that having Huawei telco infrastructure was not a very good idea, particularly when the U.S. was considering not sharing any secrets with the EU, which impacted the potential for its security. And I think we'll wind up in a very similar place here, John, particularly in Western Europe. I think the Eastern Europe, South Asia and Latin America, are really the areas of concern where Lenovo's very strong with its built and road initiative with China, big investments being made, even up to an end of Africa. Yeah.

And in some ways, it speaks to the national security strategy was just released last week in this idea that the U.S. is now prioritizing, more securing of the U.S. homeland and the Western Hemisphere in a way that we haven't seen, quite frankly, in many, many years. It all gets to this idea of this intersection of industrial policy, even tech policy, and national security. So the idea that NVIDIA could potentially be selling these chips to China, but the U.S. government would be taking a stake of whatever sale happens here. Do you expect we're going to see more of that with other semiconductor makers? I think we will.

I think we will absolutely see this with AMD if it's not a done deal already. And then when Intel gets its accelerator out in 26 or 26. we're going to see the same thing. I can't say I understand the math or exactly why they're doing it. It seems like somewhat of a reverse tariff. I can talk myself into thinking that the extra 25% is required to be able to track where those GPUs are going and who's using it and what they're using them for, but there's absolutely no information on that.

And I do think it's a little bit odd. Well, Patrick Moorhead, great to have you on. Thanks for joining us. Thank you. Coming up, check out ether. The cryptocurrency is up 6% today. It's nearly 20% gains in just the past week. Is a risk on appetite coming back to the market.

Makes me think of curious, George. Plus, this mystery stock jumping nearly 10% today, the name and the news behind the move coming up on overtime. Welcome back. Here's the mystery stock that we showed you right before the break. It's Aries Management, rising today, finishing up more than 7%. On news that the stock will be added to the S&P 500, it's replacing Kellenova, which is being taken private by Mars, Inc. Aries was passed over in a round of index changes on Friday, but the news of its inclusion came out last night, giving the stock, as you can see right there, a boost today. Yeah, a few key market signals suggested investors are embracing risk. here and betting on acceleration. Question now is that a fleeting flurry or the start of something

more durable? Senior market commentator Mike Santoli taking a closer look, Mike. Yeah, John, trying to make that so that we get the sick of golf turn. First though, let's look at the unusual situation where the very largest stocks in the market, that's the XLG, the largest 50 stocks among U.S. equities, is tracking very closely to the very smallest. IWC is the microcap index ETF. So to me, that means utter faith in the big AI theme, the Mag 7 type stocks, at least on balance, as well as some of the others like Broadcom that are just as big but not technically in that cohort, and a little bit of low-quality speculative stuff that might float on a high liquidity, higher growth environment. What's not really working is an equal-weighted version of the Russell

1000, which is essentially just the median stock in the market, and mid-caps. So clearly still a bifurcated market, sort of an idiosyncratic leadership profile. Now, about that acceleration, you can see it here in the two-year chart of the transport sector, as well as community banks. That's an ETF that tracks smaller community banks. This right here, that's the post-election 2024 year-end rally. Everybody said reflation, we're going to run it hot, growth-friendly policies, all the rest of it. Big gut check in tariff panic. And now trying to break out to those highs from late last year.

Today, he had a little bit of a setback with those negative comments from JP Morgan's CFO as well as just, a little bit of profit taking in transports and other cyclicals, but still trying to get back on the beam there. And then finally, silver, another super strong day today, whether that's a liquidity play, a speculative play. You know, we always call it poor man's gold relative to Bitcoin. You know, these were tracking for a while, and then we've talked about how, you know, you've seen this rotation. Bitcoin sort of broke as the very leading edge of risk appetites in the short term, whereas silver is still ripping at this point. So we'll see if these guys can. come to some agreement down the road.

Seems like the trend's not your friend, or at least the bandwagon isn't, because there are all these points of, you know, disconnection and then crossing again in just about every one of those charts you showed us. It's the way it goes. I mean, markets are kind of beguiling that way, and the old phrase is the trend is your friend until it bends at the end, which doesn't really help you in the moment. But it does show you that momentum is persistent, but obviously they're also going to, you know, be gut checks and trend reversals along the way. So, yeah, I do think I like to take the message

from investors' effort to price in a reacceleration in the economy and maybe a kind of a higher metabolism capital markets into next year, but that's going to have to be tested those premise as well. All right. Mike Santoli. We'll see a little bit later this hour. Thank you. It's time now for a CNBC News update with Kate Rogers. Kate. Morgan, the Education Department officially ended former President Joe Biden's Save Student Loan repayment plan today, leaving about seven. million borrowers needing to switch to another program. The move comes under a proposed settlement with the state of Missouri that still needs court approval and bars the department

from enrolling new borrowers in SAVE or approving pending applications. Senator Bernie Sanders and Democrats on the Senate's Health, Education, Labor and Pensions Committee are urging Chairman Bill Cassidy to hold an oversight hearing with Health Secretary Robert F. Kennedy, Jr. The demand comes after a CDC advisory panel assembled by Kennedy voted last week to change a recommendation that all newborns receive a hepatitis B vaccine at birth. And philanthropist McKenzie Scott revealed today she donated $7.1 billion in 2025. Her largest disclosed gift was $90 million to forest people climate. That's a group working to stop deforestation. Bloomberg estimates her net worth at about $40 billion largely from

Amazon chair she receives in her 2019 divorce from Jeff Bezos. Back over to you, Morgan. All right. Kate Rogers, thank you. Coming up, we'll get you ready for tomorrow's Fed decision. A cut is expected, but will it be a hawkish cut or Dutch cut? And first, the former chair of Universal Studios is going to join us to mold the Warner Brothers deal, Netflix or Paramount, which is better for the industry and for the consumer, Ben Silverman, joining us next. Welcome back to overtime. We had a mixed day on Wall Street. The Dow losing 179 points, a small loss for the S&P 500, the NASDAG managing a gain. The Russell 2000 closing at a record high. The 10-year yield up to 4.18%, even though markets are expecting a rate cut tomorrow. G. Evernova rising in overtime, raising its earnings guidance, also increasing its dividend and its share buyback program. And cracker bar barrel fall in as it deals what it calls unique. and ongoing headwinds. The company posted a loss of 74 cents a share, missing on total

revenue and on same store sales. What a year. The stock has lost more than half its value since that day in August when it announced a new logo, leaving it with a market cap around $600 million. Yeah, talk about a story there. Netflix is down five days in a row. It's hitting its lowest level since April. As Wall Street continues to express concerns over the company's takeover of Warner Brothers. Needham's Laura Martin out with a note saying Netflix loses if it wins, especially in a Gen A.I. future. But joining us now is Ben Silverman from Propagate Content. And Ben, it's always great to have you on the show. So I'm going to start right there. How do you see this deal? Well, I think there's some parallels to the Fox sale to Disney and then the sky sale to

Comcast in the way that two bidders are looking at the asset in different ways. I do think there's a lot of value that Netflix can extract out of Warner Brothers well beyond the scale they're going to add to their already amazing offering at Netflix. And I think people aren't talking about that. The fact that there's an unbelievable historical merchandising, licensing, exploitation machinery in the old studios that knows how to take a Harry Potter and turn it into a theme park ride, turn it into a comic book, make TV series, make movies, all the things that Netflix has lacked from having its own internal franchise engine,

it could really gain, both in terms of the intellectual sense, that comes with those executives, but also the assets that have been built over a hundred years of premium storytelling inside Warner Brothers. So I think there's a lot more opportunity than just the story about scale and streaming that seems to be dominating the Netflix conversation. What do you think about it from a content creator standpoint? Because this is going to leave fewer bidders in the marketplace, however it ultimately shakes out here. That in turn could also mean less content spend moving forward over the longer term. I have a really adult way to say it. It sucks. This further consolidation, the further diminishing a voice, the lack of independent voice in the modern American media ecosystem is incredibly disturbing to me.

You know, there is no way for alternative voices to make their way through this system. And it is deeply concerning. And I think it's going to require some government oversight and some involvement so that we ensure. there's a plurality of stories being told and a plurality of voices making their way through these systems. And so that we're not just, you know, having every piece of content for you decided by one person at the end of the day who's running a company with the scale that this will have. I also think, you know, Warner Brothers has been in a belt tightening, cutting process for years. So it's not like they've been a very aggressive buyer in the marketplace. They've been, in fact, I think, you know, cutting and cutting and cutting. So they haven't been that robust. So the goal and hope would be that this kind of brings them back in some way.

But I'm more concerned that this amount of scale and pressure that can be placed both financially on the suppliers, as well in terms of the diversity of voice and ideas that will come through a system of that scale is very disturbing to the Hollywood community. Back to the potential in this deal, though. One angle that I haven't perhaps seen yet, I haven't seen everything, is that this for Netflix could be like the equivalent of Disney buying Pixar and Disney buying Lucasfilm. Because, I mean, you got Batman for the rated R movies, you got Harry Potter in the middle, you got Looney Tunes at the bottom. Arguably, we haven't seen enough of Looney Tunes over the past couple decades.

But this gives them the potential to do parks down the line. It gives them this level of cultural mythology that has alluded them up to this point, even though they've built some nice little shows and franchises, no? I can't agree more. I think that is totally being overlooked, and I think you've nailed a massive piece of upside here. It also gives them a team of people who know how to take the assets they've created, i.e. like a stranger thing, and put that through the same machinery, the machinery that sells programs around the world, but also makes T-shirts and hats.

knows how to license books and knows how to license toys and knows how to create theme parks and alternative revenue streams. And I think that is going to be so much cash and value unlocked for Netflix through what's inside Warner Brothers. And unlike Warner Brothers itself, Netflix will be able to invest in that content. They'll be able to greenlight the series that haven't been greenlit. They'll be able to go invest in those titles and those properties. And I think, you know, as I look at this, It looks to me like it's going to kind of fall out if this acquisition actually goes through and somehow passes regulatory muster. You're going to have Amazon with this massive breadth of third-party apps running through its system

being a kind of version of the modern cable ecosystem and television. You're going to have YouTube with its own kind of cable offering plus user-generated. And you'll have Netflix with Warner's. And I think we're going to have this very, these three are going to become stronger and stronger and in a weird way, Disney will end up probably becoming dependent on YouTube and Amazon for its survival. All right, Ben Silverman. Thank you for joining us. Up next, the CEO of Defense Contractor, North of Grumman, on how the outlook for defense spending and changing technologies are impacting the company and the entire industry.

And check out shares of AutoZone. It's the worst performer in the S&P 500 today, posting its largest decline in more than three years, down 7%. the auto parts retailer missing Wall Street's profit and revenue estimates in large part because of higher costs from tariffs. Overtime, we'll be right back. Welcome back to Overtime. It is rough seas for shares of Norwegian cruise line today. Goldman Sachs downgrading the stock from Biden neutral and trimming its price target from $23 to $21, citing an over exposure to the Caribbean market. Meanwhile, it's smooth sailing for Viking, though many of them historically were Norwegian.

Goldman upgrading it from neutral to buy and hiking its price target from 66 to 78 bucks a share, thanks to its higher income passengers, helping it stay afloat in the current cruise market weakness. Afloat. I sat down exclusively with Northrop Grumman Chair and CEO Kathy Warden at the Riga National Defense Forum. This is the largest national security conference of the year. shares the company that builds the B-21 bomber and sentinel ICBMs have kept pace with a broader S&P this year, but have taken a breather over the past two months, losing 13% after touching a high. The U.S. strategy regarding national security is shifting.

So, too, is the way the Pentagon is acquiring weapons systems and contracting with companies to modernize the military. So I asked, Warden, what it means for Northrop Grumman. We are up to the challenge. We very much embrace the country. concepts that are outlined in acquisition reform, we have been working to create projects that are focused specifically on taking a concept, getting it through a design and development phase into production and speed and affordability are our key premises along with technical capability. And it's that kind of focus within our company that is directly responsive to

the objectives of acquisition reform. So what are some examples of that? We just this week announced Project Tallinn, and that's an autonomous system that leverages many years of experience that our company has and now focuses that experience with over 500,000 flying hours on autonomous systems into a project that is focused to get capability fielded in less than 24 months. And usually these projects are many years in coordination with the U.S. government. We did this on our investment.

as a demonstration of how quickly we can move. And it's not just about streamlining the design process. It's about building a design that can be quickly manufactured and scaled, because we know that mass and getting high levels of capacity in place so that we can produce that scale is important for the deterrent. How does that speak to what we're seeing overall in terms of this evolving defense ecosystem and landscape and new technologies, also new entrants coming into the fold,

and this ability to move more quickly and more innovatively. There certainly is a perception that small companies have an advantage of moving fast. And we're demonstrating that it doesn't matter the size of your company. You can move fast if you have intent and you streamline the processes that allow you to do that. And so in our company that's what we're doing. And our engineers are very excited about this work. They want to be able to demonstrate that they don't just focus on airworthiness of an air craft, but they can do that and focus on getting capacity delivered quickly and on point

for our war fighters. Golden Dome, another big focus as well, coming into this conference and this year in general, huge opportunity. I have many conversations with many different companies about what that could look like. What does it mean for North of Brumman? We realize that Golden Dome is an important way of putting in place the homeland security infrastructure that we need to defend our nation against incoming threats. and that's threats of many forms.

So this isn't a simple system with one set of technologies. It will be a complex system of integrated technologies. And we see many capabilities already existing today that can be deployed into that architecture. And then, of course, there are some areas where there will need to be new capabilities developed and we're already starting to work on those as well. We're waiting on an NDAA.

So this is the defense policy legislation. and what that's going to mean in terms of top line for defense spending here in the U.S. from Congress. But whether it is stateside or whether it's internationally and globally, it does seem defense spending and money going to military capabilities continues to grow. What does that mean for Northrop? Well, this is a very exciting time to be in defense for that reason. We are seeing significant top line increases not just within the United States, but many of our allied partners are also committing to increasing their spending.

on national security, and that's resulting in more opportunity for us to partner around the globe and create economies of scale. These weapons systems get less expensive with a higher quantity and the partnerships that the U.S. is creating with our allies and the combination of reforming how we do foreign military sales allows us to deliver faster and more affordably across the globe. So we see this as a really unique time. It's the intersection of strong demand and willingness and openness and openness to go together with our partners and operate differently so that we can deliver. So after taping this interview, the NDAA, that defense policy bill, was released.

Top line, according to this bill, it's about $8 billion more than the $892.6 billion that the president had requested back in May. It's set to be voted on this week, but then we have to do appropriations and actually see what the final. top line is. Among the many items in legislation, though, Congress funding the Navy's 6th-gen fighter jet program, or at least establishing a plan to fund it. This is known as F-A-XX. It's a massive competition currently puts Northrop against Boeing, and the Pentagon had put those plans on hold previously, or at least had intended to. So this is going to be one of those competitions to watch, especially as we do head into 2026. All right. Well, up next, Fast Money's Guy, Dami, on how to trade Oracle shares ahead of its earnings and overtime.

tomorrow. And check out shares of digital marketing platform Braes, surging 7.5% on earnings here. The company matching on EPS, beating on revenue, $191 million versus estimates of 184, raising guidance as well. The company also beating on subscription revenue. Total customers coming in a little light. I spoke with the co-founder and CEO Bill Magnuson earlier about what's driving the growth. What you're seeing in the numbers today is the culmination of a lot of proactive efforts over the last six to eight quarters to adapt to a new demand environment and really invest a lot in customer health, product health, you know, working through customer completion milestones, very comprehensively encouraging consumption and new customer growth. And then that combined with a lot of the excitement in the product roadmap from the last year, primarily driven by Bray's AI. Welcome back to overtime. Let's get you set up with tomorrow's trade today.

The main event on tomorrow's calendar is the Fed's interest rate decision. Wall Street is expecting J. Pal and Co. To cut rates by 25 basis points, but there are also some key earnings to keep an eye out for, including Oracle, Adobe Synopsis, Vail resorts as well, which will report earnings during overtime. Chewy will release numbers before. the bell. And the market is saying it's a 90% chance. We get a rate cut at tomorrow's Fed meeting. But what kind? We'll have to listen closely to Chair Powell's comments for clues on the future cuts and the balance sheet. Joining us now is fast money trader Guy Adami, co-founder

of Risk Reversal Media. Guy, good to see you. What are you listening for from Powell, assuming, I mean, 90% hey, that we get the cut. Well, it's amazing and thank you. Hello, Morgan. And hello, John. Thanks for having me, as always. It's amazing that at one point over the last three weeks, we got down to a 35% chance of a rate cut tomorrow. And I didn't know where that came from, but here we are at basically a certainty of it happening. And it will happen. What am I listening for? I mean, is he going to pivot once again? You know what? Although the job market we're concerned about inflation remains problematic, are we going to sort of get back to that inflation as a problem? Because if we get back to that type of language, I don't think the market's going to in turn. that way. And I'll tell you, there's this old, you know, for you sports fans out there, there are people that believe if they put their hat on differently or put it on inside out, they can somehow affect the outcome of a game. That's the same way the Fed affects the outcome of interest rates. I mean, they're going to cut rates tomorrow, but I'm still pretty convinced that the 10-year yield is going higher from here for a myriad of different reasons.

Yeah, sports fans, and also, by the way, space enthusiasts, very similar in terms of some of those. Is that a true thing? Are you just saying that to make me feel good? No, it's a true thing. Okay, so let's move on, Guy, because in addition to the Fed tomorrow, we've got Oracle reporting. It's up 10% in the past week. It's down 21% this quarter. I know some of the folks that watch things like technicals are watching this very closely to see if it continued to recover here. What are you watching? I think it will recover. You know, I went back and listened to and read all the things that came out on September 10th when announced that huge revenue deal,

and the stock obviously traded at levels where, in my opinion, it should have never been because they told us about the revenue. They didn't tell us about the earnings. and I was pretty convinced we'd back and fill and fill in that gap at 255. I did not think it was going below 200. But I think the way the quarter sets up and the way the stock is trading, I think this relief rally that we're seeing is to continue, and I think you will see a bounce somewhere between that 250 and 255 level. And in a number of different ways, that's what makes sense.

It should have never gotten to 3 and a quarter. It should have never gotten below 200. But I think sort of equilibrium for this name is probably around 255, and I think that's where we're headed. Broadcom. It's actually outperformed in Viti a year to date over one year and as of recently, over two years, two, what do you

expect from it? Well, this is a name that collectively we liked here. I can't speak about the others because nobody's here yet. Tim Seymour's getting his hair done. But what I will say, at this valuation, it's really hard to get my arms around. It trades at 40 times next year's numbers. It's a company that's approaching

$2 billion in market cap that's going to do $90 billion and I'm probably being a little magnanimous. in that $90 billion in revenues next year. It's inexpensive stock. Now, maybe it's deservative of that, but they have to say everything right and guide correctly for the stock to continue.

I don't see it happening, and that's not to cast aspersions here on the company. I just think the stock's gotten ahead of itself. By the way, Dan Nathan just walked over and grabbed a handful of candy. I mean, that's what goes on. You guys got to... Hold on.

Got to get into picture. Hi, Dan. Morgan and John say hi. Anyway, she's coming to see us. Oh, by the way, we've got a lot of people. people here, Morgan and John, because Thursday we have this live show. It's ridiculous. A lot of people come in to watch. They obviously want to see Melissa Lee. So we got like nine-tenths of CNBC operations here getting ready for Thursday night's event. Just a little inside baseball. I appreciate that.

Make sure you bring some candy guy. We're all looking forward to it. Guy Adami. Fast money. He just talked about it. We're going to reiterate it. You can catch Guy and the rest of the fast money team at the top of the hour. And they do have this big event coming up too. So stay tuned. Up next, Mike Santoli breaks down what is driving PepsiCo's long-term drastic underperformance versus arch-rival Coca-Cola, whether the stock could be ready for a pop. Welcome back to overtime. Consumer Staples still struggling to regain their defensive shine. Shares of PepsiCo down about half a percent today after the company announced this week that it is restructuring. but investors aren't buying the fizz.

The stock trailing both peers and the broader market. So is this reset enough to shift the narrative? Well, Mike Santoli has the read on what's going flat, Mike. Yes, Morgan. So the broad context is the market doesn't want defensive stocks. It wants consumer staples even less. It wants food and beverage even less than other consumer staples. And PepsiCo has been an underperformer here relative to Coca-Cola.

This is a five-year chart. It's really falling down. It used to be more the preferred name, in part because the exposure to snack foods as opposed to just beverages, was considered a positive and worth the valuation premium. No more. Take a look at how the valuations have diverged between Coke and Pepsi. The forward PE of PepsiCo has really declined. It's actually cheaper than the market.

You did have an activist investor in there. Today's news was a settlement with that investor. And you see they've mostly kind of gone in sync over time. And so now you see maybe convergence is waiting. Also, dividend yielded PepsiCo 3.9 percent. Coke 2.9. I keep pointing out these extremes and divergences because maybe they'll matter. at some point if we start mean reverting. But for now, market doesn't much care.

Yeah. It means it's interesting to look at this chart. I do want to shift gears a little bit with you as well, though, Mike, because we started the hour by noting the fact that Russell 2000 hit a new all-time high today. How much of that is drift day ahead of the Fed and an expected cut? How much of that is something else? I think it's all part of that. Without a doubt, Russell 2000 and it's in tune with the other kind of cyclical and Fed rate cut beneficiaries that have been running. So I do think it's part of that trade. I think a net benefit right now

as opposed to what looked like late last year. They were trying to break out from a multi-year range is that ETF flows into small caps have not been particularly heavy. So in other words, the public is still a little bit skeptical as opposed to last year when everybody jumped in. It was the consensus trade. So maybe that means there's a little more room.

I have been pointing out, though, The Russell 2000 has been outperforming the small cap 600, Russell 2000, not just smaller companies, but kind of less profitable companies, more loss-making companies, therefore riskier and more speculative. So in addition to it being, yeah, we're going to cut rates, maybe the economy does well, it's also a lot of the speculative flows are finding their way into the small caps as well. It's not a negative sign if they're outperforming, but I think that, you know, we have to have a lot more proven by that group because they're not that far above levels. they first reached in November of 2021. See, that's why I always love asking about things like this, Mike, because you always give it context and nuance. It's all in there.

Yeah, we like to pull it out. I need something to do with it, so thanks. Mike Santoli, thank you. And of course, John, that really is the focus tomorrow. It's the FOMC meeting. It's the SEP. It's whether the tone around this cut is hawkish or doveish based on the data we do have of which there's not very much.

But there's also tech on a spectrum of it. You've got Adobe, which is down more than 20% year-to-date. You've got Oracle, which popped and then dropped. And then you got Broadcom, which, as I mentioned, has been outperforming in video over a year-to-date, one year and two. Yeah, and then you also have OpenAI with an expected new reasoning model drop this week. That is it for us here at overtime. Fast money starts now.