Closing Bell - Closing Bell Overtime: Fed Meeting Eve: Retail Bonds Brace for Policy Decision 9/16/25

Episode Date: September 16, 2025

Schwab Asset Management CEO Omar Aguilar and Carson Group Chief Market Strategist Ryan Detrick analyze markets ahead of the crucial Fed meeting. Cowen Senior Retail Analyst Oliver Chen breaks down retail sales data. Wellington Management Fixed Income Portfolio Manager Brij Khurana discusses bond positioning ahead of the Fed decision. Check Point CEO Nadav Zafrir discusses his cybersecurity company's AI acquisition. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

That bell marks the end of regulation. Western Alliance Bank ringing the closing bell at the New York Stock Exchange. So no if you're doing the honors at the NASDAQ. And stocks closing flat to lower today. The S&P 500 and NASDAQ popped to intraday record highs at the open, but fell from those levels and were just slightly lower at the bell. Bond yields flat as well ahead of tomorrow's Fed decision. But gold keeps on shining, hitting another record high, up 10% so far.

November, which is a big move for gold. Oil also rising up nearly 2%. That's up for the sixth time in seven sessions. That's the scorecard on Wall Street, but winter stay late. Welcome to closing bell over time. I'm John Fort. Morgan Brennan is off today. Coming up on the show, we'll get you ready for the stock and bond market impact of tomorrow's Fed meeting. Plus, retail sales higher than expected. U.S. consumers still shopping and eating out. Cowan's Oliver Chen is going to be here, And Checkpoint Software CEO will be here to tell you about his company's deal to increase security for AI. We're also going to hear from the CEO of MongoDB, David Acheria, about his company's newest efforts in AI announced today that stock is up 50% just in the past month. Now let's get more on today's market action with Christina Parts and Nevelas at the NASDAQ.

John, you mentioned markets teasing all-time highs earlier, but just couldn't hold the rally. But have no fear, big tech is here. Tesla surging 25% this month alone, helped by a major Elon Musk purchase. You got Oracle jumping over, what, 23% just over the last month. I'm talking month-to-date, so we can change that. And then you also have Google climbing 18% month-to-date, actually outperforming Nvidia for the year. Energy dominated today's sector action with the APA Corp closing up about 8%

Occidental, Devin, Valero, all gaining over 3% or more higher. why, as John mentioned, oil prices did jump today. But on the flip side, utilities fell. I couldn't find a single name in the green in the group. Vistra Energy was actually the lowest, down about 2%. Though context does matter since it just hit an all-time high yesterday. And speaking of all-time highs, we've now seen about five record closes this month with 11 trading days left, including today.

History suggests that's promising, according to bespoke research. In the nine other years, with at least four September. record highs, the S&P 500 finished higher for the remainder of the year eight times with a median gain of 5.4%. Possibly some more to go. John? All right. Christina, thanks. Now let's check on the bond market with Rick Santelli. As yields were slightly lower ahead of this Fed meeting, Rick. Yeah, I'll tell you what, I'm certainly glad I'm not on that Fed board to make the decision tomorrow, considering that we had a very strong retail sales. We had warm CPI.

We had craziness associated with initial jobless claims up, not up. Texas numbers distorted. All of that has to be consolidated and distilled into a decision at one Eastern tomorrow. Let's look at two weeks of a 10-year. And this is really important. Notice the way it's just starting to go sideways. At ICE, they trade an index for volatility called the moves. It's basically at a multi-year low, meaning there's not a lot of volatility.

closed to close to close, there's basically very much consolidation. You can really see it if you start the chart in early September. Now, there's something else going on today, and we get lost a bit in it because interest rates have been moving. Look at that 2s 10 spread. It really underscores. It won seven sessions in a row, the left side, where we were flattening every single session. It's just the last couple of starting to steep it. That might be an early indicator on which direction after the Fed meeting.

on four percent the tenure's going to go that augurs for higher yields and finally the dollar index it's low for the year was it early july you see on the left there but it's not the low anymore it looks as though the dollar index is on pace for the lowest yield close since february or twenty two let's call it three and a half years john back to you all right rick santelli thank you now a lot of optimism around fed rate cuts with the economy still holding up but history shows market reactions can vary very

widely, depending on the backdrop, and a chart we flagged a year ago, might be playing out right on Q. And when you say chart on CNBC, if you're lucky, senior markets commentator, Mike Santoli might appear. Mike. Yes, it's like, you know, you rub the, you know, the lamp and the genie comes out when you say chart. Yeah, the chart being, how does the stock market perform after a rate cut, depending on what the economy does before and after? Basically, if there's no recession involved, either leading up to the Fed rate cut or in the year after the stock market has on average performed very well. That's that blue top line right there. And the orange is the current path. Remember,

one year ago, September of last year, we got the initial rate cut of this cycle. And we were basically talking about this. The decision as to whether, in fact, this is a bullish or bearish sign is, do we hit a recession in the next year? We clearly did not. And the stock market is kind of conforming to that expectation, even with the big gut check in the spring. Now, if there's a recession involved, you see there's further downside, lower returns, all the rest of it. Very wide variation around these averages. You always have to note. And you know, you can't necessarily say that this is a sample size that makes it statistically bulletproof. But I do think that that's the world we're in. What's interesting is a year ago, it was all the debate, are we going

to engineer a soft landing? And now nobody's really talking about that, right? Nobody's really thinking that the economy itself is in any kind of jeopardy, even though the trend growth rate for the first half of this year has been lower than it was in 2024. So, you know, there could be a little bit of surprises, but I feel like it's a very mixed and dissonant flow of data, as Rick was alluding to right there, in terms of, you know, hot versus cold, depending on where you're looking. Mike, I want to go back to that first chart just for a second, because I think you said that we were following the trajectory of that lighter blue line. Yeah. It almost looks also like we're following the trajectory of the darker line, and we're at a moment of decision. That's a very good

point because we did have a severe recession scare in April. I mean, basically the market was pricing in some stagflationary outcome from the tariff shock. So yeah, it's not exactly like decided that in fact we're going to keep going up from you. Of course, we also are looking at a pretty good three-year run that we've been on. And this bull market started essentially October of 2022, right? It was like that was the low. The Fed was tightening. And then we got the AI, you know, kind of spark. And it was also the if, though, that you said about that cut, if there's no recession within a year.

So the clock potentially starts tomorrow if we got what we think we're going to get. But then the question is, how do the numbers turn out for the next four quarters? No, exactly. And I feel like there's a very genuine spirited debate about do we believe the soft jobs numbers are reflective of the underlying trend for the entire economy? or is it somehow overstating the weakness because of supply concerns and the immigration crack down? Or, you know, is it even a lagging indicator? And we've seen, you know, so it's an uneven economy. I think we can say that. $300 billion plus in CAPEX spending this

year alone seems to be swaying certain numbers. And then today's retail sales, I mean, maybe it's all being driven by the high end and by pull forward of demand and by a lot of this lumpiness. But it's something that you have to, you know, essentially have sort of an eye of the beholder type of an approach. Mike, thanks. All right. All right. Well, so what will a rate cut mean for the markets? Will it be a buy-the-rumor, sell the news event? Joining me now is Schwab Asset Manager, CEO Omar Aguilar, and Carson Group, chief market strategist, Ryan Dietrich. Guys, welcome. Happy Tuesday. Omar, we are expecting a quarter-point cut, but underneath that, what are we going to learn tomorrow

that's going to move the market either way? Well, 25 basis points is almost a given. Any other decision will probably end up bringing a lot of volatility to the markets. I think the key messages that the Fed may do afterwards will have to do with what is their measure of inflation. I think the unemployment and the labor market is the one that actually has given us the 25 basis points cut for tomorrow. I think the inflation numbers and their review on how they evaluate the effect on inflation, going forward is what is going to determine the pace of how many cuts they do from here on. And I think the market will be very focused on precisely how they change their dot-plots

and how they change of that trajectory so that they can understand that trade-off between what they see and the economy that seems to be very resilient, but at the same time, you know, their inflation is above their targets. Okay. Ryan, so historically, after cuts at all-time high, stocks move higher. Do you expect that this time? Yeah, John, thanks for me back. We do. I mean, I know you've talked about it all day, and I've shared this too. 20 out of 20 times the stock markets higher a year after a cut within 2% of all time high. That's where we are. But I'm a big message of the markets person. Like, what's the market saying? A year ago right now, the Fed cut 50 basis points. I think we forget that. Everybody told us, oh, my goodness, every time they cut 50, it's a recession. We push back against that in a big way. And as Mike just talked about, now we're up a lot. But what's leading this market, right? You've got consumer discretionary relative to staples hitting new highs. You've got staples relative to.

to the SB 500 hitting new lows, high beta, relative to low beta, hitting new highs. Long story short, the market is telling us, this is still a bull market. It is the second half of September. Everybody's pretty excited about this rate cut. Options markets are pretty, you know, kind of optimistic. Maybe you can get a little bit of a banana peel, sell off on sell the news, but bigger picture, this is still a bull market. We like the fourth quarter rally here.

Okay, so Omar, you mentioned the labor market. Are tariff concerns taking a backseat now for the rest of the year? labor market fears riding up front? Yeah, I think the uncertainty around tariffs is clearly gone sideways. I think there's still, you know, potential that we actually come back later in the fund, because it takes around 18 months for tariffs to actually take into effect. And if you remember, a lot of the tariff cost was actually done early in the year. A lot of the pre-consumption that we ended up having across consumers and companies for trying to prepare for the potential increasing costs, you know, happen early in the year. I think what we did observe,

which was kind of interesting in this bull market is that the level of concentration has actually benefit for those companies that have the most ability, higher margins to potentially absorb the potential tariffs, you know, an impact later on. Okay, Ryan, so given your bullish overall, how should investors treat international stocks and small caps? Yeah, we still like international. We've liked it for a while. We actually added a little bit more international back in March, and we thought maybe the dollar

goes lower, but this stage of the economic cycle and with the bull market, we think that batons being passed around. We think, you know, again, there's some cheap valuation, some good earnings growth, developed international, specifically Europe, we like that. Now, small caps, we're still a little bit underweight small caps. Again, big picture. We think large caps still going to do better. One quick thing on this. The market is looking for six cuts over the next 15 months. We think the economy is going to be a little bit better. Maybe you don't get quite that many cuts. Nothing wrong with small caps here, but we still think we're sticking with who brought us to the dance, John, and that's large caps, industrials, financials. We like those areas. We still

they're going to do better than small caps, let's say, over the next six months or so. Omar, you find these retail numbers, these consumer numbers encouraging? No, we do. You have to, right? I mean, everybody keeps telling us how bad everything is. The data keeps coming in pretty solid. So we're encouraged. And Omar, how about you? Yeah, no, we clearly think the retail, you know, provides this concept that, you know, the economy is fairly resilient. GDP continues to potentially go on and accelerate because a lot of the capital expenditures, even though we've seen already some of it, I think the rest of the year we're going to see that acceleration of CAPEX because a lot of companies have delayed

that capital expenditure deployment because of tariffs. So we may see an increase on capital expenditure that may, you know, get the economy going again. And again, that's where the Fed needs to decide whether or not that potential boost on CAPEX together would increase in productivity and the consumer, you know, continue its path. It may actually reign that inflation. I think that's probably what is going to happening. We encourage our clients to continue to diversify and then prepare for what comes ahead. All right. Sounds good. Gentlemen, thank you. Omar Aguilar from Schwab and Ryan Dietrich from Carson Group. Well, President Trump arriving in the UK for a state visit and Microsoft coming out ahead of that with big news of an investment there. Let's get to

Amon Jabbers now for more. Amen. Yeah, John, that's right. Take a live look. President Trump's airplane has just landed in England for this big state visit into the UK. There you see Air Force 1 on the ground in London, just landed a couple of moments ago, John. And as the president was in the air on his way to London, we got this announcement from Microsoft. It is a $30 billion announcement over four years. And what they're saying is that about half of this is going to be for AI CapEx as you take a look at some of the details of the deal here. The other half includes AI research, gaming and sales, and they're going to partner with the UK cloud provider N-scale. So that is one announcement. I think you can expect some more, John, as CEOs are

flocking to make this trip along with the president as well. We've got a host of tech and finance CEOs who are going to be there. Sotia Nadella, the Microsoft CEO, is going to be alongside the president in the UK, along with Jensen Wong of Invidia, Sam Altman of OpenAI, Stephen Schwartz, of Blackstone, and Larry Fink of Black Rock. All of them expected to make appearances. So I think you can expect we're going to see some more announcements along the way in terms of investment deals between the United States and the UK. And we'll watch for all the pomp and circumstance tomorrow.

This will be a full state visit. The president will be meeting with the king and the queen. He'll have a flyover and all the rigum roll we associate with going to the palace in London. John. All right, quite an entourage. Amen Javvers, thank you. Well, despite job market concerns, the American consumer is still shopping. We'll talk to Cowan's senior retail analyst Oliver Chen about the latest data and the stocks that can benefit when overtime comes right back.

Welcome back to overtime, Oracle, closing slightly higher today, continuing an eye-popping AI dream. run after its earnings guidance. That stock up 40% so far this quarter, but that's a bunny slope compared to the 3x move in Bloom Energy since July 1st. Bloom is the company Oracle is relying on to provide power for all that data center equipment. Today, Morgan Stanley maintaining its overweight rating on Bloom and nearly doubling its price target to 85 from 44. Now let's turn to the consumer. August retail sales beat estimates for the third time in a row with July's number revised upward. Spending trends appear to be holding up despite growing concerns about the labor market and sticky inflation.

So where are we in the retail trade? Joining me now is Oliver Chen from TD Cowan. It's great to see you, Oliver. Been a while since I've seen you. So tell me how does this make sense if the labor market is weakening? Is it the better-heeled luxury consumer who's still out there spending, or is it everybody? John, the consumer has been very resilient. We're very excited about that.

However, there are a lot of watchouts. What I would say, John, bifurcation, meaning low and middle income consumer being pressured. And shoppers are watching their wallet. They're looking for value. They're worried about inflation. And consumer confidence has been volatile. That being said, the positives are overall low unemployment and about a billion, a trillion dollars of savings on the sidelines.

So there's positives and negatives, but bottom line, consumers have spending power. And they're doing it. Earnings have been better than expected through July, and July momentum has been strong. What happened partly through Back to School is some pull forward in terms of demand. Also, we're in a wardrobeing cycle where apparel and backpacks are working, too, John. So what kind of a signal are we going to get in the earliest weeks of the holiday season? The holiday season keeps moving earlier and earlier, it seems, about how much discounting is going to be necessary for retailers to keep that flow of consumers going and what the impact is going to be on margins.

Yeah, John, what we've seen so far in the data is inventories are under control, meaning inventories running very close to sales rates about percentage point below. That's very good, actually, for margins. We've also had retailers with this unprecedented uncertainty, managing to tariffs and changes in supply chain, and also managing to very controlled targeted promotions. Those are all very good things that we're watching. One thing that is very stressful, though, is price increases. So it's yet to be determined as prices go up in apparel and other items by 5% or more, what will happen to unit sales.

Most people are planning for unit sales to go down by the same percentage that prices go up. So that's something to watch. Do we potentially see a pinch for retailers that are sourcing from the more tariff impacted countries? For sure. And I think it comes back to prices. elasticity, and where and when and how our shopper is prepared to pay more in certain scenarios. Also, companies have had to manage very closely with suppliers to rationalize this and take some margin hits. Our favorite stock ideas, Walmart, Costco, those that understand value and execute to it, we like BJs too.

And then on the other hand, we like Cartier-Rishmont, which has a very good pricing power, too. So what do you not like? We're cautious. We're cautious on some pockets in the mall. We're also, unfortunately, I love clothing and department stores, but it's been a tough sector with middle and low-income exposure. And we're watching. We're hoping Macy's can comp positively, positively. That's something we're paying attention to. And we're watching Target, Tarje, in terms of what they can do there and improving the growth rates and driving more consistency. What about the cosmetics players that were doing so well a few quarters ago? Yeah, so our favorite idea here is Elf Beauty, and they've been disruptive, innovative TikTokification's been a theme and social. We have a buy rating on Elf, and we have a hold rating on Alta Beauty. Alta Beauty has an excellent new CEO and management team, and they also printed great results, so it's a work and process in terms of what's happening there. The beauty sector remains very vibrant.

However, the beauty customer is also de-stalking a bit, so we're watching some mixed trends there. Overall, it's a great sector, though, at large. Okay. People like to look good. Oliver Chen, thank you. My pleasure. Well, now check out shares of Eli Lilly, nearly flat for 2025, while the broader markets have rallied. Coming up, details of the company's multi-billion dollar investment. And Moderna has been another drug stock having a rough year, but today the stock is perking up about 4%.

We'll tell you why. Coming up on overtime. Welcome back to overtime. Moderna shares gaining today, as it says its updated COVID vaccine proved effective against a new variant. But the stock has lost nearly two-thirds of its value in the past year, including a drop last week on reports the Trump administration could link COVID vaccines to deaths and children. Sticking with pharmaceuticals, Eli Lilly hired today after announcing a big

investment in U.S. manufacturing. Angelica Peebles spoke with Lilly's CEO about the move. Joins me now. Angelica, how many sites are we talking about? Do we know where? Yeah, John, well, this is the first of four new U.S. manufacturing sites, and it will be in Virginia. So this $5 billion site will make the main ingredients for cancer, autoimmune drugs, and

other advanced therapies. And this is all part of Lilly's push to manufacture more of its medicines in the U.S. It's committed more than $50 billion to that effort since 2020. But across the pond, Lilly's rethinking its investments. The company just last week pausing plans to open a biotech incubator in the U.K., one of several drug companies, to pull back over policy concerns there. Until we see the situation on the ground change in the U.K., it's pretty hard to consider investing there. And I think that is a message to our country or any other, that capital goes to where it's wanted,

where, you know, there's benefits to invest. right now that's that's not really the UK. And Rick says that the UK has gone from a leader to a laggard over the past 20 years. He's hopeful that U.S. policymakers can use trade negotiations to help change that. And of course, this could be a big week for that, but we'll have to see exactly if anything is able to materialize out of those conversations, John. Is it incentives in the U.S. that make it a relatively more attractive place to manufacture for a player like Lily? Yeah, it's incentives and it's also price. So that's the main concern. Obviously, we're talking about the price of drugs in the U.S.

The Trump administration is very vocal that they want U.S. consumers to pay less and European countries to pay more. And in European countries like the U.K., they have a number of mechanisms in place to actually control the cost of drugs. And Lilly, in particular, takes issue with two policies over there. It's a little bit complicated, but basically they have one where there's this rate that if the government spends more on drugs and anticipated, then pharma companies have to pay some of those, what Dave Ricks will tell you, is a tax on those sales. And the rate this year was

much higher than the companies were expecting, higher than in years past. And so now you're seeing all of these companies basically saying, you know, this is unsustainable, we need to do something about it. And so they're taking issue, especially in the UK, but in all of the European countries, whereas here, you know, it's still a free market. Yes, there are things where the Trump administration and other lawmakers, you know, they want to try to lower the price of drugs, but here it's just a different market and you have the country and also local government saying we want you to build here. We will incentivize you. Okay. Angelica, thank you. Well, time for a CNBC News update with McKenzie Segalos. McKenzie. Hey, John. So a Utah district attorney will seek

the death penalty for the suspect and the killing of conservative activist Charlie Kirk. He announced seven counts against Tyler Robinson this afternoon, which include aggravated murder, obstruction, and witness tampering. The DA says Robinson's D.A. says Robinson's was found on the trigger of the rifle used in the shooting. Robinson is scheduled to appear for a virtual court hearing later this afternoon. Waymo received a permit today to start testing its robotaxies at San Francisco International Airport. The Alphabet-owned company telling CNBC that it will start with employee testing and roll out the service in phases. Waymo received permission to test and operate at Phoenix Sky Harbor Airport in 2022, and it's also testing at San Jose's airport.

And the national average credit score fell the most since the great recession in 2009. That's according to data released today by FICO, which found more borrowers are struggling to keep up with their loans and credit cards. In particular, FICO found Gen Z borrowers had the biggest credit score drop of any age group since 2020. Back to you, John. Mackenzie, thank you. I guess we'll have to see if those consumers will be able to keep spending with those credit score drops. Well, coming up, we're getting you set for tomorrow's FedMe, A full slate of 12 voters will be there, we now know.

So what will the Fed do? And maybe more important, how will the bond market react to what the Fed does? That's next on overtime. Welcome back to overtime. Stocks lower across the board for the major averages, but the losses are small. 125 points for the Dow, which used to be a lot. With the Dow above 45,000, it's just a quarter of a percent. Even smaller losses for the S&P and NASDAQ after both touched intraday records to start the day.

And bond yields also basically flat ahead of the Fed meeting. But gold continued its record rally hit another all-time high. Oil prices also higher. And that's why energy was the best performing sector today with names like APA and accidental leading the way. Now from stocks to bonds, the market expects a 25 basis point cut from the Fed tomorrow. a quarter percent. Yields have been on a relatively smooth path, a lower since the last Fed meeting in July. Treasury Secretary praising the U.S. bond market this morning on Squatbox. I think that the long end is very well anchored, and I point out that the U.S. bond market

has been the best performing bond market in the G7. That in the fall, excuse me, in the spring, all we heard was that the U.S. Treasury market isn't a risk-free asset. anymore and nothing could be further from the truth. We're the best performing bond market in the world. Well, joining me now is Bridge Carrano, Wellington Fixed Income Portfolio Manager. Bridge, what do you expect to really move the bond market tomorrow? I mean, assuming we get the quarter point everybody expects, there's going to be a lot of contention among the Fed voters, possibly more than we've ever had. Yeah, no doubt. I mean, I think we are definitely going to get that 25 basis point cut.

I think there will probably be three dissents to your point, asking for 50 basis points. What the market's really going to focus on is what we call the summary of economic projections. And so here what we want to see is the dot plot. And this is basically where the Fed gives its prognostications on where the policy rates can end this year and then next year. I think this year they're going to indicate about three cuts to the policy rate. But what might be a disappointment to the market is next year, the market's already pricing the Fed getting below 3 percent or almost 150 basis points of cuts.

I find it really difficult to move that dot from three and five-eights all the way sub three percent. So I think that might be a little bit of a disappointment to the market, even if they acknowledge that the labor market is weakening, that's still, that's what the bond market's going to be focused on. How have you seen the president's efforts for more influence, let's just say, in the Fed affecting the bond market? So, you know, what I would say is it's priced into what we call term premium, which is the value in extending out the bond curve. And I guess when I think about where there is value in the bond curve, it is actually out the curve. There's a lot already priced into the Fed cutting pretty dramatically over the next few years. But when I look at forward rates, and that's important to look at forward rates when the yield curve is as steep as it is, and you look at treasury bonds, the market's basically saying that 10 years from now, 10-year treasury yields are going to be close to 5.5%. I mean, that's the highest we've had in 20-plus years.

And so I do think the market almost is pricing in term premium, and in some ways almost too much term. premium. There's a lot of ways I could see that come down. I don't imagine that we're going to see five and a half percent growth for the next 20 years. And so I do think there is value in the bond market at the end of the curve. Which do you see as a bigger weight in fixed income markets right now? The expected rate cuts or a consumer that's going to be having a harder time getting a lower mortgage or based on the FICO data that we got today, maybe continuing to pile on debt. Well, I mean, I do think that you are talking about economy that's two speeds in some way. So you have high-income consumers that are continuing to spend.

You saw that in the retail sales data today. And that's really what's making the inflation story tricky. And, you know, I do think that high-income consumers keep spending. And if you look at core inflation and take out shelter, it actually grew at 2.7% last month, which was the highest level in the last two years. And so high in consumers doing well, who's suffering are small businesses where interest rates are still too high. and you do see them firing and you do see, you know, the labor, the unemployment rate move higher as a result of that. So it really is a two-speed economy, and that's what makes the Fed's job so difficult, is who are you trying to, who are you trying to help here?

In this case, lowering rates does help small businesses, but it could increase the wealth effect, which also makes inflation stickier. So what kind of impacts does the bond market expect to see from a Fed rate cut, and what do you view as the chances that we don't get those reactions? Yeah, I mean, when I think about, once again, what's priced into the front end of the curve, it's really expecting the market, the Fed, to cut pretty drastically. And I do think that, you know, in some ways we are in this Goldilocks type environment where the market's saying, yes, growth is slowing, yes, the unemployment rate's moving up, but the Fed is going to be so aggressive with a new Fed chair at some point next year that they're going to save the cycle and prolong the expansion in a lot of ways. And I guess what could really throw that consensus off is if inflation does start to pick up.

And I think that's where it makes sense for, you know, diversified investors to really think about inflation-linked bonds. Because it's one area where the market's already pricing in, you know, the Fed getting back to that 2% target. And it may very well get there. But what ends this Goldilocks story is really if inflation picks up. And so right now I think, you know, you can buy long-end real yields. Inflation-linked bonds are tips. About 2.5 percent, I think that's pretty attractive. How much does tariff policy and tariff impacts measured in the data matter to the fixed income markets?

So I think it matters a lot, and that's, I guess, it's a surprise it's not in real yields. And, you know, I do think there is this narrative out there that we haven't seen tariffs affect inflation. I think that's just not true. I mean, if you look at what we saw core goods increased about 0.3% month over month last, you know, CPI print. And so we are seeing that inflationary impulse move in. But when you think about tariffs, you think about immigration, you know, in some ways, there's somewhat both stagflationary policies. You should expect lower growth and higher inflation as a result.

And once again, you know, the way to express that is through inflation-link bonds. All right. Bridge, thanks for connecting the dots. Thanks, John. All right, Bridge Karana. Up next, we will discuss the underperforming cybersecurity industry with the CEO of Checkpoint as Welles' new deal to acquire an AI security company. And Wall Street can't stop grabbing pieces of Reese's parent Hershey today.

investors getting a payday after Goldman Sachs double upgraded the stock from sell to buy and hiked its price target, good and plenty, from 170 to 222, implying mounds of upside 20% from Monday's close. The analysts there citing a symphony of improving market share and pricing trends. Be right back. Welcome back to overtime. shares of Warner Brothers Discovery, the worst performer in the S&P today, down 6%. T.D. Cowan downgrading the media giant from by to hold on concerns about what happens to the stock if a Paramount Skydance deal doesn't happen. Despite the pullback, the stock's still up more than 40% since CNBC reported Thursday that Paramount is preparing an offer.

Now, it's turn to cybersecurity stocks. The sector has not participated in the broader tech rally the past three months. ETF, BUG bugged down about 5% while the S&PT. tech sector is up nearly 15. One of the worst performers in that group has been Checkpoint Software. Today, the company, though, is announcing a new AI acquisition as it looks to expand, grow its business. Joining me now for more is Checkpoint CEO, Nadav Zafir. Nadav, how big a deal is AI in adding those AI security companies in your growth plans? It's huge. It's transformational. You know, this is a once-in-a-generation change in technology and the way we consume it. And, you know, we're just in the really first inning of

what seems to be an incredible game ahead of us. And at a checkpoint, you know, we're adamant to lead the change to build the first global full-stack security for AI. So the acquisition today is important. It's another stepping stone and it's going to be a center of gravity for us. What's going to be the most important strategic moat or asset that a security company has during the AI era to determine sort of whether they get to be a consolidator or commoditized? I believe that it's the depth of the tech, and that's why I'm so excited about this specific acquisition. What the Lakira team has been able to do is built one of the only real large language models that's specifically for security. And once we go into the second, third, and fourth inning, this will make a lot of difference because it's not just going to be the upper level of securing the uses of chat, et cetera, and DLP, which we're already doing, but actually once companies and organizations and people start using their own models and homegrown apps, either for inside or outside use, runtime security is going to become super important. And having this mode is incredibly important for us to have the reliability. the scalability, and our ability to trust these models.

What about this kind of platform versus best of breed question in the cybersecurity space? Platform, you might say, you know, names like Crowdstrike, Z-Scaler. How do you view checkpoint playing strategically in that conversation? Yeah, consolidation is real, and I think enterprises need to do it. Our approach is to offer an open platform approach. world that we're walking into which the incredible uncertainty and especially the chaos that we foresee in the next couple of years as agents are running on platforms and infrastructures that were not created for agents and humans interact with agents we think that it's incredibly important to have different capabilities and consolidate best of breed and so the open platform approach is our answer to the consolidation which is definitely necessary. Is the industry going to have to have a new paradigm for agents? I mean, I know we talked about zero trust, but when you've got kind of orders of magnitude, more entities moving through

a network arguably doing stuff, completing tasks, I guess with their own permissions, but they're not people. Do you need a whole way of, different way of looking at security? Absolutely. And there are different perspectives to look at it. From a philosophical sort of perspective, if we are going to harness this incredible new technology and stay relevant as organizations. We're also going to have to have a mind shift our mindset and actually we're not going to be as much as control as we were used to. We are still going to be in charge but not as much in control and it's a different mind shift that we're all going to have to make. From the attackers perspective, and remember we're protecting organizations and enterprise and

peoples against real enemies, real attackers. They're actually moving extremely fast and notoriously known for moving faster than defense and so the playing field which is not leveled as we speak and already we're dealing with an asymmetric situation this is going to exasperate and then lastly until the infrastructure that we are all working uh uh with is going to change we're going to be in this chaotic situation a little bit like we have with autonomous cars for example right so we have we have the ability to drive autonomously but the infrastructure is still not there, and we have humans interacting, so that creates chaos. Nadab, quickly if you can, tell me what are we seeing in how the attackers are deploying

AI? We saw them adopt something like a franchise model of making it easier for less experienced attackers to do the dirty work. What's the model for agents? Yeah, so what you were talking about is the ROI. We're already seeing that. But what we're seeing glimpse of is a real generational change for the attackers as well. As an example, when we look at what we call the attack supply chain or life cycle, the first input, the first breach is always going into the network, and then there are stages. We have different frameworks to look at the attack chain or kill chain.

So one example that's going to change dramatically is we believe that the portions of detect and response they're so in the middle of this model are going to become less relevant because agents are going to be working autonomous going to be working autonomously, you're not going to have that time to do the detection or respond. And so we're going to have to do sort of what we call a shift left and sort of a renaissance of prevention-first mentality. Okay. Nadav Zafir, thank you from Checkpoint. Thank you, John. Well, shares of MongoDB more than doubling since early April. Up next,

we'll hear from the company's CEO about a new tool that's helping customers migrate old software into an AI-ready format. Plus, find out which stock is getting a pop after Apple CEO, Tim Cook, mentioned them as part of his company's plans to bring more of its business back to the U.S. We'll be right back. Welcome back to overtime. Shares of Amcor technology closing higher by about 5% after Apple CEO Tim Cook said in a mad money interview here on CNBC that Amcor will help with iPhone chip packaging.

This comes after Apple's pledge last month to commit $600 billion in a U.S. manufacturing program that includes AMCorp. While artificial intelligence is changing business models and strategies across the technology landscape, particularly in the data center, I caught up with MongoDB CEO David Acheria ahead of the company's dot local event in New York this week. He told me about a new tool, MongoDB AMP, that stands for application modernization platform, designed to pull old software into a modern, ready format. And unlike other approaches where people just throw a ton of bodies at this problem, we've taken a very product-centric point of view and built agentic tooling, a very specific delivery model, as well as experts to help people migrate off these legacy platforms to MongoDB.

That's part of a broader push where businesses are trying to transition their IT systems so that their data is pooled well enough that an AI system can train on it, but organizing well enough that sensitive information won't leak to the wrong places. The LMs have basically scraped all the public data. So your proprietary advantage is your private data and how you engage with your customers, how you run your business, what's happening, how you work with your partners and suppliers. And so being able to, you know, affect you use your private data without handing it to the LMs and leverage all the reasoning and intelligence that comes to the LMs is a critical issue for most organizations.

Inich area said the infrastructure push into AI is real, but the investment will take some time to pay off for many companies, especially because executives have to be careful to deploy tools safely. But it wasn't really until 10 years later when the Internet completely transformed how we work, how we socialize, how we live. I don't know if it's going to take 10 years, but I do think it's going to take some time for AI to really transform our lives. I mean, we're not exactly seeing robots walking down the street. We're not exactly using AI and everything we do in our daily lives. But I do think that that's coming. Coming pretty soon. Well, up next, find out why the CEO of a giant commercial real estate finance company

says there's actually a risk of higher interest rates if the Fed does end up cutting tomorrow. And it comes as mortgage rates fell to a three-year low today. 6.13% according to Mortgage News Daily. We'll be right back. Welcome back to overtime. Let's get you set up with tomorrow's trade today. As I mentioned earlier, the big item on tomorrow's agenda is the Fed's decision on interest rates. That comes with the Fed's summary of economic projections, otherwise known as the dot plot, which we last got in June.

But investors will also digest the latest housing starts and building permits data, general mills earnings, and stub hubs IPO, and that's expected to price. this afternoon. So, if the Fed does cut interest rates, a quarter point tomorrow, as expected, will mortgage rates really go down as well? Well, the head of one of the nation's largest commercial real estate finance firms doesn't think so. Our Diana Oleg has the detail for this week's property play. Diana. Well, John, it's actually really complicated because mortgage rates did drop today to a three-year low ahead of the meeting, but they may head higher tomorrow. Willie Walker, CEO of Walker and Dunlop, said historically when the the Fed cuts during a recession, it pulls down the 10-year Treasury yield.

But when it isn't a recession, like now, it doesn't impact long-term rates, which mortgage rates follow. We're below where the market will be two to three weeks from now, and I don't try to predict where rates are going. But I think people are buying on the news and might sell, I mean, they might buy on the rumor and sell on the news. I think you probably see the 10-year sell off a little bit after the Fed actually announces their 25 basis point cut.

Walker also told me he never expected rates to be as low. low as they are today and calls it very positive. If you're borrowing at five and a half to six and a half percent in commercial real estate, you should be able to, you should be able to make money. You can check out more great stuff from my video podcast with Willie Locker, including the fight between Treasury Secretary Bessington, FHFA, Director Bill Pulte over the future of Fannie and Freddie.

It is all in this week's Property Play newsletter. Sign up, CMBC.com, forward slash property play or use that handy QR code. John. Diana, any insight into that dynamic and why he expects that since there's no recession, the Fed cut wouldn't have the same effect? Well, because he says that people are really buying into the bond market right now, and that's causing Treasury yields to come down, and he expects it to sell off tomorrow after. It's kind of the, it's the expectation. It's the exact same thing, actually, that we saw last year, last fall, when the Fed cut rates for the first time. You saw Treasury yields come down beforehand and then go way up right after the Fed cut.

Ah, interesting. Okay. For a lot of people who are looking to buy homes, sell homes, invest in real estate, that matters quite a bit. Diana Ollick, thank you. A little bit of a flat start for the markets today, but they're sure to be some action tomorrow with all of the expectations and those dot plots that we talked about. For today, that's going to do it for overtime. Fast money starts right now.