Closing Bell - Closing Bell Overtime: Markets Power Higher Despite Shutdown, Momentum Overseas & Visa’s Stablecoin Bet 10/1/25

Episode Date: October 1, 2025

SEI CIO Jim Smigel on set why markets may look calmer but remain fragile. RockCreek CEO Afsaneh Beschloss breaks down global market momentum as China hits highs not seen since 2022 and central banks ease. Mizuho’s Dan Dolev weighs in on Visa’s stablecoin potential, and our Robert Frank unpacks record wealth concentration at the top. 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 standard of regulation. Estee Lauder ringing the closing bell, the New York Stock Exchange. Fermi doing the honors at the NASDAQ and stocks shaking off the shutdown. Charging higher. The S&P 500 hitting 6,700 for the first time ever. A new all-time closing high for the Dow as well, fractionally. The NASDAQ the best performer today, but closing just short of a record. Healthcare, once again, the best performing sector. That's thanks to drug stocks. Utilities also a gainer. Materials and financials were among the worst performing S&P sectors. Gold and silver, though, continue to shine.

Higher on concerns about the government shutdown. Those worries also contributing to gains for crypto. Bitcoin back near 117,000, right around six-week highs. And that is the scorecard on Wall Street, but winners stay late. Welcome to closing bell overtime. I'm John Ford back alongside Morgan Brennan. Sticking with the crypto theme, we're going to talk to an analyst who says Visa could be an under-the-radar stable coin winner. Plus, it had spent a good few months for the S&P 500, but countries such as South Korea and Taiwan,

Warner, seeing even bigger gains for their stock markets. We're going to look at whether this global rally can continue. Let's begin, though, with the gains for stocks, chip stocks helping to lift tech. Intel, once again, a big winner. Christina Parts Nebless joins us now. Christina. You guys mentioned the government shutdown. Let's start. Didn't really phase investors today with the NASDAQ notching its fourth consecutive gain, S&P 500, all-time high. History really shows that the S&P 500 was near record highs before four of the past six shutdowns, and markets still delivered positive return six months out. So while federal workers, everyday Americans definitely could feel the impact, Wall Street typically stays steady. Chip stocks, like you talked about,

John made some big moves. Micron surging about 8% today. Second biggest point impact on the NASDAQ 100. Arm not too far behind, closing 6% higher. Intel spiking midday in reports of a potential foundry talks with AMD, though AMD declined to comment on what it called speculation. Nvidia closing an all-time high earlier as it, or I should say today, as it continues to trade well above $4.5 trillion in market cap. You guys talked about it, health care topped all sectors with the spider health care ETF climbing about 3% today. The rally really came after Pfizer struck a deal with President Trump to cut a Medicaid prescription drug costs in return for tariff exemptions. Drug makers saw the agreement as more favorable than expected, bringing some relief to the industry. Astrozenica posted its strongest day since 2014, and Pfizer is headed for its best week in over 50 years, dating back to October 1974.

Morgan? Wow. Christina Parts Nautilus, thank you. Let's turn to the bond market yields lower today following the ADP jobs report, showing a surprise drop in payrolls. Let's check in with Rick Santelli in Chicago, and I guess really it was curve steepening is probably the takeaway, right? Absolutely, you nailed it. And if you look at a two-day chart of twos and tens, a lot should jump out to you. Morgan just pointed out at 8.30 Eastern today, we see the big moves.

It actually is 815. The big moves on that week. Jobs report from ADP, minus 32,000, weakest since March of 23. And the revision, minus 3,000, it was 54,000 positive. And the swift move was a steepening effect. What does that mean? It means two-year notes, most closely associated with. with the Fed, moved more aggressively,

and that makes sense because of the implications of a weak labor market. And today's yields across the entire treasury curve were lower than yesterday's low yields, because those are two-day charts. And if you look at that Tuesday 10 spread there, you can see it is steepening. How steep is it right now?

Well, it's hovering right around 56 basis points, which means, should it close here, it'll be about the steepest in nearly one month. And that's important, because the steeper gets Driven on weak news on the labor market, the more that underscores that investors believe that the Fed would be more aggressive in their easing strategy. John Ford, back to you. Rick Santelli, thank you. Now let's get to Capitol Hill for the latest on the government shutdown as that fight continues.

Emily Wilkins joins us now. Emily? Hey, John. Well, yeah, today the Senate failed to pass a measure to reopen the government with all the three Democrats opposing the measure. And as the Senate is gone tomorrow for the holiday, that means the soonest that the government could reopen is Friday morning, and that likely means that job numbers for September are going to be delayed until the government is funded whenever that may be. Now, we're seeing some impacts on the shutdown. Trump's chief budget officer, Russ Fote, told Republicans today that layoffs of federal employees will likely begin in the next day or two. He didn't go into detail as to what agencies and programs will be the most impacted, so still keeping an eye. out for that. And vote is also increasing pressure on Democrats by beginning to defund various projects in their states. He just announced on X that nearly 8 billion that

would have gone to green energy programs is being canceled. And the projects are all in states with Democratic senators who have opposed the bill to continue government funding. Vote also announced earlier today that 18 billion in infrastructure for projects in New York City is also being put on hold, specifically including the Hudson Tunnel project. Now, the move targets both House and Senate Democratic leaders who are both from the state. And guys, of course, as longer to shut down goes, the more impacts we're really going to see. The more it could impact the economy, could impact jobs, could impact just a number of government functions. And we'll have to see when they come

back on Friday if there's any progress in getting to the eight Democrats they need to fund the government. Okay, Emily Wilkins, thank you. Well, markets reacting to the ADP jobs report out this morning because it may be the only jobs report that we're going to get this week. Let's bring in Steve Leesman now. Steve, are there indicators that investors can watch? Is there a way to parse through the data,

high frequency data? I mean, if you're a Fed official, what are you doing right now? Well, first of all, let me correct something. We thought the jobless claims would be coming out. They're not, according to a recent Reuters story. So there were previous shutdowns where the BLS was funded and so some of that stuff came out. This does not appear to be one of them.

So they're not going to get jobs claims. You're not going to get the jobs report. We do get ADP. It's a close proxy when you look at it on a year-over-year basis. There are other indicators that you could use. For example, the job's hard to get versus jobs easy to get in the consumer, in the conference board survey. Other things out there, for example, NFIB business hiring intentions, a pretty good leading indicator three or four months in advance. None of them is perfect, but all of them together were things that we used to really paint the picture or understand what was going on in the jobs market, and that will continue to be the case without the jobs report.

It seems like this should be easier, right? I mean, in the age of AI, there's all kinds of data flowing around all the time from credit card transactions and whatnot. I mean, are we relying on phone calls surveys where if the government shuts down, nobody knows what's going on in the U.S. economy? There's got to be another way to do this, right? You know, John, I'm not sure you meant that question to engage you. a deep discussion about what AI does.

But AI is really good when it has the data. Right. But somebody has to get the data. There are AI things out there that are creating data, but to find out if people are employed, I don't think I can ask AI how many people are employed. If I did that, you know where it would source back to? The BLS.

It might source back to ADP. Somebody has to make the phone calls. In fact, we are not funding the BLS right now, But all that does is continue a situation where we've underfunded the BLS. I'll give you an example. We do our All-America survey. The price of that over the years, thank you, management, has doubled. Why?

Because people are harder to get for the surveys. What have we done with the BLS with more difficulty? We've cut their funding on a real basis down 16%. So we're complaining about the data? Well, guess what? You've got to pay to get the data. Therefore, AI will have something to regurgitate, okay? because all it does is it doesn't create data, it regurgitates data.

Yeah. I'm down. I'm off my soft box. All right. That's a key point. So we see stocks closing your record highs. There's a general sentiment out there based on recent history. We say the last couple of decades when you see shutdowns, including shutdowns that can last maybe

even a couple weeks, that largely the economic impact is shrugged off. At what point does that change? Let me talk myself out of a job right now. We didn't know what was going on when we had the data. There were so many different and interesting. cross currents, beginning with what you're talking about. Whatever was going on, it was not enough to bother the stock market, which was so besotted with what's going on in AI and the valuations there and the prospects there for productivity and economic growth. We have reports that the consumer

was giving it up while they were booking carnival cruise lines like they're going out of style and gambling in Vegas. Our big data report that we get that we do with the NRF and Affinity solutions. That's been running pretty solid. We have things going on where it looks like employers might have taken a breather because of the uncertainty. We had a discussion this morning. Maybe it's accelerating right now. Even when we had the data, we weren't sure what's going on. This is a very interesting point. Data likes regularity. And when you have, I don't want to say irregularity because people think I'm talking about something else. But when things get weird, the weird turn pro, as Hunter S. Thompson said. So what happens is when things get

weird, the seasonal adjustments go way out of whack, and therefore it's very hard to figure out what's going on. We had like this tremendous hiring of educators in June. That really didn't happen. That was wiped away. We know the job market. This may be a great moment for investors in Wall Street to get off the data hamster wheel and take a step back and think more broadly. And I think that's probably, it's really important to know what's going on right now, the best available information. But what you do with that information is put it in context of all the other information out there. That's what I try to do when the data come out, not say, freak out

on this data. I say, take this data and put it in context of all the other data. All right. So we're going to be okay for a bit. Which is why you didn't talk yourself out of a job. We're going to be okay for a little while. In the long-term absence of this data, it will be very difficult and the Fed could be making some mistakes here.

A month, two, I think we'll be okay. We're not going to run out of metaphors, that's for sure. Steve Leeson, thank you. Well, let's turn to the market as the S&P 500 rises to a new record, despite The government shut down. Joining us now is SEI Chief Investment Officer Jim Schmigel. Jim, you talked earlier in the year about this wall of worry that the market had to climb,

even raise some concerns about private credit, I believe. We're now in Q4. How much worry is left for this market? Well, there should be a lot more wary, I think, than what the market is actually showing us and that investors are really showing us. I put out my quarterly piece today, and the big theme is it's not about the volatility. it's about the fragility. And as markets get increasingly and increasingly concentrated,

like we're seeing today, whether it's Navidia approaching 8% of the S&P 500, whether it's tech at 35%, whether it's an AI theme, which depending on how you calculate it, is about 43% market cap and accounts for about 75% of the price return since ChatGBTGT came out, that is a very concentrated market. And that adds fragility that investors, I think, particularly passive investors, need to be aware. aware of. If you ask me today as an equity investor, what's the biggest macro event that we're all

waiting for in the fourth quarter? Honestly, it's November 19th. It's Noviti earnings because that's what is going to be able to move the market. So diversification is the answer, but fragility is our term for the fourth quarter. And I think it's something investors need to be more aware of. So given that fragile state and the fact that I think economic policy is both different from historical norms right now and this government shutdown threatens to make visibility tougher than usual. How should investors compensate for that? Diversification is probably not the answer that they want to hear, but that is the answer. And that's diversification by global markets, that diversification by capitalization,

diversification by factor, which means diversification into active management. It sounds as though I'm talking my book, and in some ways I am, but passive management in the S&P 500 is not. the same thing as it was just a few years ago. You're not getting this broad-based beta that you used to get. And so diversification is really the only way, the tried and true way, to protect yourself. And your point is a good one. And Steve Leesman, hats off to Steve. He's exactly right. I mean, the data and the quality of the data is not just a problem for policymakers, it's just a problem for investors as well, right? If you're lost in the forest, not any map will

do. You need the right one. And the data has just been wrong. We have two million jobs that have wiped off the roles. And that has influenced policy. So it's, it's, it's interesting times investors need to protect themselves with diversified portfolios. You literally just took my question out of my mouth and I was going to say, okay, Wall Street investor, data hamster wheel, how are you navigating it? What's your sense of the economy and how does that feed back into asset classes? Yeah. So think about it, not just from an asset class perspective, think about it from an economic regime perspective. Do you still have inflation sensitivity in your portfolio? That's typically not a strategic holding that investors have. We're still bullish gold. It's run quite a bit.

It's reaching an all-time high. Like a lot of other asset classes are reaching all-time highs. But we think that's for good reason. Great hedge for geopolitical concerns. Also, supply and demand looks really favorable to us. We think investors are underallocated. Central banks remain under-allocated. They're going to be big sources. How should investors hold it? We like it their direct metal, quite frankly. So we'd just have that as maybe even part of a broader commodities exposure and just have that be your inflation sensitive assets. We think it makes sense on a strategic basis. Okay. Jim Schmigel, it's great to have here on set. Thank you.

Thank you both. With major averages higher today. Well, it's been a pretty good year so far for the U.S. markets. Can you believe it? Today's day one of the fourth quarter. Though many fear the AI full run could be peering out, but you can find AI-driven growth overseas, can you? Plus, the emerging markets posting nine straight months of gains. That's its longest win streak in more than 21 years. So are there still gains left abroad? We're going to discuss when overtime comes right back. Welcome back to overtime. The NASDAQ closing just shy of record highs as we near the three-year mark of the AI boom in the U.S. Is that rally running out of steam

or just moving overseas? Let's welcome Sima Modi back to overtime with that. Seema. Thank you so much, John. Yes, the AI story is not just fueling the U.S. tech names, but stocks overseas as well. I want to draw your attention to Taiwan Semiconductor. This is the biggest name now in the MSCI emerging market ETF. It has gained nearly 30% in the past quarter. And the catalyst is really strong demand from U.S. customers, as you know, NVIDIA, Apple, Broadcom, among others. Analysts at Missouho, they expect the Taiwanese shipmaker to raise its 2025 sales guidance. It's also trading, by the way, at a discount to its peers here in the U.S. And according to facts said, 44 buys and zero sell ratings right now for TSM, which just tells you how the street is feeling about this name.

It's also helped just the broader Taiwanese stock market outperform this year. It's trading at an all-time high. Tenue intelligence experts also add that the Trump administration is distancing the U.S. from the whole Taiwan independence issue in hopes of securing a trade deal with China, which, of course, would be a positive for Taiwan. By the way, other Asian markets like Korea and Japan also trading at all-time highs. They've been up big in the past three months. And in Korea, specifically, names like Samsung and AI memory chipmaker S.K. Heinex have soared. Demand for their technology continues to grow from the U.S. hyperscalers there as well. The biggest, I guess, wild card from speaking to experts who follow these markets is going to be trade.

J.P. Morgan, writing that the negative repercussions on Asia is merely delayed, not denied. though the weaker dollar, that helps emerging markets with pricing power guys. All right, Sima Modi, great to have you back and great to have you back here on the show. It's not just emerging markets that have done well this year. Europe has also seen nice gains, especially Germany and Spain, which are each up more than 20% this year. So can this global bull market continue to charge higher? Well, joining us now is Afsanibeshlaus. She is founder and CEO of Rock Creek, and it's great to have you back on the show.

Welcome. Great to be with you. So let's start right there, because this has been a global bowl market. We focus so much on the U.S., but how do you see that versus the rest of the world? So we had such low valuations in places like emerging markets that we were just talking about. And, of course, you've had a number of companies that are getting better, plus they're benefiting from inflation and currency rates with the dollar getting weaker. And last but not least, Korea being up 57 percent to a large extent is due to a few stocks, but a lot of them may be AI, similarly in China. Yeah, and that's exactly where I was going to go with you, and that was how much is AI not only powering U.S. markets, and as we were talking about with a guest just earlier on the show, maybe contributing to some of the fragility within the market because of that, but whether that's playing out in other parts of the world, too.

So we're seeing that obviously in some emerging markets, but we're seeing some emerging markets that were in such disastrous situation, and, you know, there'd been negative returns for a number of years, places like Colombia, et cetera. where they are doing well because they're starting with a low base. They have a few companies that have done well, or you've seen Hungary, you've seen what's gone on in Argentina, not today necessarily, but over the last week or two. But what is also interesting is with Europe, where we thought with the trade numbers, as we saw them, we would see much worse equity markets. And as you said, Germany has done particularly well. Defense has done unbelievably well.

So I think that's like an amazing number. You look at defense, if you look at the different baskets of defense, some are up as much as 80 to over 100 percent in Europe. Asana, good to see you, first of all, but continuing on your line of thought there on Europe, Europe had been underperforming the U.S. markets for so long in the sense that perhaps led by Germany, I'm going to start to spend more even if it means. debt, I think, got the market excited. But how will we know whether that has legs as far as what European markets can do? So I think European markets are going to be, you know, you had the PIGS, I don't want to say pigs that had done, again, not so well during COVID and had restructuring plans. Those countries are doing better because they've had better fiscal plans.

In fact, it's France, Germany that are going to be spending a lot of money. France is the one that has been borrowing the most relative to its GDP, so you do need to watch that in the longer run. Germany and UK, there's a lot of defense-related stocks that we should look at and follow a little bit more. And I think that those stocks will have legs because Europeans have just started investing in defense, and that is going to have a longer life. AI is where Europe is really behind. Okay. Now, more broadly, in the global trade order, which is certainly reshuffling right now, if you think, and please tell me if you do, that that's shifting in some ways away from the U.S. as this administration gets tougher on America, getting its fair share, who benefits overseas and how should investors think about how new alliances and deals might benefit some different regions and countries? Well, we're seeing all these different trade deals between countries and between Europeans and certain Asian countries.

So that has been moving very fast. India is the one reason we see that in the India-U.S. relationship on trade has been sort of on ice. We still don't have a resolution of that. But India has been making deals with other countries, as we've seen. So there's going to be a lot more bilateral versus multilateral deals, or the way which would have been. been ideal, at least in all trade theory. And that will probably mean more production in other countries. But let's just be clear, China is still eating everyone's lunch, right? There's, you know, when you look at cars being sold, the EV cars that China is selling

into Europe, into the rest of emerging markets, that's still huge, even if they were down last month. All right. I've signed Bashlaus. Great to take a trip around the world with you. Thanks for joining us. Thank you. As stocks continue to rise, there is growing concern that markets are just following the high flyers. Mike Santoli will join us with a closer look at the beta case. And this mystery stock might be an example. It doubled in the third quarter, yet analysts are expecting it to go even higher. That name and the reasons for the bullishness coming up on overtime.

Welcome back to overtime, the mystery chart that we showed right before the break. It's right there on your screen. It's Sunrun. That stock gaining once again today. it already doubled in the past three months. Today, Deutsche Bank raises its price target on the stock to $20 from $11 per share, but maintains its hold rating. Jeffries, however, upgrading to buy from hold

and raising its price targets $21. Jeffery says the expiration of a solar tax credit could benefit Sun Run. Those shares up 6%. Oh. Well, there's a lot of risk-related movement in the market right now, from quantum upstarts to drone makers, ripping higher in tandem, to Korea, the global whip end of risk. flying past major indices.

Let's bring in senior markets. Commentator Mike Santoli, taking a look at all of this. Mike? This has been a familiar current through this market, John. This is just a six-month chart. Paring K-TOS and AVAV are drone makers. Q-bits, which is D-Wave and Ion-Q, are kind of these upstart quantum computing names.

I put them together to show you the similarity of the trajectory, right? Over this period of time, the major indexes are up like 35, 40%, these are up four to six times as much, And they're part of just this general kind of target zone of fast money, enthusiastic speculation, and it's go, go, go. And so this is one of these things running alongside the market that otherwise is kind of rotating in this orderly way. It's also, to some degree, a global phenomenon. So here is the South Korea market, the Kaspi, making mega new highs next to. AQI is the All-Country World Index.

It's all markets and the S&P 500 actually lagging on this one-year scale. Now, South Korea Index is like 36% Samsung and Hynix, okay? So it's very much in this memory chip boom that we have going on here. Also, interestingly, you guys, Simu talking about the Taiwan market, emerging markets in general. South Korea is on the cusp of emerging and developing by official designations, and in fact just missed a chance to kind of, quote, graduate from emerging to develop this past summer. They continue to want to do that. It kind of doesn't matter in real terms.

sometimes it's considered a discount to those companies, but not this year. I'd like to think K-pop demon hunters pushed them over the bridge. That's right. You would think. But going back to this issue of when risk is really running this hard, if I think about the markets like a nature special, right? And you've got all the different animals on the plane. Like when you've got risk running hot, what does that mean for the overall ecosystem? I think of it as it creates just this sort of erratic energy in the market

that sometimes can destabilize the stuff that's not really. related to it, the overall indexes. So you'll sometimes see ETF flows that seem to get whipped around on this. Not so much these stocks, but sometimes in some of the emerging technology areas, some of these power ETFs, too. There's a new AI power basket that's traded out there in the last couple months. That's how you know some theme has kind of gained, you know, real heat as you start to get the really isolated ETFs. So I don't think of it as something like, oh,

it's a bubble, therefore everything has to go down. It's much more about, is it going to disturb the kind of core of the market? So far, it's not. Okay. Mike Sentoli, thanks. All right. We'll see a little later this hour, Mike. Well, it's time now for a CNBC News update with Bertha Coombs. Hi, Bertha. Hey, Morgan. Activists on an international flotilla trying to deliver aid to Gaza say the Israeli Navy intercepted their boats as they approached the territory. The Israeli military did not comment about the intercepting the vessels, but The Israeli foreign ministry said earlier today that it had warned the flotilla to change course

because it was approaching an active combat zone. More than 40 boats are carrying about 500 people, including Swedish activist Greta Tunberg. The Trump administration canceled nearly $8 billion in funds for climate-related projects today. White House budget director Russell Vott said in a post on X, those funds were for 16 Democrat-led states, including California and New York. And NASA is requiring employees involved in Artemis space missions to keep working through the government shutdown. CNBC has learned that the employees working with contractors, SpaceX, and Blue Origin will work unpaid through the shutdown,

but will then receive back pay when the government reopens. The space agency's acting finance officer says 15,000 employees will be furloughed, while 3,000 people will be. remain working. You can't just stop working when people are in space, right, Morgan? Yeah, it definitely makes it a trickier situation. Of course, Artemis II is expected to launch as soon as February. So I think they're pushing through, it sounds like. Bertha Coombs, thank you. Coming up, we will talk to one analyst who says Visa could be a winner in the stable coin race. And we'll hear from a firm CEO, Max Lefchin. His state on the consumer right now, is he still seeing healthy activity? That's coming up on overtime.

Welcome back to overtime stocks ending the day higher with the NASDAQ leading. The S&P and Dow both closing at record highs. It was another huge day for health care. And pharma stocks in particular, Pfizer continued to rally after reaching a deal with the Trump administration to lower drug costs and in turn get tariff relief. Even though it's only Tuesday, if Pfizer keeps these gains, it would be its best week in 50 years. Big gains from Merck and Eli Lilly as well. S&P 500 Pharma Index posting its best two-day gain since 2008. And Neptune Insurance going public today.

The stock closing nearly 25% higher, priced at 20, open at 2250, closed right around 25. Well, Visa has been a laggard lately recently, underperforming both the Dow on the S&P 500, as well as Pierce, MasterCard and American Express over the past three months. But one analyst sees a former headwind becoming a potential tailwind after Visa launched a stable coin pilot program. So joining us now is the man behind the call. Dan DeLev, Mizuho, senior fintech analysts right here on set. It's great to have you back. Okay, so how does this headwind become a tailwind for Visa? Yeah, actually, what's interesting, it's never been a headwin.

It was always like a story and narrative against them. So, you know, because you can think of yourself, like, you would not go to, like, Europe and pay with Stablecoin. But the narrative was definitely negative. And then they flipped it right now, and they're piloting stable coin, you know, transactions via Visa Direct. And Visa Direct is, like, so ubiquitous. It's over $1 trillion. I mean, it's growing like a, you know, 20% K-GAR. It's over $1 trillion.

It's about 20, 25% of their debit volumes. And that's basically what's powering like Uber drivers, et cetera. By the way, MasterCard has very similar businesses. So it's, to your point, it's no longer, it's never been a headwind, but it was a bad narrative. And now it's actually turning into a tailwind. Yeah, and I think a lot of folks, to your point, didn't realize how much Visa and MasterCard were investing into the ability to do this and sort of seeing around the corner. So what does this unlock? for Visa, especially if you start to basically disrupt the more traditional financial infrastructure

plumbing with stable coins. Correct. So here's what's going to happen. And that's why, you know, we think, for example, like, you know, they're piloting it with Circle, but we actually think that Circle is in trouble. And, yeah. Okay. Like another question.

Yeah, we have a sell on Circle. Yeah. So the USDC is very interchangeable. I think that's what people don't understand. So they're piloting it with USC, but USC, there's USDC, there's, Tether has a new U.S. cone, right? Coin. PayPal has a coin. Everyone has a coin. So what's going to happen is you always need someone in the middle, even though people say that stable coin is kind of without a middleman, but it turns out you do need a middleman and that middleman is Visa and MasterCard. And

you're going to be able to basically like interchangeably switch between those stable coins and then Visa and MasterCard are going to be in the middle. And because they're the trusted sort of network that's globally accepted everywhere. And that's why we're, we think that, yeah, yeah, USTC is one of the many stable coins that are going to be used. So does that mean Visa and MasterCard are effectively kingmakers in all the stable coin talk? Because it's the situation where so many people are talking about stable coins and how they're going to win. Somebody has to lose, right?

I mean, these are markets. So not everybody can win in stable coins. Somebody's going to pick the wrong one or it's not going to be underpinned the right kind of way. Tell me the scenario in which somebody loses. Maybe it's circle since you said you don't like them. So circle, I mean, the reason circle we think is in trouble is because not because, I mean, A, the USDC circulation is not really moving. And remember, people don't really realize it.

As rates come down, this is the only way they make revenue is, you know, treasuries. And when rates come down, they make less revenues. And those partnerships are actually hurting them. Who's losing here? The banks, right? Because right now, all these cross-border transactions are going through the banks. And so Stablecoin is really not disrupting, you know, like the networks or anything else. they're actually disrupting the banks.

So those are the, I would say, like the losers of the stable coin revolution. So how do the banks figure this out? Because usually banks don't just kind of sit there and lose. They make their money elsewhere, right? Remember, they make their money in lending mortgages, yada, yada, yada. So they, you know, swift and like all the traditional, you know, rails or pipes globally, it's not really how they make money. But they're losing on volumes, but I don't think they're losing financially as much.

but they're losing their position as, I would say, like the pillars of global finance. I would say that's probably true. All right. We'll watch it. Dan Dolev, thank you. Thank you. Well, up next, we're going to hear from Affirm CEO Max Levchen on allowing customers to use its buy-now pay leader services in Ace hardware stores, whether he's concerned about consumer spending.

And speaking of spending, we're going to discuss why record wealth gains by the top 1% of Americans is creating an even starker to, to your economy, potential risks for the market. That's next. Welcome back to overtime. Shares of AST Space Mobile are sky high after the company announced that its Bluebird 6 low Earth orbit satellite is ready for flight after completing final assembly and testing. The direct-to-sell space communications company so that expects to have as many as 60 satellites in orbit by the end of next year. They have partnerships, remember, with AT&T, Verizon, Vodafone, and a number of others. But those shares finished up today, 16%.

John. Interesting stuff. Well, by now, pay later company a firm up, let's see, almost 2% today after announcing a partnership with Ace Hardware for in-store real-time credit approval, a firm CEO, Max Levchen, telling me the move is designed to increase a firm usage among existing members, not just acquire new users. By the way, we've underwritten north of 60 million Americans, and so we, we have a very large, very well-established user base who understand who we are and what we offer

and what makes it special. What we're doing is we're lighting up parts of checkout out there where our consumer can say, oh, that's easy. I love a firm. I know exactly how to use it. I'm going to opt for my favorite payment method right now, and the repeat transaction is going to be very powerful. I also asked him about the state of the economy for credit-strapped consumers. He says it's not just the wealthy that are on solid footing. And so the affirmed customer, which is a very, very large group at this point, is definitely doing well. I think the notion of overuse of credits is a little bit more of a narrative device that has been used to tell a story that does not apply equally across various populations. There are definitely folks who are seeing some degree of struggles.

One of the advantage of our model is we underwrite every transaction, and because we make no money on late fees or compounding interest, all the usual crutches the industry uses, it is, we are in total alignment with our borrower. Finally, AI, Leibchin told me it's helping a firm show customers how they might afford major purchases. These lending products are quite complicated, and for merchants to optimize width, but they're extraordinarily powerful if you can offer just a right credit offer to the right person in the right moment as they're contemplating a big purchase. But we have now north of 350,000 active merchants at any even time. Doing this with every one of them is just not ever going to be possible with

the human sales force or human client success force. AI takes care of that. Helping the merchants to connect the customers with the deals that make sense. Now, a firm stocks up 23% year-to-date or so. It had a rough September, Morgan. Yeah, and we've had this conversation about a resilient economy and a resilient consumer. I mean, obviously it depends on the devils in the details in terms of what cross-section of socioeconomic breakdown you're talking about. But that sounds pretty consistent with what he has been saying, actually, all year, even when it's seemed contrarian. Yeah, it sounds like that the Affirm customer, which is not the Walton's necessarily, you know, it's folks who are deciding between using that and revolving credit.

And affirmed probably going to be a better deal for them interest-wise than that. folks still are paying things back at a healthy rate. The approvals are going at a pretty healthy rate. So at a time when we're perhaps not going to get as much federal data as we're used to getting, getting that sort of ground-level truth from a firm with 60 million, right, customers. We don't know how many of them are buying consistently, but that they've approved in the U.S. under their belt. That's an interesting data point. Yeah. Up next, why this year's big stock market rally may be creating a risky environment for the market and your money. Plus, Reddit, one of the hottest stocks on Wall Street, is coming under a

tremendous amount of pressure this week. We'll tell you why when Overtime returns. Welcome back to Overtime. Reddit shares sharply in the red, nearly 12% down for the second straight day on reports that Chat GPT's citation of Reddit content plunged in September. Reddit has has been one of the hottest stocks on Wall Street more than tripling over the last year. Well, this year's market rally helping the top 1% of Americans generate a record amount of wealth, but it's also creating a two-tier economy where the top 10% are accounting for nearly half of all consumer spending. Robert Frank is here.

He has more. Robert, I feel like we've been talking about this for a long time since the era of low interest rates. We have been to an extent, but now we have some new numbers and there's a new degree of both benefits as well as risk. So let's break it down. The top 10% of Americans, they added over $5 trillion in wealth in the second quarter. That was driven mainly by the stock market.

All wealth groups, in fact, saw gains in the quarter. with the bottom half of Americans adding about $150 billion to their wealth. But the fastest growth, not surprisingly, is at the very top. The top 0.1%, so those are folks lucky enough to be worth $46 million or more. They have seen their wealth nearly double since 2020 to over $23 trillion. Not surprisingly, stocks accounted for virtually all of that wealth creation. The top 10% of Americans own 87% of corporate equities and mutual fund shares. remain fairly consistent even with the rise of retail trading. The top heavy wealth creation,

though, has led to a top heavy consumer economy. The highest earning 10% of Americans accounted for a record 49% of total consumer spending. That's according to Mark Zandi at Moody's. Of course, if you have a market decline, that could place risk for the consumer economy. For the full breakdown of the changing wealth population, the winners in the luxury economy and what's happening on the wealth management side, you can sign up to the inside of the inside Wealth newsletter out tomorrow morning. CNBC.com slash inside wealth at CNBC.com slash inside wealth.

I must read every week. Thank you. You know, it's interesting because usually when you see a stock market that's at record highs, I feel like typically, historically, you see strong consumer confidence readings, and we haven't necessarily had that. Does this bifurcation speak to that dynamic? Absolutely. That bifurcation is why, on average, everything looks very good.

So you look at economic growth, GDP of 3.8%. You look at unemployment at 4.3%. The broad averages look very good, but it's really masking these two very different economies that we have. And it's also on the risk side. We now have a consumer economy that is propped up by a smaller group of wealthy consumers. That group is propped up by a stock market that itself is being supported by a small group of tech stocks. So all the pillars of the economic and market expansion that we've had are on a smaller and smaller foundation. It doesn't mean it's not working, because right now it is.

It just means that the risk are a bit higher if all this starts to turn around. Top 10% is households at around $235,000, right? In income, yes, but these measures are by wealth. So by wealth, the top 10% are those with about $2 million or more in net worth. So these are multimillionaires, but you could have retired as a couple, one teacher, one person, a regular job, and have $2 million by the time you retire. tire. So in this day and age, $2 million in the top 10, depending on where you live, not a huge amount, but it's still the top 10. Well, says Robert Fram.

Yes, $2 million is pretty good. Yes, absolutely. Thank you, guys. Well, up next, Mike Santoli breaks down why there may actually be a new hope for all of those consumers who are feeling stretched right now, outside the top 10%. We'll be right back. Welcome back. Consumers may get a jolt in early 2026. Economists say a flood of oversized tax refunds could help keep. the American consumer going. Mike Santoli is back with us and he's going to break down the dollars, Mike. Yes, Morgan. So obviously the big, beautiful bill, now law, had a lot of these tax cut

provisions that do apply to individuals. A lot of it, of course, was kind of corporate investment related taxes. But, of course, you have the salt cap being raised. You have no tax on tips and overtime, some other standard deduction adjustments. Now, they're all now law, but because the withholding schedules recommended by Treasury have not really changed this year, Essentially, the government is over withholding. I first became aware of this when David Kelly at J.P. Morgan described this whole effect. This is from Stratigas, which is now trying to handicap exactly what it's going to mean in the way of tax refund totals next year. 2026.

So about $150 billion or so incremental to what the trend has been in tax refunds is expected. So somewhere above $500 billion. Now, $150 billion incrementally, it amounts to about 2% of quarterly personal income in total. So obviously not a huge game changer, not one that's going to last all year, but it could be a little bit of a refresher for the consumer. Those tax refunds tend to get either spent quickly or pay down some debt to obviously renew people's spending power. So it's one of the reasons, I think, that the market has expressed comfort about the possibility of a reacceleration of the economy, maybe some support for the consumer next year that might be struggling a little bit now. And so it's not going to be the whole story of the economy next year, but it's one. piece of the puzzle. Yeah, and I found myself

having, I love that you brought this out and highlighted this, because I found myself having conversations both on camera and off about this topic with bank CEOs and economists and folks that are consumer facing with their businesses, and it does seem to be something that's factoring into the conversation. And oh, by the way, not just on the

consumer side, but on the business side with some of the stuff that's in that tax bill, too. For sure. And I think that is kind of getting into analysts' estimates and things like that in terms of capex expectations, because really, that's what it's going to mostly be about, is essentially incentives to invest more in the business and not necessarily to hire and things like that. But it's this general picture out there

of you have a little bit of a soft patch in the economy. Obviously we have this big slackening the labor market that all the numbers are now suggesting. And the hope is that it doesn't get too overdone to the point where we get a genuine economic downturn ahead of next year when there is this idea that the government, the administration, wants to run things hot, you know, whether that means how the Treasury is handled and all the fiscal spending measures that are at its disposal. All right. Mike Santoli, thank you.

Of course, that brings us back to some of the volatility we've seen in the bond market as well and where we started the conversation at the top of this hour about the steepening of the yield curve, as we've seen some softer jobs data with ADP this morning, but of course question marks about what the future holds and how that factors into the longer end of the curve. Right, and you don't end up with restatements on ADP. And we're not getting the jobs data, as usual, on Friday here. A lot's hanging on the labor picture, though, through the end of the year and into next year,

as well as talking to Max Lechon, people are able to repay their debt in part because they're still employed. Yeah, keep an eye on the dollar amid the shutdown as well. And then, of course, gold, which climbed to another record high today. Stock's also at record highs today. That does it first hear it over time.