Closing Bell - Closing Bell Overtime: More Affordability Pressures & OpenAI Adds Ads 1/16/26

Episode Date: January 16, 2026

Carson Group’s Ryan Detrick joins to discuss why signs continue to point toward a market rally—and whether Washington policy risks could disrupt the momentum. Breaking down the president’s new affordability push, including as Bernstein’s Chad Dillard explains how rising electricity prices and grid constraints are pulling the administration into energy policy and what that could mean for electrical stocks. Phil LeBeau looks at auto affordability pressures Julia Boorstin explores OpenAI’s move into advertising, followed by a Netflix earnings preview with Wedbush analyst Alicia Reese. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

And that is the end of regulation. You got a bunch of legends of the New York Knicks ringing the closing bell to New York Stock Exchange. What do I see, John Starks there, Alan Houston, Amari Stottemeyer, and Moore? BuildGurls.org doing the honors at the NASDAQ. Stocks closing out the week with a mixed day. The Dow is slightly lower, very small losses. The S&B in NASDAQ, but it is the small caps that keeps starring the Russell 2000.

Once again, what is it, a Peter Frampton? I want you to show me the way. And the same thing on the weekly numbers, the Russell 2000 up 2 and a half percent. Everything else is down. Dow 50K, S and VB 7K, they're going to have to wait. And we know the waiting is the hardest part. In the meantime, President Trump saying that no one should have to pay higher energy prices because of an AI data center. That news, proving to be good news for some power players, bad news for others. We'll get more on the story and the reaction coming up.

Oil prices slightly higher today. ending the week, though, pretty much right where they started, despite some multi-dollar swings on a lot of geopolitical headlines, mostly around Iran with a touch of Venezuela. That is your scorecard on Wall Street. Hi, everybody. Welcome to closing bell overtime. I am Brian Sullivan. Hope you having a great Friday on your radar this hour. The president's affordability push extending to car prices, open AI encroaching on Google's turf, and we are getting you all set up, just riled up for Netflix. earnings next week. We got a lot to do over the hour, but we're going to begin with the market action. Sima Modi, who's at the New York Stock Exchange? Seema, what is on your eye and your focus for this equity market? Okay, Brian, it's the bifurcation in tech. That continues, right? With semiconductors continue to outperform, take a look at the SOX semiconductor EPF in comparison to the IGF

software sector, outperforming it by 10 points just this week. Investors continue that rotation into chips following Time 1 Semmy's blockbuster results. The chipmaker also expanding its production in Arizona, which is raising hopes that inventory levels will continue to rise for customers like Nvidia, AMD, and Broadcom. This, as we count down, to Intel earnings next week. But a different story, as we've been discussing, is playing out in the software space

as investors grow more concerned around competition from new players and also low headcount, how that could pressure IT budgets. Take a look at names like Atlassian, DocuSign, and Intuit, all trading down by 15% or more just this week. Now, with the recent sell-off in the IGV software ETIF, it's now trading at its lowest level since May of 2025. The sector as a whole underperforming broader tech over the last four years. Some winners, though, in healthcare, take a look at Moderna up 20% this week.

The best stock in the S&P 500 following better than expected earnings guidance. And Novo Nordisk, up about 8% today as its weight loss pill had some stronger first week result. Also, some more commentary from its new CEO about the 2026 vision for that company, Brian. Yeah, I heard the hooting and hollering as well, Simom Modi. You got a bunch of New York Knicks there. I got to imagine there's a lot of excitement and a lot of really tall people. A lot of excitement, a lot of pride for the city. New York City, the Knicks here doing the closing bell honors.

So an exciting day to be here for sure. It's very, very cool. Sima Modi, thank you very much. All right, let's go from that to the Federal Reserve. because there was a big move in odds today on who the next chair of the Fed may be. According to our data partner, Kalshi, Kevin Warsh, now seen as having a nearly 60% chance, while Kevin Hassett's odds were cut in half. This after President Trump said he'd like Kevin Hassett to stay in his current job.

Let's bring in Steve Leesman for more. I don't know why I'm highlighting your name, Steve, but you get the, the Kevin's. There was a big shift all on kind of. one sentence from the president. Yeah, it was an interesting and unexpected sentence from the president, throwing a wrench into the outlook for the next Fed chair, Brian, saying he wants to keep Kevin Hassett. He was once to presume runaway frontrunner for the job,

keep Kevin Hassett in his position at the White House. And, of course, take a look here. That threw the odds to favor former Fed Governor Kevin Warsh, the long-running second favorite. But the whole process has been really volatile. The president has gone from saying he knows. who he's going to pick and then hinting at HACID. And now a little bit of a hint at Warsh here.

White House officials have repeatedly said, don't get ahead of yourselves. It will only be the president who decides that anything else is just speculation. Well, speculation in the bond market, treasury yields rising on the president's comments, presumably on the belief that Warsh would be more independent of the president and possibly more hawkish.

Here's what he said in a November, Wall Street Journal editorial. He said, But inflation is a choice and the Fed's track record under Chairman Jerome Powell is one of unwise choices. The Fed should reexamine its great mistakes. It should abandon the dogma that inflation is caused when the economy grows too much and workers get paid too much. Probabilities for rate cuts were little changed in futures markets through June when the next cut is expected. But they did drop slightly longer term, a sign that markets could see a Warsh Fed as a somewhat more hawkish fed, Brian. Well, it's easy to armchair quarterback, and he can sit there and criticize Jerome Powell.

The question is, and I'm sure you know Kevin Warsh, Steve, how would he be different? What would a Kevin Warsh Federal Reserve likely look like? Well, what's really interesting, Brian, if you look closely at that pull quote that we had there, is something a little bit actually doveish about that. One of the things that the White House has complained about, and Kevin Warsh, maybe some politicking for campaigning for the job in that op-ed from back in November. You know, he's saying one of the things the Fed ought to do is to take the administration and their policies more or less at their word and say, you know what?

These policies are supply-side policies. The economy can grow faster without having to put the brakes on the economy. That's something, that's a flyer that the current Fed has been unwilling to do, and it's one of the top complaints. So you may let it run a little bit looser for a while unless the economy shows inflation. One other thing, Brian, is what you might find is you might find Kevin Warsh has not been a big fan of the balance sheet. So he may move maybe more quickly to reduce the size of the balance. I know we got to go.

When are we going to find out this out, though? When is this announcement going to be? A couple weeks. You've heard that before, Brian? Yeah. That's what we've heard from the president. had thought, and I had actually reported, I believe, from sources at the White House that it could come as early as the first couple weeks of January, where we kind of slipped past that, Brian.

I know we got to go, but it could come anytime. I thought today's comments from the president were a sign that he wasn't quite there yet. Yeah. It's like that sign in a bar, free beer tomorrow, but it's always today. Steve Leesman, not that I would know that. Steve, thank you very much. All right, now let's go back to the bond market, some moves to the bond market today. yields ending a little bit higher. Rick Santelli, where it is today is in Chicago. Rick, what's going on? I'll tell you, they only ended up a little bit higher, but this little bit is a very important little bit. And if you're a technician, today is your day. Let's look at a two-week chart of two-year, okay? Very simple. It's kind of going up almost at a 45-degree angle there.

Okay? It's been going up. That's why the curve's been flattening, and that's a two-week chart. The reason been going up because the notion of the Fed being aggressive easer in 2026 is vaporizing. Now, if we look at a two week of tens, it's completely different. It's been sideways. Actually, sideways for about six weeks. That's a two-week chart. But you could clearly see, we haven't traded above 4.19% until today. So that little bit put us through the top of the range and it cracked through the top of the range

and it's holding above it, so most likely we're going to close above 4.19%, which is key. And should we do that? And I think we will. It'll be the highest yield closed since the 2nd of September. And it's a biggie. So today we actually steepen the curve a little bit. The long end on that breakout would a three-day weekend had some follow-through. Anybody who's traded knows you get a little nervous to wonders.

An extra day, you can't tweak your position. And finally, the dollar index, finally making a lot of sense, the long end going up, less easing, and it has been doing well. Another fresh, one and a half month, high close. Brian, back to you. Rick, thank you very much. All right, from bonds to the metals market, silver, finally, kind of, I guess, seeing a big reversal. Pippa Stevens joining us now on set, Pippa, are the metals allowed to get out? Is this allowed?

I know, quite the reversal here. but we are seeing right across the board for metals and they are pulling back from record highs. But silver is still tracking for its seventh positive week in eight and a delay in possible tariffs on critical minerals easing some tightness in physical markets and maybe some demand destruction kicking in on the industrial side for silver specifically.

Copper also pulling back after monster gains, fueled in part by AI, and in a rush to secure critical minerals, tech companies are now turning to miners directly. Amazon Web Services announcing a partnership with Rio Tinto So to buy the first copper produced from an Arizona project, it's a new technology that uses bio leaching, which has a smaller environmental impact. Rio exec, Vicky, PC, telling me the deal shows that it's not just important for companies to look at securing the metal itself, but also how it's produced, which is the holy grail. So Brian today's all about power, but can never lose sight of the minerals.

No, it's not. And I would have guessed these are, and we could talk to Ryan Dietrich in a second, but these are all still an up trend. One day, first day down in a long time. Exactly, exactly. And so when we say that they're pulling back, you really need to put it in context. I mean, 2025 was a record year best since 1979 for both gold and silver, and that has not slowed down at all. So one day does not a trend to make, as they say. Best since 1979, also a good smashing pumpkin song. Pippa Stevens? Thank you. All right. So it may have been an overall, a down week for the very tip top of the averages, but the underperformance, was it really a sign of things to come or just a blip?

because guess what? The small cap stocks have been rocking, posting one of their best starts to the year since I don't know when, but Ryan Dietrich probably does. He has Chief Market Strategist at the Carson Group. I'm kind of putting you on the spot, Ryan, but you know this stuff like, you know, better than anybody. It's been a pretty good start to the year for small caps. No, it has solely. Thanks for having me back and happy Friday and hope everyone has a good three-day weekend. It really has been. I mean, listen, it's been a good start to the year. You've just talked a lot of about that, but the story of the year clearly has been the rotation. I wouldn't say away from tech, but into other stuff. And small caps is done well. Now, I'll be clear, you know, with small caps, we have seen these fits and starts before. So we're not totally sold on that, but what we are

sold on, kind of like you've had most guests today talk about, it's a global bull market. There's a lot of participation. One more thing here, various advanced decline lines on the NYSC, the S&P 500 are all heating all-time highs. Market breadth leads price. This is still a healthy bowl market and a global bull market, Brian. Yeah, and you nailed it. As always, we've had these head fakes in small caps before. A lot of our viewers, listeners, they're watching, they're listening. Like, I just don't know if I'm ready to pull the trigger on small caps yet.

When will there be some kind of confirmation signal to you, Ryan, that this is real or maybe it's not? And the small caps go back down. Is there any kind of a timeline that you look at? Yeah, it's kind of like loose. seeing the football with Charlie Brown, right? You think you're going to kick it. She pulls it away. It feels like small cats been that way for a while. I mean, just simply looking at relative strength, like the Russell 2 versus Russell 1,000. We are seeing, you know, some new highs breaking out there. But I don't like to say one of the other. You know, we manage real money here at the Carson Group,

like billions of dollars. And we are a slightly overweight, large, over small, but it doesn't even have small cap exposure. And look at midcaps. I mean, no one talks about midcaps. They're hitting all-time highs. I don't think they did today. But, like, they're hitting all-time highs also. So, you know, you can have different buckets here. But, I mean, listen, if you're really think the Fed's going to cut a little bit more this year, which we're not so sure about that. Maybe you want to have a little more small cap exposure, but just kind of own a little bit of everything is our take here. Yeah, you know what? And you're exactly right. And shame on me. Nobody thinks about Peter or Jan Brady. They just kind of get lumped in the middle.

Everybody's talking about Bobby and Greg and Johnny Bravo. So let's go to that. How much of that is Fed exposure? Let's say we don't get another rate cut this year. J.P. Morgan, I think, believes we won't. So let's say we don't. Then what? Yeah, if we don't, hopefully that means the economy is stronger, first things first. But that would also probably mean those small midcaps don't do as well. But we mentioned midcaps. And we've overlaid midcaps with what? The S&P 500 equal weight.

And that's a big theme we've been talking about here. You know, the equal weight continues to go higher. I mean, just a couple days ago, equal weights up a half a percent. But the S&Ps down about half a percent. So that's my math is right, Brian. One percent outperformance. 318 stocks up last Wednesday. Yet the market, quote, unquote, was down.

That's because of tech underperformance. But all in all, the equal weight, that's the story of the year. And again, midcaps tend to follow the equal weight. So that's maybe an area that we think is going to continue to do pretty well in 2020. Okay, quickly, good start to the year. Generally, portends good things. That's exactly right. If the first five days are higher, like they just were this year, you're up like 85% or so of the time for the full year.

And if January's higher, I know January's not over yet, then the next 11 months, Brian, are higher, 87% of the time. That one's been on fire lately. It's been working. So we're not there yet, but listen, a good start a year likely means this momentum is real. Fundamentals are solid. We just released, I know you're at the end here. We just released our outlook. We titled it riding the wave. And we think there's a lot of waves

to this bull market still suggesting you want to be invested in this bull market. And I saw you posted that publicly to the web, so we appreciate it. Ryan Dietrich. Thank you very much. All right. Thank you. Caterpillar was your best performing stock in the Dow last year. And that momentum carried right over.

doubt doesn't care about the calendar. Caterpillar up 13% so far this year. And will the president's push to build more power plants mean even more demand for Kat's equipment? We'll talk about that and more coming up. All right, welcome back. President Trump, continuing his focus on affordability. He has a plan for housing. He has a plan maybe for credit cards. And he's extending that push today into power and even cars, Amon Javvers, in Washington with more on all this. Amen. Brian, that's right. President Trump continuing this push to lower now electricity prices for consumers with a plan to push tech companies to bid to build new power plants across the country.

The approach would push much of the cost of electricity generation for the AI boom onto the tech companies and relieve consumers of those surging costs. Now, earlier this week, we saw the president posting on social media. that he wants the big tech companies to, quote, pay their own way for power. It's part of a push from the White House to lower costs, as you say, across the board, including on items as disparate as housing, pharmaceuticals, gas and oil, and others.

The plan the White House announced today would push grid operator PJM interconnection to hold an auction for tech companies to bid on 15-year contracts to generate electricity. The Trump administration is, working alongside a group of mid-Atlantic governors on the proposal. Now it's not exactly clear that PJM will go along with the plan. However, PJM released a statement today saying PJM is reviewing the principles set forth by the White House and the governors. The PGM board's decision resulting from

a multi-month stakeholder process on integrating large load additions will be released later today. The board has been deliberating on this issue since the end of that stakeholder. process. Now, Interior Secretary Doug Bergam was on CNBC earlier this afternoon and Brian, you asked him if he thinks PJM will hold the auction. Here's what he said. I think PGM will hold the auction. I think their options at their options at this point are quite limited because we heard this morning from governors, states may decide, hey, we are going to pull out. Now, Brian, we're going to watch for that announcement this afternoon. Nothing yet from them on their social media accounts, but we'll monitor it. Back over to you. Yeah, and they don't

have to do anything, and they may not. Amen Javis, thank you very much. Right. So as the president inserts himself into this energy process, there will, of course, be winners and losers. But figuring out the companies that may benefit defends a lot on what happens, also the fine print. Your next guest has done some work on exactly that in a new note published overnight. Joining us, this is Chad Dillard. He is senior analyst at Bernstein. Chad, welcome. Listen, Listen, here's the thing. PJM runs the grid. The electricity we're getting right now, you may be getting wherever you are sitting. If you're a data center operator, you want your own power, build a power plant, neck, don't even deal with the grid. Build your own thing. Have your own plant. That's a risk to the

grid, but is that a good thing for a name like a caterpillar? Yeah, definitely. Thanks for having me on. So our call going into 26 is that power would actually be for the size. Power prices are up pretty massively. The states that see a lot of data center construction are actually leading that increase. Borders are upset, and this issue got some traction in the November elections. And in 26, we see the midterm elections. So it's no surprise that politicians need to respond. And with one third of all data center construction located in the PJM, this is ground zero here.

And my view is that this announcement actually is a positive for the overall electrical space. So 15-year contracts will unlock about $15 billion worth of new power plant construction. Your ring fixing a lot of the consumer power inflation concerns. But the thing is, there's a contrarian way to look at this. Does this actually push hypers more towards on-site generation? Because at the end of the day, the take-or-pay contracts reduce flexibility for hyperscalers. And so if you're being forced to underwrite power plants, why not just control them? And that's what I was getting at the intro.

And my first question of you, Chad, was why deal with the grid at all? Why deal with the political blowback? And if you're a data center operator, you can say, well, we didn't have anything to do with your power bills going up because we actually aren't on the grid and have nothing to do with the overall power system. We have our own little power plant. Assuming more of that is happening, it will happen. I know that, you know that. Who wins? What stocks win?

Yeah, so if you're doing on-site generation, probably the biggest winner is Caterpillar. So they manufacture both reciprocating engines and, you know, smaller-scale turbines that actually powers that local grid. Other companies that tend to win are some of like the power management companies. So when you're bringing power closer to your actual within your four walls, the complexity of power management goes up. And so there are companies like Eaton, as well as as Hubble.

They're companies like Allegiance, which does a lot of like the mechanical, electrical engineering and installation. So those are some of the companies that went on top of Qantas services. Yeah, Quanta would be a loser if that were the case, wouldn't it? Because they build power lines for power grids. Well, so they build power lines. So they would still see more growth. at the end of the day, it would be more ideal if they actually saw more transmission lines get built.

But they still do have this type of work where they actually build out the physical infrastructure and the equipment, the electrical equipment there. So they're less of a winner is how I characterize it. Got it. Less of a winner. Cat would be the big winner. And this is going to be a big fight. It's going to be very politicized. I think you're exactly right. Chad Dillard, really appreciate your time. Have a great day and a good weekend. Thank you. Thank you.

All right. Speaking of affordability to push for affordability. by the White House extending beyond energy today. They're now addressing, after talking about housing, credit cards, power, the auto market. Phil LeBoe has more on what may or may not be going on here. Phil. Well, at a minimum, Brian, what you have are members of the administration touring auto plants in Ohio and they'll be in Michigan tomorrow, basically saying we need to bring down the cost of buying and owning a vehicle. When you take a look at what the average transaction price is right now, keep in mind it is at an all-time high, according to Cox Automotive. Now more than $50,000. That's what you and I, on average, are paying for a new vehicle when we go to the dealership. The average monthly payment,

though, is what most people base a car purchase on. And it's close to a record high, according to Edmonds. At $781. And even more stunning is the fact that more than 20% of the monthly auto payments that are being made right now. Those payments are for more than $1,000. That's why the Transportation Secretary says that has to change. The reality is when we have good policies and great American workers, you're going to see more affordable cars. I mean, we don't want an old Soviet Union style set of, you know, price fixing in autos. That doesn't make any sense. But what you want is good policies, great companies, and amazing American workers to produce cars that Americans actually

you want to buy? What will those new policies be? No indication at this point. There's no specifics being shared as part of this tour. Quickly want to show you this. Seventy 7.8% of the vehicles sold in this country are internal combustion engine vehicles. EV's now down under 10% again after having a bit of a bump in the third quarter. And as you take a look at the shares of GM Ford and Toyota, keep in mind that for the automakers, I get this question all the time, Brian. and people say, well, the automaker should roll out lower priced cars. And you know what I hear back from people in the auto industry? Rightfully so, we're in the business to give the market what it wants. And right now, what people want are bigger vehicles with a lot of the features that drive up that cost.

We're just meeting the demand of the market. If you look at the median price is 50,000, as you've reported, which means a lot of cars are a lot more expensive. Is there any sign, Phil, that a not, $90,000 SUV with 18 cameras on or whatever. If there's any slowdown in sales of those vehicles, because I see them everywhere all the time. No, no, because the higher end of the upper part of the market continues to spend money. We've talked about that in this case-shaped economy. That's the part of the market that's not slowing down. And to drive home your point, Brian, about higher-priced vehicles, the average price paid for a pickup truck in this country, a pickup truck, $66,000.

Think about that. Does it drive itself? Like, does it come with a boat attached to it? Those are big numbers. You know what they say, though? wealthy people drive nice cars, really rich people drive pickups. Philibault, thank you very much. All right, maybe I just say that.

A big story watching in the markets, the widening split between software and semis, a big semi-ETF closing about 400 for the first time ever, while a software ETF below. low 99 for the first time since last year. Mike Santoli looking for possible signs. The software slump may be slowing soon, he said. We're back after this. Well, if you're not checking out, CBC.com, you should be because today there was an article looking at which stocks could be added to the S&P 500 as part of its next reshuffle

scheduled for today. The names are the biggest market caps, Marvell, Virtuble, Virtuble, strategy, Reddit, and Al-Nylam. Why do you care? Well, when stocks get added to the S&P 500, index funds and some fund managers have to buy those stocks if their fund mirrors, or in the case of an ETF for an index fund, it automatically does, mirrors the S&P 500. So they get bought, and it not all the time, but normally does create a short-term bounce in some of those names. Speaking of not a bounce, software stocks, they're plunging as investors fear that AI could simply replace some of these companies. Salesforce down 28% last year under pressure this week. So does that stock, or maybe others, have room for a rebound?

Let's bring in Senior Mark Markets commentator Michael Santoli and almost called them Mikeets, which at this point, it's not a bad name. I was going to say, I mean, just short it up. of like the poor man's copyright on that. That's ours. That's what I do. If we want to grab it. You know, I thought it would be good to do a little bit of a head-to-head comparison. Salesforce, relative to IBM, because IBM as a big tech business, tech services company,

was sort of in the wilderness for a long time. Stock looked cheap forever. Didn't move. Look at they've crossed over in market cap now, Salesforce and IBM, after a long period in which Salesforce was the larger company, now about $50 billion advantage to IBM. So this shows you the changing investor perceptions and fortunes. And the valuation, I think, is even more stark. Salesforce, one of the greatest stocks in the technology sector since its IPO in the early 2000s,

had this massive valuation premium four years. You could see it was up above 100 times forward earnings at times. And now it is well cheaper on that basis of forward PE than the overall market is. It's actually about a 17 to 18 times forward PE. And now, Mike, IBM, is actually a little more expensive at 25 after being cheap for all of that. Now, it doesn't mean sales force is a buy and it's going up and it can't go lower and the earnings estimates are going to come through because the market is clearly voting on the idea that long-term growth is very compromised by these challenges. But it makes it interesting as, you know, kind of the value versus risk versus reward equation is getting somewhat different and more interesting when it comes to big software. Yeah.

And is there a real fear that, I mean, not that AI is going to wipe these companies out, right? It's just going to hurt the business, or is it going to put them out of business? I think the idea is it's going to hurt the business in the sense that they're not going to have pricing power. The subscription-based services that they kind of lock in their customers with are not going to be as sticky. They're not going to have as wide a competitive moat. And therefore, you know, the way that the market capitalizes those businesses is going to be less generous. because previously it was anticipating many, many years of very steady recurring revenue. And maybe that equation is changing right now.

You know, we did have somebody earlier who said, look, this is kind of like when the cloud came along. And Dell and, you know, even IBM and other kind of business hardware database companies, they said we're going to be fine, but it was a long period of time before they found their way through that. And the cloud obviously grew well alongside them. I like it. Mike, it's Santoli, new name. There you go. Mike, thank you very much. Appreciate that.

It's good as ABC News update with Pippa Stevens. Pippa. Hey, Brian, Charlie Kirk's alleged assassin returned to court today as his legal team seeks to disqualify prosecutors in the case over an alleged conflict of interest. They claim the child of one of the prosecutors attended the event at Utah Valley University where the conservative activist was shot and killed in September.

22-year-old Tyler Robinson has been charged with aggravated murder. He has not yet entered a plea in the case. The Education Department today announced it will delay garnishing wages and other involuntary collection efforts for defaulted student loan borrowers. It's not clear how long the pause will last. The department says the suspension will give it more time to make student loan repayment reforms that will give borrowers more options. And new CDC data shows flu activity fell for a second straight week in the U.S. The number of states reporting high flu activity fell from 44 to 36, hospitalizations and medical office visits due to flu like illness also fell. Brian? All right, Pippa. Thank you very much. Google emerging is the

Mag 7 leader. It is the best stock in the group so far this year, over three months, over six months, and over last year. But now a threat to its ad dominance could be emerging. We'll tell you what that is coming up. And a short week, but a busy week to get you ready for Netflix earnings. Remember Monday, market holiday, the great MLK day. And Tuesday, we got Netflix numbers for preppy form coming up. All right, welcome back to overtime. OpenAI getting into the ad game, maybe directly targeting Google. Julia Borsen is here with more, Julia. Hey, Brian, that's right. OpenAI is testing ads on chat, GPT, on its free and go tiers in

the U.S. as it launches is $8 a month lower cost subscription go tier in the U.S. that part of the announcement too. Now Open AI says ads will enable more people to use its tools with fewer usage limits and its plus pro and enterprise subscriptions will be ad-free. Now, ads could be a key way for Open AI to generate revenue to pay for all of its infrastructure investments. This comes after in December, the company said it was pausing ad efforts to focus on improving its chatbot. So the question now for rival Google is how big of an ad business chat GPT can build around its 800 million weekly users with 9,000. 95 million of them estimated to be in the U.S. Wells Fargo projects OpenAI will grow to 30% of

search ad market share, $100 billion in revenue by the year 2030. As the AI advertising battle unfolds, Google does have an advantage with all of its ad infrastructure and it's roughly 50% of search market share. Google does already have ads in its AI overviews, but this week could pushback on reports that is working to launch ads in Gemini. I will have to see when that happens, Brian. Back to you. I have a feeling it will happen at some point. Julia Borsden, thank you very much. All right, saying with media, Netflix shares losing roughly a quarter of their value in just the last three months, much of that coming after the announcement of its buyout of Warner Brothers Discovery up next, a top analyst on whether Netflix's earnings on

Tuesday might turn that stock around. All right, let's talk about Netflix. That stocked out about 15% they announced their plan to buy Warner Brothers Discovery. Wall Street may not love the deal, but could next week's earnings report bring a much-need to boost to Netflix stock? Joining us now, Alicia Reese from Wed Bush, $15, I think, price target on the name. Correct me if I'm wrong, Alicia. What are you going to be most looking for on Tuesday night? I think Netflix has a real opportunity to show how their business has been tracking and focus on the core businesses. There's obviously that stock overhang from the pending M&A. They have an opportunity to really dig into the numbers

since they stopped reporting their subscriber numbers and show that the churn is very low, very small churn. Subscriber retention is great. Give great guidance for 2026. We see some really good subscriber retention and returns in Q1 from some survey work that we've done. And most importantly, we want to see that advertising has expanded. and that they've been able to leverage all these live events and all this great content and content spending that they've done to show that their ad product is expanding rapidly and going to be a meaningful contributor to profitability in 26 and beyond.

This is probably a stupid question, but I have vecta on the brain, and if that statement means something to you, you understand. See, Stranger Things. It came. It was a phenomenon. Yes, and it wrapped up last quarter. Is that going, I mean, could we literally see? a one-quarter Stranger Things pop because now it's gone. That's not what we saw in our survey work. Our subscriber survey work showed a really steady subscriber number for the fourth quarter.

And importantly, you saw people who have not had the service in at least three months wanting to come back in droves. So people who might have missed Stranger Things and were busy over the holiday period, but now I want to catch up on what everyone's talking about. I want to see WWE in 26. there may be some other content that's coming back. Bridgeton, for instance. There's so much content for everyone. You know, you're going to see this quarter over quarter, and Netflix is not intrusive with its ad policy, you know, very low ad load. And, you know, they're able to pick that up. They have a lot of flexibility with that.

Advertisers are really starting to come on because there's a lot of data leverage that they have now, because they have their partnership with Amazon and other DSPs that are really helping them. Do people mind the ads or they're going to pay up for the ad-free version or they're just going to pay the least they can but make it up on the ads? Yeah, they actually have, like I said, the lowest ad load of any streamer or, of course, any linear TV. And so it's really unobtrusive. People don't mind. And what we're seeing in our survey work is that the ad tier is getting really great retention, more so each quarter that we go along and people are switching less. They just don't need to because it's not a really difficult experience for them.

And Netflix, I do think, has some more flexibility to increase the ad load slightly. And I think they will. It is profitable, of course, and it will be helpful. But it's not bothering the consumer at this point. Yeah, I mean, I guess here's the weird news. Streaming is starting to look a lot like just kind of regular TV, right? You've got ads either in the front, sometimes in the middle. But here's the reality.

Netflix stock, Alicia, as you know, is that the exact same price it was one year ago? Is this still a moneymaker as an investment? It is with or without Warner Brothers discovery. I think the advertising opportunity is so huge, and it's now being overlooked. All the core businesses being overlooked because of this M&A overhang. Now, of course, management is a bit distracted,

of course, with this whole M&A deal. They're not buyers, typically. They are builders, but they have not stopped building. And I think the reality of that will come before in their earnings report and the guidance that they're able to give that is obviously sons Warner Brothers. If the deal goes through, I think they'll increase production from both, you know, both houses and really be able to leverage that ad opportunity once they get that integrated.

You have any data on like how much Netflix popped Kate Bush's running up that Hill song from the 80s? Oh, that was huge. It's got of it. Yeah, she sold significantly more around stranger things than she did in the 80s. A hundred percent. I've been one to see. If you have something, send it even off air. Alicia Reese, so Ed Bush, really appreciate your time. Those numbers out Tuesday. You're very welcome. Have a great weekend. Netflix's not the only major company.

Set to report earnings next week coming up. Adam, Krista Fully tells you the other name that he thinks could be a big market catalyst. Welcome back. We've got four stocks that have eight straight weeks of gains. That's going all the way back, folks, Thanksgiving. Western Digital posting its best weekly stretch since October up nearly 60% in that time. Goldman Sachs hitting another record high today up 25% in its longest win streak in five years. Look at Target. Target's up 27% on pace for its best rally since 2018. Target up eight weeks in a row. And Boeing is hovering near a two-year high seeing its longest win streak since the turn of the century up nearly 40% in eight weeks. Now, it's not all good news.

On the other side of that, Apple is down a seven straight weekly decline dating back to December 1st, down nearly 8% of the course of that losing streak. It's worse stretch since an eight-week losing streak about three and a half years ago. All right up next, we're not done yet. We've got Adam Christopher fully on what will be a huge week for earnings and data, and whether the Fed's preferred inflation reading could be the biggest market catalyst yet. All right, we're almost done here, but not quite. Let's get you set up with what's on tap for next week, including a big batch of earnings.

You talked about Netflix. But you also got 3M United Airlines on Tuesday. J&J travelers out on Wednesday, Intel, GE, aerospace, P&G, a little bit later on in the week, and then Friday closes out with SLB and Booze Hallin. On the economic front, you get the latest reports on pending home sales, construction spending on Tuesday. You got the PCE index, the Fed's prefer.

inflation measure later on in the week as well. And consumer sentiment will be released on Friday. It's a big economic calendar. So what is Adam, Chris, a fully watching? Well, let's ask him. He is the founder of vital knowledge. Joins us now, Adam. We laid out a lot of data, a lot of earnings.

Maybe there's something else. What are you watching? Yeah, I would say a couple of other major events to watch next week are going to be two Supreme Court events. So they'll be a hearing in the least of cook case. So this will pertain to Fed Independence, which actually saw a big boost this week despite the Powell lawsuit. And we could get the IEFA tariff decision

as soon as Tuesday. It's unclear exactly what that will hit. Trump will be going to Davos next week in unveiling this big housing stimulus proposal. I think a lot of the major pieces of that have already been kind of floated. So I doubt there'll be few surprises, but there are some of potential wildcards. I think those are kind of going to be some of the big wild card events for next week in addition to all the ones being met. How big of a deal is that Supreme Court,

has that SCOT? Is Supreme Court tariff ruling to you? and the markets? I think it's pretty important. I think the market widely expects that he put tariffs to be struck down. And then the real question becomes how quickly and aggressively does the White House put in place replacement? So we actually asked it addresses today with a little bit more specificity than anyone in the White House has so far.

He said there'd be an immediate 10% tariff replacement imposed. And then over time, they would replace some of the other tariffs with other legal statutes. So that would suggest the immediate tariff burden will go down. And then given how the White House is pivoting pretty aggressively to this affordability program ahead of the midterms, they might not rush to put the full power of burden back in place, you know, at least until November. On the earnings side, we talked about Netflix a bit earlier. Any of those names that you're more specifically looking at, Adam? Yeah, I think Intel will be very important.

You know, Intel's had a huge rally lately for a variety of reasons, but primarily because of optimism around the founder business. So, you know, Intel has made a huge push in recent years. They haven't had a ton of success. But in the last just couple of months, there's been a lot of anticipation, hope about, you know, potentially for some big customers to be announced for that found your business, and for that to becoming more meaningful part of the revenue and earning stream at that company. So Intel will definitely be a major one to watch. Yeah, and we got the PCE.

I was kind of joking about the Fed's preferred inflation gauge because, honestly, we're going to have a new Fed chair in a couple of months. So I don't want to downplay the data, but how close are you going to be watching it? because I don't know, even know what the Fed's going to look like in a couple of months. No, that's a great point. You know, we've had, there's been a pretty hawkish shift in Fed expectations in the last couple of weeks, you know, for a variety of reasons. But a big one, a big part has been data.

We've had decent growth data and inflation data. The inflation numbers this week were slightly core than anticipated, you know, but inflation's still running a bit above expectation. So I think the data is going to continue along that trajectory. The market, you know, the odds of the next cut and not happening until July crept up a decent amount this week. So it's either June or July right now is what the market's assuming. And so I think people are going to watch to see if the data confirms that trend or causes a doubleish reversal. Yeah, and I know, listen, I'm obviously an energy guy.

I love watching a lot of the energy tells because it's truly global. But SLB on Friday, I think really could be interesting because they are exposed to Venezuela. I know, listen, it was this quarter we took out Maduro, so it won't reflect on the fourth quarter numbers. But what they say, I wonder what they say might be interesting because SLB is Chevron. partner in Venezuela. I'm just throwing that out there. I think it could be more telling than normal. No, absolutely. I mean, they could give a good indication of, you know, how serious or how rapid, you know, spending is going to happen on the ground at Venezuela to increase production. And also, SLB, not as much as being confused, but SLB has been highlighting lately some of its, you know,

data center exposure, some of its tech-focused businesses. And that's been a big help for that stock in addition to Venezuela. Yeah, certainly is. A lot of the earnings. earnings? Netflix? Do you care? How closely? Is it Netflix a Netflix thing or is it a market thing? I think it's kind of more of a company-specific thing, but there's also, remember, it's not just the earnings. We're probably going to get an update on the Warner bid process. You know, there has been talk in the media about potential changes to its bid to make it more feeling to the Warner shareholders. So I think it's going to be two components of that, the earnings report and then plus kind of an update on the management's thinking around Warner Brothers. All right, man, we covered a lot in a couple of minutes. Adam, Chris, a fully of vital knowledge.

That was a lot in about a five-minute interview. Adam, thank you very much. You have a great weekend. Really appreciate that. You too. Thanks for having me. All right, folks. Let's mark it's down a little bit today, but small caps.

They just keep rocking. But guess what? We're done. That's it for overtime.