Closing Bell - Closing Bell Overtime: More Clues on Warsh?; Athletic Apparel Stock Woes 8/6/26

Episode Date: August 6, 2026

Darrell Cronk, CIO of Wells Fargo Wealth & Investment Management, explains where markets go from here as investors weigh strong earnings against macro risks. Former Kansas City Fed President Thomas Hoenig discusses why policymakers are holding firm and what a more hawkish Fed could mean for rates and markets. Plus, the growing divide in athletic apparel: Michael Binetti of Evercore explains why he downgraded Nike, remains bearish on Under Armour and what the latest trends say about consumer demand. Our Annika Kim Constantino reports on the FDA's approval of Moderna's mRNA flu vaccine and what it means for the biotech sector then our Brandon Gomez on the latest company moves to deal with the increasingly widespread cyclosporiasis outbreak. Then former CDC Director Mandy Cohen explains what's driving the increase in foodborne illnesses and how consumers and businesses should respond. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The bell's bringing end to the trading day at the NYSC Life Sciences Cares, New York, and Project on ramp ringing the bell. And at the NASAC, New York City, Department of Transportation, Summer Street, between the honors. Welcome to closing bell overtime. I'm live from Studio B at the NASAC market site. I'm Melissa Lee. Mike Santoli's off today. Stocks falling today. Some big names dropping after results.

The Dow down nearly 500 points. Ending a five-day 3,000-point rally. S&P 500 slightly lower the NASAC close to the flat line. On our radar at the close, sneaker stocks getting the boot. Nike downgraded this week. Under Armour reports tomorrow what is weighing on this group. Plus, foodborne illness news dominating the headlines. Why are these outbreaks happening? And how can we contain them? And SpaceX lockups expiring, will these new millionaires spend their riches on luxury real estate? Plus, we're awaiting results from Airbnb, Lyft, Draft Kings, and more.

We're bringing those numbers as soon as they cross. But first, let's start off at the drop in stocks today. Christina Parts and Lovelis joins us now with that. Christina. Yeah, Melissa, the market's growth engine really stalled today as AI storage and software stocks just sold off on earnings. Just two of the 11 S&P 500 sectors finished higher led by energy. Western Digital did beat on earnings, but its margin outlook just came in below rival C gates and shipment growth also slowed. Sanders had somewhat of a similar problem, record revenue, but guided for flat margins and only modest price hikes. So a mixed bag for chips today, but the SMH still managed to close in positive territory. Software, on the other hand, got hit hard.

HubSpot plunged after cutting its outlook. A data dog you can see on your screen down 19% even after a beaten raise. An app-loving slid on a softer forecast down also 19%. And it wasn't just tech. There's some big movers today. Honeywell's newly spun off aerospace arm cratered roughly 23% on a parts shortage as well as just the guidance that it provided.

And it was his first earnings report. And then Papa Johns fell after cutting guidance. is suspending its dividend, the turnaround taking longer than expected. But the bottom line, especially from the tech side, is the market's biggest momentum names, just show that a beat isn't enough anymore. Investors want stronger guidance, and they're punishing anything less than these sky-high expectations that we've seen. I'm zooming in on Sandus specifically, Christine, I mean, why were their flat margins and

not as big price hikes? You would think with longer-term agreements and with this just frenzy for memory chips, that they would be able to sustain margins, least. Well, the argument is that Sandus had the price hikes earlier on in the quarter, and perhaps they weren't able to benefit from the increase in demand later on in the quarter. So it just had to do more with timing of pricing as opposed to whether they're able to keep going higher. They did say that they are signing these agreements now. They're seeing four years into the future. Perhaps they'll share more news next week when they have their investor day in New York

City. But I think it's a timing issue with Sandisk, and they're actually when they raise prices, which was much earlier on. All right. Christina, thanks. Christina Parsnevilles. Thanks. Oil prices higher today on the latest tensions in the Strait of Hormuz.

Pippa Stevens has that for us and a potential new choke point for tanker traffic. Pippa. Hey, Melissa, well, oil did take a leg higher around noon after Iranian state media published a draft plan for the Strait of Hormuz

that would reportedly ban U.S. and Israeli ships from transiting while other nations would have to pay tolls. Now, a U.S. official telling CNBC routes will be without any impediments. That does come, as the Houthi said they increased attacks on Saudi interests after hitting a tanker earlier in the week. Now, everyone is rightly focused on Middle East shipping disruptions from Hormuz and Babelmandab. But another potential choke point is emerging in the Panama Canal.

El Nino is expected to bring drought. And as a precautionary measure, the Canal authorities implementing weight restrictions for transits to save water. This could be especially disruptive this year, given traffic through the canal is up 12% year over year, thanks to rerouted cargoes. That's according to BIMCO. The canal is now at overcapacity, which has pushed auction prices to transit to record levels. That in turn, means more vessels are going around the Cape of Good Hope, increasing transit times by at least three weeks. That's raising freight rates, which in turn is lifting tanker stocks. Melissa? Pippa, thanks. Pippa Stevens. Airbnb numbers are out. Let's get to McKenzie Seagalas for those.

McKenzie. Mel, you got Airbnb shares up around 2% in extended trade. beating across the board and delivering a stronger than expected outlook. Now, adjusted earnings came in at $1.37 a share that is 12 cents ahead of estimates. Revenue of $3.61 billion also topped expectations. Gross booking value reached $27.2 billion. That is nearly $800 million ahead of estimates. Adjusted EBITA came in at $1.26 billion versus the $1.23 billion forecast, with margins of 35 percent also coming in ahead of the street.

Now, Airbnb says growth is accelerating across the business with nights booked picking up not only in newer expansion markets, but also in several of its largest, more mature markets, including the U.S., France, the UK and Australia, the company saying product improvements are driving more demand while its broad range of inventory is really helping it capture travelers shifting toward domestic and more affordable trips. And the outlook here is strong. Airbnb sees third quarter revenue of $4.69 billion to $4.77 billion that is above $1.7 billion. estimates even at the low end and is raising its full year outlook for both revenue growth and adjusted EBTA margin. Those shares now up 8 and a half percent. Mel? Yep, Mackenzie, thanks. Mackenzie Sagalos, similar to the reaction we saw in booking as well as Expedia stocks higher after the results. Major averages closing lower today as Wall Street takes a breather as rates move higher, oil rises. We got some underwhelming earnings in the red hot memory trade and more hawkish Fed speak. Are these just temporary speed bumps? Joining us

now is Darrell Kronk. He is the wealth and investment management CIO. at Wells Fargo. Darrell, great to have you with us. Thanks, Melissa. What do you make at this recent rally to new highs here? It's been voracious, right? I mean, if you take the last take off today, first trading day down, right? But the prior five days, the S&P's up five and a quarter percent. If I go back in the last 50 years, that's in the top three percentile, right, of a five-day move across the index. So it's been a rip-your-face-off kind of move here just in the last five days alone. Does that make it more believable or does that make you skeptical. It makes it more believable because now I've got probably somewhere in the

neighborhood on the close of 70, 71% of the names above their 200-day moving average. That's a really healthy place to be. Typically, to sustain a good rally, you want to be somewhere in the low to mid-60s. So we're starting to push higher. We could see this thing have legs for a little while longer, notwithstanding seasonal trends here in August and everything else. So I think it still looks good and I would not want to fade the rally here. Yeah, I think what's helped make this more believable even though it's rip your face off your words on mine is that we've gone through the major earnings and they've they've pretty much either lived up or we've been able to digest so at this point what is the next catalyst because it seems like all

we have is sort of looking out and seeing the data the economic data points that are going to come out and and wondering hand-wringing over what Kevin Warsh might or might not do yeah I think um so I am watching interest rates really closely as most people are right And I think what's interesting is you've got all this Treasury issuance and you've got all this AI issuance all competing for the same dollar, you know, to place into portfolios. So when I look at like, you know, the last three years' worth of the, you know, bond aggregate returns, they're negative 4.2% on average, right? In fact, I could get the same return in a money market fund year-to-date in 2026 as I can get in high-yield bonds, right, already. So there's not much differentiation there. I think you end up, it's still an earning story.

It's still a valuation story. and I think there's a lot of capital that still remains under-invested in equities. What's interesting is, if you look at the VIX at, let's call it 15-16, at the index level, if I look at what's called the VIX EQ, right, which is a constituent. Very different. Very different story. Dispersion.

Yeah. So you've got this huge dispersion and name volatility on the surface, which tells you hedging right now is extremely expensive, notwithstanding a VIX of 15 to 16 with that dispersion index where it is. That still tells me things are going to go higher going forward. Well, I mean, you can hedge at the index. level, though, or you can hedge on the ETF level at a much cheaper. That's right.

You can hedge the index level, and then the ETFs are cheaper if you've got the single-stock ETFs where you just hedge at the name level, basically. Right. But is that what you're doing right now? I mean, since we are close to record highs, are you looking to protect here? If hedging costs cheapen up, we've not put in a lot of hedging here, but I think you do want to kind of not cap your upside, but protect your downside, right? Because we are overdue for a decent correction here, and you never know what it's going to

come from. We tend to think in that September, October time frame heading into midterms and the seasonality of it. Yeah. I think it would be natural for to get that five, eight to eight, five to ten percent correction. What pockets of the market are you most concerned about in terms of leading that overdue correction? I think it'd have to be tech, right, just because of the voracious movement we see. Anything more specific within tech? I think the semiconductor names probably, we tend to think tech is evolving into that next phase, which is going to be not just about the build, right, but about the implementation, monetization. So you want to look at the AI

integrated platforms. So things like, you know, Microsoft Palantir, places that you can actually gain that exposure to on the next wave. And I think cybersecurity will play there as well, right? I would actually start to fade a little bit some of the semiconductor names. Sell software by heart, uh, cell semies, buy hard work, sort of. AI enterprise integration platforms, I would say,

more so than true software names. Okay, Derek, we've got to leave it there. Great to see you. Thank you. Daryl Kronk. Lift earnings are out. McKenzie Seagalos has those numbers. Mac. Now, Lyft share is moving 7.5% higher after hours following a top line beat and earnings that were roughly in line with estimates. Now, revenue came in at $1.84 billion ahead of the $1.81 billion estimate. Gap earnings missed by a penny, but adjusted EBITA profits delivered a more meaningful beat. Gross bookings reached $5.5 billion topping the street and at the high end of Lyft's own guidance, while adjusted EBTA of a 177 million also came in ahead.

Demand was another bright spot with active riders up 17% to a record 30.5 million. That is the seventh straight quarter of double-digit growth and total rides also beating forecasts. Now, looking ahead, the Q3 Outlook is largely in line with both gross bookings and adjusted EBITA coming in near consensus at the midpoint. Those shares now up around 4%. Mel? Mack thanks, McKenzie Segalos. Bond yields gaining today following the latest Fed speak, but ahead of tomorrow's jobs report. Let's bring in Steve Leasman for more. Steve. Melissa Fed Governor Lisa Cook joining the ranks of Fed officials who have said they would

hike rates if inflation doesn't cool. And that's now a large group if you count those three dissenters who already wanted to hike at the last meeting. The probability of a Fed rate hike in September remains high, but down from where it was a few days ago, at 58% now. Despite higher bond yields on the day, part of that reflect a general belief that I'm reading from forecasters in the market that inflation is expected to cool in hopes for a benign employment report tomorrow morning at 830. Here are the numbers we're looking for. Payrolls forecast to have grown by 83,000 in August up from 57,000 in July. That's an okay number. The unemployment rate seen unchanged at 4.2 percent in average hourly wages. They're estimated

to have grown by 3.5 percent also unchanged. So far, many Fed officials have suggested the labor market not pushing inflation higher with wage growth relatively consistent at that three and a half percent level. But the FT reporting that sources close to Fed chairman Kevin Warsh say he like Cook would be prepared to raise rates in September if the next two inflation reports end up being hot and inflation expectations do not remain under control. And separately, the White House confirming that the president and Warsh have been speaking once in a while, they said. A story first broken in the Wall Street Journal last night said that Warsh has spoken with the president, repeatedly, Melissa.

I mean, I thought that was interesting that that was even a story. I mean, why is it a big deal for the president to speak with the Fed chair as long as he's not, you know, berating him as to what to do? Well, I mean, the president, obviously, as the White House has said, has a right to talk to the chair and the chairman, I don't think is in much of a position to say no when the president calls. But I think a way to think about it is the president can call the chairman all he likes. But I think the bond market is going to exact some form of payment for that.

Because if it does reduce the credibility of the chairman, now, to be fair, the chairman has said that he's gotten these calls. He actually acknowledged them during his Senate testimony in July and said, look, what we've done, we haven't cut rates. And the White House official, to me, also pointed out, look, they haven't changed rates. So what's the difference? Still the bond market. Well, they're on edge. there's a lot of debt out there. There's $40 trillion of debt.

Inflation is high at a time like this. This is a moment when the Fed needs to show as much inflation-fighting credibility as it possibly can. I'm just curious, Steve. You know, when was it's like a coin toss, basically, in terms of what the Fed is going to do at the next meeting. We're about a month out. How often has that happened in the time that you've been? I mean, it just feels like oftentimes the market has. sort of a take on what's going to happen a month out?

So a month out, I don't think 58% is that unusual, especially with two, you've got an employment report tomorrow, two inflation reports between now and then. What was interesting and unique was going into the meeting last week with essentially a 30% probability of something else happening. I've talked to a bunch of bond investors, Melissa, and they say to me, you know what, this is going to be the norm under Fed Chairman Worship. He's not going to tell us his

reaction function. Well, we're just going to exactly, you know, exact the price here. That's fine. You cannot tell us, we'll raise uncertainty and we'll charge you more basis points. Just like the Fed, the president can call the chairman and we'll charge you more basis points. You can do what you want. It just costs more. The market just has to price in more uncertainty. And it doesn't feel like it's a moral thing or it's not necessarily a legal thing. The president can make the call. the chairman cannot give his views, but it just costs you money. Right. Good way of putting it.

Steve, thanks. Steve Leasman. Pleasure. And by the way, we're showing you a live picture of the Sebo in Chicago where they're about to ring the closing bell there, marking the end of trading for options. Let's discuss the state of the Fed and rates with former Kansas City Fed President Thomas Honig. Thomas, great to have you with us. Glad to be with you.

Thank you. There's nothing wrong with not sharing your views as Fed Chair, but at the same time, do you think that the Fed chair has an obligation in any way to the American public to give an indication of how he is thinking about inflation? Well, I think certainly he can talk about how he feels about inflation, and he said, I'm committed to 2% target, and I'm going to get back there. And I think it's, I'm a strong supporter for not getting forward guidance. It assumes the Fed knows things that it doesn't know.

It ties his hands once it does give that forward guidance, even if circumstances change, it becomes more difficult. I think if there was an error in the last meeting, it was more of, here's, we decided not to move and here's why. And I know the media asked maybe two or three times to explain why they didn't move, and it was a little bit of a tap dance there. And that's where I think that maybe the real disappointment should be gained. But even then, the fact is, I don't think the chairman should be anticipating what the next move would be by giving signals. I think that just confuses. And I just heard Steve say it adds basis points uncertainty. But when you give forward guidance and things start to change, you have just as much uncertainty.

So the Fed should explain itself when it takes an action and should not try and anticipate those actions. Yeah, I think that you put it in the better way that I was trying to get to. And that is, you know, how can you have a Fed here who says, He's so committed to fighting inflation and bringing that, you know, bringing it down to the target rate of 2%, not acting and then not explaining why. So do you think that that's going to come out in the coming weeks? And do you think that that's what Kevin Warsh should do to satisfy the markets in terms of the crisis or, you know, tell us what you're doing so we can believe in you so you can restore Fed credibility. Or do you think that he has no obligation to do that? Well, I think he'd learned something from that.

I'm suspecting that the next time he will give fuller explanations as to why they take the actions they do. I don't think he has any idea right now where they're going to be because, as everyone said, they're waiting for more information at this point. So I think his obligation is when they act in September, here's why we did what we did. And the market over time will learn from that. What's important to them based on the actions they take? That speaks louder than words. And then how you anticipate, how the market can anticipate, the reliability of that going forward. And that's really where the rubber meets the road.

Do you think that the president should be calling the Fed chairman as maybe often as reports are saying? Well, presidents have been calling Fed chairman for as long as there have been Fed chairman's a president. So that's not going to change. And I think what really matters, you know, everyone is uncertain to what all this means because you can be sure this president is given the chairman his opinion. What really matters is how their chairman and the FOMC performs in the next several months and that they in fact act and explain themselves and that their explanation is consistent with the events of the time. If, for example, we have a very strong inflation numbers in both August and September, and we get to the September meeting and they decide not to do anything, they better have a pretty clear explanation.

That's what matters, in my opinion. All right. Thomas, great to speak with you. Thank you. Sure, glad to be with you. Thank you. Thomas Honig. Shears of Instacart parent Maple Bear jumping after hours despite an earnings miss.

45 cents a share compared to the estimate of 54. revenue is slightly better than expected. Total transaction volumes rising to more than 10 billion expects to meet or exceed that total in the next quarter. That stock is up by 10.5%. Coming up, Under Armour reporting results tomorrow, Nike downgraded to a sell by a top analyst earlier this week. Both those stocks have lost three quarters of their value over the past five years. People are still buying sneakers, right? So why are these names struggling so much and for so long? We'll do some soul searching when closing bell overtime returns. Welcome back to overtime. Sneaker stocks are trying to find their footing, but the trade still looks worn down.

Nike's down more than 35% in the past six months, under Armour down 13% ahead of its results tomorrow. And while Adidas is up in that time span, it is off 10% in a month after its latest earnings report. Even the newest player on holdings is off by 14% in just the past few months. So are these brands finally close to finding a floor or is there more pain in the sneaker trade? With us now to discuss Evercore ISI Senior Managing Director at Michael Benetti. Michael, great to have you with us. Thanks, Melissa. What is going on with, is this the industry overall or are these just these specific players

that we're pointing out are not doing well in terms of the stock performance? Unfortunately, you have a little bit of both. There's a couple trends going on. Nike's obviously the biggest, and they're struggling with their innovation, particularly on the lifestyle side. And when you're the biggest and when you've got to put a bunch of things on sale, other people feel it. I think that's a lot of what happened with Adidas last week, who's otherwise had the hot

hand with some of the fashion for. the last year or two. Under Armour's struggling. Their innovation hasn't been landing for a while, and they've seen some very discreet competitors come in, more on the apparel side. Think about Jim Shard, Vowari, some of the newer brands coming in, really going at that same customer. On footwear, you've also got a competing trend where, you know, we bought a lot of sneakers over the last five years, like innovation and variety post-COVID peak. They're really peaked, and consumers are looking at fashion footwear. You look at smaller brands like a steep. I see. Steve Madden, if many of your viewers, I'm sure know, they double-digit same store sales in their stores last week, I think they said.

And they're selling fashion shoes that's pulling people away from sneakers. So you've got multiple forces working here. We're going to have to pick some winners. I don't think they all have to lose, but it's a very tough environment out there right now for sneakers. Geographically, is China as much of a challenge for all them across the board as it is for Nike? No, Nike's got some of its own problems in China. I think Adidas is doing okay there. Ahan is doing a great job in China.

Hoke is doing a good job in China. So Nike's got a lot of its own problems in that market. And you do have a consumer there who's very proud of some of the Chinese domestic brands that maybe consumers in the U.S. don't hear of very often. They're called Leaning and Anta. Those guys are making waves in China for themselves too. And the consumer likes those homegrown brands. So, again, multiple forces working against you in China.

China. Yeah. You know, on Nike specifically, what struck me as this stat, I hadn't realized how much the stog is down since Elliott Hill took over. It's in half, basically, since Elliott Hill signed on in October of 24. How much more leeway does he get for this turnaround? Good question. So Elliot, you know, he's been there forever. He's a veteran. He knows what he's doing. I think as he's turned over all the stones to see what he had to fix, he's had a bigger job than what he thought. A lot of people. left the business. He had to get some of the right people back in, had to get China fixed to your point. I think he's going to have an analyst day. They're going to host me and Wall Street out at headquarters in Oregon in November and lay out kind of a longer term plan. That'll give the stock

market some time to chew on it and decide whether it believes this is a workable plan. I think that'll be a little bit more when we focus on, hey, is this the right team and the right plan going forward? You've got to give them a little bit of time to breathe and present what they've been working on. At the same time, it sounds like it's a tough environment just in general. I mean, if sneakers aren't in favor right now, if athletic wear is not in favor, I mean, that's a huge obstacle to overcome, even if you are the guy who knows what to do and you're going to try and bring some innovation to the product line. Yeah, you better bring some good innovation. I just think the consumer's looking for something new. You know, like we saw on the yoga side with Lulu Lemon, we bought a lot of

these comfortable clothing during COVID, maybe too much, and we're snapping back the other way a little You just have to bring something very fresh and very new. You mentioned Don, we put out a report on them today. I certainly put a bet on them. They've got very differentiated pipeline of very differentiated products coming, both lifestyle, performance. They've got some new running shoes to kind of secure their halo in the running category and then push out the fashion stuff that people like to wear day to day.

That's a brand you can bet on. There's a smaller brand called Solomon that's got some very fashionable stuff. They just launched a deal with Foot Locker here in the U.S. obviously a big retailer. They're going to push a lot out. We like that one. So these are, these are the brands that we never heard about when it was all Nike and Adidas all the time. They've come, and they're not going away easy. They have good products, and the consumers are gravitating there because they've got something new. Right. Michael, great to speak with you. Thank you. Thanks, Melissa. Michael Benetti.

Shears a trade desk down more than 20 percent after hours, earnings of 34 cents a share short of the estimate for 40 cents, revenue of $715 million, also amiss. CEO Jeff Green saying, quote, this quarter did not meet the standard we set for ourselves next quarter. Not looking much better, though. Guidance for earnings and revenue both well below the estimates. Again, down 23 and a half percent. We've also got some numbers out from Draft Kings. Let's get to Contessa Brewer for those. Contessa. Well, World Cup aside, it looks like a miss on the top and the bottom lines for Draft Kings here.

Earnings per share coming in with a loss of 14 cents. The street was expecting earnings of two cents a share on revenue. The result was $1.44 billion. The street was expecting $1.5 billion. The company blames customer-friendly outcomes. That is, customers wagered, and they won, and that they say they have also spent more money on promotions. We heard that from Flutter as well,

that they're intending to increase the number of promotions. I wanted to point out they are maintaining their revenue guidance for the full year, though, at $6.5 billion to $6.9 billion, somewhere in that range. They say that the monthly unique payers up 9%. However, the amount of money that they're earning on those payers dropped 13%. And one more note, they say their predictions platform is growing faster than anticipated. No doubt the analysts will press for more details on that on the call tomorrow morning.

Right now, the shares are off by a percent and a half, Melissa. Contessa, thanks, Contessa Brewer. Over the past three months, the best sector of the market has been health care of 13%. The gains have continued this week on earnings and drug news up next. We'll check in on some of today's pharma winners. Welcome back to overtime. Shares of Moderna closing the day lower, despite getting FDA approval for its new flu vaccine

after months of back and forth. Annika, Kim Constantino, joined us now with all the details. Anika. Hey, Melissa. This approval is a huge relief for Moderna despite the stock being down today. This shot faced a number of regulatory hurdles this year,

with the FDA initially refusing to review the application before reversing a course a week later. But the FDA finally cleared the shot for two age groups. adults 50 through 64 and those 65 and up on the condition that Madurna runs another clinical trial in the older group. And the company plans to make this shot available in time for the upcoming flu season in the U.S. that's in the fall and winter. So now let's talk about what this means for the stock. Jeffrey's analyst said this approval adds another commercial growth driver for next year and 2028.

And Moderna really needs that. We saw during earnings last week that Moderna's bottom line continues to be dictated by its declining COVID vaccine franchise. Now, when I talk to doctors, they also say that having a flu shot with MRNA technology is also important for patients. MRNA shots can be manufactured and adapted to new virus strains much faster than traditional vaccines. And Moderna's late-stage trial also found that the shot was around 27 percent more effective than a standard flu vaccine. So this approval is a win for both Moderna and patients today, Melissa. Yeah, even though the stock is down. I mean, Anika, it's got now four approved vaccines, right?

It's got two COVID. It's got one RSV. and now this flu vaccine. How does this replace the COVID franchise for Moderna? I mean, in terms of the estimated sales of this flu vaccine. That's a great question, Melissa. So this flu vaccine alone and even the RSV vaccine, those two products alone won't be enough to offset the declines that we've seen for this COVID franchise. We're going to have to wait for other products to enter the market. But when I did see notes from the Jeffries analyst, they did say that they expect the combined flu

franchise of Moderna, which includes the standalone flu vaccine. as well as the combo flu COVID vaccine. They expect that to rake in around 750 million in sales. But again, that's still not enough to offset the COVID revenue losses that we've been saying. All right. Annika, thanks. Annika Kim Constitino. Time now for CNBC News Update with Contessa Brewer.

Contessa. Melissa, Senator Mitch McConnell says he has been discharged from a rehab facility and is now continuing his recovery at home. McConnell issued a written statement today disclosing that he'll continue to work from home on advice from his doctors and did not give a timeline for. for return to the Senate. The former Senate majority leader has been out of public view since he went to the hospital in mid-June. The government accountability office released a report today on the Department of Government Officiencies' so-called wall of receipts. Now, you might remember, this listed billions in so-called savings for American taxpayers.

The Congressional Watchdog says it found that $110 billion in savings Doge claimed for taxpayers actually displayed estimates that were incorrect. or at least lacked supporting evidence. Washington, D.C. is preparing for President Trump's Freedom 250 Grand Prix race later this month. That's going to feature indie cars driving through the city at speeds as high as 185 miles per hour. And now the National Gallery of Art says it's worried and studying the vibration effects to determine whether that could damage art exhibited inside. The museum says it's going to implement a set of measures to protect its collections out of abundance of cost. See, those are the kinds of things somebody got to think about. Wow.

Contessa, thank you. Contessa Brewer. I learned so much. First, it was lettuce. Now add jalapenos to the list. Everyone is worried about foodborne illness, and it seems it's happening more often. Up next, we'll talk to the former head of the CDC about why it's happening,

and more importantly, how to fix the problem. Welcome back to closing bell overtime. Live from the NASDAQ market site, stocks lower across the board. The Dow losing 464 points, snapping a five-day winning street. S&P 500 losing 2 tenths of a percent. The NASAC turning negative late in this session, but just barely. Some stocks making big moves after hours. Let's start off with Airbnb, earnings of $1.37 a share.

12 cents better than the estimate. Also beat on revenue. That stock is higher by more than 8%. Twilio, also a big gainer beating on earnings and revenue in the second quarter. Third quarter guidance also better than expected. That stock is higher by 16.5%. Cloudflare, another winner in the after hours up 15%. narrow beats on earnings and revenue, but as with Twilio, the third quarter guidance is above

the current street consensus. Well, Chipotle shares now falling nearly 10% this week after an outbreak of salmonella in Minnesota was linked to jalapeno's at the restaurant chain and other local Mexican-style eateries. It's just the latest food safety issue hitting the nation, including the ongoing parasite outbreak linked to shredded lettuce. Brandon Gomez looks at why these problems seem to be becoming more common, Brandon. Hey there, Melissa. Yeah, but first, let's get to the cyclospore outbreak. We just, we just, We did just get earnings from Sweet Green. Remember, this is a small cap stock, but reporting a wider loss than expected in revenue

missed for Q2 sales that were down to 6.2% slashing fiscal year guidance, adjusted EBDA outlook for a profit, from a profit, to a loss. Now, look, you mentioned the jalapeno outbreak. Why does it still feel like we're having more issues this year? Well, let's look at the reach of that jalapeno supplier here on the screen. Some health and food experts tell me that years of consolidation in the food supply chain, make traceability more complicated since a single grower or distributor supplies hundreds of customers. Now, it requires more detailed traceback data, which the government just delayed until 2028.

And that same goes for Taylor Farms and Cyclospora. Now, another factor, I'm told, is environmental. Some scientists telling me the long drought period has increased risk. You see when it rains over dried land, the dirt doesn't actually absorb the nutrients and creates runoff instead of spreading the contaminant as opposed to actually providing the nutrients for the soil. Now, one thing I will say is that the response timeline for these outbreaks, I'm told, has been consistent

with past investigations, even as questions remain around staffing. But with these new external factors at play, consumers and investors likely when you see double-digit moves like the ones you do now on your screen are calling for more efficiency in the system, Melissa. All right, Brandon, thank you, Brandon Gomez. An effective food system involves coordination between the CDC, which works on the human side and the FDA, which works on the food side,

proactively. And there are steps that need to be taken between the two agencies to better protect consumers. Former CDC director, Mandy Cohen, joins us now. She served under President Biden from 2023 to 2025. Mandy, great to have you with us. Thanks for having me, Melissa. Brandon outlined some of the reasons why we may be seeing some of these foodborne illnesses and feeling like it's more common, like, oh, here's another recall, here's another something going on here. Is part of it also that will be a lot of it also that will be a lot of a lot of this is sourced overseas. Do they have different standards there?

So when we are importing from overseas, we do have less light of sight into irrigation and the water supply. And as was mentioned before, that consolidation in terms of the supply chain does make it much more difficult to trace. But I'd also add the challenge of when we are not able to identify these outbreaks as quickly because we're seeing less resources go into that work, you're going to see things spread for longer before we know there's a problem and thus it gets further or faster. And Brandon had mentioned that that traceback system, the more detailed one, is delayed until

28. Is part of that just earmarking resources for other things or not having the resources? I think it's both choices and prioritization of the current administration, but it is also the need, and we've known this for a while, just more investment in needing these systems to work well. And so we need to make sure we're investing not just on the food side, which is very important, which the FDA needs to do their work, but also on the CDC and the human side. So we're understanding what is going on and we can respond more quickly. From your standpoint, having sat in the chairs, head of the CDC, are the investigations going along

a normal timeline or should there be faster action because it seems like more and more people are getting sickened? So we know that the food net system, which helps us track a lot of this, was scaled back last year in 2025. And so we went from having seven or eight pathogens that it would track to just two. So it did take us longer to ramp up. But I do want to say with cyclospora in particular, it's a parasite. It is truly, really hard to find to under. understand the genetic markers. So those, you know, what I'm seeing now is certainly folks working hard, but it is only this week that CDC stood up an outbreak response team. So again, I think we could have leaned in sooner here to understand this faster, both by having the investment in the food net system,

which was walked back last year, but also to make sure that we are standing up the kind of response infrastructure we need at the federal level. And I'm curious, Mandy, are you eating less lettuce? Are you passing on the jalapenos these days? Well, and I'd say we're passing. I'm here in North Carolina today, this is where my home is. And we know that cilantro and parsley, we're part of that too. So yes, I mean, I would say that we've been passing up on some of those things. And we want to get back to it. And this is where the detection is so important, because the faster you can detect and narrow in on where the problems are, they're not in all lettuce. It's not in all cilantro. It's not in all jalapenos. But we need to get to narrow in more quickly so that we can help

people be assured that what they're eating is not part of that outbreak and they can go back to normal consumption of their salads at sweet green or what have you. So that's why we need faster systems. One, certainly to protect folks, but this is an economic intervention in as you've been talking about. So the faster we can get to those answers, the faster we can tell people, hey, everything's good in this part of the country or with this type of food, but we're not quite there yet now. Mandy, thanks for your time. Appreciate it. Mandy Cohen. Thank you.

One of the MAG7 companies is heading back to the bond market to raise up to $25 billion to help fund its AI spending, even as investors are starting to get nervous about surging CAPEX outlets. We've got the details straight ahead. Welcome back. Breaking News from the White House. Megan Cassellas got the details. Megan. Melissa, President Trump taking action just in the last few moments, signing an executive order to protect the domestic polysilican industry, wrapping up that Section 232 investigation that's been in place for about a year now. They're going to be putting price floors and tariffs on some polysilicon products. We don't know exactly what yet or what the level of the tariff will be. We'll have to keep an eye on that.

This is designed to protect the domestic industry from competition against China primarily. The president was also asked in the U.S. Oval Office about the Iran War and about this idea of some sort of temporary deal being notched in order to reopen the Strait of Hormuz. The president said that he's involved in those negotiations. He thinks we're doing just fine and that a deal could be soon. Obviously, that's slower than what Secretary Bessent told CNBC earlier this week, suggesting a deal would be wrapped up by yesterday at the latest, but that's still moving forward. The president says he also knocked down concerns about munition supply. He says there is no shortage, but that we need more all

the time that we have a virtually unlimited supply of certain types of munitions and on other more advanced systems, he says they are a little bit tighter. Melissa? All right, Megan, thank you. Megan Casella. Well, Alphabet shares under pressure today after announcing plans to raise up to $25 billion in a bond offering as part of its plan to fund AI spending. The stock has hit hard a few weeks ago after the company raises KAPX outlook, although it's recovered somewhat since. Sima Modi joins us now with some of the details here, Sima. Melissa, that's why the timing of this bond sale is so significant, two weeks after Alphabet raised its AI Cappex budget to up to $205 billion. The company returns to the bond market.

What's significant here is that this $25 billion debt deal, Alphabet now makes Alphabet the biggest issuer of corporate debt of all the hyperscalers. Remember, it raised over $45 billion in the credit market earlier this year, followed by about an $85 billion equity issuance. In terms of appetite, bankers we spoke to say there is still demand for hyperscalor debt. The market is just demanding more return. Case in point met us BlackRock deal. where its $14 billion, Texas Data Center, was financed at around 7.5%.

That was higher than previous projects. That just means investors want more yield to lend to big tech, which has been reflected in widening credit spreads over the past two months. But listen, debt deals don't mean stocks sell off right away. In fact, Google is off its highs, but still up about 14% this year. It's raised more money in the debt market than meta. And yet that stock is down, notably, in 2026. I'm Melissa.

Seema, thank you. Seema Modi. SpaceX is training. nearly 20% below its IPO price. But despite that plunge, many employees have become instant millionaires. Up next, we'll discuss whether they'll use that new wealth to fuel a luxury real estate boom in some states, including California and Texas. Closing bill overtime, live from the NASDAQ market site. Be right back. Shares of SpaceX closing higher today after its lockup period expired, making 911 million shares available for trading. The ability for more insiders to sell

could mint new millionaires. That could be a boom for some parts of the real estate market. at 20thus now is Josh Altman. He's the owner of Altman Brothers real estate. Josh, great to have you with us. Melissa, thanks for having me. Now, obviously, SpaceX is California. It's Texas. You operate in California. Have you seen those people walk in checking out houses thinking I'm going to have a lot of money soon? I want to spend it? Well, listen, this SpaceX IPO that happened was the biggest single wealth creation event that we've seen in our lifetime. And the first lockup, which expired today means that we're looking at a couple very specific places that are going to get a nice bump in real estate. But going to the numbers first, we're talking about 4,400 new minted millionaires and about 400 millionaires, if you can wrap your head around that.

And even if some of them spend just 15% of their portfolio, as I'm sure a lot of them are in it for the long run, you're going to see a lot of extra people running around with a lot of extra cash. And what we say in real estate is when you get new money, your first thing you do is you buy a house near the office and then after that the second house is more of a lifestyle choice. Let's talk about those first homes that they're going to buy near the offices. A couple of the major SpaceX hubs, we have Hawthorne, which is in the South Bay. You're going to see places like Manhattan Beach, Hermosa Beach, and Redondo Beach, that are absolutely going to get a pump in real estate.

If you're looking at houses over $10 million, there's only 50 of them available in these luxury markets like that. And if you're having all of these people run around, you don't need 1,000 people to change in market. You only need about 20 to 30 to take enough off the table. Have you seen the price has gone up already? I mean, I would imagine that people are, it's not like, you know, it's Thursday,

and now I'm going to go shop for a house. It's like, I knew that I was going to sell for a long time, and I knew I was going to kind of cash in, and this was my plan. So I would imagine that a lot of the shopping around has happened or is happening right now. It has. And we have seen that. They knew they were going to be rich, depending on how rich is a different story. They were looking. They were educating themselves. I assume that we're going to start to see those markets move in about six to 12 months. When you look at Texas, you look at Bastrop, which is where another hub for SpaceX is, that's about 30 minutes out from Austin. Texas, you got to assume that that market as well with the same amount of luxury real estate,

then the South Bay is also going to see a huge bump. But I don't expect to see it very soon. I think the people in Texas are a little more luckier because they don't have any state income tax. They might be spending more. And I can tell you, spending $10 million in Austin, you're going to get a lot more than you're going to get for $10 million in the South Bay. You're not even going to get front row on the water there. But it will be really interesting to see. And we are expecting it. are starting to see it. We have about a minute. You know, I was looking through your listings earlier today. I love real estate porn. I could look at that all day long, nine day. And so tell me what your favorite listing is right now. What is the bargain in your, I don't know, I mean,

your portfolio is like $68 million, you know, $70 million. I mean, they're crazy prices. So what's a bargain in your view? Yeah, they're very high-priced real estate. We sell about a billion in a quarter of year, about $100 million every month. Average listing is going to be between $20 and $80 million. I have an amazing one coming up in Dana Point in a nice guard gated community in the Strand. We're going to be listing that at about $68 million. That one was just finished. Listen, these properties on the water, they're, you know, God's not making any more property on the water. So for those people who did make $100 million in stock in spake zest, obviously, we have plenty of great houses for them.

Right. Josh, thanks for joining us. Josh, thanks for having me, Alyssa. That does it for overtime fast when he starts right after this quick break.