Closing Bell - Closing Bell Overtime: Return of the Meme ETF; NHL Commissioner on Start of Season, Business of Hockey 10/9/25

Episode Date: October 9, 2025

Market concentration and big-cap dominance take center stage as Charlie Bobrinskoy (Ariel Investments) and Courtney Garcia (Payne Capital Management) weigh the risks of narrow leadership. Dave Mazza (Roundhill Investments) joins to explain why the Meme ETF is making a comeback amid renewed retail trading buzz and what it says about the state of the rally. NHL Commissioner Gary Bettman sits down to discuss the business of hockey and the league’s momentum. Plus, Robert Frank on why even luxury buyers Ferrari’s worst day ever and a look at Levi Strauss earnings and Delta’s latest results.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Well, that's the standard regulation. AmeriPrize Financial ringing the closing bell at the New York Stock Exchange. Grassroots grocery doing the honors at the NASDAQ. Stocks lower across the board. Staples, the only S&P sector finishing in the green. Cyclicals, energy, industrials, materials, those were the worst performing sectors in the S&P. In a big reversal of a recent trend, gold and silver both following, but both are still up 50% this year. And the metal stocks are lower today. If it's got mining or silver in its name it is in the red. Another group having a tough day and a tough week, the home builders facing pressure

from the administration to build more. The home construction ETF on pace for its worst week of the year. Now that's the scorecard on Wall Street. Winner stay late. Welcome to closing bell. Over time, I am John Fort in San Francisco, along with Morgan Brennan back in

CNBC headquarters. Stock's pulling back today, but having a strong year setting some new records. In fact, things are so good. A few people are wondering if there's too much froth in the economy and into this market. Roundhill is relaunching its meme ETF. We're going to talk to the company's CEO and hockey. A new NHL season is underway. We're going to be joined by Commissioner Gary Bettman on set. Streaming has added several bidders for sports rights. It's been a boon for football, but what

about hockey? First, major average is taking a bit of a breather today. The NASDAQ and the S&P 500, both pulling back from all-time highs that were hit much earlier in this session. Christina Partes-Nevilis is at the NASDAQ with more. Christina. As a Canadian, I don't want to say, what about hockey? But let's talk about markets, taking a breather after hitting, like you said, record highs just yesterday. Big Tech mostly lower, despite Oracle closing up 3%. Invidia closing 2% higher in a possible green light to ship chips to the UAE, United Arab Emirates. Chinese tech, ETF specifically K-Web moved in the opposite direction, closing about over 2% lower.

The fund is definitely heavily weighted towards Alibaba, Tencent, PD, all of those names except for Tencent closing load. There's been recent calls by U.S. lawmakers for broader export curbs on advanced chips, and that's weighing on AI-dependent firms like Baidu and Alibaba. China is also retaliated by tightening export rules on rare earths, which are critical for manufacturing these high-tech products like semiconductors, the world I report on. And this is really seen as a way to gain leverage in the ongoing trade conflict. That's why shares of U.S. rare earth and critical mineral miners jumped, including Ramako, resources, USA, Rare Earth, and MP materials. You can see on USA Rare Earth almost 15% higher today. Lastly, Boeing was the worst performer in industrials and had the biggest point impact on the Dow.

Reuters reporting that Turkish Airlines could switch a recently announced order for Boeing to rival Airbus. That's our shares close 4%. What about hockey? Go, John. Yeah. There will be hockey later, I promise you, and all the Canadians. Now to the bond market, though, as the shutdown reaches day nine, it means uncertainty is growing, in part because investors can't rely on the usual government economic reports. Rick Santelli, joining us from Chicago. Rick?

You know, John, it's rather amazing because if you look at a two-day chart of twos, tens, and thirties, yes, our yields are higher than yesterday, so we've expanded, given a little momentum to higher yields, lower prices. But the ranges are very tight. And if you look at the entire week, it really has not been affected by the government closure, at least at this point. Tomorrow we actually get data. University of Michigan doesn't go through the government 10 o'clock Eastern release. Look at a week today to 30 year. Now, we had an auction today, okay, the last of $119 billion in coupon supply from the U.S. Treasury. We had 30-year bonds today.

Today's 30s and yesterday's 10s went well, but yields still crept up after the results came out. This chart, what I want you to notice is the left side. all bucking up against kind of the 475 to 478 area. Well, that is where we close 2024, and I know I keep saying this, but if you're a technician, if we close above that level on any given Friday, because weekly closes are prioritized, that would be significant. It would tell me that yields are going to go higher and the curve may steepen. Now, the dollar index has been on fire.

Been on fire. This chart starts last Friday. From last Friday's close, we're up nearly 2%, 1.8%, as you see on that chart. And if we stay where we're at right now, it would be the highest close going back to the last day in July. So I know everybody's down on the dollar, rough start to the year, but it really is coming back hard. We want to pay close attention when it gets closer to 100. John Fort, back to you. Rick Santelli, thank you.

Well, the S&P 500 and the NASDAQ, both taking a breather after, hitting records yesterday with earning season kicking off. Will investor focus now turn to profits and outlooks? Well, let's ask our next guest, our early investments. Vice Chairman, Charlie Robinskoy and Payne Capital Management, Senior Wealth Advisor Courtney Garcia, guys, welcome. Charlie, Ariel, known for value, and it had been kind of a rough slog versus the S&P, but you're beating the S&P this year with small caps? Yeah, you're absolutely right. Large cap growth has been where all the action has been for something like six out of the last seven years and this year. But then in the third quarter, we had a wonderful rotation. And the fund I

run aerial focus had its best quarter ever relative to the benchmark. And it was really because of small cap value. We had a lot of stocks trading at less than 13 times earnings that did very, very well in the quarter. Over the last hundred years, that's normal. Small cap value has been the best performing sector by far, but the last six or seven have not been the story. So we're hoping we get a return to the historical place. Courtney, you think Charlie's on to something here. We're talking a lot about how top heavy the major indices are. The meme stocks are back. Is it maybe time for small cap value? Yeah, there's a lot of optimism when it comes to small caps here. I think coming into the year, people are very optimistic about it. And it didn't have the

kind of returns that people were expecting, but especially as we're finally seeing interest rates come down. If the economy continues to be strong, I do think the small caps do continue to have a good setup here. And when it comes to this really heavily concentrated market, we're finding a lot of clients who haven't taken any profits are a lot more exposed as AI tree than they realize. It's a really good time to say, you know what, probably time to take some profits and look at other areas, whether that's small caps, whether it's international. There's plenty of areas that are not as high evaluations. It's a really good time to look at that. So, Courtney, let's dig a little deeper into that because I'm looking at your notes here and you say there is a generational

opportunity to allocate capital to everything that is not tech and gold. Exactly. Yeah, you know, I don't think this tech rally is over necessarily. I mean, there's a lot of conversation about are we in a bubble and I think that's happening because valuations are becoming stretched. And it's not to say that that can't keep going higher, but there are plenty of other bargains out there. And I think this is a really important time that you want to be well diversified. and international is actually a really good example. So a lot of people don't realize that international has actually been outperforming

the S&P 500 this year, but even with that, it actually is more attractive valuations. And especially if the dollar keeps weakening, that can continue to strengthen. So I don't want to get out of the tech trade. I just think you want to make sure you're broadening out right now, and it is a prime time to do so. Charlie, where do you see

bargains right now? What are some of the names that you like? Yeah, so I think frankly, we are still worried about the dollar. We are still worried about deficits. We are still worried about the impact of tariffs on the economy. And so that makes us like to own things that do okay even when the dollar is weak. And obviously that's one of the areas is oil and energy. Energy has been out of favor. It's been one of the worst performing sectors. And so there are some bargains. Gold is hitting records, but

Barrack Gold is trading at only 13 times earnings. And then there are a lot of energy companies. If you think we're really going to need a lot of electricity to power AI, that electricity is going to come from traditional sources and renewables, but natural gas is going to be a big part of it. And so some oil and gas companies are going to do well. Courtney, how are you playing in emerging markets? Emerging markets, like we talked about earlier, absolutely you want that as a piece of your portfolio, especially with the dollar weakening, which Charles also just pointed out here, I think is a really good place to have your money. I also completely agree on the energy trade. That actually really is part of the AI trade. There is not enough energy infrastructure to go around right now for this AI buildout.

And that is going to be a long-term issue. So I think that's absolutely something that you want to play here. I think the only thing I disagree with is gold is really being talked about a lot right now. And it has done fantastic this year, which is great. We have that in our portfolio as a diversifier. It's doing really well. But long-term really has not been that great of an investment. I mean, if you look at it from the peak of 1980, it's just now keeping page with inflation,

whereas the SPF 100 is up over like 4,200 percent over that time frame. So you want to have it, but I wouldn't get too overexposed to gold here on this run that it's already had. Okay. Courtney Garcia and Charlie Brinzkoi, thank you for kicking off the hour with us. As all the major averages finish the day, we'll say fractionally lower here. Delta higher after its earnings, CEO Ed Bastion, positive about a lot of areas of the business, except for one.

Up next, we're going to tell you what he's concerned. about. And we've seen a lot of signs that the market may be nearing a top. How about this one? The meme ETF is back. We're going to talk to the man bringing it back about why now is the right time. Overtime is back in two. Welcome back to overtime. Shares of Delta are higher today as earnings beat estimates and the company raised its guidance. Higher fares, stronger luxury demand driving profits, but CEO at Bastion is concerned about one thing. The lower end, is clearly struggling, and that's where a lot of the supply adjustments have gone in to try to balance out some of that. There were way too many seats in the marketplace earlier this year,

chasing low-end consumers, and now I think that's getting a better balance. These worries about the working class or something we've heard about in retail and in restaurants just last month, the McDonald's CEO telling CNBC that middle and lower-income consumers feeling a lot of pressure right now. Well, a stock sort of record high. As many people, people are looking for signs of froth. Maybe this is it. The return of the meme stock ETF. Round-Till investments bringing back its once-shuttered

ETF with a new set of holdings, including Open Door Bloom Energy, AST Space Mobile, hymns and hers health, plenty more. The funds that second biggest holding is applied digital. That stock just reporting results now and trading higher right here in overtime. You can see up fractionally. Joining us is Dave Mazza.

He is CEO of Round Hill Investments. Dave, it's great to have you on. Thanks for having me. All right. So why restart this ETF and break back into the $13 trillion U.S. ETF market with it? I think the reintroduction of the meme ETF is emblematic of the structural force that retail investors now play in the stock market. We know that prior to the COVID period, retail investors' influence in markets was actually minimal. But now on any given day, whether an up market and down market, they represent 15 to 20 percent of all value traded across markets. And with that being the case, the meme ETF allows investors to actually tap into

the power of retail. What makes a meme? I guess what's the methodology for the fund and how it's comprised? I think everyone's definition of a meme could differ. When I think about sort of meme stocks today in 2025, it's actually very different than 2021. We know the OG meme stocks, GME, AMC, and everyone thought about short interest and the rebellion that the Reddit crowd was having against Wall Street. But today it's really about sort of a mosaic of factors. So the way that the meme stock ETF is managed, it's an actively managed ETF that uses measures of implied volatility to identify our universe of stocks that have the potential to meme and then uses sentiment analysis and various other tools to identify the basket of stocks that we see in the portfolio.

today. Dave, I'm a little worried about this ETF environment and whether meme stocks are really still a thing the way they were. Because, I mean, I'm thinking back to when they first became an idea. You had Wall Street bets, you had Roaring Kitty, you had these sort of characters that were making stocks move. And these characters were not like establishment characters. They were

deeply anti-establishment. Now it's Sam Altman and Jensen Wong making stocks move for very different reasons. I mean, what do you say to the argument that meme stocks just really don't exist anymore? Well, I think it's fair to have criticism of anything with meme in the name. But what I would say to that point is that it's actually kind of missing the forest through the trees in the fact that because of the power, the frictionless trading that we now have, the access to real-time information that investors have, and the dedicated nature of communities, not just Wall Street Beth, but other communities on various social media platforms,

retail investors can actually do their own homework, identify stocks that have the potential to move and then get behind them in a material way. So the definition of a meme stock will certainly evolve going forward, just as it has when they really first came to bear in 2021. And what would you say to the argument that putting a bunch of meme stocks in an ETF actually defeats the purpose of a meme stock because they can move up and move, move down for all kinds of individual reasons very quickly. And if they're in a big basket together, they're likely to work against each other. Well, that's one of the reasons why this

ETF has actually actively managed. And it's as dynamic as the way we're intending to manage it. So the fund will actually rebalance at least on a weekly basis. It can rebalance more frequently as we identify meme stocks that may actually belong in the basket and others that we think are no longer meme stocks. And with that, being the case, we have the ability to have an agile nature in managing the portfolio. It's not tracking an index of a broad-based number of stocks. So the basket's actually going to be relatively precise in seeking to identify those particular stocks. Well, Dave, along those lines, who do you expect is going to invest into this ETF now? And how is that the same or different

than the previous version of it? Well, I primarily view strategies like this as a satellite position. This isn't going to replace someone's entire U.S. equity portfolio or something of that nature. But for investors, whether they're retail investors, advisors, or even institutional investors, looking to actually tap into the factor of meme stocks, this could be a great solution for them. So traditionally, we think about either a stock has to be growth, it has to be value, think about the size spectrum. What we actually believe with meme stocks is that they're their own kind of unique factor because they're really being driven by retail sentiment,

something that's not being captured in traditional risk models. Dave Maza, thanks for joining us. Thank you. Well, Levi-Strauss earnings are out. Courtney Reagan has the numbers for us. Hi, Corr. Hi, Morgan. Yeah, so it is a strong quarter here for Levi,

at least stronger than expected. Levi-Strauss earnings per share coming in at 34 cents adjusted. The street was looking for 31 cents. Revenue is stronger than expected. 1.54 billion. The street was looking for 1.5 billion. Americas and Asia, those regions both stronger than expected. by revenue, Europe a little bit weaker. Gross margin and operating margin also, both better

than expected at 61.7 percent and 11.8 percent respectively. Levi Strauss raising its full-year revenue and earnings-per-share outlook, though the company says in the release that the macro environment remains complex. Interesting to note, they are now looking for full-year revenue to grow 3 percent. The street was looking for it to decline about 3 percent. Earnings per share, are now expected in a range of $1.27 to $1.32, slightly above the street's expectation. And I spoke with Levi Strauss, CEO, Michelle Goss, and CFO Harmeet Singh. And Goss says, look, it was our DTC first strategy that really largely drove the growth, high single-digit comp growth fueled by conversion by units per transaction, full-price selling.

This is our 14th consecutive quarter of positive comp growth. not only are we driving the growth, but we are driving it more profitably. And then Singh also explained that the third quarter ended up to be stronger than expected, which gives the retailer the confidence, but also allows it to raise the guidance for both full year revenue and earnings, even though the tariff rates are higher than when the company had initially guided for their, or at least last guided on July 10th. Goss also said that it's Tops business turns out to be more than 40 percent of the business. Women's, it's smaller, but that's a growth area and did indeed grow faster than

men's in the quarter. Goss said where it was able to raise prices selectively and surgically and pull back in promotions, it did not see demand impacted negatively. So the customer so far is bearing it. And shares do look to be slightly down in reaction. John, back to you. Down a lot, court. 7, 8% at the moment. Hopefully we can figure out why that might be. Thank you. Well, coming up, gold pulling back today, but it's been shining lately. Speaking of, Shining, a good day for solar. All those details coming up on overtime. Welcome back.

The sun's shining on solar stocks today. Investco's tan ETF rising 3%. Solar Edge, the leader after Barclays increased its target on the stock to $36 per share. But that's below where the stock rose to today. Other solar names coming along for the ride, including Canadian solar, which is up more than 10%. Actually finished up almost 12% today. Well, now let's pan over to gold. Took a breather today, but still outperforming the major averages, not just for the year, but for the past three and five years to senior markets commentator Mike Santoli joins us now on whether the gold rush is over. Mike?

Yeah, or maybe just on a short-term basis needs a little bit of a reversal to refresh itself. John, here are the flows in aggregate over the prior year into all gold ETFs. It hit about $38 billion on a rolling 12-month basis. This is calculated by Strategist. that basically matches the peak from back in 2020, late 2020, right in the middle of the lockdown, the pandemic. So obviously, maybe we're getting overheated in terms of retail interest in gold. Now, you could argue against the idea that this is perfectly symmetrical because the price of gold was about half of what it is right now back then. So the same dollar amount rushing in, maybe it doesn't have the same influence. But after we did get that peak in 2020, you had a pullback in the gold price. and then more or less churned sideways for a while.

So just keep that in mind in terms of how popular the trade has become, even though it is very much a global buying spree, not just U.S. ETF investors. Take a look at the U.S. dollar index, because I think this is an interesting part of the story. The general kind of thumbnail sketch of what's going on with gold is, oh, people want to diversify out of dollar assets. There has been some dollar weakness,

but you see what's going on right now is arguably a kind of a base forming in the U.S. dollar index, and even in a longer-term basis, it's not particularly weak. And in fact, gold is up in pretty much every major currency. So it isn't really necessarily just the anti-dollar. It is sort of another diversifier that people are embracing, maybe because they don't want to own as much government debt, maybe just because it's been going up a lot in price.

But the dollar, at some point, if it were to go up a lot more, would present a bit of a challenge to that case that somehow it is providing shelter from the U.S. dollar. Okay, Mike. So let me try out a crazy theory. on you. Let's switch back to that first chart. Summer of 2023 is when Costco started selling gold bars in its warehouses. Maybe gold is the anti-meam stock. Maybe it's retail, retail excitement powering gold in a way that it never has before. Yes, I think there's a part of that that is going

on. Now, obviously, the specific purchases of gold bars at Costco are not going to show up in these numbers, but it would be reflective of the same type of activity. And honestly, it's in parallel with what's going on with crypto as well, arguably. So what's funny right now is that it's happening along with this revival of the meme trade, as you guys were talking about, not just the meme trade, but just other ways of grabbing at kind of low fundamentals, high velocity type assets. You know, gold doesn't have really any fundamentals except for the industrial and jewelry uses, which as the price goes up, become less relevant because it becomes more like money, more like an abstract asset. And similarly, the best kind of meme stocks have

the worst fundamentals because you don't have to worry about them, right? Quantum computing is going to happen way in the future. Buy the stocks now. It doesn't really knit to anything that's happening financially at the moment. There you go. Happy prospecting, Mike. Thanks. Well, time for CNBC News Update with Mackenzie Seagalos. McKenzie. Hey there, John. President Trump says hostages will be released from Gaza on Monday or Tuesday. The president discussed the ceasefire deal ending the war in Gaza at the top of a cabinet meeting earlier this afternoon, adding that he hopes to travel to Egypt for a signing ceremony.

The Israeli government is voting tonight on the proposal, with a ceasefire expected to begin within 24 hours of approval. Belgian authorities said they stopped a terrorist plan targeting a number of the country's politicians following a series of raids in Antwerp today. Officials say the Prime Minister was among the politicians targeted. Prosecutors said the suspects planned to carry out a jihadist-inspired attack. Three suspects were arrested. And the Miami Heat's head coach is expected to lead the U.S. men's basketball team at the 2028 Olympics in Los Angeles, but multiple outlets reporting Eric Spolstra and USA basketball have yet to finalize the agreement. If named, he would

replace Steve Kerr, who led the team to a gold medal. in Paris. Back to you, Morgan. All right, Mackenzie Sagalos, thank you. Up next, we're lacing up the skates. We're lighting the lamp with the NHL commissioner Gary Bettman on everything from media rights deals to sports gambling, whether the league is eyeing another round of expansion. This is an exclusive interview. It is on the other side of this break. You don't want to miss it when overtime returns. Welcome back. The puck dropping on the hockey season this week, the NHL coming off a down year for playoff viewership. Analysts point to unique circumstances, though, like large market U.S. teams missing the postseason and more

Canadian teams making it. But franchise valuations are growing, as is league revenue, and a new collective bargaining agreement was signed this past summer. So what's driving the momentum? Can it keep going? Joining us now right here on set is Gary Bettman, Commissioner of the National Hockey League. It's so great to have you here. Welcome. Great to be with you. Thank you. So I've got to start with NHL valuations. And maybe I'm starting at the end in the beginning here. But CNBC is working on their valuations currently. And I do wonder what you think we can expect in terms of growth this year. Well, we've had continuous growth in the value of the franchises.

I think you're seeing that in a lot of the major sports, in part because of the value of content. In our particular case, we've, I think, gone up about 100% in the last three years. And one of your competitors just came out with evaluation, and I think it was low. I think we typically tend to get undervalued in part because we don't get enough credit for our economic system, which really controls the cost side of things coupled with revenue sharing. Overall, our game has never been in better shape, which is where things start in terms of its competitive balance and its entertainment values. And so when you look at us, you say if you want live content, live programming, there's nothing better than sports, and we believe there's nothing better than NHL hockey.

So you just say you don't think you get enough credit for the economic system. Let's dig a little deeper into that now. What do you think is missing in terms of the context and the nuance? It's really in terms of the multiples that they use in revenues, and most of the valuations tend to look at gross revenues as opposed to net revenues, taking into account costs. And that's where I think we tend to be in a very good position because we have a three-level, triple-level hard cap,

and we couple it with revenue sharing, which gives us incredible competitive balance. Gary, it's John Fort, joining from out here in San Francisco. My understanding is, correct me if I'm wrong, that about a year ago, a rule change allowed Canadian hockey league players to sign with NCAA teams. I wonder, is that along the line going to help the NHL's talent pipeline and competition with the CHL? Well, the NCAA is the one. who changed the rule, making players who played in the Canadian Hockey League eligible when they previously hadn't.

There seemed to be this notion that if you played in the CHL as a teenager, somehow that made you a professional. At the end of the day, the best players in the world, whether they come from Canada, the United States or Europe, come to play in the NHL, it's really just going to be probably a change in how the journey ultimately unfolds to make your way to the NHL. And I think it's a good thing because I was never a fan of 15- and 16-year-olds deciding whether or not they were going to go to college or play in the CHL in Canada. So at the end of the day, I think it will enable hockey players, young hockey players,

to develop better and to ultimately get to the NHL if they can really have the skill to do it. And then give us your latest perspective on where streaming and where social media fit into the fan experience. To me, hockey is one of those sports, maybe the sport with the biggest delta between the energy of the TV experience versus the in-person experience. But you get options with different kinds of camera angles,

different kind of engagement with digital platforms. How do you view it? Well, first of all, I think there's nothing comparable to being in an NHL game in terms of energy, excitement, and entertainment. I think we translate as well on television as the other three major sports, but it doesn't quite capture the full extent

of what it would like to be there in person. Having the ability to connect on your terms as a fan, particularly younger fans, Gen Zs and Gen A's, I think will continue to enhance the game, whether it's the way the games are ultimately televised or streamed, or whether or not it's the engagement on social media or using data. We have puck and player tracking.

It lets people really dig deep. We actually did our first streaming deal when we did our last major, before this one, a Canadian deal, which had streaming 12 years ago. And that was at the time and up until our most recent Canadian national deal, the largest media deal in the history of Canada. And our most recent deal was two and a half times that. So in terms of fan engagement, fans getting what they want, how they want it, and getting more of the game. not just the game being played, but what our players are like, what the games like, off the ice. That's important for all sports leagues to do in something that we've made a priority. And so we're going to continue to look for ways for fans to get what they want, when they want it, how they want it.

So in light of that, media rights in the U.S. come up a little bit later this decade. Right now, you're mostly on ESPN and TNT. Are you already engaging in negotiations, and how are you thinking about? It's a little early. There's some back-end rights. we have to deal with, but opening night on Tuesday, I think our ratings in the United States were up 30%. So we're feeling pretty good about things. And you're opening, in addition to the fact that there weren't big market U.S. teams and the playoffs and a lot of Canadian teams, to me,

it's more about the competitive balance in the story. But last year's playoffs was the first time, I believe, in the history of the league, and we're over 100 years old, where all four U.S. original six teams didn't make the playoffs. That was a little bit of an aberration for us. So as we talk about growth of the NHL, what are the next expansion markets? I know you're doing great in Florida, Texas. It's a lot of talk, potentially, that there's a group of investors looking to bring hockey back to Atlanta. Could we see that happen? Potentially, we're hearing from Atlanta, Houston, Quebec City, Kansas City, a number of places. We're not in an expansion mode per se where we're saying we want to expand now. We just

recently had the two most, I think, successful expansions in the history of any of the major sports in Seattle and Vegas, both on and off the teams were and are hugely successful. When we look at expansion, it's you've got to look at ownership, market, arena, and what will it do to strengthen the league? And if there's a group or an individual wants to come in and say, I can check those boxes, we'll take a look at it. We're not pushing it, but we're getting a lot of expressions of interest. Quick, quick.

First Olympics in 12 years. Impact to the season? It disrupts the season. Okay. But it puts our game best on best worldwide on an incredible platform. And the real reason we do it is it's important to our players and our fans. But most importantly, we're doing it because the players have a history, tradition, and a real desire to represent their countries. Gary Bettman of the NHL. Thank you so much for joining us. It's great to have you here.

Great to be with you. Thank you. We've got breaking news from the Department of Justice. Amon Jabbers has a story. Amen. Morgan, this is one source from the Associated Press. But the Associated Press says that they have a source who is saying that New York Attorney General Letitia James has been indicted on a fraud charge. That is the latest case, Associated Press reports of charges being brought against a Trump foe. Now, Leticia James was accused by Bill Pulte.

in the Trump administration of alleged mortgage fraud. We'll have to wait and see what the details are of this apparent indictment of James before we know exactly what the case is that they're bringing. But the allegation had been that she was guilty of mortgage fraud for mislabeling or allegedly mislabeling a property as a primary residence. That's similar to allegations that Pulte has brought against a number of other people as well who are political rivals or otherwise in the way. of the Trump administration. So we'll wait to see what this particular indictment does. But

given that we saw an indictment of James Comey, the former FBI director, now apparently Letitia James, it does appear that there is a streak of indictments here against Trump rivals. And the question is going to be how these will be viewed in court, right, once they get in front of juries. Whether juries see this as political prosecution or whether juries look at the merits of the case here and say, you know what, that person's guilty. Back over to you guys. All right. Amin Jabbers, thank you. Up next, find out why Invidia is a big winner on Wall Street today and what it's got to do with the AI ambitions of one country in the Middle East. Be right back. Welcome back to overtime. InVitya, one of the top performers in the S&P 500 today.

On a report, the U.S. government is allowing the company to ship some AI chips to the United Arab Emirates. Christina Barts-Nevilus has the details and what this means for Invidio. and for the UAE. There's a lot. And we could say that the U.S. kind of just approved the billions in Nvidia chip exports the U.E under an AI agreement that was signed in May. But this is according to Bloomberg so far, because Nvidia is just not commenting. Those chips, though, are expected to power a massive wave of data center construction.

And the timing matters because of what's happening here at home. Data centers already account for over 4% of U.S. electricity consumption, and that could actually triple by 2028. In Washington, D.C., for example, residential bills jumped $21, per month starting in June, with half of that increase driven by data-centered demand. A single AI data center, and this is a smaller one, can consume as much as power as 80,000 American households. The UAE doesn't have that problem.

Running, cutting-edge AI models take staggering amounts of electricity. The cheaper your energy, the cheaper your intelligence. Well, business electricity in the UAE costs about 11 cents per kilowatt, roughly 30% cheaper than here in the U.S. or I guess the average of the U.S. The country runs on cheap natural gas and nuclear power as well. And Morgan Stanley calls the UAE, quote,

an AI leader in the making with its energy strategy 2050 pushing massive solar investments alongside AI infrastructure. The UAE has already said they're investing $1.5 billion in new data center capacity by 2027. There's a U.S. UAE agreement

where American hypers are going to operate a massive 5 gigawatts AI campus over there. So with cutting edge, Nvidia chips and some of the world's cheapest power, the UE is really positioning itself as the Middle East AI hub. The AI race just isn't about who trains the smartest model. It's about who can actually afford to keep it running. John? All right.

Christina, thank you. Well, let's stick with tech. A big acquisition in enterprise software this week. Qualtricks, a private company that competes in experience software with Adobe and Salesforce, agreeing to buy Press Ganey Forsta for $6.75 billion. Now, AI is a big driver behind Qualtrick strategy. Businesses use Qualtrick software to extract insights from their customer and employee experience data. PG-FORST has specialized in the health care sector, and Qualtric CEO Zig Serafin telling me one in three Qualtrix customers, is already leaning on AI tools.

About a third of the customers now are using capabilities today in our platform to be able to drive value with their own customers and the way that they interact with their employees to drive. drive real business returns. And so, you know, what we found in all of this is the more specialized and focused you are on that last mile with the customer, on the things that truly matter and actually enable the ability to act in the moment, understanding and knowing the history

of how you've interacted with that customer, creates a very unique opportunity to provide specialized AI that affects some of the most practical things that take place in business. I also asked Sarah, if Qualtricks might come public again. It was taken private in 2023 after being public for two years. He told me, quote, we certainly look at that as an option, unquote. Well, Ferrari shares are crashing and burning, having the worst day ever after issuing disappointing guidance, slamming the

brakes on the EV strategy. We've got those details straight ahead. Plus, PepsiCo shares popping on better than expected earnings. Coming up, Mike Santoli looks at why the stock still looks very cheap compared to arch rival Coca-Cola. Welcome back to overtime. Goldman Sachs just releasing its top tactical trades for earning season. Now, according to Goldman's analysts, four stocks with the largest potential upside to Wall Street estimates are Win Resorts, Suncor Energy, E Toro, and Citigroup. Meanwhile, Goldman says the companies with the biggest downside risk to estimates are MGM resorts, N-phase, water heater and boiler maker A.O. Smith and Super Micro.

Well, Ferrari shares having their worst day ever following disappointing guidance and a major change in its electric vehicle strategy. Robert Frank has details. Robert? John, good to see. Well, Ferrari shares closing out the day down 15% on fears of the slowdown and profits. And that all occurred at its investor day today in Marinello. The company raising its short-term guidance but lowering its long-term projections through 2030. So analysts have been expecting EBIT. growth of 10% a year, now looking more like 6%. The company also scaling back its EV ambitions. It released details of the technology that's going to power its first ever all electric Ferrari.

That's going to be launched next year. We won't be able to see the car until next year. But we know the name. It's going to be called the Electrica. It's going to have special motors with 1,000 horsepower, 0 to 60 in just 2.5 seconds. But it lowered its EV targets overall. saying EVs are going to account for 20% of the lineup by 2030. That's down from 40% that it had previously guided. Now, this happens as a lot of other high-end sports car makers are also delaying or rolling back their EV plans. You've got Aston Martin, Lamborghini, Maserati, all delaying their EV models. In its earnings call in July, Ferrari said there's no indication right now that tariffs in the U.S. are impacting demand.

So most of its models are sold out. the waiting lists for all of them or most of them are still over a year long, guys. So this doesn't appear to be an issue where wealthy consumers are pulling back or there's less demand for Ferraris. It's just a moderation in the profit growth, and they tend to under promise and overdeliver. So we'll see where this lands over the longer term. Robert, 20% is still a lot. Is there any sense in whether this is a lack of demand among that luxury buyer,

fan set for EVVs specifically or just part of this overall rationalization of the EV future? Yeah, that's the key question, John. The company's not commenting on whether they've lowered demand or whether it's less than they expected, but it's clear we've seen the sales patterns for these high-end cars. Everyone wants hybrid or even the 12-cylinder combustion engines. And if you look at the, it's both the broader consumer market as well as the high-end and maybe especially at the high end where people like the roar of these engines, the emotional appeal of the Ferrari engine is not to be underestimated.

So they're not categorizing it yet as a reduction in demand, but I think it's pretty clear that there is still a lot of demand for ice and hybrid engines. All right, Robert Frank, thank you. Up next, Mike Santoy breaks down the Soto War trade, and why PepsiCo shares look unusually cheap versus Coca-Cola. Welcome back. Let's bring back Mike Santoy for a look at Pepsi. Those shares are getting a little pep in their step after the earnings report beat estimates this morning. Mike. Yeah, the stock up about 4%. Morgan, and it's coming from a pretty depressed level.

Here, I always pay attention when two similar things stop trading together and maybe ask why. So here you have the forward price earnings ratios, the valuations for Coca-Cola and PepsiCo. And you see what happened to Pepsi. It's just sort of fell away, trading down to a pretty steep discount. In fact, perhaps a record discount to the overall S&P 500, if not to Coca-Cola as well. It's about 16, 17 times earnings. We got that little poppets, maybe close that gap slightly. Same kind of story on a dividend yield basis.

For a long time, actually, Coca-Cola was sort of the dividend cash cow in this group. And they've both been kind of on par in terms of yield. Now you see PepsiCo yield up toward 4%, whereas Coke is staying there in that 3%. So that's just another way of saying valuation and sentiment are kind of working together here. This is probably because PepsiCo's exposure to the snack business, which for many years considered to be an asset, it was really the growth driver within the company, has now actually started to look like a little bit of an impediment, just in terms of margins and pricing and perhaps maybe consumer habits and all the rest of it. So we'll see if this starts to create a convergence, if PepsiCo can maybe come back into line, Morgan.

Interesting. I mean, PepsiCo also as an activist investor in the mix here with Elliot, too, who apparently put forward a 75-page paper. And the CEO, Ramon LaGuarda, talked about this and said that they've had conversations and there's some similar alignment in terms of the strategies as well. How much hinges on that? I mean, plenty does, but I also like to think about from the other direction, which is what are the conditions under which a company becomes susceptible to an activist like this? And it is when, you know, you've underperformed and your valuation basically comes to a discount. And so it's considered to be, you know, maybe it's fixable. Maybe there's some moves you can make. Also, of course, there was a replacement of the chief financial officer by PepsiCo announced today as well. So things are, you know, perhaps moving around.

Of course, this is all happening in the context of consumer staples and especially food and beverage companies being deeply out of favor on Wall Street. So it's probably an uphill battle for it to get back to its former glory. but maybe there's some room for some, you know, sort of catch up in the price and performance. So as we have this conversation and as we have a day at a desert, thanks to the government shutdown, and how much hinges on the University of Michigan Consumer Sentiment reading we get tomorrow? I think it's going to get extra focus. Obviously, there's a lot of play in these numbers. You know, everyone looks at the inflation expectations. What we do know is, you know, everyone is now looking at this bifurcated type economy. You have parts of the economy looking under stress, some consumer credit, some private credit.

obviously retail and other areas like home builders have been pretty weak within this market that's been propped up by the AI trade. So I think it'll tell us something about that. And in fact, you know, there's a lot of comfort the Fed's going to be cutting rates. But today, Michael Barr, the governor said, hey, we're data dependent. We're not getting any data, though. All right. Mike Santoli, thank you. Of course, John, we do have all the major averages taking a breather today down fractionally. Yeah, I also want to mention Confluent. It was up 8% today. It's up 17 and a half over the last couple days on some M&A rumors and headlines will continue to track that one as so much going on in tech. Yeah, and of course M&A has come back in a very meaningful way, so we continue to track that overall across industries.

That does it press here at overtime.