Closing Bell - Closing Bell Overtime: Taiwan Semi Powers Tech Higher; Wells Fargo’s Ohsung Kwon on Top Ideas; Pimco’s Emerging Markets Plays 1/15/26

Episode Date: January 15, 2026

Chip stocks help power the market higher, with Piper Sandler’s Harsh Kumar weighing in on leadership in semiconductors. Is the tech trade back? Wells Fargo’s Oshung Kwon gives his take. Our Emily Wilkins explains why a major crypto bill has stalled on Capitol Hill.Global risks stay front and center with PIMCO’s Pramol Dhawan on emerging markets and rising geopolitical uncertainty, followed by Diana Olick on the state of commercial real estate. Then our Gabrielle Fonrouge breaks down Amazon’s escalating fight with Saks. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

And that is the end of regulation. Carlisle ringing the closing bell to New York Stock Exchange, American Drive, doing the honors at the NASDAQ stocks, rebounding strongly from yesterday's losses, getting back toward record highs, the Dow of 280 points. S-to-be of the NASDAQ only small gains. But the big star this year, it's been the little stocks. The Russell 2000, once again, the best of the bunch. It is now up 8% this year. If you bet on small caps, congrats. You've gotten it right, Lely. Chip stocks leading the NASDAQ higher the SMHETF with a new all-time high about 400 for the first time ever. More, by the way, on semiconductors in just a moment. Banks also contributing to the rally today. Goldman Sachs, Morgan Stanley, both higher following their results. And you are seeing a big move in the price of oil. The president trying to ease tensions with Iran, then set oil down a lot, down about 5%. back below 60 bucks and shocking.

A bit of a relatively quiet day for the medals. Gold, copper, both lower, silver, a small gain, but still not a big day for the metals. Where do they go from here? No doubt one of the topics we will address over the next hour. That is your scorecard on Wall Street. Welcome to closing bell overtime, everybody. I am Brian Sullivan, a busy hour coming up. Also, the fate of the crypto bill in D.C., Amazon apparently angry over its, quote,

worthless stake in SACS. And should you invest in emerging markets right now, especially with all the unrest and tension around the world? There is a lot to do. But let's start with some of the big gains that we had today for the chip stocks, all kicked off really by huge earnings out of TSM. And Christina Parts on Elvis is at the New York Stock Exchange. And I know these earnings were big.

And you said earlier, Christina, it was kind of like an almost an all-clear. for AI worried investors? Yes, and I will get to that. This company is seen as a bellwether for the entire industry, the chip industry, I should say. So that's why you saw semiconductors and AI-linked names among the top standouts today on those earnings.

So TSM is famous for being very conservative with its guidance. So when it hikes its CAP-X to a record nearly $56 billion and signals even more spending over the next few years, investors pay attention. And that's why you saw shares close about 4% higher today. The results, though, are reinforcing, to your point, Brian, confidence that the AI chip boom isn't just a one-year story.

And that's lifting, or compute names, Nvidia, AMD, climbing or did climb at least 2% higher today. Even smartphone-related demand held up for TSMC, which helped support the narrative around Apple, although Apple shares did close down 6 tenths of a percent. And when TSMC spends, the ripple effects really show up across the semi-cap space, ASML, hitting $500 billion in market cap for the first time. You can see shares close 5% higher. The usual is Lamb Research, KLA moving higher. You're also seeing strength in names like On Toe Inovation. We don't talk about that name a lot.

It does inspection tools. And MKS instruments, those names at least 7% higher today. And these semi-cap stocks have definitely rallied just over the past two weeks, even more so because of memory. But Bank of America says the trade isn't as crowded as it looks, especially since the earlier move was driven by the memory supply crunch. Now, TSM's foundry business is emerging as the next catalyst. Brian?

All right. Thank you very much, Christina. We'll see it a bit. Now, earlier today, I spoke with Commerce Secretary Howard Lutnik, who said a lot, but he said also in part of an agreement between the U.S. and Taiwan, chip companies, tech companies will invest at least $250 billion directly through the company in production capacity in the U.S. and the government of Taiwan will guarantee another $250 billion credit line for these companies. And Secretary Lutnik said he thinks that could be just the beginning.

So what we did is we gave Taiwan $100 billion credit because TSM came in with that $100 billion in 2025 with the Trump administration. So that's 100 towards the 250. Now I expect TSM to come in huge, bigger, you've seen reports that possibly doubling in size in America, right? So that's TSM. But then we have the rest of the supply chain of semiconductors, everything. You have to remember, like, each chip has a translator in it, right? What connects the power to the chip? What connects the chip to what you see on your screen, right?

All those bits and parts. all need to come here. And so we're going to have hundreds of companies coming here. We're going to build giant semiconductor industrial parks in America, and we are going to bring semiconductors home to America. That's what this is. This is a $500 billion down payment on let's bring those semiconductors home. So let's see what it means for semiconductor stocks and maybe some of the equipment companies and bring in harsh Kumar of Piper Sandler, who covers many of these companies. You had the blowout earnings from TSM, C Harsh that Christina Portsenevless was talking about, but then you layer that on to some of that breaking news

around that Taiwan trade deal. Is that just another bullish sign for many of these companies? Brian, thank you for having me on your show. I really appreciate it. So I think what the trade deal does is it basically formalizes and legitimizes the process of investment. These investments have been going on but to a smaller scale, and they've been sort of subject. to geopolitical risk, but when the Trump administration sort of guarantees the process, formalizes it, and gives you protection, it tells us that now that investment is free to find a home within the U.S. I think it's great for the U.S. semiconductor business to be back as a leader in chips. But remember, the Korean and the Taiwanese have been investing, but to a smaller

degree already. But now the doors are open, if you will, for stacks of investment to come in. And this is generally driven by shortages in a lot of areas. Yeah, really codifies it. I mean, if you think about it, what this deal does and the news that we broke was basically $250 billion direct investment from companies in Taiwan. Most of that, of course, Taiwan, 701 company. And then a $250 billion separate credit line guarantee. That money flowing into the United States, TSMC, a big part of that. Harsh.

I know the news came out a couple hours ago. you haven't had a whole lot of time to dig in. But if you had to guess, where do you think that money's going to go? TSMC is the stop for all large companies within the U.S. If you start with Apple and you go to Nvidia, you go to AMD, you go to people like Broadcom and Marwell, they all, literally the entire AI complex, goes to TSMC for its chip needs.

And I can tell you that, you know, we just met with several of these AI companies at CES. NVIDIA is sold out for 2026. They're taking orders for 2027. Broadcom is expecting to grow its AI business 150% growth in 2026 and another 60% in 27. Analog is turning around. And that's driving growth in industrial and automotive.

And so I think there's a lot of pent-up demand. And already you're seeing a lot of pressure on people like DSMC, to sort of raise the stake, raise the CAPEX, which is what they're doing. And I'm glad to see the U.S. government stepping on and sort of helping that process along. We need to be leaders. This is a very critical technology. US needs to be a leader in this technology. Yeah, you've got, obviously, InVITA on your coverage list with a lot of other companies as well.

I mean, I've been to that TSM facility in Phoenix. It's unbelievably impressive, unbelievably large. Now it's going to get bigger because as part of this deal, not directly, but we asked the Commerce Secretary about it. TSM's also going to expand by at least four or maybe even five new fabrication plants. You've got OnSemi, you got Broadcom, Marvell, Semtech, the companies you cover, are they going to see any of this money? Are they like in the TSM world or even in their buildings? Literally harsh.

Literally every company in some manner or the other outside of the memory place end up at TSM's door for supply. And, you know, like I said, I mean, the big guys, I mentioned some of the mega caps, but even some of the mid-cap guys, you know, there was a very popular theme for the last five years of sort of taking a part of your production and outsourcing it so you're protected against downturns. And that protection, that sort of excess supply went off to people like TSMC. TSMC is the single most reliable producer of supply for the semiconductor industry. So it's imperative that they are prepared to meet the demand.

if we're going to have a decent economy and we're going to see a pickup in not just AI, but in other areas like automotive, industrial. And, you know, what we're forgetting is if rates come down, home sales pick up. And what is the first thing when a person does when they buy a house? They typically remodel, which means new washers, dryers, fridge, etc. All that demand leads to semiconductor demand. But that's a different group. That's not the Nvidia's the world, right?

That'd be more on the analog side? That'll be more on the analog side. But TSM does a lot of analog stuff too. But, you know, when we're talking 3-Nometer, 2-nometer, 5-nometer, that's the NVIDIAs, the broadcoms, and the apples of the world. Dishwashers are the new AI. I remember Fuzzy Logic back in the day. Harsh, Kuma really appreciate it.

Big news there. Harsh, thank you very much. Thank you so much. Take care. All right, you're very welcome. All right. Now let's go from stocks to the bond market because yields actually moved a little up today following the latest jobless claims numbers.

Getting more, though, on maybe the bond market at where it could be headed. Rick is in Chicago. Rick, what do you see in? Well, first of all, let's have some trivia fun with today's drop under 200,000, Brian, for initial jobless claims.

I went back, and what I discovered is that that reading of 198 is the sixth lowest reading since 1969. Let's call that 56 years. So you see it on the, the chart there. That's a five-year chart. We can't do a longer chart because COVID would destroy the scaling on the left and the right. Now, if we look at twos and tens together, and this

really does go to your question. We see that the two-year is more prone to the upside. It's up six and a half basis points. You're up four basis points today in a 10-year. That is curve flattening. And it's curve flattening that is driven mostly by the two-year because two-year rates are going up because we're taking some of the easing out. And really, this has been going on for about two and a half weeks, really, since the last Fed meeting. Look at a year today, the dollar yen. We were talking about that earlier. Okay, on Tuesday, it was at a one and a half year high in favor of the dollar.

Yesterday, you have one down day. It's back up today. So we're still hovering near the best levels on the next chart since July of 24. And finally, all of that has pushed the dollar index up along with interest rates. And remember, many times when the yield curve flattened, especially when it flattens by two-year rates going higher, usually see the dollar follow. It's going to close at a five-week high today.

Brian, back to you. All right, Rick Santelli, sir. Thank you very much. Appreciate that. All right, folks, we are just getting started. We got a lot to do it on deck. Is the buy big tech, and forget about it, trade over and done? Small caps and semis, they've been hot, but guess what?

Apple, meta, Microsoft, they're all down about 5% this year. What? But if anything, does it mean? We'll talk about it. Next. I want to talk trucks and I want to talk energy. We're going to start with trucks because J.B. Hunt earnings, they are out. $1.90 a share. That was nine cents better than the consensus forecast. Revenue smack-david line, $3.1 billion. A little lower than the fourth quarter of last year, likely hurt by a drop in revenue for its final mile services. That was down 10%. Company blaming generalized soft demand, although, again, they beat on EPS stock down about 5% right now.

On the energy side, Tallinn energy jumping, it makes a deal to buy natural gas assets from energy capital partners for $3.45 billion. Even at a price tag, markets like that deal, thinking it will help Talon meet the growing demand for power from data centers. Tallon up 11.8%. Other power names associated with AI, Vistra, Bloom Energy, they're up 3, 4, or even 6% in Vistra's case as well. All right, as we talked about before the break, semiconductor stocks, largely the big winners today.

And recently, some of the big caps have been punished for spending too much money. Seems weird. So where should you invest, given where the money may be going? Joining us now is Osang Kwan. He is chief equity strategist at Wells Fargo. Osang, good to have you on set. Thank you for coming in. That's what I have me.

Small caps up, many large-cap tech stocks, flat or even down this year. It's 11 days in. I don't want to make too much of it. But do you see a rotation happening in the equity markets? Yeah, for sure. And I think this is going to continue for the foreseeable future. And what's really changed is we're seeing fiscal tailwinds for the first time in three years. And we have seen this movie before, right?

Every December and into January, all the strategies come out and call for a rotation. And it lasts for like two months or so. sort of rotates back into AI. I do think this time is a little different that we are seeing physical tailwinds for the first time in three years. Also, we started seeing a changing reaction function in the equity market.

So over the past three years, higher rates meant the max seven outperforming the Russell 2000. Now this is starting to change. And I think that's driven by two reasons. One is that the market's interpretation of higher rates is changing from higher rates are restrictive

to cyclicals to higher rates being drilled by cycle-clock. Let's start there. I want to give it the second part. I hate to interrupt, but I don't actually hate to interrupt. I interrupt all the time. But go back to that first point. Higher rates, good for the MAG-7.

Connect the dots between higher interest rates and Nvidia and others outperforming. That used to be the case for the past three years. That's now starting to change. And I think one of the reasons is because a lot of these hyperscalers are issuing a lot of debt. So their sensitivity to rates are now changing. In just in Q4, the four big hyperscalers raised close to $100 billion, just in Q4. So that's a significant amount of money. And their duration is also lengthening because of it, because their free cash flow is coming down because they're investing so much on CAPX.

Their free cash flow margin is now going to be below the rest of the index. Their free cash flow versus net income, that's only going to be 50%. So are you kind of, if I'm hearing you right then, the mega cap stocks, particularly the ones, not just the MAGACP, But I'm sure the other, you don't talk individual stocks, but companies that have issued a lot of debt to fund some of their dreams, are they kind of de facto bond market plays then? They're super interest rate sensitive. They're becoming more interest rate sensitive for sure. And their duration risk, because they're spending so much money today for future returns,

their duration risk has risen. And I think that's what's driving the changing reaction function in the equity market. And so I think then the other side of your point, which I believe you were getting is that then the lower rates that we see or steady rates. Do they have to be lower or can they just stay where they are for the smaller cap stocks to benefit? I think steady works. I think the set of four small caps is pretty interesting this year. I always say this. For small caps to outperform, you need speculation because the Russell to index these days, the makeup of it has changed a lot. There's a lot of speculative assets such as quantum and a lot of small cap semi-companies.

But also you need a good PMI. You need a good manufacturing cycle. And I think we are on the cost of a potential manufacturing up cycle for the first time in three years. Wow. And so take that out one step further than Osung. What would that mean? What do people just buy the Russell 2000 and forget about it? I still like the Russell 2000.

I like the commodity side too. So like energy materials. We actually double-upgraded both sectors from underweight to overweight back in November. What does materials mean? That's a lot. That's a big category. Yeah. So the metal side of things. So copper, even gold.

I still like gold as well. You've been early on that and you've been right. But are you getting a little worried? It's getting a little crazy. I mean, silver has gone from 30 to what, 93 in a year. It's still a rock. It's a valuable rock, but it's a rock. Yeah, I think we were just going through this huge debasement cycle right now.

I think that's likely to continue. We actually, based on regression, we found three drivers of the currency cycle, the FIA currency cycle versus hard currency. And those are fiscal deficit, debt to GDP, and inflation. All of which are probably going to remain negative for the first year of future. And what was also interesting is that we went back all the way to the 1800s, and we earned the fourth devaluations debasement cycle that started in 2022. Just the fourth since the 1800s.

Yeah, yeah. That was a lot of hundreds ago. It was, yeah, I mean, these cursive cycles last a very long time. And what was also interesting was that every time there was a debasement cycle, the S&P 500 underperform gold, which is happening right now. And I think that could potentially continue if the debasement cycle continues. And do I want to buy like the Japanese stock markets at a record or near a record? Do I just want to keep buying it then?

I think that's also, you know, part of that happening is also being driven by debasement cycle. I mean, even the S&P 500 last year, I want to say, a lot of that was due to FX. You know, S&P in your terms last year was only up about 20-5%. Yeah. A lot of that was, you know, a lot of the gains that we saw in the S&P was due to FX.

And gold obviously outperformed the S&P again last year. So I think we're in, we're still in the midst of this huge debasement cycle that's happening. And it could go on. I think so. Started three and a half years ago, four years roughly, yeah, we're at the beginning of 26.

But you think it could go on? I think so. Like I said, there are three drivers, physical deficit, debt to GDP, and inflation. Wow. We covered a lot in a short amount of nice work, by the way. I had nothing to do with it. O'Sung Kwan, I really appreciate it. Take care.

Thank you. All right. So the NASDAQ 100, we kind of just talked about it, up about 1% so far this year. But within those 100 stocks, really 99 because Google has two shares, a big split is emerging. We'll tell you more about what that means. Plus, while the biggest NASDAQ names up only a little, the smaller stocks, Again, we just talked about it. They're jumping the Russell 2000 up 8% for the year.

Surprised? Osung's not, but we'll talk more about it. Coming up right here on overtime. All right, welcome back. We talked earlier about some of the semiconductor stocks leading your markets higher today, but it's not just today. It's also, though, expanding the gap between software and semis. Now, on your left, you see the top stocks in the NASDAQ 100 so far this year.

If you're on the radio, I'll read them to you. Intel, Western Digital, KLA, Lamb Research. Those are three semiconductor stocks and one basically storage stock in Western Digital. Now, on your right, we're going to show you a software. It's been grim. This year, 11 trading days, Atlassian, down 21%. Into it, down 16%. Adobe, down 13%.

And Datadog, down 11%. Obviously, many, many, many days left in the year. Things could change. But as of now, very early, 11 days in, those are your numbers. Software are not good. Some conductors really good. Meantime, investors also beginning to show some real enthusiasm for risk appetite and retail flows. Gages already flashing hot.

Let's bring back in Michael Santoli. He's got a couple of charts that he's got a couple of charts that. He thinks just maybe, Mike, what? The mood's getting a little too hot? Some indications of that, Brian. Now, look, at the beginning of the year, you often do see a little bit of a rush of enthusiasm, people wanting to put money into the market and seeing ETF flows have been very heavy. Other indicators, one that caught our eye here is Goldman Sachs's risk appetite indicator.

This isn't just people's mood. They're not telling you that they're bullish. It's market-based gauges such as credit spreads and options, volumes and other types of relative performance and where the flows are heading. And you see it's gotten to pretty much as high as it's been since late 2021. That was kind of the peak of the meme stock craze right in there. We have bumped up against these levels. As you can see in 23 and 24, bull market years, you did have a pretty significant correction in late 23, not too long after we got to these levels. I'll just point out a couple other things. That's early 2018. That was right

before that kind of volatility eruption that we got after a very long and steady up trend in 2017. That's post-2016 election, and you can imagine. So look, it's a bull market acting like a bull market. This doesn't mean run for the hills. The market's going down, but it may raise the threshold for what people to decide is good enough news to continue to chase this market higher. Finally, this is a long-running trend. It keeps getting a bit more extreme. It is the percentage of options volume accounted for by retail traders. You see, this has been scaling higher since 2021. We're now at about 21% of all options volume initiated by smaller traders.

I kind of can't say that there's some kind of a natural peak here that you're going to say it's overdone. It's just the world we live in right now, and it really does impact stock prices. Yeah, but you've got to admit, man, it's pretty amazing, Mike. I mean, we're going to probably do something tomorrow on Power Lunch. Sandisk is up 75% in 11 trading sessions, okay? Western Digital, we showed some of these gains. We're not talking about three months. We're talking about 11 days.

There's definitely been some hot money coming in. There's no doubt about it. Springloaded action. I mentioned earlier that the micro cap ETF is up 9% here to date. So yeah, there's no doubt about it. These kind of rapid money flows are going into more speculative parts of this market. But we've seen this at times before. So these phases come and go.

Sometimes they destabilize the core of the market. sometimes they don't. They kind of just unwind. Yeah, what's the next thing on Michael Santoli's radar? Like, what's the next big thing you're going to be watching? I mean, first of all, we do have an expiration tomorrow. We'll see if that loosens up the market after we get through it. I think it's probably we're building toward big tech earnings. And we're going to see if this rotation toward a broader group of stocks matters or not,

whether, in fact, investors' eyes have gotten too big. So we're looking at over the next week or two, having some of those blanks filled in. All right, Michael Sandelie. Good stuff. Appreciate it. Thank you very much. Step outside the markets for a minute. Get a CNBC News update with Kate Rogers.

Brian, the United Nations Security Council's holding an emergency meeting right now to address violent protests in Iran. A U.S. representative said President Trump is keeping all options on the table to respond to Iran's deadly crackdown. The U.S.-based human rights activist news agency says at least 2,600 people have died. but some activists insist the actual number is higher. Venezuelan opposition leader and Nobel Prize winner Maria Karina Machado spoke with a bipartisan group of senators this afternoon on the hill following her meeting earlier in the day with President Trump, which she said went very well. Her visit came as Venezuela's acting President Delci Rodriguez asked lawmakers to approve

oil industry reforms that would allow more foreign investment. And nurses in New York City say they'll return to the negotiating table with hospitals, administrators on the fourth day of their strike. The two sides have not met since Sunday, the day before roughly 15,000 nurses walked off of the job. Hospitals have had to bring in temporary nurses to keep facilities running during the stoppage. Brian, back over to you. Yeah, and very good that the Iran issue is getting a little more mainstream attention. Kind of off the headlines. Kate Rogers, thank you very much. Thank you. All right, back to the market of Bitcoin, pulling back from a two-month high today, the long-awaited crypto bill in Congress, now delayed after objection

from Coinbasee O'Brien Armstrong. You're going to hear why coming up. All right, welcome, but welcome back to overtime. Your markets, your money, higher today. Following yesterday's losses, we had a gain of about a quarter percent for the S&P 500 in the NASDAQ, not big gains, but up nonetheless. The bigger story, the smaller cap stocks are Russell up again today. Russell 2000 up 8% this year.

Now, in commodities, we saw a big drop in the price of oil, oil, which had been rising in the last few days, fell back. back below 60 bucks. The barrel, President Trump, trying cool tension with Iran, this idea that we would strike imminently on Iran because they're violently putting down protests. They're killing, according to the UN and maybe others, thousands of protesters protesting effectively for their freedom and more freedoms for themselves, getting killed. Well, maybe that attack by the United States, push back, whatever you want to call it, that is off.

That's at the price of oil back down. down 4.5% to 5930. And trucking company, J.B. Hunt, that stock down about four, four and a half following its results right now. It did beat on earnings, but there are some concerns about sales and what investors may be focused on their. J.B. Hunt, big trucking company down over 4%. All right, of next. We're going to dig into what has been a steep drop off in commercial real estate deals. And the few bright spots we are seeing in that industry.

And later on, we'll talk about whether it's. too late to bet on emerging markets. They've been outperforming the S&P 500. Can they keep it up? We'll talk about it. Coming up. The Senate Banking Committee postponing a highly anticipated debate on a major cryptocurrency legislation, this after losing support from one of the biggest names in the industry. Let's find out why Emily Wilkins, who spoke with that CEO, has more, Emily. Yes, Brian. And look, this is Coinbase CEO, Brian Armstrong. He's shot capital. Hill yesterday when he publicly opposed the crypto bill that he and so many others in the industry have been working and lobbying and chatting with lawmakers. They've been discussing this for months.

Armstrong said that his team found numerous concerns in the 278-page bill that dropped late Monday night. There were certainly some things which came out which we were surprised by and had issues with. Armstrong detailed his concerns in a tweet. They included a ban on tokenized equities, a smaller role for the CFTC in overseeing crypto and limits on stable coin rewards. And it is that last issue, that ability for crypto exchanges to offer users rewards that's proved to be really the biggest battle of this bill. Armstrong said it's about fairness and letting banks and crypto offer similar incentives to customers. I think the high-level principle here is that we can't really have banks come in

and try to kill their competition at the expense of the American consumer. The American Bankers Association, meanwhile, said in a letter that the rewards are too much like interest and allowing them, quote, will siphon trillions from local lending, leaving less money available for car loans, agricultural loans, mortgages, small businesses, borrowing that drive local economies. This and many of the other issues that Armstrong raised, they've all been sticking points for months. And some senators are debating even other parts of the bill that haven't even come up so far. Senator Cynthia Lummis said the vote today died by a thousand cuts, and she said that Armstrong's tweet was the 1,000th. Still, she, Armstrong, and other senators on the committee told me they planned to keep working on the bill

in hopes they can reschedule the vote for sometime next month. Brian? Yeah, I was going to ask you what the timeline is. You just kind of answered it sometime next month. Is it a guarantee it goes forward or is it kind of in limbo? It's absolutely not a guarantee, Brian. And it's actually a great question because remember, this vote would just be the first vote on this major bill. Let's say they do get it done next month.

They still have to marry together the two separate parts of this bill, make additional adjustments on it, have it voted on the full Senate, and then try and marry it with a completely different version of this bill that the House passed. So let's be clear here, even if they do wind up getting it done in the next couple weeks, which some lawmakers told me is pretty optimistic. It is going to be a huge rush to get this thing done before momentum here really slows for the next couple of. the midterms, and they have an uphill climb all the way here. All right, Emily Wilkins, on Capitol Hill. Emily, thank you very much. Well, for the second month in a row, we are seeing significant cooldowns and some commercial real estate dealmaking. Diana Oleg, joining us with this week's property play. Diana. Well, Brian, deal volume in November was down 10% year over year,

according to exclusive data from Moody's provided to CNBC's property play. October was the first month, dealmaking went negative year over year since the post-fed rake hike at recovery began in early 2024. But this was not just a continuation of that trend in November. Transactions in November were even lower than November of 2020, obviously the first year of the pandemic. Now, Moody's head of CRE research says it's all about higher for longer interest rates, policy uncertainty, a tenuous labor market, and caution on the part of CRE lenders and investors. investors are leaning toward larger scale acquisitions and bigger, higher asset quality assets when they do. For example, the volume of all deals dropped significantly during the month,

except for those deals that were greater than $100 million. Those were 51% higher year over year, and that pushed the average deal size in November to over $14 million compared with an average of $12 million since the start of 2019. Now, in addition, the majority of assets in the top 50 sales were Class A, that is the newest, highest quality properties. The most November deals were in multifamily apartments, followed by office and then industrial. And of course, the second biggest deal was a data center complex.

For a deeper dive on all the deals, it's all in the property play newsletter, CNBC.com forward slash property play. Brian, it's free. You're signed up. I know you are. You better be. Yes, of course. It was just in D.C.

We were just chatting about this. You were talking about data centers, and you've done a lot of great work on that lately. much of these the volumes that we're seeing, I know there was number three on your list there. Number two. Number two, how much is data centers? Like how big of a thing nationally is this? It's got to be monstrous. They're huge. Yeah, there's huge capital coming into data centers and they're part of that industrial complex that we talk about. And, you know, you have private investors. You have the, the hyperscalers themselves who are into the data centers. There's construction.

Some think it's being overbuilt. We've talked with the CEO of Digital Realty last week in the property play. He made the argument. that data centers are not being overbuilt, not being overinvested, but you are seeing increasing deals and, of course, increasing construction in the center because we need it for all those growing number of chips. So the headline there is industry executive says his industry is not the problem. Right, exactly. See what I do.

How'd you figure it out? You know, I'm smart, SMRT, smart. Diana, thank you. Thanks. All right, up next. Is it time to invest? in emerging markets, or is it played out? Plus, why Amazon cares so much about the bankruptcy of retailer sacks. All right, welcome back if you want to sit home and let other people do

your shopping. You're in luck. Kroger expanding its partnership with Uber. The deal will let Uber customers shop at Kroger stores directly through the Uber Eats app. Now, Wedbush saying that deal threatens Instacart's market share in grocery delivery. And so that deal weighing on shares of Instacart parent company, Maple Bear, which is down 2.5%. It's also weighing on DoorDash, which is down 1.5%. Kroger shares are, they're up 3 cents, which is 5.100s of 1%. Meantime, if you have invested in emerging markets, go out for a nice dinner tonight, because emerging markets largely been banking some coin.

In fact, one emerging market ETF, just hitting an all-time. high, and that's going back more than 20 years. Now, this one ETF getting a big pop from the pop in Taiwan semiconductor. But let's be clear, it is not just one market or stock powering these returns. It is truly global. Taiwan, South Korea, Indonesia, and others all at or near record highs. The question, though, is where to now? Joining us now, Pramol Dwan, he leads the emerging markets portfolio management at PIMCO and joins us now. A promo, we talked about at the very top of the show with a different guest, Osang Kwan. He thinks the U.S. dollar, the debasement in the U.S. dollar currency moves have a lot to do with

this. What say you? Yeah, we think we're early innings, Brian, in this emerging markets rally. This is not the EM rally of the early 2000s when you had a commodity super cycle. and China came into the WTO. We really think this is a very durable rally built on solid fundamentals. Firstly, the ratings are improving for emerging market credits. Last year was the highest year ever. When you look at the ratio of upgrades to downgrades in emerging markets, it's the highest year on record. So, EMs are being rated higher. The ratings agencies are saying that the underlying credit

strength of these economies are doing better. That's in thanks, thanks in part, to really orthodox monetary and fiscal frameworks. Indeed, at a time when the same can't be said for the developed markets, which are going the other way in terms of their monetary and fiscal framework. So the fundamentals look very solid. This is an underowned asset class, Brian. I mean, we've spoken about this for many years. People have shied away from EM. They've favored U.S. assets. You know, U.S. assets comprised 65 to 70 percent of global portfolio allocations. EM is a fraction of that. And really, there's a lot of room within that sort of dollar debasement story for EM to catch up. And then the final kicker, Brian, just on valuations.

You know, in a world where credit is rich, where equities are an all-time high in the US, where rates are range-bound, you know, emerging market offers investors value, whether it's bonds, real yields offering 8 to 9% across Brazil and Colombia, whether it's equities that traded a 40% discount to U.S. equities. You mentioned Korea and Taiwan here. We see a world of opportunities and values across emerging markets. Your data shows wild underinvestment, under allocation to this group. Your fund rose 22% last year, largely investing in government bonds.

Congratulations on that. So why aren't more investors allocated to it? Is it because, like, you know, you just buy Nvidia and make a bunch of money and go away? Look, I think people have been quite gun-shy around emerging markets for the past two decades. or put it in another way, EM was really the biggest casualty in an American exceptional environment. So when the dollar went up, when US equities just kept going up in a very linear fashion, as you said, there was no need to do anything else. You could have just bought the US and gotten away with it. But, you know, last year that wasn't the case. You know, Korean equities were up

sort of 70, 80%, EM equities broad based up 40 to 50%, whether it's bonds or equities, global assets outperform the US. And we think we're at the early in the early innings in a multi-year cycle where global diversification, where emerging market assets are going to outperform. And you really do need to think about how to diversify your portfolio. Quickly then, where in the world are you looking? So we like in fixed income, we like Latin America, high real yields, good starting valuations within the U.S. sphere of influence. That mitigates a lot of left-tail risk like we saw in Argentina. Within equities, I think you focus on Asia. China equities, China's pivoting towards more of a

consumption-based economy. That's going to boost equity markets domestically. We also like Korean equities and Japanese equities as well. Japan, we're looking at Latin America. And right now, Pramol, I'm not sure anywhere is outside of the U.S. sphere of influence. We might have just seen that in northern Latin America. Pramol, Duan from Pimco, up 22% last year. Pramol, thank you. Have a good day. Thanks, ma'am. Cheers. Luxury retailer, Sacks filing for bankruptcy in Amazon. It's ticked off about it. We're going to find out why next.

It was a deal making Thursday, and the deal was made a medical device as Boston Scientific's buying a company called Pinnumbra, which makes devices treat vascular conditions like strokes and heart attacks at a cash and stock deal with $14.5 billion. Deal values Pinnomber at a nearly 20% premium, and here's a good RBI, random but interesting stat for you. Penumbra was a $40 stock about 10 or 11 years ago. It's now 350, 40 to 350. One of these quiet money makers has made a lot of people very rich and needs more attention. All right, drastic action. That is what Amazon is threatening over Sachs's bankruptcy. Gabrielle Fon Rouge joining us now.

Gabrielle, welcome. Why is Amazon upset about Sacks going bankrupt? Should be a good thing for them. Well, Amazon made a $475 million investment in Sacks when they acquired Neman Marcus. And now there's a lot of stuff that's in the weeds, but basically, Sacks released its bankruptcy plan yesterday. And as part of the plan, Amazon is now further down the pecking order in terms of repayment. So they want the judge to kind of revisit this plan, reject certain parts of it. So Amazon has a better chance of getting repaid.

And if SACS does not heed Amazon's concerns, it has threatened that it would seek drastic remedies, which includes essentially kind of delaying the case, right? Sachs has a pretty straightforward bankruptcy plan. They're planning to emerge later this year. But Amazon is essentially threatening, look, we'll get another trustee involved, we'll set up committees, we're going to hamstring this and make it last. a lot longer. Yeah, to paraphrase Warren Zivan, the lawyers, guns and money are coming in, but I would probably say in this case, just the lawyers don't worry. Why would Amazon invest in

Neiman Marcus? Again, I'm dense. I mean, it's a good question. It wasn't a great investment, and it was really doomed from the start. But Amazon has always been trying to dip its toes into physical retail. And another part of it is that Amazon has been trying to win over these more luxury, higher-end brands. So as part of this deal, Amazon made this equity investment, but in exchange, Sacks created this storefront on Amazon selling its stuff. Amazon traded some logistics and technology expertise, but this was Amazon's attempt to win over these higher-end brands. I'm going to say something weird and offensive.

Won't be the first time today, by the way. $475 million is a lot of money for us, a lot of money for most people, not for Amazon. It does feel a little bit petty. There's another part of it here that Sacks was going to be paying Amazon up to $900 million in fees. eight years, though. So yes, this is about $1.4 billion, but I wouldn't want to be on the other side of Amazon's attorneys. Seems like Amazon, Gabrielle, is just, and I know they've been in everything, but I mean that literally now. You can't go anywhere. Maybe, I guess, cell phones, they sell them,

but like the service used to be with fire. That's not in the case. Amazon's in everything now. There's like no story that doesn't seem to involve Amazon in some way, even the Washington Post, because of Jeff Bezos. They even have a stake in a legacy department store, and they're suing them over it. You know, I mean, that just kind of speaks to what the company is and how pervasive it is in our day-to-day lives. Yeah, it really is.

Keep us informed to where this goes, because anytime there's a lawyer fight over luxury retail, it's just, there's something kind of fun about this. Something's going to come out in the lawsuit if they get to that point. If they get to that point, we're watching the court filings very closely. the judge is yet to rule on this.

So we're not sure if the judge issues a ruling that's in favor of Amazon. And also, Salesforce was an investor in this deal as well, much smaller stake than Amazon. We don't know if they're going to make an objection as well. Salesforce? Yes. Anybody out there that didn't invest in Sacks? A few people who are doing pretty well today.

Can you explain that one? I know you're on the retail side. That doesn't make any Salesforce? I mean, there was a lot of hype around this deal. It was supposed to create this luxury powerhouse. They were supposed to be able to create, you know, better vendor negotiations, cost synergies. You know, I mean, look, to get Amazon and Salesforce at the table,

obviously there was excitement about this, but this investment was doing. I'll tie it together on Bryant Parker, New York City, there's a building. Salesforce tower. Salesforce is in it. Whole Foods owned by Amazon is underneath it. Connected? Probably not, but I wanted to just mention. It's been a long week.

Gabrielle Fawn Roos, thank you very much. Appreciate that. Folks, that does it for us here on overtime. Fast money begins right now. Thank you.