Closing Bell - Closing Bell Overtimes: Fast Casual Fallout & AI Eating Software? Plus Centerview Partners Co-President On Dealmaking 8/13/25

Episode Date: August 13, 2025

Kristina Partsinevelos sets the day’s market theme before Rick Santelli covers bond market reaction. Paul Hickey of Bespoke Investment discusses weakening breadth, while Ben Reitzes of Melius Research examines the software slump and the role AI is playing.Earnings spotlight includes Cisco, plus Kate Rogers on the fast casual sector’s troubles with Danilo Gargiulo of Bernstein analyzing Cava’s crash and where to find value in the restaurant sector. Centerview Partners co-president Tony Kim weighs in on a bullish environment for IPOs and dealmaking – and if it can continue. 

Well, that's the end of regulation. Stantec bringing the closing belt in New York Stock Exchange, commerce.com doing the honors of the NASDAQ, and stocks and bonds rallying today. As investors continue to price in a September Fed cut, the S&P, the NASDAQ and the NASDAF 100, hitting all-time highs, but it was the Russell 2000 that led today's gains.

Healthcare and materials and discretionary leading, staples and communication services, sectors lagging, treasuries rallying as well today ahead of the next key inflation report tomorrow's producer price index. We've got more on that ahead. And another big day for crypto, especially Ethereum. Ether jumping more than 4% just shot at just $200 shy of its November 2021 all-time high. Influes into ether ETFs are up to $1.5 billion so far this week. That's compared to just $244 million for Bitcoin ETFs. WTI and Brent ending the day in the red after oil prices

hit the highest level since early June. The move lower came after U.S. crude supply unexpectedly rose. And that's the scorecard on Wall Street, but winter's day late. Welcome to Cozumbell overtime. I'm John Ford alongside Morgan Brennan. On the earnings front today, we're awaiting numbers from Cisco. That stock's up 20% this year outperforming the NASDAQ. And shares of Kava are getting crushed today. It's not the first restaurant stock to get hit hard following earnings.

So what does it tell us about the consumer and their appetites? Plus, bullish going public and soaring in its debut, continuing a recent trend of outsized first day moves. Are these IPOs being priced too low? we'll discuss. But first, let's start with the markets. More record highs. Christina Parks and Nevelas joins us from the NASDAQ with more. Christina. That's exactly how I'm starting. Another day, another record. The S&P 500 and NASDAQ, like you said, hitting record highs for the second straight session. Small caps continuing

in our performance. And then you have the communications sector also notched a new record. Market breadth, though, is really expanding. You've got healthcare and materials that are leading today's gains with healthcare actually outperforming tech just this week, which is a, I guess we can call it a notable rotation. But I want to stick with technology. I'm at the NASDAQ. AMD surged 5%, one of the NASDAQ's top performers. And this is interesting.

After analysts suggested, NVIDIA may need to redesign its next generation Ruben AI chip to better compete with AMD's offerings. Separate research pointed to potential delays in NVIDIA for this Ruben chip into 2026. And so that's why you really saw the discrepancy between AMD shares up 5% and VD closing negative. But just within the last 20 minutes,

and NVIDIA spokesperson just told me that the, quote, report is incorrect. Rubin is on track. Meanwhile, Corweeb also closing much lower today, despite a solid Q2 result yesterday. You can see down 21% light backlog growth due to supply constraints with the IPO lockup expiring tomorrow, which would add selling pressure on Friday, plus ongoing scrutiny of its potential score of core scientific deal, which continues to weigh on sentiment. So that is why you saw the sell off today, Morgan. Yeah, big that name. Christina Parts Nevelas, thank you. Now let's turn to the bond market as yields pulled back today, and we get another read on prices tomorrow morning. Rick Santelli is in Chicago to lay it all

out for us. Hi, Rick. Hi, Morgan. Indeed. Tomorrow's going to be the cousin of CPI, but maybe not as important as CPI. We all know that CPI is always a big hump in the road when it comes to interest rates. After the last CPI and the CPI a couple days ago, interest rates tend to move lower. Why? the nervous, big statistic is in the rearview mirror. Let's look at Fed Fund Futures today, the December contract. Why? Because everyone's talking about the Fed. Everybody's talking about rate cuts.

Well, since the CPI, we've released just a day ago, here's a two-day chart of these Fed Fund futures. You clearly see they're moving higher. When they move higher, they're pricing in more Fed rate cuts. And if we look at the contract and move it on the big picture, it's at the highest prices since early July, six-week high. Why is that important? Because it's pricing in an effective overnight Fed funds rate right now of 3.69% after the December meeting.

The same as it was in July, pricing in basically 2.6 quarter point rate cuts. And it's important to watch this contract because the higher it goes, of course, the more Fed activity we're pushing in the market. Here's something interesting. The Fed did 50 basis point cut in September of last year. At that time, yields for the two-year around 362, for the tens around 370. Look at where they're at now, virtually unchanged in a two-year, but significantly higher in the long end. And that's the valuable lesson to be learned, not only by all of the traders, but by Washington. Putting pressure on the Fed doesn't mean you're going to end up with the desired outcome on the long end of the market,

which in many ways is the most important part of the curve, especially when you think, housing. Morgan, back to you. All right, Rick Santelli. Thank you. Let's turn to our first guest who's watching Market Breath as the S&P 500 and the NASDAQ both hit new highs again today and closed there. Join these now as Bespoke Investment Group co-founder Paul Hickey. Paul, it's great to have you on. And let's start right there because Christina touched on it, the rotation we're seeing. You come to us with some charts. What are you seeing? Yeah, so I mean, today's action is rotation within the market. We saw breadth improve and it's exactly what investors wanted to see, especially after yesterday, we closed at an all-time high, yet 60%, less than 60% of S&P 500 stocks

were above their 50-day moving average. And so that number has been slowly declining over time, and it just indicates a narrowing of the rally. So where you can see in the chart, the price and breadth are moving in the opposite directions. So those short-term divergences aren't a big worry, but the longer they last, the more concerning it can become. And just the fact that we're starting to see this rotation. We've talked about this before, Morgan, where you see it doesn't take a lot of rotation out of these big mega caps to cause a much bigger move in the rest of the market. And we've seen that today with some, even though the S&P was up 30 bips, I mean, we saw some big moves in non-Mag 7 type stocks today. Yeah, I mean, the Russell 2000 finishing

of 2%, transports up almost 1.5%. We have earnings. Cisco results are out. Christina Parts Nevelis is back with the numbers. Hi, Christina. So Cisco, posting a top and bottom line beat with earnings per share of 99 cents on revenues of 14.67 billion. Within the quarter, networking revenue actually grew 12%. They're seeing gross margins, adjusted operating margins falling in line with estimates. The company did see growth across all geographies. As for their Q1 revenue guide, that midpoint coming in a little bit higher than street estimates, same for full year revenue guide. So we can say that Outlook is a beat. As enterprise firms really are just building out their AI infrastructure, often we think,

think of chips, but Cisco does become part of that mix, given their contribution to networking. And so in this report, they're saying, quote, record AI infrastructure orders taken from web-scale customers exceeded $800 million in the quarter. So that brings their total for fiscal 2025 to over $2 billion, more than double their original $1 billion target that they had for fiscal, which they stated back in Q4, fiscal 2024. But I'd like to point out that those numbers are just orders and not actual AI figures. Perhaps that will change on the call. Shares dropping, though, about 3% right now.

Perhaps maybe the beat wasn't big enough in terms of the revenue guide. Okay. Christina Parts Nevelas, thank you. Well, don't miss first on CNBC interview with Cisco chairman and CEO Chuck Robbins. That's tomorrow at 9 a.m. Eastern on squawk on the street. Paul Hickey, I'm going to go back to you

because you had a beat, you had some better than expected revenue guidance as well, and yet the stock is falling. What does it tell us about what we've seen in this earning season? Yeah, I mean, that's exactly right. The trend this earning season is we've seen beat rates at, you know, near historic highs in terms of earnings and revenues and companies raising guidance at like unprecedented levels

almost. And so what you tend to see when you have everybody doing it, it's not as a special, so to speak. So investors react with the yon. I think this is more of a short term than anything else. Cisco trades at a blow at market multiple yields. over 2.3%. And it's, you know, it's within 15% of its March 20, March 2000 highs, excuse me. And, you know, I think I'd much rather be buying Cisco in the high 60s, low 70s now

than at those levels in early 2000. Yeah. Price-wise, not that much of a difference, as you mentioned. So with the rotation that we've seen thus far, small caps, fitting today, yesterday. What's that based on, you think, is that interest rate cut hopes that will quickly evaporate, or is there a hope that that rotation continues? No, I mean, John, I think the investors are taking out the rate cut playbook. You know, it's amazing to think, look at the housing-related stocks, the home builder ETF, Lowe's, Home Depot, restoration hardware. They're all up more in the last month than NVIDIAs, believe it or not. So there's this rotation. Investors are looking for.

for rate-sensitive plays, and they've been rotating into those names. And on the inflation front, yesterday's CPI was in line with estimates. But what's really important gets overlooked here is gas prices. Gas prices are up 3% this year. Normally at this time of year, they're up 18% year-to-date. There's only been two years since 2004, where there's been a smaller year-to-date gain than this year. And so besides that, they've been remarkably stable, since the inauguration, gas prices have traded in a 6.2% range.

That's the lowest, most narrow range ever. So at least going back to 2004. And in this environment where there seems to be so much chaos and uncertainty, one of the biggest parts of consumers' budgets being filling up their tank has been remarkably stable. So what remaining upside catalyst is most important for 2025 here? So I think what you want to see is you want to see the job market continue to, remain steady and you want to see the inflation number. So a PPI tomorrow that's, you know, in line or better than expected, I think that will really, you know, solidify the market pricing

of rate cuts. And as long as it's rate cuts for the right reason, inflation contained, rather than the economy weakening, that's good for the market. All right. The right reason is key. Paul Hickey. Thank you. Thank you. Well, the SMH, semiconductor, ETF, rising again today, hitting a new all-time high. Meanwhile, the software ETF down again. Is software getting left behind with all the AI hype? Plus, we will give you the news behind these two media names making huge moves today. Overtime is back in two.

Welcome back to overtime. The tech software ETF IGV continues to slide as concerns over AI's impact on the software industry grow. The IGV is down more than 3% since the start of the month. Several names in the fund, including Snap, Fortinet, Monday.com, and C3AI all got hammered after their earnings reports. All those names down at least 20% this month. And this software slump comes as semiconductors are hitting all-time highs. So is software getting left behind in the AI boom? Joining us now is Ben Ritesis from Mellius Research. Ben, good to see you. This is probably confusing to a lot of people.

because AI is software, but the way it's been sold to businesses for generations now is based on seats. How many people are using it? AI and agentic AI seems to me could mean software operating software instead of as many people, and that blows up some business models? Oh, yeah. Oh, yeah. We're just in the beginning of this, and I don't think the SaaS guys know what's hitting them. And it's interesting. It reminds me exactly like it was with the cloud when the server vendors were telling us,

everything was going to be okay. And then obviously, you know, at first the units started to get hit and then they plunged. And it feels exactly the same, frankly, John. And it's funny, you know, I know you have a lot of people on here who say SaaS is fine, you know, short Palo Alto, stuff like that. But there was a good day today. But no, it feels like a big disruption. I think you're right on. So it seems to me the question is if these agents are like AI software people, right then the question is who do we buy the software people from in the future because whoever is the command center for the agents whoever you're getting the best productivity that you would have used people for whoever you're getting the best productivity out of is going to be the one

who captures that margin no well yeah like we really like microsoft in this and think that you need a cloud and tools to create the agents then mass deploy them and get them mass consumed. Nobody has the end-to-end with the resellers and the channel and the ISVs like Microsoft. So they probably can pull it off the best. There's some tools at Google that are awesome, like agent space and whatnot. They just don't have the breadth of the reach. So they have an uphill climb where they actually may have some of the best tools. Microsoft catches up and then ends up winning. And then obviously Amazon has some tools and they have the least amount probably of reach in the enterprise, even though they have a great cloud business, Microsoft really has the

advantage here. And we're seeing it in Azure results right now, but it really could get stark in the future. And then a lot of the SaaS folks have been raising prices the last four or five years all the way through COVID when they had the unnatural seat sprawl. And then they're raising prices again. I think there's going to be a backlash and some embracing of agents. It's going to be a little slow the next few quarters and then boom, one of those quarters, you know, maybe you'll replay this. I'm not sure. So if AI is eating software, does software start buying AI? Do we see more M&A? Yeah, you know, that was really good point, Morgan. One of the things that we probably are going to see is more things like Service Now, like trying to get into CRM. What Service Now should be doing

is probably running as fast horizontally into everybody's space because they have great, they're great athletes. And I think you're going to see a lot of the SaaS guys go, hey, I know we're moving to outcomes from seats and agents obviate the need to work with our UI. And they're going to start trying to buy each other potentially to gather more users and try to offset this threat if they can. And it could. It really could. But then again, all the assets might not be worth as much as you think. So it might be something that occurs a little bit at a worse time in the cycle. I used to be a banker back in the day, but, you know, I just, I see that we might have to have the disruption hit first before everybody starts buying each other once they realize

consolidation is the only way they can really thrive. Okay. Ben Wrights us. Thank you for joining us. Oh, thank you. Pleasure. Coming up, bond yields falling today as market start to view September's Fed meeting as a virtual lock for a rate rate cut, will interest rate sensitive sectors benefit? Plus, another big IPOs soaring in its debut, bullish, more than doubling today. Up next, a closer look at the bankers who are making bank on all these big IPOs. Over time, we'll be right back.

Over time, a couple of media movers to tell you about, starting with shares of Paramount Skydance, soaring today up 36, almost 37 percent, busy time for the company, closing the merger on Thursday, announcing a $7.7 billion deal with UFC on Monday. Jim Kramer saying Paramount's become a meme stock, pointing out it has a small float. Public investors own only about 30% of shares. Also, look at Webtoon Entertainment. If you're not familiar with Webtoon, wow, 81%, it's a leading platform for digital comics. The company signed a deal with Disney, and it'll be able to make original web comics series based on Disney properties, including Marvel and Star Wars, Morgan. All right. Well, now let's bring in senior markets commentator Mike Santoli for a look at whether relief is on the way for rate sensitive sectors as hopes for a rate cut next month continue to grow. Mike?

Yeah, Morgan, the relief is already getting into the stock prices of some of these groups. It's been a big part of the story of even before yesterday's CPI report as the market tried to get a clear site on a potential September rate cut. Here's one way of visualizing it. You got the ITB, of course, the home builders, ETF, and then that's the regional banks. really a very similar path you see them making up ground on Walmart, which I include here as obviously an enormous consumer play, but one that's very defensive and not so dependent on that refresh of lower rates, and that is curled lower. So a little bit of convergence there between a little bit of the kind of higher leverage consumer type plays and real estate plays

along with lower rates and then some of the more steady defensive ones. Similar story, if you take a look here at the spread between the BKX and the Regional Bank Index. So BKX is the big money center banks, global capital markets driven, obviously huge and stable. And, you know, one argument perhaps for a rate cut, even with financial conditions loose and with unemployment still relatively low, is that you have that sort of bank lending, small and mid-sized business community that is not really in as great as shape. the KRE somewhat reflects that, and that's the kind of more direct short-term funding-based lending that's gone on there. So look, there's still a gap. We still don't know if this is a decisive move or just a reflex rotation, but certainly worth watching. You know, I just feel like

it's worth taking a step back and getting the refresh on how long it takes. When the Fed starts to move rates in one direction or the other, how long it takes for that process to went its way through the economy? Yeah, I mean, it's sort of on multiple tracks. I mean, there's a sort of an instant market reaction. You definitely are going to catalyze some activity relatively quickly just in terms of, you know, floating rate, loan rates go down quickly. So you have some businesses that have lines of credit. But in general, certainly not one rate cut, even if it's a half percentage point cut, is not going to be some kind of accelerant. In fact, in this case, because it's a continuation of a rate cutting cycle as opposed to the initiation of a new one after a tightening cycle, it's hard to kind of get the pattern straight.

It hasn't, it has happened before, but it's not as if the Fed has been tightening, tightening, tightening, and then all of a sudden is letting the pressure off. So, look, we have to see, I think most people are viewing rate cuts if they come as somewhat more normalization of rates and essentially insurance against a downturn as opposed to a rescue operation. All right, Mike. We'll see you again in just a little bit. Now time for a CNBC News update with Bertha Coombs. Bertha. Hey, John. New York Attorney General Letitia James sued Zell's parent company today for allowing fraud on the platform. James's office said Zell was built, quote, without critical safety features which opened the door for scammers to steal more than a billion dollars from its users between 2017 and 2023.

Zell called the lawsuit a, quote, political sales. That's a copy of a suit the Consumer Financial Protection Bureau dropped back in March. The port of Los Angeles is bringing in more cargo right now than at any other point in its 117-year history, according to executive director Gene Soroka, who says shippers have been front-loading cargo for months to get ahead of tariffs. The port of L.A. is the largest in the U.S. by cargo volume. And Venus Williams is returning to singles competition at the U.S. Open 45-year-old Williams received a wildcard invitation today, which, according to the International Tennis Federation, makes her the oldest player since 1981. At her last U.S. Open in 2023, she lost in the first round. I'm going to be rooting for her. I love the fact that she's back in it. All right, Bertha, thanks.

George Foreman was 45 when he won in 1994. All right, well, COVID down 16% today, just the latest fast casual chain to get crushed following results. Sign of consumer weakness are people just eating cheaper. We'll dig in next on overtime. And another big day for small caps. The Russell 2000, up 5% so far this week. It closed up another 2% today. And signs of a reversal, unloved health care names leading the Dow higher today.

United Health and Merck both seeing gains with United Health on pace for its best week since April. We just got earnings from Cisco as well. That stock slightly lower. It did beat on both earnings and revenue, but only narrowly. You can see those shares are down about 2.5%. Intuitive Machines is also down big right here in overtime. the Lunar Lander Company, the commercial space company, announcing a proposed offering of $250 million of convertible notes.

You could see those shares are down 10 percent and coherent, which makes Face ID for Apple. That's falling big in the after-hour session as well. You could see down about 16.5 percent. Earnings were in line, but the company did say it is selling its aerospace and defense business to private equity firm Advent for $400 million. And I think that is changing the outlook for the company. as well. Meantime, Kava shares cratering after becoming the latest fast casual restaurant chain to report disappointing earnings. You could see those shares also finished down 16.5%.

And Kate Rogers has the details. Hi, Kate. Hey, Morgan, no way around it. This was a tough quarter for Kava. The company had positive same store sales. They were up 2.1%, but that was much lower than the 6.1% the street was looking for. Its traffic was approximately flat this quarter. And Kava was lapping a really successful Q2 of last year. It cut its full year same store sales forecast to a new lower range of growth between 4 to 6%. Now, on the earnings call, CFO, Trisha Tollivar, saying, quote, we're operating in a fluid macroeconomic environment, and it's one that sort of creates a fog for consumers where things are changing constantly. It's hard to see the clear, and during those times, they tend to step off the gas. Now, that's a trend being felt

across the casual dining space, fast casual dining space, rather. Sweet Green also had a big same store sales missed last week and cut guidance as consumers pulled back from its salads and bowls. Kava and Sweet Green were the best sector performers of last year. They were up 162 percent, 183 percent each in 2024. Now, if you look at Shake Shack and Chipotle, those are two other fast casual names that have been under pressure. They had same store sales misses this quarter.

Collectively, the four are among the weakest stock performance. performers in the restaurant space in 2025 so far. So we will see how the back half of the year looks. But the fast food names and then the casual dining names seem to be faring a little bit better with investors, guys. John? Yeah, interesting change of fortune. Kate, thanks. One group of restaurant stocks that so far has been healthier for investors is the dine-in category, stocks like Brinker and Darden. So how should investors make sense this growing divergence in the categories? Let's bring in Bernstein Senior Research Analyst Danilo Garjulo. Danilo, good to see you.

So, interesting, the Chipotle CEO squarely said, hey, look, economic times are tough. The working class consumer, I'm paraphrasing here, is drifting toward these deals. Is that a normalization, or is this somehow like a tougher time that's going to get alleviated? Because, I mean, hey, the markets are doing pretty well, but that's not necessarily helping the working class person. Yeah, John, first of all, good to see you. Secondly, I would say you were talking about this divergence between the fast casuals and, you know, the full-service restaurants. And I think to your point, there is an element of pricing that might be potentially impacting how people are perceiving full-service restaurants and casual diners as opposed to even the fast casuals as of today. Specifically, you know, for about $20 you can go out and potentially sit down in a place and have your meal.

serve to you. And right now, if you're in Central Manhattan for $20, you probably can get a ball. And I'm not talking specifically about chip-holders, we agree, but in general, the fast casual have been taken some price, and now some consumers are starting to be shifting back their experiences into the restaurants in a full-service space. So there could be two other reasons. Go ahead. I'm sorry. No, I just wanted to follow up on that. So which, though, is normal? Is it normal that people enjoy the fast casuals and they're going to go back to them after some things, after there's more certainty or was the anomaly that people had gone away from those more affordable actions in the first place?

Yeah, and this is actually the second point that I wanted to mention. So if you look at the casual dining in the past two years versus the fast casual, fast casual has taken less priced versus the big service restaurant. They have accumulated some incremental standing and traffic from consumers. And so there was a little bit of an incremental consumer going into this fast casual place. Now, you're starting to see a normalization of the trends, right? You're starting to see consumers realizing that even going out in a full dining setting may not be as expensive as we started to see places like Chili's or even Olive Garden

bring back some of the value and the value for money on the table. So listening to you, Dinello, and looking at the earnings that we just got, including from Brinker today, the takeaway to me is that the consumer is still leaning into value, but what's considered value has changed. And it sounds like fast casual, at least in terms of prices, has gotten so high that it's now competing with some of these dine-in options, and the value therein lies with the restaurants.

Well, I would say that the dynamic also would have spent to the quick-service restaurants. I mean, your comment is extremely valid, and I would extend to the entire restaurant sector because even the quick-service lessons have taken even more price than the fast casuals. So what we are seeing today is a little bit of the lower-income consumer of the higher income consumer of the quick service restaurants are now trading up a little bit

into the fast casual, so at least this has happened also last year, because they realized that for one or two extra dollars, they can be going for chivalre and having a bigger meal, so bigger body for money. But at the same time, because the pressure is happening in the low-income consumer and we're starting to see some consumers fading away in the entire sector, that kind of uptrade is not sufficient to be bringing the entire restaurant demand up. And so on a net basis, the consumer is now under more pressure. And so with the income coming down, everybody's seeing an outflow in the total consumer. Okay.

What do you buy here then? What do you like of the stocks? So look, if I look at the expectations for Chipotle for next year, I think the market is expecting Chipotle not to go back into mid-single digit, same-store sales. And I think this doesn't include or doesn't reflect necessarily all the effort that Chipotle has put in place in marketing, increasing the amount of limited time offer they're going to be offering next year, and in throughput slash extending the catering. So all of that should be leading to a mid-single-digit com. And if Chipotle is going to go back into mid-single-digit sims or sales next year, I'm confident that all the questions on survivability or maturity of Chipotle are going to fade away, and the stock is going to go back into three-year. trading in the 40 times earnings.

Okay. Danilo Garzullo. Thank you for joining us. Thank you, Morgan. You can hear more on this topic tonight with Brinker's CEO on Mad Money 6 p.m. Eastern time. Up next, we will look at what a surge in short sellers could mean for the market and whether that's setting Wall Street up for a huge short squeeze.

And later, a top investment banker gives us his outlook for the IPO market after the massive debut of Crypto Exchange Bullish. We'll be right back. Welcome back to overtime. Shares of food delivery and grocery companies getting hit hard today. Amazon announcing a big expansion to its same-day fresh grocery deliveries with plans to reach around 2,300 cities and towns by the end of this year. Prime members who spend more than $25 on fresh foods will receive free delivery.

And you can see right there on your screen, the company, better known as Instacart, down 11.5%, door-dash lower, Kroger down for more than 4%. Even Walmart down 2.5% on this news while we saw pop and shares in Amazon, John. Indeed. Well, short interest on Wall Street is on the rise, according to new CNBC data.

That means bent's against stocks going higher. That could lead to a big short squeeze, which can pop them higher. Christina Parks and Nevelas has the details. Christina. You had a much tamer intro because I'm going to start with, like, the animal spirits are back. We have, of course, the new record highs

for the S&P 500 or NASDAQ. But retail investors are spreading, beyond meme stocks into broader large-cap tech names primarily. Goldman Sachs, warning to note today of elevated upside symmetry in stocks with high retail participation. The Goldman's data shows massive retail inflows in particular names like Palantier with 1.2 billion. You got AMD with over 700 million, I'm sure a lot more today given AMD's 5% pop.

Then you got Key Corp, Electronic Arts, UPS, Warner Brothers. And so Goldman Sachs is recommending clients. by call options on these names you're seeing on your screen. So essentially betting these stocks will rise by purchasing the right to buy them at today's prices. The risk's appetite, though, extends to short squeezes, John, what you were talking about. So we had CNBC data, our bureau desk, shows short interest across the Russell 1000, jumped to 4.6% in July from 3.8% at year end. And like Coles, roughly a third of its shares remain sold short.

So there was quite a few names on that list, and that's why I bring up Coles, because look at it, it's just up 9% in the last month. And this is, like, the fact that the 3% of the, I should say, one-third of the float is shorted. The department store is part of what is being called the dork trade on Wall Street bet. So you've got Krispy Kreme's parent company, Open Door, Rocket Companies, and Coals, all drying heavy retail interest, primarily that has to do with the shorts in those names. But the retail momentum could derail if the Fed doesn't cut in September.

But Goldman's message is clear today in its note, if you're betting on market momentum, follow the retail money. And that's why they gave that list that we just saw on the screen. It's super fascinating to me, Christina. I mean, there's been a lot written, including just recently by the Wall Street Journal on the topic of the resilience of individual investors and the fact that they are willing to stick with stocks that maybe their willingness is more enduring than maybe some of the veterans

and some of the institutional players and professional, you know, traders realize and the impact that has on the market here. And I just wonder if this is a dynamic that we can continue to see playing out, given how much access, so many more people have to these markets. I think access plays a big role, but I also think, too, they're buying the dip mentality. They haven't been proven wrong yet. And so you'll have the institutional guys that say, oh, they haven't been around for 20 years and they haven't, you know, suffered any losses, especially when you had those April lows,

who was buying. It was retail traders. Perhaps the accessibility of being able to trade anywhere, even on your watch, if you wanted to, has changed the dynamics. But that momentum is going to continue until we start to see just maybe one massive day drop and they lose money. But many of them are still hedging their bets. They understand options trading, too. So that plays a role. Christina, thanks.

Thanks. Well, a fitting debut for Crypto Exchange, bullish. Up next, the top investment banker on whether the floodgates are open for companies going public. And check out shares of H&R Block, the tax preparation company, a big loser on Wall Street today. After missing Wall Street's profit estimates and issuing weaker than expected full-year guidance, you can see those shares down about 3%. Stay with us. Welcome back to overtime. Investors, extremely bullish for today's big IPO, bullish, the crypto exchange rallying more than 83% after pricing at $37 a share,

above its expected range. It opened at 90 bucks, hidden the intraday high of 118, halted within moments of opening due to that volatility. Well, sticking with that theme, some of the biggest M&A deals of the year have been announced in the past two months as well, and there have been 38 deals valued over $10 billion so far in 2025. That's the most ever at this point in a year.

That's according to a merger market. So will the rainmakers stay busy? Joining us now is Tony Kim. He is co-president at Centerview Partners, is one of the top independent banks for deals. Tony's recent work includes advising scale AI on meta's investment at $29 billion valuation. And I know you are staying busy

because that's just one of a few examples. I do want to start with the IPO piece of this, though. Great, yeah. Because we have seen just these big pops on the first day of trading. We just talked about bullish today. You saw it with Firefly last week. We saw it with Bigma before that.

I could go on down the list. Is the re-through here that there's so much pent-up demand when these names hit the market? or is it that they're being priced too low, given the fact that there's so much pent up demand? You know, I think the right read there is the IPO market's been weak, and it's coming back,

and so you want to price conservatively and make sure that they land well. Interesting stat, over the last decade, there have been about a dozen IPOs that landed north of 150% gain on the first day, and this year we have two. We have Figma and Circle. And so clearly there's that pent-up demand

that you're talking about, But it has been concentrated in a few sectors we were just talking about. Defense tech, AI, crypto, and less demand for the other sectors. We seem to be seeing dealmaking in those sectors, too, but it's also expanding out into other areas as well. I mean, I think about the recent rail merger, some of the stuff we're seeing in the energy sector. I guess what is your outlook for M&A activity, too? M&A seems really robust right now. I mean, we had a moment in April post-Liberation Day where everything kind of seized up.

And that's really because of the uncertainty that it posed. What's happened is the market settled in. People sort of see the soft landing the way through. And then in June, July, August, you saw that pipeline start to build, and so you're seeing some of those deals get announced now. Two and a half years ago, software was going through some rough times. We saw a bunch of companies get taken private, some moves get made. How long before the sharks circle again in software,

given the action we're seeing, and who are the sharks? Well, I mean, I was watching your segment. earlier on AI and software. I mean, I think that's sort of the big question right now sitting over. It's like, what are the impacts? It's sort of like a parallel of tariffs. Like people didn't know how to analyze that. People are trying to figure out how to analyze AI and software. I think you need to have some certainty there before you see deals actually manifest. But you are seeing deals like scale AI get done where people like Mark Zuckerberg, there aren't that many people like Mark Zuckerberg, with enormous hordes of money, are willing to

invest it in the future they see here. What do you liken that to? You've been doing this a long time. Yeah. Well, look, you know, the one sector that is doing it differently is technology. So there have been a couple of big MNA deals. There's WIS, there's CyberArk a couple weeks ago, but not as many deals as you might expect because that's such a big sector. In that market, these are not MNA deals. The scale idea was not an MNA deal. The big sort of trillion-dollar tech companies are rotating to these investment partnership licensing transactions. We call them Lyft transactions for licensing IP founders and talent. And, you know, those are deals that allow a company like META to get a partnership with the things they want out of the company, but not all

of it. They're not buying it. And they've really, you know, pivoted to deals like that. There have been sort of, I think, seven of those done in the past couple years. Is that a reflection of antitrust concerns for some of these biggest companies, or is it something else? Well, I think that the overall lack of M&A, those big companies, is reflective of that, right? When you're under investigation for monopoly practices, like maybe you're a little hesitant to go pursue M&A. I think it's a reaction to the moment. I mean, probably most, all of those deals that have been done with this structure are AI deals, actually. And there have been almost, there have been very few actual M&A deals done for AI companies.

You think about it, right? We don't really know where AI is going to be in three, six, nine months. Like, the idea of waiting for 18 months for a deal to close, it's pretty hard on both sides. What do you make a perplexity trying to get its hands on chrome? Ambitious. You know, they've not been shy about going out there with different things, so we'll see what comes of it. But I think that's pretty core to tell for sure.

All right, Tony Kim, thank you. Thank you. You covered a lot. Senator Hugh partners. Well, junk bond credit spreads near historically strong levels. Up next, Mike Santoli is going to explain why that's somewhat surprising, given Wall Street's increasing expectations that the Fed's going to cut rates. And don't forget, you can catch us.

on the go by following the closing bell overtime podcast on your favorite podcast app. We will be right back. On the economic front, we will get another reading on inflation with the July producer price index as well as weekly jobless claims. Producer price is expected to rise by 0.2% month over month. So another key one to watch. And, of course, we know, John, that tends to be an input into future CPI reports to a certain extent as well. Yes, indeed. And now let's bring back Mike Santoli for a look at the unusually strong levels and junk bond credit spreads. Mike? Yeah, John. So very, very tight yield spreads of high yield debt to treasuries. It's about three

percentage points right now. That's what this chart is showing you is the yield spread of junk bonds over treasuries. And that's very historically low. It hasn't really spent a lot of time below that. It obviously goes back over 25 years. This was the credit bubble that preceded the global financial crisis. Maybe shouldn't be wishing for us to challenge those levels. Obviously, it shows you that investors are not demanding a lot of compensation for extending credit to somewhat riskier companies, that's basically in sync with low recession odds that are assigned by the markets right now. So it's a little bit unusual that the Fed would be kind of reinitiating rate cuts at a time when you have measures like this showing very loose financial conditions, not unprecedented,

probably earlier than this chart. In the mid-90s, you had some instances there when the Fed was easing into a soft landing and very tight credit spreads. But it does sort of suggest out there that companies already have it pretty good. The other thing I point out, and this is unmeasurable, but private credit, which is not reflected here, could be suppressing public junk spread yields, basically, because they're kind of taking on some of the riskier stuff, and they're also maybe more aggressive in credit provision right now. Interesting, Mike, but also given what we've seen with crypto.

doing quite well, return of meme stocks. Is this another sign, potentially, of complacency in the market? Well, yes, it's sort of the, it's the backdrop that would be compatible with a determination that we're complacent. We're not priced for a lot of disturbances out there. We're not necessarily riding on a very wide margin of safety based on low volatility levels, tight credit spreads, as you say, some of the most speculative parts of the market going up, valuations being pretty rich. Now, those things can co-exist and they can sustain for a while in a good economic backdrop, but it's obviously the case that we're not really bracing for any kind of a shock right here. Yeah, I was trying to look around corners and think about the things that could

go wrong. Makes me wonder how out of position various players in the market are. We're just talking about all the traffic coming into the port of L.A., folks trying to get ahead of tariffs. Is that demand, you know, is that demand that won't be there later to drive, to drive more revenue, one wonders, depending on how the Christmas season goes? I think there's a huge question about the lumpiness of economic, especially goods-related activity this year and whether we're just not seeing lagged effects of tariff friction or if it's just going to be diffuse enough across the global economy that maybe it's not going to be enough to upend markets and really impact earnings expectations. So that's, I think, what we're waiting for. I would say for large cap equities,

institutions are not really over their skis in terms of their exposures, but maybe they're not far from there in time. All right. Mike Santoli. Thank you. Yeah. Can't help but wonder, Morgan, with all of the different data that we've gotten, both on the macro side and on the micro side, we're just talking about the different restaurant outcomes. Those who have a lot of money are still spending it. But perhaps that working class consumer is watching the wallet a little bit more closely and thinking about where that money gets spent. But at the same time, with markets at these highs, you know, maybe we're not all having the same experience. Yeah, and that's why the consumer confidence numbers we get on Friday are going to be one to watch too, because you do

have stocks at all times highs. And typically, historically, there tends to be a relationship there. So do we see that translating more again here after months of uncertainty? I'm watching Deere tomorrow morning. This is one of those names, a Made in America manufacturer that's extended to other parts of the world. How are they hit by tariffs? What does that look like? Especially as they did make an announcement recently to invest another $20 billion into U.S. manufacturing. Also net ease tomorrow morning after you had the K-Web today, the China Internet Fund, jumping as well. Those names have been doing well this earning season. That will be interesting to watch. That does it for us here at overtime. Fast money starts now.