Closing Bell - Closing Bell: Regional Bank Action Drives Volatility 10/16/25

Episode Date: October 16, 2025

The market had a big mid-day move with the regional banks at the center of it. Leslie Picker explains all the details. Charles Schwab’s Liz Ann Sonders and Solus’ Dan Greenhaus tell us how they’re playing today’s action. Plus, Allianz’s Mohamed El-Erian maps out what he thinks is the path ahead for the Fed. And, top strategist Jeff DeGraaf breaks down the big move in yields.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

And welcome to closing bell. I'm Scott Wobner, live from the New York Stock Exchange. This make or break hour begins with these markets, of course, a drop in yields, a spike in volatility today. Have investors a bit on edge? We'll show you the scorecard here with 60 to go in regulation. Stocks did begin falling around midday as financial stocksperson. I want to show you some of the biggest names within that group because they are all lower today. There is city down three and a third. JPM and Wells Fargo are down as well. Some really big moves in the regional banks too, and that's a big story. Leslie Picker's going to be here in just a moment to tell us exactly what is going on behind those sizable declines

in what you're looking at on your screen. She's also following the money today in the alternative investment in private equity names. Most are falling again. Take a look at those slides. Apollo's down more than 5%. KKR is as well. Blue Owl has not traded well lately either. We'll get to the bottom of all of that.

United shares, the airline down sharply after reporting earnings on the bell. That's yesterday that those earnings came. The follow-through today, United down 7% American Delta are also in sympathy there. It takes us to our talk of the tape. The market's midday move and why the regional banks are at the center of it. As I said, Leslie Picker, always following the money. And she joins us now with the very latest on what is exactly happening here, Les. Yeah, Scott, pretty much every company with a loan.

book in the red right now on concerns about credit quality. Regional banks are plummeting. Alternative asset managers are slumping and Jeffries is tanking once again as its name has become increasingly synonymous with the first brand's bankruptcy. Credit concerns that Zions and Western Alliance spooking the entire sector today. Zion's revealing in a filing last night that it is filing a lawsuit and taking a provision of $60 million due to what it describes as, quote, apparent misrepresentations and contractual defaults related to a borrower. Western Alliance filed its own 8K this morning saying it doesn't need additional provisions related to its exposure to that borrower, which it had sued back in August alleging fraud.

The bank believes collateral coverage will cause it to avoid losses, but Western Alliance also had exposure to first brands, and you can see what those stocks are doing. They're down double-digit percentages. Bank of California is another name to watch. today, as analysts point out, it too has exposure to the same borrower, although its exposure is minimal and senior in the capital structure, still those shares down 8% right now. Even though exposure totally for each of Zion's Western Alliance and Bank of California stands at under 2% relative to their respective tangible common equity, the markets are

on high alert about cracks in the credit markets following the bankruptcies of those two auto companies last month that sent private credit stocks roiling, which we're seeing kind of a rinse and repeat of today, Scott. All right, Leslie, Leslie Pickard. Let's bring in now Charles Schwab's Lizanne Saunders and Solis Alternative Asset Management's Dan Greenhouse. It's great to have you both with us, Lizanne. Thanks. Welcome to New York. It's good to have you here. This definitely seems to be pretty heavily on the mind of the market. What do you make of the concern here? Yeah, these concerns were brewing, probably exacerbated even before the news. out of Zions and Western today from the cockroach comment by Jamie Diamond and some of the

weakness in the likes of, you know, the Apollos and KKRs have preceded it. So I think probably the move down and yields represents a bit of a flight to safety. Also budding concerns about whether maybe we're going to get to a point where the expectations bar for earnings, at least certain pockets of earnings, may have gotten set a little bit high. So I think it's a confluence of things. Dan, is this where there's smoke, there's fire, at least that's how the market is going to react before it has more answers? I think the market's clearly reacting in that way. But we talked about this last week in the week before that. I don't think this is a fire. I just got back yesterday last night

from the Deutsche Bank Distress Conference down in Austin, Texas. I don't know, 1,000 investors across the high-yield and distress space. And talking to everybody, listening to the panels, et cetera, et cetera, I get the feeling that everyone agrees with the position I have, which is, particularly as it relates to first brands and tricolor, this is probably idiosyncratic in nature. You made unsecured, high-risk loans to undocumented immigrants during a deportation program and fraud. And fraud, by definition, is not widespread, at least we hope.

So I think this is a case of shoot first and ask questions later, but I really don't think this is emblematic of larger issues, these two issues specifically. I guess my first comeback on that would be, well, what do you expect them to say at a conference where they're in the business. No, but these are investors who are presumably on the lookout for the type of fraud that affected first brands. The whole problem with this issue to begin with is if you're on the lookout in a dense fog,

so you can't really see anything because it's so opaque. The shadow banking system by nature is that way. So what are you looking for if you can't see it to begin with? Well, so first of all, let's delineate for the viewer. There are two issues here. One is in private credit, which is the Aries of the world, so to speak. And then there's what we described last time as the what we call the broadly syndicated loan market or the BSL market. The investors typically who are at the Deutsche Bank Conference or any other conference or investing in the loan space, as Leslie mentioned, are the ones that would be exposed to first brands and tricolor. These were not private credit deals.

These were not particularly large issues in Blue Owl, et cetera, et cetera. In the case of the... Have you seen the way Blue Owls been trading? then why is that stock doing what it's doing along with a lot of these other names? Yeah, well, first of all, far be it for me to defend Blue Owl. I'm not an analyst in the space. You don't have, but you can take it in total with the others. I would argue. The whole group has been bad.

Without commenting on Blue Owler, Carlisle, the fundamental specifically, I think it's a case of shooting first and asking questions later. The loans are done on a face-to-face basis. They're not traded around. Presumably the credit quality. The covenants are going to be stricter at a Blue Owl or an Apollo than they're going to be in the BSL market. And so I'm generally on the side of the private equity guys that, I'm sorry, on the private credit guys that are arguing this is not an issue for us, at least right now, as far as we know. Do you worry at all about issues in the shadow banking system that we don't

really know about, that we're just sort of looking around. And as Jamie Diamond said, you alluded to it already. There's never just one cockroach. It feels like every day here we're maybe seeing another one or worried about more coming out from the dark? How do you feel? Well, I think that's why you want to watch some of the big players that are publicly traded companies, the likes of Apollo and KKR. I think the market often gives you those signals. But to your point, Scott, it's in the shadows, you know, literally and figuratively. So we can only speculate. I think one of the other broader concerns is that there's been so much speculative fraud that's developed within the the public markets, kind of Wild Wild West with baskets like quantum and drones and non-profitable

tech and meme stocks, that when you have that kind of speculative froth and then you have sort of a bigger picture potential issue, those two can sometimes collide and cause an increase in volatility. Does that mean that you agree with those who suggest there's a bubble in AI? It's just in certain parts of it and not in all of it? What concerns me is, and maybe the right comparison to the late 1990s, late 1990s, there was not a lot of there there in terms of the denominator of the valuation equation because most of the hot stocks actually had no earnings and had no prospects for earnings. Not the case this time, a robust denominator in the equation, which makes you wonder whether

if there's a bubble, maybe it's just sort of an expectations bubble, where you just get the bar set a bit too high. So I worry about the circular financing. I worry about everything that everybody else is worried about. But I think one of the most interesting things that Warren Buffett said back in the 2001 era was about everybody assumes they're going to leave the ball right before midnight. The problem is the clocks don't have hands. So that may be relevant, but we could have a long way to go still.

Well, from hands to feet. and Paul Tudor Jones saying you could still have a long way to go before you get to those extreme levels and you better have, you know, quick feet to know when to get out. I mean, are we inflating something that's going to have the potential to just go on for a long period of time? So it's not much of an issue today. Well, I think Liz is, we've talked repeatedly on the show and elsewhere about comparisons to the late 90s. And there are going to be echoes as time goes on in terms of. of overcapacity that's built, then obviously, telecom communications infrastructure today,

data center, eventually probably power. But I don't think we're there yet. I mean, obviously large numbers are getting tossed around, capital commitments, open AI, obviously arranging, making arrangements with everybody under the sun. But I don't, it's not as if we have unleashed 100 gigawatts of additional power capacity. No, look, even Michael Dell on this network said, you know, we're going to get to a point where we build too many data centers, but I don't see any evidence of it today. But that sounds like what you're saying.

I think one of the issues, though, is that if you look at the Magnificent Seven as a mega-cap proxy for AI, it represents now about a third of S&P KAPX. But in the last five quarters, you've seen free cash flow growth for that same cohort go from more than 60% year over year to negative 5% year over year. What I would start to pay attention to is so far this boom and AI has been equity financed. But increasingly, you're hearing about debt finance deals. And I think that is something to keep a close eye. It's a little more of an esoteric thing to talk about.

But that's kind of on my radar to gauge, are we getting closer toward the end of this? And if we take the $400 billion in committed CAPX right now and we annualize it out, which of course Wall Street is very good at extrapolating. annualizing. So we're going to need somewhere around a trillion and a half dollars of cap-ex expenditure over the next couple of years. Free cash flow is obviously not going to pay for that going forward. And so the Fed reducing interest rates, which appears, obviously they've done so already, appear likely to do it several more times, is coming at the exact right time that we're making the shift, however marginally from funding a lot of this stuff out of cash flow to the debt markets. And so it's actually going to help, in some respect, prolong or at least

ease the transition in a way that might not have been the case, say, a year ago. I mean, we're thinking a lot as it relates to AI, obviously, about the amount of spending that all these companies are doing, the kind of margins that they're going to be able to maintain. There's been some recent stories about that lately regarding Oracle, for example, which, I guess Sima Modi, who joins us now, is refuting whatever that recent news report suggested, which is one reason why the stock is doing what it's doing today. Yeah, the big picture here, Scott, from this analyst day for Oracle is that gross margins

do look better than feared specifically the artificial intelligence cloud margins. That's Oracle's capital-intensive business that buys and rents these GPUs to the likes of open AI. They're expecting gross margins to be in the range of 30 to 40 percent. So to your point, the story from the information last week claimed mid-teens. Executives also went into detail on this call on the ways they're thinking through the buildout of data centers where. They don't pay, right, for the land, the power.

Oracle is responsible solely for the compute, the storage, and the networking. And they're saying that they're going to reduce the time between implementation of those technologies inside a data center and generating revenue. And Mizzouho is basically saying this is going to lead to faster monetization. We're looking at the stock up about 4% right now. So building on this year's big gains of over 80%. And just looking at the average price target across the street, $340 a share for Oracle. The stock is trading at 314.

analysts do say a better margin profile could also, Scott, give Oracle, better flexibility when it comes to making even more purchases of chips. So we are looking at the stock, NVIDIA, specifically, higher on the day. All right, Sima, thank you very much for that. That's Sima Modi. So, Lizanne, you said something a few moments ago that caught my attention. You said we're closer to the end. No, I think that would be a sign if you started to see a significant increase in debt finance. Oh, okay.

Yeah, no, I have no idea. Don't you think that we are prime to maybe do that? Well, to Dan's point, at some point, that is mathematically what has to be done because you've got this diminution in free cash flow growth. I also think it's interesting, and maybe this is a good sign, is that most of the speculative froth is not in the big mega cap names anymore. You know, NVIDI is the best performer of the Magnificent 7, but I think it's ranked 65th in the S&P in year-to-date terms. It's not even in the top 600 best-performing stocks in the NASDAQ. Now, it also points to a lot of speculative fervor in these micro-pockets. In fact, down the cap spectrum, it's the microcaps within an index like the Russell that's doing well.

That's where I think you've got some potential problems because of just how much speculation is. in there, but it's moved away from those index dominant names. Yeah, I think a lot of that's right. I mean, Liz tweeted the other day, and I retweeted because I thought it was a great observation, that in the Russell, we know some portion of the Russell is profitless. It was the profitless portion of the Ruffle, is the profitless portion of the Russell. That's up 60% or something from the Liberation Day lows compared to the profit-full, if we will, portion of the Russell, which is up, say, 30% or something.

So you're seeing the speculative fervor. And when I break down the market by baskets, if you will, it's not just the AI derivatives, it's the nuclear, et cetera, et cetera. It's also a lot of short covering. And so you are seeing some frothier. But to the point, we were both there in the late 90s and early 2000s. It doesn't feel like 99 to me. You're not having IPOs from a bunch of unprofitable companies that were recently delis and changed their names to AI.

The valuation of the NASDAQ then versus now is not even in the same. It was a hundred and twenty-five times. It's not even the same conversation. We shouldn't even have it because it wasn't even close. But let me push back. So real quick for the viewers, the NASDAQ was trading at 125 times forward earnings at the beginning of 2000. Obviously, we're nowhere near there. But I do want to push back and say, yeah, Nvidia's only 30 times or 40 times.

It's still relatively expensive. I mean, it's a high-growth company that's growing net income by 50% or so. So it should trade at a premium valuation. But just because it's trading at 50 times earnings or whatever, and not $100,000, times earnings, doesn't mean if there isn't an end to this, that it's not going to go down. What does all of this mean for a broadening, a more, a broadening of the market further, you know, away from you, we're looking at the market cap spectrum. Obviously, it's been a big cap rally. It's not just mega caps, industrials and financials. Now here we are having a conversation about

regional banks. Does this just throw cold water on the idea that you can have a real broadening of the market. The Russell is down 2% now. It's still up 3% for the week, but it was up 5% earlier today looking even better. As interest rates start to come down, the economy looks like it's holding in. You're like, well, the market's going to broaden from here. So at a moment in time broadening, I think, is less likely. Right now, if you go out one year and then you look at trailing one year, trailing six months, trailing five months, four months, three months soon, you don't have more than 30% of the index in the case of the S&P outperforming the index itself. So we're not seeing it. What we're really seeing that some people call a

broadening is this rotation under the surface. Even since the April 8th low, closing low on the S&P, where the S&P has had no more than a 5% drawdown at the index level, NASDAQ a little bit more, 7% draw down at the index level. And that was back in the immediate aftermath that that intraday low on April 9th. He had a little bit of a retest. But the average member within the S&P has had a 15% drawdown just since April 8th. And the average member within the NASDAQ has had a 34% drawdown. So there's a lot of churn and rotation going on under the surface. I think that kind of backdrop is likely to continue. I don't know that I would define that as a traditional broadening, just a lot of rotation under the surface. What's the message here on the

screen here? Treasury's yields moving lower. At what point does that become a concern. It's a, you know, it could be a traditional just flight to safety. It could be a flight to safety because you're worried about some of these other issues spilling the economy over into a worse off place. What do you think? This is what makes our job so fun because we've spent six months debating on the show whether higher interest rates or something to worry about. And now you're asking me whether lower interest rates are something to worry about. There's always something to worry about. But to your point, I don't think there's anything to worry about, I mean, the Fed's reducing interest rates. We know that. The economy is not doing gangbusters.

It's actually slowing a little bit. But perhaps most importantly, the worst of the inflation worries has not as of yet come to pass. And so when you put all of that together, why should the tenure be up at 475 or 5 percent? The worries around the debt were momentary and have existed in general for 30 some odd years now. That obviously is not new. And again, to the extent that tariffs are not a problem. We have to wait in here what the consumer companies tell us in a couple of weeks. In conjunction with the Fed reducing rates, I just, I don't know that lower rates are a problem. They've been, and let me, they've been falling all year. The high was in January. There are contradictions, though, in the market. You suggest, Lizanne, that bank and airline

earnings suggest the economy and consumption are on solid footing. Airline stocks are getting smashed today. Bank stocks are lower, and they've been really uneven lately. What do you make of that? Well, unevenness is part and parcel to just this rotation. And I think these mini bouts of profit taking can kick in really, really quickly. And I think that's a function of the dominant cohort in the market right now, which is the retail trader, distinct from the individual investor. Which is still really engaged, right? I mean, retail is highly engaged. There were a couple of stats that I had today on halftime that suggested retail is not going anywhere.

No, they're 20 to 25 percent on average of daily trading volume, and there are times in days where it's significantly higher than that. They're FOMO, their YOLO, their BTD, and quite frankly, it's worked. And the whole notion, as it's often been defined as sort of stick it to the man, with targeting these heavily shorted stocks, to Dan's point about those are some of the best-performing baskets are those heavily shorted stocks, interestingly forcing institutions that are short those names to have to buy back stock and reposition. There is a bit of froth, though.

I had an individual investor client recently at an event that told me that she had switched from being a long-term investor to a day trader. And the most recent two stocks she bought, she bought because the tickers were her initials and her husband's initials. We're at that stage. So I thought, oh, I don't like to hear that kind of story. Yeah, right. A different kind of lotto ticket, I suppose.

I don't know. Lizanne, thanks. Good to have you here, Dan Greenhouse. Thanks to you as well for being on set with us. To Kay Rogers now for the stocks, the biggest ones moving into the close today. Hi, Kate. Hey there, Scott. So we'll start things off with shares of United Airlines sinking 5% after posting Q3 revenue

that just missed Wall Street expectations while profits beat estimates. United was helped by growth rates for its premium seat offerings, and CEO Scott Kirby expects earnings from United's loyalty program to double by the end of the decade. Moving on now to shares of Salesforce climbing around 4% after saying it expects revenue above $60 billion in 2030. Salesforce's CIO says the cloud-based software company is counting on its agent-force automated customer service software to increase revenue. Its shares, though, down about 25% so far this year. And finishing things off with shares of Snowflake and Palantir, both moving slightly after announcing a partnership that integrates Snowflake's AI data cloud with Palantir's Foundry and AI platforms. Global Power Management Company Eaton announced it will use the partnership for a best-in-class data foundation.

So far this year's shares of Snowflake are up around 56%. Palantir, though, Scott, up 136%. Back over to you. Kate, thank you. Kate Rogers. We're just getting started here. Up next, Muhammad El Erie, and he is at Post 9. He'll tell us about the big move in the bond market, what it means for the Fed. We'll look forward to that conversation right here at the New York Stock Exchange next.

All right, welcome back to the bell. Busy day of Fed Speak today, the 10-year yield falling below 4% for the first time since April. Our CNBC senior economics correspondent, Steve Leesman, is here with our biggest headlines of the day, Steve? Yeah, Scott, a strong late morning rally in the bond market sending yields below 4%. And while it didn't appear lined up directly with Fed speak, it ended up raising prospects for a third consecutive rate cut in January. In fact, the most important Fed comment of the day, or Fed comments, were modestly hawkish.

Fed Governor Chris Waller, a leading contender for the Fed chair job, said the Fed should cut in October 25 basis points. But wait for the resolution of this strong GDP. numbers we've had and the soft job market before deciding whether to cut again. If you do see a situation where inflation remains and check and the job market weakens, he says the Fed can cut by a hundred to and 125 basis points. That was early in the morning. Richmond Fed President Tom Barkett earlier than that noted that hiring looks to be

soft for productivity from AI, but the bond market reverse course at 11. It had gone up after Waller but rallied for reasons that my friend Rick Santelli thinks is a combination maybe of some potential funding stress, geopolitical trade tensions and the shutdown. But what's clear is that the rally began before those better September deficit numbers appears and those numbers may not be quite as rosy as they appear. What's also clear is the market confidence in Fed rate cuts

in October, December, and now January, growing confidence in a third consecutive cut in January. That's 65% numbers, one of the higher probabilities that we've seen. What's also clear, Scott, and you've been chronicling day after day at least certainly the last couple of days. We had some inexplicable intraday volatility

that doesn't seem to line up all that well with the news events that appear to be that usually move markets. Yeah, Steve, exactly. It's a good setup for our next conversation. Steve Leesman, our senior economics correspondent. Speaking of, let's bring in Alian's chief economic advisor Mohammed L.A. And he too is at

post-line, and it's nice to see you in person as well. Thanks for having me, Scott. So what do you make of the move below 4% on the 10-year? And what Steve just showed us, 100% The market's convinced for this month, and then in December, and then 65 for January. Are we over our expectations a bit or no? No, I think the moves are motivated about what you discussed earlier,

which is concern about credit, concerns about regional banks, concerned about alternative asset managers, and that plays into the financial stability concerns of the Fed. You think there are real things to be concerned about in those areas? Look, I agree with what Jamie Diamond said, which is, you know, cockroaches don't come in one and twos. And we are living through a period where credit has been incredibly loose. A lot of money has been thrown at borrowers.

And you've had lax standards trying to get the money to work. So would I be surprised if we see more credit issues? No, do I think it's systemic? Do I think it's something that really brings down the economy? No, I don't. But I do think you will hear the news of defaults. and certain players will be hit. You know, you raise an interesting point.

It's like the two sides of the coin to very tight credit spreads. It's something everybody always cites as there's no problem, there's no seize up in the credit markets, but by nature, very tight credit spreads are going to lead to a lot of lending and huge demand because the environment is theoretically good to do so, but then maybe you get yourself into some of the issues that we're only now learning

about. You're absolutely right. The lower the level of the spreads, the more the curve flattens. Because people reach out for return, and they venture into areas they know less well. Because at this point, it's all about relative returns, and they forget about overall compensation for risk. I've seen it happen over and over again. So it doesn't surprise me, but I don't think it's systemic, but I do think it adds

to the pressure on the Fed to cut. But it's not straightforward because, yes, they should be worried about employment, but inflation will go up in the months to come, and they don't know whether the employment side is a supply side issue or the demand side issue. If it's a supply side issue, they're going to be pushing on a string. So Stephen Meyer, in the newest Fed Governor, he wants a half-point cut this month. Fed Governor Waller is more on a quarter point. Which way are they going to go?

I think they'll go quarter. They should have gone half last time. Why shouldn't they go now a half? Because I think now they have less clarity on what's happening in the economy. I think that's really important. Data for them is important. This is a data-dependent Fed. The fact that they're cutting when I suspect the CPI inflation is going to go above 3 percent

is going to be already a question mark. But cut 50 when you haven't had the drops data, that's going to be hard to explain. What about the announcement on the balance sheet the other day? that they're going to end the runoff or at least stop it for a while in the coming months. What do you think? I think a little bit too early, but I understand why. Why do you think that? Because I do think you've got to get back to an equilibrium level of the balance sheet.

The balance sheets is still too big, but I understand why. It's because they're worried about the labor side of the economy. Do you think the economy's in a good place? I mean, you chair a corporate board that has a under armor that has a direct line into what the consumer is doing? So on the surface, the economy is great. We had 3.8% growth in the second quarter highest in two years. We're going to get over 3%. Inflation is contained. The Fed is easing. The stock market is booming, but gold is at record level, but the dollar is languishing. You think that gold at record levels is more concerning than not? Yes. It's a whisk-off

asset that has broken its correlations for good reason because of what's happening to the view of sovereign US. So you think it is a debasement trade, so to speak, that's leading to gold? Yeah. Look at the amount of inflows into our stock market from outside that are hedged, dollar hedged. So people love U.S. companies. They don't like the dollar. So they're hedging that. I think the other issue you've got to be concerned about is the decoupling. Low-income household from middle and up-income household, that's a decoupling. The labor market from growth, that's a decoupling.

There's below the surface, there's a lot of question marks that suggest that we've got to be careful in the months ahead. All right. We'll leave it there. Mohamed's good to see him. Thanks for being here, Mohammed L. Aalarian. Still ahead, we're going to talk to top technician Jeff DeGraff. He'll join us live. He'll tell us where he thinks the market is going from here.

What are the charts telling him that he wants you to know about? No, he'll reveal that coming up. All right, coming up next, Apple, betting big on sports. NBC spoke exclusively with Apple's services chief, Eddie Q, all about it. We'll reveal the strategy coming up. Welcome back, Apple, Apple, doubling down. streaming. Our own Alex Sherman just spoke exclusively with Apple's services chief, Eddie Q. Alex, Eddie Q doesn't do much when it comes to the way of interviews, so this is a big get.

Nice job. Yeah, appreciate it. I asked him, look, my reporting indicates Apple is close to a deal for the media rights, the U.S. media rights to Formula One. We were speaking at an event dedicated to motorsports. So I figured, look, that would be a great time for him to break the news. He didn't. that deal is not official yet, but I am told it is imminent. So that would bring US Formula One to the Apple TV platform. You said Apple doubling down in the introduction. I asked Eddie, look, you know, Apple's got Major League Soccer now, Friday night baseball for Major League Baseball and potentially F1. Would you consider really going big in the sports? Would you even consider buying ESPN? Take a listen. We like doing things ourselves. We like

like building things. We start generally from scratch and build. And, you know, that takes a little longer from that standpoint. But I think it lets us do things that are unique and special. So we didn't say no, but that certainly sounds like a no to me. And that shouldn't be surprising. I mean, in Apple's history, they almost acquire nothing. I mean, it's, for a company that large, they've never done it through acquisition. They've always done it through build and buy. And it sounds like sports rights will be the same thing. Well, we know it's popular with many of the tech companies, so why not Apple, right? We know what Amazon's been doing in the 4-Awn Prime, and we know about Netflix and the big move

that they're making into live sports, too. So Apple just sees what everybody else does, how lucrative it can be. Yeah, I think Eddie Q feels like this can be a real business for him, and he has a very long-term horizon. That was really the point he emphasized. He said Apple goes about this at a certain way. We want to own all the rights for a sport if we can

rather than this trend right now where the league carves up its rights to five different media partners. The problem with that, of course, is that if the NFL and the NBA Major League Baseball, they feel like the most lucrative way for them to maximize the value of their media rights is to carve it up. So that's a tension.

Apple feels like their way is more consumer friendly and in the long run the leagues will come around to it. So we'll see. All right. As I said, Great get. Alex Sherman, thank you. For the full interview, you can scan the QR code. We'll show you on the screen here, or you can head to cnbc.com slash sport, and you can do it that way. However you do it, check it out. And an all-new season of On the Record, that's next Saturday at 3 p.m. Eastern Time. We track the biggest movers next as we head into the close.

less than 15 for the closing bell. Let's get back now to Kate Rogers for the stocks as she's watching. What's on the list? Hi again, Scott. So we'll start things off with shares of Micron rising around 4% after UBS raised its price target to 245. Analysts there pointing to a boost from a memory chip shortage and an uptick from U.S. hyperscalers and smartphone customers for that move. The chipmaker has been on a tear so far this year. It's up around 139%. Moving on now to J.B. Hunt, transport services skyrocketing around 21%. After the trucking and logistics company posted a Q3 profit and revenue beat, J.B. Hunt was helped by operating income growth in its intermodal division,

which moves goods across a combo of its truck and rail operations. J.B. Hunt is having its best day since 1998. And finishing things off with shares of Hewlett-Packard Enterprise tumbling around 9% after giving a full-year forecast for fiscal 2026 that came in below expectations. HPs looking to position itself for higher growth opportunities in places like networking, cloud and AI over the longer term Scott back over to you okay thank you so much Kate Rogers up next we get to set up for CSX results they are out in OT we're in the market zone next all right we're now the closing bell market zone CNBC senior markets

commentator Mike Santoli is here to break down these crucial moments of the trading day plus Renaissance macros Jeff DeGraph he'll tell us about the big move in yields what that could be confirming and Simomodi tracking the action in HPE. Frank Collins on what to watch for when CSX reports in OT. Mike, you first, though, this move lower in yields in the 10 years certainly has gotten people's attention. Yeah, so you have yields down, stocks down, Bitcoin down. Bitcoin's not been able to get off the mat since last Friday, and obviously the dollar down. So it has that sense of a little bit of a half step back from risk.

The big question of the week, I think, was it was Friday's air pocket in the market in the S&P, kind of a one-and-done blip that we had to get out of the way, or is it opening the way for a longer period of chop and figuring out, you know, if we've overshot in some areas? I think it looks like the latter. We've spent the entire week within that range. What's key is the low-quality, frothy stuff that was really ripping all week has come in today. The microcap index is down 3% today after going vertical. So I think some of that is we had a massive short squeeze.

You're seeing some of it kind of go in reverse. We'll see where we kind of come out. We're still above Friday's lows in the S&P. We haven't really broke containment, but I do think you should probably expect it not to just be, you know, a couple days and we're done with it. Yeah, I mean, earnings are looked at to be the thing to keep focusing on in these markets. And Sima, we're going to have HPE after the bell in OT. Yeah, and, you know, what the company has been talking about is, you know, what they're doing to stay more competitive in this whole A.I. Server business. The latest

numbers that they provided was not so great, right, a disappointing guidance from HP Enterprise. And I think that's raised concerns about what does the outlook look like for the company. The last time the CEO joined us, Antonio Neri, he talked about how they're defending the company's position, adding that revenues expected to rise by 5 to 10% in the coming fiscal year. But that's still lower than what Wall Street is anticipating. J.B. Morgan noting that execution challenges the past, but sticking with their overweight rating, and we're looking at HPE down about 9%. But the stock has really written this AI wave. It's up about 5.6% this year. So I guess underperforming the overall trade.

All right. Seva, thank you. Sima Modi. Frank, a good read on the economy, really, CSX coming up in OT as well. Yeah. Yeah, absolutely. The CSX, the East Coast Rail, those shares were up over 8% since last earnings, the stock saw a big run-up on M&A and M&A speculation, then it dropped and rallied again after a new CEO was announced in late September. Two areas to watch in this report, the merchandise segment that generates just about two-thirds of revenue. In this business, CSX ships mostly commodities, including agriculture, chemicals, and metals. It's also the most sensitive part of the business to tariffs. Intermodal or container shipping is also going to be very closely watched following a partnership between CSX and West Coast Rail BNSF. Through that

agreement, analysts at Wells Fargo say CSX could potentially gain an additional $375 million in annual revenue from container shipping. After the CEO transition, the company maintained its guidance for volume growth this year. So far, it's been pretty close to flat in the first two quarters. One potential tailwind, J.B. Hunt, as you guys mentioned it earlier, surging today. On its call, it says that there's is value, the volume here in the U.S., but it's just waiting to be moved. That could be a good sign for CSX. Back over the time. All right, good stuff. Frank Collins. Thank you very much for that. So Jeff DeGraph, let's go back to what's happening in yields because I know you're watching those closely. Where's the next stop? Well, on the 10-year, I think that the yields trade

down to about 388 or so, and then from there it's about 370. I'd feel comfortable with yields doing what they should do anywhere between here and 360 under that, and that starts to get a little uncomfortable from what the market's message is about the economy. But I actually think This is really good news because it implies that the inflation that people are concerned about probably isn't a problem, at least from the market's perspective. And keep in mind, we've got this dearth of information because of the government shutdown. So, you know, we're kind of trading in a vacuum here as far as the macro data is concerned, at least. You say that the move lower supports the quote-unquote, we ain't seen nothing yet potential for this market. is that because, okay, it just supports the whole notion.

Yields are coming down, Fed's cutting rates, economy's hanging in, and then it's off to the races like some are projecting this market could go. I think that is spot on. I think the risk to the market is that the economy, the real economy, is weaker. It gives the Fed all the cover they need to cut rates, and as you said, we ain't seen nothing yet if that's the case. Yeah, Mike, it's interesting. You know, I know you listen and read Jeff's stuff.

What do you think about that? It's only going to get people more excited if they are convinced that rates are coming down while the economy is still okay. That's right. And it's while the economy is still okay. So the whole premise of why we got here, right? Why we got to 6750 or whatever on the S&P was because Fed was going to be cutting. It was going to be the second annual soft landing execution successfully. And it wasn't.

And that we also have this sustainable disconnect between job. growth and GDP. And we also have the ingredients for reacceleration next year. I agree with all that. That's why we're where we are. Regional banks can't go down every day like this and have that story be intact. I'm not panicking out of it, but you have to pay attention to whether, in fact, the market is starting to get nervous that you're seeing some stress points in either the real economy or, you know, the funding markets or something like that. We've had more false alarms and real alarms over the past few years in that, but I do think you have to at least pay attention to it. And that is, in the absence of official data, what you have to struggle with exactly

what the trajectory of the real economy is. What about that, Jeff, the idea of these regional banks, top of the headlines, the ALTS managers, top of the headlines, the stocks of all of those together are not trading well. No doubt about it. I mean, I don't worry about the regional so much. I think there's a little bit of a disconnect there. The alts are far more advanced in terms of a topping pattern. You know, as Mike said, is this a false alarm? Is this issue specific to first brands and the like? We'll see. I mean, clearly the growth in credit was from the private side over the last 10, 15 years. So, you know, if you're going to look for a spot where there might be trouble and, you know, maybe a little lowering or lack standards, I think that's

exactly where you'd want to look. So look, I'm personally, we're short these things as the hedge against the bullish call. But keep in mind, I mean, if it, I mean, perversely, if it is bad enough and it gives the Fed more fodder, that's, again, still good for these stocks, particularly these concentrated stocks as this kind of blue sky narrative continues to play out and probably build. Yeah, don't fight the Fed has broad meaning to many, doesn't it? What about the gold? Are you watching gold and what are the charts telling you, now I'm hearing 5,000. Before it was 4,000, now it's 5. Yeah, look, I think gold is certainly in an up trend. And, you know, we're hearing a lot of talk about bubbles in the equity markets. I don't think if it is, we've only just

begun. You know, some of the things that we look at for gold, this kind of excess alpha that we look at, we are now rivaling where we were back in 1990. So, you know, with that, that doesn't mean sell it. What that means is that, hey, we're likely entering a bubble phase. And so I need to be very, very careful about how I play that, which is I don't want to be in a FOMO position, right? In other words, I don't want to, I don't want to be playing from a position of weakness, you know, in these types of environments. So you hold on tight, you look for it, you kind of peel some of this off systematically. Everybody talks about dollar cost averaging. We talk about dollar cost selling when we get in these environments, but that's just begun for

gold. I think that's important. Mike, you're watching this too? For sure. And I think it's confounding a lot of people because it hasn't maintained its historical relationships to almost anything at this point. So it didn't really react to the inflationary boom bust. It's not about real rates anymore. Obviously, it's sort of a hedge, but even when the dollar wasn't falling, it was doing well. So it's just got a life of its own and it's self-sustaining demand. You're hearing about dealers in Japan having to stop physical sales because they're kind of running So something's happening. It's the universal diversifier at this point,

but it's just gotten in such rarefied height that I don't know that you wanna chase. Hey, Jeff, I appreciate you joining us. I'm gonna get some news in before the bell rings. GitLab is popping. We can look at it on a street insider report citing a source that Datadog is exploring a new takeover bid for that company

at more than $60 a share. Stock currently trading 48 as it gets a big time pop here just before the bell rings to end what has been yet another volatile day on Wall Street. Started out all right, started to get steadily worse, yields down, stocks decline, and we've got the majors all across the board going out in the red, led by the Russell, which is down more than 2% into the close. I'll see you tomorrow.

I'll send it into overtime, John Ford.