Closing Bell - Closing Bell: Signs of Life in IPO Market 6/20/25

Episode Date: June 20, 2025

From the open to the close, “Closing Bell” and “Closing Bell: Overtime” have you covered. From what’s driving market moves to how investors are reacting, Scott Wapner, Jon Fortt, Morgan Brennan and Michael Santoli guide listeners through each trading session and bring to you some of the biggest names in business.

Bell of Scott Wobner live from Post 9 right here at the New York Stock Exchange today. This make or break out begins with stalled stock so close to a new all time high and yet no clear sign they can actually get there.

Take a look at the scorecard here with 60 to go in regulation today not a lot of movement from the majors feels like they're still digesting Wednesday's Fed meeting in those comments from Fed Chair Powell yields. Well they are higher today and that's being closely watched tied in obviously with what's happening at

the Fed. We're also watching developments out of the Middle East. Definitely a defensive tone today utilities and staples to the better performing sectors and one might expect as for individual standouts Netflix. Go figure it's up again and getting a new street high price target of 1600 bucks. Carmax is up sharply today on earnings will follow that into the close that's near 6%. It does take us to our talk of the tape what can get stocks moving towards that new milestone.

Let's ask Wharton School professor of finance Jeremy Siegel. He is also wisdom tree chief economist professor it It's always good to see you. Welcome back. Thank you Scott. Good to be here. What's this market trying to figure out today? It feels like it's searching, searching for something. Yeah. I mean it was encouraged by Waller

and by the way I think he's completely right. We can talk about that later. I think the Fed should be lowering rates, and I think that was an encouragement. It's certainly a wait and see on the Mideast. I don't know if you would call it a two-week window, which Trump gave a couple days ago, you know, we have triple witching. So there's a lot of cross currents. But I think the bullish tendency is there. There's more, I think, I mean, there could be bad things coming out of the Mideast, but

there could be some very good things coming out of the Middle East. So I think that that balance is certainly not negative. Well, let me ask you that. Let me ask you, let me interrupt you, and forgive me for doing that. You say there could be some very good things. Like what? I mean, I'm thinking about how the market's gonna react.

If we decide to get involved in the Middle East, I mean, if the president makes that decision, what do stocks do? Because I feel like now, when he put the two week timeframe on the decision, are we stalled for the next two weeks and then we go up or down based on what he decides? Well, I think it also depends. I mean, basically, will Iran come back to the negotiating table?

Is there enough pressure now? I mean, I think Iran is in a weaker position now than it was two months ago I think it's more likely they're gonna come to the new gun No, no guarantee of course got that they will But coming to the negotiating table in a weaker position would be a stronger position for the West and a more feral Position for the United States. So that's what I mean about the balance potentially being positive here. If we join in some sort of military action,

is that a net negative, no doubt, for the stock market? Well, it's, you know, partly, you know, we're talking of course about Fordo and whether we're gonna have the Buster bombers. I mean, that is what's talked about. I mean, is that a one and done for the U.S.? And then what the Israelis try to take control from there? I mean, I think we also have to know, you know, what are the set of demands that Netanyahu

and Trump are going to put forth to Iran? I mean, what do they have to do to stop the attack by Israel? I know that Trump called for complete total surrender. That's not going to happen. But clearly there are a set of conditions in mind and if they're put forth and Iran says, given our position, maybe that's the best we can do. That's a net positive outcome. You mentioned at the top, the Waller comments,

which were made this morning to our own Steve Leesman, which essentially said, just look through the tariffs and the inflation that could be a one time shock and get beyond that and cut rates in July. That we're prepared to do that because we can. Now I'm going to bring in Steve Leesman because he did do the interview and you just said that you agreed with what Waller said. Now of course it brings up the

natural tension not between the two individuals but between the two perspectives of Steve Powell saying we're going to wait and we have the luxury of doing that because I want to see what happens as we expect inflation to increase.

And Waller's like look through it. What do we make Steve of the tension between the ideas not the men themselves? It's a really good way to put it. You know, one guy wants to go on a theory the other guy wants to wait and see what happens. Chris Waller feels very strongly about this idea

that the record shows that these things pass through and do not create greater inflation. He's based it on a research paper that's out there by a Federal Reserve official. And that's one idea that's out there. And I kind of think there's a difference between a guy who advises it and the person who's in charge. And for Powell, he has all of the responsibility. If, if,

if, if, if Waller's wrong, you know, it's not that big a deal. If Powell gets this wrong, I think it's a pretty big deal. And I think what he's saying is, I do not want to be in the position of reversing myself. I do not want to be in the position of having to pause. Plus, by the way, Scott, we all know there's not one cut we're talking about. We're talking about a process by which the Federal Reserve would bring rates down to another level. Maybe it's 50. Waller even said 100 or 125. But let's hear what Waller actually said about part of this idea of being able to look through the tariffs in route to cutting. And I've been arguing since a year ago that central banks should be looking through this.

This has been debated for 50 years in central banking and the standard rule of thumb is you look through these types of price shocks. And that's what I think I'm arguing that's what we should do. And so if that's the case, start moving on cutting the policy rate. Fed Chair Powell, of course, on Wednesday, he cautioned that he expects meaningful price increases from tariffs and that it was a reasonable idea to wait. Just quick, Scott, real quick at the Fed probabilities, a little bit of a jump in February, sorry, in July to 15%. It's still a long shot bet, but a little bit more feeling of confidence in the September and December rate cut, Scott.

You know, Professor, as Chair Powell was speaking on Wednesday, that's the line that stood out to me more than anything else. That Chair Powell said he expects a meaningful pick up in inflation and we need to be prepared for that. So what's wrong with that? Like why shouldn't they wait? Maybe Waller's wrong. Listen Scott, a tariff is a tax. And when you put a tax on, you're going to raise prices. Is that an appropriate time to tighten monetary policy? No, absolutely not. I mean, for instance, suppose the United States decided to put a 10% consumption tax on and reduce the income tax, which many actual economists advocate, more like a value-added tax.

That tax that you put on on you should not tighten policy When you put a tax on you should only tighten policy when inflation is caused by excess demand And I think what wall is saying is that you know the tariffs are not going to cause Excess demand for anything they're going to cause a lessening of demand Well, let's do what's tightening they're not talking about tightening lessening of demand. And that's why I think that is- But what's tightening? They're not talking about tightening. Are you suggesting that by doing nothing, it's a de facto tightening?

Yeah. I mean, because I think the other factors are going down on inflation. I think the trend is the X tariffs is definitely down. If you look through the tariffs, we are very, very close. In fact, by some measures, we are actually at the 2% level. We're at the 4.2% level. We're at that goal. So why should we be, what, 200 basis points above the neutral rate?

And that's basically, I think, what Wal-Ware is saying. We're way above the neutral rate. If you look through the tariff caused inflation, we are extremely close to the target and therefore we should be closer to the long-run target on Fed funds. Steve? Professor, let me throw you another argument at you from the other side that Powell sort of has said this several times that it's the fed's job to make sure there is no additional inflation that comes from the tariffs and it does that by remaining tight and not loosening and keeping control of inflation expectations. In fact, former Fed Governor Kevin Warsh actually wrote an op-ed

in the Wall Street Journal pretty much saying exactly this, that if there is inflation on the backside of the tariffs, it's not the president's fault, it's the Fed's fault, and that the Fed is the one with the responsibility to make sure that tariff inflation remains a one-time price increase and not let it bleed into other parts of either inflation expectations or the broader inflation indices. Well it's certainly true and he's worried about it going into long-term inflationary indices, but he admits it isn't there yet. Long-term inflation expectations have barely moved. Once you get beyond the bump of the tariffs, you don't see a movement.

And by the way, again, this waiting until a big slowdown smacks you in the face, I mean, Powell himself has said, the long and variable lag to monetary policy, if we wait until the unemployment rate goes up, which is a coincidence and maybe lagging indicator, that's gonna be too late. So my feeling is, look at the fundamentals. The rentals are going down, home prices are going down. That's 40% of core inflation is

on a downward trend at the present time. So, X tariffs were there. It's going to be a one-time bump. Right now, my feeling is don't be 200 basis points above neutral. All right that's the professor you've given me stuff to professor you've given me stuff to give to Mary Daly at four o'clock. Yeah. I'm gonna be talking to it I've just written down all of your arguments I'm gonna throw right at her. All right good stuff Steve you go prepare for that we'll look forward to it again a four o'clock exclusive interview today in overtime with the San Francisco Fed President, Mary Daly.

Steve, thanks, Professor, you stay. Let's now bring in Fundstrat's head of research and Fundstrat Capital CIO, Tom Lee, along with Wells Fargo's head of equity strategy, Chris Harvey. Tom's a CNBC contributor. You also make the argument that all this concern over inflation related to tariffs is too aggressive

and overdone. That's right. So what you hear is, here's what should be happening. Prices should be going higher. You hear that from economists, you hear that from the Fed, you hear that there's a lag. What we look at is what's actually happening. And what companies are saying is, we see tariffs, we're going to mitigate them to the best of our ability, and they are.

Right? If you look at Costco, what is Costco saying? We're not gonna raise prices on a lot of that day-to-day stuff. We'll raise it on discretionary. We'll keep the basket under control, and we're really not gonna push along inflation. And that's what's happening.

So this whole belief that we're gonna see this inflation shock, I don't think it's really well-founded. If you're looking at the data, if you look at what companies are doing right here, right now, and what you expect them to do, inflation is not going to be a problem. I think Tom you agree with that, don't you? I do. You know, one of the things that I think helps is if you go to the May CPI report, core inflation was 0.13% month over month.

The goods component was in deflation, which is affected by tariffs. And then if you look at core, the two biggest contributors were housing and auto insurance. That was 0.14%. So outside of housing and auto insurance, we had deflation in the May CPI report. I don't think tariffs are going to cause housing prices to go up, nor is it going to cause auto insurance. So to me, the Fed is, I think, shifting to looking at expected tariffs, but not realizing the real driver of inflation. 75% of inflation since 2019 was housing and auto insurance.

Those are both actually starting to cool. So are we all, not we, you, three, all suggesting that the Fed, I think the professor already said as much, that the Fed should cut rates in July? Harvey, you first. It sounds like yes. So what the Fed has said, which I agree with, the Fed's saying, hey, the economy's still strong, we still have time to take a wait and see approach, it's in our best interest to do that, and I don't think they're gonna move in July.

I don't think they should move in July, but I do think later this year. You don't think they should move in July? No, I think they can take their time. I think they can take another meeting or so, let the data come in, convince themselves of what they need to convince them of, and then we'll normalize later in the year.

And then we can all just move forward. So Tom, do you agree with that? Do you agree that Waller might be jumping the gun here with calls for July? You know, I think if we looked at the Fred's framework that they've repeated in statements over the last eight meetings about data dependence, then they should have cut or they should be cutting in July. So I think this last meeting seemed to have changed the guideposts from dated dependence to forward-looking

expectations around tariff inflation that I think is why markets are starting to question the Fed's rationale. And Professor Siegel points it out, long-term inflation expectations are lower today for one year forward than they were in December. So we've gone through a full tariff liberation day and expected inflation is lower Yields are actually lower. I think the market is moving ahead of the Fed and saying the Fed should be cutting sooner So at what point is the market going to get Tom too upset by the pace that appears to be slower Than it would like

Well, there could be an accident right because I think what we are ignoring is housing is choking and collapsing under the weight of higher interest rates. And the labor market isn't as strong as it appears. I mean, when we look at the ability to get a job, it's much harder. So as Professor Siegel says, there's long and variable legs. There could be an accident where the Fed will have to panic. So I think that's something we have to watch in the incoming data.

When you say accident, what do you mean? On the long end of the curve, like rates go up too much, what do you mean? No, I think that there could be a point where the Fed suddenly realizes the risks are actually to the downside for the economy weakening. And so the Fed will actually have to respond to an economy that they're strangulating and really fighting what they believe is a supply shock inflation. So yeah, I'm a little concerned that the Fed could be late

if they continue to hold. Professor, I guess you share that point of view. I would also ask you about rates moving the way they are post Powell Is there a level in your mind that the stock market just doesn't want to handle is it is it five percent on? The 30 year where are we now for 92 3 in that ballpark the 10 years not that far away from four and a half again ballpark the 10 years not that far away from four and a half again. Yeah, 10 years has been range-bound. I like to say that the the Waller position is a minority position on the Fed, but I'm

glad that he was first out of the box to make that position. I think there will be a growing group of advocates on the FOMC for his position over time as they see that outside of the tariffs, and by the way, there is a lot of mitigation on the tariffs. I believe that a lot of firms could accelerate AI to offset a lot of the costs that tariffs are going to impose, and I think that the market thinks so also, still will be a bump on that tariff, but it won't be as bad, certainly, as inflationary expectations from the public is in the short run, and perhaps even from the Fed.

And then when they look at the slowdown that the economy is likely to undertake because of being so high above the neutral rate, I think they will act. But I agree with Tom. They were real late on the upside in 2021, 2022. They may be late on the downside. I don't think it's seriously late as they were on that downside. I'm glad Waller is putting in their ear,

be on the lookout here. Yeah. So given all that, I mean, it just adds to the uncertainty. The Fed's roadmap and the Middle East, you throw that into the mix too. We're not really sure what's gonna happen there. What's your best idea now in light of all that? Best idea is still AI.

AI has run, but it's still, if you're looking 12, 24, 36 months out, it's still that AI trade. This is not like the late 90s. The players not like the late 90s. The opportunities not like the late 90s. This has legs that AI diffusion, the Mitigation of AI Diffusion Act

has given it legs and we will continue to see AI. That is the US secular robust trade. That is the trade that you need to be in if you're not in already. Tom, you guys sound like you're sharing research. Yeah, I mean, yeah, I broadly agree. I might add that I think interest-sensitive groups are gonna benefit because they're gonna start to look forward and realize the Fed, if they are a little slower this year, they're gonna be more dovish next year. That's good for financials.

You know, it is good for the industrials, really good for Bitcoin and small caps as well. Professor, when you look at the tech trade, do you feel like the stocks are overvalued or do you believe Harvey, which says no, they're giving you every reason and they keep telling you and proving to you, including in the most recent earnings season, exactly why money should still go to those stocks. Well, AI is very important and certainly those companies I think will continue to prosper. But let's not forget about the AI users. And I think it's in the infancy of use to cut costs by regular firms that are not in technology.

And I think in some ways, tariffs might be one of the things that pushes them to more intensively use AI to cut costs. We saw during the pandemic, all of a sudden, people use Zoom, they saw, well, I don't have to have a business meeting in Chicago or someplace around the world. We could use other technologies that did cut costs at that time. And so the users could benefit in the future as much as the producers in the AI technology space. So, you know, I'm very optimistic about firms implementing AI to cut costs, maintain margins, or even maybe expand them despite the tariffs. Are we going to

be okay, Chris, this next earnings season? We were better than expected in the last one, and I don't know what's going to be in the next one, but what about this one that's coming up after the second quarter earnings? I think so. Everything we're seeing from the consumer is still okay. You're seeing some weakness, but not a ton. CapEx still really strong.

The shock from April really hasn't affected things all that much. I think if you have that weakness, but we get some progress on trading tariff, people will look through it. But if you're asking the question, are numbers going to be solid? Numbers will be solid. Yeah. Tom, you agree with that? I do. I mean, I think companies have proven many times over the last five years that they are incredibly resilient and adaptive. You know, this is really the fifth shock that they've

absorbed. I do think one of the consequences of sort of surviving COVID and fastest hikes in history and now this tariff shock is that investors are going to start to assign higher multiples to the companies that are succeeding. So I do think PE expansion is a theme we should think about the next 12 months. All right, we'll leave it there everybody. Good weekend to all. Professor, thank you as usual, and Tom and Chris, we'll see you again soon. Let's turn now to Medar. Deirdre Bosa joins us now with the latest on Mark Zuckerberg's AI investing spree and this scoop that you confirmed recently today,

I think is very interesting because it's a name that's been bandied about in the last handful of weeks, at least on who might be interested in it. Yes, it is a darling as well, right? In the AI world. And so according to sources, Zuckerberg approached AI, startup and darling, Perplexity, ahead of his scale AI deal.

Bloomberg first reported the discussions. One source tells me that it was Perplexity that walked away from the deal. Another, though, tells me that it was mutual. Either way, Perplexity adds to this growing list of Zuckerberg's big swings in AI where he's not just chasing talent, but he's making a play for every layer of the stack. And when he can't buy a company like Ilya Setskova's SSI, he'll settle for poaching

its CEO, as Kate Rooney reported yesterday. Now this all underscores a narrative, Scott, that I hear repeatedly from sources here that Metta's campaign is about momentum, not coherent strategy. Perplexity, it's a consumer search AI app. Scale is AI infrastructure. SSI is a mission-driven research lab. They are very, very different companies and taken together, this push looks less like a roadmap

and more like strategic FOMO. In Zuckerberg's case, it could come off as just another rebrand without earning the trust or credibility that comes with it, which is why, Scott, he's had some swings and also some misses. Maybe, maybe Zuckerberg is trying to get that asset, even though he was rebuffed, obviously, according to your reporting, before somebody else does. Maybe that's part of the whole thing.

When we were sitting out at WWDC outside of Apple Park, in Apple Park outside HQ, Alex Kantrowich was like, Apple should buy perplexity. To him, that was a no-brainer. So I can't help but think that this is an attempt to get something before somebody else. I've heard that as well, that an Apple needs a perplexity or even an anthropic,

even though these startups, remember, they are climbing in value. There are so much money in private markets willing to go into them, that it's a high price tag that yes, only a mega cap can afford. But then there's a question, do the founders want to sell to a Zuckerberg or a cook? They're seen as behind and jumping on this super intelligence or AGI bandwagon, a lot of these, the top, you know, AI researchers that are fetching the highest salaries or the highest bonuses, they care about purpose, right? They're already making a huge amount of money. They want to go somewhere where they can achieve super intelligence. And that's why I think you see Sam Altman,

Masayoshi San talking it up a lot about this purpose. So maybe it's not just salary, but remember that these are researchers that care about cover of Nature magazine or being cited. It's not just cap table to them. Let's get quickly though to one last story, which is a big talker out there. And I know it is, and it's about Co2 management and Philippe Co2, well-known tech investor, one of the best and brightest out there for sure, putting out its fantastic 40 list the other day, what they consider to be the next tech order.

And the fact that Google is off of it. Microsoft, Nvidia, Bitcoin, Amazon, Meta, TSMC, Tesla, those are the first seven. I could go through many other names which you know, public and private markets. Alphabet is nowhere to be found. What do you make of that? I mean, that is just flower-gasting to me. Whatever you want to say about Alphabet, maybe it's facing this innovator's dilemma, but it is firing on a lot of cylinders as well. When you compare Metta, right, that's playing catch-up and that's had problems with its latest models,

its latest llama models, but then you have Google. A Gemini model is, and this isn't me saying it, by benchmark, third-party benchmarks, is the cheapest and the best model on the market, beating even OpenAI and Anthropix Cloud latest models. I mean, it seems crazy to leave it off this list, and that's just AI. You got Waymo, which I spent a lot of time talking about

expanding rapidly this year. Maybe it's search business could be hurt, but I think that covering this company day in, day out, they're doing a lot. It may not be the biggest and the brightest. It may not be number one on that list, but certainly it's gotta be in the top 40. I just think when Philippe Lafont does something like that

and people hold him in such high regard and his views on tech, that's like a sit back and say, wow, of all the companies. But you know, Coat2 once was known as a tourist investor in Silicon Valley. They're not necessarily like an Andreessen Horowitz

or a Sequoia Capital. Dee, thanks. We'll continue to follow it. Deirdre Bosa, to Pippa Stevens now for the biggest names moving into the close. Hey, Pipp. Hey, Scott. So Taiwan Semi is under pressure as the U.S. reportedly weighs measures that would terminate waivers, allowing some chip makers to send American technology to China. That's according to the Wall Street Journal.

Chip control is, of course, a key sticking point in the tariff and trade talks between the U.S. and China. And CarMax is in the green after the company reported first quarter results that topped street estimates with an 8.1% increase in same stores, used unit sales making up for a slightly lower average selling price. Mizuho calling it a solid print amid softening sentiment, but those shares up 6%.

Scott? All right, Pippa, thank you, Pippa. Stephen's just getting started here. Up next, are stocks overvalued or not? solid print and amid softening sentiment, but those shares up 6%. Scott. All right, Pippa. Thank you, Pippa. Stephen's just getting started here. Up next, are stocks overvalued or not? We're going to ask the dean of valuation, Aswath Demodaran, next. We are back. It's a question almost every investor is thinking about given the uncertainty in the markets.

Are stocks overvalued at current levels or not? Well, who better than the so-called Dean evaluation to weigh in? Aswath Demodaran of NYU Stern School of Business joins us now. It's good to see you. What would your answer be? Well, if you thought stocks were fairly valued at the start of the year, you got to think they're fairly valued still because you come to a trial by fire and it's amazing to me that stocks have held up as well as they have. But I think the answer is in spite of all of the news stories we've seen, the earnings have held up and the earnings hold up. I don't see why stocks shouldn't hold up as well. So 22 times doesn't bother you when you assess where we are in the market.

Well, it didn't bother me at the start of the year. So if it didn't bother me at the start of the year, at this point in time, I've looked at what it's been able to do, the resilience. And 22 times earnings now might be what this market deserves given that resilience. Maybe that's what we're paying for. Well, I know, but things are different now than they were at the beginning of the year, obviously, given we didn't have tariffs at the beginning of the year. And we're far more optimistic about the economy and earnings growth than we are today, no? Notwithstanding all the economic and the news story talk, the earnings don't reflect any of

those fears we've had, right? We've talked a lot about the things we should be afraid of and I would say since 2022 that's what we've tended to do. We've talked about things that bother us but surprisingly earnings and stock prices seem to be okay with them. So until they start to show up in earnings this is for the most part more talk than real effects that should affect stock prices. So I agree with you, a lot more worries, but those worries are not showing up at the earnings. Well, some say it's just a matter of time that, you know, given the tariffs and earnings, it's not like the last, I give it to you, the last quarter's earnings were obviously better than many people had anticipated, but it's not like they were knocked out of the park. I mean, the expectation is that in the coming

quarters, that's when you're going to start seeing the potential lag effect show up. So you try and think of the valuation now relative to future earnings not today. And maybe the lack of credibility on the part of

people who keep warning us this is going to happen is why the market's holding off. Maybe the market saying let's see if in fact we see this effect on earnings because I mean I can only count the number of times since 2020 where we won next quarter, the next quarter, it's the recession's coming. And I think the market, I mean, it's like the boy who cried wolf at some point the market

says, maybe these guys have no idea what they're talking about, including me. Well, no, look, things have been more resilient than many have thought. And your point is well taken. I mean, look, when the Fed started hiking rates, it was recession, recession, recession, it never came. Now it's with the tariffs, recession, recession, recession, it still hasn't come. So I hear you on that.

You still own the Mag-5 and a quarter of Nvidia. The five being Apple, Alphabet, Meta, Microsoft, and Amazon. Now, you don't look at the market as a whole because it's hard to look at what the Mag-7 or Mag-5 are from a valuation standpoint relative to the equal weight? Are the MAG-7 overvalued? And if there is one that is, which one is it? I mean, it's not that...

I mean, the only one of the MAG-7 that I sold was Tesla. And I didn't sell it because I thought it was much more overvalued than the rest. It's because I wasn't comfortable with the fact that it had become a political play rather than an electric car play. So I think to me that when I look at the MAG-7 and I look at the capacity to generate, I mean you look at the margins that these companies deliver and they're able to do it on a sustained basis you're paying for cash flows but I think you've got to be realistic. At this point in time the MAG-5 that I have are not the ones that are going to deliver

50% returns for me but they're still at the heart of my portfolio. I think of them as mature cash cows at this point, and I'm paying for them on that basis. Solid stable cash flows, and I think that's what people should recognize when they invest in them. You're not going to get 20% growth in these companies going forward, no matter what the tales are about AI in these companies. All right. We shall see.

Professor, good to see you as always. We'll see you soon. Thank you. Up next, the Lakers record-setting sale. Our Mike Ozanian joins us next. From showtime to show me the money, the Los Angeles Lakers selling this week for an eye-popping 10 billion dollar valuation the most ever for a professional sports franchise CNBC senior sports reporter Mike Ozanian is here with more it's good to see you $10 billion made how

does it get to 10 we had them at CNBC sport at 7. That's right. Not that long ago. You're absolutely right Scott and what's really interesting about this every NBA executive I spoke with an owner was completely shocked by this deal it came out of the blue. You're talking about valuations a lot on your show this is 18 times revenue. Previous highs you look at the pending Celtic sale, Phoenix Sun sale we thought those prices were higher at a little over 13 times revenue. The new buyer is building a empire of sports properties. Yeah, yeah, he has.

He's got involved with European soccer, he's got involved with auto racing, he already owns the Dodgers, and I think the limited partners looking to come in with this are gonna spend time looking at the success he's had with the Dodgers building the brand up building the business up great model and track record with the Dodgers. Dolan and MSG they look at this and they say are they on the phone calling the bankers? What are they doing?

Did you see the stock price the last two days of MSG sports? It's popped, the market's been down absolutely and I think there are two other teams really looking at this. One is the Golden State Warriors. They're exploring possibly selling a limited partner share. The Warriors own their building. They control the economics. The Lakers do not. They do not control the economics. So the Warriors have a bigger advantage. And the Portland Trailblazers, as you know, they're for sale. We're going to really see if this deal affects the Trailblazers, which at CNBC we've added like 3.6 billion, then we know this isn't just a big market phenomenon with the Lakers

and the $6.1 billion Celtics price. This is spreading throughout the NBA. Thanks for being here. It's an amazing story. Mike Ozanian, thank you. It's been a roaring comeback for the IPO market. Vista Equity Partners, Ashley McNeil right here next. The IPO market has come back to life in a big way in recent weeks as several offerings have surged. So is it a sign of even greater things to come? Let's welcome in Ashley McNeil, head of equity capital markets for Vista Equity Partners.

Good to see you again. You too. You saw what's happened in the last couple of weeks and said what? I said, we're back guys, we're back. Are we? Look, I think it's too soon to call a normalized IPO market,

but it definitely feels like we're making strides return back to something healthy. I mean, we've had this conversation so many times about companies staying private for so much longer than they ever used to. And now you look at valuations of some of these private companies like the OpenAI when you say it's going to a trillion dollars

in the private market, will this force companies to get off the bench and now access the public market or do they not need to as OpenAI is proving? I think it's sort of two separate paths. So for a functioning healthy IPO market, you need to have investors willing to deploy capital, you need corporations able and willing to report consistently their earnings, and you need market certainty. I would argue in this market we have one and two. Number three I think

we've found pockets of certainty so we've had investors find certainty in the uncertainty. However we also have created through capital innovation and funds flow a really unique market in the private market and I do think there are going to be companies, bespoke companies companies unique companies like open AI as you mentioned that will stay private for longer because they have liquidity what's the outlook as you see it for software your bread and butter business at this equity we we think that software continues to be a fantastic place to invest for all of the reasons we've talked about before. Predictable business model, really able to capitalize on generative AI, and really

the center or nexus of like the data, the workflow, the automation. Software is going to be the ultimate beneficiary of generative AI. Are we moving though beyond all the belief in what generative AI can do because we've seen real examples and now it's going to be all about agentic AI when you take the human equation sort of out of it. I know Robert Smith runs the firm, he's really bullish on that. Well, yeah, we think about software sort of in three buckets

and it's a little bit linear about how far along are they. The first and foremost is agentic AI as you talk about having actual agents think and do and perform tasks. Then the second bucket which is actually where the bulk of software companies exist which is this moving from rule of 40 which is you know adding your top line growth plus your margins adding up to some number around 40 that's going to move to 60 or 70 as they deploy generative AI to really enhance their margin efficiencies and top line growth.

And then there's a third bucket, which is software companies that haven't yet embraced the technology and aren't quite up there and they may lose the right to win. Interesting, all right, so the race is on. We'll talk to you soon. Yeah, great. Ashley, thanks, Ashley McNeil. Thank you.

When we come back, a sector that's been on a tear having its third positive week in four. Do you know what it is? We'll tell you next. Coming up next Mike Santoli standing by for his last word plus a sector check on one of the best performing groups this week. The market zone is next. We're now in the closing bell market zone, CNBC's senior markets commentator Mike Santola

here to break down these crucial moments of the trading day. Plus Leslie Picker on the big bank stocks making moves. Mike, we begin with you first as we head into the weekend. What's on your mind? It's a pretty listless showing. I don't think you would necessarily look at it and say, okay, we have something fresh to worry about. But I've all week been talking about last Friday's low in the S&P 500.

That's when the market reacted to the downside on the Israel-Iran news. We actually cracked that low today just by a little bit. We're trading right in the zone of it at the moment. And it feels as if all of these wait-and-see situations, all of these kind of standoff debates about Fed policy, what's actually going to happen, trade in tariffs, obviously the Iran situation. They didn't get better over the course of the week, so I just wonder if the market is getting fatigued

from treading water for basically a month now. Maybe it's content that it just didn't get worse either. That's right, and there's something to be said for that, basically. It sort of worked off this overbought thing, and now we're kind of consolidating at a pretty high level. Yeah, Leslie, what about the banks? Been on a nice run of late. Oh, absolutely.

Banks by far the best performing industry in the S&P this week. The group up more than 3% week to date boosted in part by speculation that there will be an easing of one of the big banks' capital requirements. It's known as the enhanced supplementary leverage ratio, the minimum amount of capital banks need to hold as a percentage of their assets, including U.S. Treasuries.

Regulators are reportedly set to reduce the buffer by 1.5 percentage points for the largest firms. Regulators hinted that they support the rollback to boost the industry's ability to serve as intermediaries in the Treasury market in the event of a crisis. The Fed and FDIC plan to meet separately next week to discuss the plan. Also next week, bank stress tests will find out how the biggest banks performed against a hypothetical downturn and the results will dictate how much the banks can return to shareholders in the form of dividends and buyback. So potentially

some optimism there as well, Scott. Alright, Leslie, thank you. Leslie Picker, you know, I'm thinking about my catalyst, potential catalyst. If the Fed governor coming out and saying, hey we should hike next month, I mean cut next month doesn't do it. Yeah. With all the Fed speak that's likely to come in the days ahead. What is the catalyst? I almost wonder if that absolutely clear position on the dovish side by

Governor Waller doesn't just highlight what deeply split opinion there is within the Fed committee because nobody else is close to that so I feel like the markets have it in terms that's right hey nobody dissented we know what the dots look like it doesn't feel like the committee as a whole is rushing to cut rates whether they should or not and there's a case to be made that they should lean that direction. I do think that it's just a matter of the market being frustrated that the lack of resolution on all these fronts, right?

I've been pointing to July for a while. You're gonna get the tariff pause expires at that point. We need a federal budget. It should probably start to come together in July. You do have that late July Fed meeting, all these things that kind of blend together at a time when the market sometimes, you know,

kind of loses some seasonal tailwinds. I don't think it's major. I still think you look at the index and everybody would have said a pullback of a further 3%, which, you know, on the chart looks like the absolute ideal type of pullback from here would be no big deal. The thing is, it's been just sort of like leaking sideways for so long,

it would probably feel like we were having a little bit of a change of narrative if we did get that 3% in a hurry on the downside. I guess we'll be watching yields more than anything. I mean, they did move up on Powell. Then they, you know, 4.9 on the 30, dropped down a little bit. I think you're in the range where it's just kind of okay,

nothing much to see here yet. Yeah. You know, let's be talking about the banks. I see Goldman Sachs up another 1% today. The investment banks and brokers are clear leadership. Usually that means the market is in a decent spot. You got these IPOs that are going wild. You even have old stale IPOs from a couple of years ago

that are waking up because the speculators are saying, ah, it's a low float or it's a heavily shorted stock, and they're running. I don't know if that's healthy, if that's sort of introducing some kind of erratic energy into the market, but it's clearly the case that if there was any glimpse of kind of like a green light for further deals, if we get rate certainty, if you get some kind of like a green light for further deals. If we get rate certainty,

if you get some kind of policy certainty, I think the market's kind of revving to move in that direction if it sees the opening and there's lots of IPOs to come. We'll see if that can carry the whole market or if that's just a side-chunk. The pendulum has swung so far, to your point, that now we're hearing people talk about Spacks again.

Yeah, it's Spacks for sure. They are back. They are back. And, you know, it's usually not the first Spack that does it, but one of them is going to be the bell that rings. Have a good weekend. That's my show. So, we will go out a little bit of a mix here with the bells ringing. All of you as well have a great weekend. We'll see you on the other side in those, too.