Closing Bell - Closing Bell: The Road Ahead for Your Money 10/3/24

Episode Date: October 3, 2024

NewEdge’s Cameron Dawson, Virtus’ Joe Terranova and Morgan Stanley’s Ellen Zentner break down how they’re navigating today’s volatility. Plus, Lo Toney from Plexo Capital tells us what he thinks is next for OpenAI after its massive funding round. And, we explain what’s behind the big drop in Hims & Hers stock today. 

All right, welcome to Closing Bell. I'm Scott Wapner, live from Post 9 here at the New York Stock Exchange. This make or break hour begins with the outlook for stocks. That jobs report looming amid a pickup in volatility this week. We'll ask our experts over this final stretch what all of it means to your money. First, let's check the scorecard with 60 minutes to go in regulations. Pretty much how the picture's been all day long, mostly red. And that's despite the highest ISM services report in some 20 months. It does bolster the case for a soft landing, but

could also mean the potential for smaller rate cuts. More on that in a minute. Oil higher today amid the escalation in the Middle East. It's been higher this week as another 5% today. NVIDIA is as well. As CEO Jensen Wong told Overtime right here yesterday, that demand for its chips remains, quote, insane. Well, not so much in terms of demand. Levi's, the company missing on its revenue, they cut its outlook. The stock is under severe pressure today. It does take us to our talk of the tape, the road ahead for this market. Let's welcome in Cameron Dawson of New Edge Wealth,

Joe Terranova from Virtus Investment Partners, Ellen Zentner with Morgan Stanley Wealth Management. They are all with me, as you can clearly tell by now at Post 9. Welcome, everybody. It's good to have you. All right, Cameron. So we had a lot thrown at us this week. The market's been pretty resilient. If it was down a lot more than it is now, you'd say, well, I understand that given the tensions in the Middle East, the port strike and a lot of other stuff, too. What's your view? Yeah. And you add on top of that seasonality. We do know we're in this tougher seasonal stretch just because it didn't result in a lot of wheat markets in September doesn't mean that we're necessarily out of the woods for October.

And so we do know typically going into an election, that is what we get. Now, the one thing to watch is that with oil prices moving higher and potentially adding to inflation, that is the one thing that could catch the Fed dead in its tracks for the cutting cycle. And I think that that's why markets are reacting to higher oil prices today in a negative way. Now, it's a big question of does that actually filter through higher inflation? The big reason, Joe, that some say the market's brushing all of this stuff off and treating it as noise for now is because the Fed's cutting and the economy's pretty good. And we got more evidence of that today, as I said, with ISM

services. Is that how you see it? Oh, we are clearly in a secular bull market. Global central banks, the percentage of global central banks that their last policy action was a rate cut is now at 65 percent. We haven't seen that since October of 2020. And yes, there are signs in the eco data that the consumer, maybe they just paused their spending intentions over the summer. It seems as though it's reaccelerating. So I think ultimately, you know, you've got some election angst. Once we get past that, you get the clarity surrounding the election on the other side. You ultimately make a return to business investment once again in consumer spending. But unfortunately, geopolitics has control of the near-term price action right now. It's lifted the VIX above 20,

and it's all about energy right now. You've got the XLE. It's done 16 million shares so far today. It's the leading sector out of the 11 major S&P sectors. And there's far more room for oil to run because from a positioning perspective, it's bearish. Sentiment is skeptical. The 200-day moving average is only at 77.50. The real question is, you know, to what degree is the market going to be disappointed by the size and speed of rate cuts? It goes to what the chair of the Federal Reserve, Jay Powell, told Ellen Zentner, the same one who's sitting on our set today, by the way, that they're in no hurry. Listen.

This is not a committee that feels like it's in a hurry to cut rates quickly. If the economy performs as expected, that would mean two more cuts this year, a total of 50 more. Well, you got the goods from the Fed chair who sort of dialed back everybody's expectations. Were you surprised at all that that was the answer he had? Well, I think when you look at the data that the Fed has in hand since their September meeting, these benchmark revisions to GDP and GDI, gross domestic income, were significant, and especially GDI being revised up. So now you have much higher corporate profits than we thought, lower labor costs than we thought, higher incomes than we thought,

greater spending than we thought, and the savings rate is still high, even higher than we thought. So that cushion is still there. So as he put it in that appearance on Monday, it gives him more confidence that the labor market won't weaken so much that they have to speed up. That doesn't mean that there's not a low bar for going 50. And I think you've got that employment report coming during blackout. That's the meeting where the employment report could look pretty muddy if these strikes last long enough. And so having ample room to cut the chair's own word ample means that 50 is not that big a deal if the unemployment rate rises and they feel that they need to continue with 50s. Ellen laid out the case as to why the bull market

to many remains firmly intact. Right. Ryan Dietrich, S&P 500 up five months in a row, looking at the previous 29 times it did that shows us stocks were higher a year later, 28 of those 29 times. It all boils down to something rather simple, which is that profits drive price. As long as you are seeing that 12-month forward earnings estimate continue to lift, as we have over the last two years, this market can shake off a lot of headwinds. Just think, the market was pricing in six cuts at the beginning of the year. It got all the way down to one cut, and yet the market still rallied.

The reason why is because profit forecasts kept going up. So as long as, to Ellen's point, that you're continuing to see this expectation for better economic growth leading to better profits, this is an equity market that can continue to shake off headwinds. You made the case just now without saying it explicitly that the broadening of the market should continue theoretically. That supports broadening of the market. And productivity drives profits at the end of the day. And so it turns out that the restated data, and this is always an issue for monetary policymakers, right? They're making

policy based on the current landscape of data. and then all of a sudden the data changes. And it turns out that the data on income and corporate profits was just much better than we thought, a much better picture. Joe? Yeah, I think the broadening, as you know, Scott, I still want to stay high up in the equity size class. I want the large caps. I want mid caps. There's something that troubles me about the price action in the wake of the Federal Reserve announcement. And that was that the Russell, it was a sell the news moment. The high for the Russell was basically at 215 on

September 18th, the afternoon of the Fed announcement. And then Cameron mentioned before Treasury yields. I think it's important to understand what's happening with Treasury yields. Tenure got to 359 on September 17th. A 30year got to 388. And guess what? Sell the news moment for treasuries because yields are lifting higher. So I just don't think the evidence is there just yet where you say, OK, the broadening is going to happen and I'm going to trade down into small caps. Look at the why yields are going up. Now, maybe it's because of what the Fed chair in part told Ellen. But the other side of that could be she just listed off all the good things in the economy. And we got more evidence of that today.

So maybe rates are going up for the right reason, which is why you would get the broadening and even down the smaller size of the cap space. Ten-year yields tend to be correlated with economic surprises. And economic data has been coming in better than expected, and thus economic surprises moving higher, which is why we think that you've seen this move higher in the 10-year. Now, we are at a very critical juncture. We've seen it push right up to its 50-day moving average. If it gets through that, then you could be targeting something like 410 on the 10-year, unless we forget how the market reacted in the third quarter of 2023. You saw a big move in the 10-year. Profits were perfectly fine. But that was a source of

volatility as yields rose, mostly for those small caps that really don't like higher yields. But yields were going up then because the Fed was still hiking or rates were still high. Now, how do you view what rates are doing since the Fed cut? Some of the economic data that's come in has been stronger than expected. Right. And so I think the market is taking that into account and reversing out some of the Fed path that was priced in. So the moment the Fed even communicates it might start cutting, market price is in the entire path. And I think especially when the Fed starts at 50, the risk was always that 50 is the new 25 and you extrapolate that forward. And then as the data comes in, it's better than expected,

right? You've got to give back some of that. The Fed is going to be cutting, but they don't have to get as far as the market initially priced in. Are we good, Joe, if we just get 50 basis points in total between now and the end of the year? Is that fine? Yeah, without question. As long as we continue to have the growth and profits and we have strong guidance, in particular from the technology sector and the AI adjacent names, I think that's the obstacle for the market. You know, the comps are going to be very difficult for that industry as we move through the back half of October. That's going to be a challenging environment. They're going to have to exceed a very high bar. You think the bar is still as high?

I mean, you could make the argument, as some have tried to do, that the edge, if you will, has been taken off some of the mega cap stocks because the performance hasn't been great in the last quarter. So maybe the bar isn't quite as high as it was if all of these stocks had just kept on running right into earnings this time around i don't know that i necessarily agree with that because i think what you've seen is just more rotational in the quarter so you've seen alphabet struggle but then you on the other side you've seen that an apple perform remarkably well in when in

videos had that you know significant corrective behavior it's recovered a very sh very nicely so no i i i still, it's recovered very nicely. So, no, I still think it's a moment where the semiconductors, the NVIDIAs, they really have to step forward. They have to, as they did yesterday on the network, just hearing that word insane. Think about that. You know, insane. That's the demand, right? I feel like haven't we proven it out that they don't have to step forward for the market to do okay?

We hit new highs without those stocks carrying the load. I mean, the equal weight S&P was up 8% in the third quarter. Market cap weight was up 5%. The market proved to you to some degree that it could do OK without mega caps driving the train every single day. It's such an important point because they became such a high portion of the index that the strength in areas like you've seen in utilities, which are now extraordinarily overbought, has been enough to be able to offset the weakness or at least the lack of strength and leadership within tech. Now, we do think that tech needs to play ball for this market to continue to press to new highs just because it's such a large weight. And the real test is, can tech break above its September high? Because the September high, if it doesn't, then it's starting to carve out a little bit more

of a downtrend. So we would watch that level very closely. How do you see that? Look, I think it should be a no-bra why strength is is broadening out, right, because the Fed is cutting interest rates at a time when the economy is fine. How many of us have experience in a cycle where the Fed is cutting interest rates because they just need to normalize. Real rates don't need to be this. They don't make sense where they are. And we haven't even begun to see the full impact on the economy. The impact was lagged on the way up. It we haven't even begun to see the full impact on the economy. The impact was lagged on the way up. It's going to be lagged on the way down. Money market funds extend out. So the yields have not come down yet and they will.

And you're going to see outflows. We're still seeing inflows to money market funds. Where does that money go? And then the low income consumer that is relying on credit card rates to come down. Right. That moves with the Fed, not in anticipation of the Fed as other interest rates do. So we're not seeing a lot of the impact yet, which will be positive. Some say the money that you suggest is going to come out of money market accounts, which it very well might, is going to go into credit. Well, it can't. And that valuations are very rich now in equities and already expectant of what's to come. Well, and that would be your case for investment grade corporate credit continuing to do very well here and private credit, because folks that were in money market funds are still

going to be the ones that want safe investments for that money. Private credit's an interesting area. I mean, you still think there's a lot of runway amidst the debate of whether that whole space now has become a bubble because the amount of money that's flown into it over the last few years? We do think there's still room. Jane U. Sullivan on my team had released a note about private credit, picking Apollo and KKR out of the bunch. And then a week later, Apollo makes the announcement with Citigroup that they're partnering up. I think you'll see more of that. You? We think that there's two things to watch with private credit. The first one is that spreads are starting to come in because there's been so many inflows.

You've seen spreads compress mostly in the CLO market as well. Watch leverage levels. If they start to tick up, that's where we start to get more concerned. What we are hearing from private credit players, though, is that as they're seeing interest expense come down for their companies, their companies are talking about reinvesting in their businesses and potentially returning to hiring. That's the whole point of broad financial conditions. Credit spreads come in, interest rates come down, companies can reinvest. So let's see if that actually plays out as we move into 25. How are we thinking about China? This meteoric run in some of these stocks on the stimulus that they've done and the likelihood that they're going to do more.

Now we get a little bit of air out of it today. You got some of the tech-related names that were up a ton given a little bit back. But what about that trade? As I said the other day on a call with a group of your advisors, I think you're far more excited in the fall of 2024 than you are in the fall of 2023 about the investment opportunities because it's broadened so dramatically. So now you have Chinese policymakers stepping forth with this historic monetary and fiscal stimulus. And that lends itself to not only directly support this, quote unquote, China trade, but it lifts emerging market currencies. Now I'm thinking about EM debt, which is actually at a very strong quarter. I'm looking at other

areas of the emerging market asset class for the very first time once again. And yeah, there's a lot of resting capital in India for good reason. But there's other places that I can turn like Latin America, like Africa. And those areas, I think, were forgotten about in the last year. How are you thinking about those markets? I mean, there is a suggestion that what what was one of the hottest trades on the planet, India, will now have assets siphoned towards China instead? How do you view the whole global investing picture? China may suck the air out of the room. Our China economists are still very skeptical on China. I mean, yes, you could say on the one hand, is this a do whatever it takes moment, but then debt levels are crushing there. When we take a sort of longer run view and not tactical

view on China, they're providing the wrong stimulus. Yes, they've stabilized their property market, but they're not stimulating their consumption, their consumer economy. They're creating even more slack in manufacturing and global manufacturing. And we are importing that deflation, which makes the Fed's job even easier to cut rates. All right. So speaking of the Fed, I'm glad you went there because that's where I want to finish as we look ahead to tomorrow morning and the release of the jobs report. And I know we say that good news is now good news. Bad news is now bad news. However, I wonder if, in fact, it's a little bit softer number tomorrow if we start thinking, OK, well, despite what the Fed share told Ellen, maybe 50 basis points is now back on the table. And then the market starts to look at

that in a more positive way. Well, to an extent, it's already priced in, meaning that if you look at what is in through the end of the year, it's 70 basis points. So how much of a surprise would that be? If it is a softer number, it would call into question growth forecasts. And we do think that is the most important thing for risk assets is rising growth forecasts. So we do think... Which are going up, which are rising, by the way. Which are continuing to rise. So if you get data that challenges that, that is a negative for credit, for equity, which are banking on this being such a strong growth environment.

I mean, this market's been hooked on Fed stimulus for forever, like 15 years at this point. We've usually been able to digest, well, bad news is good news for the stock market because the Fed's just going to become more engaged as the Fed put his back. We've convinced ourselves more recently that good news, good news, bad news, bad news. Does that still hold? I think it holds. The way I think about tomorrow is I'm expecting extreme volatility once again. And the reason I say that is tomorrow, whether the jobs report suggests, well, maybe it's 50 or suggests maybe it's 25, I'm not going to make too much in terms of making portfolio allocation adjustments. I think the volatility remains in place for two reasons.

Number one, you're in a period where corporate buybacks are not active as they prepare for the earnings releases. And then geopolitics is in control. So tomorrow's a Friday. You've got geopolitics in control. Even if the market wants to feel good about what they hear at 830, I'm not so sure price is going to cooperate. I'll see. I mean, the market's down like, I don't know, a half a percent this week. It's, you know, it's a running in place moment. I'm not suggesting anything nefarious, but I'm saying it's it more runs in place when it should probably be running forward. Just last thought, L.T.U. on this, you know, job looking at the unemployment rate. All right. One fifty on jobs. Great number. All I care about is does the unemployment rate move up? That's determined off the household survey. And that can be a completely different number. All right. Good

stuff. Thanks, everybody. I really appreciate the conversation. It's good having you all here. Let's send it to Pippa Stevens now for a closer look at the big moves in energy today. Pippa. Hey, Scott. Well, oil prices are jumping more than 5 percent as fears grow that oil infrastructure could be impacted by the Middle East escalation. When asked today whether the U.S. would support an Israeli strike on Iranian oil facilities, President Biden said, quote, we are discussing that before saying there is nothing going to happen today. WTI is now up 8 percent on the week. And that move is lifting energy stocks, which are the top group today. Refiners Valero and Marathon Petroleum leading

the gains, followed by drillers Diamondback and APA. The sector is now just 5 percent away from a new all-time high. Scott? All right, Pippa. Thank you, Pippa Stevens. We're just getting started. You're up next. Plexo Capital's Lowe Toney's here with what he thinks is next for OpenAI.

After its massive funding round, he's going to join us at Post 9 just after the break. We're live at the New York Stock Exchange. You're watching Closing Bell on CNBC. We are back on the bell. OpenAI CFO Sarah Fryer speaking with our very own Kate Rooney today. She joins us now with the many highlights. Hi, Kate. Hey, Scott. So this was on the heels of OpenAI raising $4 billion in debt from all of the major investment banks. That news came out this morning. It was an in addition to $6.6 billion in equity that was announced yesterday. It brings the total in new liquidity for OpenAI in this round at least to $10 billion. NVIDIA was one of the new investors. Microsoft doubled down as well. SoftBank got in on this round.

Sarah Fryer, the CFO, talked a little bit about the capital-intensive nature of their business, comparing it to building out railroad infrastructure. The next model is going to be an order of magnitude bigger and the next one on and on. And so that does make it very capital-intensive. It's a really different technology cycle than if you think about the last cycle, which was much more bits and bytes, a lot cheaper. This is much more like the telephone being brought, dropping cables, electricity going up, the railways. I mean, I think you're in much more of that sort of capital intensive cycle. And that means for us, too, we're going to have to really be careful and smart about how we raise money. She told me earlier that they are not overly worried about profitability or at least profitability for profitability's sake.

Although she has taken multiple companies public, she was the CEO of Nextdoor. She just said not to expect an IPO for OpenAI anytime soon, Scott. All right, Kate. Appreciate that. Kate Rooney joining us now. Now joining us at Post 9 here to discuss Low Tony, a flexo capital. Welcome to our coast. Thank you. Good to catch up with you here.

Absolutely. I think the big takeaway from all this is very capital intensive, i.e. we're going to need to raise more money. Is that how you're thinking about it? Absolutely, that will be the case. That line of credit is clearly just there as a financial backstop. You know, I would expect to see another

massive financing round within the next couple of years, even with all of the growth. I think the hope is things get a little more efficient as time goes on. We'll see. What about profitability? I mean, how should we be thinking about that or lack thereof at this point? Yeah. You know, clearly they're not too concerned about profitability at this point. I think there's a few different drivers, right? So the top line revenue growth looks good, right? It's terms of, you know, I think they're forecasting about $11 to $12 billion next year, maybe $25, $26 billion in 26. That looks good. What we want to see, to your point, is the ability for the cost to run the models, train

the models, obviously have the people and the staff to decrease over time. They've had some defections, and one of those defectors, Dario, who went to start Anthropic, his big takeaway from that experience at OpenAI was instead of throwing hardware at the problem, make the models more efficient in terms of their need to use so much CPU power. OpenAI has now started to do that. And I think we'll see that efficiency playing out in the years ahead. But I would not anticipate an IPO anytime soon. That was not positioned. It doesn't seem like it. That's for sure. It's really, are you, when you're around the Valley, so I mean, I don't know what surprises you in terms of valuations anymore because you've seen a lot, but the meteoric growth of this

company, where it was valued even at the beginning of this year to where it is now. What's your reaction? What's your reaction to all that? It's partially the excitement around AI, which some people might make excitement and change that word to hype. But I think it also just shows the gravitational shift that we're seeing towards, first, software being incorporated into all these companies, as Marc Andreessen famously said, you know, software will eat the world. That's happened. If every company is a software company, then therefore every company is or will be an AI company.

And I think we're just now starting to see this happen. Plus, and this is what's a little bit different this time, the fascination on the consumer side because of the success with chat GPT. When they, I'm curious your reaction to when they say hey we love your money, Nvidia, Microsoft and this that and the other but don't invest in any of our competitors to which Bill Gurley who I'm sure you know tweeted that's just inviting money to go to the competition we've seen this movie before. What's your view here of that yeah you know i think look this is what always happens is you have certain investors that will hold steady remain firm but then you have other folks that

are a little bit more you know kind of want to explore the different opportunities and i think that there's just so much need for money to go to these companies it's just massively capital intensive and there are very few players that can write these large checks so i don't know how so much need for money to go to these companies. It's just massively capital intensive. And there are very few players that can write these large checks. So I don't know how realistic it is, but I think we'll see. Certain Microsoft obviously is going to remain. Their finances and futures are tied together. So I don't think we'll see anything happening with Microsoft going out, but with some of the other players, we'll see. I mean, there's like no indication that any of this is slowing down at all. I mean, NVIDIA founder Jensen Wang was on overtime yesterday for an exclusive interview and

said the following about the demand that they're seeing for their chips. Blackwell is in full production. Blackwell is as planned. And the demand for Blackwell is insane. Everybody wants to have the most and everybody wants to be first. Still insane, he says. You heard it right from the man himself. I mean, this doesn't appear to be slowing down one bit. How should we take what he says of where demand seems to be relative to the valuation of the company and how we're supposed to position it, whether it's overvalued, whether it still has a huge growth trajectory, how much is in the price,

you know, all that kind of stuff. All these things, I think, just indicate that we're going to see a little bit of a reshuffling in the top companies. NVIDIA catapulted up, and when you start to look at things, like if you just look at revenue multiples, I mean, NVIDIA is just off the charts, but it's a reflection of the insatiable demand that we see for their product. We're going to see more trillion dollar companies. And I think when we look at companies like OpenAI, we are looking at another trillion dollar company. Look, in order for investors to get their return, remember, Sam Altman famously said, we will likely need a hundred billion dollars. Well,

they're about 20% of the way there. And when you think about the multiple that VCs need, we will need to see a $1 trillion, $2 trillion, $3 trillion exit at some point from OpenAI. When does the floodgate start to open for ipos forget open ai just in general we've had this conversation every single time you've been on for the last 18 to 24 months here that's right i mean the market's resilient we've been hitting record highs and yet not that many companies are going public yeah where where are they where the ipos we're gonna i think one ipo that will be a bellwether, of course, is going to be Stripe. I think that's a company that everyone has been waiting for.

One of the challenges that we have is we had a period in time where the valuations for a lot of these financings were much too high. A lot of these companies have had to grow into them. Fortunately, these companies have the ability to stay private much longer. We have functions like a secondary market that's robust, that will allow for some liquidity for early employees, early investors, reducing the pressure for these companies to rush to the public markets. These companies need to exit at such a high valuation to provide the returns, they need to make sure that everything is lined up perfectly. And given that they don't have a rush because they'll still be able to access capital, they'll still be able to provide liquidity, they are making sure that they have everything in row before they exit. All right, good seeing you again. Thanks for coming by here.

That's Lo Tony of Plexo right here at Post 9. Up next, the Miami Dolphins in talks to sell a stake in the team to a private equity firm, a big first for the NFL. The details and insight from SportsCorp founder Mark Gannis after the break. The bell is back after this. All right, welcome back. Miami Dolphins said to be in advanced talks now to sell a minority stake in their team to private equity firm Ares Management. Here to discuss is CNBC senior sports reporter Mike Ozanian. As we discussed earlier, it's good to see you.

This doesn't come really as a surprise, neither the fact that it's the Dolphins nor that it's private equity, because Ross, Stephen Ross, has apparently been shopping part of his team for a while. And we know about the recent announcement in private equity's allowance in the NFL. Yeah, it's great to be here, Scott. And you're exactly right. This has been going on for a while. I think unlike the other deals, this deal is going to happen in large part because of what you just mentioned, private equity getting 10 percent and the owner of the Brooklyn Nets getting an additional 3 percent. So how do we get to so we had the Dolphins at 7.1. Is that right? That's right.

So this is 8.1. And that's because the inclusion of the stadium and some other assets, correct? Yeah, principally Formula One racing, which they have there, which is very profitable. Ross's share of Ibitda is about 50 million from the race. And also the U.S. Open Tennis, which Endeavor runs, which they get about half of that revenue as well. And I think that this really speaks to, too, is how well run Stephen Ross's sports empire is. This was the first private equity deal, as you mentioned. And I don't think it's any surprise that Stephen Ross's sports empire is. This was the first private equity deal, as you mentioned, and I don't think it's any surprise that Stephen Ross and his sports assets were the first deal. Who's next? I think it's going to be the Philadelphia Eagles. They're going to have

about 15 percent, and I think that valuation is going to be eye-popping. Unlike this deal, Scott, that deal is going to be just for the team. They do control their stadium, which gives you revenue from concerts and such, but you're going to see that deal place a valuation in excess of $7 billion. Why do you suggest that the Eagles stand out to you? I think the market. I think my sources have been telling me there's been interest in that team for a while. And look, the Eagles are a good team. They have been for a few years. Jeffrey Lurie, of course, principal owner.

Exactly. Majority owner. Exactly. And until the Dolphins quarterback got hurt, they were a hot asset. But, you know, they were an up-and-coming team as well. Yeah, still Miami. Mike, I appreciate you.

Thank you. Thank you, Scott. Thanks for being here. That's Michael Ozanian joining us. For more on team valuations, head to cnbc.com slash sport or scan the QR code on your screen you can read all of mike's reporting there and see his list now let's bring in mark yannis he's

an insider in sports deal making he's the founder of sports corp it's good to talk to you welcome back to our program great to be here how should we be thinking about this dolphins deal which we assume is going to happen at this point? Yeah, the deal is very likely now to happen. The way you look at this is first, the foundation of the $8.1 billion is the NFL itself. The NFL is not just profitable. It's not just on a continuing trajectory. It's still a growth business. There is so much more to come in the NFL. People saw some of the plans that I've been fortunate to seal for the next five to 10 years. Roger Goodell has got plans that he thinks that far in advance. When you start thinking about

a sports league where so much capital wants to go into, it's the top of the heap. It is profitable. It has certainty as well with its profitability. You look at it and say, all right, there's a base, say five billion for each team in the league. And then you add to it things like the market, things like with the Dolphins. They have a variety of different businesses, the Miami Open, the Formula One race, and they execute. Michael talked about Steve Ross. They also have an extraordinary CEO named Tom Garfinkel, who executes beautifully on this plan. And they keep adding assets using the NFL and the NFL facilities as the base for them. And that's what I think Aries saw here. I've spoken with some of the people involved. They saw this as more of the kind of asset that they look at, not just a sports team,

but sports with other assets and growth associated with it. I mean, you've been in the middle of a lot of these deals, you know, bringing prospective investors together with sellers. So you're well versed on how all this works. Now that private equity is in the game, pun intended, do we do we feel like that's going to continue in and of itself to push valuations higher? How should we view that? Really an interesting question, Scott, because one of the other deals you're about to see, and I think the one that will get approved first, is the deal for Tom Gores to buy approximately 27 percent of the Los Angeles Chargers. And that's not a private equity deal. That is the traditional wealthy person, wealthy family buying in. I think what you're going to see here is a mix. You're going to see an expansion

of private equity, but you're also going to see more individuals, high net worth individuals and families buying in at these high valuations for the same reasons that the institutional capital wants to get in. The growth, the certainty, the base, and the fact that it is an industry that is in very many ways recession resistant and uncorrelated to other investment opportunities. What do you make of what Mike said about, you know, the next targets that maybe the Eagles, according to the people that he's talking to, could be very high up on that list? We keep hearing about the Eagles. We keep hearing about the Buffalo Bills. They're building a new stadium. So they have some they have some need for some of their for additional capital.

But that's really those are those are the teams that we're looking at right now. The Chargers were one, but they're going to be taken off the table with the Tom Gord steel. So when when people look at what's happening here and maybe they're referring more to other sports, which have sort of ridden the coattails, if you will, of the NFL as it relates to valuations. They say, Mark, valuations don't go up forever. How do you respond to that? Well, you just had Mike Ozanian on. He could tell you valuations the last decade have gone up 12.5 percent in the NFL, over 11 percent over the last 20 years. That's through pandemics. That's through recessions. That's through global financial crises. What we're finding is that sports has and there's an

interest in sports that is necessary for all the new technologies that are out there, whether they be social media, whether they be streaming, whether they be linear television. Of course, we knew for many years in cable. So there needs to be content. The sports is the content for the world. And we're getting into a position here that where you have globalization and digitization coming together around and into the sports world, that the real smart money is seeing is going to continue this explosion in valuations. Well, it's proving to be one of the best returning asset classes ever, especially at the very top of the cap table, if you will, when you're talking about the NFL. Mark, it's good catching up with you. Thanks for your insights. We're smarter because of them. Thanks. We'll see you soon. Thank you, Scott. Mark Yannis, SportsCorp. Up next, we're tracking

the biggest movers as we head into the close. Pippa Stephens is standing by with that. Hi, Pippa. Thank you, Scott. We're 15 from the bell. Let's get back now to Pippa Stevens for a look at the stock she's watching. Hi, Pippa. Hey, Scott Stellantis. Hitting a two-year low after Barclays downgraded the automaker from overweight to equal weight, the firm said it was wrong-footed on the stock and too slow to acknowledge Stellantis' U.S. inventory issues, as well as its eroding market share in the U.S. and Europe. The firm added there's no real proof points for recovery until the first half of next year. But EVgo is soaring after the EV charging company

received a conditional loan from the loan program's office at the Department of Energy worth more than $1 billion. JPMorgan and TD Cowan upgrading the stock to a buy today as well, and those shares up 61 percent. Scott? All right, Pipps, thanks. Pippa Stevens still ahead. Hims and hers health sinking on the back of a new development in the GLP-1 we got the details coming up on the bell. Coming up next a new survey shedding some light on what iPhone 16 upgraders actually want out of their new device and the details might surprise you and later don't miss an exclusive interview with the Perplexity CEO and co-founder it's tonight at five o'clock eastern time market zones next. Let's do the closing bell market zone CBC

senior markets commentator Mike Santoli here to break down the crucial moments of this trading day. Plus hims and hers tracking for. It's one of its worst days ever Brandon Gomez has those details for us and Steve Kovac on why artificial intelligence isn't exactly driving Apple's latest upgrade cycle. That's an interesting story we'll get to in just a moment. The markets, though, and the countdown to the jobs report and all that's on the line tomorrow morning. Yeah, kind of clinging to to vicinity of the all-time highs. I do think the market is doing a good job of kind of absorbing this very high noise level in the market and not really reacting too dramatically either way.

It seems a little delicate, I'll be honest. I mean, we're only about where we were at the July highs in the S&P 500. And from the end of July, you had to do an almost 10% correction to get a couple percent to the upside. So the point being, we already have had a little bit of that sort of seasonal tougher risk reward play out. I do think tomorrow's jobs number is pretty consequential, mostly because the market has really been sensitive to any signs of inflection points in the labor market and what it means for the Fed. So I still think we want good news. So the market is positioned to appreciate a good report

as opposed to enjoy a weaker one and get more Fed easing. But I do think it's worth keeping an eye on how the market is trading kind of, you know, erratically day-to-day within a narrow band because a lot of these overnight moves in Asia as well. All right, we'll come back to you in a second. So, Brandon, what's happening with HIMS and HERS here? Yeah, Scott, it's an interesting one today. The telehealth company getting hit. The FDA removed Eli Lilly's GLP-1 weight loss drugs from its

shortage list. Now, a reminder that while the drugs were in shortage, other companies like HIMS were allowed to distribute compounded versions of those drugs. Now, they're not officially in shortage. Restrictions are back, except one detail, Scott. Today's news on Lilly's drugs applies specifically to what are called terzepatides, while semaglutides, another form of GLP-1 drugs, remain on the shortage list. Now, those are the ones that HIMSS has been producing and will still be allowed to produce for now. Investors clearly, though, taking this as a mark of what's eventually to come. I will say I spoke with the company's CFO back in August. He did say that even in a post-shortage world, they will still be legally allowed and plan to offer

a compound with a, quote, fundamentally different formula. But again, investors should expect a battle with big pharma ahead. Yeah. I mean, I guess the question then becomes what what does the company do when the drugs they actually are currently compounding come off that shortage list? Yeah. Once those come off, they will have 60 days to sort of clear house, clear supply. And then it's a matter of working with another classification of compounders. Now, those compounders will have to decide if they want to stick with these telehealth companies and continue to offer those drugs to them, or if they're going to back big pharma sort of in this back and forth battle

as to who will be allowed to supply those drugs. Scott. All right, good stuff. Brandon, Thank you. That's Brandon Gomez following that story. Steve Kovacs on another one about artificial intelligence and maybe not exactly on the top of mind of upgraders for the iPhone. Not just top of mind at the rock bottom here, because perhaps, Scott, maybe this Apple

intelligence thing isn't as exciting for iPhone upgrades as the Bulls thought. JP Morgan came out with a survey this week, and it shows artificial intelligence is actually the last thing customers are upgrading to the iPhone 16 care about. That's behind features like device speed, 5G, design, the camera, all the stuff we always talk about. And the survey comes as the street has been trying for weeks to figure out what iPhone 16 demand looks like. So far, the signals are not that great because analysts have been looking at the ship times for online orders as the gauge of demand, since that's pretty much all the data we got right now. And by the way, the iPhone 16 Pro models appear to be selling worse than they were

last year and the year before that. That's important. Those are the big moneymakers for Apple there. And, of course, I've been on this program three days this week now, showing the stock has been seesawing based on all those analyst reports, rising Monday after 16 pro-demand signals appeared to improve, and then 24 hours later, a report that Apple cut 3 million orders from an iPhone supplier sent shares down. Now, we won't get more clarity, Scott, until Apple reports earnings in a few weeks here. Pay attention to guidance,

especially growth in the iPhone segment. And for now, though, the survey shows AI may not be the spark Apple needs to get the iPhone business growing again. People just upgrading for the same reason they've been upgrading for the last few years. And we reserve the right to book you tomorrow, too. I'm just saying, let's do it. Don't don't fill your calendar up. All right. I'll be here. Go back. All right. Good stuff. Thank you, Mike Santoli. There it is. The two minute warning. Let's talk for a minute. Sure. Because it's one of those outperformers today up better than three percent. Yeah, it's interesting. Obviously, the open news pushes in the direction of having people rediscover the whole fundamental demand story.

The stock has really kind of gotten itself tightly coiled in here. It peaked back in June. It's not too far from that high, but it's been unable to really get stringed together multiple days. So it's pretty interesting in that it didn't break down and it's kind of held this valuation. You can talk about whether next year's numbers look right and all of a sudden you have a less expensive stock. So, you know, the big cap techs did not really act as really great defense the last time we had a little bit of a nervous market on Monday or so. Now it seems as if, or Tuesday, now it seems as if maybe at least a couple of them are trying to play that role. We definitely feel like a little bit tensed up, you know, ahead of tomorrow morning.

The VIX is north of 20 just by a touch. But, you know, volatility has increased. We clearly feel a little bit nerve-wracked going in. We do. And it is the jobs report, but it's also the overlay of potential retaliation in the Middle East for the Iran airstrikes. You have the anniversary, October 7th, on Monday. And you just have a general sense of storm disruptions, strike disruptions, what else might be coming at this market. So with all that said, that's the reason I say we're kind of tolerating this high noise level and trying to hang in there because the trend is still up, the Fed is still friendly, and earnings seem like they're going in the right direction.

We'll be down for most of the majors here as we ring the bell. Dow's going to go up 175. But now it's actually a fight for positive right to the end. We'll see it all unfold tomorrow after the jobs report. Can't wait to take you through the final stretch. Let's send it in overtime now with Morgan and John.