Closing Bell - Closing Bell: Tide Going Out on the Bull Market? 11/4/25

Episode Date: November 4, 2025

Are we starting to see the tide go out on the bull market or is this just some froth being skimmed away? We discuss with Dan Greenhaus of Solus Alternative Asset Management, Sofi’s Liz Thomas and Ned Davis Research’s Ed Clissold. Plus, we discuss some big opportunities outside of the tech and AI space with portfolio manager Brian Kersmanc of GQG Partners. And, star analyst Stacy Rasgon tells us what he is expecting from AMD results in Overtime.  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 Mike Santoli, in for Scott Wapner. We are live from Post 9 at the New York Stock Exchange. This make-a-break hour begins with stocks under some stress as the leaders of the recent strong but narrowing rally reversed sharply and the broader market struggles to take up the slack. The S&P 500 has been down more than 1% much of the day. It is off about 1.2% right now. That's a rarity in recent months. And the NASDAQ is the epicenter of that weakness down almost 2% right now. A seller news response to Palantir's results in a global gut check in semis. Exacerated by a warning in Korea about the rapid surge in S.K. Heinek shares seemingly. That's all pressuring tech. Consumer sensitive areas remain suspect in investors' minds as airlines and retailers deepen their recent setbacks.

And a breakdown in Bitcoin. The price there briefly sinking below $100,000 just above that right now. but off almost 6% while money migrates for the day at least to traditional defensive areas such as staples and health care you also have berkshire hat the way up two and a half percent for a change it all takes us to our talk of the tape are we starting to see the tide go out on the bull market or is this just some froth being skimmed away let's ask our panel dan greenhouse of solace alternative asset management so fies liz thomas and ned davis researches ed clishold welcome to you all Dan, just pick up the question because, you know, when the market is kind of resolutely going higher,

we say, you know what, it's actually kind of concentrated leadership and not everything's playing balled. It looks like the macro message isn't that strong. Everyone says, yeah, but you know what? The trend is fine. We're rotating our way away from danger. What does today's action tell you, if anything? I'm not sure today's action really tells me anything. We've had a great run, but I also think it's impossible to separate out that today is Election Day in New York City.

and obviously the market is global, but there are a lot of people who invest in the market who live in the area call at home or have called at home previously. And these are people who have been told they're not welcome, et cetera, et cetera. I mean, you can believe that's what's going on. But S.K. Heinex was down 5%. Sure. And everything was down 90%. I mean, down in the pre-market.

And you've had a leading candidate for the mayor's race in New York City that's been at 90% odds for weeks. And today, people walk up and say, I'm selling my stocks. Well, we all know that the bulk of the rally has been driven by S.K. Heinex. So the fact that it's down today, VINVIDIA's down 3.5% and Microns down. And the point out, listen, there's a lot of things that go into the market. The point I was going to make is on the way up, we talk a lot about sentiment and positive and vibes, et cetera, et cetera. And I'm saying, for the day, what's different? Well, today's election day. And I don't think it's impossible to separate it out that for the day, a bunch of people who are being told they shouldn't exist in the case of billionaires.

Okay. But no, you disagree, and that's fine. I mean, I just feel as if, you know, we don't always need a specific timely reason for a 1% decline in the market, Liz, right? I will just say you were asking me for a timely, specific reason. No, no, I get it. I'm just saying, like, it's not always the headline is the thing that's driving what's happening in the market. And I guess, Liz, the question I would have is we've been able to point to a build-up in either excesses or divergences. or everybody sliding their chips into one area of the market

or, you know, alphabet and meta raising a bunch of debt, you know, to build data centers and meta selling off on its result and not bouncing at all, even yesterday, right? So I guess the question is, you know, is it just a matter of, we got some slippage in this rotation or is the market maybe reacting to something different? I think a lot of times, especially when we get this extended, we create a self-fulfilling prophecy.

The commentary heats up about, oh, it's time for a pullback, everything is so expensive. We had a number of financial company CEOs come out today and talk about everything being too extended. We need some sort of breakdown in the valuations. So then we create this sort of prophecy of everybody got nervous. We're looking for a reason to get more nervous. Maybe that reason today was Palantir's pullback or all the headlines going on around that. And then we just do it and follow everybody else down.

So I think some of this, first of all, I'll say, I don't think that this is concerning today. I do think that as far as we've gotten this extended is concerning eventually, but I still think that we're going to run into year end. I still think the chase is on. I still think the large-cap love affair is on, and that's probably not going to change over the longer-term period. But today, I think we were looking for an excuse, and maybe the election is part of that excuse, but we're looking for excuses to just kind of shape the show.

To be fair, I don't think it's not in the mix, at least psychological. On the other hand, I would also say, you know, the same thing was happening on the way up where people talked themselves into, hey, this is an unbeatable market. The S&P 500 is bulletproof because we have this AI theme and everything's working, right? So it's not as if it's real when it goes up and it's kind of an excuse when it goes down, right? Right. I mean, it's real when it goes up when there's earnings to back it up. And there have been. And we're in the midst of earning season now. Obviously last week was one of the biggest weeks for Meg 7 names. And we're looking at earnings that are still led by 10. and communications and for the full year led by tech and communications and financials in the number three spot. So those cyclical names and the stuff that actually has firepower to back it up. And then you mentioned the debt raised by some of these companies. The companies are still in good position, right?

No matter what your view is, you can probably find data to support it right now, but you can look at just the cash balances of a lot of those companies. Yes, they've come down, but that doesn't mean that they're not fundamentally sound. and now they're going to raise debt from a pretty fundamentally strong position in order to spend more and grow. So I think the market will still reward that. We're still in this reward the spending mode. Again, at some point, this becomes a problem, right? But at this point, I think investors are still rewarding that growth potential. And maybe we're going to reward selectively based on our faith because met is 20% off.

It's high, actually, as of today. Ed, in terms of just the underpinnings of this move, of course, we came into this week, everybody understanding. that November tends to be strong. You know, good years in the market tend to finish to the upside. How does the action read to you? Well, as a Floridian, I have to say the mayor of race in New York did not play at all

into my thought process and why the market could pull back. When I was in New York a couple weeks ago, every meeting started with, is this AI boom a bubble? Where are we? Is this 1997? Is this 1990? And I think that sentiment really did set this pullback today up pretty well.

So maybe it did take a couple of CEOs pointing out the obvious that corrections happen. Look, in a given year, the S&P has at least one 10% pullback. So I think the narrowing of the market over the past few weeks set us up for a situation where those few stocks that were going up ran into their inevitable trouble. And here you go. But yeah, in terms of the end of the year, Michael, when you get rallies like we did where we were up 22% during the supposedly worst time of the year of the six months of sell and may and go away, November, December is up an average of 6%. So momentum does continue into year end when you've had the kind of moves. And so perhaps, you know, this is a cooling off before the final push into year end. Yeah, and I guess it also bears mentioning that there have been multiple days here when we would have today's kind of weak market. which is like a little worse than two to one negative in terms of

stocks down versus up. And if Nvidia and Amazon were up as much as they're down today, the S&P would be positive and we'd be saying, okay, that's fine. It's just a selective market, right, Ed? So, I mean, I guess the question I would have is at what point do you feel as if it's creating some kind of fragility in the market longer term, the lack of participation? Usually these divergences go on for longer than they have now. If you're going to get a major top, it's basically an idea where the longer divergence

is last, the bigger the decline can be on the other side. So the fact that this has been fairly short, just over several weeks to maybe a couple months, I would think that the pullback would be shorter. But if this is something that perhaps goes into next year, at a time, say, we get to May, we get a new Fed share, a lot of uncertainty around that, the little fiscal bump from the one big, beautiful bill tax cuts, when people file beginning. the year, that starts to fade. If those divergences are still there, now we're talking of a risk of a bigger correction, your kind of cyclical bear market, 20% plus type of decline, potentially,

if the divergences continue for that long. Right. Dan, how do you think, I mean, you've been able to look at some of the consumer-sensitive parts of this market, you know, whether it's the cumulative effect of government shutdown, we know this is a soft labor market. The Fed decided it wasn't going to promise a December cut last week. Obviously, the credit stuff is kind of noise more than it is signal, probably, but I just wonder if in the absence of people having confidence in the here and now pace of the economy, what it means for where the market is. Well, I disagree that people don't have confidence in the economy right now. The economy is doing pretty well. We printed almost 4% in the second quarter.

A lot of the consumer companies who have reported thus far, I always talk about Veson MasterCard, talked about sustainable consumer strength. specifically said they don't see any trouble in all of their income cohorts. Obviously, there's trouble, as you alluded to, at the lower income consumer, and we know for consumer-stable companies, for residential construction, there is certainly weakness. Restaurants have been going south. Straight south. Visa shares are trading where they were in January. Sure.

Okay. The whole market is not up. Some portion of the market is down. And I'm not saying it's a disaster. I'm just saying, like, you were able to look at the market and say, okay, for a while, going into September, industrials and consumers, reciprocal is just absolutely rock-solid leadership where you won't have to question them. And now it's a little more give and take.

Well, I don't know. I don't maybe other people, but the market's 2% off its high. Listen, we've had a divergence beneath the headline, as Ed will note, for some time. The equal-weighted S&P is basically unchanged since like mid or late July, even though the broader market is higher. As you mentioned, a number of industries are not just down, but are breaking down. And the AI story from tech and comm to industrials to utilities, etc. has really been the driving factor.

There's no doubt about it. But I wouldn't call anything into question, not the economy, not the bull market, because we're a little bit off the highs on election day. Sure. So the billionaires are wrong to sell today, is what you're telling me? Well, I don't know if they're wrong to sell. They may need to pay for the move.

Okay, that's fine. Liz, in terms of, I guess, tactical, right? If you think it's going to be like kind of the large cap chase reasserts itself into the year end, is it just kind of reloading with what's been the winners so far this year? I think so. I mean, look, we've had periods of false starts of this broadening out trade throughout the year. I still think that that can continue, but it is interesting that traditionally what we look for in a rally is confirmation that it is also evident in the economy.

And confirmation would be things like small caps catching up or outperforming large caps. That hasn't been happening. We've had, again, some false starts. I do think small caps can catch up a little into year end. But now that we're in this period of a lot of active managers trying to catch up with all the performance that's happened in large cap, a lot of even retail traders catching up, everybody's trying to get to the place where the S&P and the NASDAQ have gotten to, and that will, I think, bleed more money into that large cap space. Ed, has we sort of taken care to some degree of what many were decrying, which was sort of the low-quality speculative flavor of part of this rally. I mean, even before the S&P 500 has kind of taken a half step back here, you did see some of those parts of the market, so the fever break in that area. Is that relevant to the broad market call?

It is. You know, if we were to go back, say, three weeks, it was basically, you know, large cap tech and then unprofitable small caps that were leading the way. And the more speculative parts of the market came off first. And again, that tends to happen, you know, leading into. to a market pullback. So that is your typical market reaction. I'd honestly be a little more concerned if on a day like today, there were some of those really speculative names that were still flying high. So our sentiment data were showing a little bit of frothiness a couple of weeks ago that started to come back. Maybe it takes a little bit more to get the rest of this off.

But I would view it from a contrarian standpoint as a little of a positive thing that the really speculative names have started to pull, have already pulled back. I mean, and it's also, Dan, worth noting that Wall Street strategists are actually still kind of underwater relative to where the market is right now for year end. I do wonder how that's going to shape up as people formulate their 2026 outlooks. Maybe then everybody gets, you know, a little excited about the outlook or something like that. But for now, it feels like it's representative of the fact that kind of like the professionals in the market have not been all in just yet. Well, yes, that's fair, but also getting back to the concentration of AI and the posity

of other ideas, we talk a lot about the market and the AI, but for a lot of the active managers, you've got to, you go to war with the army you have, not the army you want, and you've got to try to outperform an index that's up 16% year-to-date, and if you're not a large-cap tech, or have a large-cap tech, you've got a really hard time doing. Right now, again, the index is up about 16% or so. Yeah. There's only, quote unquote, only about 140 names that are up more than the index. Right.

The Mag 7s are not leading the way, but there's only about 140 names. That's a small, if your mandate is the S&B 500 or so, that's a small section of names to be exposed to to try to beat the index. And a lot of those names, like Amphanol, like Lamb Research, etc., are essentially AI derivative. Sure. So it's really, it's been a really difficult year. really difficult year. So I'm not surprised a lot of people are off sides. But when you get such a dominant theme, if you're not going to ride that wave, it just becomes near, this is a point Adam Parker

makes all the time on the show. You've just got to be overweight the names because otherwise you're going to lag. Yeah. I mean, being overweight in Vivida means having a 9% position. And a lot of people that's really impossible to do. Or you don't want to. Yeah. So I guess, Liz, the lack of government economic data, it's something that we've kind of navigated fine. Obviously, the market point to point from the beginning of the government shutdown has not really struggled. But I do wonder where that leaves us, because once we even reopen, you know, you're going to either have lagged data or the market's going to maybe look sideways at whether it's representative of the economy. Does it matter or are we okay with not quite knowing? I think the longer it goes on and we get

some sort of wave of data and have to look back and say, okay, what would we have done if we had this data on time? Probably the most likely thing that happens is we recalibrate what the Fed is expected to do. And there's already been some rumblings this week about Fed speakers saying we're now more focused on inflation than jobs, but we don't have any data so who knows what we're supposed to be focused on. Well, we do. We do have some. We've got ADP. We do. Well, yes, those of us that have access to a battery of things, right? But the general public doesn't and just the sentiment. So back to the beginning of the conversation of what's happening today, absent government data, absent macro data, absent anything else that we can look at

from economic standpoints, we are left to the headlines that are market-driven. And we're going to be more sensitive to that. And Dan Stad about, was it 140 companies are beating the S&P? More than 150 companies in the S&P are down more than 20% off their 52-week highs. So that's why the equal weight isn't keeping up. And we're fragile here, absolutely. It's been uneven, for sure. Well, tomorrow, everyone can tune in for ADP jobs as well as ISM services.

So we're going to all celebrate the abundance of data tomorrow. Dan, Liz, Ed, thank you very much. I appreciate the conversation today. Shares of Palantir, as we've mentioned, dropping on the back of its earnings report. Sima Modi is here with the details of perhaps why. Hi, Sima. Well, Mike, nine consecutive quarters of revenue growth, not enough to keep Palantir's record rally going today. If you had to pick apart perhaps some of the potential negatives on international,

Palantir CEO Alex Carb did say on the third quarter earnings call that growth in Europe is, quote, stagnant. Analyst also pointing to the ongoing government shutdown that could impact the number of new government contracts right after Palantir released earnings. A new 13F filing from Sands Michael Murray revealed that the big short investor is betting against Palantir and Invidia. Here's CEO Alex Carp's reaction. I'll tell you why the short sellers are constantly getting screwed by Palantir because every time they short us, we just are like tripling down on getting the better numbers, and part, honestly, to make them poorer. The other active discussion is happening around valuation, which Jeffrey's analyst Brent

fills, calls extreme warning that the current valuation is susceptible to any downtick in the AI hyper cycle. Cantor Fitzgerald, adding that Palantir is trading at five times higher than any other software infrastructure name. On the topic of valuation, Carr pointing to Palantir's run rate, the 121% year-over-year surge in its commercial business, do in part to Palantir's. success with boot camps that essentially help train clients on how to use this technology. Carper said on the call that that is leading to faster adoption, Mike.

All right, Seema, thanks down 9%, but only back to where it was a little over a week ago, I guess. So that stock had really run. Thank you. Kate Rogers tracking the action in Papa Johns for us. That stock sinking this afternoon. Kate, what can you tell us? Hey, Mike. So Papa Johns was halted for volatility briefly, but opened again in the 1 p.m. hour.

And it was just down about 11 percent, as you can see right now. This all on a Reuters report citing sources that say Apollo has withdrawn its bid to take the company private at $64 a share. We're out to Papa Johns and Apollo 4 comma did not hear back immediately. The Reuters report says the P.E. firm withdrew its bid about a week ago because of some of these macro pressures are hitting the broader restaurant industry and the category. Papa Johns is down fractionally on the year. Set to report earnings on Thursday. And this all comes, of course, as Young Brands announced this morning, a strategic review of its pizza hot business, which could also involve a sale. There's no timeline there for completion of that review.

The pizza category facing headwinds, but Domino's, which is also down slightly on the years, has been performing well. We should note at same store sales surpassed expectations in the most recent quarter up over 5%. So definitely interesting to watch this all kind of play out. Back over to you. For sure. Absolutely. Thank you, Kate. Let's send it over to Courtney Reagan for a look at the biggest names moving into the close.

Hi, Mike. So Uber's shares falling today after the ride chair giant's Q4 adjusted EBITDA guidance slightly missed expectations. Strong Bookings guidance wasn't enough to offset that. Management did say on the call that they expect to have autonomous vehicles in at least 10 cities by the end of 2026. An important thing to track for investors who are worried about AVs encroaching on Uber's market share. Meantime Hertz is surging today after beating Q3 estimates with its highest fleet utilization rate since 2018. The rental car company also has a high short interest. we should note nearly 18% afloat, which could be helping the stock if bears rush to close short positions. And DuPont shares are among the S&P leaders today after it announced the completion of its spinoff of CUNY Electronics, which was the first announced in September.

The stock is on pace for its best day since April. Mike, back over to you. Courtney, thank you. Well, we are just getting started. Up next, former Dallas Fed President Richard Fisher weighs in on the employment impact of AI, more of lack thereof. He'll join me at Post 9 after this break. With the S&P 500 down 1.1%. We're live from the New York Stock Exchange.

You're watching Closing Bell on CNBC. Welcome back. Recent layoffs raising concerns that AI is suddenly replacing corporate jobs, but that might not be the case just yet. CNBC Senior Economist correspondent. Steve Leesman has much more on that story. Hi, Steve. Yeah, Mike, everyone wants the story to happen real quickly. We've had a slew of mass layouts.

48,000 at UPS, 14,000 in Amazon, 1,800 at Target. It's raised fears that AI is already whacking corporate jobs, but maybe not so fast. In some cases, company could be involved in AI washing or attributing job loss to AI one. In fact, it could be just a downturn in the business or a restructuring. Amazon CEO, Andy Jassy, actually, walk back the impression, which was kind of created by the media and fostered by the company

itself that recent corporate layouts were linked to AI. The layoffs, he said, were, quote, not really financially driven, and it's not even really AI driven right now. It's culture. UPS mentioned AI and automation when it announced 34,000 of its layouts, but many of those cuts seem linked as much to closing buildings, right-sizing staffing levels in the wake of the online shopping move from the pandemic. MIT economic professor David Autortelling NBC News, quote, But it's much easier for a company to say we are laying workers off because we're realizing AI-related efficiencies than to say, we're laying people off because we're not that profitable or bloated. These are early days, of course, for the new technology to be responsible for massive layoffs. It could be coming, but investors, Mike, should be wary of regular old job cuts that are wrapped in AI clothing.

Absolutely. Steve, thank you very much for setting that up. Joining me now is at Post 9. Here is Richard Fisher, Jeffrey's Senior Advisor, and, of course, former. Dallas Fed presidents. Great to see you. Thank you, Mike. I guess in trying to assess the labor market in general, we've been able to, first of all, talk about reduced supply. It's pretty well known, and maybe that has made weaker job growth more palatable or more acceptable to the Fed and others. Now we have this issue with perhaps shedding of jobs, but we also

had overhiring during the pandemic. It's just a very noisy backdrop. We don't know what productivity is going to look like. So how does that all net out to you? I think you also have taken consideration the pressures on margins coming from the tariffs and other cost pressures. And the only way to deal with that is to either pass on those costs, which they're thinking about doing, but they haven't figured it out yet, to your customers as service or goods, or cut cost elsewhere. Now, what AI promises is the increase in productivity. We haven't seen it yet. And according to McKinsey, for what it's worth, 80% of the companies have said they're really not getting any additional cash flow and profit boost from AI. I just think it hasn't hit yet.

And I do feel, given the slowdown is taking place right now, and we're seeing that in the Bage Book and other Fed surveys and elsewhere, these are just people that have realized they're overstaffed, they need to cut cost. And unfortunately, there's a human price to pay. Sure. And it's also difficult to pull apart whatever imagined effect there might be from the AI investments, from just the perpetual trend of technology making certain functions more easy and cheaper and more efficient, and now somehow some kind of step function change in all that. So I guess where does that play into your thoughts of how the Fed is thinking about the balance of risks? Well, I think Powell has said it very well in his presser, and they've also said this publicly elsewhere, which is there is a tough balance of risk right here.

I would think they have yet to feel any advantages coming from AI, and I think he referred to that in his presser after the last meeting. So we'll just have to see. I'm, as you know, I was, I am, I always will be a hawk. Doves are members of the pigeon family. I don't want to be a pigeon for anybody. So I do think they would have reason to pause in December, get a sense of where this is actually going. We still haven't gotten inflation below 3%. Right.

And you don't want to announce he's got four more meetings, Mike, that he's giving in, and let the next Fed chairman take over, direct the committee. I think the committee's evenly balanced right now. Actually, there are more hawks than there are doves, because there's an extreme dove. We all know who it is. He wants to cut 50 basis points. That's at the president's direction. And what do you think the implications of that are? You mentioned a pretty divided committee or at least one where there's kind of a healthy back and forth.

Does that hamstring policymaking or is that just, you know, a positive part of the process? No, that's the way it works. I mean, as you know, I dissented 10 times over or 8 times over my period of 10 years. There were other dissents on the other side. It's an intellectual argument. And I hope viewers know this, but I want to repeat it. It's not like Congress or even the Supreme Court. Everybody sits around, provides their best ideas on the table,

gives all the input to their ideas, and then a very nice discussion takes place. It's an intellectual discussion. There's no arguing, there's no vengeance that takes place. And including with Steve Myron, by the way, he's being listened to very carefully. He just hadn't persuaded the committee. Right.

So that's the way it works. Yeah, by his own account, even, you know, he says, it's very, obviously collegial in the room. He's actually a very nice guy, by the way. So it's interesting because the absence of timely official data on employment and consumption and everything else, at one point the take on that was, well, maybe it actually causes a slight more dovish bias because as risk managers, they might want to just make sure the job market does not fall apart. It doesn't seem like it's working that way.

Obviously, we've gotten some. They seem confident enough that overall growth is hanging in there. They are. And they have, there's so many private sources right now. There's so many ways to track things. You can look at ways, for example, for traffic movements or shopping center malls or the ISM numbers, which are not very good right now. No, they're not.

But manufacturers spend a recession for a very long time. Yeah. So I think they've got plenty of data. In my view, it's nice to have the official gold standard data to base your, if anything, for a CYA, I'll let you interpret what CYA. No, exactly. So, yeah. I think they have enough to work on it.

Excellent. Richard, great to see it. Thanks for having me. I appreciate it. All right. Well, still ahead. Your big earnings setup. Everything investors need to be watching from the likes of AMD, Rivian, and Kava reporting in overtime tonight. Plus, a rundown of McDonald's numbers out tomorrow before the bell. Closing bell, be right back. Up next, our next guest is a portfolio manager that's making some big bets outside of the world of AI and big tech.

break down his top plays after this break. Closing Bell will be right back. S&P down 1.1%. A.I. AI stocks pulling back as investors grow increasingly concerned about sky-high valuations My next guest is in that camp, saying the tech sector is at a significant inflection point. His portfolio, which had 75% of its holdings in tech last year, now has less than 10% in the sector. Joining me now is GQ partners, Brian Kirshman.

And Brian, it's really great to have you on here to lay it all out for us. What is the nature of this inflection point that you there have perceived and how long have we been at risk? How does it play out from here? Yeah, thank you very much first. for having us and you're being able to share our views here. So in terms of tech, I think our biggest issue at this point in time is for all the spending and all the hype that has happened to call the $600 billion that have been spent on the infrastructure, there's really been a limited monetization that has happened on the other side in terms of revenues,

$20 to $30 billion in revenues. And then when we look at where that spending has gone to, a lot of that has been in the cloud. And quite frankly, we're seeing lower barriers to entry within the cloud players. We're seeing that pricing is actually getting pretty aggressive there in Oracle undercutting each other. The other cloud players, excuse me, by 40 to 70%, and they're really undercutting the traditional players like the AWS is the Azure's. In fact, we made calls ourself from the GQG side

if we wanted to go rent out some cloud capacity, and we got quotes on Blackwell chips for compute. That was $3.70 per hour in terms of the rental. That's dramatically lower than what we've seen even a couple of months ago, AWS offering, like $10 per hour in terms of their chip rentals. So we're seeing a lot of that price competition come through and we're very leery that that combined with the fact there's

lack of monetization on AI itself is not really leading it to anywhere and there's a lack of headroom there. Interesting. So the answer to that, I imagine, from investors in the, in the sector and obviously the companies themselves is, look, we just continue to see insatiable demand for computing capacity. We will serve it. If we build it, there's going to be a use for it, whether it is something, some magical, you know, version of intelligence or if it's simply just lots of applications, it's too early to judge that monetization is not going to happen. So I guess two points that I would offer on the other side of that. Number one is if you look at the MIT study, you know, 95% of folks that were trying that in that study in terms of AI deployment

found it was basically useless. They couldn't find a sort of an acceptable use. We did our own studies with consultants. One of the consultants we talked to from a big tech, big three consulting firm, said that they did 400 AI projects on a year-to-day basis. Only 15% of those showed any sort of positive results. The other side of the argument, though, is what we're seeing in terms of the chips themselves. So we've had some work that we've done in terms of calling up folks around the distribution channels and things like that. And we're seeing that even H-200s that have been around, called the last six to nine months, are selling at 30 to 40% discounts within the channel, and it seemed to be readily available.

So there might be a narrative that there, all that compute is sort of coming through, but I think you're seeing that there is a little bit more capacity out there than maybe people are giving credit for. So that makes us very nervous about where things are and where the expectations are. It's interesting, given, I guess, the tremendous collective bet that the market as a whole has on this sector, right? So, I mean, the market has tolerated the big cloud platforms and meta and them essentially spending all of their free cash flow, handing it to NVIDIA, half of it falls to NVIDIA's

bottom line, the market puts a 35 multiple on that. You know, it's worked pretty well so far as if there's not a lot of kind of victims or losers in this program. So what does it mean for the overall market, even the economy, if somehow we have a recognition moment that this is not really paying off? So I think you hit the nail on the head there, is that this is actually way more pervasive than just the big tech players, the AI players. Because if you think it globally, even outside of the U.S., all of the best performing assets and stocks and other markets around the world have AI sort of implications on them. So you think about the best semiconductor stocks or memory stocks within Korea, for example, or all attached back to high bandwidth memory, which goes into AI and data centers. You think about the European cap goods, the industrial companies that are providing the electrification equipment and also providing generators and things like that for on-site power.

That's all been a beneficiary of this AI narrative. You think about even the banks within the U.S. A lot of the capital raising, M&A, advisory activity, private credit, private equity side of things. All of this is being raised for sort of AI and going into this sort of, you know, same narrative over the course of time. Even the utility side. We have a decent amount of utilities exposure, actually a lot of utility exposure. You look at the best performing utilities. They're on the non-regulated side on their utilities, which means they can charge whatever prices they want if they perceive to see limited supply and there's more demand.

Well, that goes the other direction as well. If the demand isn't there or supply seems to be overbuilt, those come right back down. You saw that during DeepSeek, when the correlations of some of those things came down pretty heavily when people questioned the headroom for data center means. And, Brian, quickly, I mean, aside from utilities, you're a manager of quality equities, where else are you finding that at this point? Absolutely. So we do see quality within the regulated utility space.

That's a big, important delineation there where, again, for the amount of that they receive, they get a paid, a spread over that. So whether the demand comes through or not, they get paid. And you think about the math behind that, you call it a high single-digit EPS growth, another three to 400 basis points of dividend yield, and minimal multiple compression because they're trading 15 to 20 times earnings, that's a double-digit return with a high degree of certainty. If I look at some other areas, you'll get like P&C insurance over the course of time. You're seeing a 7% long-term annual growth rate in PNC insurance.

They actually grow a little bit faster in some areas. Like a progressive, for example, grows faster than the market. So you get a good boost there. Even in Allstate, an Allstate has actually out compounded the S&P 500 on the past five years and 10-year basis despite the fact you've had multiple compression. And that's with all the tech stuff loaded into that space in that time period. So we're finding those names much more interesting, much more resilient in demand. Again, AI would actually be a beneficiary of the insurance space because they can actually do some of the things that they do on the underwriting side a lot more efficiently and gain share from a fragmented market.

Fascinating perspective, Brian, really appreciate you bringing it to us. Thank you. Thank you. All right. Up next, we are tracking the biggest movers as we head into the close. Courtney Reagan standing by with those. Hi, Mike. So Bitcoin's plunge today is weighing on crypto stocks. We'll have more on those details after the break. Just under 12 minutes till the closing bell. Let's get back to Courtney Reagan for the look at the key stocks to watch.

Hey, Corey. So Bitcoin dipped below $100,000 today for the first time since June, though it's currently above that at $100,865. The flagship cryptocurrency has no lost around 12% of its value over the past week. Its move is weighing on crypto stocks, understandably. Coinbase, Robin Hood, they're both down around. 6% for the day. Meantime, Zoetas is on pace for its worst day since March of 2020 after the pet health care company cut its full year revenue guidance. The company said in a release that it

updated the guidance, quote, based on the broader macro trends and operational environment in the back half of the year. And Surrepta is plummeting today after two of its late stage gene therapies did not meet the target in treating Duchenne muscular dystrophy. The stock is on pace for its worst day since July. Mike? Courtney, thank you. Up next, what to watch for when AMD, Rivian, and Kava report in overtime. That and much more when we take you inside the market zone.

We are now in the closing bell market zone. Contessa Brewer is tracking the action in cruise stocks. Plus, we're getting you set up for earnings. Phil LeBoe here with what to watch from Rivian's numbers. Kate Rogers is tracking Kava. report tonight and McDonald's tomorrow morning. And star analyst Stacey Rascott is standing by with what he's expecting from AMD after the bell. Contessa, talk to us about these declines in cruise stocks. Yeah, especially Norwegian stock. You might have seen that today just

plummeting even though the cruise company announced record revenue and its best third quarter ever. Forward bookings look good, but the street wanted more out of ticket prices and on board spending. There you're seeing the shares down 15 percent right now. Though Norwegian raised its fourth quarter guidance for earnings. It lowered expectations for net yield. That's the earnings it makes per passenger. CEO Harry Summer told me in an exclusive interview that you can see on CNBC.com that he's optimistic about a plan to focus on families, premium families. Read that as families with money to spend. He believes the return on that investment pays off over the medium and long term in customer loyalty. Investors were hoping for more all over.

round. In fact, all those cruise stocks were suffering today. Carnival down 9 percent. Royal Caribbean down 7 and a half percent. Viking down 5 percent. But Norwegian is down 25 percent year to date, where its competitors are significantly higher on this year. So it's the one that's really taking it on the chin here, Mike. Yeah, we can see that divergence there. Thank you very much, Contessa. Phil, Rivian, coming right up. Yeah, and the expectation, at least going into today, is that Rivian's going to post a loss of 72 cents a share. So when you look at the numbers when they come out in a few minutes, here's what to watch for.

First of all, will it be a loss of 72 cents a share? Sales were relatively strong in the third quarter because so many people were moving in to the EV market, or will it be a little bit lower? We'll find out also what is the impact on the 2025 guide. What's the liquidity level? Do they have enough cash or do they need to do a capital raise to extend themselves over to the middle of 26 when they begin R2 production? And finally, what's the strength of the supply chain? When you look at Rivian's deliveries in the third quarter,

keep in mind that they were up 32%. Now, they don't sell a lot of their vehicles to people who were looking for the $7,500 federal tax credit, but the EV market was strong in the third quarter. Now they go into a couple of quarters where the demand may not be as great. And we're going to be talking with RJ Scourange. The CEO of Rivian, this is an exclusive coming up

in just a few minutes on the closing bell. We'll talk to him about what he is expecting. and also the question of the capital needed to make it to the start of R2 production. Guys, we'll send it back to you. All right, Phil. Thank you very much. And, Kate, restaurants among the worst performing groups in the market lately, stakes seem to be rising for Kava and McDonald's.

Yeah, so we'll start with Kava. Mike analysts are looking for EPS of 12 cents on revenues of $293 million for Q3. Same store sales expected to increase 2.8%. Now, last quarter, traffic was flat. Same store sales were disappointing, leading the company to lower its full-year same-store sales guidance. The stock has also had a dramatic fall. It's down around 50% year-to-date. This is a broader consumer pullback hits the fast casual space and other competitors, Chipotle and Sweet Green.

And then on to McDonald's, before the bell tomorrow, it's all about the value play and low-income consumer momentum. Same store sales projected to increase 3.5% globally, 1.9% in the U.S. This quarter, remember, it also launched its extra value meals in September, so we will see. if that resonated with consumers in this murky and challenging environment for the broader restaurant sector. Mike, back over to you. Okay, Kate, look forward to all that. Stacey, AMD, obviously, we heard about the Open AI deal, a lot of excitement around that. What's going to get the most attention in the quarterly results?

Yeah, you bet. I actually think the setup for them looks pretty good. The core markets, PCs and servers should be pretty strong, servers especially. you have Intel sort of bizarre supply constraints as well, which they may be benefiting from. And then on the AI side, you have to remember the last several quarters, the big issue has been that the near-term AI numbers have been a little bit lackluster. And we'll see what happens, but frankly, like the real story is the Open AI ramp. That doesn't actually happen for a year or so, frankly, like, who really cares what the

near-term AI numbers look like as long as they can paint that dream on that ramp in a year or so when it starts? They also have an analyst day on November 11th next week, where I'm sure they'll, you know, come out swimming. So, yeah, but I think those are the things that people will be watching for. The core business fundamentals, especially in the wake of Intel's report, and then any future commentary they can give us on the shape and pace of that open area. Sure, yeah, it seems like they probably do have a pretty good narrative loaded up with all those touchpoints with the investor meeting. I wonder more broadly, Stacey, obviously you're getting a little bit of a gut check in semis generally today after blistering run. Is there anything much behind it besides repositioning?

No, look, I think people have been a little nervous about the AI trade. You know, the numbers have gotten really big. We're hearing lots and lots of announcements. And, you know, I think there's just a little bit of a pause today, given the wake of some of that news flow. I mean, things can't go up into the right like every single day forever. We got a little bit of consolidation today. Sure. We did just speak to, you know, money manager that had owned NVIDIA and has backed away from the whole AI-related group suggesting that it doesn't actually seem as if pricing is holding up in terms of chips and these rentals for processors and things like that.

Is that something that's kind of out there more pervasive? You know, people look at things like older generation hopper price. I think Bloomberg, for example, has a tracker and shows it down. And I think the new stuff, though, is that is certainly not the case at all. And again, you just look at the overall, like, level of demand. Like, these guys are selling everything that they can make right now. Like, I'm not too worried about pricing holding up. Like, those prices, especially the older generation of stuff, tends to fluctuate day to day,

day, month to month. You can't draw too many trends from there. Yeah, okay. So, right, the new stuff that's that much better, people are happy to pay up for it, it seems. Yeah, I think so. And then just quickly on AMD, I mean, what's your kind of, core investment call on it, obviously, after this massive run. I mean, we've been neutral in the stock, and, you know,

like, we haven't been, like, enormous AMD bowls. And I'll be honest, you know, I didn't have them, you know, giving 10% of the company a way to open AI in exchange for, you know, selling parts soon. It wasn't really on my bingo card. That being said, like, I kind of get it, like, you know, at least it has to be on that open AI lock. Right.

Right. If she's not, she gets left behind it. So she has to be there. Stacey, you really appreciate it. Thank you very much. As the bell rings, S&P 500 down about 1.22%, not far off the lows. The Dow down half a percent, and the NASDAQ leading the downside off 2%. That goes with a closing bell.

It's been in overtime with Morgan & John.