Closing Bell - Closing Bell: Trading a Busy Week for Stocks 1/26/26

Episode Date: January 26, 2026

Morgan Stanley Private Wealth’s Sherry Paul tells us how she is navigating the crucial week ahead for stocks. Plus, we discuss what could be next for the Fed with Trivariate’s Adam Parker and Invesco’s Brian Levitt. And, several mega caps are gearing up to report results this week – just as some of the names in the group appear to have woken up. Doug Clinton from Intelligent Alpha tells us how he’s playing that sector. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

All right, guys, thanks so much. Welcome to closing bell. I'm Scott Wobner, live from Post 9 here at the New York Stock Exchange. And this make or break hour begins with mostly higher stocks as a pivotal week gets underway. Let's show you the scorecard here with 60 to go in regulation today. The majors are all positive. With the exception, of course, of the Russell, it's given a little bit back from those recent gains that we've seen a lot on the plate this week, mega cap earnings, a Fed decision, a potential government shutdown. We've got updates on all that coming up in just a little bit. Let's talk about some names. that are moving today. Corweave is rising. It's extending its relationship with NVIDIA. Stocks up near 6%. That's certainly worth watching. Booz Allen is sinking today. The Treasury Department canceling government contracts with that company. Market doesn't like it. Stock down near 10%. Mining stocks are higher today. The metals trade, it remains quite robust, led by, of course, the USA Rare Earth's government taking a stake, stock off to the races. It takes us to our talk of the tape today. The road ahead after a volatile week. Let's bring in, Sherry, Paul, private wealth advisor with Morgan Stanley. It's nice to see you again. Welcome.

Nice to see you. So we are coming off volatility. I feel like we have a pre-davos market and a post-davos market. Pre-davos, everybody's all bulled up. It's hard to find a bear just about anywhere. Now we're talking about renewed volatility, the sell America trade, gold's continuing to ramp, the dollars weak still. What do I do with that? Is there something to that that could be more lasting? Yeah, I think it's a great way to put it, Scott. I think one of the most important things that came out of Davos that was a change in language was going from de-globalization to now the phrase New World Order. De-globalizing felt a little more like conscious uncoupling, and New World Order has a much harsher tone to it, which means that the urgency around reimagining supply chains, partnerships, and frankly advancing AI and automation manufacturing here in the United States, along with the dollar that's now lower, because I think even more urgent. Does it mean that more volatility is ahead? Absolutely, without question.

As these things unfold even further. Yes, but remember that volatility is a part of investing. It doesn't necessarily mean that something bad is happening. It means something emergent is happening. And the emergence, I believe, is moving away from the Mag 7 into what I'm calling the magnificent thematics. And if you follow these thematics of New World Order of AI Automation, Innovation, Longivity, and a couple of other. that we've talked about, you can start to kind of trail down into the different sector

waiting so that people should be over-wading in and not necessarily moving to cash. Are you looking at the MAG-7 differently than you used to? That has any of the luster come off of that trade in your mind? As I said at the very top, we're embarking on this very critical week with many of the earnings reports hitting starting Wednesday. Yeah, I think that the MAG-7 have become more important than ever. as we're witnessing, I think, a change from going from a company to holding companies. I mean, we've got companies that sit within the tech sector that also make movies.

And we've got companies that sit in the consumer discretionary sector, you know, with traditional clothes sellers that are, you know, launching rockets and building out point-and-click technologies. And so the distortion in that, I think, means that an equal weight is important if you're just a traditional investor in exchange trade of funds. but to not concentrate in these, but understand that there's a lot of value that's about to get unlocked within those companies, particularly even in the energy sector as an example. Would you stay overweight the mega caps, or would you lean in like the market has been

from the beginning of the year into the equal weight areas as that has outperformed the market cap weighted S&P? You know, you asked me that in December as a lead into what I thought to 2026. I think you lean into the other 473. And my biggest thesis I'm teasing out about that is whether they realize, are not, every company is now a tech company. And if you don't understand that and realize that and understand what the application to AI is going to be in your business model, then you're going to be facing what I'm

explaining to clients is the blockbuster event, these extinction events, because the race is now moving so quickly that if you don't start to model out yourself and understanding that every company is a tech company, who's going to advance in productivity, cost-cutting, and advancement, like in particularly health care, one of the places you and I have talked about quite a lot. It leaves a lot of room for profits to improve across the spectrum. I mean, it's not as easy as it sounds, though. I mean, because in terms of your AI advancement area, you have software on the list. Now, you have it broadly listed as software. Now, we know that software has traded rather poorly. Even, you know, Microsoft hasn't done all that much over

the last year. When you say software, what exactly you're talking about? Because like 90% of the stocks in that universe feel like they're just sitting there doing nothing. Well, I'm glad you brought that up. It's actually one of the areas that we're underweighting within the subcategories, because it actually does carry the most vulnerability for advanced AI. That's why I ask about it. Yeah, without question. So there are other areas within tech that you wouldn't consider traditional tech,

which is why I go back to this point that now I'm starting to look at every company as a tech company. And if they're adopting the ability to compete in this massive hyper-scaling of borrowing and spending, that's now, there's a convergence between corporate spending and government spending in the AI space, it's so powerful. This is not like the early 2000 when it was sort of the domain land rush for beard.com. You know, I think these comparisons to the early internet just once again do not hold true. It sounds like you're starting to think about moving away from, you know, that trade over the last three years that we talked a lot about, from the hyperscalers to the AI enablers, how the technology and how the investment that these hyperscalers are making is going to

funnel out to every other company in every other industry. And trying to pick the winners from those is where you're going to make the most money. That's right. And that's why diversified portfolios are the greatest hedge. Most investors that I'm talking to are experiencing an existential, I'm going to call it an existential crisis around this concept of sovereignty. Now we're experiencing that at the global level as we now face a new world order. And at the individual level, as workers become replaced through AI, there's a very existential thing that's happening in the white-collar space. My advice to them is don't transfer that onto your portfolio.

They're two completely different things. And so the investment to go into the other 4-703 is crucial. And there's a lot more money to be made there than just overweighing the Mag 7. When you talk about, you have this area where you say how we're investing client portfolios. And geography, you're U.S. centric. So that flies in the face of how the early market performance has been. Like emerging markets are outperforming. So many of the other developed markets are outperforming the S&P 500.

A lot of those markets outperformed the S&P 500 last year by the widest margin we've seen in many years. You don't buy that story? Well, I think it's a blip story instead of an enduring one. Oh, why so? When I think about thematics, well, like so, for example, if you're allocating a portfolio and you've got stocks, bonds, gold, and cash, and then you're doing the allocation of the stock portion, you're thinking, okay, which is the geography? I'm bringing that through the threat of idea thematics. and where are the enduring ideas occurring?

And then overweighing those versus, let's say, putting a 5% allocation into international because that's what you're supposed to do. Just because. Just because. Because if you can get the same outperformance in the U.S. sector that you're getting in the geography, and you've got a 98 correlation between European stocks and U.S. stocks to begin with, so you have no diversification at the statistical level, then I'm going with the best idea. And for my clients and private wealth that sit here within the U.S., I've got the currency then on my side as well.

So I've removed that from the trade. And so I understand the concept of international investing, but at this moment of disruptive change, and instead of emerging markets, I've got gold in the portfolio. Well, speaking of, obviously gold and silver have been continuing their tears today. Pippa Stevens is looking at that for us a little bit closer, Pippa. Well, Scott, the metals just smashing through records with gold topping 5,000 for the first time. As silver also hits a new high, Jeffrey's noting that gold share of central banks' foreign exchange reserves is now up to 30% while the U.S. dollar share has declined to 40. And despite gold's monster gain firms, including Morgan Stanley, saying the run might not be over, raising their bull case target to 5,700 for the second half.

Now, silver posting even larger gains than gold, more than tripling in the last year. And the gold to silver ratio, which falls when silver is outperforming, is now at the lowest since 2011. The metals run fueling interest in the miners with the GDX and the SIL, both hitting new records. Scott? But thank you very much. Just quick question before we move on to something else. Are your clients asking you about metals? Where does their exposure lie when you talk about what's happened with gold and silver?

Yeah, so I started putting gold in client portfolios three years ago. actually when the war in the Ukraine broke out. And, you know, gold is an interesting, it's an interesting asset class because there are three or four reasons that people tend to rush into it, and all four of those conditions are being met right now, which is why we're seeing the rise in gold. And so that's how we talk about metals, is really what is the constituency of buyers for gold.

So it's either a dollar hedge, it's an inflation hedge, it's a hedge on sovereignty around monetary supply, a debt hedge, lots of different ways people think about it and also from a consumptive standpoint. So we've had it in the portfolio for quite some time. And Morgan Stanley's position is there's still room to run. I would, as a portfolio manager, agree with that. All right. Well, in terms of an inflation hedge, all lies on the Fed this week with Wednesday's decision looming quite large.

No move expected on interest rates, but plenty of other issues will be closely watched as always. Steve Leesman joining us now, our senior economics reporter with that angle. the commentary is going to be interesting. Powell being asked directly about the investigation is certainly going to be worth watching. And then, who knows, when will we learn about the next Fed chair? So all this is all, you know, just as interesting, Steve, as whatever they would have done or might not do related to interest rates this week. Yeah, Scott, I have a theory on that.

If you could think about what the ultimate troll would be, it would be to announce the new Fed chair when Chair Powell, steps to the podium at 2.30. I don't know if that'll happen, but I was just thinking about it that way. As you said, the Fed expected to keep rates unchanged while the market waits for the president to announce his pick for the next Fed chair. Black Rock's Rick Reeder wants a dark horse candidate given almost no chance of getting the job. He now leads the betting for the Fed chair post on Kalsi, but it's unclear if there's actually any wisdom in this or any inside knowledge behind the bet. Former Fed Governor Kevin Warsh. He's the frontrunner for most of this. month, now at 31 percent, and Chris Waller, a favorite of Wall Street at 10 percent. The former front

brother, Kevin has it at 7 percent. I'm not sure there's much behind this reader surge. We reported a week ago that Reader had had a good meeting with the president and had support from Wall Street leading to some increase in his odds. Bloomberg said Friday afternoon that he had, quote, grabbed the president's attention with his ideas for overhauling the Fed. That didn't sound much different to us from positive comments made about Warsh. People I have spoken to say only the president knows who he's going to pick. And any suggestion otherwise is just maybe a lot of hot air on this rise here more than the actual information, Scott. Well, I guess I could say if you look at Reader, now not comparing him to the others, but strictly on his merits,

he's certainly highly respected by the market community. That's number one. Number two, on numerous occasions, he has sat with me on this very set and said that the feds should cut interest rates by 100 basis points more. That's number two. And number three, he has on numerous occasions called this one of the greatest, if not the greatest investing environment that he has seen. And I think it's obvious in some respects based on reaction to those comments that the White House was watching and listening. And that's the kind of stuff that matters a lot. I think that's right, Scott.

I just think that you could have made the same case for HACIT. You could also make the same case for, by the way, you'd make that case in spades for Chris Waller, who actually offered the sort of economic underpinning for the current series of rate cuts the Fed is going under. But Waller's negative might be that he's at the Fed. HACIT, the president wanted to keep him there. Evan Warsh may be seen as more hawkish and the trial balloon that was floated on Warsh,

ended up having a little pop and interest rates. So you're right. It may come down to that, but a lot of people also tell me they don't think that Reader is President Trump's kind of guy for a lot of reasons, maybe just how he looks or maybe the fact that he works for Larry-thinking Democrat. There are other aspects that might keep the president from appointing Rick Reeder. I mean, I saw the interaction between, you know, Mr. Fink and the president in Davos, and it was pretty warm and cordial, too. So I don't know. You can read into, I guess, any kind of tea leaf that you would like to do, and the market certainly does that.

The prediction markets are obviously doing that, and the money is flowing in towards Mr. Reeder. But Steve, I suppose we'll see, and that's what makes it fun. And we'll see you, I know, on Wednesday, of course, in the room when those questions are asked. That's Steve Leesman, our senior economics correspondent. Let's bring in our CNBC contributors now. Adam Parker is certainly one, and Investco's Brian Levitt joins us today as well. Morgan Stanley, Sherry Paul, is still with us. Adam, you first.

I mean, you heard what Sherry had to say about the market. We brought these other issues about gold's move and what the Fed is being gamed out as. What's on your top of list this week that you're watching more than anything else? Well, I thought Sherry did a great job. Not that that's a surprise. I agree with a lot of what she said. The only thing I'd add about the gold point is, I'm not sure it's uncorrelated to the AI trade.

So I worry a little bit now that this is all part of the same risk on theme. It's a lot of what we do with Trivaria's risk management work for equity managers. And I do worry a little bit about that. But top of mind is earnings season. Man, we've got 200 companies reporting in the next two weeks. And so far, so good. I think the real issue is that the second half of your estimates are way too high. And so the question is, can we keep the momentum here through April guidance?

I think yes. I think the market trends higher as long as people will do. that earnings dream, the challenges that earnings estimates outside the grade eight are massive for net income expansion in the second half of the year. So you really need to see a lot more examples of AI productivity hitting companies in, I would say, like the July and October quarters. Do you agree with that, Brian? Yeah, I do. But if you think about the broad macro backdrop continues to be quite conducive. And I suspect we'll have another good earning season as Adam points to. And I look towards what

is likely to be in improving economic backdrop policy easing, not only in the United States and around the world. So continues to be good for risk assets. You know, one of the things that this conversation about whether we want to be exposed to the international markets, I continue to want to be there. And, you know, the recent move in the dollar just affirmed. this. One of our big views coming into this year was that the dollar is going to depreciate, and it continues to, I view it as a hedge against concern about U.S. policy and U.S. politics and valuations and growth prospects continue to look good outside the United States. Why not, though, Brian, I think in part to Sherry's point, just play that move with large U.S.

multinationals that are going to take advantage of that as well, but you're staying U.S. centric? Yeah, the idea isn't to eliminate, you know, U.S. exposure. The idea is to diversify away from what I believe a lot of people are heavily concentrated in overvalued portfolios. Now, valuations are certainly not a timing tool. They require catalysts. And what you're seeing outside of the United States are some of those catalysts emerging. If you look historically in a weaker dollar environment, which we believe we will be in. Emerging markets tend to be the outperformers. The developed world tends to perform quite well.

The S&P 500 does fine. It just tends to underperform non-US assets during that period. Adam, do you not agree with Brian in his idea of an improving economic backdrop and lower interest rates? Because if you do, why would you think that earnings estimates in the second half, are too high and that you have to be believing in this in this dream as you put it. The estimates outside the grade eight are for 35% net income growth in 26 versus 25, despite the factor for slightly lower gross profit.

So it's like unprecedented. It's always about beating expectations. What Brian said is totally right. Valuation doesn't work in isolation. You need a catalyst. That catalyst is upward revisions. And so I look at the S&PS estimates 15% growth on. in earnings this year, and I need a catalyst to beat that.

And I think that's really unlikely. The median top 500 U.S. equities had no gross margin expansion for nine months, so I need to believe in incremental pricing, incremental cost cutting, et cetera. I think that's going to be hard. So I'm not bared up or anything. I just think the challenge is going to be getting upper revisions the second half of your numbers is going to be unlikely. Moreover, I think your Fed point relates to the multiple.

Am I going to get multiple expansion from here? because the Fed incrementally cuts? Probably not, because if they're incrementally cutting, it's probably the economy weakened. So I'm looking at a year where I feel like the multiple probably contract some for the median stock. Maybe earnings grow 10%, not 15. The penalty for missing has been way harsher

than the reward for beating. The point I liked a lot up front, though, is the correlation of U.S. markets and non-U.S. markets. Everyone on this program has a different bent. I focus on U.S. equities, risk management. you got a massive financial advisor with a huge book and different kind of clients. And you got a cross-asset strategy just working at an enormous public firm. Someone comes out of from a different angle.

I'm always going to try to find U.S. equities that I think can beat the equity market, the index. And I think that's where you need to focus on margin upside. And I'm looking at those businesses thinking, man, more than half the companies can't beat numbers in the second half. I mean, I sense there were times when you were answering my question that Sherry Paul next to me was, moving her head like this in disagreement, but then towards the end, you came back around, and I started doing this, too. So what do you make of the points that out? I would never mess with someone as successful as hers. Whatever she's there.

Well, so, you know, I got to say, it's so amazing. I mean, at late 90s, okay, you had almost a zero correlation to European stocks to the U.S. Now we're 98% correlate. We have to acknowledge that as the inability to just risk manage through, quote, traditional diversification. I'm such a big proponent of like where are the ideas and just to simply follow the CAPEX spending and what that means and what Adam I think is really pointing out too here is that it also means that the corridor of opportunity is getting more

and more narrow and it's broadening in some senses but at the company level it's narrowing because we are going to get some downside revisions based on who has been able to self-identify and embrace the fact that whatever your business is you are now a tech company and if you're not installing then you're falling behind, period, end of story. And all of those ideas and manufacturing, all of that innovation, not to mention our unique financial system here in the U.S. advantages us going forward.

Are you not a fan of the 7% move in the Russell so far this year? Do you not believe that's sustainable or as durable as some would like to believe because I have here that your favorite U.S. large cap? Yeah, well, the reason is, you know, maybe some mids. Yeah, because I'm an investor, not necessarily, But this is the same reason I wouldn't invest in European stocks just based on a dollar call, which is a trade, not a theme, in my opinion.

And so that's more of like a trader hedge. But with small caps, I think it was an expectation that the cutting cycle would happen more quickly. 49% of small caps are not profitable. I'd rather be in the mid-cap space. I think that's a better play for the M&A activity that we should start to see coming up that Morgan Stanley feels very strongly about. We had one of our head guys on here earlier, I'd be in the midcaps over the small caps.

Brian, I'm not so sure you agree 100% with that, right? Haven't you made the case here before that you believe in this small cap trade? We believe in what we're seeing from leading indicators globally, and we believe what we're seeing with our sentiment. So our to this year was broader market participation, weaker dollar, so far so good. to lean into that unless we see some type of meaningful disruption. Because in essence, what you have and what you have not had in a long time, which is you've not had an environment where the Federal Reserve is gradually lowering interest rates.

We've only been in the last 15 years in these periods where we've either been tightening or lowering interest rates effectively to zero. So we're in a gradual lower rate environment. We've got an environment where the Chinese are working to stimulate. We've got an environment where the Japanese are working to stimulate. It's a different world than we've been living in for the last 15 years. It suggests better economic activity globally. And you're starting valuations on small mid and international stocks are more attractive.

Adam, last and quick to you on the idea of small versus large in the market. I don't think smaller. Even though we went to the University of Michigan, the greatest university in the world, I'm going to disagree on that last point with Brian. I just think the estimates are high and their worst companies. And look, if you're managing 20 million bucks of some of these U.S. equities, you know, the SEP is 18 times as big as the Russell. So you're saying for every, you know, you don't want 18 million S&P in one Russell and you want to be 17 and two, fine.

If you're saying you want it to be balanced, I think you're crazy. And I agree that the themes that grow above GDP impact the big companies more. So I don't like it. I don't like it at all, actually. I would be underweight. All right. He bleeds maize and blue. We know that well.

Go blue. All right, everybody. Thank you. We'll talk to you soon. Sherry Adam and Brian. Now to the very latest on the potential for yet another government shutdown. Betts are pouring into prediction markets with the odds steadily increasing the bets and the money moving in that direction. Emily Wilkins with the very latest, a reality check of sorts.

Where do we stand, Em? Scott, honestly, the chances for a shutdown, they have skyrocketed. As many Democrats say that changes are going to be needed for that Department of Homeland Security Bill and ICE, and even some of the Democrats who voted with Republicans to end that last government shutdown in November, are now saying that they are going to be firmly opposed this time around. You have seven of the eight who have just come out directly and said it. Nevada Senator Jackie Rosen said it in a statement that, she would be voting against any government funding package that contains the bill that funds

this agency until we have guardrails in place to curtail these abuses of power and assure more accountability and transparency. Now, of course, to be clear, the DHS funding, it's only one of the agencies that would shut down at the end of Friday if this bill is not passed. While the other pieces have bipartisan support, Senate Republican leadership, they are not planning on removing the DHS funding from this larger package. And that means that agencies that would be likely impacted, they include the Defense Department, they include health care, finance, labor, the FAA and transportation. They would all be set to shut down on Friday if there can't be a path forward at this point.

And it's not clear at this point if there is going to be some agreement that allows Democrats to get on board. Scott? All right. Here we go again, potentially. Emily Wilkins, thank you very much for the latest from our nation's capital. We're just getting started here on Wall Street. Up next, we're following the aftermath of this weekend's major winter storm. A check on the energy markets, which are moving big time yet again. We'll also discuss how the airlines are faring. Closing bell right back after this. We are back on the bell, much of the country digging out from that brutal winter storm over the weekend. And energy markets are still on the move.

All of those canceled flights, they're trying to get there too. Pippa Stevens and Phil LeBoe covering both of those angles. And Pippa, we start with you today. Yes, Scott. So now gas is surging another 20% today after the monster's 70% gain last week, in part because of a short covering with more volatility expected ahead of Wednesday's expiration. But also, more fridge attempts are forecasted into February, and that could keep prices elevated.

Now, gas-focused trailers that have commodity price exposure like expand energy, T, they're mixed today, but all outperforming over the last week. Now, pipeline names like energy transfer and Kinder Morgan also in focus, although during prior weather events, namely URI in 2021, their performance was muted since pricing upside can be offset by lower volumes. Utility stocks are higher for regulated names like Southern Dominion or AEP, likely no immediate upside since fuel is a pass-through cost, although longer-term weather events can justify new CAPEX spending. And the IPPs like Constellation, Vistra, and Tallinn, they do have direct

exposure to higher prices, but they could also be left footing the bill if generation comes up short and they have to buy on the open market. Scott? All right, Pippet, thank you very much for that update. A massive number of flights impacted from this storm, fill the bow. Where are we in the road back? It's getting, Scott, it is getting better, though that is little consolation for people who may be trying to get in or out of Boston or Charlotte. But it is getting better. The numbers don't lie. Look at what we saw over the weekend in terms of cancellations. We're not going to show you a delay. We're just focused on cancellations. This is according to the flight aware, more than 15,000 over the weekend. Today it's down under 4,900. Still a huge number,

but far fewer than we saw yesterday. Tomorrow, just 141 flights have been canceled. This is all expected to gradually clear out, starting in Dallas, all the way as you move east. I mentioned Charlotte. They should be in a better position tomorrow. The Northeast airports, their operations, are still to a certain extent limited, but that will also, it's expected to improve tomorrow. The CEO of Breeze Airways was on earlier today with us talking about the challenges that he at his airline and other airlines are facing. The thing about yesterday, everyone knew it was going to be bad. So most people moved off those flights anyways.

And, you know, we canceled a fair number, but a lot of them were not full because people knew that the storm was coming. That's one piece of good news. The other piece of good news, January is the slowest month of the years. You take a look at the airline stocks. Not a huge impact here, Scott. And this is a contained event. Yes, tons of cancellations. But it's going to be over in the next day, day and a half. And so the impact, while there probably will be some, it's hard to say it's going to be a huge impact at this point. Don't forget, we've got some airline earnings this week. Tomorrow, American and JetBlue. Thursday, we hear from Southwest. Scott, back to you. Good stuff. Phil. Thank you very much for that. That's Phil Lebo.

Still ahead, the big tech setup. Intelligent Alphas, Doug Clinton joins us. How is he playing this week's critical earnings? What are his expectations for those names on that calendar? He'll tell us next. All right, welcome back, a big week for big tech. Several mega-cap earnings reports are looming beginning on Wednesday. There is your calendar, Meta, Microsoft, and Tesla,

and then the biggie of this week, Apple, on Thursday. Some of these names in the group have actually woken up of late. Doug Clinton is the founder and CEO of Intelligent Alpha, and he joins us now. It's good to see you. What do you think is on the line for these this week? Scott, I think it's all about the same two things that we were talking about last earnings. It's still about AI. It's about CAPEX spend.

And it's ultimately about cloud growth, a continuation of this demand that we're seeing from AI users that supply is not kept up with. On the KAPX side, what I'm expecting is if you look at the MAG 5, so you take out Tesla, you take out NVIDIA. They're expected to grow KAPX about 34% going into 2026. I think that number ends up closer to 50% and the year. So that's good for the chip names. It's good for NVIDIA. It's good for Western Digital, another name that we own on the memory side. On the cloud growth side, you look at Amazon, you look at Microsoft, you look at Google.

All three of them had pretty strong. cloud numbers last quarter, Amazon and Google exceeded street expectations. The street's kind of looking for flat quarter-over-quarter growth trajectory. If either of those companies can accelerate, I think that the stocks work on that. I mean, if you get really robust spending numbers, Nvidia may move the most of the group by doing absolutely nothing. But I think there's going to be a lot of attention, speaking of spending on meta, which you describe as their wild card is what their plans are in AI, expect Zuckerberg to be aggressive, expect healthy CAPEX guidance. Well, we know what happened last quarter when he was aggressive with their numbers and they

had extremely healthy CAPEX guidance. The stock went down hard. Are we going to see a repeat? It did get beat up. I think the good news for META, Scott, is that that is now priced in. Again, you look at these CAPEX expectations. The street's looking for more than 40. percent growth on the KAPX side for META. So I think there's already the expectation that they're going to have a pretty drastic expansion in terms of how they're investing. We know that Zuckerberg's aggressive. We know the last six months. He has spent a lot of money, not just on infrastructure, but also on talent on his superintelligence labs team. And so I think this quarter, if we get a sense for what that talent is going to ultimately be building, I think that that would be possibly good for the stock,

because sort of that bad news about CapEx already seems to be priced in. What about Apple? Down like eight straight weeks. What's going on into this number? iPhone sales have been better than I think people thought, but the AI delivery has obviously been much less and lighter than people expected. It has been. If you look at meta where it feels like some of that bad news around CapEx is priced in,

I think most of the good news right now for Apple has also been priced in, Scott. You think about iPhone 17, it's been a great upgrade cycle for Apple. I think everybody sort of knows that at this point. And so if I look at that stock, that one just feels like it's set up more maybe to skew to the downside versus the upside on the print. I don't think it's big downside, but I do think it's hard for them probably to put anything out there that gets investors incrementally excited on this print. The thing investors should look for with Apple is what comes of Siri in March, because

we're expecting a big update then. Maybe Apple finally gets into the personal AI game that is really heating up right now. Where does Amazon lastly fall in this combo? Amazon's one we own. It's actually the one that Intelligent Alpha, we use AI to do our stock analysis, our portfolio management. Our AI has been the most excited about Amazon coming into 2026. You go back to them, I think you look at their AWS number.

It's really all about AWS and what's the AI demand. 20% is kind of, I think, that sort of hurdle for them in terms of investors' minds. If they can exceed 20% growth on the AWS side, and we think they will, I think the stock works. And on top of that, I think they've had really good news around their tranium chips, their inferential chips. They're second to Google and infrastructure in that sense, building their own chips. But I think that they have shown that they are a strong player, not just in delivering the cloud infrastructure, but also their own hardware.

All right. Thank you. We'll talk to you soon. Doug, thanks. Up next, the biggest mover is into this close. Less than 15 from the bell. Let's get back now to Steve Kovac for the stocks that he is watching. Tell us more. Hey there, Scott. Yeah, let's look at shares of USA Rare Earth. They're up about 6% after announcing that deal with the U.S. Commerce Department, which is going to take an equity stake in the company, including a $1.3 billion loan and $277 million in federal funding. The company will issue $16 million shares of common stock and $17.6 million warrants to the Commerce Department. Anytime shares of Booz Allen Hamilton sinking around 9% after the Treasury Department said it canceled

all contracts with the consulting firm. That's after a Booz Allen employee leaked Trump's tax records between 2018 and 2020. And this one just breaking on CNBC.com, Scott Nike is announcing plans to cut 775 employees as it accelerates automation at its U.S. distribution centers. That's according to people familiar with the matter who spoke to CNBC. Now, these layoffs are in addition to the 1,000. corporate job cuts last summer. Shares were moving up slightly. They were down initially on the headline. We see them up about three-tenths of a percent, Scott. We'll watch him over this final

stretch with about 10 minutes left. Steve, thanks. Steve Kovac. Up next, the headline that has GameStop popping in today's session. That and more in the market zone, which is next. Time for the closing bell market zone. Mike Santoli and Newberger Berman. Shannon Sacocha are here to break down these crucial moments of Trading Day. Plus, McKenzie Segalis tracking the big move in Corrieve, Kate Rooney on what is sending shares of GameStop higher today. Michael, this is much more about the days ahead than this day specifically. Yeah, it would seem, Scott, especially investors not wanting to lean too negative into the mega cap earnings. And it's fascinating. Every day you watch the market action. It seems as if the market's perfectly bifurcated in one

direction or another. It's just a matter of which type of stock is pulling up and which is down. Today, on the NASDAQ and New York Stock Exchange, 3,600 stocks are up, 3,600 stocks are down. But because the ones that are up include Apple, Microsoft, JP Morgan, and we're sort of having a little bit of an unwind of that broadening trade, you have a half percent gain in the S&P. It's almost scripted year to date. You know, the S&P's up 1.7 percent, even though it's underperformed the average stock. So things are going right. Treasury yields are benign. I guess the question is our earnings is going to redeem this picture.

Give us a quick taste of what to expect, top of the hour. Yeah, in addition to all of that, trying to handicap the earnings reactions, I think we're also going to delve into this decline in the dollar versus the yen, what it means for global bond yields in part and maybe some explanation for what's going on. And in fact, we do see some intervention there. All right, good stuff. We'll look for you in Mel, the top of the hour, as we said. All right, Mac, Corweewee and Invidia.

Tell us more. Corwee share is jumping as much as 14 percent today, Scott, after Nvidia disclosed a fresh $2 billion equity investment. And even with that move now cooling to a 6% gain on the session, the market is clearly reading this as a confidence vote in Corweave's expansion story and an ongoing demand for GPU-heavy AI infrastructure. Nvidia bought the shares at a discount to Friday's close, and this isn't a new relationship. It was already one of Corweave's backers, but it does still signal the chipmaker doubling

down. Corweave says it's targeting more than 5 gigawatts of AI factories by 2030. That's roughly the annual electricity use of about 4 million. in U.S. homes. Jensen Wong telling CNBC this is really just a down payment that doesn't entirely fund the buildout. Corrieve still needs more capital to make it happen, so it's not simply NVIDIA recycling money back to itself. The overhang here, Scott, is who writes the rest of the checks and on what terms, perhaps part of why we're seeing those shares pair gains as we move into the close. All right. We'll wait for some answers. Mack, thank you very much.

All right. Burry Boost GameStop. That seems to be this story, Kate, right? That's the headline, Scott. So Michael Burry's buying up shares of GameStop. That is what's sending the stock up today as much as 6% earlier. Burry, of course, famous for short in the U.S. housing market ahead of the financial crisis. He wrote in a substack today, quote, I own GME. He says he has been buying recently. He highlighted the CEO Ryan Cohn. He describes GameStop as a long-term play and a value play, not necessarily a bet on meme stock speculation. He says, quote, Ryan is making lemonade out of lemons. Bury writes that he says that he, He has a, quote, crappy business. His words not mine. He says he's milking it the best you can while taking advantage of the meme stock phenomenon to raise cash and then wait for an opportunity

to make a big buy of real growing cash cow businesses. So last week, Ryan Cohen also himself bought about a million shares of GameStop. It's according to SEC filings. It does come on the eve. The five-year anniversary of the GameStop short squeeze, though. The stock has given back most of those gains from five years ago during that speculative really mania around the stockbury did recently close down his hedge fund, Sion asset management, Scott. Okay, thank you. That's Kate Rooney. All right, Shan, we got a few minutes here to talk into the close.

What's on your mind as we embark on a very important week? It really is, Scott. And I think one of the things that you're seeing, and Mike sort of spoke to this, is this rotation back into some of these tech names ahead of the earnings. And I think that's based actually on the broader earning strength that we've seen already during earnings season. This undercurrent of a stronger economy,

evidence that the U.S. consumer has engaged and perhaps is even more engaged as we moved in 2026, that's boosted this strengthening trade, this broadening train, excuse me, and strengthened it over the last couple of weeks. However, there's no reason to think that that foundation of economic growth can't also support some of these tech giants, which have done very well over the last couple of years. And so I think investors are being very careful to make sure they're not under exposed going into this week. But I would agree with some of your comments on NVIDIA, they may end up winning without doing much at all. On the broadening trade, you suggest to lean into small caps here. Tell me more.

We have been, and we were a bit early on this last year, but I think importantly, the transmission of this cyclical rebound, lower interest rates, it doesn't matter how many more times you think the Fed's going to cut. We haven't benefited enough yet from the cuts last year, that stronger economic growth. And the fact that there are, you know, areas like health care, financials, industrials, are well represented in that universe. and those are where we're seeing some of that momentum over the course of the last couple of months. Do you think the Fed's irrelevant this week? I mean, how do you score that going into the decision on Wednesday when the market certainly doesn't expect them to do anything?

I think what they do is somewhat, I mean, the Fed is never going to be irrelevant, Scott. But I think what they do is less important than maybe the messaging. Yeah, but I think the messaging around how they feel about this potential for more tension in the second half of the year between employment and inflation is going to be important? Do they think that we can grow at two and a half percent plus this year and not have perhaps a little bit of tick up in prices? I think that narrative is going to be most important rather than necessarily them taking any further accommodative action. I don't really hear anybody talking about negative market impacts from yet another government shutdown. We're watching it. It's Friday. Who knows what happens between now and then? Is that on your radar in terms of an overall market, you know, potential move? I think that there is the expectation that it will be short-lived.

But, Scott, I think we thought the one in the fourth quarter was going to be short-lived as well, and we all were pretty much wrong on that. I think that there's important comments coming out of the administration today that might push off the potential for that shutdown. So I think that's providing some, at least short-term calm. But I do think it's something to watch because it could drag out similar, not to the length, but similar to what we saw in the fourth quarter. And you think these earnings from mega caps are going to be solid this week?

It does appear to be pointing to that. I mean, I guess more of the concern is the guidance around, you know, the AI spend. We haven't yet seen that baton pass to other sectors in terms of their willingness to go out and put real money into the ground on AI CAPX. And so that still is an important driving course for GDP growth this year. So I think that the earnings will be fine. I think it's more about the guidance for two and three. All right, I know you can hear the clapping started. Thanks for joining us.

That's Shanna Sikosa. The clapping started because the bell is about to ring, and there it is. And we'll be green on everything but the Russell 2000 today. Dow S&D now is getting a good start to a very pivotal week. I will see you tomorrow. I'll see you tomorrow. I'm in time with Melissa and Mike.