Closing Bell - Closing Bell: What Could February Hold For Your Money? 2/2/26

Episode Date: February 2, 2026

We discuss what the month ahead could look like for the market with Solus’ Dan Greenhaus, Requisite Capital’s Bryn Talkington and Northwestern Mutual’s Matt Stucky. Plus, the future of an AI deal between Nvidia and OpenAI is now in question. Alex Kantrowitz from Big Technology – alongside Kristina Partsinevelos and Kate Rooney – tell us what’s at stake. And, Stempoint’s Michelle Ross tells us where she is finding opportunity in the biotech space. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to closing bell. I'm Scott Wobner live from Post 9 here at the New York Stock Exchange. This maker breakout begins with rising stocks and right along with that rising expectations that earnings will deliver. And this is the busiest week yet. We do have a couple of mega cap reports that are looming large. And we'll ask our experts where this rally is going from here. But let's check the scorecard now with 60 to go in regulation. We're nicely green today. As you can see, all the two S&P sectors are in the green. so that's obviously helping today. Tech having a pretty good day,

even with Nvidia, Microsoft, and meta in the red. We're going to get Amazon and alphabet earnings later in the week, so a lot to focus on as it relates to the AI trade and beyond. And it does take us to our talk of the tape. What February might hold for your money? Let's ask our panel. Solace alternative asset management's Dan Greenhouse, CNVC contributor, requisite capitals, Brin,

Talkington, and Northwestern Mutuals. Matt Stucky, good to have one. and all with us. Dan, I'll turn to you first. So here we go, new month. Sometimes February can be a little volatile, but not necessarily if you come into it in an uptrend like we are. How do you see things unfolding? You're always coming out of the seasonally strongest part of the year, which is the last two months and January. And so there's some volatility that returned, so to speak historically. But I keep coming back to the themes that have been driving risk assets higher. The Federal Reserve, obviously not tightening rates, probably reducing rates a little bit more this year,

the strong economy and profit backdrop, and the tariff story not getting worse, probably getting better a la the India headline that we saw earlier today. So you still have those tailwinds in place. And just to reiterate the main point, the AI story, is still driving markets. Sandusk's latest report is the best encapsulation. I mean, it was just absolutely a blowout number. This is a well-followed stock. Everyone's well aware.

And it's still managed to beat on every metric and then some. And so I think when you put all of that together, yeah, you might get a little more volatility in February, but what's driving the market higher is still there. Bryn, it's the question that I asked in the open, whether earnings can deliver, whether they can deliver enough. They have delivered already. Whether they can keep delivering and consistently delivering as the quarters progress. That's what all of this optimism is about in the first place. Right. And I think we've already heard, especially from mega-cap, as earnings have delivered.

margins have delivered, but as an investor, you have to say, well, what's priced in? And it seems like with a Microsoft, they had amazing Azure numbers, really good margins, revenue. There were so many great things to think about. At the end of the day, they are so closely tied to Open AI. And even though Open AI is not a publicly traded company, investors are voting to say, we don't think that 45% of Microsoft's recurring performance obligations are money good. And so we're going to take you down. And so earnings are strong. I think as an investor, you have to like go into earnings and say, well, what's already priced in if you're going to look to trade around the individual names on earnings? Matt, how do you see? I mean, Britain raised a really good point there at the end

with mega caps and some of the questions that exist. And we're going to get into that a bit deeper as the show progresses. This idea of talking a lot about large sums of money, we need to see it at the end of the day, the earnings would suggest that we're still good. There are no questions deeply to be raised about these stocks. Are there? Yeah, I mean, I think just to belong to Prince's point, she brought up Microsoft. You know, it just contrasts a little bit with what we heard from, from meta, both spending, you know, aggressive amounts of money on CAPEX and guiding to sequential increases above expectations in 2026. The key difference, though, was meta was pointing to an accelerating top line forecasts, and Microsoft did not, instead turning to use some of that

CAPEX internally for product development instead of immediate returns on capital. And I think that's probably where the bar is being raised is turning AI investment into return on investment. Meta's looking to accelerate those trends, Microsoft taking a longer term view in terms of reinvesting it back into the business. And I think that was the key reason why we saw different results. And so if we're looking forward to this week, we get Google as well as Amazon, I think investors not only want to see continued spending, but the fundamental topline growth accelerations on top of that, I think, are going to be necessary for positive reactions. I'll give you, Dan, obviously, the earnings outlook is positive.

AI is obviously positive. The one thing you mentioned, though, the Fed and that interest rates are likely to go lower a couple times more this year, I think was how you said it. We'll see. I mean, Kevin Worse maybe needs to outrun his history a little bit of being probably more hawkish than not. Those, that was then, this is now. Times are different. Things are different.

We'll see where all that progresses. I'm not sure you can count on anything, though, from the Fed at this point. And some would make the argument that that's fine because we don't need anything anyway. But for the reasons that you already said, economy's good, earnings are good. Okay. We've had some version of this discussion for a year now. I don't like the word need. The focus on the word need, I think, misses the main point.

If you're driving 65 miles, I don't know, I'm going to make this up on the spot, so I apologize for how bad this is going to be. But if you're driving 65 miles an hour and you want to get to 55 miles an hour, I'm going to abandon this entire thing before I screw it up. All right. The economy doesn't need rate cuts. The question is whether or not rates belonged at five and a quarter, at four in a quarter, and now in the upper threes. The question is not whether the economy needs those rate cuts, but whether rates should be to balance savings and investment throughout the economy at a lower level. And I've been arguing for some time, and I'm not alone, obviously, that yes, rates should be lower. When you got into the mid-3s, which is kind of where we are now, you can revisit that conversation.

And now that we are there, I think the case for further rate cuts is much more difficult to make than it was when rates were 100 basis points higher or 200 basis points higher. To the point about Warsh's history, you made the important point there, which is that was then, this is now. Ten years ago, I think people do a disservice to Kevin Warsh and to the evolution of one's own intellectual interests to say 15 years ago in the midst of the greatest crisis ever, he thought X, Y, and Z, therefore 15 years later, when the economy is doing fine, he's not the appropriate guy for the case. I don't think that's a fair assessment to make. Okay, and I think that's a fair point, by the way, that you do make. Now, we're watching Bitcoin. We've been watching the dollar. We're watching Golden Silicon. We're watching Golden Silicon.

They've been stabilizing at least a bit after that wild last week, culminating with Silver's biggest decline since 1980. Our Pippa Stevens is here with more on how we're doing today. What people are telling you about where this is going from here. Well, Scott, we've seen mixed performance today after Friday's rise in the dollar sparked just a massive unwind in that in what had become a very crowded trade in the precious metals. Now, even after Silver's 30% plunge on Friday, it is still up double digits on the year, showing just how swift the higher truly was. And Wall Street is still bullish on the precious metals, J.P. Morgan, raising its year and target on gold to 60, sorry, I should say 6,300, saying it remains a dynamic,

multifaceted portfolio hedge, and investor demand has come in strong. The firm added that prices are not yet close to a place where the structural rally is at risk of collapsing under its own weight. But the firm is a little bit more cautious on silver, saying going back to December, the drivers have become harder to pinpoint, although they do see a higher floor. looking forward in the $75 to $80 range. Scott? All right, Pippa, thank you for that. Pippa Stevens. Incredible moves, Bryn. And it had made some a little nervous that why are these metals running up the way they are?

Is it telling something bigger about maybe part of the underlying market? I mean, how do you see this trade progressing from here and if it means anything for how the stock market should feel? Well, I've been telling our team when we've been talking about gold and silver, especially silver, it's never different. It is never different. And narrative follows price. And all of this narrative around, you know, America and deficits, et cetera, was narrative. But really, when you look underneath it, it was the retail hive and you have futures and you have leverage. And silver is like thinly traded. It's silver, right? It's not gold. No one's storing millions of

ounces of gold. It just takes too much storage. And so I just think this is a really, good example of when the momentum and that energy of the retail and hedge fund investors get levered up. To me, the Friday fall wasn't even remotely the amazing thing. It was the past month or so as you saw this run up. And so I just think investors need to be careful. I mean, Bitcoin and Ethereum today, wow, you know, just like real carnage for people trading around, lots of money getting wiped out in both of these areas. Yeah, I mean, we've said Matt on numerous occasions today and probably other days as well, that this started to get a little bit memeish. What does it mean to you?

Well, I think that's the way to describe it too, Scott, and to Bryn's other point, just the amount of a factor exposure that's near kind of near all-time highs in the prime books, to me, I think, is a cautionary tale for positioning at this point. Even with the unwind on Friday, I think that there's probably more to go as it relates to how much could potentially be unwound. Because if you look at some of the fundamentals behind gold prices, real rates being one of those, and I know that that correlation has loosened over the last few years, but you would at least want to expect if you're a momentum investor for those fundamental trends to be in your favor.

In fact, real rates have been moving higher, which typically would mean that gold prices should be moving lower. And so to me, I think about positioning and I think about momentum and the potential for that to unwind with the lack of a fundamental kind of driver beyond, you know, the debasement trade. and it's just not there. And so for me, I think, you know, this could unwind pretty quickly. And so it just speaks to some potential caution as you look at kind of the setup at this point. This was like elevator up, elevator down.

Like something they say, you know, take an escalator up. Sure. This was like, what is going? Rocket ship up and trap door down. Again, we've talked about this a couple of times. The charts are screaming, this is not going to keep going. silver in particular was just an obnoxious chart that you knew was going to end and was going to end with enormous downside volatility. I will just add real quick about the lack of a fundamental underpinning. I somewhat disagree. We can see and we can track central bank buying of gold has basically doubled.

It began really with Russia and being excluded from the Swiss system a couple of years ago. Central banks have gotten a lot more interest. Silver, to Brin's point, is a whole other story. Obviously, there's a fundamental underpinning, but it is thinly traded. it is not a store of value, at least traditionally the way the gold is. But in the case of gold, you do have a new buyer in the market that is perpetual and for the gold bugs, hopefully permanent. All right. Everybody, thank you. We'll see where everything goes from here. Dan, thanks. Brandon and Matt will talk to you soon. I mentioned all eyes on Bitcoin as well as the cryptocurrency has fallen sharply again over the weekend.

Mackenzie Sagalus is here with more on that. Hey, Mac. Hey, Scott. So Bitcoin is now about 40% off of its October peak, breaking key support levels as risk appetite, fades, and investors repriced the path for rates after President Trump tapped Kevin Warsh to lead the Fed. Now, the move got ugly fast. Bitcoin briefly dipped into the 74K range, nearly erasing its post-election rally, as a leverage unwind accelerated the slide in thin weekend liquidity. The ETF complex is also starting to show signs of strain with 10 straight sessions of outflows, the longest streak on record. That weakness is spilling into crypto-linked stocks, strategies Bitcoin Treasury slip below its average cost basis for the first time since 2023,

coin base is sliding, and Robin Hood hit a seven-month low down about 40% since its record close in October. Still, Piper Sandler stays overweight, calling Robin Hood the best way to play secular growth in retail trading and the closest fintech platform to a super app. Scott? All right, McKenzie, thanks for follow that as well. We're just getting started up next. Show me the money.

New questions swirling today about the future of a mega deal between NVIDIA and Open AI. We break down what's really at stake next. All right, welcome back, new developments today. About the future of an AI deal between NVIDIA and Open AI announced right here on CNBC back in September. This partnership is about building an AI infrastructure that enables AI to go from the labs into the world. This is about the AI Industrial Revolution arriving. It's a very big deal.

Well, Christina Partsenevolos is here with more. I guess this comes down to a couple of words. Partnership, commitment. One, maybe not the other. Explain. Very good point, because there's a lot of words that have been said, but it's a little confusing because in VideoC CEO, Jensen Wong, really just spent the weekend in Taipei doing damage control,

literally as former reporters on the street in Taipei. And he was reassuring investors that NVIDIA will, quote, make a huge investment in Open AI, potentially the largest investment we've ever made. That was a quote from him. But he also clarified that the $100 billion figure that's been reported was, quote, never a commitment for Open AI. And those comments really came after the Wall Street Journal reported that NVIDIA's proposed up to $100 billion investment in Open AI has stalled.

Or you can see on your screen is on ice. Jensen announced the deal, like you said on your show in September, and the plan really called for deploying 10 gigawatts of data center capacity in phases. So, NVIDIA would give $10 billion per phase. But, in Vidae's November filing disclosed, quote, there is no assurance that we will enter into a definitive agreement. And then in December, the CFO Collette Crest confirmed at a UBS conference that there was no definitive agreement that had been signed and that projected revenue from OpenEI wasn't even included in the company. forward guidance. So potentially, to your point, Scott, the largest investment ever for NVIDIA, but, quote, never a commitment thus far. It's an interesting story of being talked about a lot today. Stay with us, too, because there are potential implications as well for OpenAI, obviously.

Kate Rooney's following that money for us, Kate. So, Scott, yeah, a lot hinges on this for Open AI. I'm hearing some pushback from the Open AI camp sources there are telling me the VDIA Open AI deal that we've been talking about. They say it's still actively being discussed. I would also point to some math on this. So Christina mentioned the tranches, you know, $10 billion in multiple sort of packages here. They also told me a person close to the Open AI group said that, you know, $50 billion is sort of what you look at per gigawatt. 35 billion of that goes to Nvidia. So they are strategically aligned. Also mentioned the equity round. And we've been reporting it could be up to $100 billion. You got Amazon also there. Soft,

bank likely to participate there. And V-Vidia is still likely to put in equity checks here. And as Jensen said, and they're still backing them. But the real question is the deal that they announced back in the fall. We also, Scott, I know, talked earlier about some of the journal reporting about financial discipline. Jensen reportedly, according to the journal, their citing sources, sort of criticizing Open AI for what they, he talks about, you know, lack of financial discipline is sort of how he phrased it. And then also competition. I would say Those are the two things from that report that are getting a lot of attention from tech investors. Obviously, Jen Svong is just such a respected big name here, close partner to Open AI.

We have not confirmed that reporting, but those would be the two things. Just the sort of behind-the-scenes conversation, I think, that are catching people's attention, mentions Google, mentions Anthropic. At a time when Open AI, we have reporting is looking to go public as soon as the end of this year, competition is obviously top of mind for a lot of investors. Yeah, I mean, there's obviously good, you know, water cooler drama in this. piece that is being, as you said, widely discussed today. You stay with me, too. I want to bring in Alex Kanchowitz of big technology. He's also a CNBC contributor. First thought of you to opine here. Anything to see here in your mind? Yeah, I don't think this is good for open AI. And if you think about the words that Jensen used in the fall compared to the words that he's using

now, it's definitely a pullback. No matter what the camps say, everything, they might say everything is hunky-dory. It's a real shift. In September, the press release said that NVIDIA intends to invest $100 billion in Open AI. Now Jensen is saying, Open AI invited us to invest $100 billion and we'll evaluate it step by step. So I think we knew from the outset there was no firm signature on this deal, that it would be something that they evaluate as they go on. But there definitely seems to be less of a, as has been mentioned already, a commitment and a concrete belief that from NVIDIA that they will fulfill all $100 billion. And for Open AI, I don't think that's a good sign, and it does come down to the fact that the company, when this deal was signed, was doing great, it was out in front. Now there's been a lot of competition. Anthropic comes in with Claude.

Google comes in with Gemini 3. All of a sudden, you're not really sure if you're betting on the winner. And that's what I think we're seeing with Invidia. What do you make, though, A.K., about the other comment allegedly made, according to their sources, journals, about a lack of discipline at Open AI. have thoughts on that, you must. I do. My perspective is, if you think about what OpenAI is doing, they're going after so many different markets. You have the device that's coming with that big investment with Johnny Ive, you have an enterprise bet, you have a consumer bet. There's bets everywhere for OpenAI.

I think that that might be interpreted within NVIDIA as a lack of focus. It would be one thing if it was leading in every single discipline. But when you see other companies, for instance, Anthropic going ahead with Claude Code or Google with this. very competitive model with Gemini, that's when you start to say, do you need to be making all these sprawling vets or do you need a focus because you could ask Open AI, what is your bread and butter? And it's not 100% clear what their winning horse is going to be. So that's how I read it. Kate, what would you, how would you respond to that? Interesting to something Alex said there about, you know, the perceived lack of focus. I would say the DNA of this company has

been a focus on the consumer. We have seen just such a pivot from them and sort of a broadening of the scope here wanting to win an enterprise and really wanting to compete with Anthropic and say, you know, these big businesses are a lot stickier, their higher margin. And Sarah Fryer, we heard in Davos talking about wanting that to be a 50-50 split versus about 80-20, if you look at a couple of years ago. So they have kind of changed the scope of the business, I think to adapt to the realities of needing to generate more revenue, needing to make this profitable. You know, If their winning horse in the beginning was consumer, I think there has been a realization that you can't necessarily win with people paying 20 bucks a month. You've got to make sure you're winning on enterprise as well.

And then the other thing that comes to mind, Scott, it's just dog ears. You know, we think back to the fall when the perception was that Open AI was so ahead. Things change so quickly. You know, this has been a material change in the competitive landscape in just a few months here. So I would say, you know, not to count anybody out. I think it's interesting to see how quickly things change. You might feel new entrants come in. We've talked about open source models.

So when the time this company goes public, I would just prepare people that so much can change in this landscape. But it adds a lot of pressure to these guys because Google's, you know, scene is winning, anthropic scene is winning. Not necessarily that Open AIs not, but you just have to have to really be ready for kind of the race to continue and people to sort of move up and down, you know, in a matter of days. Yeah, Christina, important to underscore as well, I think.

and very important to make the point as you did, and Jensen Wong did as well, that they, Invidia, are still going to be significant investors into OpenAI. This is just a very, very large number, and maybe some things have changed. Alex raised a good point that have changed. We reported this in November and then in December that Invidian actually never signed a concrete agreement with Open AI. So we have Jensen promising they're going to invest. I have no doubt in that. I don't think even from day one we were ever going to get close to that $100 billion level because of those various tranches.

I think the reaction in the stock, though, is a little bit concerning, down 2%. We know the stock has been range-bound ever since the last eight months. It hit an all-time high on October 29th at just a little bit over $210. But why are people treating this as negative when we know Nvidia has the cash flow? Open AI orders wouldn't be included in their guidance. The CFO confirmed that at a UBS conference just in November. So is it just an opportunity to get into the other high-flying memory names, storage names, optical names, or is this really something that's going to affect NVIDIA estimates, EPS estimates in the near term,

which I don't think so. So I don't know if the market reaction is warranted. I think of a couple other things, Alex. You know, this, it was never a commitment, whether, you know, in some respects, the cart's been put before the horse on thinking about these pledges or agreements or, you know, memorandums of understanding and just assuming that all of this money is going to be shown, right? We say, show me the money. Whether it is actually going to come to fruition, whether there are other non-commitments floating out there that could change.

It also makes me think about the circularity of some of these things, and one break in the chain can be a problem for more than one party? That's correct. Well, that's always been the worry around the AI trader. One of the main worries is that we've seen these big numbers, for instance, Open AI's intent to spend more than a trillion dollars on the infrastructure buildout. And then the question has been how much of that is real, how much of that can be reneged on.

And when you have a company like Nvidia with a big number that they came out, remember, in the press release initially in the fall, they said they, they intended to spend that $100 billion. Now they say, oh, maybe not. We'll just evaluate it bit by bit. That does start to throw in the entire number into question because you say, OK, if Nvidia can do this, how many other deals are there out there that have some element in them

where it's possible that Open AI won't actually end up fulfilling that promise. Now, I do think they're going to end up getting a ton of money. It looks like they're going to raise, you know, in the neighborhood of $100 billion in this new round. But I do think the number that Nvidia does put in in this round is going to be very important because it's going to signal how far and how strongly behind Open AI that company is. So we're going to see pretty soon what that looks like.

You know, the other thing, Kate, I suppose, is as you've been talking about and reporting on this race to go public, if it is, in fact, a race between Open AI and Anthropic, once you go public, we get to see everything, for better or worse. You get to see everything. I am feeling a lot of people. You know. You have a clear. You have a clearer picture of what the financials actually are. What money's real? What, you know, expectation versus reality? I think, Scott, that's a great point.

The prospectus, I have a feeling a lot of people are going to be excited to dive into what that actually looks like on a various, whichever open eye or anthropic ends up going first, I think the profitability, kind of how unprofitable these companies are, I mean, gross margins or just there's so many questions on the extent of how unprofitable these are. And, you know, Sarah Fryer has talked about some of this compute spending really going straight to revenue and saying that there is a direct translation. It makes sense they've thought through it. I would also just point out the amount of leverage that NVIDIA seems to have in all of this. Open AI is really central to this AI ecosystem. I think it's a great point, Alex, that they are

really tied to everybody now. So they're central to this AI economy and really the global economy at this point, they've really tried to sort of diversify away from invidia as well. You've got AMD, you've got a lot of other partnerships that they're trying to kind of strike. So you wonder if this sort of forces them to also look outside of Nvidia and kind of increase the diversification when it comes to sort of their chip supply and what that actually looks like. But video seems to have the last word on all of this. I'm sorry. Last word, Christina, on that point, you know, everybody's tied to everybody. and diversifying your stream of revenue around a little bit may not be such a bad thing.

And then you could say the same thing for investors too, which is why so many of them have pulled out of compute names like Nvidia and Broadcom. But for, Nvidia does have all the leverage to Kate's point. There's no doubt about that with every partnership they have. I do believe that we're starting to see in the end of 2025, 2025, 2026, really for investors, the diversification away from the high-flying compute names. And even AMD getting more love as of late compared to just last year alone. So it's an opportunity to seek out.

I just wonder how much more upside when you're looking at all these memory names, you're looking at all these storage names. And Nvidia still has two catalysts. You have February 25th, the earnings, and then GTC on March 16th, where I'm sure we'll hear more about just the production and ramps and everything like that, which should be a good catalyst for the stock. Oh, yeah. All right. Great stuff. You guys are awesome. Thanks so much for that. We'll talk to all of you soon. Kate, Christina, and AK. We're getting some news out of D.C. Emily Wilkins has that for us now. Am, what's up? Hey, Scott. Well, you know, we are on shutdown watch right now. And now we have President Donald Trump, who is weighing in telling lawmakers that they need to go ahead and pass that funding bill, ASAP, and get it to his desk to end the shutdown. This, of course, comes as a number of Republicans have voiced concerns with the bill, that it doesn't do enough when it comes to funding the department.

of Homeland Security. Others are saying that they're not going to support it unless it includes language that would allow for stricter voter ID requirements. And basically what Trump is saying in this brand new truth social is, hey, put all that to the side right now. We'll get to some of it later. Right now we just need to reopen the government again. This, of course, coming just a little bit after the Bureau of Labor Statistics announcing that they are not going to be putting out job numbers on Friday because of the impacts of the shutdown. And they will reschedule a new day. as soon as the government reopens. That could happen as soon as tomorrow afternoon,

but it is likely going to take either all Republicans being able to vote and move together or some Democrats potentially crossing the aisle, and neither of those at this point are a guarantee. Scott? All right, Emily, thank you. Emily Wilkins, still ahead. We dig into Disney.

Why is that stock selling off today despite record earnings? It's down almost 7%. We'll answer the question next. Just showed you before the break. of Disney falling after reporting very strong results. Julia Borsden joins us now with more. Why is the question? Well, Disney reported a solid earnings beat, a slightly smaller revenue beat, but despite beating on the top and bottom line, the company only reaffirmed its full year guidance and did not raise that full year guidance. Now, the key reason for the stock's decline today seems to be

disappointing fiscal second quarter guidance, including warning of international tourism headwinds for the domestic parks. Wolf Research saying, quote, the explanation regarding international visitation was somewhat vague. It didn't help that the company eliminated more disclosure regarding their entertainment segment that some may have expected. Going on to say, quote, the company didn't handle today as well as they might have. Disney did say streaming revenues and operating income were strong. They did not break out subscriber numbers or details, but they said that bundling their streaming services is successfully reducing churn. and they're working to roll out new vertical and short form video as part of the app.

But now the focus turns to the succession race. Sources tell us Disney Board is meeting this week to vote on a successor to CEO Bob Eiger. CFO Hugh Johnson telling us today that Disney has momentum for whoever takes over. Back over to you, Scott. Okay, Julia, thank you. Julie Boorston. Still ahead, stem points. Michelle Ross breaks down her biotech playbook for the year ahead. Where is the opportunity?

sector's not doing all that well after being strong in 2025. We'll ask you why. One of late 2025's best areas of the market, off to a very slow start in the new year. For more on why biotech is taking a breather and where the best opportunities may lie, let's welcome in Michelle Ross of Stempoint Capital. It's good to see you. Very nice to see you too.

The last conversation we had was like, wow, this trade is unbelievable. It is back. You said it was back. Everybody thought it was back. What's going on? I think this is a very healthy pause. I don't think fundamentals have really broken at all. I think we're seeing exactly what we want to see out of companies. I think there may have been a little enthusiasm that went into the new year with the JP Morgan Healthcare Conference. We typically do get a deal or two announced at that time. And I think you're seeing some of the more robust thinking that those names were going to go, not transacts. Maybe they pulled back a little bit.

Is it fair to say that maybe there was just a lot of pull forward, and now it's time to actually see the results of why the stocks had advanced so much? So it's interesting. I think it's kind of a bifurcation of that thinking. A lot of the data that we had seen over the last six months was best in class. This was first in class and best in class, as we like to say. This was truly transformational to the markets and to patience, more importantly. And I think the question is going to be, does this go into the hands of an acquirer,

or do these companies grow on their own, which is actually something that allows you to look at both sides of the coin here and say, if these companies are acquired, you know, there is a benefit to the pharmaceutical complex here. And if they're not, I think they grow into the next leaders in the space as well. I think that maybe, you tell me, you know it better than me, obviously. The trajectory of interest rates has changed a bit since the latter part of last year. We thought that lower rates are obviously better for these companies which need as much capital as they can get their hands on. on to R&D and trials and everything like that. Is that having an impact?

They're intertwined to a degree. And I would say that biotech in my mind, and I think many people who are investing in the space, believe it's really built on three fundamental core tenants. One is the actual data and the science. And we haven't had much in the last month or so of new data, new data sets that we're waiting for that are coming later in the quarter.

The second is the FDA, a strong regulatory environment. I think we're still understanding is happening at the agency right now. And the third and potentially most important for long duration capital is the payer system, what the government wants to do and how they're gonna pay for these new drugs. I think what we saw at the kind of middle point of last year

was questions on all three of those core tenants of biotech. And you did see that coiled spring effect as each and every one of those pieces kind of improved to some degree. So along with interest rates, which I think are very healthy for the system, you are seeing very, very strong companies that don't actually need to go to the capital markets to raise,

and therefore the interest rate breakdown may occur a little bit more in how much they are connected. So you're focused on a couple of significant areas. Best in class for treatment of disease, which you always have been, and you tell us about various diseases rare or otherwise, where you are keenly and highly focused on the companies that are working on treatments for all of that, especially around cancer, immunology, and metabolic disease. Which companies are at the forefront on your list?

So there's three companies that I think in the next year to year and a half are going to be launching what we believe are first in class and best in class. The first is RevMed, Revolution Medicine. They have a new treatment for pancreatic cancer that we think is above and beyond what the market currently is using as a standard of care. This is a company that whether or not they are acquired in the cancer oncology space, we think they will do a phenomenal job on the launch of this drug in the coming quarters. Is this the one that we've heard a lot about recently with this breakthrough?

There's the breakthrough that came out, and then you probably have heard it also because of the rumors that started in the media. There have been a number of press pieces that have come out in the Wall Street Journal and others saying that there may have been interest in Revolution Medicine because of how strong the potential of this drug and the opportunity is. Abivax? Abivax. What's that?

So in immunology, it's a huge space that has seen a lot of changes dependent on the patent expiration that is set to come. We do need to be able to fill what we call the loss of exclusivity or the patent cliff that is about to transpire in something like an abivax with an oral pill to be used in an area like colitis, ulcerative colitis. in patients who have been what we call refractory, they're not responding to current treatment, this would be a revolutionary type of treatment.

Last one. What's Scholarock? Scholarock. I don't think we've talked about that in the past. Scholarock is a drug for a rare disease called spinal muscular atrophy, SMA. They have a drug that uses a specific target called myostatin. It affects the muscle. That potential launch in the coming year,

we believe, would be a step change in the way those patients are treated and seen in other neuromuscular disorders going forward. All right. It's great to talk to you always. You make it smarter about this space. Michelle, thanks. Always happy to be here.

All right. Michelle Ross. Up next. We're tracking the biggest movers into this close today. The bell's back after this. Now I'm closing about Market Zone of Mike Santoli and H.SBC's Max Ketner are here to break down these crucial moments of the trading day. Plus, Christina Parts of Nevelas has a rundown of what to watch when NXB's semi reports in overtime.

And Simomodi here with more on Oracle's fundraising plans. Michael, I'll begin with you. Pretty good day. And hey, I mean, if you're going to give up Nvidia and Microsoft and meta and have this kind of day, we'll take that. Yeah, for sure. I mean, you have to give the market credit

for finding a path to actually stay positive as it has. Now, it's off the highs a little bit. We still continue to struggle with this area around 7,000 on the S&P 500. But you just look at the way the upside push you're getting from Alphabet, Amazon. Clearly, the market's willing to bet

on the non-open AI part of that trade. And I guess that for pretty good numbers coming in the next few days. Still do wonder how much we're kind of using up a lot of energy to stand still on the S&P front. But good cyclical tone to the market, good economic data this morning. And that's been a theme. How are you going to tackle it coming up in about 10 minutes? Yeah. Well, first of all, we are going to get into a couple of the big volatile movers outside of equities, one of them being certainly metals, crypto, as well as the dollar. feels as if equities right now kind of fending off the potential whipsawes from those areas.

And then we have Kate Moore, strategist from City Wealth, to talk about the outlet. All right, good stuff. We'll see you in Mel, about six or so. And we look forward to that in overtime. Got some earnings, too. Speaking of, Christina, tell us about NXP. Well, analysts definitely see potential for a beat. Auto exposure really looms large for this name. Oppenheimer expects revenue and EPS earnings per share above consensus, citing growing backlog and demand for high content, specifically in electric vehicles and premium vehicles. But NXP is heavily weighted to the automotive sector when that market really looks mixed at best.

Texas Instruments improved order trends just last week, and that lifted the entire analog group, and then you had a Legro's strong guide on power sensing used for cars that added to the optimism. Still, though, auto remains the wildcard. A solid guide could spark another, like, higher in analog semis as we wait for microchip later this week, but a weaker auto outlook from NXP

could really pressure the group, Memory shortages, too, aren't expected to hit NXP's order book directly, but they're a broader market concern for 2026. The setup, though, cautious optimism with a lot riding on management's commentary around auto demand. Scott. All right, good stuff, Christina. Thank you for that as well. Christina Parts and that was. All right, Seema.

Tell us more. Big news from Oracle today. Yeah, and specifically the equity portion of the deal for Oracle that $20 billion, that's not being received warmly by existing shareholders, as UBS notes. in a note to clients today. The latest reports on OpenAI's fundraise, Scott, also not helping, given Oracle's reliance on that company, it makes up a significant portion of its backlog.

But the big move, arguably in the bond market, with Oracle's five-year credit default swap, plunging credit investor telling me that the market is more confident now that Oracle can avoid a credit downgrade. But the big next update is going to be in a month when the company reports earnings where we'll want to see how the company's

allocation of capital and the build out of its data center plan is going. All right, great stuff. Seema, thanks so much. Seema Modi. All right, Max, we're going to run into the close with a conversation on the market. You like U.S. equities as your top pick.

Yeah, look, I do. I think what we've been doing in the last couple of months really since mid-November was leaning more into the high meter and to the riskier corner of the market, the Russell, the home builders, regional banks, non-profitable tech. We're taking some chips off the table yet because I do think with that economic strength that we're seeing the numbers today with the ISM,

that also means that there is perhaps a little bit of upside risk for yield, and that really will put, I think, at least in Reddit to put a little bit of pressure on these high-beta segments of the market. So the name of the game now is really going back and rotate back into those large-cap quality and those magnificent seven names. Oh, interesting. I still feel like people think that this broadening is going to continue because the economy is going to have this ramp and growth. is going to be stronger than expected.

Yeah, I think that's one of the issues that I have, you know, two and a half, three months ago, when we were advocating for that in November, you know, we had a lot of meetings with Cliveversa said, where are you seeing that? Why would you say that? You know, we're on the brink of the funding crisis. Remember, we had some sort of repo funding issues that the Fed was tackling with more T-bill purchases. You know, back then it was very, very long consensus. But now I do think without re-rating, think the Russell is now trading almost the 24 times earnings.

With that re-rating, we really need to get the earnings going really, really strong. And if that doesn't come any kind of disappointment on the earnings of those high beta segments and the super cyclical stuff, I'm going to be taking a little bit with disappointment. You feel like you got what you wanted to see as mega cap earnings have started and now will progress even further this week? Yeah, absolutely. I do think not only in the mega cap earnings, also in the first sort of 2030 names, we have been still that weaker dollar filtering through into better earnings growth.

Even the S&P overall, we've got an average earnings surprise factor of 6%. That is still much better than the historical average. And that is really something that really keeps us quite optimistic on US equities overall. One thing you're most underweight you suggest is oil, energy, obviously having a great run of late. Is that ending soon? Yeah, I think so. You know, it is always, I think, tricky at the moment to really find more downside once you hit the sort of 60 to 62 levels because then it just gets too unprofitable, I think,

particularly for US shale. But the levels that we've had over the last couple of days and weeks and that we've reached on the back of this geopolitical concerns, I think they're equally unjustified because for that, for that to sustain or you can push above $70, we just simply have too much supply globally, not only in the US, but also from OPEC plus. So for that to sustain a push even higher, I think it needs more than geopolitics. It needs some proper supply concerns. And we just simply don't have that.

Speaking of globally, you like Japan. You just don't like their debt. Yeah, that's absolutely right. So in Japan and in the Eurozone, actually, we like, in both jurisdictions, both areas, we like the bank specifically. Now, one of the things, however, with Japan is, obviously, we've got the elections now coming next weekend. And I do feel that perhaps after the weekend, once we get perhaps the last bit of bare

steepening on the curve and the last bit of breakout in Japanese banks specifically, that means probably we're probably getting closer to the end of the trade. Look, we've got on the front end of the Japanese government bond curve, we now have almost 60 basis points of rate hikes prior than, not rate cuts, that's the US, but rate hikes. You know, once we push towards 65, 70, towards the likes of three rate hikes, I think it's going to get quite tough to get even more hoaxedong. Max, we'll talk to you soon. Thank you.

Max Ketner, as we say goodbye on a green day for stocks. That's where we're going to ring it out on this first trading day of February. Bell's going to ring, and then I'll send it into overtime with Mike and Melissa, and we've got those warnings coming up to you.