Closing Bell Overtime: Stocks Finish Out Topsy-Turvy July 7/31/26

The Bell's bringing into the trading day at the NWSC Conductory TFs by Iron Horse bringing the Bell and at the Nasak. It's Texas Freshest Meadows Closing Out the Week. Welcome to Closing Bell. Over time, rely from Studio V of the Nasak Market site. I'm Melissa Lee along with Mike Santoli. Stocks closing out the week with gains, the Dow up 300 points. S&P 500 gaining a little less than a percent Nasak gaining a little more. For the week, gains across the board, the Nasak got nearly 2%. The Russell squeaking into the green by the end and change in the narrative this week. Microsoft and Amazon both soaring despite continued heavy cap expending. Amazon's best week in 10 years. Microsoft's best week in 25 years and Google recovering all of its post earnings losses. And as we close the books on July, it was a rough month for some of this year's hottest stocks. We'll discuss the next moves for these names straight ahead. But what a market day you would think that with the 10 years trading up, the yield trading up to levels we haven't seen since January 2025 that it would be some sort of resistance for stocks. It definitely challenged the breath. The majority of stocks were down. So that's been the that's been the toggle. If yields are up, maybe the tech trade can work, but the majority of stocks are going to be held in check. That was what went on today. Where do we finish it up? S&P? Just about 75 hundred. Exactly. We got there first. They keep pointing it out May 14th for a month. They've been saying maybe that was consequential. I think the question now is, have we spent enough time around here and kind of churned and de-risked parts of this market where it's reloaded a little bit. Now that we're most of the way through earnings and at least the E in the PE has a little more support. I mean, this will be 11 weeks basically at this level of 75 roughly 7,500. And so to the point of, you know, the longer the base, the higher and space goes the same, you know, according to the Yamada, are we somewhat of a coil spring at this point? Are we going to move higher? I mean, I don't know. The moves though for the month were interesting in terms of software being up by about 7%. Semi's being off by about 4%. So that same narrative exists in terms of hardware eating software. The extremes of the first and second quarter were kind of reversed a little bit and reconciled in there. So yeah, we'll see if in fact, it really is a resuming of the momentum trade or just kind of convalescing for a while. Let's get more on today's moveers with Christina Parks and Elvis. Christina. Thanks, guys. Well, Apple did have its worst day since March 2020. After missing estimates on iPad and service revenue in its Q3 report, which was lately yesterday, the company recently raised prices on MacBook and iPads. Why memory and storage chip costs surging, obviously benefiting micron incentives, et cetera. Amazon went the other way up about 15% to its AWS cloud unit posted the fastest sales growth in 18 quarters, powering a beat. That's strength actually rippled through the AWS Trainiam chip ecosystem lifting Marvel, Credo and a stair labs today. Also in chips, NXP semi conductors was reportedly in talks to buy Ambrella, a deal that could beef up its auto mode of radar and AI offerings. Nothing's finally reached out. Haven't heard back yet on the companies. On the downside today, Roblox pulled its full year guidance all together, just a quarter after cutting it, dragging down take two and unity reddit also had its second worst day on record on slowing us user growth and then Coinbase disappointed with a wider than expected loss. Really as crypto prices fell last quarter, Bitcoin again lower today below the $63,000 fresh point. There you go. There's the word Friday. Christine, but thanks you. Christine parts levels. Now to the bond markets, the zealots continue to move higher risk and tell you it's in Chicago for us. Where do the key levels are? It's 5% inside at this point on the 10 year. You know, I think it is. I've been continually talking about that 4.67 level. Once again, we're closing above it, but we did hit literally a half a basis point under four and three quarters and the markets backing up a bit. But I think 5% is a pretty good bet at this point. I would continue to use the, you know, high four 60s is an important pivot on a closing basis though, Melissa Lee. And as you look at the chart, as Mike has pointed out, you know, another fresh high yield close going back to January of 25. So we're talking about basically a year and a half, but we weren't alone. Look what happened in Boon yields. They snubbed up very close to three, three and a quarter, three 21 plus highest yield close since May of 2011, 15 years. And with everybody, of course, pointing a finger at worse. Here's what I contend. This is a chart of Fed funds, the December contract for the week. Notice the middle of the chart there, the rally. Well, let's not get into the numberology here. What does that mean? Well, when prices go up less tightening, when prices go down, more tightening, that's the market speaking. Now, if worse made a mistake, why wouldn't that be lower on the week? Because interest rates are higher. So to me, either all three are looking at the same thing, or maybe it's just the nominal rates are looking at the war, not the war. Bet to you. Yeah, or look at it all of it. Rick will have to say, is the big jump in yields this week? A message to Fed share wars. Let's bring in my Peterson right now. So it's some kind of message. I guess how it will be read and what the relevant pieces are is that that's what we're still trying to figure out. Yeah, I mean, I think the bond market is sending a message to Kevin Worsh, but I also think the bond market didn't really hear what Kevin Worsh himself was trying to say. You know, I went back and went over the transcript very carefully after I heard that mess of a press conference. And if you separate out what Kevin Worsh says at the top in his prepared remarks, where he thinks very carefully about what he's going to say, it's a lot clearer that he's a lot more hawkish than the way he came across in the Q&A with reporters at that press conference. But why such a disconnect? Because it was not just the state, the prepared remarks, but it was every statement prior to the prepared remarks as well, including the testimony in front of Congress. And then the press conference is a completely different story. You still believe that he is at heart hawkish, though. I do. The markets are getting around. Right. So let's take AI, for instance, right? I mean, we've all heard all the things he said about how wonderful AI is going to be for productivity and all the rest of it. Right. If you actually look at what he said in his prepared remarks, he tells us demand is happening right now. We're seeing, you know, 20% growth in all these areas, but the supply that has not caught up and we don't know when it's going to catch up is what he says. So he's telling us right now that he does not think the productivity story is actually happening yet. It gets lost, right? He doesn't clearly get into this when he explains this to reporters. This totally gets muddled in the answers. It's true, although he also in the prepared remarks kind of extolls the market reaction between the June and July meeting and saying, real and nominal treasuries yields have gone up because the market was responding to economic data, the cap X growth, oil price, whatever it might be. But then later on, he mutes about whether even policy rates are the right instrument to deal with any of these things. And, you know, so I do think, I don't think the market said he's dovish. Therefore inflation is going to rage out of control. He said he's perhaps intentionally unpredictable. Therefore, we need more of a risk cushion to own bonds. And that means higher yields for now. That's fair enough. I mean, let's take that question about sort of what tool he wants to use, right? Because he talked a lot about this. And, again, I think it was muddled. What he's trying to say, I think from reading his words, is that he wants to cut the balance sheet. Right? So that's a long standing campaign. It's a long standing campaign. But he actually told the FOMC to get started on. Yes, right? That's the message was that the FOMC has already started discussion of how accommodative it is beyond the interest rate position through the balance sheet. That's telling you he wants to cut the balance sheet and he thinks that this will tighten financial conditions, right? So the bottom line, it sounds like you believe that the markets are sort of overreacting. And that at some level, there will be an unwind when they realize what Kevin Worsh really meant. And that is that he's actually more hawkish than he came across. Look, I don't know if the markets are overreacting or underreacting. But I do think we are much closer to a rate hike in September than people think. Because I think that, you know, unless we get really these, you know, next two CPI reports that we're getting, they've got to be great in order for Worsh to avoid putting himself into the hike camp. He did also decline the opportunity to point to the software CPI report that we just got and saying that that, you know, kind of justified a hold here or gave some encouragement about the inflation pick. Yeah, I mean, look, he did not do himself any favors in general in his conversations about it, but that's right. He could have taken a victory lap on on soft CPI. He didn't do it, you know, that's that's pretty telling. Matt, thank you. My Peterson. A week after Google got punished for its spending guidance, Microsoft and Amazon are also upping their capex, but this time the markets are rewarding them. Kate Rooney's got more on this. Kate, Ameless, this is a Microsoft and Amazon are emerging as the big winners of tech earnings season. So far, both were able to get a hall pass on AI spending because both did show tangible AI driven results in the quarter and plenty of customer demand to justify all of that spending. Let's start with Amazon. They've been breaking out AWS AI revenue that topped $25 billion in the quarter, growing triple digit percentages, chips business, also surprised to the upside scene similar growth rate and revenue there. Overall, AWS cloud growth, blew through expectations. It was 37% year over year versus 31% expected CEO Andy Jassy highlighted demand outpacing supply on that earnings called demand was the theme of the day. Amazon capex is expected to go up this year, 220 billion versus 200 billion they had forecasted earlier. That is mostly thanks to higher memory cost. Microsoft was a similar story of cloud outperforming and then some other pockets of AI strength, including co-pilot. Microsoft did not change its forecast on spending still on track to spend 190 billion this fiscal year. year. An unlike Google and Amazon, it does expect to stay cash flow positive at least in 2027. Both stocks had been lagged this year, but they are very much catching up this week ending the week with double digit gains adding about $1.5 trillion in combined market cap guys. Kate, thank you so much. It was a crucial week of earnings that helped jump start the market rebound, but will that be enough to get tech trending higher again? Joining us now is Cameron Dawson, Chief Investment Officer at New Edge Wealth. Good to see you. Good to see you. I guess you know, earnings did enough at least in the context of some compressed valuations in the stocks that had had a hard time. It thank goodness for earnings because this market has been so resilient even though we've thrown so much at it. Think about it, you have the Mag 7 that has been under pressure the largest weights in the index. You've now had a leverage unwind in the favorite trade of the market being AI infrastructure semiconductors. You price in a more hawkish or maybe more uncertain or less in control fed. You have a 10 year yield at 4.7% a restart of geopolitical issues and yet the market's been flat for 11 weeks. It's truly incredible and you still have an S&P 500 with 70% of its names trading above their 200 day moving average. So maybe this is a market that's sending sending something like Elton John is saying I'm still standing despite everything. Oh, I was going to say Kelly Clarkson what doesn't kill you makes you strong. Oh yeah, definitely. Both work. Yeah, one or the other. In terms of the hyper-skillers, I mean what we learn here was what Kate had outlined and that is investors are actually okay with spending as long as there is a path for that spend and it is clear what that path is going to bring you to. So do you think that this sort of differentiation amongst the hyper-skillers will continue? Communication is key and we would hope that the likes of Metta and Google that were punished on the days of their earnings would see the merit and the benefit of saying look we're spending all this money and here is the return you're going to get from it. I think the really big question is that in order for this cloud growth to continue do we have to see the spending growth continue because Amazon despite it it's good numbers still had negative free cash flow in the quarter. So the market is looking at 2027 having free cash flow stats being even more negative for the for the hyper-skillers in total which means that they're going to have to rely on the bond market. They're going to have to potentially rely on the equity market in order to fund all of this. So it really is giving line of sight then to when we'll get the return and go free cash flow positive. I've been paying attention to this idea that there's a risk of these companies over earning. In other words collectively you see 25, 28, 30 percent, S&P 500 earnings growth, you know in an expansion in the S&P 500 you've pointed out it's important to keep in mind so much of the of the mag seven earnings have been just kind of accounting adjustments for their stakes and anthropic and open and in other words they're just like booking paper gains which is fine but it's what you don't put a multiple on that. No and we could actually have a period in 2027 where year over year earnings growth is negative for Google and Amazon because they won't have that same kind of gain and if you look at the earnings growth rate in the second quarter it's tracking at 47 percent which is an absolutely wild number but if you take out those gains it's still tracking at 29 percent which raises the question of is this as good as it gets? Not just in the earnings revisions. Earnings have been revised higher by about 15 percent year to date for 26 and 27 but is that pace of earnings growth rate as we look at the second quarter is that effectively as good as we're going to get this market usually trades on second derivatives so if the pace of growth slows maybe that's one reason why we could see some multiple compression. Unless you hope that the return on investment starts to actually show up in results as sort of the beton is being passed. I think that's the the most important point because if you look at the reason why the market multiple has come under pressure it's because the market has been discounting the mag seven. They've lost about a third of their multiple since the peak in October so if the market starts to become more sanguine and say look we think you're going to get a return you actually deserve your more average multiple than that could lift the overall market multiple and thus the overall market. Did Worsh scramble the story in a fundamental way for equities or is it just noise? I think your point earlier is that you have to have more risk premium bonds certainly is our takeaway. The fact that you had a day where the two year fell and the ten year went up tells us that the Fed at least at the margin lost some credibility and the ten year is really important for valuations as equity investors. If you look at the peak evaluations back in October of last year it coincided with the low in the ten year so that could be another reason why this market has been flat despite really strong earnings. Cameron thank you great to see you happy Friday Cameron Dawson new edge and take a look there that's a live look at the CBO allied universal will be bringing the closing bell there in Chicago ending the regular day of trading for options on this Friday. Up next another AI model goes rogue hacking three organizations with growing concern and backlash about AI how can we stop this from happening but first we've got some drug trial results moving stocks those details coming up you're watching closing bell over time live from the Nasak market site. Some interesting moves in biotech and pharma today novo Nordisk down 9% a major setback for a heart drug is it failed to reduce adverse events in late-stage trials. Moderna also falling on disappointing drug trial news it's neurovirus vaccine failed in a phase three trials stock down 5.4% and rep Lemune doubling today as an FDA panel votes to back the company's skin cancer treatment up 107% that's that that whole story has been back and forth in terms of that that that product the novo move though I guess kind of a setback in its efforts to have another answer beyond GOP 1. I mean it is surprising the the reaction in the stock compared to what analyst had been expecting this this drug this particular drug would yield in in the market which is just over a billion dollars so you know that kind of move doesn't seem commensurate but it does underscore sort of this notion that it's a one-trick pony right now. It's basically got the diabetes business and the obesity business which are basically the same businesses and not much else and so we'll put further pressure on it to look for other targets as it has tried to in the past but unsuccessful do it through M&A exactly another week another AI hack and thropic says its clawed models found its way to access the internet and accidentally hacked real systems of three different organizations this comes just one week after hugging face the hugging face incident in which led and thropic to launch more than 140,000 test runs raising questions about unregulated AI models and their capabilities to outpace legal in corporate oversight. Joining us now is trusted sec founder and CEO David Kennedy Dave great to have you with us. Yeah thanks so much for having me on. You know the open open AI incident and the anthropic incident I mean they were caused by different things right open AI they were they were testing so the guard rails were let down and thropic was human error and malware. The bottom line seems that there is plenty of room for these models to go out of control. Yeah this is a completely uncharted territory you know as these models advance they're advancing so fast that it's very hard to understand what their capabilities are and so you know anthropic and open AI are are testing about to see hey you know does this work really well from an offensive and defensive perspective and you know they have these environments set up there called sandboxes and they're supposed to prevent you know internet access but the model doesn't know the difference between a sandbox or what the internet actually is and so as it goes through if there's gaps in those sandboxes it's able to say well hey I'm still allowed to hack into this because the internet is still my sandbox and it goes out of control and I was leading to multiple breaches because of it. Is there a sense in which as more of these incidents occur that it's at least as a side effect you know having a better immune response I mean in other words it's telling people what vulnerabilities are out there and and where to look and to essentially try to try to remedy them. Yeah absolutely so anthropic gave access to their mythos model which is one of their their high speed that's really trained focused on offensive security to a lot of corporations like personal Amazon fire fox and various browsers and they were able to identify a lot of new exposures that humans hadn't identified before in the past. So this is definitely having a major impact on trying to shore up the vulnerabilities and exposures out there the major concern though is that there's these what are called open weight models you know from China and other countries that do not have these essentially ethical restrictions and can be downloaded effectively on any site which I'm an advocate for because if you shut that down the United States then you know the rest of the world has access to these models and defensively we don't have any way to really prevent that other than going with the frontier models which you know don't allow us to actually do this so it's a it's a very complex situation in AI's moving at such a fast pace that it's really created a turmoil in the cyber security industry around how do you defend appropriately against these in the future and everybody's rethinking how we look at cyber security as of right now in the future I mean what seems concerning is that at least for in these examples a no open AI reportedly deactivated one of the models so that's that's off but for an open source model there's no telling who and where and how many times that model has been downloaded so there's no way to deactivate there there's no sort of kill switch that that is even possible is that is that right that's that's absolutely right and what's more concerning about and what this is actually done is you know our security programs were designed to handle the the normal amount of thresholds of hackers out there so if you look at hackers there let's just say you know 98% of them are you know generally skilled hackers but they're not super elite well what's happened with models is it now you know creates a 98% of just average hackers and makes them elite hackers. And now you have a much higher population of elite hackers that are able to breach systems. And these models are very, very good. And they have, you know, study offensive capabilities. In fact, my book was, I got a class action lawsuit for my Metasploit book that I wrote and Anthropic uses to train its own models to figure out how to hack better. And so these models are really selective on offensive capabilities. And there's no way to track it. Anybody can download it. And literally, you know, you can be a kid out of high school that has barely touched a computer, just played video games and say, hey, I want you to hack this company. And if you have it set up properly, it'll start hacking that company for you. >> Wow. David, hang with us for just a second. We have more news on this topic coming out of OpenAI. Kate Rooney has a detailed success. Okay. >> Mike, so according to Reuters, citing two people familiar with the matter, OpenAI has found other instances in which this autonomous agent you guys have been talking about escaped the containment it was in, this closed environment or sandboxes, some call it. And it is part of this expanded investigation into the hacking incident in which the company OpenAI, the AI agent hacked into another startup hugging face, the investigation, according to Reuters again, we have not heard this directly from the company, we are reaching out. But is a part of this larger discovery process, larger investigation, it says that goes deeper than initially thought there. They've been investigating the high profile hugging face hack, talks here about two more, multiple more hacking incidents, as part of that. It has not been previously reported they say that this is a basic expansion, more issues in OpenAI, spokesperson two Reuters referring them to the company's earlier statement, which says that the company was reviewing broader activity, but it does go as these companies now, retroactively start to look at what happened and it appears to go deeper than initially thought guys back over to you. >> Kate, thanks. Kate Rooney. David, what's your take? I mean, it does seem that they're going back and they're looking for these instances, but there are more and more being found. >> Yeah, well, I mean, the good news of this is you're getting hacked by a legitimate company that's trying to secure systems. The bad news about this is that it's showing the exposures that we really have with this autonomous hacking. Something that would take a normal human, let's just say weeks or months, can take seconds, or a few minutes to rip through computer security systems. It's unprecedented. It's things we haven't seen before, in the history of cybersecurity or technology. These models, you have to think about it today, we're scared of the mythos like models, and three one which just came out recently, which has near parity, the mythos out of China, but look at six months or a year from now. These things are advancing so fast and so quick that it's going to continue to get even better at hacking into computer systems than we could ever possibly imagine. There's a lot of discussion on what do we even do because we're not going to stop the progress of these models getting better. So how do we shore up our defenses in our corporations, the country, critical infrastructure? All of those things are on the open table right now, but there's really no good answers at this moment. >> Yeah, obviously kind of a moving target at a pretty high speed. David, thank you very much, David Kennedy. >> Thank you so much. >> Well, the S&P 500 basically flat for the month of July. That doesn't tell the market's whole story. Big moves out of tech and into other sectors and even other parts of tech. So where does that rotation trade stand right now? That's next on overtime. (upbeat music) >> Welcome back. We've been talking a lot today about the rotation we've seen in July, energy the best performing group as oil surged 20% in the month. The sector once again higher today, earning some Chevron helping, Exxon however lower on its results. The only name in the sector in the red today, but it's not only energy, financials and staples also moving higher in the month of July. Well, tech was the worst sector down 4%. >> All this rotation that's gone off for the last couple weeks, you know, we've talked about it in terms of the broadening, right? So mega-cap tech underperforming the majority of stocks working this plots that to some degree. It's S&P 500 relative to the equi-weighted version of the same index. So when it's rising, the market's narrow, right? The biggest cap stocks are driving things when it's declining as it has been for a few months here. It's broadening out and obviously the equi-weighted version is catching up. I do find it interesting where we sort of found a little support here in this relationship. It's essentially the lows from the first quarter as well as the highs from the latter part of 2024. Whether that matters, I don't think people are really buying this thing, but it is interesting. And I think for the overall index to make progress, this line has to go up. It's just the way the math works. I do want to point out some other big versus small questions. Here's two-year XLGs that top 50 stocks, largest 50 in the index. That's a small cap, Russell 2000. You can see it kind of come to a similar place after this massive, underperformance of small caps that has been somewhat ameliorated here. - Very clever, Mike. - Yeah, for now, we'll see. (laughing) - The color is red. - We try to be lit around you. - Time for a CMBC News update now with SEMA Modi SEMA. - Hey, Melissa, here's what we're watching. Lawyers from President Trump today said they will appeal a federal judge's recent order that blocked his IRS settlement that gave him a broad tax immunity and to set up the $1.8 billion so-called anti-weaponization fund. The judge initially avoided the settlement, calling it a bad faith effort to manipulate the legal system. In other news, authorities in Arizona releasing redacted versions of two early ransom notes in the Nancy Guthrie kidnapping case, saying they hope that someone will recognize the writing style today's show, "Cohos of Anna Guthrie" released a new video appeal to unknown kidnappers earlier this week asking them to make the right choice and help find her mother. The commodities futures trading commission today, imposing a three-year trading ban and find former Congressman George Santos, $35,000 from manipulating prediction markets. Santos allegedly placed bets on whether he would attend the state of the union address earlier this year. When he knew he would not, Santos's lawyer said in a statement he agreed to resolve the inquiry and put the matter behind him. CMC and Calche have a commercial relationship that includes customer acquisition and a minority investment. Mike Melissa back to you. Thank you, CMC, Modi. Well, Bob Dylan once sang the first one now, will be later last. Later be last. Thank you for looking at me. Yeah, it says Dylan syntax for you. Yeah, definitely not me. I'm full of music. Maybe he was talking about Sanctus, the stock was number one in the S&P 500 for the first six months of the year. Up 850%, but times they are changing. It's 500th in July, losing almost half its value. So where does that leave the memory trade heading into August? That's next, Unclosing Bill Over time. Welcome back to Closing Bill Over time, live from the Nasak Market site. Major average is higher today, 275 points for the Dow, 710 for the S&P 500, 1% gain for the Nasak for the week, 1% gain for the Dow and S&P 1.5% for the Nasak. It was also an interesting week for the Mag 7. Excuse me, Apple having its worst day. And more than a year, Metta also got hit hard after earnings, but Amazon and Microsoft were clearly the big winners for Microsoft up 21% this week. That's its best week this century. Let's take another look at some other stats from a top seat, "Turvy July." Check out the top performers in the S&P 500, Cognizant Tech Accenture Paypal and Workday. Also, for stocks, it was the best month ever for Paypal, the second best for Accenture and Workday. However, those names are still deeply negative for the 2026 after their horrible start of the year, including Cognizant Accenture coming in at fourth and fifth worst performers in the entire index during that time. Now, the flip side, July's worst S&P 500 stocks, Sandisk, Corning, KLA, Marvell, all falling more than 30%. It was the worst month since 2002 for Corning and Marvell and KLA's worst month since 1987. Yet, even after those steep declines, all four still outperforming the S&P this year. Thanks to their huge runs in the first half. In fact, Sandisk was number one, the number one performer in the index during that time. So, where does all that leave markets as we begin August? Joining us now is Adam Christopher Lee. He is founder and president at Vital Knowledge. Adam, good to see you. - Thanks, Adam. - So, a month ago sitting here, we might have said, look, what this market needs is for this crazy overbought, crowded momentum stocks and semis to really cool off. Maybe the rest of the market can hang in there. Did we get that? And I guess maybe we got some help by this massive unwind of a hedge fund. - Yeah, no, you definitely did see up until the last few days, the eco-weight S&P performed quite well and you saw a tech kind of go through this, you know, pretty violent, violent on month. And now it's kind of come to the end of the earnings season and I think there's a lot of reassessment at taking place as to where things stand fundamentally. Also, technically, you know, obviously had a lot of technical pain this week. - Do you feel like the after having all these earnings reports? Do you feel that the AI trade is firmer than it was a week ago or weaker? - I think it's very, very nuanced right now. I think from the demand perspective in the near term, it's as strong as ever. The major cloud platforms, Azure, AWS, Google, all had explosive growth. Every single company that sells into data centers, whether it's industrial company, semiconductors, all of them are as well as ever, the numbers are terrific. But you still have, I think, the nagging concern about how this is all gonna get funded. Free cash flow numbers were in the red for Amazon, for Google and pretty much break even from Meta. The amount of equity that's being raised, even if debt is being raised to fund this, the data center boom can continue in perpetuity and markets are showing some indigestion. And so I think that's still the real question. Can this cat-bex boom continue at the present pace, given where the cash flow dynamics stand right now? - You mentioned the sort of technical side. It's really interesting setup in the sense that you look at, uh. amazon microsoft where you've seen some relief and flows recently you know those are tough charts right there kind of down trenches a lot to prove their uh. on the other side you see the beat up samis still up big for the year but they really look like uh. they're going to be challenged to challenge those old highs which we now know were set using a ton of leverage and a lot of just pure momentum strategy no definitely you know it's interesting in some some of these i'm not just especially memory the p_e_s_ are among the cheapest in the higher market clearly suggesting that markets are worrying about a pretty steep cyclical decline whereas many other names leveraged to the data center bloom like especially the data center linked industrials so have very large multiples right at that part of the market does not anticipate kind of a steep cyclical decline so there it's it's not clear by any means that you know this week if there was a relief rally and people felt a lot better but i would say there's as much debate confusion controversy as there was you know on on one day as it is today i mean for for the whole a_i_ trade you also raise the point that it all depends on open a_i_ not all of it but mean a lot of it is at the center of this whole sort of you know universe absolutely at the open a_n_ and thought crystal kind of the two sons around which the entire industry revolves there's a sense that compute is is fungible and so if something were to happen to those companies and it couldn't fulfill their obligations are to be someone else a step right in uh. perhaps over time that that might come to pass but so much of the capacity is linked directly to those two companies that you know if anything were to occur even the i_p_o_s_ i think that i was a very critical because again that cash is going to be plowed right back into date is a construction to meet obligation so capital markets are playing a huge role those two companies in particular are still you know the the underpinnings of the entire industry yeah the source of the backlogs that that all these cloud uh. platforms are kind of all the growth we saw this corner in large part was driven by open-a_i_ and anthropic yeah you know there's still drive the entire industry i don't see you i don't think so really space x_x_ here's falling nearly twenty percent is going public in mid-June up next an early investor tells us what he is expecting for the company's first earnings as a public company next week and if a looming lock up exploration could be more pressure on the stock closing by lower time be right back let's get you set up with next week's trade on the economic calendar will get the i_s_m_ manufacturing and construction spending reports on monday durable goods factor orders and jolts are out on wednesday excuse me Tuesday on wednesday brings eighty p_n_ plumber uh. i_s_m_ services and the weekly mortgage applications Thursdays the weekly job is claims of course and the big item is friday's july jobs report it'll be another massive week of earnings as well starting monday with paleteer and on semi Tuesday brings caterpillar murk fizer mcdonald's a_m_d_n_ space x_'s first report as a public company disney elie lily and sandisk are the highlights on wednesday air being be lift and insta carter out Thursday and the week loads is that with underarmour wednesdays and take to interactive let's get more now on space x as we awaited first earnings report in the august six lock up exploration the stock closing today one hundred eight dollars a share that's well below is i_p_o_ price less than half of where it was at its peak on june sixteenth with us now to discuss all of this and wars chat Anderson found her in c_o_ space capital chad great to have you were early investor in space x_'s and as we were discussing you have installed a single share so far right okay i have a chance to yet because the lockup has happened but uh. i'm not planning to not either uh. the reasons why we invested our uh. still hold this is a long-term play for us i mean so seven weeks since the largest i_p_o_ in history and what has happened the company has uh. flawlessly operated they've nazback one hundred inclusion they had a successful test flight of their starship vehicle uh. which sets them up very nicely for their next test flight which should be orbital and um. they should be catching the starships i mean this is as we've talked about before very integral to their future business their connectivity build out their a_i_ build out so uh. the company is performing incredibly well and from our perspective it just got more affordable the uh. among the things that will actually be able to dig into when we get the results is is starlink and i just wonder what your assumptions are in terms of how big and how fast uh. starlink can become you know you know i guess even more uh. relevant platform and we need to spend a lot of skepticism about the direct to sell and all the rest so i mean uh. connectivity is the engine by which they're funding their cap ex spend and their build out right so it's incredibly important that's one of the things that i'm going to be watching is um. is this self-funded cap ex uh. uh. a program continuing right is that ratio still holding itself they had ten million subscribers at at IPO from uh. with a pro you know a product that didn't exist six years ago they're expecting to get to twenty five million by year and that's going to be supercharged by starlink mobile and they're direct to sell program a lot of that again relies on starship they successfully launched twenty of v_3 direct to sell satellites they tested those they seem to be working very well uh. so i think we'll hear more about those as well so that's pretty exciting so that's becoming online supercharging uh. subscribers adoption growth so and then that's the engine that again is is is funding their a_i_ build out so it's like it's like that the car business for test love funding everything else uh. i'm wondering also are you concerned at all about amazon's uh. desire to enter the direct to sell also it would be a directly you know direct competition this is a huge opportunity i mean i think there's more room for even more players and i think we're gonna see some so uh. what's really interesting is we're starting to see founders from space x go off and start new companies and do interesting things so they've gone there uh. they've done their special forces training uh. they are uh. are trained in the algorithm you know to build things from first principles and we're starting to see that diaspora happen and as a early stage investor we're investing a lot of these companies which are going to be bringing more of these solutions online so you mentioned that you know since the i_p_o_ the stocks become only more affordable to me all that really says is you know that initially targeted valuation didn't really bear that much resemblance to you know when anybody had put real money into the company before right and eight hundred billion was the last time real money is invested well i'm excited to see how things re-calibrate right and so uh. certainly there's uh. we've got uh. trailing revenue multiples will see how things shape up uh. because things have changed quite a bit not even through the i_p_o_ period from the s_1 perspective to actually going public things change significantly they doubled their revenue run rate essentially so uh. excited to see where things actually land i do expect to see uh. continued loss like we've seen across big check as people continue to invest uh. heavy into this ai bill but uh. no i mean if they are self funding it continue to do it with a connectivity business then you know the future is bright for this company because who knows where there's a lot of nervousness and concern about uh. where the models go from here who knows which one's gonna lead every quarter there's like a new leader on the leader board there's also a lot of push for open-weight models and things like that and talk about these models going to to commodity into zero uh. but that isn't the value doesn't disappear right it goes to the proprietary data and to the infrastructure that the intelligence is running on so we are uh. ai_p_o_d_ we're very bullish on this opportunity and so we think whoever owns that infrastructure is going to benefit greatly check good to talk to you thanks to a lot chai Anderson we have new developments on the fed when closing bell overtime returns as america celebrates its two hundred fifty at the anniversary c_n_v_c_ spotlights the companies that rose with the nation and continue to shape its future which incredible to think about the fact that we've operated across four centuries of american history and through all of the innovations that have occurred uh. during that time both for the nation but also for the financial system i'm robin vince i'm the c_e_o_ of b_n_y_ in seventeen eighty nine president washington was inaugurated out of the hamilton was the first secretary of the treasury just installed in his post how to believe in establishing the credit of the nation and ensuring that the united states would be able to come together as one country and he turned to the bank of new york at the time and b_n_y_ lent the money to the nation two hundred thousand dollars the first ever loan to the united states uh. as a new nation to be able to go about the business of building a country if you think about the same principles that he brought to the bank of new york it was to be resilient to be an innovator to be able to participate in that fledgling country of the time and to be able to power it forward and then as the merchants gathered under the button would tree a few years later in seventeen ninety two the bank of new york was actually the first stock traded on the exchange and it was really a moment of crystallizing that beginning of the capital markets uh. of that new nation we were part of supporting the build out of the area canal we supported the build out of the subway system we launched the u_s_ treasury clearing through computers uh. here in the united states it's that story of innovation the reality that when you bring a group of people together with common purpose and setting a mission wrapped in freedom and the opportunity to innovate you can do amazing things that is the story of the United States of America, and in a way, it's the story of the Bank of New York too. [Music] We're showing all the dramatic moves for the month, the top and. That's crazy month. Yeah, within the market, basically just kind of a seesaw, and then the S&P 500 was the Fulcrum and the Middle Barley move at all, and here we go as we tried to absorb a lot including. Pretty to mulchers press conference from Fed Chairman Worsh, and now we have a potential new twist in Worsh's 10-year-old Fed Chair. The New York Times reporting he's considering reducing the frequency of Fed meetings. Let's bring back Matt Peterson for some thoughts on this, Matt. Hey, well this would be a pretty big change if what the New York Times says is right. Their reporting is that the Chairman threw out the idea of reducing the number of times the Fed meets every year, statched thoroughly. They're only required to meet four times a year so they could do this in principle, but it would be a pretty big and dramatic shift in the way that the Fed operates. And if he's doing it ahead of this task force report that's coming at the end of the month, which is what the New York Times is suggesting that too, it would be quite a big acceleration in his plans. Right, currently of course eight meetings per year. One thing that occurred to me, Matt, is that when the Fed is in the process of shifting policy, it's in a tightening campaign or an easing campaign, it quite often makes a move every meeting. So it's like quarter point, pretty much every six or seven weeks, and you might need more jagged or larger moves if you were meeting less often. Yeah, that's right. And just think about the kind of volatility that we've seen around the last meeting cycle. The combination of the Fed, not telling you where it's going, and then meeting less often would probably produce pretty dramatic and volatile results for the markets. Or the other possibilities intra-meeting hikes or intra-meeting hikes. That's true, which have happened for sure. It would be equally or more maybe volatile for the markets. But it is, I mean, you mentioned the task force, and it is surprising to hear this report come out way before. I mean, you would think that this would be squarely in the sites of the communications task force. Can Chairman Worsh just say we are going to meet four times a year, and the committee doesn't necessarily have to buy in? It's a good question. I suspect he would need the board's -- excuse me -- the committee's vote on that matter. The Chairman has a lot of power, but by and large, it's all delegated from the rest of the committee. So I doubt that he could do it unilaterally, and it's also the kind of thing he wouldn't usually want to do unilaterally. That's then kind of the whole message of his early tenure is that I'm getting the rest of the Fed to move along with me. So for him to come out and do this on his own, would again it be pretty dramatic? Yeah. Matt, thanks very much. Well, he has said he wants the Fed to be more in the background, and less of a main character and a prime mover of the markets, I guess this would be one way to do that. And we'd find something else to cover, you know, for -- for other Wednesdays a year or whatever it is. All right. That does it for overtime, happy New Week. That's when he starts right after this quick break.