Closing Bell Overtime: Markets Look Past the Noise 9/11/26

0:00It's NFL kickoff time exclusive NFL team valuations with sports business expert Michael O's A.N.F.L. is by far the most profitable league NFL team valuations now on C NBC dot com slash sport. The Bell is bringing in to the training day at the NYSE the Cantor Fitzgerald relief fund bringing the Bell and not the Nasak BGC group closes out the trading week. Welcome to closing bell over time we are locked from studio B at the Nasak market site. I'm Melissa Lee alone Mike Santoli stocks closing out the week with gains the Dow up around 500 points S.B. 500 up nearly a percent the Nasak gaining 1 percent. But those gains not quite strong enough to erase weekly losses the Dow down more than a percent the other key index is off a bit more than half a percent for the week stocks able to get a lift as long term bime yield today old relatively steady following the CPI data being pretty much as expected a decline in oil early also easing the pressure on stocks although oil prices did firm up over the day.

1:00And the big stock story of the day what happened to Oracle a jump last night after the results right here in closing bell was higher at the open but all those gains faded we got much more on that story and the story behind the stock fade right after this but what's your take on this on this market year in response to CPI it seemed like almost like a cyber leaf here. Well as at least initially and I think it mostly carried throughout the day mostly I think it's the end of the suspense about what's happening next week. Clearly the bond market race to that moment of pricing in a rate hike and probably a couple more after it. The CPI data just warm enough on the court to ensure you get the rate hike but not necessarily really changing the overall trends you didn't have to rethink everything in general I mean this market it tries to stay in the game it's just not really willing to necessarily reprice on an index wide basis even though we're kind of watching what's going on with oil and yields. I will grant over the past five or six weeks sentiment has cooled a little bit you know people were maybe over positioned for the a. I boom a little while ago after earnings

2:02and now it's kind of dimmed somewhat so maybe that means risk rewards better but it has felt tenuous over the course of the day the majority of stock did not add to their gains in the morning and it did sort of soft up so it's a low conviction rally. Yeah yeah and it's worth noting the two year yield did did to stay firm. Absolutely. Throughout the session in response to the expectation that the feds will in fact hike and it's a ten year yield so five percent is still sort of insights and we'll see what happens in the weeks. It is I always say it's like it would be unusual if you're kind of that close to the hot stove and don't touch it and see if it burns but you know interestingly the market with this grind higher has been able to to some degree make its peace with these levels we'll see if that could last for much longer. All right let's get right to Oracle as that stock reversed lower as the street digested its results and ended the week down more than five percent I think street mobility joining us now with more seem a lot of questions today Mike and Melissa about this intraday reversal the excitement around Oracle's cloud infrastructure business which saw record jump in sales initially sent the stock up by around seven to eight percent but once the earnings

3:05calls started we started to see shares pair gains on the company's conservative guide in a note to clients this morning Morgan Stanley says gross margin pressure and a modest EPS race for the year leaves us needing more evidence on the economics and visibility around the infrastructure build out the other concern that in Vannell has been talking about oracles data center pipeline oracles co CEO Clay McGurrick addressed the rising political pushback on data centers acknowledging that some sites like New Mexico or is dealing with permitting issues but he really made the point that the delays at this point are not emblematic of what oracles seeing across the nation with about eight hundred fifty megawatts delivered in the in total for the first quarter but is still a wild card guys as well as yields the speed at which treasury yields are rising makes oracles billions of dollars in debt more expensive to service we did see oracles five year CDS why didn't just a bit today guys all right see my thank you see my moody let's not bring in Brent fill of Jeffries for more on this and you recall Brent joined us right after the earnings cross Brent great

4:06to get your take your fairly constructive yesterday on the print you said peak negativity was going into the print here and this is sort of a sigh of relief here we are the stock is down so what's your feeling in talking to clients day investors today about about the quarter and what it means for oracle hey Melissa saw clients all day and London and I would say the feedback from institutional clients here has been that it just wasn't enough and they're still concerned about the balance sheet there's also concerned relative to do I own oracle or can I own micro sawd and the gun and Google who seemingly are any potentially better position so I think there are multiple factors there Wayne on story at this point so Brent what would you point to as potential proof points I mean the oracle has traded a little more like kind of the neoclags than it has you know one of the hyperscalers with the more resilient business model but from here on out they're going to do the spend for now they think they

5:10have the capital necessary they seem to be kind of on this treadmill that's running pretty fast but so far they're they're staying upright yeah I mean I think you go back to oracles core value prop at the beginning of this whole infrastructure build with software right a double digit growth software business with a mid 40% operating margin and now they've chosen to go after infrastructure it's lower margin it's capital incentive requires a lot of funding they they have you know raised the potential issue for you know additional equity raises so I think there's you're going from a story that had you know again lower growth high margin to a higher growth potentially lower margin business and then the balance sheet quite honestly just a mess right now relative to other companies we cover right 130 plus billion debt 30 plus billion in cash and you know 30 plus billion in in operating cash low and they've said you know free cash flow is going negative so it's

6:11a short term trade-offs and as we said you can't look at this over the next day two weeks you have to look long term they will be one of the few vendors that helps build out the AI infrastructure boom and we think we'll look back and there's only a handful of companies that can really reap the reward so Oracle has been through transitions like this before Larry Ellison has caught every other side of these tiktok chips and they've been the survivor and again I think most investors are just super skeptical in my entire group everything is trading below all the other stories because of what's happening do you want to own the tech companies that are spending the capital or receiving the capital and Microsoft Amazon Google Oracle our spending at the capital and that's why infrastructure all the liquid cooling to infrastructure utilities to land the data centers they're all outperforming because they're receiving the capital so I think this is just more of a general fear of

7:17a their spending why do I need to be there and when does this free cash will switch and then secondarily you have an application business that could be under duress from AI with the you know likes eventropic and you actually build some of the applications that Oracle one sold right so there are kind of multiple issues that are weighing on the group right now Brian great to check in with you again thanks a lot Brent Thel Jeffries. Group price is easing a bit today but still hovering year hundred dollars a barrel meantime diesel prices are hitting an all time high Pippa Stevens is here with more in this record move higher Pippa. But let's start here with the oil because we did just got confirmation a little bit ago that the Saudi Arabian east west pipeline has been taken offline after multiple attacks so the ministry did not say the extent of the damages they did say that there were some injuries and that they just posted that they are some of the damages and the injuries the human injuries are currently being addressed but this of course has been a lifeline it's about seven million barrels per day capacity and they had increased their exports out of Yon boosts and south going through the Red Sea to Bob Bell Mandab as is chart from Kepler shows

8:17you can really see how much more oil was going south but now the hooties are targeting that region as well we had seen a little bit of a pickup here to start the month but then as of Sunday that has now all been halted because the hooties have now advanced and taken this port city of Mocha along the Red Sea so that does call into question now it's not only the straight up for moves but now also very much Bob Bell Mandab both of those are at threat and that's why we're seeing this spike in oil prices we started to hear rumors about the east west pipeline being targeted yesterday so that's what contributed to that very big moving yesterday session so that's why we're still in the right here despite this pipeline not being taken offline moving over to diesel we did top six dollars for the first time and that of course it's a very tight market and there doesn't really seem to be a solution for that in the near term because while we're now beyond the peak gasoline season we're actually heading in to peak demand season for diesel you can see a number of states including California now just two cents shy of eight dollars per gallon on diesel also Nebraska, Kansas, Iowa, Minnesota, Missouri a lot of these ag sensitive states are all seeing record prices today in terms

9:18of that pipeline is there any sense as to how long it will be offline if there can be repairs made and brought back online so they have not disclosed the extent of the damage or the type but there were other reports it was to pumping infrastructure that's what's above ground and along the pipeline that would be an easier fix than if there were damage to the pipe itself but we don't know of course the Saudi Arabia, Saudi Arabia built this pipeline in the 1980s in response to the Iran Iraq war and so you got to imagine they had some foresight and thought about what would happen to different pumping stations also if it's a pumping station it's not clear the whole thing would have to be taken offline you know indefinitely because you could still potentially throw oil flow oil through but just at a lower pump rate. Hey Pepe thank you. Our CPI data pretty much as expected but the 10-year yields only slightly higher in reaction shorter term yields did go up more did the bond market already price in the news and an expected rate hike Rick Santelli joining us now from Chicago. Hi Rick. Yeah a couple of numbers PPI and CPI made a big difference on probabilities let's start at the

10:18beginning this morning you know I understand that yes sir he's PPI was definitely warm and today CPI very close to expectations but I frame it a little different I think the monthly numbers were hot and the core was not you know year over year core 2.4 is a 5.5 year low and we're making progress as we see on that chart well off of the 6.6 high now well should the Fed go well now let's look at what the markets say look at 2's and 10's on one week wow it's pretty clear two year yields on the week well as they sit right now they're up 25 basis points on the week the 10's almost 20 basis points on the week so 7% move on the 2's 4.5% move on the 10's major curve curve flattening which actually is somewhat normal it's definitely somewhat normal when you believe that a cycle of potential heights may be coming especially when the first one right around the corner and if we look at what's going on with oil and 10's you know today especially Mike you know

11:18first of all oil is up 10% on the week 10% on the week and as we look today they were tracking but in the last three hours when the pipeline news you just talked about came out you could definitely see the effect that's what turned yields and attends higher they were actually a little bit lower before that and now here we get to the Fed fund story this is a one week chart of these Fed funds forget percentages for a moment even though I know they're at 86% for Wednesday's meaning what you want to see here is how on the beginning of last week and the end of last week we sold off yesterday we sold off today we sold off every time it sells off percentages go up we've basically gone from 50% to almost 90% and I don't see that there's enough leverage in the data out the only real data points out that are big is Wednesday's what retail sales I don't think that has enough leverage to change the percentages so the first hike here is most likely built in the cake back to you yeah for sure and I guess you know the debate is whether 50-50 is a tougher market to trade than

12:24just kind of knowing what probably comes next and then you you figure out the paths from there Rick as we talk about all of this the interplay with oil and treasuries and everything corporate spreads have remained quite tight I know there's some exceptions to that and in some parts of tech but I was just looking at investment grade domestic yields are just now not even making through your highs right so it's almost like you know companies have not yet felt the full effect and maybe they won't have to yeah no and the last guys really pointed out the balance sheet I'm some of these companies on the build out making some investors a bit nervous the spreads have acted well the break evens have acted well real rates have moved up which really augurs the question that the fed really needs to deal with and that is should the conflict in middle east and should oil break down let's say to over a couple months after that to sixty five dollars where will rates go and that is the silver dollar question Rick thank you Rick Santelli for what the fed may be thinking for next week let's bring him Steve Leesman now Steve I don't have much there's not much distance between

13:30Rick and I on this on this question but here's the deal Melissa as far as I can tell which is that the extent to which the Fed can count on oil prices coming down you remember that over a period of time when oil prices shut up the president with step forward and say we have an imminent deal with Iran and that would sort of stop the shorts in their tracks from saying you know what I'm going to I'm going to sell oil long here that's not a possible anymore the president's not saying that and the outlook for policy augurs I believe for higher oil prices at least for a period of time and the Fed has shown that it will look through one off supply shocks but I think one of the things that will underlie the decision next week that a decision to hike is that the Fed can't count on anything being one off in the Trump presidency here I mean I guess it's sort of the the gamble that it will in fact be transitory and we saw where that led once upon a time before Steve to just sort of assume that something is a shock but the other side of it is that this this is not a monetary

14:31problem this is supply problem so even if the Fed does something it doesn't ease what is really driving the inflationary polls right now I think that's right but I do think the Fed has to over some period of time address a supply shock with influencing the demand side of the economy Paul Volcker showed he needed to do that in in the early 80s and the late 70s and that's what he did and it was effective back then if it sticks around long enough when the see you get these anchored or shall we say entrenched inflation expectations and that's where we're at we're plus 3% on most of the one the one three and five year inflation expectations so the Fed wants that that plus there's a pretty substantial credibility question here both for Fed Chair Worsh and the Fed itself to show the bond market to show markets in general to show the public that it has its back on this inflation problem yeah Steve thanks Steve Lisman by the way that was the University of Chicago financial

15:34mathematics program bringing the yes ebo close market having all kinds of fun doing options math and ringing the bell I mean the same time probably off the top of their head all right stocks bouncing back today even with oil above a hundred dollars the 10 year near 5% in yield and the Fed back in play with the S&P 500 still up about 12% this year earnings remaining strong is this resilience or complacency with us now as Keith learner truest wealth and chief investment officer and chief market strategist Keith good to see you hey Mike good to see you guys yeah let's start right there I mean you know this market had a pretty decent head of steam through earnings season we got a lot of reassurance on the the AI theme the tech earning story since the peak of earnings season it's been a little bit more subjective to you know other other influences from the macro so where does that leave us in terms of the risk reward yeah well yeah I think you kind of laid it up pretty well I mean one of the main thesis is that we've had as we've moved from this earning driven bull market which was really positively skewed over the earnings season this macro market which as

16:35we've seen the last couple days last couple weeks it's much more mixed and we're seeing that we reflected in price action which is really just more of a grind right now Mike so overall I still think the positive is the the uptrends are in place I still think we have to give this bull market the benefit the doubt you know but you're in between like as far as you know a lot of the indicators they're moving towards oversold as an example about 31% of stocks above the 50-day moving average not deeply oversold you know valuations have reset down to about 19 multiples so that's good but which lacking right now is is clear leadership and to be fair this is pretty typical of a midterm election year as far as more of a grind on this period and then even next week if the fed raises or hikes rates as the market's pricing in when you look forward after that the near term tends to be a bit of a mixed picture as well so you know I think that's what we're in for I think during this period we still think that you know leadership likely returns to tech and you all seeing these higher rates bite in some areas you've seen the equate index relative to the S&P you know roll over a bit you've seen about small caps down about 5% and dust fuels down as well

17:39so you're just seeing it as you mentioned earlier in the program just more internally focused at what point do rates change your sort of bullish outlook to the end of the year I mean I understand that you think it's going to be a grind that there's going to be some hurdles there but ultimately the path sounds like you think it's going to be higher Keith 5% in north of 5% does that that sort of puts some grit grist in that and make slowdown yeah it's the magic question you know when we were probably here a year ago or six months and you talk to strategists I think you know people thought 450 would be it then it was 480 and I mean look at the last couple like really last three weeks we've seen oil prices up 25% the 10 you go from 4.6 to 2.5 and the market at the headline level has this basically you know shaken it off so I don't know that there's a magic level I think some of the the discussion that was just discussed around credit spreads or important credit spreads at this point are very well behaved but I do think it's the character of the market that changes and we're seeing that so you know we had a lot of discussion about the broadening trade as rates continue to move higher

18:41if they do move higher that will continue to be under pressure you're seeing housing and housing related stocks near the low you're seeing utilities and read so I think it's really you know the character of the market changes I think that also bodes well for return back to tech leadership during this kind of grind process so from one perspective Keith you know rates are a potential hurdle for stocks and maybe they pressure valuations if they go much higher from an investor's perspective I guess you have to ask the question if they're presenting you with some value given these initial yield levels I do note that you know equity exposures at the retail investor level remain very you know it's pretty pretty elevated versus history a lot of that's a market appreciation there's not a ton of love for bonds cash levels even down I have those data from you know be a private client and I wonder what you think you ought to do with that allocation now that yields maybe give you some cushion here yeah so we're still maintaining an equity overweight

19:42partly because it's an you know an inflation hedge as well and you know as we look into 2027 the earnings estimates which normally start to go down this time of year are still moving up but to your point we do see that there is value in bonds enough view at 5% and especially even after inflation as well the other thing we've done recently is you know stress tests and even if bound yield on the 10 year go up to say close to 5.50 because that coupon is so healthy on a one-year forward even if we got to 5.50 the overall return would be still positive and you know our view is more likely that you know even if we have a little bit of an overshoot that yields are probably at the higher end of this range so we do think there's value there even though you know you may be subject to a little bit more of an overshoot you know well in some ways if rates keep moving up I think it'll be self-correcting because you'll see some of those other areas of the market start to buy it as far as the economy where we're seeing already you know as I mentioned in the housing market which is still you know still being weighed down by these higher rates. Keith great to speak with you thanks have a good weekend thanks to much guys hot topic from Wall Street to Silicon Valley

20:45this week has been the alarming claims that AI wiping out humanity is a real possibility and maybe only just a few years away but now a summer shooting down those claims is gross exaggerations will have more in that story coming up on overtime. It's NFL kickoff time exclusive NFL team valuations with sports business expert Michael O'Zania NFL is by far the most profitable league NFL team valuations now on CNBC dot com slash sport pushback over AI getting some pushback itself after a former anthropic researcher warn of a real possibility that AI could wipe out humanity within a few years but some in Silicon Valley are firing back including altimeter capitals Brad Gerson or calling those claims hyperbole and rejecting the idea that threats aren't being taken seriously enough here's what he had to say earlier on the halftime report. It's a false narrative I think it's a strong man argument it's simply not true every single person in Silicon Valley has kids we take

21:46this very seriously we want to usher in a safe world of AI but that doesn't mean that we need to stop shut down over regulate because of the fears the hyperbolic fears of a few who have their own political agenda I do worry of these massive distillation efforts because I don't believe the Chinese are going to scrutinize themselves to the same states these standards that the United States is going and I don't want to hand our adversaries capabilities that we shut down ourselves. The worries over China were echoed by President Trump last night saying that if we don't win the AI race we're going to be put in a very bad position those are his words. I've heard a couple conspiracy theories that maybe it is the frontier models the companies themselves putting this out in order to make themselves look better ahead of an IPO that their models are so powerful or that they're putting it out themselves in order to sort of spur action on the regulatory front so

22:49they actually have a firm regulatory framework with which to work. Yeah I mean you can sort of seem scrupulous and public-minded at the same time you're highlighting the fact that look we built something that is about to maybe escape our control it's such a big we don't know what we don't know problem when discussing all these things and you don't know what the probabilities might mean I still go back to the kind of the dawn of nuclear weapons the difference was you had a couple of governments who had that it wasn't like the private sector with incentives to just build as fast as we can. I do wonder if all of this plus the data center pushback it's just kind of you know having the market question whether we're in for a bit of a of a tapping of the brakes a bit of a stutter step in the growth of data center capacity and everything else I don't know but it seems as if it's not you know we're not going to escape this I think the the S1s will be interesting the IPO filings of anthropic and open AI. But I mean in terms of sort of the caps on development it could either come from within yeah as we heard Sam Altman you know in a memo that was circulated

23:52that maybe we should sort of slow down here or it'll be from external so either way wherever it comes from that does slow down the story that slows down the timeline for these things and slows down the return on the best yeah I wonder if it was if it were explicit what liability where the liability would sit if something happens if they were on the hook yeah they would probably slow down they would actually be more controlled about it all right cash is once again king the big AI spenders are under scrutiny and money is going back to where the money is we'll look at the recent gains for stocks generating cash well that's next it's in FL kickoff time exclusive NFL team valuations with sports business expert Michael O's a N F L is by far the most profitable league NFL team valuations now on CNBC dot com slash sport welcome back to close about overtime well with some of the biggest and most profitable companies in the market spending all of what would be their free cash flow to build AI we now have a

24:54market that sees the scarcity of free cash flow and says we need to pay up more for what's left v flow is a free cash flow yield ETF it's like 50 stocks with the highest free cash flow yields and what I like about the three-year chart is how close it's stuck to the S&P 500 for almost that entire period of time until a few months ago and then absolutely launched relative to the overall market now what's inside the CTF now it rebalances every three months a ton of software I believe it are not sales forces the highest weighted stock at the moment and then as well as healthcare and energy no surprise so maybe that's of temporary as the price goes up free cash will go down but it is fascinating how the market is found its way here and I would imagine that a year ago or six months ago even the composition was completely different completely it would have been kind of the hyper scalers without a doubt now even something like micron is going to screen out as having massively positive free cash flow so we'll see if that stuff starts to get in there and influence them over months to come time now for CNBC news update with Frank Holland hey Frank

25:56hey good afternoon Melissa a letter is reportedly circulating among us house members calling for speaker Mike Johnson to cancel the chambers recess until congress passes a i safe cards that's according to axioms it comes after an anthropic researcher earlier this week said he was quitting the company and accused anthropic and open a i of quote gambling with our lives government documents reviewed by the new york timeshow contractor errors led to issues with the summer renovations of the link in memorial reflecting pool president trump has repeatedly blamed bandals for causing the polls new american flag blue liner to appeal but according to the documents the liner peeled and tore because workers use two chemicals that turn out to be incompatible the contractor blamed the issue on human error and jimmy kimms reportedly in talks to renew his late night show on abc the report comes from variety just uh just days after abc denied a story from tabloid page six claiming the network didn't plan to extend kimms contract passed 2027 last year kimms on a one year deal with abc that is due to expire in may of 2027 back over to you

26:59all right frank thank you well ahead we've talked about the decline of the atleisure trade Nike down 50 percent in the year below 40 dollars a share Lulu lemon down 40 percent in the year and even the new players in the game like on holdings down 36 percent so what will it take to see a turnaround in this sector well as the former Lulu lemon CEO next welcome back to closing bell over time live from the nasback market site stocks with a strong friday snapping a four session losing streak the Dow up 509 points the s and p 500 closing right around 76 50 slightly less than a one percent gain for the nasback but today's gains not enough to erase weekly losses one and a half percent down for the Dow less than one percent declines for the other averages a decline in oil prices clearing the way for today's gains but still up 10 percent this week and at a hundred dollars a barrel still a couple of stocks moving after hours after zeneca says its breast cancer treatment did not meet the goal in the trial it was not a statistically significant progression

28:00progression free survival rate those shares down 3.2 percent corning also falling it's filing to sell up to two billion dollars of common stock taking advantage of a stock price which is up 90 percent this year those shares down to an average check out the discretionary sector the worst performing sector year-to-date on pace for its worst year since 2022 with elevated gas prices and a more cautious consumer investors have pulled back from many of the sectors biggest names the two worst performers in the group Lulu lemon and Nike so wire customer and investor shunning these two apparel heavy weights and what signs should you look for in a potential turnaround joining us now is christine day she was lou lehmans ea from two thousand eight there's twenty thirteen currently sits on the board a western wearmaker to covis christian great to have you with us we'll talk about boots and western wearing just a minute but but what is it is it specific to the athletes your sector that there's something deeply wrong there i think both brands suffer for some structural issues you know i do believe that elit hillum particular is the right person to

29:01reengage the culture reengage the product but you can remember the cycle you know is at least thirty six months to get new product really through the cycle in wholesale and he has to rebuild five years of culture and a breakdown of going away from sports going away from small specialty wholesalers where really brand creation occurs so i think it's going to take a little bit of time but i have faith in both the size of Nike and frankly the size of Lulu and what i would say about Heidi joining is we should all want her to be successful right i mean and i think she deserves all of our chance um this is her first gig as a CEO right she's always followed everybody else's direction and so this is a chance to see what she can do she certainly has the background in depth of experience but you know you've got to be a culture fit um but she certainly has an eye for the segment and i think we should all get behind her there's too much to lose there but the size and scale of Lulu and Nike when you compare it to the viewories and aloe both good companies decent product i would say that Lulu still is ahead in the product fabric they've

30:04fallen behind in fabric innovation and some of the fashion you know in that but to me those are easily fixable problems that with care and attention um i think that Heidi should be able to get ahead of you mentioned Nike having straight away from sports and performance and i guess arguably Lulu has also kind of diversified the products chasing things outside of its core presumably those were rational decisions well at least they were based on some motivation to say hey we're not we maybe we've exploited as much as we can in the core because maybe the categories growing as fast as it was before i would say you know when you you need a leader and this is where i do agree with ship which i don't agree with much right but um that you know having a CEO and if you look at Nike versus donahoe you know he wasn't a product CEO right and you know Calvin was the president of um you know Sephora and other things but he wasn't a product Perlick yeah so when you're not leading with product innovation when you start to put too much

31:06into marketing you're buying consumers you know and then if you over build infrastructure and sales drops you know you've got flow through issues so the reality is they've got to get back to um you know really looking at that product engine and really re-embracing the feminine customer you know they've done a good job with men over the last few years but they've really left the whole women's re-engaging the store partners um you know being a store operator is really really important in the Lulu business and re-engaging the ambassadors and more localized um when you centralize things you miss things like what happened with a china drum um you know situation right so uh making sure that you really um allow local to be local and the Lulu brand is particularly important is there anything about uh the period right now post-COVID back to work back to wearing normal clothes to normal non-ethnesia sort of clothes to work more and more um that is difficult for these brands in terms of stating that turnaround i do think so i mean i think when i look at the trends and why i'm so excited about to koba you know you've got this whole americana heritage

32:09aspirational you know wanting to go back to a simpler time a past that we think existed but maybe didn't really um you know you see that in the women's um shirt dresses that are popular right now you know did you include your look you see this in western you see it in um Ralph Lauren Polo which is really the look um for fall so all of that kind of speaks to this kind of heritage you know america wants to find its story and so that is and these aren't to me um trends these are really segments and you see the depth of the segment really playing out in the consumer psyche right now so you know 51% of adults listen to culture and country music it's the fourth largest streaming segment um you know you've got five million people going to rodeo and arena bull fights right you know so you know you're seeing these trends that are are quite deep um even like visits to Montana and Wyoming for instance five billion non um residents visited those states so there's a lot underneath

33:11here that i think brands embracing this whole americana heritage are going to be the winners it certainly seems like it is um you know a segment of the of the mainstream uh as opposed to some one off but there has to also be some cyclical fashion element i mean i remember urban cowboy i remember after the bicentennial people wanted to go back to a simpler time too that was 50 years ago but i think that's when you think about kind of western as costumes versus western as lifestyle when you think about the number of people that go to nascar though and um f1 that were cowboy boots you know i was just at elilangley's concert last night you had 14 000 people in juries singing along you know so i think this has some some deeper roots than just a trend great to see krisine thank you for joining us thank you our energy is this year's top top sector as oil prices jump during the aron war but the other side of the energy market is ayes insatiable energy demand up next we'll hear the bowl case for this a i build out stock even with a 25 percent gain just this week go

34:14over time we'll be right back oil pulling back today and that's giving relief to some of the travel names which are sensitive for course arising prices gains for the airlines and cruise lines but all those stocks you see here are down at least 10 percent in the past month well despite oils decline today the energy sector was slightly higher sector is leading the s and p 500 this year up 44 percent as oil continues to stay elevated and as the a i build out intensifies energy service companies are emerging as beneficiaries names like solaris energy uh infrastructure halibut and slb are all up double digits this year so should investors keep pouring into this sector moving forward joining us now is barkley's energy and tech analyst david anderson good to see you thank you for having me so all of a sudden uh everyone needs to figure out this space right you feel like it's multiple super cycles everyone needs their own energy how does it manifest from an investor's point of view from your perspective well there's really kind of two concurrent things happening at the same time one first of all we have the largest supply shock we've ever seen in history that's going to have global ramifications well into the next decade that's the first part

35:18we're going to need to see massive amounts of capital being invested just uh for whether or not you're talking about supply diversification or energy security or filling refilling s prs we see a new cycle developing a new upstream-spendling cycle developing over the next several years the second part as you mentioned is the powering ai theme that's a theme which is pervasive throughout my sector and as you mentioned solaris is one of the companies my companies are providing what we call speed to power so we we know all about the ge evenovas and all the kit and all the industrial uh turbines that are coming on the market those aren't coming on till 2030-2031 the hyperscale is don't have that much time they need it now so we're seeing it through distributed power that's through reciprocating engines through turbines they now see and we're now seeing hyperscale setting up long-term contracts with these companies uh we mentioned solaris i mean that stock is up 25 percent this week they they were they at your conference they raise their guidance right they raise full year as well they said they they already supply uh power to two data centers and they have two more sort of coming in the offing when you hear you know like from the Oracle conference call

36:20for instance that permitting issues things like that are prolonging the time frame how does that impact a name like a solaris or other names in your universe in our view that's going to push more more and more to behind the meter clearly there's a lot of issues that are out there about citing these citing these is critically important so that's what sort of where we're seeing where we're seeing this this is really technically mobile power so it can really go to anywhere they need it to be but it's not just the megawatt it's not just getting the power it's actually it's the infrastructure around it managing power is very critical that was why solaris raised their numbers they've been building out their power services business so bringing it in but also maintaining it's the balance of plant they call it it's maintaining it because the reliability is absolutely crucial to these cut to these these hyperscalers and there's big penalties for distributed powers that they can't meet those requirements you characterize it as the biggest supply shock in history the price response was not the biggest in history right we never got in terms of crude up to certainly even on an nominal level let alone inflation adjusted where we have in prior shocks does that tell us anything

37:22about the the usage intensity of petroleum or longer term what it's going to mean for the energy mix not really I think I think Marcus are just very confused at the direction to go here I think there's a general view that once this event ends whatever that looks like you're going to see an oversupply it'll be probably a temporary oversupply but we have a refining issue right now so that oil can't seem to get anywhere so it's causing this sort of strange dislocation in the markets I think everybody knows oil is not going to stay at 100 so if anything oil today at 100 is sort of a disincentive to on the group we know it's going to happen we know it's going to come down but what's interesting is that our conferences week is our 40th energy conference for 40th annual energy conference remarkably investors are pretty bearish on oil prices yet they're very bullish on oil services and EMPs so I think they see there's a big structural shift happening and I would say the biggest change from our our event this past week was the generalist investor we haven't seen that in probably 10 years this has been all energy specialists for a long time so that was a big change for us seeing this week big change in tone so when you say that you're seeing generalists now are

38:26they just starting to allocate I mean where are we in that sort of you know cycle it's a tricky setup right I mean it's a tricky setup where we are right now I think what we're seeing here is a lot of investors are coming in here they're trying to figure out what's going on they haven't been in the sector I had one investor come say I haven't been here in 10 years help me understand what's happening help me understand the companies I mean how about in Baker Hughes Schlumberj these are not the same companies from 10 15 years ago these are very different companies today they're trying to do their work I'm not expecting to say big a big build up right now what I think you're seeing here is they recognize there's a change they recognize they need to own energy energy is only 3% of the SM200 500 if it goes from 3 to 5 or 6 most of my stocks are probably doubles from here yeah I mean it's fascinating because many investors have just decided that energy stocks commodity stocks in general mostly act just as a as a counterweight right it's not so much we have to care about what the earnings are going to be it's just like you know tech goes down energy appreciates this is just a way to play this cycle I think what you're going to see I mean we're seeing it across the board so we have a Middle East rebuild happening we have international

39:29unconventional we have deep water is all starting to inflect Argentine was a huge topic Venezuela now people are all talking about Venezuela so we're seeing this kind of across the boards everybody's trying to figure how do I play this maybe the one area we're not seeing growth is in North America right now North America looks pretty flat it's really the international offshore stories which are really driving this Dave great to see you thanks for coming by thank you David Anderson coming up we've heard a lot of retailers reference higher prices as a headwind in their results but Kroger is sourcing a different kind of pressure lower prices in one department we will discuss that next and coming up on fast money on this 25th anniversary of 9-11 we'll be speaking with this year's FTNY Foundation honorary Goldman Sachs CEO David Solomon his reflections on the day and the revitalization of downtown New York 25 years later that's coming up next on fast money meantime closing bill over time live from the Nasdaq Market site you right back shares a Kroger falling today after reporting results missing slightly on revenue cutting its sales outlook as it says middle and lower income consumers are feeling pressure from macroeconomic factors including oil prices the company also said that margins will be

40:33head due to the inflation reduction act which lower prescription prices for Medicare beneficiaries that weighed on pharmacy revenue historically pharmacy revenue has been growing as a percentage of total sales hitting 12.3% in 2025 that's up from just 9% in 2021 on the day though the stock was higher it was higher on the day had been very weak obviously coming into that and this is also a factor I do believe in in Wal-Mart's last quarter to where pharmacy felt like it was a bit of a headwind probably also shows that they don't have a lot of other options in terms of getting it somewhere else in the store in terms of price staying in margins and all the rest of all right let's take a look at the key events for next week no major earnings on the calendar but we will get some economic data that includes retail sales on Wednesday housing starts and pending home sales on Thursday as well as initial jobless claims but of course the big event will be the Fed rate decision on Wednesday afternoon the decision is expected at 2 p.m. Eastern with Fed chairworsh's press conference at 230 as we mentioned the markets now pricing in a high

41:34overwhelming odds of that since the last meeting in late July the 10-year yield has gone from 4.66% to 497 oils risen from $84 a barrel to $100 employment has held steady while inflation has remained sticky by most measures the last time the Fed raised rates was in July of 2023 so remember we were on hold for over a year then you got the rate cutting cycle in 2024 and then you know maybe it's easier to forget we got three rate cuts late last year so down 75 basis points I think the question is going to be because we're also going to get the summary of economic projections projections the dot plot how many rate hikes might be priced in or at least projected all the plot has been sort of minimized no exactly and maybe it's the last one we're ever going to get but we're going to be the dots but it's a point give us plenty to talk about in terms of the baseline of expectations because it's be unusual you hear people say oh maybe to be a one and done you're very unusual for the Fed to say there's grounds for a hike but we only think 25

42:38basis points as far as we have to go I mean the markets believe now next week's in the books there's another one pretty much in the books as well and that's the remainder of the year that doesn't take away those three cuts that you mentioned before right no exactly so it wouldn't be strange if we got there for a four and a half four point six is where the two year note yield is all right that's almost a full percentage point above where where the Fed funds rate is so that would give you an idea of the markets headroom of course Kevin Moore says he wants to listen to what the market has to say that does it for over time this week fast money by the way David Salomon is in the wings he's going to join us on fast money which starts right after the spring it's NFL kickoff time exclusive NFL team valuations with sports business expert Michael O'Zanean NFL is by far the most NFL team valuations now on CNBC dot com slash sport