Protecting Your Portfolio Against Rising Oil Prices and Yields 9/10/26

0:00It'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.com slash sport. I'm Scott Wapner and you're listening to CNBC's halftime report, the podcast, the most profitable hour of the trading day. You record this live weekdays at 12 Eastern. Listen in. Carl, thank you. Welcome to the halftime report. I'm Scott Wapner, front and center of this hour. You know the big story today. Oil yields up, stocks down. We trade it with the investment committee as always, joining me for the hour. Stephanie Lake, Malcolm, et cetera. Rich, Bill Baruch, Josh Brown. I'll show you the markets just to get you caught up on where we are. We're red across the board. I'm not big losses by any stretch, but nonetheless, we are red. The 10-year topping 490. Crew topping 100. The XLE is at a new high. You just heard the mortgage rate report from Diana Olic.

1:03The home builders are decidedly weaker today in what's been a really bad week as yields continue to back up. I'll give you the first shot at this. I mean, it's pretty easy to figure out what's going on in the market. As oil goes up, yields go up and stocks remain challenged. Yeah, I mean, there's a lot of moving parts to your point. And we're all watching oil prices. We're all watching bond yields. We're all watching inflation in the PPI numbers. CPI numbers tomorrow. How it impacts the core PCE numbers. Yeah, they were all hotter. All the components in the PPI. Go into the PCE. For the PCE, we're hotter. That's the big problem. And that's why yields are up as well because of what's oil is doing. Normally, you get CPI before PPI, but now that you get PPI first today, and you get the core PCE components that are hotter, therein lies the issue. But it's not really a surprise, though. Right? And inflation has been stubbornly high for such a long period of time. So, and it also, by the way,

2:04Scott, happens to be September, which is the worst month or the year in the S&P 500. On average, the month is down 2.7%. Before you get to negative, though, October and November are the next two best months of the year. And I expect that to be the case this year because of the economic momentum, the earnings momentum, and yesterday, we had two CEOs, two bank CEOs that said very important things about the macro environment. Wells Fargo and Bank of America both CEOs spoke on CNBC, and they talked about the strong consumer, both the high end and seeing a little bit of a pickup in the low end. Credit quality is excellent. M&A activity is abundant. I've invested in banking, especially for wells, because they've been behind the eight-bought for a while on investment banking. But the most important thing to me is profitability. Both are indicating the profitability is going to continue to improve. So, I hear more about what the front-line bank companies are saying, because they see real-time what's happening to the consumer,

3:08despite all this stuff that we're actually worried about. And the one last thing, credit-default swaps, spreads, they're actually pretty darn tight. They're not really blowing out at all. And so, that's the thing I keep an eye on as well. Okay, it's going to be volatile in September. I think you want to pick your spots, pick your favorite stocks, because I do think you're going to see a rally and a recovery into the end of the year. Okay, we're hugging 7,600 on the S&P, as you see. Malcolm, I feel like that's where the tug-of-war is. It's noticing the calendar. You don't have a lot of things with you this month, so people are getting cautious. Those Steph Payne's, the bigger picture story, which is still decidedly bullish. There's just no two ways around it. Which you want to lean into more right now. I go back to what we mentioned yesterday from Citadel Security, Scott Rubner, highest conviction he says, hyzer in for the month. Mid-month really starts the weakness seasonally. Blackout window on the 12, option X, Brady the 18, quarter and the 30. If they're all historically large risk transfer events.

4:09And then I go to a Goldman Sachs desk today which wonders whether investors, sentiment, and positioning might be too cautious at the moment. It pretty much lays out exactly how we started the show. There are reasons to be cautious as you enter the month. If you're thinking about the month, there are reasons to be bullish if you're thinking beyond the month. You have to decide what kind of person you are as an investor right now. Yeah, color me skeptical. I think the September seasonality probably explains a lot of the negative sentiment we're seeing trying to build. I am not convinced that all of a sudden we care about the 10-year treasury being close to 5% or oil prices even being above $100 a barrel or the straight-of-form move being blocked for the six or seventh month in a row. Those are all things that have been present this entire time. And the only thing investors have been focused on for the most part is the growth in earnings this year based on AI. And so as long as that story holds true, as long as the spending that has been powering the AI trade holds true and we can continue

5:10to see positive earnings growth momentum going into the back the fourth quarter of this year, I see no reason why this negative sentiment really builds and stays long. So you're not allowing yourself to get too negative because of what you said earnings? No, I think there's some opportunities being created right now in this market with this negative sentiment that is brewing. And I think if investors continue in this direction, there will be some chances to scoop up some stocks who really loved, which I'm sure we'll talk about in a little bit. I mean, Tony Pascarello, Goldman Sachs, you know, we highlight his notes all the time. I think he generally agrees with you. He says the secular trend or broad-based AI spending remains intact and I believe the investment framework should now account for the idea that AI will be a full form that enables many companies to operate better. But I also expect the path in front of us is going to be a bit more jagged than it was in the early innings of the sequence. I don't think anybody is going to dispute that. Volatility feels like it's back, the vixen, what was 13 and maybe puts that in the rear view for a while.

6:13I mean, I think this is when you get the volatility, remember last year there were three sharp sell-offs in September, October, November. We rebounded pretty quickly. We touched on the PPI report today and yeah, it does force a hotter PCE, but really, I think there's things in there for both sides. You look at it from transportation. If you're hawkish and you think the feds should be hiking, you can support that transportation up 2.8% month over month. Heck, I'm trying to book a flight for family of five international right now and it's brutal. And then if you look at a hospital cost, the PPI report, that's also going to pass through. But on the other side of it, the trade services that companies cannot pass through the higher costs actually could pull down CPI a little bit. So again, there's something in there for everybody. And I maintain that 70% probability of the fed hikes next week is too high. I don't think that that Worsh is going to move through with the hike. In fact, the Kansas City Shuffle debate and switch that I've been talking about for two, three months now is coming into play. I mean, even hearing last week,

7:14Mester, who was the ex president of Cleveland bank on the network was talking about that the Worsh may not even have the votes to hike. He's really kind of bait and switch this that his hawkishness early on has laid down these probabilities. And but yes, you have to acknowledge, we're getting a full breakdown of local lows into 10 year futures. The 30 year is now sticking its nose below its low. But both have the lows from the 2023 levels. They're testing. See if that really breaks down crude oil is above 100. So this is a really volatile environment. And I like what Malcolm said. And I like what Stephanie said that there's going to be opportunities and names you like. And then the earnings are right around the corner. And I think that's going to booey things too. Do we think that as Goldman Sachs, their desk suggests that sentiment and positioning might be too cautious? When I read that, I think of, well, are they talking about, if people are worried about rates continuing to back up, the economy slowing down as a result of that, the cost of borrowing going way up, high oil, et cetera, all sort of bleeding through

8:16to what may be a slow down discretionary hasn't traded well. No. Industrials haven't traded well. Is that a sign of things being overdone too much and too negative in those areas? Because if you're right and you continue to tell a story of a pretty strong economy, then wouldn't you believe in the discretionary and industrial story? I do believe in the industrial story. You know that. I've been overweight substantially. But I also like some of the names and some areas within consumer discretionary. But you're being more selective in that area than industrial. I think it happens, because if you've long been discretionary, that also includes housing. And housing we know has been miserable. And I'm thankful that I actually sold some of my, is it all of my positions? But I think the consumer continues to consume. They say that they're not happy, but they actually are spending. American Express had US spend in their last quarter, up 11%. And Capital One had their volumes, purchase volumes, up 26% in their last quarter.

9:17And as Brian Moynihan said yesterday, they're seeing spend at Bank of America, their credit card company, 4%. Yeah, because they're spending. I mean, right. Until the jobs picture changes marketly, and the earnings story changes marketly. But that's why you want to pay attention to the weekly claims and smooth it out, because that's the real time adjustment for jobs. I mean, non-farm perils, they get revised a million different times. But if you look at also metrics in the labor market, challenge or gray, the layoffs are down 41% year to date. Jolts are up 3% year to date. So to me, I mean, there are positive signs, yes, that the consumer is consuming, because they have jobs and wage growth is about 3.5%. Is it perfect? No, of course not. But I actually am really encouraged by the commentary on the low end, because their wages are actually going up a little bit more than people do. Let's spin it forward then. You said Malcolm that there was plenty of opportunity to find some stocks that have maybe gotten a little bit dislocated in all this caution, like what and where.

10:19So a big obvious one to me is Apple, right? So Apple didn't really trade positively on the news, the announcement, the release of the new lineup of iPhone. But I actually think that this is going to be the thing that spurs that super cycle that we've been talking about, even though it is the higher-end phone, it's the most expensive phone they've ever sold, probably the most expensive phone out there. I actually think that this will be the thing that is the catalyst that we've been looking for. And oh, by the way, there's no AI story to it. I know that Siri suppose to get enhancements to watch is supposed to have some agentic quality to it. But realistically, this whole thing is still underpin my Google's Gemini, which means then that there's limitations to how much AI can be in the phone and in the ecosystem. So realistically, it's all about the handset. But I think that the handset changing the way that it has is going to be transformative. Apple's share price right now doesn't really reflect any of that. There's pretty good commentary, by the way. Typically, this stock doesn't trade all that well in September.

11:20It's been, I think historically, a Selva news event on the iPhone launch, which is always in September. And yesterday, there was a little bit of weakness around the initial presentation. But then the stock rose later, not up huge today, obviously, but it's still green. And maybe that's an indication in and of itself that this is being viewed in a pretty positive way. Melius today says the foldable on ozemic is going to be a hit, which stood out to us was how thin the duo was. Each side thinner than iPhone Air. So sturdy, especially at the seam in the middle, they think it's going to be pretty sweet. B of A, the duo steals the show. They did lower the target by 10 bucks. Yeah, they're concerned like everybody else is about gross margins because of the component and the memory costs as well. So they go to 370 from 380. You did obviously have the John Ternis era officially begin as Morgan Stanley's Eric Woodring is talking about. And it's a good segue to welcome Josh into the conversation. Finally, got your audio figured out.

12:20I'm glad we did. So you were pretty early, I think, in sensing that this stock was going to be poised for a pretty good run. It had that. And then it had a post earnings malaise, albeit reasonably brief. And here we are now after the first significant presentation and roll out from the new CEO. What's your big takeaway from this? I thought what they announced was way more than what the expectations seemed to have been. John Ternis did not go into his first solo keynote sort of easing into the role. He came out guns blazing. I think the foldable is going to be a hit. They will not be able to make enough in order for this to move the needle in Q4. But hopefully in 27 it becomes a blockbuster product. I also think that what Malcolm is saying about what Malcolm is saying about there not being AI is not quite true. The A20 chip, which is a two nanometer chip being manufactured by TSM, is specifically designed

13:22so that Apple can run AI and agentic workflows on the device. Remember the whole Mark of Apple's brand is safety and security. And it's very important that we stop thinking about AI as strictly something that takes place in a data center. What Apple is doing on device is far in advance of what anyone else is doing and probably will do. And it is incorrect to say that they've not made in-rolls. Where they haven't changed and Malcolm's right about is they don't have their own LLM or they do, but it's internal and it's not really in use. I think that's perfectly fine. They didn't have their own search engine either and they still managed to sell a billion iPhones. So I think the big picture here is the duo is coming out under $2,000. I think the consensus amongst the tech bloggers was more like 2,500. That's an upside surprise. I think it'll lead to waiting lists. The other thing that's important is the iPhone 18 Pro and Pro Max. Those will be up $100 well within what people expected.

14:24And I think they're going to sell a ton of them. So the watch is nice, the AirPods are nice, but the big picture here, how many handsets and is foldable going to be a massive category? I think the answer is yes. The BIAV had the pricing a little higher as well going in. So it was, according to his Josh says, BIAV says and others are talking about as well, a bit of a surprise, wasn't quite as expensive as maybe they thought it would be. You want to respond to some of what Josh had to say? Well, I think that that's an important distinction that Josh is making. They are putting the infrastructure in place to make sure that AI can run smoothly, but I also meant there's no AI product that's wowed anybody about the Apple yet made you say, I have to upgrade it. But the point that to your making about the pricing that I'm surprised Josh didn't touch on is the fact that Apple has engineered a way for people to be able to take the phone from them by its lease program if you don't want to get it through your phone provider. So there's another way to sort of smooth out the cost and make it a no-brainer for folks who want to consume Apple products.

15:24And then Apple is not going to reduce the cost of the products once they do corner the market on memory. So we know that Apple can go to whoever supplier and get a discount which they will negotiate at some point in the near future and that is going to be baked into those margins. So at the price point of $2,200, let's say at the top of everyone's estimates, it's still going to be a net positive for them probably by the time they get ready to report Q4 because they obviously won't have the phone ready to talk about the numbers just yet. That is all going to be positive for this story. The share price hasn't moved yet and so I still make the case. This is one to me that there's a set up in any time to get a pull back throughout the month of September. Could we suggest that there is a willingness by Ternis and company to sacrifice a little bit on the margin side to not make a mistake and price the phone too high, get a try and make up for some of the margin shortfall

16:26that they may have to face due to the cost of memory? Yeah, I mean, I think the adoption is, if you're sitting on defense, whether you're going to use this phone or not, and I find myself on defense, I was talking to Stephanie before the show, 25 years ago I had a blackberry in my hand and then it was, or 25 years ago it was a next tell and then it was a blackberry and then I didn't know I was going to go from a blackberry to an iPhone and all of a sudden, I couldn't imagine life without the iPhone. It's going to be like that with this duo and from the LLM that Josh brought up, these Macbooks Pro, they actually run terrific. People are buying that at a great price point. I think they build on that and Ternis can really build on that because they're pulling the CPU and the GPU memory together for more efficient tasks and running those LLM. So they have infrastructure in place too. I think that this is going to be more of a no-brainer than you think it is. I think that this is going to be similar to like the next pair of Jordans coming out 30 years ago where people had to go out and get them and it was like must-see TV. I think this is one of those things because it's so drastically different

17:26from all of the other Apple iPhone handsets, which have all looked very similar for decades at this point. So because this is the one thing that separates you as the newest iPhone owner from everyone else, I think that they're going to have a hard time keeping these things in their memory. I'm going to channel Steph and she's, I'm a channel what I think she's thinking and then I'm going to let her tell us what she's thinking. Agree with everything. Yeah, sounds great. It's awesome. Phone's going to be great. It's their first new innovation in the iPhone significantly in decades. As you said, got a new CEO. They're raising prices. They have pricing power, but I can't get over the fact that the stock trades at 33 and a half times. And that's the principal reason that I don't own it anymore. Well, that's 100%. Am I right? Yeah, that is 100% the case. By the way, I do own Broadcom which has a little bit of exposure to Apple too. So I do have some of that, but it doesn't get credit. Of course, it's not a pure play. I've always had a problem with the valuation. I don't know what happens with margins though. That's the one thing that's been so steady at this company and with the memory costs, skyrocketing,

18:30and no line of sight of that ending. I wonder if you don't get a massive acceleration on the top line, which I just don't know if you're going to, and then you have margin compression at 36 times forward estimates, to me, there's a little bit more risk to the story. Pass the steps. How did it nice run? I mean, it is up 18% year to date. So I look, if it falls back, maybe I would take a look at it, but I'm not encouraged to or inclined to be adding here. So Josh, I want you to address that, but also with Laura Martin, who's been more negative on, I think, the stock than many of the other analysts, suggests the bigger screen doesn't solve Apple's bigger problems. She says shares aren't moving, and we think that's the right conclusion from the event. Yesterday, they retained their hold rating. She lists a number of reasons that she suggests that there are problems that John Ternis needs to fix. The iPhone problem, she says, greater than 53% of revenues come from iPhone sales. A foldable phone might be that product, although we worry about its price point and volume limitations given rising memory prices. That's one gross margins.

19:30We just addressed that. Did they price the phone high enough to deal with the margin issues? The reliance on Gemini for their core AI functionality, growing competition, organizational velocity is glacial, and also a capital allocation problem. Those are her words that John Ternis must share his vision about how Apple will stay relevant in an agentic AI future. Do you do those resonate at all with you? I agree with every one of those as real challenges until you said, will Apple stay relevant in an agentic future? Apple has, in my opinion, literally, VBEST position on the entire map because regardless of which LLM or which chatbot people are comfortable using, they will be using them in the iOS ecosystem. They will, somebody is paying the VIG, whether it's the company providing the app and doing revenue or whatever the case may be, everyone pays Apple.

20:32And Apple has an ability to weave these AI services into its app store, into its services business, in a way that really the only company you could think of that has a comparable advantage would be Google. These are companies that touch the consumer directly. They're not reliant upon a third party or some sort of an agreement to get themselves in. If Apple wants to deliver something directly to its consumer, it's in the poll position. Nobody is in its way, not even the carriers anymore. So I don't think you could say that about anybody else, maybe with the exception of Google because of Gmail, but from my perspective, that's not really the challenge. The challenge here is the valuation, Stephanie's right, but ask yourself a question. Is 34 times forward PE high? Yes. Why are people paying it anyway? What are people saying to justify that decision? Because they are doing it. And the answer is it's the stability of the earnings. And it's the fact that we're back at record setting quarters

21:33once again. So it's not a fast growth story. It's a reliable growth story. And in this day and age, when their tape is read, people will reach for Apple because they may not be a 1,000% confident on whatever the gross margin number is going to be next quarter of the quarter after. But they know that there's a stability of earning story here. And they're not drowning in this cap expend that the other mega cap techs are real quick. And the mega cap of the week is meta. I just want to hit that real quick. It's the only one that's positive. And it's up almost 7%. Got an upgrade today at JP Morgan to overweight now. Target goes to 820 from 640. Bill, you own the name. They had the big announcement, the Muse AI agent this week, which seemed to be very well received on the street. What do you think? They execute on the Muse. And it gains the traction. This is a really great story. I think it's a stock that you're going to want in your portfolio. But they have to execute on this. And the other thing in the background is the compute build out that they're working on.

22:36And there is rumors where it was said that they're actually purchasing compute from Azure. And they're building out their own compute. And they may be selling it next year. That could be a 2027 story if they're not using it themselves. So I think it's a win-win situation. If this Muse takes off, they're going to need that compute. And if not, they can rent that compute out. So we're going to take a quick break. When we come back, it's best stocks in the market, according to Josh Brown. What's special about this particular one is that he just bought the name as well. We'll tell you which stock that is next. It's NFL Kickoff Time. Exclusive NFL team valuations with sports business expert, Michael O'Zanean. NFL is by far the most popular belief. NFL team valuations now on CNBC.com slash sport.

23:39All right, welcome back to Josh Brown, best stocks in the market. So a lot of times we highlight names that pop on the list. You don't necessarily own everything that's there. But this time's different because you saw restaurant brands international and decided to buy it as well. So give us more detail here. Yeah, so we talked about this on April 2nd at 75. So it's up a buck or two since I've been stalking it since then. U.S. comps were eight plus eight and a half percent in the second quarter. That's more than nine points ahead of the overall QSR industry. And they just passed Wendy's this spring to become the number two burger brand in North America. They're reporting their 21st straight quarter of positive international comps as well. So whenever it's going on there, management has figured it out and they are moving forward, improving the menu, improving the customer experience. And it's working.

24:39The customers are coming back. The last earnings report was $1.7. They beat the dividend was raised by 5% they're paying 260. That's the 11th straight dividend raise. And you got Bill Ackman in the stock Persian Square added 14% more stock to its position according to their Q2 13F filing. So here are the technicals. Give me a one year chart while I talk, guys. This is what we call a cup and handle setup. Classic goes back to Edwards and McGee. $82 is the line. You can see that it hit 82, struggled, hit it again, and then formed this little handle shape. The next time through, I think she goes. What we need here is a weekly close above 82 to confirm the breakout. If I'm trading the stock, this is what I'm doing. Putting on a position here with a stop around 73, which has been support, pretty decent risk reward. And then I'm putting in a by stop limit at 82 and a half. As it breaks 82 and a half, I might be at the dentist.

25:41I might be down the street getting a sandwich. I don't know what's happening, but I want to buy in as it breaks out and my average price will already be lower than that price. By stop limits, good, so canceled. This is how I would play it right here. I own the stock personally and I will be adding as it breaks out. What would you say the chances are you being getting a sandwich down the street versus at the dentist, just so we know we're all on the level. I mean, it's probably 10 to one. I should mention Burger King fixed its nuggets. This was a huge overhang on the stock. This is like China revenue for Nvidia. They finally got the nuggets right. They listened to the fans of the brand. They listened to the customer. They figured out what they needed to do. The nuggets are hot again. They're doing a lot of things right in the store and that's what translates to what's happened with the stock. All right, good stuff. We thought this was a good excuse to hit Starbucks. Steph, because two years since Sprine Nickel took over, he was on the network this morning. Stocks up only 10% in his tender.

26:44I remember this call you made on it and you did a big CNBC Pro presentation around that. It's up 18% since you first got in on November the 11th. So how would you assess the first two and what are the next two going to look like for shareholders? I mean, I think that it's just really beginning. I think they spent so much money just in brand revitalization, in product innovation, in store experience. And now they're starting to see better results and better traffic. That's the very key to the story, traffic. And they are seeing that substantially, mid-single-digit traffic growth, but comms. Comms are going to grow 5% next year. And then in 28, probably 4%. But what's also interesting is margins, you're going to see expansion. And then you're going to see really great positive operating leverage. So margins are going to go from 11.7 this year to something close to 15%. You added all up. This is a $6 share earnings power story. And I don't think it's all that expensive base on those numbers. This was also, by the way, is not was on your best stocks list.

27:46Still, Josh, correct? Yeah. Yes, it is struggling and that subject to change. But it's holding, it's hanging in there. It's the two-year anniversary for Brian Nickle. I think by now, we could stop calling and turn around and really start talking about the different focuses that he's put in different areas of the business. Partner turnover to a record low jumped out at me under 50%. That's really important, very expensive to have a revolving door with employees. Global comms have gone from negative 7% to plus 8% as of the last reported quarter since Brian took over. So if you're looking for a report card, you ask the stock price is number one. But some of these line items below the stock price are even more encouraging. And ultimately, hopefully, they end up going where it matters, which is where it's trading. All right, good stuff. Guys, appreciate that very much. Pippa Stevens has a CNBC news update. Hi, Pips. Hey, Scott, it's free and court. Once again, rejected a push to use

28:47a new congressional map in Missouri that has been backed by President Trump, the high court issued an order today that requires the state to move forward with a 2022 map. The new map was drawn to give Republicans an advantage in the midterms by flipping a seat in Kansas City. Hurricane Loew, which battered Hawaii's Western Islands earlier this week, has been linked to at least two deaths so far. The storm brought widespread flooding and damaging winds in the overnight hours Tuesday. Hawaii's governor is asking the federal government issue a major disaster declaration to speed up the extensive cleanup efforts. And FIFA, President Gianni Infantino, is reportedly voiced to keep his job, despite recent concerns over his power in soccer's global government-domening body. According to Writers, there is no challenger yet that is able to gain enough support across FIFA's 211-member associations ahead of a March 2027 vote. Infantino's role has been called into question after his unpopular proposal to sell a 20% stake in FIFA's competitions, fell apart earlier this year.

29:48Scott, back to you. I appreciate it, but thank you. That's good to see you. Up next, CNBC goes down under. A head of tonight's football game, Alex Sherman, is live in Melbourne, Australia, Netflix, gearing up for a historic broadcast, Rams and 49ers. What's going on? Scott, you know who else is in Melbourne, NFL Commissioner Roger Gidell. I sat down with the man himself. He had some intriguing things to say about the future of the league's meteorites. Here, what he told me coming up after the break. 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.com slash sport.

30:49We're back. Scott in the half of the NFL's first international game of the season, kicking off tonight in Australia. Netflix airing the Rams 49ers matchup. As the company continues to bit big on live sports, our Alex Sherman is live in Melbourne. He joins us now where it is 2.30 AM on Friday morning. That's the trade off. We send you to Australia, my man, but then we make you stay up all night. I just, I have a slight correction for you there. Scott, apparently it's Mel Bin. That's how the locals pronounce it, not Mel Bourne. So I'm becoming an Australia expert in my 48 hours here. As you said, it's 2.30 in the morning here. We're running up to start time, which is Friday. Remember, it's a day ahead in Australia at 10.30 in the morning. That's when the Rams and 49ers will play this game.

31:50As you mentioned, this game can be seen on Netflix, which owns the global rights to the game. I've been talking with locals throughout my stay here in Australia. To be honest, I was a little skeptical about just how popular this game would be as the NFL really all that popular in Australia. I got to tell you, one person after another has told me, yeah, they are legitimately excited for this game. The sort of the engine of the NFL, of course, is its media rights. And there's a lot of, I don't know if I would say concerned, but certainly anxiety among the traditional media companies about will they be able to get their new package of NFL games when the next deal for NFL media rights comes up, which could be as soon as the end of the 2029-30 season. That is when the league has an opt-out clause, which will allow the league potentially to resell its packages. Take a listen to what Roger Gidell told me

32:53about what the future of the league's media rights could look like. I think one of the things we are doing is a league is talking to our partners, talking to future partners, potentially partners, talking to others and evaluating should we repackage our current packages, should we think differently about where we go with those things, all those are going to be part of and are part of our evaluations. So that's some intriguing words there by the commissioner, talking about should we repackage our media rights? Now, he wouldn't really get into details about what that could mean, but the packaging of NFL games has been the same for quite a while now, the two Sunday afternoon packages, one owned by CBS, one owned by Fox, Sunday night football, owned by NBC, Monday night football, owned by Disney, and more recently Thursday night football owned by Amazon. Now, if you were to kind of, you know, jumble up those packages or resell them,

33:53you know, that would be big news for both the NFL and the entire media industry. Now, one of the reasons why he may be thinking about this is to maximize the monetization of this. In other words, if you can slice and dice the packages differently, the NFL may be able to make more money, and one of the potential buyers for a new package is Netflix. So tonight's game is one of five games that Netflix owns this season, but if Netflix were interested in buying even more games, of course, they would pay a higher price for that, but Netflix wants a specific type of game. They want a game that Netflix can eventize. So then the question is, well, what is a game that you can eventize? What even is an event? And that is a question that I asked Netflix chief content officer, Bella Bajaria, who's also down here in Melbourne. Listen to what she told me. The first NFL game was Christmas day, right? So we're like, we can make Christmas a holiday, Beyonce is going to do the halftime,

34:54and we can sort of turn that into event. And it can be world-based, well, classic in Japan. It can be home run, Derby on this website. But it also can be Alex Honnell type A101 when he climbed to the building. The thing about an event is it's busy cultural zeitgeist, kind of that really sort of un-missable moment, right? There's something in that that just feels like there is very sort of appointment TV, but with also like great conversation around it. So clearly tonight's Melbourne game counts as that sort of busy zeitgeist moment, at least in the minds of Netflix. Scott. Big deal for all the parties involved. Alex and Joy, thank you, Alex Sherman down under for us. We're coming right back. Actually, no, let's trade Netflix. I'm sorry. Malcolm, that's what we're supposed to do. Shares are down 18% year to date. Down 7% in three months, what'd you take? I think the stock is not reflecting

35:56at all these types of positive improvements. Netflix is trying to make the street doesn't really give them credit for it yet. So there's still a set up in those shares. I don't think that the live events like this are going to be the thing necessarily to move. Investors 100% into Netflix's camp, but I do think you want to see them taking these kinds of big swings to figure out what will be the catalyst to bring more eyeballs to the platform, help them figure out how to monetize that install base, if you will, because they can't really add but so many new subscribers at this point. They have to figure out things to make it more valuable to the people who are already there. There's a reminder though that this is where they clearly see the growth opportunity. Well, they're trying a few different things, right? They're bringing live podcasts onto the platform. They've got other live events like concerts that they're bringing to the platform. So those kinds of things are things that you experiment with and see where let the market tell you where you should be spending that effort. So we'll take another break. We come back. Josh has two more new moves to tell us about. First though, Mike's market memo. We're back right after this. All right, Mike's market memo time,

37:03senior markets commentator and over time, co-anchor Mike Santolli's here at Post 9. That's same sort of thing that I could toss you almost every day on yields oil. Now we got PPI and what you were looking out for those core PCE components, they were hotter. They were a little firmer. Yeah, so same story only more so. We keep pushing to find where the threshold is when the underlying composure of the equity market breaks. You obviously did breach at 7600 level in the S&P. Kind of cracked the floor of this trading range. It's been in place for let's say five weeks. But otherwise, I think we're withstanding it. I just wonder if people don't want to lean too far in that direction into CPI. You do have yields starting to get overbought. You do have the eco-weight S&P starting look actually oversold and is outperforming today. One thing I'll note, ECO-weighted S&P stocks down 2.3% week to date. The energy stocks are not gaining any further benefit from what's going on in crude.

38:03So that's sometimes me we getting toward it an enough for now moment for these price moves. Maybe front running the fact that they think that maybe we're peaking. Exactly, right. So that sometimes happens where the stocks try to sniff that moment out early. All right, I'll see you a little bit later, Mike. Thank you. Coming up next, we'll go to those Josh moves plus. We'll get his take on service Titan, which was a big, big, big loser this week when we come back. All right, welcome back. I'm just looking at shares of service Titan to see if they're recovering anything from a dreadful move. Josh, obviously people want to hear from you on what happened a couple days ago. What's the story here? So the story is the company did 21% revenue growth. Beat on earnings, but they missed on EBITDA and people looked at that and said, what's going on?

39:04The answer is that they are transitioning their customers over to their AI platform, which is called MAX. I think they view this as do or die. The problem is they're not charging a fee to move customers onto that new platform. So there's a little bit of a hit in subscription revenue as they've got, they think they have 700 locations that are now transitioned over to their own proprietary AI. This is one of the craziest stocks in the market. It went from 110 to 56 at its low this summer back to 105. And now it's back to 56. All of that within 90 days, it's a tiny market cap with almost zero institutional sponsorship. It only came public a year and a half ago. Most people don't know the story. And I think that's why you get these exaggerated moves up and down. I don't know that it's going to run back to 105 again. I think the stock's probably in the penalty box for a quarter or two, but what they're telling the street, I think is the right thing. This is about setting themselves up for the future and the more users they have on their AI platform,

40:06the better going forward. It just doesn't feel that way in the short term as they have to take that subscription revenue hit in order to make it happen. So I think it's pretty cut and dry what happened here. And now the question is, how do they earn back all streets trust to small handful of analysts that follow the stock? You're staying with it for now. Yeah, oh yeah, of course. Couple of things you're not sticking with. You sold Marriott, which we thought was interesting. You know, Airbnb recently made your best stocks list. And I think even in the near term, you thought that Marriott, correct me if I'm wrong, that Marriott would do better than Airbnb, at least in the near term, but you sold Marriott, tell me why. Well, Marriott worked. And then the question is like, are you in it for a trade or an investment? And for me, Marriott was a trade. So we're moving up stops and we're making sure that, you know, you have a winner. You don't want to see a reversal wipe it out completely. So you've seen me do that this year before,

41:08with other names, McDonald's, et cetera. So if it's a trade, you have to have your exit. You can't buy a stock, say it's a trade, and then it falls, you have no answer for it. And your thesis is, well, it'll go back to, you know, some imaginary price. So on Marriott, very simply, it was a trade, the stock went up, and then it rolled, and that was it. You sold a CFG also, which is Citizens Financial, up 19% year to date. What about this one? Yeah. Same story. Don't want to let a winner return to the loser. Great company. I may be back, but we don't want to see a stock that works turn into, oh no, I'm breaking even. Oh no, I'm down 5%, oh no, I'm down 10%. So the idea of moving stops up as a stock is working. It's something that we talk about repeatedly. And the reason why is if we're buying something based on the technicals, we can't end say, oh, you know what, I don't care about the technicals anymore. I'm going to focus on the fundamentals when the stock heads in the wrong direction.

42:09I want to show you shares of Uber as well, Josh, before I move on, because the stock is moving. There you see the move on your screen up more than 2.5%. After we learned that the CEO, Darik Aswashahi, reportedly has bought stock. 141,000 Uber shares believe personally. What's your take on that? Yeah. Well, I would say one, it's about time. I think the street likes to see that there's this belief in his own strategy, even when the market doesn't believe it. We've talked about this a million times, so I won't rehash the arguments, but Uber also announced another autonomous partnership, level four autonomous passenger taxis in Spain with a couple of partners. We ride in particular. So they will continue to expand their automated ride share businesses all over the world. Ultimately, people will realize they will end up being the platform

43:09with the most AVs on it. And I think the stock will get its growth back. But I don't know how long that takes. All right, let's take a break. We'll come back. We'll do finals on the other side. I will track the final stretch during closing bell. We'll do it today with the professor, Jeremy Siegel. Chris Harvey, Brin Talkington, the draft king, CEO Jason Robbins, going to join us as well ahead of that big game as we were just talking about this evening in Australia. Let's do final trades. Josh Brown, what do you have for us? Snowflake Rally is not over green stock in a red tech tape. OK, who's Tempest AI right here? Small healthcare technology company, great management team, working to cure cancer. We added to portfolios as a starter position last week. OK, good stuff. Jump. Jump AI is making it more profitable, but the shares are flat. The last couple of months. Oh, why did you pick in video? Because it's really cheap and I'm probably going to continue to buy it. It's like 18 times or something like that. 16 times. All right, good stuff. Thanks, everybody. I'll see you on the bell.

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