it's probably a name i'll keep on my radar. i would have liked to have seen things further along in the company in terms of what their plan is to fix their issues. >> thank you very much. we appreciate the thoughts. we'll see you soon. thanks very much for watching "power lunch." markets are well off their lows right now, kelly. >> appreciate your time today. "closing bell" starts right now. welcome to "closing bell." scott wapner from live at post 9 at the new york stock exchange. this hour begins with high anxiety. the middle east once again a flashpoint. it was around midday, iranian missiles were launched into israel. oil moving sharply higher. same for the dollar. the vix also higher today. there's your picture. yields moving down. investors moving to safe havens as normally happens when something like this happens. let's show you the major averages, too. they've been in the red all day. very interesting activity within the last half hour. would you know the dow is only about 30 or so points away from

another closing high, or just about. it's down about 51 points. we're watching that. it was just about 30 points away from a closing high. we'll keep our eyes over the final stretch. nasdaq is where the most weakness has been today. it, too, off the worst levels. was about a 2% decliner off that significantly. apple is lower, nvidia is lower. other names are mixed. it takes us to our talk of the tape. new quarter of stocks with the economies, election, geopolitics are investors' minds. let's bring in for answers one of this country's top investment advisers, chris toomey, morgan stanley private wealth. good to have you. interesting price action as this new quarter begins. what are your general thoughts on where we sit in the markets? >> i think when we last spoke, we were concerned about september. we were really concerned about the fact that the market had pivoted have good news was good news, but bad news was bad news. and what was the fed really going to do? i think that was weighing on markets going into fed week. i think the fed giving that

50-basis-point cut really jolted into the economy. or into the markets, i should say. kind of a more stronger risk appetite. our view, we think the economy is doing well but we think a lot of this kind of euphoria is already probably priced into the market. >> you mean all the good stuff is priced in? the fed has just started cutting rates. some would suggest, look, just keep it simple, right? fed's cutting. economy's good. powell himself reiterated that yesterday to the degree at which he says, hey, we're going to go smaller than 50 because we can. >> look -- >> what's wrong with that? >> if you look at q3, now that we're through q3, what's performed well? tech has not performed very well. things like utilities, reits, financials up north of 10%, in some cases up 20%. >> that's right. >> i think a lot of that euphoria about rates coming down has immediately been responsing into those areas of the market.

i think looking forward as to what we see, we're entering the blackout periods of buybacks, starting to go away. we're starting to look at earnings expectations. earnings now are priced to be about two times what historically they have been. and so in our minds, you know, you're right, the market is very resilient. i'm surprised with how well it's doing today after what's happened in the middle east. that being said, we think at some point price is going to matter. we see earnings probably price for perfection and a potential for a pullback. >> isn't there a huge catch-up for all these other parts of the market? just because the equal weight s&p outperformed the market cap weight in the third quarter doesn't mean it's done. >> no, no. i think that's the area we're probably most constructive. s&p 500 was up about 4% or 5%. >> 8%. >> 8.5%. i think there are opportunities in that 473 as well as expectations for those types of companies are actually much more

reduced than the mag 7 and the names that have really been driving this market. >> let me ask you this, why aren't you just net-net, you know what, the game's changed a little bit, the economy is more resilient than most thought it would be at this point in time. fed's cutting. they're just beginning. the trend on that is continuing to go lower. china, stimulus there. i mean, central banks are cutting all over the place. or stimulating all over the place. >> and this is the difference between a question of what they want to do and what they need to do. i remember when we were talking about the fact that economic data was getting weaker and the fact that the fed -- >> marginally. >> well, look at the labor market. >> come on, look at the upward revisions in gdp. >> look at the labor market. one of the key drivers with regard to why the economy is doing well and why inflation is going down is what oil prices and labor costs. labor costs have been relatively

going down and oil prices have been stable. we're in a situation right now where we have this issue with regards to what's going on in the ports. potentially with regards to revisions, with regards to labor. i think labor is a key thing we want to be focusing in on. the fact that china is reaccelerating could be a negative for the u.s. economy in the sense if they're starting to draw more demand with regards to oil, granted, saudi arabia is raising production, that could be an impact with regards to oil prices. if you get oil prices going higher, you get labor being an issue with regards to labor costs going higher, that's going to affect margins. that's going to affect earnings. that could be an issue if prices are too high. >> there's a lot of ifs, could bes and whatever that people have been talking about for the last 18 months, my friend, right? a lot of these things haven't come to fruition. now you actually get to the point where the fed is cutting interest rates where the labor market, yes, admittedly from the fed chair himself yesterday, is softer now. it's still strong.

>> it is. >> still resilient. there are jobs. >> this isn't a situation where you say i want to sell all my stocks and go to cash. the question is where do you find the most value allocating risk? not necessarily adding exposure to equities. probably just waiting for things to come to us. we don't want to be chasing right now. >> by the way, if you look at tech, there's a good note out yesterday. i think it was from ubs. all this talk about multiple expansion for the mega cap stocks, their multiples are lower than they were in 2021. before all this big a.i. rush even happened. >> but if you look at what's driving them, earnings have been good. >> they've been great. >> they've been great. but what has been driving the performance is pe multiple expansion. it's people chasing the winners, chasing the winners. that works great until it doesn't work great. that's a situation which investors need to be wary of. >> some of these multiples have come down. the reason why the stocks have

gone up, the multiples have gone up, the earnings have gone up. earnings expectations have gone up. you don't think the earnings have justified where the pe multiples have gone for mega cap tech? >> i think in my mind, i think the expectations with regards to where earnings are right now are higher than they will be. i think that will put pressure on markets. >> you don't think the 15% earnings growth expected for next year is -- >> i don't expect -- >> isn't going to live up to that? >> i don't think you should expect earnings over the next 12 to 18 months to double what they historically have been. >> even with the fed -- >> even with the fed cutting. i actually think the reason the fed is cutting is because i think the economy is softening. i think there is some concern. i think the other thing you have to worry about is what's going on if rates don't come down dramatically more? the rates have started to come down, but the concern is they're not going to come down enough. >> because the economy's good. >> you have $1.6 trillion worth of debt that has to be refinanced at a much higher relief. >> we're still on the deficit thing? >> it is a real thing.

if you're in a situation where the deficit is now bigger than the actual foreign defense budget, right, and we're in a situation where we're going into an election, where both candidates are probably going to raise that by multiples of trillions of dollars, at some point you have to be concerned. >> i got you. 20% ago, a lot of people were concerned about the deficit. that's all anybody was talking about and the cost of funding the deficit, interest rates are going to go to the moon. that hasn't happened. i'm not suggesting the deficit is not a real issue, but, you know, it's not an issue today. not enough to send the stock market into some sort of fit. >> yeah. we're not necessarily as concerned about today as tomorrow. our kesh is that going forward, it's going to become an issue, especially with prices at this level. from our standpoint we want to make sure we're in higher quality names, cash flow generative. the benefit f we get the pullback we're expecting, we have cash to put to work at a

better price. >> last question. you like credit better than equities here? rick rieder was on. you watched that interview at the time we did it, not that long ago, made the argument, like you make, you're not the only one who says, look, a lot of good stuff is priced in, market looks a little rich. do you think there's more opportunity today in credit than equities? >> i think there's opportunities in equities below the surface. in the 493, in the names that aren't necessarily driving this market, i think in the private markets particularly in the sense they don't have access to capital the way that public companies do, i think there's opportunities there. i think the area that's most interesting to us right now is probably on the credit side. >> really? okay. we'll see what happens. chris toomey, i appreciate you being here. number nine on the barron's 2024 top 250 private wealth management teams. congrats. >> thank you. >> to brian sullivan for a look at the energy sector as tensions rise in the middle east and oil is probably off of its biggest

spike of the day, brian. bring us up to date on exactly what is happening. >> i think it goes to exactly what you and chris were talking about because the port strike probably could not have happened at a better time, at least vis-a-vis oil and gas prices. you think about the fact that 25% of all oil is used for transport. heavy trucks, trains, diesel fuel, et cetera. any slight slowdown in that might take that marginal pressure off of oil demand in the united states. so, bizarrely, the timing of the port strike may actually be very good given what has gone on in the middle east. to your point, oil is up 3%. $70 a barrel. off its highs of the day given everything we're watching in israel and all the missile attacks there. here's the point. i think, scott, if this was eight or nine years ago, ten years ago, oil would be up ten bucks a barrel. because the u.s. is at 13.2 million barrels a day, not 8

million barrels a day, this increased u.s. production, increased brazilian production has sort of decreased iran's importance in the global oil market. the key going forward, everybody i've talked to today, been reading today, says this, if we stay here, you get supply demand that goes back in. oil prices are likely to go lower in the weeks and months ahead. however, it's how israel responds, scott. if israel does attack, iranian oil infrastructure and/or nuclear infrastructure, then we could get another leg higher. the key then would be, what will the saudis do? they kind of, quote, come to the rescue and replace any lost iranian barrels. >> that's a whole new ball game you talk about. maybe the market doesn't think that's going to happen, which is why what was 5% spike for wti has now come down to blow a 3% one. >> i think the market is truth. you talk about it every day on

"halftime" and this show. price is discovery. i think the market knows that absent any further escalation, the supply demand scenario, the one that's favored lower oil prices for a number of months now, probably comes back into the fold. remember, we're sitting on a saudi arabia that is voluntarily taken 2 to 3 million barrels of oil off the market. if iran at 3.2 million barrels a day, 1.6 million, about half is being exported. if some of that comes offline, let's say israel attacks an iranian port, pretty easy. the market knows saudi arabia, scott, could probably step in. by the way, one random group of stocks you may not be looking at, look at some of the shipping stocks, the ones you don't talk about a whole lot. the gas logs of the world. they're actually higher today because we could see higher shipping rates. shippers are nervous, they'll charge more. watch what happens in the

straits of hormuz. they get no love but they're all up. >> let's bring in bryn tal talkington and jason to continue the reaction to today's news. in the bigger picture, jason, what is your outlook for stocks in the final quarter of the year? >> yeah, scott, obviously there's very disappointing news with some of the geopolitical moves we saw today. and, you know, for me, obviously these past events remind me of what happened a few years ago with ukraine and russia advance. for me, thinking about the markets and thinking about q4, i'm optimistic. i think the election about 33 days from now will be a clearing event. i think earnings going into q4, we're expecting 10% earnings growth. yes, we're talking about 15% in 2025. i think earnings and margins are

relatively intact. i think the consumer is hanging in there. i feel relatively good about what the market presents and prospects going forward. >> bryn, what about you? >> so, october down to sideways. not only do we have a geopolitical event, october we know is a weak month. buybacks are closed, tax off sellings. i think going into october we're weak. i think that's a good opportunity for investors to add to positions. i agree november will be the -- the beginning of november, the election, will be a clearing event. you have huge china stimulus, which i think the market is starting to think this is real and not a head fake. somewhat of a kitchen sink. you have don't fight the fed. the fed is in a dovish, easing cycle. we have earnings, especially within the remaining 493. going into q4, which we won't know until january, are looking to grow 15% year over year. i think we have all of these ingredients that once we get through october, we're going to have a good november, december

to kick off 2025 with a bang. >> there's a lot there that you said. chris toomey made the argument, in agreement of all the positives, but suggests it's already in. what doesn't the market know at this point? >> i mean, the market can just continue to operate on the continued strength of the market as a whole because really you need to stumble into something to actually have the market go markedly weaker. i also think from a technical perspective, the s&p hit that double top, which in and of itself is bearish, but we broke through that. now we've broken through a double top. if you look historically, that's another bullish sentiment of technicals. i don't think you have to read through all the tea leaves and say, nvidia has to have another 40% growth. if we just continue with the economy slowing, not stalling, gdp is okay, the consumer seems to be -- the higher and middle consumer is okay. the lower end is not.

and that you have a broadening of the rally. why wouldn't stocks go higher? i also think never underestimate -- and i talked about this a lot in 2022. don't fight the fed in 2022. fighting the fed was a dumb move. don't fight the fed now. they're in a dovish sentiment. be long equities. >> that's why, jason, some argue, just keep it simple. economy good. fed's cutting. that's kind of all you really need to distill everything down to. cut out a lot of the noise. we've heard this kind of noise before. bryn says it's just -- it all boils down to that. >> 100%, scott. and i think what bryn said, which i really appreciate, talking about the 4.93. the rsp, equal weight s&p, i mean, over the quarter is up almost 10%. it's up 14% year to date. so, we saw a lot of that run this past quarter going into q4.

i think that's a healthy sentiment. that's something to cheer along. obviously, all the talk and all the talk we've had over the last 18 months or so has been about the a.i. themes and what's going on with mega cap tech. obviously, we've seen underperformance this past quarter but it's healthy to see the other sectors -- financials, utilities, staples. staples are expensive but others -- securities, other sectors that have done well. and i think we'll continue to see some follow-through to bryn's point on the easing cycle. a little ease on the consumer. and the market and the economy is still relatively healthy. i think those will continue to be catalysts. >> that's where chris toomey was leaning, too, the 4.93 is where it's at. mega caps, multiple expansion and now they'll come up against tough comps when they start reporting earnings, because the fed is cutting, because the economy is still hanging in there, all those other stocks

finally woke up in the third quart that's true will continue to work in the fourth. >> i think within the mega caps -- obviously, we have a big position in the qs, but when you look at them individually, i think you have to discern. i think tesla is getting stronger. microsoft and apple, we'll see. i think google and meta, amazon, netflix, those are getting stronger. i think you'll see dispersion, continued dispersion and probably even more dispersion within those seven. we added rsp in january. we were definitely early, which we could have timed it for this last quarter. i think historically for investors, if you look going back to 1990 when the equal weight was inverted, they always mean revert. it's not that the s&p to come down. you want the rsp to go higher. that's what we have right now. that rsp. i think that mean reversion where the rsp catches up to the s&p is well under way. >> we've been watching a lot of these chinese names, especially

in tech after news of the stimulus there, you suggest i wouldn't be buying any of those. why? >> i own baba until they kidnapped jack ma. gdp growth -- and michael semblis had a great piece. gdp in china has not translated into investor returns. over the past ten years, i think it's mhci, the china etf, you're negative. i still think you have a communist regime, a dictator. i don't think you're going to see this pull through longer term to the underlying names. i think you had a long japan, short china. you have that totally closed out. david tepper, who is an amazing investor, he's all in. i think if i'm a u.s. investor, i'm going to buy tesla, i'm going to buy apple, some cosmetics. i would buy u.s. companies that have great balance sheets you can look through. you don't have communist leaders

on the boards of these companies to be able to play if we do have a sustainable, you know, economic hiccup in china. >> we'll leave it there. thanks so much. bryn, we'll talk to you soon. thanks for joining us on "closing bell." up next, semi stocks are selling off. we hear from stacy rasgon how he's navigating this volatility. you're watching "closing bell" on cnbc. ♪♪ from this can't miss moment... ...to this hello new grandpa moment... ...to that whatever this is moment... your moments are worth protecting against rsv. if you're 75 or older, or 60 or older with certain chronic conditions, you're at higher risk of being hospitalized from rsv. and there are no prescription rsv treatments. you have options. ask your pharmacist or doctor about pfizer's rsv vaccine.

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welcome back. chip stocks under some pressure today. this is new a.i. chipmaker-- a new a.i. chipmaker files to go public. seema mody with the details. >> it may be a five-year-old startup, over 200% sales growth in 2023, and backed by benchmark

and altimeter, sam altman has captured the attention of silicon valley. they were valued $4 billion. we're told by sources the a.i. chip designer is aiming for $7 to $10 billion valuation when it goes public on the nasdaq. it will be the first private a.i. company to ipo. the company is not profitable. it will be competing with chip giants nvidia, the dominant leader, and amd. not an easy feat. analysts pointing to the high switching costs plus growing competition from cloud providers. microsoft and amazon that are working on their own in-house chips. scott? >> seema, thank you. let's bring in now to talk about the chip space more broadly, top chip analyst bernstein's stacy rasgon. welcome back. >> good to be back. >> i know it's too soon for you to talk about this company specifically, but at least it raises the issue of companies that are out there that want a piece of this a.i. pie. how should we be thinking about

these newcomers relative to the heavyweights like nvidia? >> yeah. so there's a number of areas of competition for nvidia, which makes sense. it's an enormous potential opportunity and all the dollars are flooding to nvidia. you have other suppliers like amd or even intel. you have hyperscalers doing their own products and startups as well. i think for a lot of the startups, it's difficult. they don't have scale. you know, they don't have ecosystem. if their pitch is, we have a chip that's better than nvidia, i think that's heart because with every generation, nvidia has a chip that's better than nvidia. they have all the software and ecosystem that goes with it. i'm not going to comment on cerebras but they're doing other things. clearly, they'll try their best at this point. in general, so far it's been a winner takes all. it seems like it's nvidia's game to loose more broadly. >> it's winner take most.

it's not like broadcom hasn't done well. >> no. >> the yirn, though, is that as it's done better, its multiple has gone up, hasn't it, so it's want as cheap as it was viewed to be before. >> that's true. if you're talking about the real competition, i actually think it is more on the hyperscaler side, the cloud vendors doing their own chimz. this is an area where broadcom shines. it's a very big business for broadcom. they'll do -- they said $12 billion in total a.i. revenues this year. i bet $8 billion of that 12 is probably custom a.i. accelerators for those guys. look, i do think that is real and it will get bigger. i wouldn't be surprised if the penetration of a6 relative to the broader channel gets bigger and bigger over time. it's kind of apples and oranges in some sense. it it used to be more internal

workload of hyperscalers versus workloads that are more customer facing enterprises. they are two different markets. this is a market that's already sizeable and getting bigger. to be fair, i think the overall opportunity, the tam is big enough for both to benefit. i don't think it's one necessarily winning over the other. the market is sizeable enough where both can win. i like nvidia and broadcom. >> but that kind of squeezes out amd, doesn't it? >> this is amd's broader issues. they have an a.i. event coming up in a week or two. we'll get new product announcements. they suggested they'll do $4.5 billion. i think expectations are probably for five plus. i don't want to knock them too badly because it was zero a year ago. so on an absolute basis ramping up 5 billion of a product from zero in a year is nothing to sneeze at. in the grand scheme of dollars

getting spent, it's not that big. broadcom will do double digits in total a.i. revenues. it's not that big but it's -- long term, you bring up a good point. i understand the need for a second source but most of amd's exposure is at larger hyperscalers. does it need to be amd or is it broadcom? that's an open question at this point. >> two quick ones before i let you run. what's the outcome, the endgame, whatever you want to call it, for intel? what happens here? >> yeah, that's a great question. their next generation process 18-a, they're betting the company on its success. i guess that's what we're waiting for. if it is truly successful, maybe we'll see a revitalization. they're outsourcing a lot of stuff to tsc, which is killing their margins.

they can take back mark share and charge more and gives customers confidence to put foundry volume there. that's how you build the targets they put out there for 2030. there is a lot of wood to chop between now and then. you know, if that process does not knock it out of the park, if it's not successful, then there are more severe scenarios that may come into play. i don't think they're desperate at this point. i think given the opex cuts and capex cuts, i think their cash position is okay. they're not desperate. they don't need to make any crazy moves but they have a year, 18 months to see if 18-a holds muster or not. if not, there are more severe scenarios that may come to mind. >> what about qualcomm, quickly? >> i like qualcomm. the only issue with the stock is there is an apple overhang. it's looking more likely -- they

already suggested that by the end of 2026 the apple business mostly goes away. it's looking like they may lose potentially some more next year. that being said with the stock trading right now, it's a roughly low 20s multiple on next year's number, even if there was no apple in it. my own. is by the time apple is gone, if apple leaves, which would be fiscal '27, i think they're doing ten bucks plus at that point even without apple. i think you need to sort of clear the apple overhang and the stock can work. in general smartphones are not great but they bottomed. i'm getting more positive on the content opportunities, not necessarily on the units for a.i. smartphones. there is a diversification story that's slow but it is building. we like the stock. >> good stuff. covered a lot. stay safe. up next, rick is with us to break down where he's seeing the opportunity in the a.i. world. the names he's betting will bring in big returns. "closing bell" is back after this.

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pressure. nasdaq leading the major averages to the downside today. it comes as investor demand

grows for return on big tech. joining me is rick heigtzman. >> that's kind of what we talked about for the last two years. ooebtly the expectation -- the return has to live up to the investment. and so chickens are coming home to roost in the second half of this year. so far there's been probably a little -- very little return on investment. some of the simpler models, some of the guys doing data enablement. we talked about data iq in the past are showing a real return on investment. for a full cycle, we're still early in the process. especially if the private conditions. there's still a lot, people are betting a lot on comp. >> you say at some point you can't spend against hope forever. where's the breaking point? >> it depends. >> it's so early. >> you're in the first or second inning. people are thinking, how long do you spend? if you're a hyperscaler,

microsoft, google, amazon, your return threshold is so long. you're playing the game of, can i outspend people? can i outlast people who won't be able to get from here to there. therefore, i'll have a competitive advantage. there's a general belief that a.i. is maybe not -- it's not -- if it's going to happen, it's just a matter of when. so, if it's a matter of when, how long could people hold on? >> do you feel like the winners are so clearly defined at this point or is the jury still out? >> the jury is clearly still out. the first or second inning, the winners are not defined. you're seeing the early leaders. as we've seen in other technology, oftentimes the pioneer gets the arrow in the back and someone learns from their business model, learns from their go-to-market and becomes much stronger. you saw it from social networking to pcs. >> you think this will be no different? >> this will be no different. openai has a significant lead.

they have a tremendous amount of capital. they're playing like an incumbent. they might be able to stay ahead of it. obviously, we talked about microsoft in the past. they invested heavily and have a substantial amount of capital. they're staying ahead of the curve. we're seeing things in the private markets, which are very interesting that might be disruptors. >> openai's valuation would have one believe that the game's over, right? $150 billion, i think s what they're currently raising at. and, you know, you put that against perplexity or some of these other generative a.i. companies being valued at, it's like disparity is unbelievable. >> you're seeing anthropic, perplexity valued at the billions of dollars. people are playing the game. if you get a certain portion of the search market and google's worth a couple trillion, what are you going to be worth especially if things get thrown up in the air? conventional wisdom is five years from now we won't be doing

conventional search. we'll be working with chatgpt, even if it's meta glass to answer our questions. that whole new version might be completely different. it might not be phone based and, therefore, there should be new winners. clearly you say price to perfection if you're openai at $150 billion. >> where are the other ipo snz. >> there's still too much risk. >> in the market? >> in the market. we had the first thing to unwind that risk. we said we have to unwind a couple of risks. unwind the war risk, presidential election, and clearly the fed. and the fed started to drop rates a couple weeks ago. they'll drop it again. that's one thing going. hopefully we'll have a peaceful transition in the presidential race. maybe some of the shooting wars will slow down. so, less of a perception of risk. in general, on days like today when you see the nasdaq do what it does, people are not looking to take a risk on a new a.i.

company. >> what are tech companies thinking about the path of interest rates, how it affects their business, ability to raise capital? >> they're feeling pretty good. even if their projects, so if you're an enterprise software company, you're coming out of the capital budget and, therefore, interest rates are decreasing, people are litting earnings, therefore, they have more money to invest and deploy. you're feeling good about fundamental demand because of lower interest rates. they're feeling better about the ipo market. there's still a lot of risk. what some folks thought was the fourth quarter of the ipo market is now second quarter of '25. >> second of '25. a hear a lot about health care is the great frontier for a.i. >> yes. >> you msmile. how do you think about that question, whether it's in health care or elsewhere? what's exciting to you? >> you think about health care, biggest part of the economy, shortage of doctors, shortage of nurses, the ability to do it on your phone. even you're starting to see a.i. be as good as some doctors.

what is this thing on my hand? what should i do about this? the logic is catching up. that should be good. but you're seeing it in law. simplistic documentation, legal questions, accounting. even things like media and adobe firefly doing creative media. that's changing. so you're gradually seeing a.i. at least change the incumbents if not disrupt those markets. >> a few companies on your list, whether you invested in them or not that you think are in the pipeline and rising towards the top, who will go public when you suggest could happen in the second half, maybe second quarter, whatever it ends up being of 2025? >> on the a.i. side you'll see data iq so people can build their models. hopefully we'll see openai that has to go public and unlock that value. on the consumer side you'll see probably harrys.com a consumer brand that's direct to consumer and even stubhub and seatgeek on

the ticketing side. >> what about stripe, we keep hearing -- >> supposedly they're pushing it out. some companies that -- sometimes the door gets kicked in on the ipo market. it would have to be openai, stripe, spacex or even starlink as a spinout would be something to open the ipo market. conventional wisdom is you won't see them in the next 6 to 12 months. great to catch up with you. founder and partner. up next, we're tracking the biggest movers into the close. seema mody standing by. >> 18 minutes left in trade. we'll tell you why disney shares are underperforming and what the street is saying about that stock. that's up in ex.

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"closing bell." let's get back now to seema mody. >> shares of paychex in focus after the human resources company reported better than expected quarterly results. total revenue climbed 3% despite headwinds caused by the employee retention tax credit. and there's disney shares sliding by 1.5% on a raymond james downgrade from outperform. analysts say the slowdown of disney's park business could be more than a short-term blip due to increase in competition from our sister company, universal,

and consumers digesting price increases over the past few years. shares still up 5% this year. scott? >> seema, thank you. still ahead, apple shares slipping on some bearish analyst commentary. we do have the details ahead. stock is down 3%. ed income toda, helps secure tomorrow. our time-tested fixed income suite, backed by over 145 years of risk experience, helps investors meet their goals. pgim investments. shaping tomorrow today.

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geopolitical risk type event injected into the market. you also had the first of the month, losing the end of the quarter bid. i think the market over the course of the middle part of the day read the actions of iran as somewhat stage managed and not necessarily an open-ended escalation and it felt familiar. all that being said, there's an interesting tension between everything leading up to the final quarter of the year suggesting further upside ahead. the trend is intact. if you make a new. high in september, if you're up 20%, all of that feeds into we usually finish the year strong. often with profit taking in chop and downside testing in october. i think it makes sense that the nasdaq was the source of weakness for the morning. it was not defense. magazine ga cap tech was not acting as defense. you take that as a change of character and suggest there's a little profit taking undertoe we

have to deal with. it barely made a blip into the longer term trim. >> comps are hard given what they've been reporting a year ago this quarter. >> as they lose a little bit of their premium to the rest of the market because they did monopolize personings growth for a year and a half and now that's no longer the case. >> speaking of, you know, steve kovach, i'm not sure what to believe at this point. maybe investors aren't either because you go from a flood of negative notes about demand, then the defenders coming out and more notes questioning demand. what's the story? >> i have more whiplash than watching yesterday's mets game. we have so much divergent opinions of what's really going on here with iphone 16 demand. today barclay's coming out with this note saying they see a sign that a supplier of apple's has cut 3 million units of

production. we get these reports every single year when new iphones launch. they measure how much demand is going on and they make little cuts or increases as they need to. by the way, they can still increase productions if they need to going into the holidays. that seems to be sending the stock down. it's down 3%. we weep hearing -- it's the same story we hear over and over again. the preorders, the first week of iphone 16 sales looked weak. it looked weak the first full week of sales. now things are moderating. seems like barclays have been focused on the first week showing sales down 15% on the preorders. look, it's really going to take many more months before we have this full picture of what this iphone 16 upgrade cycle actually looks like. we're still waiting for apple intelligence coming next month. we're still waiting for it to fully be realized into next year. it will take until early next year before we know what

happens. in the meantime, we have everyone on the street trying to figure out what's happening with iphone 16 demand. you see the reaction day by day what happens. >> patients needs to be in order. i appreciate it. steve kovach, the latest on apple. after the bell, "overtime," nike reporting their earnings. i wonder if this is a free quarter. they replaced the ceo. that's the overriding story. how is this gentleman going to engineer the turn-around this company desperately needs. >> and tremendous expectation on the street they will probably guide down or be conservative looking ahead. it's already been a big downward revision to expectations. six months ago this fiscal year, which ends in may, was supposed to be 4 bucks a share in earnings. now it's closer to $3 a share. you've seen this massive downgrade of what people are looking for from neighboringy. it's a pretty good scene setter

for a new ceo to come in there. essentially convey the strategy, whatever form can be done in the next month or so. and then maybe have a cleanish slate. the stock is as cheap as it's ever been relative to the market before this bump on the ceo news. it's still -- >> isn't it like 26 times. >> 27 times earnings. so it never really trades cheap but it shows you that it was sort of rescued before having to go -- undergo any more valuation compression. yeah, i agree expectations. you definitely want to see a plan in terms of market share of new product. >> i feel like people are not sure what to do with discretionary stocks. there are so idiosyncratic stories, this is one of them. the sector has done pretty well. i just don't -- >> i don't see a lot of conviction behind it when you get beyond, let's say, amazon and tesla, which have been driving the car now. >> that's right. then you have walmart and costco, staples, which everyone

assumes is the winner or value in retail, like tjx and ross or home builder. that's been your discretionary winner's tier. and autos are trading terribly. they're not a big part of the index anymore but you have all this fear about a real weak spot in the global auto cycle. they more or less held the advantage over staples. if you want to look at it as a macro read, it's still hanging in there but it's spotty within the index. relying a lot in the past six months or so on a handful of bellwethers. >> next 24 hours will be interesting. market's likely to be on edge over tensions in the middle east, what does israel do now, what happens with oil, with the dollar. >> you have adp and weekly claims and monthly payrolls in the next three days. so, all of that stuff, i think, is going to fine tune the macro message. yield's down today even not on

geopolitics news. i think it's the jolts report and the possibility of deceleration. >> mike, thank you. we'll go out red across the board. the dow looked like it was going to make a run. [ bell ringing ] >> that bell marks the end of regulation. the estee lauder company is ringing the closing bell at the new york stock exchange. breast cancer research foundation and ulta beauty doing the honors at the nasdaq. volatility ratcheting higher on this first day of october. as iran launches a missile attack on israel and as east coast american port workers go on strike. the major averages closed off the lows of the day.

that's