Stocks Jump as Softer CPI Sends Treasuries Higher | The Close 12/18/2025

>> YESTERDAY'S AI SKEPTICISM FLIPPING TO AI OPTIMISM.

LIVE FROM STUDIO TWO AT BLOOMBERG HEADQUARTERS.

I'M ROMAINE BOSTICK.

>> I'M KATIE GREIFELD. THE CLOSE IN THE U.S.

FROM OUR CHAIRS. HIGHS BY ABOUT .70%.

A BOUNCE BACK FROM WHAT WE HAVE GOTTEN USED TO.

CERTAINLY OFF OF THE HIGHS WE SAW JUST TODAY.

SESSION HIGH OF 1.4%. SOME OF THE MOMENTUM DRAINING.

A BIG GAIN WHEN IT COMES TO BIG TECH, HIGHER BY ABOUT 1.3 PERCENT. ALL AS O'REILLY BUILDS IN THE

PERCENT. ALL AS O'REILLY BUILDS IN THE BOND MARKET. WE DID GET THE SOFTER THAN

BOND MARKET. WE DID GET THE SOFTER THAN EXPECTED CPI. 10 YEAR YIELDS DOWN ABOUT FOUR

EXPECTED CPI. 10 YEAR YIELDS DOWN ABOUT FOUR BASIS POINTS. THE VICTIM OF VOLATILITY IN

BASIS POINTS. THE VICTIM OF VOLATILITY IN YOUR EQUITY MARKET TRAINING A BIT.

TRAINING WITH THE 17 HANDLE. ROMAINE:

YOU ALLUDED TO TWO OF THE BIG BOOSTS.

SURPRISINGLY STRONG FORECAST FOR MICRON.

A SURPRISINGLY BENIGN CONSUMER INFLATION REPORT OUT OF THE GOVERNMENT.

THE UNDER SHOOT COMING AT THE SLOWEST READING SINCE 2021.

A BIGGER PUNCH SINCE THE REPORT IS SEEN AS TILTING THE BALANCE OF ARGUMENT AT THE FED TOWARDS ANOTHER RATE CUT IN LATE JANUARY. BUT NOT EVERYONE IS CONVINCED.

JANUARY. BUT NOT EVERYONE IS CONVINCED.

RATE CODONS HAVE NOT MATERIALLY INCREASED, AT LEAST NOT TODAY.

THE KNEE-JERK REACTION DROP THAT WE SAW IN THE TWO-YEAR YIELD, THAT HAS ALL BEEN ERASED BY 11:30.

INVESTORS STILL WANT TO SEE MORE DATA TO HELP ROUND OUT THE ECONOMIC PICTURE.

THE MARKET CAN STILL HOLD FAITH AND CORPORATE EARNINGS, WHICH ARE SEEN MAINTAINING THE CURRENT TRAJECTORY ABOVE HISTORICAL AVERAGE.

AND IMPROVING EXPECTATIONS AROUND REPORTS FROM NIKE AND FEDEX.

2026 ESTIMATES FROM S&P COMPANIES DECLINING FOR MONTHS.

NOW IMPLY YEAR-OVER-YEAR EARNINGS GROWTH OF 12% INCHING UP TO 13% AND 14% IN 2027. KATIE:

WE WILL END THE YEAR AT AROUND 13% AND CORPORATE EARNINGS.

WE'VE HAD ALL-TIME HIGHS ON THE S&P, THE NASDAQ, ALL OF THE ABOVE. THE IDEA IT WILL CARRY INTO

ABOVE. THE IDEA IT WILL CARRY INTO 2026 IS PRETTY IMPORTANT. ROMAINE:

THAT IS THE MIX WE ARE SEEING ON THIS THURSDAY AFTERNOON.

OF COURSE I WANTED TO LOOK AT THE BOND MARKET.

WE TALK ABOUT EARNINGS. WE KNOW THE 10-YEAR TREASURY YIELD AND WHERE YIELDS ARE GOING INFORMS THE ENTHUSIASM IN THE EQUITY MARKET. BOND VOLATILITY AT A MULTIYEAR LOW. YOU'RE LOOKING AT A FOUR YEAR

LOW. YOU'RE LOOKING AT A FOUR YEAR LOW. EVEN THOUGH IT FEELS LIKE IT

LOW. EVEN THOUGH IT FEELS LIKE IT HAS BEEN TURBULENT WHEN IT COMES TO THE BOND MARKET, IT IS A STUDY GRIND -- A STEADY GRIND LOWER. BUT THE TREND IS CLEAR.

THE VOLATILITY COMING DOWN. YOU CAN SAY THE SAME ABOUT THE EQUITY MARKET AS WELL. ROMAINE: LET'S KICK THINGS OFF WITH THE HEAD OF ISHARES INVESTMENT STRATEGY OF THE AMERICAS OVER AT BLACKROCK. I DO WANT TO KICK OFF WITH THE

AT BLACKROCK. I DO WANT TO KICK OFF WITH THE INTERPLAY BETWEEN WHAT WE ARE SEEING IN THE STOCK MARKET AND THE BOND MARKET AND WHETHER THEY ARE SINGING FROM THE SAME HYMNAL RIGHT NOW, OR IF THERE IS A DIVERGENCE WE SHOULD BE PAYING CLOSER ATTENTION TO?

>> GOOD AFTERNOON. IT IS WONDERFUL TO BE HERE.

HAPPY HOLIDAYS TO YOU AND YOUR LISTENERS.

NOT JUST TODAY IN TERMS OF STOCK AND BOND MARKET, BUT IF YOU LOOK AT THE PRICE ACTION FOR THE ENTIRETY OF 2025, I THINK THEY HAVE BEEN SINGING FROM THE SAME HYMNBOOK.

TWO OF THE THINGS WE HAVE BEEN PAYING ATTENTION TO HIS WHAT IS DRIVING EQUITY MARKETS HAS BEEN VERY MUCH AROUND EARNINGS GROWTH AND WHAT HAS BEEN DRIVING BOND MARKETS, ESPECIALLY AROUND THE LOWER VOLATILITY YOU JUST POINTED TO IN THE BOND MARKET HAS BEEN AROUND THE FED DELIVERING WHAT IS EXPECTED FROM THEM IN THE TREASURY DELIVERING WHAT IS EXPECTED FROM THEM. TAKING THE VOLATILITY OUT OF

THE MARKET. BOTH THOSE ASSET CLASSES AS

THE MARKET. BOTH THOSE ASSET CLASSES AS WELL AS IN OUR PORTFOLIOS. AND ENDING ON A POSITIVE NOTE.

ROMAINE: WITH REGARDS GOING TO POSITIONING, DO YOU ADD ALL WORRY ABOUT INFLATION, AND THE BACKDROP WHICH SUGGEST DOES IT MEAN FOR REGULATORY ENVIRONMENT?

>> SURE, WE ARE IN THE MIDST OF WRITING OUR YEAR AHEAD.

IT WILL COME OUT ON JANUARY 6. I WOULD LOVE TO DISCUSS MORE OF THAT. BUT MAYBE THREE THINGS WE ARE

THAT. BUT MAYBE THREE THINGS WE ARE THINKING OF WRITING ABOUT IN OUR TEAM, THE FIRST IS A GRADUAL DECELERATION.

NOT TODAY SPRINT PARTICULARLY, THERE TENDS TO ME A SHUTDOWN IMPACTING THE NUMBER. BUT IT IS DIRECTIONALLY CONSISTENT.

IT IS DIRECTIONALLY CONSISTENT WITH A YEAR-OVER-YEAR PRINT IN NOVEMBER LOWER THAN WHAT WE HAD SEEN IN JULY AND AUGUST, ETC. THAT ITSELF IS ALLOWING FOR THE FED TO CONTINUE TO DELIVER TWO RATE CUTS, THAT IS OUR EXPECTATION.

MAKING INCOME REALLY VALUABLE IN A PORTFOLIO CONTEXT.

AT THE SAME TIME, ANOTHER FACT WE ARE THINKING ABOUT IS THIS IDEA THAT GOING INTO 2026, THERE ARE MANY POSITIVE IMPULSES FOR GROWTH.

WITH RESPECT TO WHERE WE END Q4 VERSUS Q1.

THAT MAY ALSO AID THEIR EARNINGS GROWTH ACROSS A BROADER SWATH OF INDUSTRIES. AND THE THIRD THING IS WHAT YOU SAID. YOU STILL NEED DIFFERENT TYPES

SAID. YOU STILL NEED DIFFERENT TYPES OF DIVERSIFIERS OF THE FULLER VALUATIONS IN MANY DIFFERENT ASSET CLASSES.

KATIE:KATIE: LET'S TALK ABOUT INCOME MORE.

FOR THE PAST SEVERAL YEARS IT WAS AS EASY AS COMPILING INTO A MARKET FUN.

HOW DOES IT REDEFINE INCOME AND WHERE THE FED IS EASING?

>> SUCH A GREAT QUESTION.

THERE IS REALLY THAT VERY FRONT AND YOU WERE ABLE TO BUY SOME CASH IN THEIR BECAUSE OF THE YIELD AVAILABLE WITH THAT COMING DOWN FURTHER, WE REALLY NEED TO IN YOUR INCOME BUCKET

AND THINK ABOUT SOURCING INCOME FROM FIXED INCOME.

ACTIVE ETF'S, MULTI-ASSET SECURITIZED AND EQUITY INCOME AS A SOURCE OF INCOME. AND LOOKING AT DIVIDEND INCOME AS A SOURCE OF INCOME AND PRIVATE CREDIT AS A SOURCE OF INCOME.

AND A PORTFOLIO IS EQUITY FIXED INCOME OR DIVERSIFIERS TO ALLOCATE TO INCOME AND A LOWER FED REGIME IN THE MONTHS AHEAD.

>> I DO WANT TO TALK ABOUT FIXED INCOME ETF'S.

IT IS STRIKING WHEN YOU TAKE A LOOK AT BLACKROCK'S OWN ETF LINEUP IN THE FIXED INCOME SPACE, THE BIGGEST YEAR TO DATE LOSSES ARE IN TLT, 20 YEAR PLUS TREASURIES USING ABOUT $3 BILLION. ON THE FLIPSIDE, IT IS A

BILLION. ON THE FLIPSIDE, IT IS A STAGGERING $37 BILLION OF INFLOWS WITH ZERO TO THREE MONTH TREASURIES. IT TELLS THE WHOLE STORY PILING

MONTH TREASURIES. IT TELLS THE WHOLE STORY PILING INTO DATA DEBT. BASICALLY SAYING GET ME OUT OF THE LONG END. WHERE DO WE SEE PEOPLE STEPPING OUT OF THE CURVE A LITTLE BIT?

>> I THINK WE ARE BEGINNING TO SEE THAT A LITTLE BIT ALREADY.

SOME OF THE OTHER ASSET CLASSES THAT HAVE ALSO BEEN GATHERING INFLOWS ARE MORE OF THOSE MULTISECTOR FIXED INCOME ETF'S.

IF YOU LOOK AT ACTIVE FIXED INCOME ETF'S, 38% OF THAT TOTAL INFLOW AND THINKING ABOUT CATEGORIES, JUST PURE SIMPLE AG THAT MIGHT BE MORE EXCITING THAN IT WAS JUST A FEW MONTHS AGO OR MORE ACTIVE VERSIONS. WE ARE TALKING ABOUT THE

SYSTEMATIC BOND FUND WHICH WE THINK IS GOING TO GATHER INVESTORS ARE LOOKING TO MOVE AWAY FROM THE VERY FRONT END.

AND FIND OPPORTUNITIES ALL IN YIELD AT A TIME WHEN YOU MIGHT NOT BE ABLE TO GET THAT IN THE VERY FRONT END. ROMAINE:

ALWAYS A PLEASURE, ALWAYS SO SMART.

THE INVESTMENT STRATEGY OVER AT BLACKROCK COMING UP HERE ON THE BIG PROGRAM TO COUNT YOU DOWN TO THE CLOSE.

A CLOSER LOOK AT THE STATE OF THE ECONOMY AND HOW THE FED MAY REACT TO IT. A CONVERSATION WITH BNY INVESTMENTS CHIEF ECONOMIST VINCENT REINHART. KATIE:

AND A CLOSER LOOK AT WHAT IS DRIVING THE MARKET WITH PAUL ABRAHIMZADEH. WE WILL DISCUSS THE

ABRAHIMZADEH. WE WILL DISCUSS THE OPPORTUNITIES WITHIN A.I. AND TECH, INCLUDING THE COMPANY'S INVESTMENTS IN SPACEX AHEAD OF A POTENTIAL IPO.

ROMAINE: NOT QUITE SPACE, BUT IF YOU ARE TAKING TO THE FRIENDLY SKIES, WE MIGHT KNOW OUR NEXT GUEST, ALAN WALSH, TALKING MORE ABOUT WHAT HIGH NET WORTH INDIVIDUALS ARE DOING WITH REGARDS TO THEIR OWN PERSONAL TRAVEL.

ALL THAT AND MORE COMING UP IN A SECOND ON THE CLOSE, THIS IS BLOOMBERG.

KATIE: CORE U.S. CONSUMER PRICES ROSE AT THE SLOWEST RATE SINCE 2021 IN NOVEMBER.

BASED ON THE LONG-AWAITED CPR REPORT.

THE MARKET PRICING IN SLIGHTLY MORE RATE CUTS IN 2026 ON THE BACK OF THE DATA. JOINING US TO IMPACT THE REPORT IS VINCENT REINHART, CHIEF ECONOMIST OVER AT BNY INVESTMENTS. A LOT OF QUESTIONS ABOUT THE

INVESTMENTS. A LOT OF QUESTIONS ABOUT THE QUALITY OF THIS DATA. IT WAS IMPACTED BY THE SHUTDOWN IN TERMS OF COLLECTIONS. WHEN YOU LOOK AT THE FIGURES YOU GOT THIS MORNING, HOW BIG IS THE ASTERIX NEXT TO IT?

>> BLOOMBERG RAN WITH THE HEADLINE THE SWISS CHEESE REPORT. WE LOST SOMETHING BY NOT HAVING

REPORT. WE LOST SOMETHING BY NOT HAVING THE SURVEY TAKERS IN OCTOBER. SO WE JUST DON'T KNOW WHAT HAPPENED. THERE IS SMOOTHING THREE TO TWO

HAPPENED. THERE IS SMOOTHING THREE TO TWO MONTHS. WHAT I SEE IS ESSENTIALLY TWO

MONTHS. WHAT I SEE IS ESSENTIALLY TWO MONTHS WORTH OF SLUGGISH FURTHER PROGRESS AND DISINFLATION FOR THE FED.

THE STICKING PRICES, SERVICES, THINGS TIED WITH CONTRACTS, AND THEY LOST ABOUT 1/10 OR SO OVER THE LAST TWO MONTHS IN TERMS OF THEIR INFLATION RATE. THEN THEY GOT A BONUS THAT MORE FLEXIBLE PRICES, COMMODITY AND GOODS PRICES, THEIR INFLATION

RATES SLOWED MORE BECAUSE OIL PRICES HAVE FALLEN.

>> A LOT OF NUANCE. THE SWISS CHEESE REPORT.

A LOT OF HOLES. THAT BEING SAID, IT SHOWED GOOD PROGRESS, SOME PROGRESS WHEN IT COMES TO SLOWING INFLATION.

YOU THINK IT IS THE CORRECT INTERPRETATION BY TRADERS TO PRICE IN SLIGHTLY MORE EASING WHEN IT COMES TO NEXT YEAR?

>> I THINK WITH THE LAST TWO DAYS WAS VALIDATE THE FED DECISION BACK IN SEPTEMBER TWO BY THREE QUARTERS PERCENTAGE POINTS WORTH OF INSURANCE BY CUTTING AT A QUARTER OF THE LAST THREE MEETINGS. IT SAYS THE FED IS IN THE RIGHT PLACE NOW TO RESPOND TO NEWS. DOES NOT TELL US WHAT THE NEWS WILL BE. SO I THINK WE HAVE TO BE A

WILL BE. SO I THINK WE HAVE TO BE A LITTLE MORE EVENHANDED ON EXPECTING WITH THE FED WILL DO IN 2026. ROMAINE: A LOT OF QUESTIONS AS WE WAIT

IN 2026. ROMAINE: A LOT OF QUESTIONS AS WE WAIT OUT THE END OF POWELL'S TERMS A MATTER OF WEEKS FROM THE PRESIDENT AS TO WHO WOULD REPLACE POWELL.

WHAT DO THE CONVERSATIONS LOOK LIKE AT THE NEXT THREE MEETINGS?

IS HE GOING TO BE THE ONE GUIDING THIS SHIP OR MORE OF A FREE-FOR-ALL?

>> I THINK IN DECEMBER IT GAVE YOU A BIT OF A SIGNAL.

THE CHAIR ONLY HAS ONE VOTE.

BUT YOU CAN EXERCISE THE SOFT POWER ASSOCIATED WITH THE JOB.

MAKE PROMISES ABOUT THE FUTURE WORDING OF STATEMENTS AND CAN THREATEN ABOUT WHAT ASSIGNMENT YOU MIGHT HAVE OVER THERE OR NOT THEY WILL GO TO YOUR RESEARCH CONFERENCE FOR YOUR RESERVE BANK PRESIDENT. THAT EXERCISES SOFT POWERS BUT BRINGS THE COMMITTEE TOGETHER. HOWEVER, IT HAS A SELL BY DATE.

CHAIR POWELL CAN'T MAKE PROMISES TOO FAR INTO THE FUTURE.

SO HE LOSES HIS TRACTION ON THE COMMITTEE.

YOU LOOK AT THE LAST COUPLE OF MONTHS, CHAIR POWELL IS REALLY PREPARING HIS COLLEAGUES FOR HIS SUCCESSOR. WHAT DID HE DO?

HE WAS VERY QUIET. HE LET THEM TALK, HE LET THEM GET THE MEDIA ATTENTION. HE TOLERATED DISSENT, THREE DISSENTS AT THE MEETING, DID NOT WORK HARD TO CORRAL THOSE DISSENTING COLLEAGUES.

AT THE BOARD LEVEL, THEY VOTED SEVERAL MONTHS IN ADVANCE ON THE ROSTER OF BANK PRESIDENTS. AT THE FOMC LEVEL, THEY STARTED RESERVE MANAGEMENT PURCHASES OF TREASURIES WELL IN ADVANCE OF WHAT A LOT OF PEOPLE THOUGHT. WHAT WAS HE DOING?

HE WAS GETTING THE INSTITUTION READY. ROMAINE:

I CAN SEE THAT PLAYING OUT. AS WE GET INTO NEXT YEAR, WE WILL GET INTO MORE RELIABLE DATA FOR THE FED TO DEPEND ON THAT, WHATEVER DISRUPTIONS WE HAD FROM THE SHUTDOWN, THAT IT WILL BE RESOLVED. AS WE GET INTO THE LATE JANUARY MEETING AND HOPEFULLY THE MEETINGS AFTER THAT, IT WILL BE A CLEANER READ OF THE ECONOMY?

>> ARE YOU PREDICTING NO MORE GOVERNMENT SHUTDOWNS >> DON'T BE THAT CONFIDENT. I THINK WE ARE GOING TO GET PAST THE HOLE IN THE SWISS CHEESE OF OCTOBER.

BUT THAT CONTAMINATES THE PANEL. FOR THE HOUSEHOLD SURVEY.

BLS DOES THIS ROLLING SWITCH OF THE PANEL.

THERE IS A WHOLE THAT YOU CANNOT FILL.

SO IT WILL TAKE A WHILE BEFORE WE CAN TRUST THE DATA.

AND THERE ARE A LOT OF OPEN SLOTS IN THE STATISTICAL GATHERING IN AGENCIES. YOU HAVE TO WORRY ABOUT LEADERSHIP. BUT WE WILL GET PAST IT, HAVE

LEADERSHIP. BUT WE WILL GET PAST IT, HAVE MORE CONFIDENCE ABOUT THE DATA. BUT WE ARE IN AN INFLECTION POINT. WE'LL GROWTH STILL BE A TREND,

POINT. WE'LL GROWTH STILL BE A TREND, WILL INFLATION GO LOWER? INFLECTION POINTS ARE TOUGH TO PREDICT. ROMAINE: WE HAVE TO LEAVE IT THERE.

PREDICT. ROMAINE: WE HAVE TO LEAVE IT THERE.

A NICE WRAP UP BEFORE THE END OF THE YEAR.

HAPPY HOLIDAYS, WE WILL CATCH UP WITH YOU.

WE SPENT A COUPLE OF DECADES AT THE FEDERAL RESERVE, WHEN WE COME BACK AFTER THE BREAK, WE WILL TALK ABOUT OLIVE GARDEN, THE PARENT COMPANY ON THE BACK OF ITS EARNINGS.

THEY HAD REALLY INTERESTING THINGS TO SAY ABOUT THE HELP OF THE CONSUMER. INTERESTING THINGS AS HE DEFIED

THE CONSUMER. INTERESTING THINGS AS HE DEFIED SOME OF THE DOOM AND GLOOM WE SAW.

THAT IS COMING UP NEXT ON THE CLOSE.

ROMAINE: TIME FOR OUR TOP CALLS. A BIG MOVERS ON THE BACK OF ANALYST RECOMMENDATIONS. STARTING WITH RIVIAN.

ANALYST RECOMMENDATIONS. STARTING WITH RIVIAN.

UPGRADING TO OUTPERFORM AND INCREASING THE PRICE STARTING TO A HIGH MATCH $25. THE 2026 LAUNCH OF THEIR R2 MODEL WILL EXPAND THE LINEUP INTO A LOWER PRICE CATEGORY THAT SHOWED SIGNIFICANT INCREASE IN ITS TOTAL ADJUSTABLE MARKET. SHARES ARE UP 13%.

ADJUSTABLE MARKET. SHARES ARE UP 13%.

EVERCORE ISI COMING TO UNDER. SLASHING 92 FROM 114.

THE DOWNGRADE IN THE WAKE OF THE HOMEBUILDERS, DISAPPOINTING EARNINGS. THERE COULD BE FURTHER DOWNSIDE

EARNINGS. THERE COULD BE FURTHER DOWNSIDE RISKS. THOSE SHARES DOWN FOR A THIRD

RISKS. THOSE SHARES DOWN FOR A THIRD STRAIGHT DAY. SHAKE SHACK. J.P. MORGAN UPGRADING TO NEUTRAL.

STRAIGHT DAY. SHAKE SHACK. J.P. MORGAN UPGRADING TO NEUTRAL.

MORE THAN 30% DROP IN THE STOCK SINCE JULY MAKES IT A LOT MORE ATTRACTIVE ACCORDING TO THE ANALYST. THE SHARES GIVE IT A NICE BID ON THE DAY FOR A SECOND STRAIGHT DAY.

THOSE ARE SOME OF OUR TOP CALLS. WE WANT TO STAY IN THE RESTAURANT SPACE AND TAKE A CLOSER LOOK AT DARDEN, THE OWNER OF OLIVE GARDEN. SEEING SPECIAL GROWTH IN THE RECENT QUARTER, THAT WAS BOOSTED BY STRONG SPENDING FROM MIDDLE AND HIGH INCOME DINERS. THE MANAGING DIRECTOR AND RESEARCH ANALYST AT MIZUHO SECURITIES JOINS US.

I WANT TO IMPACT WHAT TYPE OF CONSUMER WE ARE SEEING WALK IN THOSE DOORS. EARLIER THIS YEAR, THE TALK

THOSE DOORS. EARLIER THIS YEAR, THE TALK SEEMED TO BE THESE ESTABLISHMENTS, THESE MASS-MARKET SEMI CASUAL PLACES WERE NOT DOING WELL BECAUSE THE MIDDLE INCOME CONSUMERS WERE NOT SPENDING. WHAT IS GOING ON?

>> THANK YOU FOR HAVING ME. ULTIMATELY A LOT OF RESTAURANTS HAVE TAKEN TOO MUCH PRICING. SOME RESTAURANTS HAVE TAKEN LESS PRICING THAN EVEN GROCERY. IF YOU LOOK AT CASUAL DINING AS A SEGMENT, THEY HAVE TAKEN PRICING IN LINE FOR GROCERY

OVER THE PAST FIVE YEARS. THEY HAVE DONE A GREAT JOB OF HIGHLIGHTING THE CHECK COMPRESSION RELATIVE TO QS R.

CROSS CASUAL DINING, WE HAVE SEEN POSITIVE TRAFFIC TRENDS AND THE SEGMENT HAS OUTPERFORMED, LED BY DARDEN.

THE REST OF THE INDUSTRY, INCLUDING FAST CASUAL AND QS R.

ROMAINE: HOW ARE THEY DOING WITH REGARDS TO MAINTAINING COSTS WITH THE ELEVATION WE HAVE SEEN, PARTICULARLY IN BEEF?

>> GIVEN THE FACT THEY OWN LONGHORN, THE EXPOSURE TO BEEF WITH FINED ICING -- FINE DINING BUSINESSES, THE EXPOSURE TO BEEF IS HIGHER. THAT IS DRIVING OUTSIZED INFLATION. THAT IS WHAT WE SAW MARGE AND,

INFLATION. THAT IS WHAT WE SAW MARGE AND, DESPITE THE TOP LINE UPSIDE IN THE QUARTER.

THAT IS WHY WE MAINTAINED EPS GUIDANCE DESPITE RAISING SALES GUIDANCE.

HOPEFULLY THE HEADWIND FROM BEEF INFLATION DECELERATES IN 2026. IT IS A VERY LONG CYCLE.

2026. IT IS A VERY LONG CYCLE.

AT THAT INFLATIONARY HAVEN CAN BE WITH US FOR A WHILE, EVEN AT A LOWER PACE. KATIE: ALSO INTERESTING TO SEE THE RECEPTION TO SMALLER PORTIONS. WE KNOW THAT SPECIFICALLY OLIVE GARDEN HAS BEEN ROLLING OUT SMALLER PORTIONS, LOWER PRICE OPTIONS, THE AFFORDABILITY VIBE OUT THERE.

WE KNOW THAT THAT HAS BACKFIRED IN MORE FAST CASUAL LUNCH SPOTS.

IT SEEMS TO BE BEARING FRUIT AT OLIVE GARDEN.

>> THAT IS ANOTHER TREND ACROSS FAST CASUAL DINING.

THE LOWER SIZES A MOVE TO APPEAL TO THE LOWER INCOME CUSTOMER WHO IS HYPER FOCUSED ON VALUE.

THE CASUAL DINING SEGMENT, LET ABOUT OLIVE GARDEN, TO MAKE THOSE TYPES OF MOODS TO GO AFTER THAT.

HOPEFULLY SUSTAINED A POSITIVE TRAFFIC THAT WE HAVE SEEN ACROSS THE SEGMENT ACROSS OLIVE GARDEN. KATIE:

WHEN IT COMES TO RETAIL, SOMETHING THEY TALK ABOUT IS THE IDEA OF THE TRADE DOWN TRADE THAT BASICALLY WHEN THINGS FEEL STRETCH, WHEN INFLATION IS STUBBORN, THAT PEOPLE GO FOR LOWER PRICED OPTIONS, DOES IT EXIST IN THE RESTAURANT INDUSTRY? CAN YOU APPLY IT TO WHAT WE ARE

RESTAURANT INDUSTRY? CAN YOU APPLY IT TO WHAT WE ARE SEEING?

>> IT CERTAINLY EXISTS. WHAT WE ARE SEEING IS BECAUSE CASUAL DINING HAS KEPT ITS AVERAGE CHECK GROWTH RELATIVELY SUPPRESSED AND FAST CASUAL AND QS R, WE ARE SEEING A SWITCH FROM WHAT WE WERE SEEING HISTORICALLY, A TRADE DOWN TO THOSE CATEGORIES. TWO CASUALLY -- TO CASUAL

THOSE CATEGORIES. TWO CASUALLY -- TO CASUAL DINING FROM FAST AND QS R.

LIKE CHILI'S HIGHLIGHTING THEIR $10 99'S AND SPURRIER, GOING AFTER THE BIG MAC ON NATIONAL TELEVISION.

THAT IS A MESSAGE RESONATING WITH CUSTOMERS, THAT HAS ACTED AS A HALO ACROSS THE ENTIRE SEGMENT.

AND OLIVE GARDEN IS BENEFITING AS WELL. ROMAINE:

ALWAYS APPRECIATE YOUR INSIGHTS, A GREAT DAY WHEN IT COMES TO WHAT WE ARE SEEING OUT OF DARDEN AND A LOT OF FOLKS ARE LOOKING AT THE BROADER RESTAURANT LANDSCAPE FOR ANY CLUES WE CAN GLEAN FROM THAT REPORT.

THE MANAGING DIRECTOR OVER AT MIZUHO SECURITIES.

WE TALKED A LOT HOW THESE CASUAL DINING PLACES WERE BEING SQUEEZED.

DINERS WHO WANT TO FAST FOOD, MIDDLE INCOME DINERS WERE STAYING AT HOME MORE OR LESS.

>> INTERESTING TO SEE THEM DISPEL THAT.

I THINK IT IS REALLY INTERESTING THAT OLIVE GARDEN, IT SEEMS TO BE WORKING FOR THEM, SMALLER PORTIONS AT LOWER PRICES. I FEEL THAT CAN ONLY GO SO FAR

PRICES. I FEEL THAT CAN ONLY GO SO FAR BEFORE DINERS START TO REVOLT A LITTLE BIT. ROMAINE:

I'M IN FAVOR OF SMALLER, I FEEL LIKE PORTIONS ARE TOO BIG.

KATIE: THIS IS AMERICA. ROMAINE: BUT YOU PAY FOR THAT.

THE TRADE-OFF IS GIVE ME A SMALLER PORTION I CAN FINISH IN ONE MEAL AND GIVE ME A LOWER PRICE POINT, I'M ALL FOR IT.

KATIE: THESE ARE FAIR POINTS. ROMAINE:

I KNOW YOU TAKE THE ENDLESS BREADSTICKS OVER AND OVER.

KATIE: I WANT A PILED HIGH ON THE PLATE. COMING UP, NEWS OF A SPACEX

PLATE. COMING UP, NEWS OF A SPACEX ACQUISITION THAT CAN TALK ABOUT WHAT IT WOULD CHANGE IN TERMS OF HOW THE COMPANY OPERATES. WE WILL DISCUSS.

THIS IS THE CLOSE.

ROMAINE: 3:30 P.M. HERE IN NEW YORK, THIS IS THE COUNTDOWN TO THE CLOSE. KATIE: KEEPING AN EYE ON THESE MARKETS, LOOKING AHEAD TO 2026 AND SPACEX TOPPING OPENAI AS THE HIGHEST VALUED UNLISTED FIRM, THAT RAISES THE POTENTIAL FOR A 2026 IPO. IT'S FUN TO SPECULATE WHAT THAT

WOULD LOOK LIKE. ROMAINE:

WE WERE TALKING ABOUT THE BIGGEST, SAUDI ARAMCO, HOW WAS THAT DIGESTED? LET'S JUST SAY IT WAS A SMALL

THAT DIGESTED? LET'S JUST SAY IT WAS A SMALL SLIVER THEY GOT PEELED OFF AND THAT WAS THE ONLY WAY THEY COULD GET IT DONE. I ASSUME SPACEX WOULD BE SOMETHING TO THAT DEGREE AS WELL. KATIE:

IT'S NOT APPLES TO APPLES. I'VE NEVER BEEN TO SPACE AND I WOULD NEVER GO. I BELONG ON EARTH.

PAUL, IT'S GREAT TO SEE YOU ON THE SET.

COME INTO THIS CONVERSATION, WE'VE BEEN DOING THE THOUGHT EXERCISE OF WHAT THIS WOULD LOOK LIKE AND TO THE POINT OF SAUDI ARAMCO, THAT'S NOT QUITE AN APPLES TO APPLES SITUATION.

IF WE DID SEE THESE MEGA COMPANIES COME THROUGH, SPACEX AND OPENAI, HOW DOES THAT GET DIGESTED IN THE IPO MARKET?

>> INCREDIBLE DEPTH OF LIQUIDITY IN THE U.S.

CAPITAL MARKETS.

ARAMCO, ALIBABA, TWO IPO'S I WAS FORTUNATE TO WORK ON.

YOU GOT THE ABILITY TO PLACE CONSIDERABLE CAPITAL IN THE U.S.

AND ABROAD. YOU'RE TALKING ABOUT SPACEX OR OPENAI OR ANTHROPIC, THESE WILL BE BILLION-DOLLAR IPO'S, MAYBE TRILLION DOLLARS PLUS. THERE IS STRONG DOUBLE DEMAND AND BRAND RECOGNITION AND INCREDIBLE RETAIL FOLLOWING WHEN THEY ARE PUBLIC COMPANIES. WE HAVE NO CONCERN ABOUT MARKET

DEPTH. IT WILL BE A FACTOR OF STRUCTURE, VALUATION AND TIMING.

DEPTH. IT WILL BE A FACTOR OF STRUCTURE, VALUATION AND TIMING.

KATIE: TALK US THROUGH WHAT IT MEANS, THE IDEA THAT WHEN THIS GOES PUBLIC, IF YOU ARE IN INSTITUTIONAL EVENTS ARE, IT SOUNDS LIKE YOU JUST HAVE TO PARTICIPATE.

>> IF YOU THINK ABOUT IT, SPACEX, OPENAI OR ANTHROPIC, YOU NEED TO OWN IT, IT'S A QUESTION OF WHEN YOU BUY IT.

THERE WILL BE A LOT OF GAMESMANSHIP AROUND THE IPO'S.

THESE ARE MUST OWN COMPANIES INSTITUTIONALLY AND RESALE AND THEY WILL MOVE MARKETS.

SPACEX WILL HURTLE INTO THE MAG SEVEN ALMOST IMMEDIATELY ONCE IT'S PUBLIC. WE ARE INCREDIBLY EXCITED AND

IT'S PUBLIC. WE ARE INCREDIBLY EXCITED AND WE THINK THIS IS THE YEAR OF COMPANIES GOING PUBLIC.

THERE'S AN INCREDIBLE BACKLOG AND WE THINK THERE IS M&A ACTIVITY EMANATING FROM SILICON VALLEY THAT WILL BE A SECOND CATALYST TO CAPITAL FORMATION. ROMAINE:

DIGESTING IPO'S OF THIS SIZE, IS NOT JUST SPACEX.

AT LEAST THREE OF THOSE WILL BE COMING PUBLIC.

WITH THE FIRST ONE DILUTE THE SECOND?

>> IT'S A GREAT POINT. THE CADENCE WILL BE VERY IMPORTANT. YOU CAN BRING ALL THAT PAPER TO

IMPORTANT. YOU CAN BRING ALL THAT PAPER TO MARKET AT ONCE. THE MARKET HAS BEEN STARVED OF IPO ACTIVITIES FOR THE PAST 3-4 YEARS AND THERE'S LOTS OF EXCITEMENT. FOR LARGE CAP EQUITIES AND

EXCITEMENT. FOR LARGE CAP EQUITIES AND THINK THERE'S GOING TO BE EXCEPTIONAL DEMAND.

TO PUT IT IN PERSPECTIVE, YOU LOOK AT A COMPANY LIKE ALIBABA, THEY WERE A 25 BILLION-DOLLAR IPO. GETTING BACK TO THAT POINT, THERE'S INCREDIBLE DEPTH OF LIQUIDITY IN THE MARKET TO SUPPORT THESE JUMBO DEALS. BUT YOU ARE RIGHT, THE CADENCE WILL BE VERY IMPORTANT. ROMAINE: WITH REGARD TO M&A ACTIVITY IN THE PRIVATE SPACE, IS THAT A FUNCTION OF SMALLER OR MIDSIZE

COMPANIES OR ARE WE TALKING ABOUT BIG GIANTS BUYING COMPETITORS OR JUST UP AND COMERS, I SHOULD SAY?

>> WHEN YOU LOOK AT THE EQUITY VALUE, A LOT OF THE PIVOTING TO FREE CASH FLOW UNICORNS IN THE PRIVATE MARKET, THEY ARE LOOKING FOR THE NEXT LEG OF GROWTH.

MANY OF THOSE LARGE CAPS HAVE HAD A GREAT 2024-2025 ORGANICALLY.

IN AN ORGANIC GROWTH WILL BE A CATALYST FOR 2026 AND 2027.

THERE HAVE BEEN THREE OR FOUR NOTABLE DEALS ACROSS THE UNICORN LANDSCAPE. I THINK THERE MORE THAT TO COME

UNICORN LANDSCAPE. I THINK THERE MORE THAT TO COME NEXT YEAR. KATIE: IS THERE ANY SPECIFIC INDUSTRY

NEXT YEAR. KATIE: IS THERE ANY SPECIFIC INDUSTRY YOU HAVE YOUR EYE ON THAT SEEMS RIGHT FOR CONSOLIDATION?

>> ACROSS THE SECTORS WHERE WE INVEST, I THINK THEY ARE ALL FAIR GAME. I SAID THAT BECAUSE WHETHER YOU

FAIR GAME. I SAID THAT BECAUSE WHETHER YOU LOOK AT THE LARGE LANGUAGE MODELS, YOU GOT SOME OF THEM WHERE, IT'S STILL A DROP IN THE BUCKET FOR SOME OF THESE MEGACAP TECHNOLOGY COMPANIES.

SEE ME COMPUTE IS ANOTHER AREA, WHEN YOU THINK ABOUT, WHILE THE PRICE CHECKS AREN'T CHEAP ON A MULTIPLE BASIS, ON ENTERPRISE VALUE, SOME OF THESE COUPLINGS ARE RELATIVELY SMALL VERSUS THE INCUMBENTS. I THINK YOU'LL GET BACK TO THE

INCUMBENTS. I THINK YOU'LL GET BACK TO THE PARADIGM WE SAW A DECADE AGO OF THE DISRUPTED ACQUIRING THE DISRUPTORS. BEYOND THE IPO MARKET REOPENING

DISRUPTORS. BEYOND THE IPO MARKET REOPENING WE THINK THAT'S AN IMPORTANT SECOND CATALYST TO COME. KATIE:

LOOKING AT YOUR PORTFOLIO COMPANIES, I SEE A LOT OF AI NAMES, A LOT OF SOFTWARE NAMES AND SOME DEFENSE NAMES IN THERE AS WELL. WHEN YOU THINK ABOUT WHAT YOU

AS WELL. WHEN YOU THINK ABOUT WHAT YOU HOLD RIGHT NOW AND THE DIFFERENT NAMES IN HERE, WE SPOKE TO ONE CEO A FEW DAYS AGO. IS THE HOPE THAT SOME OF THESE COMPANIES IN YOUR PORTFOLIO RIGHT NOW DO COME TO THE PUBLIC MARKETS?

>> ABSOLUTELY. WE LOOK AT OUR PORTFOLIO AND ROUGHLY ONE THIRD TO 50% COULD BE PUBLIC IN THE NEXT 12-15 MONTHS. BASED ON INTERNAL PREPARATIONS,

MONTHS. BASED ON INTERNAL PREPARATIONS, FROM OUR PERSPECTIVE, WE ARE BEING VERY CAREFUL ON THE CAPITAL DEPLOYMENT. I THINK IT'S AN INCREDIBLE

CAPITAL DEPLOYMENT. I THINK IT'S AN INCREDIBLE PERIOD OF DISRUPTION. WHEN YOU LOOK AT THE AI LANDSCAPE BROADLY DEFINED, WE HAVE EXPOSURE WITH COMPANIES WE ARE VERY PROUD OF. THE INDUSTRY HAS HAD A LOT OF FOCUS IN THE LAST FEW WEEKS.

BASED ON CAPEX REQUIRED TO FIND THE BUILDOUT AS WELL AS LARGE LANGUAGE MODELS LIGHT REFLECTION AI, WHICH IS ENDEAVORING TO BE THE LEAD OPEN WEIGHT MODEL, WHERE U.S.

REGULATED INDUSTRIES NEED TO BUILD ON AN AMERICAN-MADE FRONTIER MODEL. OTHER COMPANIES WILL BE

FRONTIER MODEL. OTHER COMPANIES WILL BE CRITICALLY IMPORTANT AS YOU THINK ABOUT CHALLENGES FROM A SEMI COMPUTER HARDWARE PERSPECTIVE.

WE ARE MAKING CALCULATED BETS ON BEHALF OF OUR PARTNERS ACROSS THE LANDSCAPE. WHAT ALWAYS LOOKING AT DISRUPTION RISK AND A PATH TO LIQUIDITY. ROMAINE:

WE SHOWED A GRAPHIC EARLIER ABOUT COMPANIES THAT ARE AI NATIVE OR AI ENABLED, I FORGET THE EXACT PHRASING.

GIVE ME AN EXAMPLE OF HOW YOU SEPARATE THE WHEAT FROM THE CHAFF. A LOT OF COMPANIES ARE PITCHING

CHAFF. A LOT OF COMPANIES ARE PITCHING THEMSELVES AS BEING AI COMPANIES THAT REALLY AREN'T.

>> WE HAVE PILLARS IN OUR PORTFOLIO, YOU LOOK AT WHAT ELON HAS DONE JUST IN THE PAST SIX MONTH AND THE DISCUSSIONS AS THE DISRUPTOR FOR TRADITIONAL SOFTWARE COME NEXT MONEY BEING AUGMENTED TO CAPABILITY ON IT SUCH THAT YOU HAVE A REAL CREDIBLE SUPER APP WHICH YOU'VE NOT REALLY HAD TO DATE IN THE UNITED STATES. YOU SEEN THEM IN ASIA AND LATIN

AMERICA. WE ARE SUPER EXCITED ABOUT THAT.

AMERICA. WE ARE SUPER EXCITED ABOUT THAT.

AS YOU LOOK AT THE SOFTWARE LANDSCAPE WHICH RIGHT NOW WE THINK IS AT A PIVOTAL POINT.

YOU LOOK AT SOFTWARE COME FOR THE PERCENTILE.

PEOPLE ARE PIVOTING AWAY FROM SOFTWARE BECAUSE SOFTWARE COULD VERY MUCH BE DISRUPTED BY THIS NEW WAVE OF AI.

COMPANIES BUILT ON AI THAT ARE RELATIVELY NEW THAT WE THINK WILL WITHSTAND THIS DISRUPTION.

DEALS IN HR SOFTWARE AND PAYROLL AND SOFTWARE EXPENSE MANAGEMENT, THOSE ARE COMPANIES BUILT TO WITHSTAND THIS PERIOD OF DISRUPTION. ROMAINE: GREAT INSIDES, GREAT TO CATCH

OF DISRUPTION. ROMAINE: GREAT INSIDES, GREAT TO CATCH UP WITH YOU. -- GREAT INSIGHTS. WHEN WE COME BACK, WE'LL TALK ABOUT THE STOCK OF THE HOUR. THE STOCK IS DOWN.

A WARNING FOR SALES GROWTH. THAT'S COMING UP NEXT ON THE CLOSE. THIS IS BLOOMBERG.

CLOSE. THIS IS BLOOMBERG.

ROMAINE: TIME FOR THE STOCK OF THE HOUR.

WEAKER THAN EXPECTED SALES GROWTH FORECAST, THE SANDAL MAKER SIDING PRESSURES FROM TARIFFS, THE WEAKER U.S.

DOLLAR AMONG A FEW OTHER THINGS. OUR MARKETS -- MARKETS CORRESPONDENCE JOINS US EVERY FILE EARLIER THIS YEAR EVERYONE WAS TALKING ABOUT HOW GREAT BIRKENSTOCK WAS DOING.

ARE WE JUST NOT WEARING THEM ANYMORE?

>> DEMAND IS STILL THERE BUT INVESTORS ARE REALLY HUNG UP ON THE FORECAST MOVING FORWARD. THEY ARE TALKING ABOUT SLOW SALES GROWTH HEADING INTO 2026 AND SIDING TARIFFS AND A WEAKENING U.S. DOLLAR. OF COURSE WE KNOW THIS IS A

WEAKENING U.S. DOLLAR. OF COURSE WE KNOW THIS IS A GERMAN BASED COMPANY BUT ABOUT HALF THE REVENUE COMES FROM U.S.

SALES. WHEN YOU THINK ABOUT THE DYNAMIC OF U.S.

CURRENCIES AND ALL WE'VE BEEN SEEING IN TERMS OF A WEAKENING U.S. DOLLAR, THEY'RE SEEING THIS AS

U.S. DOLLAR, THEY'RE SEEING THIS AS POTENTIALLY HAMPERING SOME OF THE METRICS AND PROGRESS FOR 2026. THAT'S A GENERAL CONCERN. SHARES ARE DOWN ABOUT 27% SO

2026. THAT'S A GENERAL CONCERN. SHARES ARE DOWN ABOUT 27% SO FOR THIS YEAR SO BROADLY SEEING THIS STOCK AND A LOT OF OTHER RETAILERS STRUGGLING. KATIE: AN INTERESTING POINT ON THE

RETAILERS STRUGGLING. KATIE: AN INTERESTING POINT ON THE DOLLAR, THEY REPORT IN EURO SO A LOT OF CROSS CURRENCY IMPACTS THERE.

I JUST WHAT WERE SEEN WITH BIRKENSTOCK COMPARE TO THEIR PEER SET THOUGH?

>> IT ISN'T UNCOMMON IF YOU THINK ABOUT RETAILERS MORE BROADLY, THE REPORTS WE'VE BEEN RECEIVING.

IS IT CHANGING CONSUMER WE'VE BEEN SEEING, ECONOMIC HEADWINDS, TARIFFS HAVE BEEN THE BUZZ WORD WE'VE BEEN TALKING ABOUT ALL YEAR. SOMETHING THAT REMAINS A STRESSOR .4 A LOT OF THESE COMPANIES THAT HAVE BEEN

STRESSOR .4 A LOT OF THESE COMPANIES THAT HAVE BEEN REPORTING IN RECENT WEEKS. IT'S NOT NECESSARILY EXCLUSIVE TO BIRKENSTOCK.

WITH THE TEAR CONCERNS ARE EXPECTING, WHEN YOU THINK OF THE BROADER RETAILER IT HAS BEEN A MIXED PICTURE THAT WE GOT FROM THIS EARNINGS SEASON. OF COURSE WE WILL HAVE NIKE REPORTING AFTER THE CLOSING BELL TODAY. ROMAINE:

NIKE IS A DIFFERENT STORY BUT IT GETS TO THE IDEA OF HOW YOU STAY IN THE ZEITGEIST. THERE'S ALWAYS THE CONSUMER SPENDING STORY BUT AT THE END OF THE DAY, PEOPLE WILL ALWAYS BE BUYING SHOES. IT'S JUST A MATTER OF WHAT IS

BUYING SHOES. IT'S JUST A MATTER OF WHAT IS RELEVANT AND WHAT PEOPLE GRAVITATE TO.

>> THEY HAD A MOMENT, DOWN ABOUT 11% THIS YEAR WHEN YOU THINK ABOUT THE COMPARISON. THAT'S HER MAJOR PEER ON THE TERMINAL. BUT IT'S ABOUT WHERE PEOPLE ARE

TERMINAL. BUT IT'S ABOUT WHERE PEOPLE ARE SPENDING THEIR MONEY AND A LOT OF PEOPLE HAVE BRAND LOYALTY.

SOME OF MY FRIENDS OBSESSED WITH BIRKENSTOCK BUT THEY'RE THE ONLY PEOPLE GOING TOWARD THEM WHEN THEY ARE SHOPPING FOR DIFFERENT NAMES. DO YOU LIKE NIKE OR ADIDAS.

DIFFERENT NAMES. DO YOU LIKE NIKE OR ADIDAS.

IF YOU RUN PC GO ON THE TERMINAL IT COMES UP AS A COMPETITOR. ROMAINE:

COMPETITOR. ROMAINE: REMEMBER DR. SCHOLL'S? >> THEY DID THE INSERTS FOR YOUR SHOES.

>> YOU COULD GET THEM LIKE AT CVS, I REMEMBER THAT.

GREAT REPORTING AS ALWAYS, I WILL SAY I WILL BE BURIED IN A PAIR OF HOKAS. LOYALTY IS A BIG FACTOR WHEN IT COMES TO FOOTWEAR. ROMAINE: DO YOU HAVE A HOOKUP WHERE THEY SEND YOU A NEW AIR EVERY SIX MONTHS?

WE HAVE TO AUTOMATE THAT. KATIE: THE CLOSING BELL IS UP NEXT.

WE HAVE THE CHIEF INVESTMENT OFFICER AT HSBC AMERICAS.

THIS IS THE CLOSE, ON BLOOMBERG. >> TWO OF THE THINGS WE HAVE BEEN PAYING ATTENTION TO IS WHAT IS DRIVING EQUITY MARKETS HAS BEEN VERY MUCH AROUND EARNINGS GROWTH AND WHAT IS BEEN DRIVING BOND MARKETS AND ESPECIALLY AROUND THE LOW VOLATILITY YOU SAW IN THE BOND MARKETS HAS BEEN AROUND THE FED DELIVERING WHAT IS EXPECTED THROUGH THEM AND THE TREASURY

DELIVERING WHAT IS EXPECTED FROM THEM, AND REALLY WITH THAT, TAKING A LITTLE BIT OF VOLATILITY OUT OF THE MARKETS.

THAT'S EXACTLY WHAT WE HAVE GOT. ROMAINE:

KICKING US OFF TO THE CLOSE, A BIT OF UPLIFT FROM WHAT WE SAW YESTERDAY WITH THAT SIGNIFICANT SELLOFF CLAWING BACK A GOOD CHUNK OF THOSE LOSSES TODAY. KATIE:

THE S&P 500 HIGHER BY ABOUT 1%, SNAPPING FOUR STATE -- STRAIGHT DAYS OF LOSSES FOR THAT BENCHMARK.

YOU CAN COMPLAIN ABOUT A 1% RALLY.

THE NASDAQ 100 HIGHER BY 1.7%. YOU CAN THANK MICRON FOR A LOT OF THAT. 10-YEAR YIELD, A LITTLE BIT OF

OF THAT. 10-YEAR YIELD, A LITTLE BIT OF RALLY. WE DID GET CPI FIGURES EARLIER,

RALLY. WE DID GET CPI FIGURES EARLIER, SWISS CHEESE REPORT AS WE WERE DISCUSSING, BUT SHOWING PROGRESS ON INFLATION NONETHELESS.

ROMAINE: SOME OF THOSE TECHNICAL LEVELS WE WERE TESTING PUTTING SOME DISTANCE BETWEEN IN HERE ON THIS THURSDAY AFTERNOON. JOINING US IS THE CHIEF INVESTMENT OFFICER OVER AT HSBC AMERICA. GREAT TO SEE YOU HERE.

LET'S TALK ABOUT THE POTENTIAL FOR THIS RALLY, I KNOW THE PRICE ACTION OVER THE LAST FEW WEEKS HAS BEEN DISJOINTED FOR A VARIETY OF REASONS. ASSUMING THAT SMOOTHS OUT IN JANUARY AND BEYOND, IS THERE SPACE FOR BROAD MARKETS IN THE U.S. RIGHT NOW?

U.S. RIGHT NOW?

>> WE REMAIN OPTIMISTIC. SHORT-TERM WE THINK WE WILL SEE A BIT OF REPRICING IN EQUITIES CONTINUE INTO THE FIRST QUARTER.

ESPECIALLY IN THE TECH SECTOR, AZTEC IS GOING GLOBAL, IT'S INCREASING DEMAND. THAT MEANS HIGHER PRICES WHICH

INCREASING DEMAND. THAT MEANS HIGHER PRICES WHICH IS GOOD FOR MARGINS AND EARNINGS BUT IT DOES MEAN LONGER DELIVERY TIMES AND MORE COMPETITION FOR THOSE CHIPS AND COMPUTERS.

ROMAINE: WE WERE TALKING ABOUT THE EARNINGS REPORT FROM MICRON, OBVIOUSLY A LOT OF PRICING POWER.

WHERE IS THE MONEY GOING RIGHT NOW WITH REGARDS TO THE TECH AND AI TRADE? WHAT ARE INVESTORS REALLY LOOKING FOR RIGHT NOW?

>> INVESTORS HAVE TO REALIZE COMPUTERS AND CHIPS OUR INPUTS INTO AI. THAT IS NOT AI. AI IS A PRODUCT OF SERVERS THAT

INTO AI. THAT IS NOT AI. AI IS A PRODUCT OF SERVERS THAT IS DERIVED AND CREATED FROM THOSE INPUTS.

SO THERE'S A LOT OF DEMAND FOR THOSE INPUTS.

WHAT'S GOING TO BE PRODUCTIVITY ENHANCING AND BOOST PRODUCTIVITY -- PROFITABILITY IS THE PRODUCTS AND SERVICES BEING CREATED CURRENTLY. IT'S NOT JUST PUTTING SOMETHING ON A WEBSITE AND PEOPLE BUY IT AND DOING FREE RESEARCH PAPERS.

IT'S A CONSULTING ARRANGEMENT ESSENTIALLY WITH THE AI COMPANY AND YOUR COMPANIES. KATIE: IT'S INTERESTING TO TRACK THE AI TRADE IN MARKETS. IT FEELS LIKE WE'VE BEEN IN THIS SORT OF AI ENABLING SPACE FOR A WHILE WHEN IT COMES TO CHIPS AND THE PICKS AND SHOVELS. THERE'S BEEN MOMENTS WHERE IT GETS TO THAT SECOND LEVEL, BUT IT STILL SEEMS LIKE A LOT OF

THE EXCITEMENT IS AROUND THESE CHIPMAKERS.

>> ABSOLUTELY. AND I THINK THE CONCERN IS, TO WE GET TO THE POINT WHERE PEOPLE UNDERSTAND WHAT ARE THE NEW PRODUCTS AND SERVICES BEING CREATED THAT HELP REDUCE COST AND LYFT REVENUES, WHAT ARE THOSE AND WHERE DO THEY EXIST AND WHO MAKES THEM? UNTIL WE GET TO THAT, WE HAVE TO DO WITH THE FACT THAT PC AND CHIP DEMAND IS SO HOT THAT THE

LOGISTICS WILL CREATE SLOWER EARNINGS GROWTH IN THE SHORT TERM. LONGER WE ARE EXTREMELY LOOSE.

TERM. LONGER WE ARE EXTREMELY LOOSE.

DATA CENTER CONSTRUCTION IN ASIA IS BOOMING.

LOOK AT WHAT IS HAPPENING HERE. ARE WE GETTING TO A POINT WHERE WE HAVE TOO MANY, IS THAT WHERE WE ARE GOING? KATIE:

ARE WE OVERBUILDING?

>> IT COULD BE, BUT I THINK WE ARE A LONG WAY FROM THAT.

YOU HAVE EVOLUTION IN CHIPS, COMPUTING POWER, WE HAVEN'T TALKED ABOUT QUANTUM COMPUTING AND ALL THE EDGE COMPUTING THAT IS COMING, THAT WILL REVOLUTIONIZE THE INDUSTRY.

THAT MEANS MORE SPENDING, NOT LESS. YOU BUILD AND EVOLVE AND REVOLUTIONIZE OVER TIME. ROMAINE:

WE'VE HEARD FROM INSTITUTIONAL INVESTORS AND THOSE IN THE PRIVATE MARKET, THEY SAY THEY ARE LESS INTERESTED IN THE DATA CENTER AND MORE INTERESTED IN THE POWER THAT WILL BE ADJACENT TO THESE CENTERS. I'M CURIOUS IF THAT OFFERS POTENTIALLY BETTER UPSIDE VALUE, LONGER-TERM, GIVEN SOME OF THE HIGH PRICE POINTS WE'RE ALREADY SEEING TO INVEST IN

ACTUAL DATA CENTERS THEMSELVES.

>> IN TERMS OF OPPORTUNITIES TO GROW YOUR PORTFOLIO, ABSOLUTELY.

THERE'S A LOT OF ENERGY AND THERE WILL BE A TIME MORE NUCLEAR, ETC., COMING IN THE NEXT YEAR.

THE TRUMP ADMINISTRATION IS PUSHING THAT, WHICH IS GREAT.

BUT ELECTRICITY PRICES ARE GOING UP.

THAT MEANS UTILITIES SHOULD DO WELL AND GET PRICING POWER IN Q1. INDUSTRIALS, MATERIALS, EVERYBODY NEEDS THE SAME BAG OF

Q1. INDUSTRIALS, MATERIALS, EVERYBODY NEEDS THE SAME BAG OF CEMENT AND EVERYBODY NEEDS TO BUILD THESE FACILITIES, AND YOU WANT TO LOOK AT THAT LAND, ABSOLUTELY. KATIE:

THE STOCK MARKET LOVES STORIES. THE STOCK MARKET IS IN LOVE WITH THE AI STORY. ARE THERE ANY OTHER TRADABLE NARRATIVES AND INVESTABLE THAT YOU CAN PUT REAL MONEY BEHIND?

>> ABSOLUTELY. WE THINK THE FED IS MOSTLY DONE, IF NOT DONE COMPLETELY. THEY ONLY HAVE ONE EASE IN THE NEXT FEW YEARS. SO THAT'S NOT MUCH.

THE BULK OF IT HAS BEEN DONE, AND I THINK WHAT WE SEE FROM HERE IS INTEREST RATES MATTER, ON THE MARGIN IS ABOUT GROW STORY. IF YOU LOOK AT FINANCIALS, WITH

STORY. IF YOU LOOK AT FINANCIALS, WITH THAT YIELD CURVE, WE WERE TALKING BEFORE ABOUT THE LONG END OF THE CURVE. LOOK AT CONSOLIDATION AND REGIONALS, THINK YOU WILL SEE MORE M&A, OR IPO'S NEXT YEAR.

IN ADDITION TO INDUSTRIALS AND MATERIALS THAT WE JUST DISCUSSED. ROMAINE: I WAS GOING THROUGH THE THIRD

DISCUSSED. ROMAINE: I WAS GOING THROUGH THE THIRD QUARTER EARNINGS SEASON. YOU HAD GREAT PERFORMANCE BY TECH THOUGH A LOT OF THAT WAS SHIFTED INTO THE SEMICONDUCTOR SPACE.

BUT FOR S&P FINANCIALS IT WAS LIKE 20% PLUS YEAR-OVER-YEAR GROWTH. DOES THAT CONTINUE WE START TO

GROWTH. DOES THAT CONTINUE WE START TO SEE THE FOURTH QUARTER NUMBERS AND THE FIRST QUARTER NUMBERS?

>> YOU'RE GOING TO SEE CONSOLIDATION IN TWO AREAS, MEDIA AND FINANCIALS. WE THINK THAT MAKES SENSE.

FINANCIALS DO WELL WHEN THE ECONOMY IS DOING WELL.

AFTER THE FED EASES, WHEN THE FED EASES, PAUSES, AND EASES AGAIN, FINANCIALS ARE ONE OF THE TOP THREE SECTORS IN THE NEXT 12 MONTHS. LOWER RATES HELP AND THE POSITIVE SLIP TO THE YIELD CURVE HELPS AS WELL.

WE STILL THINK THE ECONOMY AVOIDS RECESSION NEXT YEAR.

ROMAINE: GREAT INSIGHTS. WE WILL SEE HOW THINGS SHAKE OUT.

COUNTING US DOWN TO THE CLOSING BELL, ABOUT 2:30 TO GO.

STOCKS FIRMLY HOLDING ON AND GREEN. KATIE:

NOT SOMETHING WE'VE SEEN FOR A WHILE.

WE HAD A FOUR DAY LOSING STREAK ON THE S&P 500 BUT THE GOOD NEWS REPORT FROM MICRON REALLY CHANGED SENTIMENT AROUND.

ROMAINE: EVERYONE WAS SAYING THAT WOULD BE CONSERVATIVE ON THE GUIDANCE. NOTHING CONSERVATIVE ABOUT IT AT ALL. A FULL BREAKDOWN OF NIKE COMING

AT ALL. A FULL BREAKDOWN OF NIKE COMING UP AFTER THE BELL. IT STARTS RIGHT NOW.

>> THE CLOSING BELL, BLOOMBERG'S COMPREHENSIVE CROSS-PLATFORM COVERAGE OF THE U.S.

MARKET CLOSE STARTS RIGHT NOW. ROMAINE:

RIGHT NOW WE ARE TWO MINUTES AWAY FROM THE END OF THE TRADING DAY. WE'RE TAKING YOU THROUGH TO

TRADING DAY. WE'RE TAKING YOU THROUGH TO THAT CLOSING BELL, IT'S A GLOBAL SIMULCAST. CAROL AND TIM JOIN US FROM THE RADIO ROOM.

24 HOUR ZOOM, CAROL STARTED OFF THE SIMULCAST TALKING ABOUT THE BIG SELLOFF IN MARKETS. TODAY WE START OUT TALKING ABOUT A SIZABLE RALLY. CAROL: MIKE RYAN LEADING THE DAY, SOARING IN TODAY'S SESSION AND RAISING THE OVERALL SEMICONDUCTOR AIR.

THE BILLY INDEX IS UP, STILL A BIG GAIN AND THAT IS PROVIDING SOME MOMENTUM. TIM: CAROL IS HORRIFIED BECAUSE I

SOME MOMENTUM. TIM: CAROL IS HORRIFIED BECAUSE I JUST SHARED WITH HER THAT THE PATH TRAIN IS GOING TO RISE TO FOUR DOLLARS BY 2029. KATIE: THAT IS NEWS TO ME AND THAT IS

HORRIFYING.

TIM: CAROL WAS FREAKED OUT. CAROL:

THAT'S EIGHT DOLLARS JUST TO GO TO WORK. THAT'S INSANE. TIM:

ROMAINE, THIS DOESN'T CONCERN YOU. ROMAINE:

ISN'T THERE A TRAIN THAT RUNS FROM BROOKLYN OR SOMETHING?

THERE IS YOUR FOUR DOLLARS. IT SOUNDS LIKE SOME VALUE THERE.

CAROL: I WILL SWIM WITH YOU. ROMAINE:

FOR THOSE WHO DON'T HAVE TO CATCH THE TRAIN, STICK AROUND, WE WILL GET SOME EARNINGS IN JUST A FEW MOMENTS OUT OF FEDEX AND NIKE. ONE OF THE LAST BE COMPANIES TO

AND NIKE. ONE OF THE LAST BE COMPANIES TO REPORT THIS EARNINGS SEASON. SOME OPTIMISM COMING OUT OF THE LATEST ECONOMIC DATA AND OPTIMISM COMING OUT OF THE MICRON DATA IS NIGHT. THE DOW JONES UP BY POINT TIM PERCENT, THE S&P UP .8%. THE NASDAQ COMPOSITE UP 1.4%.

THE NASDAQ 100 UP ONE POINT 5%. THE RUSSELL 2000 WANT TO PARTICIPATE AS WELL ADDING .6%. CAROL:

BACK TO THE S&P 500, AND EVEN SPLIT AGAIN.

ANOTHER DAY, TO 63 NAMES TO THE UPSIDE, TO THE DOWNSIDE AND THREE UNCHANGED. KATIE:

THREE UNCHANGED. KATIE: IT'S UP EVEN SPLIT, THERE'S A LOT MORE GREEN THAN RED.

A LOT OF THAT HAS TO DO WITH THE FACT THAT COMMUNICATION SERVICES OUTPERFORMING TODAY, THAT IS THE BEAUTIFUL GRID.

YOU LOOK AT WHAT DIDN'T DO TOO HOT AND THAT WAS ENERGY.

THE BIGGEST LOSER ON A PERCENT BASIS, AND CONSUMER STAPLES LOSING QUITE A BIT TODAY, DOWN ABOUT .7%.

THAT JUST SPEAKS TO THE RISK ON ACTION. CAROL:

THERE'S A LOT OF GREEN THERE. I HAD A FAIR AMOUNT OF THINGS TO CHOOSE FROM BUT LET'S GO TO MICRO TECHNOLOGY, FINISHING WITH A GAIN OF JUST OVER 10%. ATOP GAINER IN THE S&P 500 AND NASDAQ 100. WE BROKE DOWN LAST NIGHT, THE

NASDAQ 100. WE BROKE DOWN LAST NIGHT, THE COMPANY GET IN THAT'S KEVIN UPBEAT FORECAST FOR THE CURRENT QUARTER, SIGNALING SURGING DEMAND AND SUPPLY SHORTAGES ARE ALLOWING THE COMPANY TO CHARGE MORE FOR PRODUCTS.

SO THAT ON TOP LINE AND IN MARGINS.

THE VORACIOUS APPETITE FOR AI COMPUTING COMPONENTS DEFINITELY PUSHING MICRON TO THE UPSIDE.

WE JUST THREW IN THE SOCKS THERE, UP 2.5% IN TODAY'S SESSION. SPEAKING OF A GAINER, LULU,

SESSION. SPEAKING OF A GAINER, LULU, THAT WAS ATOP GAINER IN THE NASDAQ 100.

THAT ONE UP A .7%, FINISHING WITH A GAIN OF 3.5%.

IT CAME OUT L.A. INVESTMENT MANAGEMENT HAS BUILT A STAKE OF MORE THAN A BILLION DOLLARS IN LULULEMON.

THEY'VE BEEN WORKING WITH THE RETAIL EXECUTIVE JAY NIELSEN WHO'S VIEWED AS A POTENTIAL CEO CANDIDATE TO TAKE OVER FOR THE CEO, CALVIN MCDONALD WHO WE KNOW IS ON HIS WAY OUT.

BUT THIS IS A COMPANY THAT HAS DEALT WITH SLOWING GROWTH AND SOME OTHER ISSUES. A LOT OF COMPETITION IN THIS SPACE. THE STOCK IS DOWN NEARLY 50% SO

SPACE. THE STOCK IS DOWN NEARLY 50% SO FAR THIS YEAR AND ABOUT 7% OF THE FLOAT IS SHORT.

CHECK THIS ONE OUT, UP 42% IN TODAY'S SESSION, THIS AS THE COMPANY CAME OUT AND SAID IT'S GETTING INTO NUCLEAR FUSION.

THE COMPANY SAID IT WILL MERGE WITH A FUSION DEVELOPER FOUNDED BACK IN 1998. IT'S A TRANSACTION VALUED AT MORE THAN $6 BILLION. TRUMP MEDIA BEHIND TRUE SOCIAL AND A BUNCH OF OTHER THINGS BUT PIVOTING THE BUSINESS I'M IN SPENDING INTO FUSION. FUSION IS A WHILE AWAY.

TIM: SOME BIG GAINERS THERE, I HAVE SOME BIG DECLINERS. HP Q DOWN 4% TODAY.

HARBOR STOCKS TOOK A BIT OF A HIT TODAY, SOME OF THEM.

BLOOMBERG INTELLIGENCE ON WEDNESDAY DID FLAG CONCERNS ABOUT HP Q EARNINGS SAYING ESTON'S HAVE LOWERED REFLECTED EXPECTATIONS, HENCE THE MICRON GOOD DAY. IT REPRESENTS A $.30 HIT.

GOOD DAY. IT REPRESENTS A $.30 HIT.

FOLLOWING 4% TODAY.

BIRKENSTOCK WITH ITS WORST DAY IN MORE THAN A YEAR AFTER THE COMPANY PREDICTED A SLOWER PACE OF SALES GROWTH DUE TO THE IMPACT OF A WEAKER U.S. DOLLAR AND TARIFFS AS WELL.

BIRKENSTOCK EXPECT SALES TO PROBABLY RISE AS MUCH AS 15% IN FISCAL 2026.

IMPLIES ANNUAL REVENUE OF 2.35 BILLION EUROS, SLIGHTLY BELOW ANALYST EXPECTATIONS. FINALLY, INSPIRE MEDICAL

ANALYST EXPECTATIONS. FINALLY, INSPIRE MEDICAL SYSTEMS, WE TALKED TO THE CEO QUITE FREQUENTLY ON OUR PROGRAM.

THEY MAKE A MEDICAL DEVICE TO TREAT SLEEP APNEA.

DOWN 19.5% TODAY. THIS AFTER TWO REGIONAL MEDICARE CONTRACTORS REMOVED A NEW HIGHER-PAYING CODE THAT WOULD AFFECT THEIR PRODUCT TO TREAT OBSTRUCTIVE SLEEP APNEA.

ROMAINE: SPEAKING OF REVERSALS, LET'S LOOK AT YOU'LL. WE DID SEE A BIG DROP IN YIELDS THIS MORNING WHEN WE GOT THAT CPI DATA AS WELL AS THE JOBLESS CLAIMS NUMBERS. THOSE COMPETED AGAINST EACH

CLAIMS NUMBERS. THOSE COMPETED AGAINST EACH OTHER AND YOU DID SEE SOME OF THE WORST DROP IN YIELDS PEEL BACK A BIT, THE NET RESULT OF IT ALL THERE ON YOUR SCREEN.

ONLY DOWN ABOUT TWO BASIS POINTS ON YOUR TWO YEAR YIELD AT -- AFTER BEING DOWN AS MUCH AS SIX OR SEVEN BASIS POINTS.

KATIE: INTERESTING TO SEE THAT BID COME INTO THE BOND MARKET, ON THE HEELS OF THAT CPI PRINT, THERE ARE A LOT OF NUANCES THERE. WE NOTE WAS MUDDIED THE GOVERNMENT SHUTDOWN. I LOVE THE HEADLINE ON THE

GOVERNMENT SHUTDOWN. I LOVE THE HEADLINE ON THE BLOOMBERG TERMINAL, CALLING IT BASICALLY A SWISS CHEESE REPORT.

YOU LOOK AT MARKET REACTION, THEY ARE TAKING THOSE NUMBERS AND SAYING THAT PERHAPS THE FED WILL HIKE A LITTLE BIT MORE THEN MAYBE WE EXPECTED IN 2026. CAROL:

JUST YESTERDAY YOU HIGHLIGHTED THAT THE S&P 500 DIPPING BELOW THAT 50 DAY MOVING AVERAGE.

IT JUST WENT BACK ABOVE THE 50 DAY MOVING AVERAGE.

TRYING TO FIGURE OUT THIS TRENDLINE IS SOMETHING WE'LL HAVE TO WATCH INTO THE NEW YEAR. ROMAINE:

IN MID-NOVEMBER WE ALSO HAD A TEST OF THOSE KEY MOVING AVERAGES. A NICE BOUNCE OFF OF IT COME

AVERAGES. A NICE BOUNCE OFF OF IT COME THE S&P GROWING 6% AFTER HITTING THAT LINE BACK IN MID-NOVEMBER. IT GETS TO THE IDEA THAT A LOT

MID-NOVEMBER. IT GETS TO THE IDEA THAT A LOT OF WHAT WE SEEN THIS EQUITY MARKET HAS NOT BEEN A TRUE SELLOFF. IT'S BEEN MUCH MORE OF A

SELLOFF. IT'S BEEN MUCH MORE OF A ROTATION OUT OF THOSE HIGHER WEIGHTED NAMES WHICH DRAGS EVERYTHING DOWN. BUT THAT MONEY FOR THE MOST

EVERYTHING DOWN. BUT THAT MONEY FOR THE MOST PART HAS STAYED WITHIN THE MARKET. TIM:

WE'RE STARTING TO GET TARGETS FOR NEXT YEAR, WE SPOKE TO RYAN DIETRICH OF THE PARSON GROUP A FEW MINUTES AGO.

HE'S BEEN RIGHT FOR THE PAST THREE YEARS.

HE'S VERY BULLISH WHEN IT COMES TO HIS OUTLOOK BUT HE SAYS AFTER A YEAR, AND HE'S A TECHNICALS GUY, AFTER YEAR LIKE WE SAW WITH THE SO-CALLED LIBERATION DAY IN APRIL AND THE RISE SINCE IN AT WERE POISED TO SEE AN INCREASE ON THE S&P NEXT YEAR UP TO 15%.

ROMAINE: THERE WAS AN INTERESTING TORY ON THE BLOOMBERG TERMINAL. YOU GUYS ARE ON THE RADIO BUT FOR REASONS THAT WERE NEVER EXPLAINED TO ME, ALSO ON TV.

THIS HAS BEEN A TRAINED AND WE'VE SEEN THIS LAYOUT WITH PODCASTING. YOUTUBE IS GOING ALL IN ON

PODCASTING. YOUTUBE IS GOING ALL IN ON THIS, THE IDEA THAT WHAT USED TO BE CONFINED TO JUST YOUR EARS HAS NOW BECOME VIDEO AS THE MAIN MEDIUM.

THEY HAVE WRITTEN THAT WAVE TO BOOST VIEWERSHIP AND SUBSCRIBER SHIP AS WELL, THOUGH DO THINK ARE GETTING EARNINGS NOW OUT OF FEDEX. KATIE:

FEDEX. KATIE: FEDEX, HERE'S THE RED HEADLINE, $17.80 TO $19.

PREVIOUSLY IT HAD SEEN $17.20 TO $19, SO BRINGING UP THE LOWER END OF THAT RANGE. FULL YEAR CAPEX, $4.5 BILLION, AND I'M WITH HIS PREVIOUS GUIDANCE AND ESTIMATES AS WELL.

ADJUSTED OPERATING INCOME FOR THE SECOND QUARTER, THE ESTIMATE HAD BEEN FOR 1.36 BILLION DOLLARS.

REALLY INTERESTING TO SEE THAT GUIDANCE RAISED HERE. TIM:

OF ABOUT 3% IN THE AFTER-HOURS. THE FEDEX PRESIDENT AND CEO SAID THE COMPANY DELIVERED AN OUTSTANDING SECOND QUARTER, SUCCESSFULLY EXECUTED OUR GROWTH TRAGEDY AND EVENTS ARE NETWORK TRANSFORMATION WHILE NAVIGATING A HIGHLY CHALLENGING EXTERNAL ENVIRONMENT. HE'S PROUD OF THE TEAM MEMBERS

EXTERNAL ENVIRONMENT. HE'S PROUD OF THE TEAM MEMBERS WORLDWIDE FOR THEIR COMMITMENT TO FEDEX. ROMAINE:

A LOT OF IT WAS ABOUT MOVING INTO HIGHER VALUE BUSINESS AND DELIVERIES BUT ALSO CUTTING COSTS.

THEY TALK ABOUT THAT THEY ARE STICKING BY THOSE COST REDUCTIONS, SAYING THEY WILL BE PERMANENT, IN THEIR WORDS AND SAVINGS FROM THAT WILL THEN BE REINVESTED BACK INTO OTHER PARTS OF THE BUSINESS. CAROL:

OPERATING RESULTS REDUCED DUE TO THE HIRING OF ADDITIONAL DEDICATED SALES PROFESSIONALS. THEY STILL HAVE SOME CHALLENGES BUT THE STOCK DID POP A IN THE AFTERMARKET. THAT'S A WRAP, ARE CROSS-PLATFORM COVERAGE, YOUTUBE AND TB, ALL OF US.

KATIE: THE FUTURE IS NOW.

CAROL: KATIE AND ROMAINE WILL CONTINUE ON TV AND TIM AND I CONTINUED RIGHT HERE ON BLOOMBERG BUSINESSWEEK DAILY ON BLOOMBERG RADIO. ROMAINE:

THOSE EARNINGS FROM FEDEX JUST CROSSING THE WIRE.

WE'LL TAKE A DEEPER DIVE INTO THOSE WHEN WE COME BACK AFTER THE BREAK WE ARE AWAITING EARNINGS OUT OF NIKE, TWO DISTINCT COMPANIES BUT BOTH WITH AN INTERESTING READ ON CONSUMER SPENDING. THAT'S COMING UP NEXT HERE ON

CONSUMER SPENDING. THAT'S COMING UP NEXT HERE ON THE LOWS, THIS IS BLOOMBERG. ♪

ROMAINE: A BIT OF A REBOUND FROM THE SELLOFF WE HAD YESTERDAY WITH THE S&P 500 PUSHING HIGHER ON THE DAY BY ABOUT .8%. THE NASDAQ INDICES GETTING IN ON THE ACTION, UP ABOUT 1.5% OF THE NASDAQ 100, TWO POINT 5% FOR THE PHILADELPHIA SEMICONDUCTOR INDEX.

MICRON, THE FORECAST A GAY PROVIDING A LOT MORE CONFIDENCE AT THE AI TRADE CAN CONTINUE GOING.

AS FOR THE ECONOMY AND THE DIRECTION OF YIELDS, A BIT MORE OF A BIG SMACK -- MIXED BAG.

DOWN TWO OR THREE BASIS POINTS ON THE TWO-YEAR AND BITCOIN CONTINUES TO BE UNDER PRESSURE, RIGHT AROUND THE $85,000 LEVEL.

KATIE: LET'S LOOK AT THE DAY'S BIGGEST MOVERS COME WE HAVE TO SHOUT OUT MICRON, REPORTING EARNINGS ABOUT 24 HOURS AGO. I 10% POP IN THE STOCK.

TESLA CONTINUING ITS WINNING WAYS.

DID TOUCH A FRESH RECORD HIGH BUT IT WILL FINISH A LITTLE LOWER THAN THAT.

YOU HAD PRESIDENT TRUMP RESCHEDULE MARIJUANA, BUT WE HAD SUCH A BIG RUN UP IN MARIJUANA STOCKS.

LET'S TALK ABOUT THE TOP STORY THIS HOUR.

TWO KEY BELLWETHERS REPORTING EARNINGS, OFFERING FRESH INSIGHT INTO CONSUMER AND THE ECONOMY.

NIKE RESULTS DUE ANY MOMENT NOW WITH THE FOCUS ON THE COMPANY'S NEXT TURNAROUND STEPS, AND THE RUNNING CATEGORY IN THE SPOTLIGHT. FEDEX JUST REPORTING RESULTS IN

SPOTLIGHT. FEDEX JUST REPORTING RESULTS IN THE TAKE AWAY THEIR IS THAT THEY BOOSTED THEIR PROFIT FORECAST WITH THAT SWEEPING OVERALL THEY'VE BEEN ORCHESTRATING GAINING SOME TRACTION. ROMAINE:

$1 BILLION IN PERMANENT COST REDUCTIONS FOR 2026, TAKING THE GROUND AND AIR CARGO BUSINESS AND MERGING THEM TOGETHER.

PETER MCNALLY JOINS US, WHAT DID YOU MAKE OF THE RESULTS?

>> IT LOOKS LIKE FEDEX IS STILL A STORY ABOUT SELF-HELP.

THE REVENUE NUMBER WAS ABOUT 3% BETTER THAN FORECAST. THE CONSENSUS ESTIMATES HAVE BEEN A LITTLE BIT SKEPTICAL ON THE FEDEX TOPLINE GROWTH.

HOWEVER THE BIG STORY WAS $.71 BEAT ON EARNINGS PER SHARE.

IT LOOKS LIKE COST CONTROL CONTINUES TO BE THE STORY HERE.

THEY HAVEN'T HAD ANY MACRO TAILWINDS IN A LONG TIME.

WHEN THAT COMES, THE PLAY HERE IS FOR OPERATING LEVERAGE, BUT WE MIGHT JUST SEE THE FIRST STAGE OF THAT NOW. KATIE:

YOU WRITING YOUR PREVIEW THAT INVESTING IN FEDEX HAS REQUIRED A LOT OF PATIENTS IN RECENT YEARS.

LOOK AT THE SHARE PERFORMANCE AND A LOT OF FOLKS WOULD AGREE WITH YOU. THINK ABOUT WHETHER COMPANY

WITH YOU. THINK ABOUT WHETHER COMPANY STANDS, ESPECIALLY WITH THE TURNAROUND THAT THEY'VE BEEN PUTTING THROUGH. HOW MUCH MORE PATIENCE IS

PUTTING THROUGH. HOW MUCH MORE PATIENCE IS NEEDED BEFORE WE FINALLY START TO SEE SOME OF THOSE FLOWERS IN THE SHARES THEMSELVES?

>> CALENDAR 2026 IS SETTING UP TO BE PRETTY INTERESTING FOR FEDEX. WE HAVE THE SPIN OF THE FREIGHT

FEDEX. WE HAVE THE SPIN OF THE FREIGHT BUSINESS WHICH IS A HIGH MULTIPLE BUSINESS IN THE MARKET.

THAT'S A LITTLE BIT OF EXCESS CAPACITY.

THIS IS A GOOD BUSINESS AND FEDEX IS A MAJOR PLAYER IN THAT.

AT THE SAME TIME, THEY ARE GOING TO CONTINUE WITH THESE COST CUTS AND AS I SAID EARLIER, THEY HAVEN'T HAD ANY TOPLINE HELP IN A LONG TIME. THEY CONTINUE TO GAIN SHARE VERSUS UPS, BUT ALL THESE HEADWINDS IN 2025 AROUND TRADE, TARIFFS, SLOWER ECONOMY, IT COULD EVENTUALLY START TO TURN

AROUND AND DRIVE SOME REAL GROWTH.

FOR A COMPANY THAT'S HAD THREE YEARS OF STAGNANT EARNINGS, YOU COULD REALLY BE LOOKING AT A TAKEOFF IN 2026. ROMAINE:

ALWAYS GREAT TO CATCH UP WITH YOU, PETER MCNALLY.

A TURNAROUND STORY FOR FEDEX, IT APPEARS TO BE GAINING TRACTION. ANOTHER TURNAROUND STORY WE

TRACTION. ANOTHER TURNAROUND STORY WE BEEN KEEPING AN EYE ON IS WITH NIKE.

THOSE EARNINGS NOW CROSSING THE WIRE.

LARGELY IN LINE WITH ESTIMATES, REVENUE COMING IN UP A LITTLE LESS THAN 1% YEAR-OVER-YEAR. THE STREET WAS LOOKING FOR 12 POINTS WHEN $4 BILLION ON AVERAGE.

DIRECT REVENUE DID CONTINUE TO DECLINE YEAR-OVER-YEAR AND CAME IN SLIGHTLY BELOW EXPECTATIONS. WHOLESALE REVENUE APPEARED TO COME IN ABOVE ESTIMATES AT ABOUT A GROWTH RATE OF 8.7%.

DIGITAL SALES DOWN ABOUT 14% YEAR-OVER-YEAR BUT THAT IS AN IMPROVEMENT OVER WHAT WE HAD SEEN A YEAR AGO.

MARGINS IN LINE WITH ESTIMATES. KATIE:

TRADERS DECIDING WHAT TO DO WITH THE SHARES AFTER HOURS AS WE'VE BEEN BOUNCING BACK AND FORTH.

YOU'VE HAD ABOUT 60 SECONDS TO GO THROUGH THESE NUMBERS.

WHAT STICKS OUT TO YOU?

>> I THINK THE NUMBERS ARE ACTUALLY VERY GOOD.

THE PIECE OF THE BUSINESS THAT'S WORKING BEST IS THE WHOLESALE BUSINESS. THE RESULTS ARE FANTASTIC.

WHOLESALE BUSINESS. THE RESULTS ARE FANTASTIC.

EXPECTATIONS ARE VERY GOOD, INVENTORIES DOWN 3%.

THEY ARE CLEARING OUT WHAT THEY NEED TO CLEAR OUT AND WE SEE THAT IN THE DECLINE. OVERALL THESE NUMBERS LOOK PRETTY GOOD. THEY SHOW THAT NIKE IS MAKING

PRETTY GOOD. THEY SHOW THAT NIKE IS MAKING PROGRESS.

I WOULD SAY THE WEAKNESS IS STILL CHINA, AND ALSO IN THE DTC CHANNEL, WHICH WE KIND OF EXPECTED. ROMAINE:

IS THAT AN INVENTORY ISSUE, OR WHAT IS GOING ON THERE?

>> IF YOU THINK ABOUT ALL THE EXCESS INVENTORY NIKE HAS HAD OVER THE YEARS, IT IS ALL BEING CLEARED THROUGH THE DIRECT CHANNEL. WHICH IS WHY YOU SEE WEAKNESS

CHANNEL. WHICH IS WHY YOU SEE WEAKNESS THERE. PART OF IT IS JUST LOWER PRICE

THERE. PART OF IT IS JUST LOWER PRICE POINTS, HOPING TO CLEAR OUT THE INVENTORY.

THE NEW UNIT -- NEWNESS IS REALLY ON THE FLAGSHIP STORES.

KATIE: YOU SEE THE HEADLINE ON THE TERMINAL CROSSING NOW, IT'S REALLY THE QUARTERLY REVENUE JUMP THAT SEEMS TO BE THE SURPRISE HERE.

NOT NECESSARILY WAKE -- MAKE HIS WAY INTO SHARES OF NIKE AFTER HOURS. I JUST WONDER WHERE SENTIMENT

AFTER HOURS. I JUST WONDER WHERE SENTIMENT STANDS ON THIS DOCK. WE HAVE BEEN TALKING ABOUT THIS TURNAROUND FOR QUITE A WHILE NOW.

IT JUST FEELS LIKE THEY CAN'T QUITE GET THEIR LEGS BACK UNDER THEM. WHAT DO WE NEED TO HEAR ON THE

THEM. WHAT DO WE NEED TO HEAR ON THE CALL TO SHIFT THE SENTIMENT?

>> ONE IS, ARE CLOSE TO THE BOTTOM?

HAVE THAT CLEARED OUT THE INVENTORY THAT THEY WANT TO CLEAR OUT, OR HOW FAR ARE WE FROM THAT?

THE SECOND THING IS CHINA, WHAT DO THEY NEED TO DO TO IMPROVE IN CHINA? IT IS A CLEAR GROWTH REGION FOR

IN CHINA? IT IS A CLEAR GROWTH REGION FOR THEM IN THE YEARS AHEAD. ROMAINE:

I'M CURIOUS ON THE INVENTORY SIDE.

THE INVENTORIES ARE NOT BAD. AS A PERCENTAGE OF THEIR TOTAL BUSINESS, IS IT ANY WORSE THAN WHAT IT HAS BEEN HISTORICALLY?

>> YOU SEE THEY STILL HAVE A LOT OF AGE INVENTORY THEY NEED TO GET RID OF. THEY NEED TO BRING MORE NEWNESS INTO THEIR OWN CHANNELS AND TO DO THAT HAVE TO GET RID OF THOSE OLD INVENTORY PRODUCTS THAT NO ONE REALLY WANTS TO BUY ANYMORE. ROMAINE:

ANYMORE. ROMAINE: WE ALWAYS APPRECIATE THE INSTANT ANALYSIS, A DEEPER DIVE INTO NIKE. WAITING FOR THAT CONFERENCE

INTO NIKE. WAITING FOR THAT CONFERENCE CALL TO START AT THE TOP OF THE HOUR BUT RELATIVELY IN-LINE ON MOST OF THE MAIN ESTIMATES HERE, AND TRYING TO GET INVENTORY UNDER CONTROL UNDER THE RELATIVELY NEW CEO.

WE WANT TO STICK WITH I.T. IN TALK ABOUT THE MOMENTUM IF AT ALL FOR THEM AND THE BROADER APPAREL RETAIL SPACE.

DEBRA, LET'S START OFF WITH NIKE WHICH I THINK FALLS INTO THE PREMIUM CATEGORY WHEN IT COMES TO CASUAL APPAREL.

DOES THAT WORK IN THEIR FAVOR OR AGAINST THEM IN THE CURRENT ECONOMIC ENVIRONMENT?

>> FIRST, THANKS FOR HAVING ME ON.

SECONDLY, I THINK IT WORKS FOR THEM BECAUSE YOU HAVE THE CONSUMER WHO IS LOOKING TO MAKE INVESTMENTS WHERE IT MAKES SENSE, BUT ALSO THEY ARE LOOKING FOR THE DEAL.

IT'S KIND OF THIS BARBELL. BUT I THINK YOU HIT THE NAIL ON THE HEAD IN TERMS OF WHERE THEY ARE POSITION. ROMAINE:

WHAT ARE YOU GETTING IN TERMS OF HOW THE CONSUMER -- SEEING HOW MUCH TRACTION A BRAND HAS. I NOTE NIKE WENT DOWN ON THAT LIST. HAVE THEY GOTTEN SOME OF THAT MOJO BACK, AND AWARENESS

LIST. HAVE THEY GOTTEN SOME OF THAT MOJO BACK, AND AWARENESS OF THAT STANDING OR STATURE?

>> ALL THE DATA WOULD SUGGEST EXACTLY THAT.

WE SPEAK TO A LOT OF CONSUMERS.

IT'S REALLY INTERESTING IF YOU JUXTAPOSE THIS TO LULULEMON WHERE THEY ARE SEEING A STREAMING STRENGTH IN CHINA.

IT HAS SOME OF THE SAME MISS STEPS IN THE U.S..

THEY DON'T HAVE THE SAME INVENTORY CHALLENGE.

KEEPING OUR EYE ON THE PRIZE, IT'S REALLY CHINA. KATIE:

IT'S INTERESTING. YOU MENTION LULU.

COMPARE AND CONTRAST TO BECAUSE LULU IS APPARENTLY ANSWERING THE CHINA SITUATION A LITTLE BETTER.

IT'S NOT LIKE IT HAS BEEN A ROSE GARDEN FOR LULU LESS THAN -- LULULEMON ADVISORS.

>> I THINK WHAT IS REALLY INTERESTING, I'VE ALWAYS LOOKED AT C-SUITE CHANGES AS AN INDICATION OF WHERE THINGS ARE GOING.

NIKE CANNOT HANG ON TO THEIR INNOVATION TALENTS.

IT'S LIKE A REVOLVING DOOR LIKE I'VE NEVER SEEN, TO BE QUITE HONEST. ANY COMPANY -- IN ANY COMPANY IN MY ENTIRE CAREER.

HONEST. ANY COMPANY -- IN ANY COMPANY IN MY ENTIRE CAREER.

I DO WORRY, LIKE FROM MY ESSENCE, THAT SOMETHING IS STILL OFF AT NIKE.

YOU HAD SEEN ONE CHANGE AT LULU TO ADDRESS SOME OF THE CHALLENGES THEY HAVE BEEN FACING.

THEY ARE KIND OF CLEANING HOUSE, IF YOU WILL.

I FEEL LIKE NIKE IS TWO STEPS FORWARD AND FIVE STEPS BACK.

THERE IS A HUGE AMOUNT OF OPPORTUNITY FOR THE SHARES BUT I STILL THINK THERE IS SOMETHING A LITTLE BIT OFF.

THEY HAVE A LOT OF INVENTORY THAT NOBODY WANTS. KATIE:

I FEEL LIKE NIKE IS BEING HIT FROM MULTIPLE ANGLES AND AT LEAST TWO OF THEM ARE THE TRADE LANDSCAPE, THE TERRA CONVERSATION. AND MAYBE THE MORE EXISTENTIAL

CONVERSATION. AND MAYBE THE MORE EXISTENTIAL QUESTION OF, HOW DO YOU BECOME COOL AGAIN?

THAT FEELS MORE EPHEMERAL AND I DON'T NECESSARILY KNOW HOW YOU SOLVE THAT PUZZLE.

>> ONE OTHER THING TO THINK ABOUT ON THE CHINA LANDSCAPE, L ULU DOESN'T HAVE THE SAME COMPETITION THAT NIKE DOES.

THESE TECHNOLOGICAL ADVANCES, SPECIFICALLY THERE IS A LOT THAT NIKE IS DOING WITH THEIR ABILITY TO COMMUNICATE THAT AND PROVE THEY ARE DIFFERENT IN THE LANDSCAPE.

THEY ARE HAVING TROUBLE COMMUNICATING.

AND THEN YOU PUT THAT ON TOP OF ALL THIS TURNOVER AND THEIR INNOVATION TEAM, THERE IS SOMETHING MORE THERE. ROMAINE:

I HAD A CHANCE TO CATCH UP WITH THE CEO AND SOME OF HIS DEPUTIES AND THEIR CHIEF DESIGN PRODUCT OFFICER, PHIL MCCARTNEY.

I WANT YOU TO LISTEN TO SOMETHING ABOUT HOW THEY ARE MARKETING THEIR PRODUCTS GOING FORWARD.

>> OUR BUSINESS IS DRIVEN BY PORTFOLIO.

SINCE ELLIOTT RETURNED, THAT HAS BEEN A PART OF OUR IMMEDIATE CHARGE.

WE ARE SEEING THE RESULTS OF OF SESSION IN THE MARKETPLACE AND COMMUNITY. ROMAINE: THE IDEA OF A REFOCUS ON THE

COMMUNITY. ROMAINE: THE IDEA OF A REFOCUS ON THE ATHLETES AND A LITTLE BIT OF A NOD TO THE PREVIOUS CEO WHO MAY BE FOCUSED A LITTLE TOO MUCH ON FASHION AND AMNESIA RATHER THAN THE ATHLETIC SIDE OF THE BUSINESS.

>> GOING BACK TO MY PRIOR POINT AROUND THE TECHNICAL SIDE OF IT, I DO THINK THEY ARE DOING ALL OF THE RIGHT THINGS.

SO I WOULD AGREE WITH WHAT PHIL SAID EXACTLY, BUT I DON'T KNOW IF THEY ARE DOING A GREAT JOB OF COMMUNICATING THAT.

SO IT'S MAYBE A BETTER PROBLEM TO HAVE.

TO COMMUNICATE THAT TO THE RIGHT PEOPLE IS MORE OF A PROBLEM.

THEY HAVE PRODUCT THAT THEY HAVE TO CLEAR.

ON THE HORIZON, THINGS COULD BE BETTER IF THEY KEEP THEIR INNOVATION TEAM STABLE AND GET THEIR MARKETING MESSAGE STRAIGHT. KATIE:

STRAIGHT. KATIE: WE ARE HAVING THIS CONVERSATION ON DECEMBER 18, THE CHRISTMAS SHOPPING HOLIDAYS RIGHT AROUND THE CORNER.

WHAT ARE YOU SEEING WHEN IT COMES TO THE HEALTH OF THE CONSUMER AND THAT SHOPPER DURING THIS VERY CRITICAL TIME FOR SEASONAL GROWTH?

>> IT'S INTERESTING, WE HAVE A WHOLE RESEARCH TEAM.

SOME HAVE WALL STREET BACKGROUNDS, ETC. THEY WERE MORE CONCERNED THAN MOST ABOUT THE HOLIDAY SEASON.

AND IT WAS JUST DATA DRIVEN. THE QUALITATIVE CONVERSATION WAS SO POSITIVE.

BUT IS LIKE THAT LITTLE, KIND OF, SITTING ON MY SHOULDER.

WE HAD PEOPLE SAY THEY WILL SEND PHOTOS AFTERWARDS.

I'VE NEVER QUITE SEEN ANYTHING LIKE IT, THERE ARE LITERALLY ON HANDWRITTEN NOTES.

SO THESE ARE UNPLANNED PROMOTIONS WHICH YOU DON'T GENERALLY SEE RIGHT NOW.

SO I DO WONDER IF SOME OF THESE HIGHER PRICES MAYBE HAD A BIGGER IMPACT THAN EXPECTED. THE DISCOUNTS WEREN'T AS DEEP AS EVERYONE HAD THOUGHT. BUT I WILL SAY IT'S A LITTLE BIT LESS ROSY THAN WE HAD HOPED. >> IT'S ALWAYS GREAT TO SPEAK WITH YOU, COMING UP, FEDEX REPORTING RESULTS JUST A FEW

MINUTES EARLIER. WE WILL BRING YOU MORE DETAILS,

MINUTES EARLIER. WE WILL BRING YOU MORE DETAILS, COMING UP NEXT. THIS IS A CLOSE ON BLOOMBERG.

KATIE: FEDEX REPORTING RESULTS EARLIER WITH THE PARCEL CARRIER HIGHER BY ABOUT 2.5% AND AFTER HOURS.

THIS IS A TIME OF HEIGHTENED COMPETITION TAKING AIM AT RETAIL DELIVERY. OUR NEXT GUEST SAYS IT POSES A

RETAIL DELIVERY. OUR NEXT GUEST SAYS IT POSES A CONUNDRUM FOR UPS AND FEDEX WHETHER THEY SHOULD RETREAT FROM RESIDENTIAL DELIVERY OR MEET IT HEAD ON.

JOINING US IS THOMAS BLACKBEARD -- THOMAS BLACK.

HAS YOUR ANSWER CHANGED SINCE WE GOT THESE RESULTS? THOMAS:

IT'S BEEN BACKED UP A BIT, FEDEX ON THE PARCEL SIDE INCREASED REVENUE, A LOT OF THAT IS ON WHAT THEY CALLED YIELD OR HIGHER PRICES. THEY ARE GOING AFTER PRICE AND NOT SO MUCH VOLUME. ROMAINE: AFTER PRICE, THIS GETS TO THE IDEA OF I GUESS A STRONG OR BUSINESS BUT HIGHER VALUE

ITEMS. WHERE WAS THAT BUSINESS BEFORE? THOMAS:

THEY ARE MOVING INTO THINGS LIKE HEALTH CARE, WHERE YOU HAVE A LOT OF COLD CHAIN MOVEMENTS, WHICH ARE HIGHER PRICED. THEY WANT TO DO MORE BUSINESS

PRICED. THEY WANT TO DO MORE BUSINESS PACKAGES AND LARGE, OVERSIZED PACKAGES, THAT SOMETHING THEY SPECIALIZE IN AND SOMETHING THAT UPS HAS BACKED AWAY FROM.

IT HAS HELPED FEDEX IN THAT SENSE. KATIE:

FEDEX VERSUS UPS IS INTERESTING, WE KNOW THAT FEDEX INVESTORS HAVE HAD TO BE PATIENT THE PAST COUPLE OF YEARS. YOU LOOK AT HOW THEY ARE PERFORMING IN 2025, SLIGHTLY

YEARS. YOU LOOK AT HOW THEY ARE PERFORMING IN 2025, SLIGHTLY HIGHER YEAR TO DATE.

I CAN'T SEEM THE SAME FOR UPS, UNDERWATER 13% TO DATE.

I WONDER IF YOU THINK UPS IS ABLE TO GAIN A LITTLE MORE TRACTION. THOMAS: THE DIFFICULTY IS UPS HAS A LOT

TRACTION. THOMAS: THE DIFFICULTY IS UPS HAS A LOT OF IT'S COST LOCKED IN , ESPECIALLY AROUND UNION WAGES, WHICH OF THE HIGHEST IN THE INDUSTRY.

IT DOESN'T HAVE AS MUCH FLEXIBILITY AS FEDEX DOES TO CUT COST AND FEDEX HAS GONE THROUGH A TRANSFORMATIVE PERIOD FOR ITSELF SINCE THE NEW CEO. THAT CUT COST AND TAKING -- TAKEN OUT ABOUT $4 BILLION OF ANNUAL COST AND ARE STILL GOING.

THE NETWORK HASN'T SHOWN ITS POTENTIAL YET BECAUSE THE MARKET IS WEAK. A LOT OF ANALYSTS THINK WHEN YOU GET THE DEMAND BACK ONLINE, MARGINS WILL POP. ROMAINE:

TOM, ALWAYS APPRECIATE IT. A DEEPER DIVE INTO THE RESULTS OUT OF FEDEX. SEEN AS A BIT OF AN ECONOMIC BELLWETHER ALONG WITH RESULTS OUT OF NIKE.

IT'S BEEN A ROBUST EARNINGS SEASON. ON THE HOLIDAY SCHEDULE, EARLIER TODAY WE LEARNED THE PRESIDENT WAS GOING TO CLOSE DOWN THE FEDERAL GOVERNMENT ON THE DAY BEFORE CHRISTMAS AND DAY AFTER CHRISTMAS. CHRISTMAS DAY HAS ALWAYS BEEN A NATIONAL HOLIDAY AND WE ARE LEARNING THEY PLAN TO REMAIN

OPEN WITH NORMAL HOURS. FROM CHRISTMAS EVE, THEY WILL BE OPEN UNTIL 1:00 P.M. AT THE STOCK EXCHANGE AND THEY WILL HAVE A FULL DAY THE DAY AFTER CHRISTMAS.

WHEN WE COME BACK WE WILL TALK MORE ABOUT THE INVESTING LANDSCAPE AND RETAIL INVESTORS. CHARLES SCHWAB WITH UPDATES TO THE PLATFORM TO ENHANCE THAT. THIS IS BLOOMBERG.

ROMAINE: CHARLES SCHWAB HAS BEEN ENHANCING ITS RETAIL TRADING OPERATION WITH PLATFORM UPDATES AND CONSULTING ROLES AT ITS PHYSICAL LOCATIONS. ONE RECENT ANALYSIS ISSUING

PHYSICAL LOCATIONS. ONE RECENT ANALYSIS ISSUING PAYMENT FOR ORDER FLOW AT TOP BROKERS GROWING MORE THAN 50% IN THE THIRD QUARTER. JOINING US TO TALK MORE ABOUT THE TREND IS OUR GUEST FROM TRADING SERVICES AT CHARLES SCHWAB. LET'S TALK ABOUT THE WAVE IN

SCHWAB. LET'S TALK ABOUT THE WAVE IN MORE IMPORTANT, IS IT TEMPORARY, IS THERE A TEMPORARY BLIP THAT LED TO THIS OR IS THIS MORE OF A STRUCTURAL CHANGE? JAMES: WHAT WE'VE SEEN SINCE THE

CHANGE? JAMES: WHAT WE'VE SEEN SINCE THE SHOCKS IN APRIL IT'S BEEN REALLY CONSISTENT AND WE'VE SEEN PHENOMENAL LEVELS OF RETAIL ENGAGEMENT.

WE ARE THREE CONSECUTIVE QUARTERS OF 7 MILLION PLUS DAILY AVERAGE TRADES, A REALLY HIGH NUMBER, AT A TIME WHEN VOLATILITY HAS NOT BEEN THAT HIGH.

WHAT WE'VE SEEN OUR SPIKES IN VOLATILITY.

IT IS KEEPING THE RETAIL INVESTOR AND TRADE ARE HIGHLY ENGAGED AND I DON'T SEE ANYTHING ON THE HORIZON THAT WILL STOP IT RIGHT NOW. ROMAINE: HOW DOES SCHWAB KEEP THEM ENGAGED RELATIVE TO UPSTARTS? YOU THINK ABOUT THE EVOLUTION OF SCHWAB FROM THE EARLY DAYS OF MUTUAL FUNDS AND ALL OF THAT TO NOW WHAT HAS BASICALLY BEEN A MUCH DIFFERENT MARKET.

ARE YOU KEEPING UP? JAMES: YEAH. YOU TALKED A LITTLE BIT ABOUT PLATFORM ENHANCEMENTS. CONSTANTLY LISTENING TO CLIENTS.

PLATFORM ENHANCEMENTS. CONSTANTLY LISTENING TO CLIENTS.

HE DID ABOUT 8.5 MILLION TRADES IN NOVEMBER.

I THINK IT'S A COMBINATION OF THE PLATFORM, SERVICE -- WE HAVE 1200 PROFESSIONALS ON THE TRAY DESK AVAILABLE ANYTIME FOR CLIENTS. REALLY ROBUST RISK MANAGEMENT

CLIENTS. REALLY ROBUST RISK MANAGEMENT TOOLS. ENTER THE PRODUCT SIDE AS WELL,

TOOLS. ENTER THE PRODUCT SIDE AS WELL, A LOT OF ENGAGEMENT WITH OPTIONS , ESPECIALLY SINCE APRIL. KATIE: I WANT TO TALK ABOUT THE POINT

APRIL. KATIE: I WANT TO TALK ABOUT THE POINT YOU WERE MAKING ON TRADING VOLUME, THIS HAS BEEN RELATIVELY CONTAINED AND YOU CAN STILL SEE THE TRADING VOLUME. I'M WATCHING A TREND IN ETF'S.

VOLUME. I'M WATCHING A TREND IN ETF'S.

TRADING VOLUME ALL-TIME HIGH EVEN THOUGH YOU NORMALLY ONLY SEE THAT WHEN IT IS A ROCKY SORT OF MARKET.

I WONDER WHAT THAT SAYS TO YOU. TYPICALLY YOU THINK VOLATILITY LEADS TO GREATER TRADING VOLUME BUT MAYBE THE FIGURES SUGGEST THERE SOMETHING MORE STRUCTURAL GOING ON. JAMES:

A FABULOUS POINT. HISTORICALLY THE CORRELATION BETWEEN THE VIX AND TRADING VOLUME WAS A PERFECT BETA.

WHAT WE ARE SEEING THIS YEAR -- IT'S NOT THE VOLATILITY ANYMORE BUT THE THREAT OF VOLATILITY. FOR A WHILE AND APRIL IT WAS A POTENTIAL TWEAK, POTENTIAL NEWS ABOUT TARIFFS.

NOW IT'S MORE ON THE AI TRADE. YESTERDAY IS A GREAT EXAMPLE, NUMBERS PUT UP BY ORACLE THAT SOURED ON THE AI TRADE.

NOW TODAY A NICE DAY. SOME OF THE MICRON NEWS SPARKED THAT. OVER THE COURSE OF THE LAST SIX

THAT. OVER THE COURSE OF THE LAST SIX WEEKS, THE S&P HAS BEEN VERY RANGE BOUND, 66 TO 69.

YOU SEE POCKETS OF VOLATILITY OVER SHORTENED PERIODS OF TIME AND I THINK THAT'S KEEPING PEOPLE ENGAGED, NOT JUST DURING THE MARKET DAY. KATIE:

LET'S TALK ABOUT THE 24-5 WINDOW.

DO PEOPLE REALLY WANT TO TRADE AT 3:00 A.M.?

WHO IS IN THEIR PAJAMAS TRADING? WHAT UPTICK ARE YOU SEEING?

JAMES: WHEN IS TOO MUCH, RIGHT? I THINK THE ANSWER IS PEOPLE WANT TO TRADE IN THOSE WINDOWS WHEN THERE IS A REASON.

IT'S NOT I DO MY ROUTINE, I GET MY PJS AND I TRADE MICROSOFT OR NVIDIA.

WHEN THERE ARE EARNINGS OR BIG NEWS EVENT OR POTENTIALLY POLITICAL UNREST IN THE MIDDLE EAST, YOU SEE OIL COMPANIES.

THAT'S WHEN WE SEE RETAIL TRADERS GET HIGHLY ENGAGED.

ON A NORMAL DAY WE ARE AVERAGING 80 TO 100,000 TRADES PER NIGHT IN THAT WINDOW. IT'S A PITTANCE COMPARED TO THE BROADER DAY BUT WE THINK IT'S AN IMPORTANT TOOL FOR WHEN YOU NEED IT. ROMAINE:

NEED IT. ROMAINE: THIS YEAR GIVEN POLITICAL RISK, AND DROVE A LOT OF MARKET VOLATILITY. SOME PEOPLE ARE LOOKING AT NEXT

VOLATILITY. SOME PEOPLE ARE LOOKING AT NEXT YEAR AND SAYING COULD IT BE EVEN WORSE GIVEN THE MIDTERM ELECTIONS IN THE U.S. AND OTHER THINGS INTERNATIONALLY THAT HAVE TO BE RESOLVED.

YOU GUYS LOOK AT MORE NEBULOUS THINGS ON THE HORIZON TO SAY WE NEED TO MAKE SURE PLATFORMS ARE READY FOR THIS? JAMES:

WE ARE CONSTANTLY LOOKING AT ALL OF THESE FACTORS.

WE ARE SCALED WELL BELONG -- BEYOND THE NUMBERS, THREE X THE NUMBERS I QUOTED YOU. OUR PLATFORMS ARE ALWAYS READY FOR THAT.

WE LOOK TO GUESS AND FEEL FOR WHAT'S GOING ON MORE TO HELP OUR CLIENTS, AND EDUCATE CLIENTS.

SOME OF THE WE USE FOR STAFFING LEVELS.

I TEND TO AGREE, I THINK THE ONLY THING CERTAIN RIGHT NOW IS MORE UNCERTAINTY. BUCKLE UP. KATIE: EVERGREEN PHRASE.

MORE UNCERTAINTY. BUCKLE UP. KATIE: EVERGREEN PHRASE.

WE ARE TALKING ABOUT EQUITIES BUT LET'S TALK A LITTLE BIT ABOUT ETF'S, THAT'S THE SANDBOX I LIKE TO PLAY.

WHAT ACTIVITY ARE YOU SEEING, PEOPLE GOING FOR SINGLE STOCKS VERSUS BASKETS OF STOCKS. JAMES: WE ALWAYS SEE ROBUST ETF VOLUME.

WE HAVE ALMOST 25% OF CRYPTO ETF'S AT SCHWAB, THEY ARE ALWAYS POPULAR. NOT NECESSARILY SELLING BUT

ALWAYS POPULAR. NOT NECESSARILY SELLING BUT CERTAINLY HEDGING THOSE POSITIONS.

WE SEEN A LOT OF BULLISHNESS IN METALS.

YOU'VE GOT GEN Z AS BIG BUYERS OF GOLD AND SILVER RIGHT NOW, WHICH HISTORICALLY WOULD'VE MADE YOU SAY HMM.

THE SAME ONES HEDGING CRYPTO. KATIE:

JAMES, IT'S ALWAYS GREAT TO SEE YOU. JAMES IS HEAD OF TRADING SERVICES AT CHARLES SCHWAB. LET'S LOOK AT NOTABLE MOVERS IN THE AFTER HOURS TRADE. A BUSY SLATE OF EARNINGS.

NIKE DOWN 5%. THE LOSSES DEEPENING. ROMAINE:

THE NUMBERS RELATIVELY IN-LINE WITH ESTIMATES AND I THINK SOME OF THE CONCERN IS WE WERE NOT TALKING ABOUT A MATERIAL BEAT.

THE CONFERENCE CALL WILL START IN ABOUT 15 MINUTES OR SO SO MAYBE THEY WILL GIVE MORE COLOR ON GUIDANCE. KATIE:

IT WILL BE INTERESTING TO SEE WHAT THE C-SUITE HAS TO SAY AT NIKE. LET'S LOOK AT FEDEX, SHARES

NIKE. LET'S LOOK AT FEDEX, SHARES RISING A LITTLE BIT. SOME EVIDENCE THAT TURNAROUND IS BEARING FRUIT. THEY RAISED THE LOWER END OF THEIR GUIDANCE AND YOU ARE SEEING THAT WELCOMED IN THE

MARKET AFTER HOURS. KB HOME IS DOWN.

ROMAINE: DELIVERIES WERE DOWN YEAR-OVER-YEAR BY 9% BUT I THINK THE KICKER IS THE MISS ON EARNINGS, THE IDEA THAT THEY ARE DOING OK ON THE SALES SIDE BUT THERE ARE PRICING PRESSURES.

THE STREET WAS LOOKING FOR $1.79, AND A LOT OF ANECDOTES ARE THAT HOMEBUILDERS HAVE TO OFFER INCENTIVES TO GET HOMES OFF THE MARKET. KATIE: ABSOLUTELY, KB HOME'S DOWN ABOUT 3% HEADED INTO THESE RESULTS AND YOU CAN SEE THEY ARE GETTING A LITTLE WORSE.

AAA PROJECTS A RECORD 8 MILLION TRAVELERS WILL TAKE DOMESTIC FLIGHTS THIS HOLIDAY SEASON AS THE SEASONAL TRAVEL RUSH CONTINUES. OUR NEXT GUEST LOOKING TO

CONTINUES. OUR NEXT GUEST LOOKING TO CAPITALIZE ON THAT GROWTH. THEY'VE BEEN TRANSFORMING PRIVATE AIR TRAVEL AND'S 1999. I AM PLEASED TO SAY THAT THE PRESIDENT JOINS US. GREAT TO HAVE YOU WITH US.

AROUND THE HOLIDAYS YOU SEE COMMERCIAL AIR TRAVEL PICK UP IN A BIG WAY. DOES IT FOLLOW YOU SEE A SIMILAR TREND WHEN IT COMES TO THE PRIVATE JET LANDSCAPE? ALAN:

IT DOES. THANK YOU FOR HAVING ME ON.

IT ABSOLUTELY DOES. WE'VE BEEN IN OPERATION 25 YEARS.

WE HAVE 6800 OWNERS AND THEY LOVE TO TRAVEL.

BUSINESS IS BIG TRAVEL BETWEEN CHRISTMAS AND NEW YEAR.

THIS SEASON WILL BE NO DIFFERENT. KATIE:

TALK A LITTLE ABOUT HOW YOUR BUSINESS WORKS.

I KNOW YOU INTRODUCED A NEW INDUSTRY SEGMENT WITH THIS IDEA OF A JET CARD. WALK US THROUGH HOW THAT WORKS.

ALAN: IT'S SOMETHING WE INVENTED BACK IN 1999. THE COST OF PRIVATE AVIATION

IN 1999. THE COST OF PRIVATE AVIATION CAN BE EXPENSIVE, HOWEVER THE JET CARD GIVES FLEXIBILITY, YOU CAN BASICALLY PREPURCHASE HOURS TO USE AT YOUR DISCRETION.

WE SELL IN INCREMENTS. THE HOURS DON'T EXPIRE AND THE RATES ARE GUARANTEED AND AVAILABLE ANYTIME YOU WANT.

THAT'S THE BEAUTY. THE FACT THAT THEY DON'T EXPIRE.

A LOT OF FLEXIBILITY YEAR-OVER-YEAR. ROMAINE:

I'M CURIOUS ABOUT THE BEHAVIOR OF YOUR PASSENGERS.

ARE THEY BOOKING LAST-MINUTE FOR TRIPS OR ARE THESE THE TYPES OF TRIPS THEY ARE TAKING THAT COULD BE DONE MONTHS IN ADVANCE? ALAN: IT'S A BIT OF BOTH TO BE

ADVANCE? ALAN: IT'S A BIT OF BOTH TO BE HONEST. WE SEE MORE AND MORE COMING OUT OF COVID, WE SAW AN

HONEST. WE SEE MORE AND MORE COMING OUT OF COVID, WE SAW AN EXPLOSION IN TRAVEL.

WHAT IT'S DONE IS GIVEN PEOPLE A DIFFERENT MINDSET WHEN IT COMES TO TRAVEL, IT'S MORE ON THE EXPERIENTIAL SIDE AND NOT JUST A BUSINESS NECESSITY.

ON THE EXPERIENTIAL SIDE, PEOPLE PREPLAN.

WHEN YOU LOOK AT DECEMBER, YES, PEOPLE TAKE THE SAME TRIPS TO THE SAME PLACES TO BE WITH FAMILY EVERY YEAR.

AT THE SAME TIME YOU ALWAYS HAVE LAST-MINUTE TRAVEL BUT TYPICALLY YOU SEE FOR SEASONAL TRAVEL IT IS MANY WEEKS.

ROMAINE: WHAT SORT OF DESTINATIONS?

ANYTHING RELATIVELY NEW THIS YEAR? ALAN:

THE TRADITIONAL ROUTES ARE NORTHEAST TO SOUTHEAST. YOU

WANT TO GO TO THE WARMER SOUTHEAST. ALSO ESCAPING INTO THE MOUNTAINS FOR SKI SEASON. ONE OF THE TRENDS WE ARE SEEING IS PEOPLE FLYING BIGGER AND LONGER.

THAT MEANS EXPERIENTIAL TRAVEL WHERE PEOPLE WANT TO TRAVEL WITH FRIENDS AND FAMILY MORE.

THAT COMES INTO THE END TO END EXPERIENCE OF A HOLIDAY AND REALLY SPENDING TIME. KATIE: THAT'S INTERESTING BECAUSE MY PERCEPTION HAS BEEN PEOPLE FLY PRIVATELY, BASICALLY DOMESTICALLY IN THE COUNTRY, WHEN IT COMES TO INTERNATIONAL TRIPS, THAT'S SOMETHING YOU MIGHT BOOK A COMMERCIAL FLIGHT FOR. LISTENING TO YOU, IT SOUNDS LIKE THAT TREND IS SHIFTING A

FOR. LISTENING TO YOU, IT SOUNDS LIKE THAT TREND IS SHIFTING A BIT. ALAN: IT REALLY IS.

BIT. ALAN: IT REALLY IS.

IF YOU LOOK AT PLACES LIKE THE ISLANDS AND CARIBBEAN, THEY ARE MORE MORE POPULAR. THE REASON IS ACCESS.

YOU MENTIONED COMMERCIAL AND SOME OF THE CHALLENGES WE WOULD SEE OVER THE HOLIDAY PERIOD. WHEN YOU ARE FLYING PRIVATE, YOU HAVE THE FLEXIBILITY TO FIND SMALLER LOCATIONS, SHORTER RUNWAYS, GREATER FLEXIBILITY, AND IT'S BECOME VERY ACCESSIBLE TO PEOPLE. IT'S A PICK UP.

TO PEOPLE. IT'S A PICK UP.

WE SEE THAT TYPE OF TRAVEL WITH EXPONENTIAL GROWTH THE NEXT COUPLE OF WEEKS. ROMAINE: REALLY APPRECIATE YOUR GREAT INSIGHTS. APART -- A PART OF THE BUSINESS

INSIGHTS. APART -- A PART OF THE BUSINESS WE TALK ABOUT HERE. A LOOK AT PRIVATE TRAVEL.

MEANWHILE WE WANT TO STICK IN THE WORLD OF AEROSPACE AND SPECIFICALLY SPACE ITSELF.

SPACEX ASTRONAUT -- A BIG BACKER OF ELON MUSK AND SPACEX, HE BEEN NOMINATED THIS YEAR TO RUN NASA AND THAT GOT SCUTTLED, BUT THE SECOND TIME AS THE TERM, HE'S BEEN CONFIRMED TO LEAD THE AGENCY.

IT ENDS A PROCESS, A LOT OF QUESTIONS ABOUT BUDGET CUTS AND THE GENERAL DIRECTION OF WHAT THE SPACE AGENCY IS SUPPOSED TO BE.

FRESH OF THE HEELS OF THAT CONVERSATION, HE HAD A CHANCE TO SIT DOWN WITH ED LUDLOW TO TALK ABOUT HOW HE IS GOING TO RUN NASA.

>> THIS GOES BEYOND A RECOMMITMENT TO THE ARTEMIS PROGRAM, IT'S THE NEXT BIG LEAP. WE ARE NOT JUST GOING BACK TO THE MOON, WE ARE DECLARING WE ARE GOING BACK AND WE WILL ESTABLISH THE INFRASTRUCTURE -- WHAT SPACE LOVING FAN DOESN'T WANT TO SEE A LUNAR BASE? THEN WE WILL INVEST IN TECHNOLOGY THAT WILL ENABLE FREQUENT, LONG-DURATION MISSIONS TO MARS AND BEYOND, WHETHER THAT BE THROUGH NUCLEAR

PROPULSION OR SERVICE POWER WHICH HAS A NUMBER OF USEFUL APPLICATIONS.

IT'S AN EXCITING DAY AND IT'S EXTRAORDINARY NATIONAL SPACE POLICY AND ONE I AM NOT SURPRISED TO SEE.

UNDER PRESIDENT TRUMP'S FIRST TERM WE RETURNED AMERICAN SPACEFLIGHT CAPABILITY TO THE UNITED STATES AND KICKED OFF THE ARTEMIS PROGRAM. NOW WE TAKE IT TO THE NEXT LEVEL.

>> THE QUESTION I GET MOST FOR YOU RIGHT NOW IN RESPONSE TO EVERYTHING THAT'S HAPPENED IN THE LAST FEW WEEKS IS HOW IS NASA STILL RELEVANT? IN A WORLD WHERE THE PRIVATE SECTOR IS DOMINATING ACTIVITY, IT'S DOMINATING INNOVATION, WHAT IS YOUR ANSWER?

>> THAT SEEMS TO BE A COMMON MISCONCEPTION.

YOU GO BACK TO THE 1960'S AND NASA DIDN'T GO AT IT ALONE.

WE HAD DONALD DOUGLAS, BOEING, NORTHRUP.

THESE WERE CRITICAL VENDORS AND CONTRACTORS THAT HELPED US ACHIEVE THE NEAR IMPOSSIBLE OF SENDING ASTRONAUTS TO THE MOON AND BRINGING THEM BACK SAFELY TO EARTH.

SOME OF THESE COMPANIES STILL EXIST AND PLAY A HUGE PART IN THE PROGRAM AND THERE ARE NEW COMPANIES LIKE SPACEX WHO HAVE GIVEN US VEHICLES, AND BLUE ORIGIN.

NASA IS LEADING THE ULTIMATE HIGH GROUND TO SPACE.

LET'S FOCUS MORE ON SCIENCE. AS MUCH AS I WOULD LOVE TO SEE PRIVATE COMPANIES AND ACADEMIC INSTITUTIONS BUILDING HUBBLE TELESCOPE'S AND JAMES WEBB SPACE TELESCOPES AND PUTTING ROVERS ON THE MOON, THAT'S SQUARELY IN THE RESPONSIBILITY OF NASA. IF NASA ISN'T TRYING TO UNLOCK

OF NASA. IF NASA ISN'T TRYING TO UNLOCK THE SECRETS OF THE UNIVERSE, NO ONE ELSE IS GOING TO DO IT.

>> WE ARE SCRAMBLING A LITTLE BIT TO REACT TO THIS EXECUTIVE ORDER THAT HAS JUST BROKEN AT THE TIME WE ARE SPEAKING.

ARTEMIS IS WEAVED THROUGHOUT IT AND IS A MAINSTAY.

YOUR PREDECESSOR, IN THE ROLE ON AN INTERIM BASIS, REOPENED THE COMPETITIVE FIELD. WITH THE SPACE X LANDING SYSTEM, THE CONTRACTS FOR ARTEMIS THREE, HOW SHOULD WE EXPECT YOU TO APPROACH NEW RFPS OR ANY REAL CHANGE TO THOSE

EXISTING CONTRACTS, OR WILL THE FIELD BE OPEN UNDER YOUR TENURE?

>> IT'S WORTH POINTING OUT THAT SPACEX AND BLUE ORIGIN ALREADY RECEIVED CONTRACTS FOR HUMAN LANDING SYSTEM VEHICLES TO RETURN AMERICAN ASTRONAUTS TO THE MOON.

BOTH ORGANIZATIONS ARE PUTTING AN IMPRESSIVE AMOUNT OF THEIR OWN RESOURCES INTO A CAPABILITY THAT'S VITALLY IMPORTANT.

NOT JUST FOR A RETURN TO THE MOON, BUT THE REUSABLE HEAVY LAUNCH VEHICLES WILL A THE FOUNDATION FOR MISSIONS TO MARS . I DON'T THINK IT WAS LOST ON EITHER VENDOR THAT WHATEVER

. I DON'T THINK IT WAS LOST ON EITHER VENDOR THAT WHATEVER LENDER WAS AVAILABLE FIRST TO ENSURE THAT AMERICA ACHIEVES ITS STRATEGIC OBJECTIVES ON THE MOON IS THE ONE WE WILL GO WITH.

I DON'T THINK A LOT HAS CHANGED IN THAT DYNAMIC.

NASA IS FORTUNATE TO HAVE SPACEX, WE ARE FORTUNATE TO HAVE BLUE ORIGIN AND CRITICAL VENDORS.

NO DIFFERENT THAN RELYING ON KEY CONTRACTORS DURING THE 1960'S.

>> HOW HAS THIS EXECUTIVE ORDER CHANGED THE APPROACH TO THESE CONTRACTS?

>> IT TAKES IT ON A WHOLE OTHER SCALE.

WE ARE NOT JUST GOING BACK TO THE MOON FOR FOOTSTEPS AND PLANTING THE FLAG. WHEN THE PRESIDENT SAYS WE ARE RETURNING TO THE MOON, WE ARE ESTABLISHING THE INFO STRUCTURE TO REALIZE THE BENEFITS. THE PRESIDENT IS NO STRANGER TO AMBITIOUS REAL ESTATE ENDEAVORS. WE WILL BUILD A MOON BASE.

NOT ONLY THAT, WE ARE COMMITTED TO THE TECHNOLOGY THAT WILL TAKE US BEYOND THE MOON. THE COMMITMENT TO NUCLEAR PROPULSION AND SERVICE POWER WILL BE A KEY CAPABILITY AND ALLOW US TO WORK ALONGSIDE A VERY HEALTHY FIELD OF COMMERCIAL CONTRACTORS TO SET MISSIONS TO MARS AND BEYOND.

I THINK THIS SPACE POLICY IS THE MOST SIGNIFICANT COMMITMENT TO SPACE SINCE THE KENNEDY ERA. KATIE:

THAT IS THE NASA ADMINISTRATOR IN CONVERSATION WITH ED LUDLOW.

ON THE EARNINGS FRONT, NIKE SHARES REMAIN -- CONTINUE TO FALL. ROMAINE:

FALL. ROMAINE: THIS IS AFTER QUARTERS OF REVENUE DECLINES, YOU CAN SEE THEM DOWN. JOINING US IS LILY MEYER TO

THEM DOWN. JOINING US IS LILY MEYER TO TALK ABOUT WHAT'S GOING ON. THE NUMBERS ON THE WHOLE WERE IN LINE OR SLIGHTLY ABOVE ESTIMATES.

WHY DO YOU THINK WE ARE SEEING SUCH A NEGATIVE REACTION? LILY:

IT COMES FROM CHINA AND CONVERSE.

FOR THE MOST PART THE REPORT IS PRETTY HAPPY AND SHOWS A LOT OF GROWTH IN SOME AREAS, IS STILL BEING DRAGGED DOWN. ROMAINE:

WHILE THEY ADDRESS CONVERSE AT ALL?

I FEEL LIKE THEY'VE DODGED THE QUESTION.

THEY HAVE NOT MONETIZED CONVERSE IN A WAY I THINK MOST INVESTORS WANTED THEM TO. LILY: THEY TALKED ABOUT IT LAST QUARTER AND I WILL BE CURIOUS TO HEAR WHAT THEY SAY.

THEY ARE LEANING ON THE CHUCK TAYLOR AND THAT'S NOT ENOUGH.

I'M ALSO CURIOUS TO HEAR WHAT'S NEXT. KATIE: TALK ABOUT CHINA.

THIS FEELS LIKE AN EVERGREEN ISSUE FOR NIKE.

NEVER QUITE ABLE TO ESCAPE THE CLOUD.

WHAT IS THE CURRENTLY OF THE LAND? LILY:

ONE THING THEY REALLY NEED TO FOCUS ON CHINA IS A SPORT, A BIGGER PROBLEM FOR THE COMPANY GENERALLY.

LEAN TOO FAR INTO LIFESTYLE AND CHINA IS AN AREA WHERE THEY HAVE ASSESSED A FOCUS ON SPORT WOULD HELP.

I'M CURIOUS WHAT CHANGES THEY WANT TO MAKE.

THEY RECENTLY CHANGED IT SO THE HEAD OF THE CHINA AREA WOULD BE REPORTING TO THE CEO SO THEY HOPE THAT DIRECT LINE MIGHT HELP. KATIE: INTERESTING STUFF AND WE WILL

HELP. KATIE: INTERESTING STUFF AND WE WILL GET THAT CONFERENCE CALL IN JUST UNDER FIVE MINUTES.

LILY, APPRECIATE YOUR REPORTING. NIKE SHARES DOWN 5.5%.

ROMAINE: WE TALK ABOUT THE LAST GASP OF THE EARNINGS SEASON, NIKE AND FED EX OUT TODAY, A COUPLE MORE COMING IN TOMORROW MORNING. AS WE SET YOU UP FOR WHAT TO WATCH, KEEP AN EYE ON THE TRAVEL SPACE.

YOU ARE NOT A CRUISE PERSON BUT YOU HAVE TO CARE ABOUT CARNIVAL EARNINGS. KATIE: IT'S AN INTERESTING READ ON THE

EARNINGS. KATIE: IT'S AN INTERESTING READ ON THE CONSUMER AND THE STATE OF TRAVEL.

YOU ALSO ARE NOT A CRUZ PERSON, SO A GOOD COMPANY. ROMAINE:

I LIKE TO GO SOMEWHERE, WHEN I GET ON A VESSEL, I DON'T WANT TO JUST END UP BACK WHERE I STARTED. KATIE:

I LIKE TO STAY HOME. SENTIMENT FROM THE UNIVERSITY OF MICHIGAN ON EXISTING HOME SALES.

ROMAINE: THERE WAS ONCE THAT I WAS ON A FLIGHT THAT HAD TO TURN BACK TO CHICAGO AND I WAS ASLEEP -- YOU DON'T NEED TO KNOW THAT. ALSO THE BOJ RATE DECISION.

BALANCE OF POWER IS AT THE TOP OF THE HOUR, THEY WILL AXLEY WHAT HAPPENED LAST NIGHT WITH THE SPEECH BY TRUMP.