Title: Live From Future Proof: AI's Regulatory Divide 9/15/26
Show: CNBC Halftime Report (podcast of the live noon ET show) -- live from the Future Proof conference, Huntington Beach, CA
Host: Scott Wapner + Investment Committee -- Josh Brown, Stephanie Link, Shannon Saccocia
Guest: Rick Rieder (BlackRock CIO of Global Fixed Income, head of the Global Allocation team) -- the halftime headliner; Kate Rooney (CNBC, AI-safety camps); Christina Partsinevelos (CNBC News Update)
Date: 2026-09-15 (Tuesday)
URL: https://open.spotify.com/episode/5iCxAWTxdPrSTY7t27r2ZM
Length: 42:58
Note: Spotify auto-generated transcript (accuracy may vary); this is an AUDIO podcast -- the Spotify panel
  carries NO (mm:ss) cues, so there are no timestamps anywhere in this file and the analysis page's "At"
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  NOTHING WAS INVENTED.
  Spotify's chapter headings appear inline in the panel and are kept below as "## Chapter:" lines.
  Speaker diarization was numeric only ("Speaker N") and is left as-is below; from context the mapping
  is: 1 = Scott Wapner, 2 = Josh Brown, 3 = Stephanie Link, 4 = Shannon Saccocia, 5 = Kate Rooney,
  6 = Rick Rieder, 7 = Christina Partsinevelos (News Update), 8 = the podcast disclaimer announcer.
  (Anchors: Wapner's "Josh, I'll get your thoughts first" -> Speaker 2; "Shannon, what let's just say" ->
  Speaker 4; "Steph" -> Speaker 3 on Wells Fargo; "Rick Rieder... are they going to hike?" -> Speaker 6.
  Diarization noise, not new speakers: Wapner's AI-segment intro ("investors we as an investor class...")
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  Auto-caption garbles left verbatim here and corrected only in the analysis: "Wapter" = Wapner,
  "Sakosha" = Saccocia, "guilt" = gilt, "Kevin Wash/chair washes" = Kevin Warsh, "A46A" / "two 4" = core
  PPI 0.4 / core CPI 0.4 (likely m/m), "Dumer" = doomer, "Daria Amadei" = Dario Amodei, "Jensen Wong" =
  Jensen Huang, "Crowd strike/crowd" = CrowdStrike, "Mark Newton a fun Strat" = Mark Newton at Fundstrat,
  "Wells today/Wolf" = Wells Fargo / Wolfe Research, "black rocks, Rick reader" = BlackRock's Rick Rieder,
  "Co Bank" = an unnamed BlackRock short-duration ETF (not identified), "Jeffrey Gunlock/double lines" =
  Jeffrey Gundlach / DoubleLine, "Christina Parts Nepolis" = Christina Partsinevelos, "Troy Mink" = Troy
  Meink, "clawed" = Claude, "Truest Financial" = Truist Financial, "Porterhouse" = a Ritholtz strategy name
  as heard, "LNGFTI, Fang" = LNG, FTI, FANG, "Telsey" = Telsey Advisory.
  Light remove-only filler cleanup (pure stutters/false starts like "the the", "I, I"); wording otherwise verbatim.

This transcript was generated automatically. Its accuracy may vary.
## Chapter: Market Open: Fed Decision, Yields, and AI Trade
All right, Carl, thank you very much.
Welcome to the halftime report.
I'm Scott Wapter.
We're live in, as Carl said, Huntington Beach, CA for the Future Proof conference, the 5th annual event drawing more than 5000 financial advisors and wealth management professionals.
We'll have a lot more on all of that in just a bit.
Clearly, though, the markets are front and center today with the Fed decision looming and the AI trade being hotly debated.
Joining me here, our host Josh Brown, Stephanie Link and Shannon Sakosha are by my side as well.
Let's take you to the markets.
You know the story.
I'm sure by now we are red across the board.
Bond yields though, they remain very much the story, especially the 10 year note yield above 5%.
It is the highest level since 2007.
That seems to be as much of a driver as anything.
Crude oil, yes, we're watching that too because it's up.
Diesel is surging.
And Josh, I'll get your thoughts first.
We'll talk about future proof in just a little bit, but that's a pretty decent market backdrop to start on.
Speaker 2
Yeah, I think that the Bond story is tied in with the oil story and those are really competing for attention right now, but they're all of a piece because in the end, this is a global phenomenon with yields rising.
And just out of my notes here, you look at the UK, the guilt is back about 5% as well, and that's a high since 2008.
In France, the same story on their ten year 2008 high, the German Bund 2011 high Japan, it's a 3 decade high.
So anyone that's pointing out, well, it's the deficit or it's the budget or whatever the case may be, that's not actually true.
It's a global phenomenon.
The other thing that's happening is inflation expectations are heading higher and that's highs back into the oil story WTI back above 100.
It is unavoidable, this.
There's no way you can look at the market through any prism other than people are getting concerned about energy prices, not that they're going to ramp to 130, but is there any relief insight and that is resetting expectations.
And So what you have here basically is a 10 year that's been rising all summer.
It snuck up on people because they weren't paying attention.
But it's been happening for a long time and it is not an emergency.
In 2022, we had a 255 basis point move in the 10 year.
This year, not quite the same story.
It's only about 79 basis points, not some sort of overnight jarring thing.
But again, it is attracting people's attention.
And it's important to understand this is now the driver.
Speaker 1
Little more than 24 hours until we get the Fed decision.
Are you sort of resigned to the fact now and preparing for the fact that they're going to hike rates?
Speaker 3
Yeah.
I mean, it changed my mind after last week.
The numbers were just really high.
It was touch and go for a while there.
But a core PPI, Scott, A46A, core CPI of two 4 is just too high.
And the Fed has to have credibility if they're going to get that number.
Those numbers down closer to 2%.
I don't think though it's a foregone conclusion they're going to go in December.
I think we're going to wait and see.
We're going to see about the data that comes out.
We'll see about inflation, we'll see about the war for sure.
But I think it's going to be kind of a dovish hike, if you will, tomorrow.
I think Warsh will come out and say it's just exactly that.
This is not an aggressive campaign all of a sudden that we're going to see massive hikes for the next several quarters or several months.
And I think the economy can handle it.
That's the most important thing.
The economy can handle it.
Whether the Atlanta Fed is at four or three, it's above trend at the consumer.
We're going to talk about the banks in a little bit, but there have been the Barclays Bank conference is this week and every one of the banks are talking about how the consumer is in fine shape and credit quality is very, very tame.
So I think we can handle it.
I think earnings will stay elevated as well, not 50% like we just saw, but I think something like 20% for this year, maybe even into next year.
And I think the market's going to get over this whole hiking.
Speaker 1
That's the real question is how the markets they're going to react, both the bond market and the stock market.
By the way, I should remind you too that Black Rock's Rick Rieder is going to be with us in the next segment today right here on this set with us here at Future Proof.
So we'll get his views on what he thinks the Fed's going to do and what he thinks the markets are going to do.
I'll get your view though, first on all those questions, Shannon, what let's just say that the markets right at plus 90% steps, right, that they're going to hike.
What's the market going to do, do you think?
Speaker 4
I think it comes down to the intersection of all of these things that are affecting the market today.
You know, Josh mentioned oil prices, rates, the Fed.
I think that they hike, they hike.
We get a bit of a relief rally for a couple of days.
But we come back to the fact that from now through the middle of October, all we're going to hear about are the elections, higher oil prices, the potential for higher rates, and oh, by the way, the reason that yields are higher is because there's anticipation of stronger economic growth.
Speaker 1
You said a relief rally, the markets, stock markets going to rally.
Speaker 4
Yeah, I know.
I mean, I think we get maybe like one or two days of strength, but then I think we're going to fall back into this pattern through the middle of October.
I think we're pricing on the Fed.
I actually think what I'm a little bit more concerned about, Scott, is that I'm not so sure Warsh is going to Telegraph that this is a dovish hike because he is loath to give forward guidance in this environment.
And so we could see a day, a day and a half of relative, you know, relief.
But I think we fall right back into this challenging continuum of all of these, this confluence of factors.
The other thing that Josh pointed out is that, yes, the trend higher in the 10 year has not been at the pace of the velocity that would create challenges in the equity market over the last several years.
But we could see that pace accelerate as we move into the beginning of October.
And without earnings as the foundation as the backdrop, I'm concerned that these macro considerations are going to dominate the market and that all of this noise, especially around AI, which we're going to talk about, is going to create a ceiling on stocks at least through that October time period.
Do you agree with?
Speaker 1
That the market goes up if the Fed hikes.
Speaker 2
I almost think the market goes up either way because we want this news, whatever it is out of the way.
I think the only thing that could really drive the market lower is a hike accompanied by an incredibly hawkish statement.
And I would put the probability of that as like 1 or 2%.
I do not think Kevin Wash wants his first hike to be accompanied by Brimstone.
We know who his primary audience is and it's not us.
And so even if there is a hike or no hike in like an either case, I think the market will say, all right, that's out of the way.
The reality is 25 basis points is not going to have a major impact on the earnings outlook for the S&P.
It's not going to stop the CapEx race, which is the primary driver of earnings.
It's probably not going to be terribly meaningful.
The market, if you look back through history, it likes when there's certainty regardless of the outcome.
And we can do thousands of examples of that.
Speaker 1
Let me tell you this.
What if?
What if the move in interest rates starts to challenge the multiple and even it already has it?
Speaker 2
Already has it already.
Speaker 1
Has continues to do it.
We've been.
Speaker 2
Shrinking we have accelerating earnings growth in the NASDAQ 100 in the S&P 500 and yet all we have is cheaper and cheaper and cheaper stocks.
People talking about AI bubble.
There are only 40 stocks in the S&P 530.
Something stocks in the S&P 500 with APE multiple above 40.
There is no.
There is no I.
Speaker 1
Just I bring it up because Wells today is out Steph with a new note.
They cut their S&P target to 7700 from 7950.
They see a 5 to 10% downside risk at first, but they raise their earnings forecast, but they believe we're in the later innings of the cycle and they're arguing for multiple compression.
So even if you get a better earnings story, you still get multiple compression and that brings stocks down.
Speaker 3
But we already have seen multiple compression.
As Josh mentioned, we started the year with the S&P 500 at 23.5 times forward estimates.
We're now at below 20 times.
Earnings are going to go much higher.
And I think you can deal with a multiple contraction.
So the market goes up one way or the other.
Either earnings go up and you get multiple expansion or you earnings go up and you get multiple contraction one way or the other.
I mean, I think that the market can handle it and I think earnings are still very, very powerful.
And so I don't agree with Wells today in terms of cutting targets.
Speaker 1
I agree with Wolf, which says we don't think hikes will mark a top in stocks.
I think for the very reason that we got here in the 1st place that all of you still believe in the durability of the earnings story, right?
We wouldn't be having this kind of conversation about the Fed if the earnings picture was different than it is now.
Speaker 4
And the breadth of the earnings story, I think that's really important.
Yes, you look at the top end and text at the top end of that.
But then you look at energy, you look at industrials, you look at financials and you look at the earnings growth that you're seeing across the board.
Scott, yesterday we saw semis down over 6% and yet Russell 3000 gainers were better than decliners yesterday.
So we still see that breath in the market and that's because of earnings.
It's not because there is this continued concentration.
Now could we see a rotation over the next couple of weeks in terms of those winners?
Absolutely, because some of the stocks that are actually poised to continue to grow their earnings very robustly have seen significant multiple compression.
And so those values are starting to become a lot more attractive, especially if you don't want to take a risk on some of the high Flyers and really put continue to bank on this.
Speaker 2
We're getting that rotation now.
Like if you give me a chart of the XLE and pull it back three or five years, this is probably the most untold story, but it's a story nonetheless that people need to hear.
We say on this show all the time you never sell your energy stocks.
I don't care how bad the outlook for crude is or how much peace there is in the Middle East temporarily, you do not get rid of your hedge.
This is your only hedge against an oil price spike is the equities that where the companies make money from higher oil on my best stocks in the market list, I now have 15 oil stocks.
Keep in mind this sector is like 2% of the S and Pi have 15 names.
We've been talking about some of these all year.
The refiners marathon, Phillips 66, they look incredible.
Schlumberger's on the list, Conoco Phillips, Chevron's on the list, Marathon, of course, LNGFTI, Fang.
These stocks are breaking out.
Almost no one owns them.
They're not expensive.
The outlooks are going higher.
And if you think about like what are people trying to do right now that's away from the AI trade, but that has this tailwind, that's your energy sector stocks.
Very easy for an active manager to outperform by overweighting this group relative to tech or relative to communication services.
These are smaller companies and these charts look unbelievable, right The.
Speaker 3
Problem is it's only 3% of the S&P 500, right?
So take them, yeah, you take them to 6%.
But you know what technology, we know what that is.
That's a huge, that's 35% of the S&P 500.
So you got to get both of them right?
Speaker 4
Yeah, but this idea of a barbell hedge is incredibly important.
Energy, healthcare, you look at these names and you look at the opportunity there and I feel like this is a great way to just take a little bit off the table in tech and just have something on the other side of this trade for these down days.
## Chapter: AI Safety Concerns and Their Market Implications
I think we're, you know, investors we as an investor class are trying to figure out what exactly to do next with these AI related stocks given where the conversation has gone really from the weekend some new headlines and they're going to be headlines probably multiple times a day every day for the foreseeable future of Google DeepMind staffer says AI may quote kill us all after and that was in an exit post.
So that's sort of reflecting what has really been on one side the Dumer cycle time magazine's cover.
Take a look at this.
How dangerous are you in a chat question the AI tipping point is the title there the president you know by now he's been railing on social media calls the safety fears A hoax.
David Sacks weighing in Gavin Baker weighing in Nikesh Arora weighing in.
It seems like every significant voice within the technosphere, if you will, is weighing in Jensen Wong did yesterday as well in the all in summit.
The president calling into that our Kate Rooney is in San Francisco, up the coast from us following that part of the story.
You're head must be spinning with all these headlines.
Speaker 5
It's been really busy, Scott, and you have had some really influential tech CEO's weigh in.
And there are some different camps really starting to form around really whether or not to slow down AI.
So on one side of this, you have the AI lab.
So Anthropic CEO Daria Amadei kicked all of this off over the weekend with an essay on Saturday calling for an AI slow down.
You had Sam Altman tweeting his support for that.
Open AI also just told us within the last hour that the company is working with other AI companies, so Anthropic and Google in particular, working with them on sort of how to police this, how to oversee it.
Elon Musk also agreed with Amadei on Twitter.
He said I agree with Dario and Musk was at the All In summit as well.
He unpacked some of those comments on stage.
He said when people from anthropic and open AI are telling you that their models are very dangerous, he said we should believe them.
Called for a peer review of some of the most powerful AI models.
Speaker 1
What I think would be wise to do as soon as possible, if not immediately, would be to have the major AI competitors test each other's models so that you'd have everyone's security test harness testing everyone's models.
So, you know, instead of kind of grading your own homework, you would at least have competitors grading your homework and raising the alarm if they see concerns.
Speaker 5
Scott, you also had Jensen Wong, Nvidia's CEO, on stage at that same event, saying there that companies should take safety seriously, but they do also need to draw a line between some of the concrete risks and predictions of human extinction.
He called some of the rhetoric irresponsible.
He also said that slowing down could cost the US its lead over China.
And President Trump very much agrees with that sentiment and called some of the fears that AI could take over or destroy humanity a hoax.
He called Jensen Wong on stage.
It was on speakerphone.
And then finally, you had Pentagon technology chief Emil Michael also arguing Some of the existing laws are already there to provide the tools needed to police this industry, Scott.
But a lot going on in this space.
Speaker 1
Yeah, no doubt about that, Kate.
Thank you very much.
That's our Kate Rooney.
Wells Fargo guys today downgrades tech to equal weight.
I thought Mike Santoli had a very interesting part of his market memo today, quote the youthful phase of AI when promise was unlimited and winners were easy to spot and vastly outnumbered losers is over.
I guess my question to all of you, is it going to be harder now to find the winners from the losers?
Speaker 2
I think it couldn't be easier.
The market has spoken.
We have the verdict already.
Give me these charts in rapid succession.
Crowd strike.
Speaker 1
I know you're going to go there.
Speaker 2
Stocks up 104% year to date.
It is the 12th best stock in the NASDAQ 100, is the 15th best stock in the S&P 500.
I don't care what model you're rooting for.
I don't care what LLM, what hyperscale, I don't care.
What I can promise you is there is no AI without the appropriate amount of cybersecurity.
And what the appropriate amount of cybersecurity seems to be is only going in One Direction.
Tell me one government or one board of directors at a public company that's having a meeting, even considering lowering the amount that they're spending on cybersecurity in the age of AI.
Look at Fortinet, FTNT, and by all means, let's throw up Palo Alto.
All three of these stocks have doubled this year.
The market has spoken.
These are the built in winners.
Can you make money in chips?
Sure.
Can you make money in hyperscalers power?
Yes, absolutely.
But we know you cannot bank on any spending not being accompanied by the right amount of cybersecurity.
I think crowd is the winner here.
This is a long term holding of mine.
I'm in the stock for 600 plus percent.
I never stopped talking about it, and at this rate, I probably never will.
Speaker 1
Steph, you really don't stop talking about the need for cyber either.
I thought Mark Newton a fun Strat.
I had an interesting note today.
The Mag 7 is on the verge of an imminent breakout and that should spark a sharp rally in large cap technology.
It was pretty telling, don't you think?
Yesterday, in the way that some of the hyper scalers traded in the face of all of that negativity over the weekend, Alphabet, Meta, Microsoft, they were green.
Speaker 3
They were green.
They should be green because you're starting to see monetization.
Maybe not Meta because that's where I will differ.
But I think when you saw, you know, Microsoft and you saw Google Cloud and you saw Amazon AWS all see these numbers in their cloud businesses accelerate last quarter substantially.
That was real confirmation that you are starting to see the ROI.
We want to see better ROI.
We want to see higher numbers, but we're starting to see it.
And as long as they're going to spend and then they start to see the ROI's that does benefit the entire food chain.
We're going to spend $7.1 trillion on data centers between now and twenty, 31.4 trillion on the grid and upgrading the grid between now and 2030 power, 1.7 trillion.
And as a plus sign next to it, no doubt in my mind, because we just don't have enough of it and we don't have enough of anything.
Scott, that's the whole debate about inflation, right?
AI is inflationary in the short term, but eventually it'll lead to productivity, which will also be very positive.
Last thought.
Speaker 4
Core businesses that can be enhanced and improved by AI are where you want to be investing and that's why the hyperscalers are going to outperform some of this, you know, kind of these frontier AI names over the course of the next couple of months, OK.
Speaker 1
I'll see you guys in a few because coming up next, our halftime headliner from here at Future Proof BlackRock Rick Rieder, He joins me live ahead of tomorrow's Fed decision.
Josh also has some new moves coming up.
Stephanie Link has a new buy.
I promise we get to all of it when we come back.
Huntington Beach, CA
## Chapter: BlackRock's Rick Rieder on Fed Hike and Market Outlook
All right, welcome back to Huntington Beach, CA Investors betting heavily at this point that the Fed will raise interest rates tomorrow.
It's sure to be a market moving meeting no matter what happens here with his outlook for stocks and bonds is Rick Rieder.
He is BlackRock CIO of global fixed income.
He's head of the global allocation team.
It's nice to catch up with you ahead of tomorrow.
Great timing.
Speaker 6
Yeah, yeah.
Well, this is great.
Speaker 1
Well, let's just get right to it.
Are they going to hike?
Speaker 6
Yeah, they're going to hike.
I mean, I think the markets are pricing at over 90%.
Do I would I have priced it at over 90%?
I wouldn't, but yeah, I think you have to assume at this point given everything, given the position they're in today, boy, the communication, you would think even though we're not getting forward guidance and we're not in the future.
Well, I think this would given how much the markets have assumed it's the case and the variable, the volatility of the back end of the curve, I know I think it'd be pretty tough.
It didn't happen.
Speaker 1
OK, so you're with me just a few weeks ago.
Yeah, right.
You told me then that you thought they'd be on hold quote for a period of time.
Yeah.
Have you moved in your own mind from they shouldn't hike to they should?
No.
Speaker 6
No, no, no, no, I think.
Speaker 1
You don't think that they should?
Speaker 6
Oh, I mean, I wouldn't, but that being said, I've learned in investing, it doesn't really matter what I think, it matters what they do and it matters what the markets perceive that they're going to go.
And so no, I wouldn't because I think there's, you're not going to really do much.
I mean, talk about moving the funds rate 25 basis points.
Are you really going to do anything for inflation?
What's driving inflation is interest rate insensitive.
Obviously got war, you've got energy price, you've got education, insurance costs, healthcare, it doesn't really do much.
So what I do it, what it does adversely impact.
Look at the housing market that's frozen.
And one of the things I presented at a conference the other day and I talked about this, it's not free to raise rates.
U.S. government, when you move rates up 100 basis points, it's $100 billion to the US government.
The tricky part is we're going to have a compounding debt problem in the country.
Ultimately you got to get that rate down.
So when people say we should just raise rates, boy, there's a serious cost, let alone the most of the country that's having a tough time with these rates, not the parts that are driving CapEx, they're doing just fine.
Speaker 1
Do you think that a hike would be then more about credibility than it would be inflation?
Speaker 6
So I mean, I think the narrative in the marketplace, the Fed has to go for credibility.
You know, could you describe it in a way?
Listen, I think now the position they're in, I think you'll most definitionally have to go.
You know, I think the Fed's credibility really I don't think should be questioned.
I mean, I think as long as you have you lay out what the metrics are utilizing to determine where rates are going to go from here, as long as you're thoughtful about these task forces, what are these complex issues today?
Listen, I think people are pretty harsh when they say a couple of meetings and now they have a credibility issue.
I don't.
I don't really.
Speaker 1
Well, haven't or hasn't the chair put them in this position by being as hawkish as he has publicly been?
He said we're not going to tolerate inflation where it is we're above target.
And then at Jackson Hole he was hawkish.
So how can you do all that and then not hike?
Doesn't that create a credibility problem?
Speaker 6
So listen, I mean, can you to say you are going to be vigilant on inflation going forward?
I still think you can do and I think there's a whole series by the way, you can use the balance sheet, you can use liquidity, you have a whole series of tools that you can utilize to get there.
To your point though, and the reason why, gosh, at this point, I think you almost have to go.
You have laid out a dynamic and you've had a series of speakers, not just the chair who've outlined that you have core PCE that is above target.
And you know, if you had a reasonably, if you had a softer employment report and inflation report, CPI, PCE and gosh, could you have waited?
Yeah, I think you could have did.
Speaker 1
The data last week forced their hand.
Speaker 6
Yeah, I think so.
I mean that was even when you break down CPI, there was some exogenous influences like telecom services that shocked the number higher.
But yeah, I think those numbers, if you have a committee and I think the key is people focus on the chair.
You've got a committee that's got a, you know, a series of people on it that are feel like you're above target time to go, let's go.
And I think he has to manage to that dynamic.
Speaker 1
What do you think the long end does if they hike?
Speaker 6
Listen, I think one of the things and we've dabbled a little bit in the back end of the yield curve.
I still think you got to be careful about interest rates and I've talked about it for a long time.
Long end interest rates haven't been interesting.
For the first time, you're getting to break evens that are, I mean, you know, I was looking at when the tenure hits 5 percent, 95% of the time in history.
When it does, it's a really good forward investment environment in terms of buying interest rates.
So we've dabbled a little bit.
That being said, I still think rates could move a bit higher, assuming they hike.
Yeah, I think the yield curve will flatten.
I think the back end will hold in just fine.
Speaker 1
You may get a little bit better opportunity, but why fight it?
Why wait for it?
Speaker 6
Well, so we've been significantly underweight for a long time and I think now well.
Speaker 1
You say you're dabbling in.
Speaker 6
It.
Yeah, Yes, you're dabbling.
Speaker 1
By some longer treasuries.
Speaker 6
Yes, but not, but I think our, you know, today we're still, we could still own a whole lot more than we have.
We're pretty significantly underweight in terms of the back end of the curve.
So yeah, we bought a few pieces.
But at the end of the day, listen, you've got influences.
The amount of supply that's coming to market is significant.
They're both obviously you get treasury supply, but you also the amount of credit supply is significant pressure on long rates, you know is real.
And so, you know, I think you can own a bit here.
I think if you took a longer term time perspective to it, yeah, you can own rates, but I think today we'll you know, we're going to buy a little bit, but be careful.
Speaker 1
What about the fact that you've liked the belly of the curve?
Yeah, Most yes.
Is that starting to change?
Speaker 6
So no, I mean, I still, I mean, I like actually a bit more, I actually like the front end, the very front end Now.
I mean there's so you can create.
So we have this ETF Co Bank, we're running it under three years of duration and over now we're running actually 7.2% yield with an A minus average rating.
Boy, if you can sit in that part of the yield curve where volatility, I mean, we're, you know, we're having a decent year.
We're up money this year, which in fixed income has been pretty tough to do.
So yeah, I like, but I've moved it a little bit in the front and then, like I say, a couple of pieces out in the back end.
Speaker 1
You think it's one and done?
Speaker 6
Listen, I think you know, it's dependent on where the inflation goes.
I mean, the concept, what's or why it is in my mind just hiking 25 bases doesn't do anything.
If you're going to hike and you want to make a difference, you got to go more.
The problem is the pressure you'd put on most of the country to do that doesn't in my mind, doesn't make any sense.
So yes, my ultimate view is I think you'll probably do this hike.
I don't think we're going to get much forward guidance.
That seems to be the philosophy.
And then I said, I don't think they should.
They should go any further and let's, you know, we'll see what the data says.
Speaker 1
What do you make of the Treasury's intervention and the fact that yields have continued to back up even though they're in the market?
Speaker 6
So I think the treasury has been quite clear and they're not trying to manipulate or they're not trying to set where the rate should be in the back end of the curve.
I do think what they are doing and I do think that intervention is suggesting that gosh, we have tools.
If people get short the back end or people are aggressive and pressing against it, they have tools to combat that.
And so listen, the amount of size they bought and people are focused on the fact that you think about the 40 trillion of debt we have in the country and the fact that people were so wrought over.
It was 6 billion, not 8 billion.
It's kind of ridiculous.
I think at the end of the day, secretary will make a determination.
Does he have to do more if rates become unanchored, But today they're not really unanchored.
I mean, you talk about, you know, the move we've seen in the back end of the curve.
I mean, people got crazy and exaggeration.
You've got an economy that's running on a real time basis, well over 6%.
You know, you've got a tenure when you look at the yield today.
I mean, if people say that's the anchored or unanchored, it's not really unanchored.
It's reflecting, in fact, you've got strong growth in the economy.
Speaker 1
Yeah.
But when you were with me last time, you did use the word untethered, that it was starting to look a little untethered at the back.
Speaker 6
There are days that that gets a little bit that gets volatile, but when you step back and look at where these yields are and you think about gosh, you got an economy that's doing really well.
Our view is you'll start to see it peak.
You know, you're on the back end of the fiscal stimulus, the first derivative of CapEx growth from AI should be a bit lower.
So I think the I don't know why I think you've seen some pretty amazing growth.
So I don't think the Treasury has to jump in, in significant size.
Speaker 1
What do you make of the fact that Treasury, the secretary says I'm the House and whether the market is testing that a little bit?
Speaker 6
So listen, I mean, you know, I will say one thing.
I mean it's a hard job and I understand, you know, I understand what he said around asymmetric information.
And listen, whether it's what Japan is doing or looking at deficits in terms of what the forward is, listen, he's got good information.
And so I'd maybe we can debate the words he uses, etcetera.
He's got good information.
And I think he's looking at a world that it where he thinks that if you grow at this sort of level, tax receipts are high enough, then you could manage that.
Speaker 1
Let's finish on stocks.
What do you think the stock market's going to do if they hike?
Speaker 6
So first of all, you know, one thing I've learned, no matter what the stock market does, people say was because of the Fed.
And it's funny, it's like, I think it was on your show once and the day before the market rallied or the day the Fed moved, the market rallied.
The people say it's the Fed and then it got hammered and people said it was the Fed.
Listen, I think the one day change is pretty hard.
I think people need to see the Fed moving and I think as long as you get, I think Josh said it was, I think is right.
As long as you get behind it, I think the equity market will have an OK time with that.
Listen, I will say I don't remember a year ago we were here, we talked about it was the best investment environment of all.
Speaker 1
Time I remember.
Speaker 6
I don't think that today, particularly with regard to equity.
So when you think about where we are in a year hence and how much things have changed, whether it's multiples, whether you just had a tremendous GDP dynamic that we're going through that buoyed stocks, the fact that I could build a portfolio of over 7% with a three-year duration single A, it's like all of a sudden the alternative to stocks is real.
And then if you say, well, you know what, you know, AI, you know, I think AI is still going to be significant in terms of growth.
But you said, you know, when I go through sectors and I say, OK, that sector's OK, they're not a lot of sectors, I say, gosh, you know, the convexity upside downside is great today.
So anyway, I think stocks are fine, but I think they're AB minus really relative to like we came last year.
It's like you had opportunity to get yield, not as great as today, an opportunity to get yield.
You had an opportunity to get equities in what was I would argue was a pretty good point in time today.
I think it's just OK.
Speaker 1
So you think they were an A + a year ago and they're AB minus today?
Speaker 6
I think they're, I don't know everybody characterized about that back then, but we talked about it was an amazing environment.
Today I think they're just OK.
And I think the volatility of equities will be higher going forward because you got to grow at 20 that we've been growing at 2025% earnings growth.
That is a pretty hard bar to eclipse when you've gone the backside of fiscal tailwind, when you have a war that obviously creates some duress around it.
So yeah, I think they're just OK.
Speaker 1
Well, I mean, if you think that earnings are in the process of peaking and that yields are going to challenge the multiple, then that's a significant.
Speaker 6
Issue, isn't it?
Yeah.
So let me throw out one thing.
You know, it's many years we've been on together and people said, you know, if the tenure gets to 3% or 3 1/2 or 4 or 4 1/2, like it's over 5 is now the round Number that it's over.
I actually don't think as long as you move there in a deliberate way, I don't think there's a number.
But I do think something has evolved and there is rollover financing risk in a number of sectors today.
And I do think you'll see that whether it's in real estate or bilateral credit finance, there is some rollover risk in the market.
So I think that is real.
But what has changed is that with these real rates where they are today, if you're running, if you're an endowment, A pension, a foundation and you say, gosh, I've got an operating budget to fulfill.
And usually that return is about 7%.
And if you say, gosh, if I can do it in a really low volatile stable way versus I got to hope for earnings growth again, the needle will move.
And you're seeing that.
We've seen some clients who said, gosh, maybe I'll move the needle.
Not a lot.
I think most people feel pretty good about equities today.
But I do think that all of a sudden the alternative is quite significant.
Speaker 1
We'll leave it there.
I appreciate your time as always.
Let me see on the stage in a little bit.
So don't go too far.
That's black rocks, Rick reader, of course, quick programming note as well.
It is of course fed day tomorrow, which means we'll be speaking with double lines.
Jeffrey Gunlock immediately following chair washes news conference.
So huge interviews.
You get to hear from Rick Rieder today ahead of the decision.
You get to hear from Jeffrey Gunlock right after the decision.
So got you covered all the way around.
Still ahead, we're back to the committee.
Josh and Steph both have new moves.
As I said earlier, we're going to get to the names coming up next live from Future Proof.
Speaker 7
We're back on HALFTIME Report.
## Chapter: Latest Headlines: Reiner, Lithuania, Denmark, US Space Weapons
I'm Christina Parts Nepolis with your CNBC NEWS UPDATE.
Nick Reiner won't face the death penalty for killing his parents, the Hollywood director Rob Reiner and Michelle Singer Reiner.
The LA County District Attorney announced A surprising twist today, saying the decision comes after a rigorous review.
Reiner has a history of mental illness and has pleaded not guilty to the deadly stabbings.
Italy's defense minister says the drone shot down in Lithuania's airspace overnight by an Italian NATO fighter jet most likely came from Russia.
Separately, Denmark said a Russian warship fired 2 flares of one of its military helicopters.
The incidents came just one day after NATO's chief said strikes close to NATO territory would only increase the military's alliance support for Ukraine.
And the United States just confirmed for the first time it has weapons in space.
US Air Force Secretary Troy Mink confirmed the deployment during a conference, but didn't specify what kinds of weapons were actually in orbit.
Halftime report is going to be back after this short.
Speaker 4
Break.
## Chapter: Anthropic's AI Tools for Wealth Management Unveiled
All right, welcome back to 5th annual Future Proof Conference came with a very big announcement this year down on the mainstage, Anthropic unveiling a set of AI tools for financial advisors through its clawed chatbot, Josh's Ritholtz Wealth Management named one of the design partners for that new product.
We'll start there before we get to the conference at large.
What does that mean?
Tell.
Speaker 2
Us.
I think what was announced yesterday is a landmark situation for the wealth management industry.
We are an industry where we have spent the last 10 years basically cobbling together hundreds, if not thousands of different point solutions, software programs that do everything from portfolio accounting to asset management and trade rebalancing, customer connection points.
But like everything that you can imagine, there's a software solution for that's in part, you know, the success of this event is because of the way the ecosystem is thriving.
The problem is nobody has come up with an intelligence layer that can pull all of those things together and allow the financial advisor, the wealth management firm to coordinate and not have to log into 50 different things, move customer data, trade on one platform, trade on another, pull them into a spreadsheet, do some sort of reporting.
So now, for the first time, having clawed in our ecosystem, pulling together all of our systems, reporting to both us and our client in real time, everything we need to know before every conversation, before every market moment, this is, in my opinion, the Holy Grail.
We finally found it.
On behalf of Ritholtz Wealth, we are honored to be working with Anthropic on the project, and I think everything is about to change.
Speaker 1
What does that mean?
You're a design partner and you're working with them to design exactly what the whole experience is going to look like between the advisor and the client.
Speaker 2
What does it need to do?
How does it need to operate?
What integrations does it need to have?
Which custodians does it have to be plugged into?
How does it work with the existing data lakes that firms of my size and larger have already built?
This is the most important.
Anyone can say, OK, great, here's enterprise software, but if it doesn't get the job done, it's just one more SAS product that people don't want to pay.
Speaker 1
For so it doesn't take anything away from the human to human contact.
It only sounds like it enhances it.
Tell me what the client at the end of the day gets out of this, because I think that's what our viewers probably want to know more than anything else.
How does this going to help me be better at, you know, my advisor making more money for me?
Speaker 2
Yeah, I think that's exactly right.
Like what is the externality in the eyes of the end customer?
I know a lot of people see me on TV and I talk about the stock market, but my real job is running one of the fastest growing wealth management firms in the country.
I'm not just a pretty pair of kneecaps and we're almost $10 billion in assets under management.
I've got dozens of certified financial planners working with thousands of households.
It is exhausting to sit on a call with a family where they're going through a transaction of a small business they're selling or a matriarch or a patriarch has passed away, or they're creating trust in the state documents for the first time and trying to decide who gets what and when and what are the contingencies and who gets to sign off on right.
There's there.
These are emotional conversation.
They're not market conversations.
The markets are the tools that enable us to satisfy the goals and objectives that we're setting out with the planning.
What is the customer get as a result of all this tech clarity #1 more of their advisors attention.
I have very highly paid certified financial planners.
They have.
They're brimming with empathy and wisdom and experience.
My clients are paying me for access to that.
They don't care who pushes the button.
They're not interested in who does the rebalance.
That stuff has to work, has to be executed.
Florida State, if AI can help us get that done, that's more time for the human connection, which in the end is the most important part of the engagement.
And I don't care who you talk to.
You could talk to an advisor at Goldman Sachs.
You could talk to a two man or two woman operation in a strip mall in Dubuque.
Both of them will tell you the same thing.
The client cares about attention and FaceTime and understanding their situation.
They do not care about tech.
We care about tech because we're trying to run incredible businesses and satisfy a lot of customer demand to.
Speaker 1
Feel like this is a if you build it, they will come thing for future proof.
In general, the fact that you've got 5000 people here, you've got thousands of registered investment advisors, Anthropic came here to make the announcement with all of you and what that says about what this conference has become.
Speaker 2
Anthropic's announcement is unbelievable.
There are 12 logos on there from companies like Schwab and BlackRock and all of the biggest players, they're all in on the provider side.
On the RIA side, again, it's a small handful of firms, mine being included, where we're helping them understand what is the need of the advisor.
The fact that that's going down here at the fifth version of future proof, it's like a dream come true.
It's unbelievable to be right in the center of it all.
All right.
Speaker 1
Quick break.
We come back, Josh's move and Steph as well.
## Chapter: Investment Committee Reveals Latest Portfolio Adjustments
We are back.
And let's talk about that move that Stephanie Link just made.
So you bought back Wells Fargo once your largest position that you had exited, now you're back.
Why?
Speaker 3
Yeah, because I think the turn around is starting to become evident.
The asset cap was lifted a year ago.
It has taken them this long to really build a momentum in their business and they are starting to talk very positively.
They were at Barclays this week at the conference then talking about gaining market share and investment banking in M&A, fee growth is accelerating.
Most importantly, NIM net interest margins have bottomed and net interest income is growing and that is by definition positive operating leverage to be seen.
So this stock has actually lagged the Big 5 by 14% year to date.
It's down 2% in the year, trading at 1.4 times book, 11 times earnings.
I think they're back.
Speaker 1
What do you make of Bank of America yesterday?
Worst day since April of 25.
They said they expect Q3 investment banking fees to fall more than 10%.
Morgan Stanley was out today, said the stock reaction was way overdone.
They reiterated overweight and you own the name.
Speaker 3
I do own the name and I was surprised that the stock was down that much because they did have a lot of positive things to say.
He was more not concerned but just surprised that positive operating leverage this year instead of 500 basis points will be two to 300 basis points.
That's a yield curve thing.
I don't think it's really they're in their control, but he was out very positively on CNBC.
What was it last week or the week before talking about the business momentum and them seeing loan growth and demand growth etcetera and deposit growth.
And so I just think this was just a backtrack a little bit, but I'm not concerned at all, not at this valuation.
Speaker 1
Jan, you like the group?
Speaker 4
Yeah.
I mean, if you look at the opportunities in terms of net interest income, but also you know, even with the decline in investment banking, we're still going to have a lot of transaction volume.
And so trading is still going to be a huge driver for these financials as we move forward.
Speaker 1
So you real quick, you bought more Netflix, you bought more Delta.
Speaker 2
I did.
Netflix is 38% below it's 52 week.
It's all time highs.
I think the stock is just too cheap.
Mark Mahaney came out yesterday, $110 price target says the market is missing all of the positives.
I agree also added to Delta on this dip.
Delta is being depressed with the other airlines because of crude oil back above 100.
You wait and see how fast that reverses.
One or two week weekdays for oil.
The airlines will RIP and delta probably more than the others because it is the best player in the group.
I think anywhere under 80 gets a steal all.
Speaker 1
Right.
Good stuff, guys.
We'll take a quick break.
We'll come back.
We'll do finals from Future Proof coming up.
## Chapter: Panelists Share Final Trades Before the Closing Bell
All right, we're back at Future Proof for closing bell 3:00 Eastern Time.
Tom Lee, Dan Ives, Sarah Malik and Cheryl Penny of Dynasty and I look forward to having you all with me this afternoon as we countdown to the end of the trading day here.
We'll do final trades now.
Josh Brown, you were.
Speaker 2
First, yeah, we did a segment a couple of weeks ago about target hitting my list of the best stocks in the market.
We have just put the stock and client portfolios for our Porterhouse concentrated momentum strategy basically 16 times earnings with 33% growth expected over the next year.
I think it'll keep running.
Speaker 1
Telsey reiterates it outperform 182 is the target, Steph.
Speaker 3
Welcome to the party.
Speaker 1
On that name.
Speaker 3
For a long time.
Speaker 1
Hasn't been a very hasn't always been a fun party.
Speaker 3
It is not a fun party, but it is this year.
It's up 61% year to date and they have a lot of momentum in.
Speaker 1
This What's your final?
Speaker 3
Truest Financial another new CEO doing it.
Speaker 1
All right.
All right.
So we're going a little more regional.
They're super regional, if you will.
How about you, Shan?
Speaker 4
Healthcare, managed care, improving margins and might get a little bit of a bump that the Democrats take the House.
Speaker 1
All right, I'll see you in a couple hours back here in Huntington Beach at future proof for closing Bell.
The exchange begins right now.
Speaker 8
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