Closing Bell Overtime: 10/16/26

Netflix

Across the shows: 8 speakers in other episodes, 8 bullish and 1 bearish calls, past 30 days

• Julia Boorstin · CNBCBearish

  Netflix's engagement slump reflects no breakout hit and YouTube's rising share of viewing time.

  Boorstin cites Nielsen data showing Netflix's share of US viewing time down a point year on year to 7.8%, while YouTube gained nearly as much to 14.2%. She gives two causes: no breakout new show, and a summer schedule that lacked big releases before the fall. She says the broader issue is competition with YouTube, which everyone is chasing for engagement. Netflix must decide how far to go in replicating YouTube-style creator content versus its traditional series and films.

  “I would say there are a couple of factors here. One is that there wasn't a breakout hit new show.”at 30:21

• Matt Belloni · PuckBearish

  Netflix's content approach isn't working; it must take more risk on content, formats and sports.

  Belloni says Netflix is down more than 40%, possibly because of the failed Warner Bros. bid, which made investors question why it would pay tens of billions for a studio if its own business were great. He sees the Bajaria shakeup as a partial scapegoat. Netflix lacks buzzy hits since last summer's K-pop Demon Hunters, and YouTube pays nothing for its content while Netflix pays about $20 billion a year upfront. He expects Netflix to try podcasts, audiobooks, linear channels, sports, theatrical deals and other services, and says the company has to take more risk because what it's doing isn't working.

  “They gotta take more risk on this because what they're doing isn't really working.”at 35:28

• Matt Belloni · PuckBullish

  Netflix's ad business is growing but early; it needs buzzy shows and engagement to sell ads well.

  Netflix's ad business is growing, though still early. Ad buyers see Netflix as behind Amazon Prime Video, which has transitioned more successfully to its ad tier partly because it opted all Prime Video subscribers in, while Netflix did not. Most of Netflix's subscriber growth is coming from the cheaper ad tier, so Belloni expects ad-business improvement, but says Netflix must keep producing buzzy shows and engagement that draws people in to sell ads. Sports or more live events and podcasts could help, but this is not yet proven.

  “It is growing, and it's still early days for Netflix and ads. But when you talk to ad buyers ... So I think you're going to see improvement there, but they gotta have the buzzy shows.”at 35:56

Amazon.com

Across the shows: 10 speakers in other episodes, 6 bullish and 3 bearish calls, past 30 days

• Michael Baker · D.A. DavidsonBearish

  Amazon's AWS faces heavier capital spending and rising competition, pressuring its margins and multiple.

  Baker says Amazon's multiple compression and margin pressure come from AWS, not retail. AWS is seeing much more capital thrown at it and is becoming more competitive. He contrasts this with Amazon's retail business, which he thinks is doing very well.

  “the difference is that that AWS business is seeing a lot more capital thrown at it. It's becoming more competitive.”at 15:28

• Matt Belloni · PuckBullish

  Amazon Prime Video has transitioned to its ad tier more successfully than Netflix, helped by opting in all subscribers.

  Belloni compares Amazon Prime Video with Netflix. Amazon is very good at selling ads and has been much more successful moving its video service to an ad tier. A key reason is that Amazon opted every Prime Video subscriber into the ad tier, which Netflix did not do. Amazon's advertising strength and its ad-tier execution are the advantage he draws out.

  “which is very good at selling ads, they've been much more successful in transitioning over to their ad tier for video, in part because they opted everybody in that was a subscriber to Prime Video”at 36:02

Walmart

Across the shows: 9 speakers in other episodes, 6 bullish and 2 bearish calls, past 30 days

• Michael Baker · D.A. DavidsonBullish

  Walmart's higher-margin businesses and market-share gains justify its valuation; $132 price target.

  Baker says Walmart has added higher-margin businesses (membership, media and marketplace) that grow faster than the core and expand margins. That margin expansion funds price and delivery investments to win share. He says inflation hurts consumers and Walmart wins in that environment, with gains among higher-end customers and strong online delivery. He notes the valuation has expanded to about 45 times forward, below its earlier peak, and compares it to Costco at about 45 times. He concludes the valuation is justified. Walmart's alternative businesses are still small, so there is plenty of runway.

  “Walmart should benefit from taking market share in a tougher economy. Inflation is hurting consumers, Walmart wins in that environment.”at 16:30

US inflation

• Richard Bernstein · Janus Henderson Investors

  US is now importing inflation, with core import prices rising faster than core CPI, leaving the Fed with a problem.

  Bernstein points to hot CPI and PPI prints and import prices. He says core import prices are rising faster than core CPI, which he calls the exact opposite of the past thirty years. He argues the US is now importing inflation, not exporting disinflation, so the Fed has a real problem fighting it and the risk of a recession rises.

  “core import prices are now rising faster than the core CPI. The United States is now importing inflation. That's the exact opposite of what we've seen over the past thirty years.”at 10:47

• Andrzej Skiba · RBC Global Asset Management

  Year-over-year inflation comparisons ease from late March, which should relieve pressure on Treasuries within months.

  Skeba says inflation data will become easier only a few months away. Once year-over-year comparisons start lapping the conflict that began around March 27 of this year, the base effects should make inflation prints easier. He expects that to take pressure off the Treasury market. He does not give a specific inflation number.

  “we're only few months away from inflation data becoming easier. Once we start getting year over year comparisons ... we should get easier comps for inflation data, and that will take some pressure of the treasury market as well.”at 39:13

Oil & fuels

• Pippa Stevens · CNBC

  Converging Iran, Ukraine and Houthi threats raise crude supply risk and push refiners to secure barrels.

  Stevens lists three supply threats: Iran stepping up attacks in the Strait of Hormuz, including sinking a container ship; Ukraine again attacking Russian refining infrastructure after a pause; and the Houthis stepping up attacks on Saudi infrastructure. Together with military assets heading to the Gulf and the midterms, this raises concern about supply risk. Refiners are trying to secure barrels. Russia's diesel exports are also constrained by the Ukrainian attacks, so the diesel market remains tight. Miller Tabak notes Brent's weekly golden cross has happened only five times in thirty years and was followed by further upside each time.

  “Iran is stepping up its attacks in the Strait Of Hormuz, including sinking a container ship in the last few days. Then you have Ukraine vowing to continue attacking Russian refining infrastructure.”at 4:17

US rates & the Fed

• Richard Bernstein · Janus Henderson Investors

  The Fed has begun a tightening cycle markets don't believe; speculative stocks are the canaries.

  Bernstein says the cycle has reached the point where the Fed traditionally takes away the punch bowl. He argues the Fed has begun a tightening cycle that people refuse to believe is more than one-and-done, and that the Fed is starting to remove liquidity. He treats the selloff in the most speculative parts of the equity market as the canaries in the coal mine, showing the liquidity withdrawal is starting to bite.

  “I think we're at the point in the cycle where traditionally the Fed takes the punch bowl away from the party. ... They think it's one and done. But ultimately, what happens is the Fed starts removing liquidity, taking the punch bowl away from the party.”at 6:57

US stock market outlook

• Richard Bernstein · Janus Henderson Investors

  Broadening market is healthy: lower cost of capital for the wider economy; long-term leadership is broader.

  Bernstein argues the shift from mega-cap tech into the rest of the market is healthy for the economy. AI data center companies have been getting near-free capital while the rest of the economy has been starved, so if valuations of the remainder rise and long-term rates fall, the cost of capital drops for most of the economy. He cites small caps rallying as long-term rates fell, since their financing costs should drop. He says the broadening may hurt data centers and tech, but he calls it very bullish for the broader economy. He believes the long-term story lies in broader leadership across US and non-US markets, not the leadership of the past two to three years.

  “I think it's very healthy for the economy that the market broadens because it means the cost of capital is going down for the majority of the economy.”at 8:13

US growth & recession risk

• Richard Bernstein · Janus Henderson Investors

  Rising recession probability is why consumer staples are outperforming.

  Bernstein says consumer staples are doing better now because the probability of recession and the fear of one is creeping into markets. He ties this to the inflation shock and the Fed's problem, and hopes the Fed can navigate it without a recession.

  “the reason you're seeing things like consumer staples start to perform a little bit better now is because that recession probability and that fear is starting to creep into the markets.”at 11:12

AI bubble & tech valuations

• Richard Bernstein · Janus Henderson Investors

  Doubts about AI and tech companies' future profitability are showing up in CDS spreads and defaults.

  Bernstein says there is a real question about the future profitability of these high-flying tech companies. He cites evidence in CDS spreads and defaults, which he says are starting to show that stress. He treats the company-specific stories as canaries in the mine shaft: small signs of risk that the market is beginning to digest.

  “there is a real question about the future profitability of these companies, And you're seeing that in CDS spreads and defaults and all those kinds of things that people tend to look at.”at 11:38

US Treasuries & yields

• Andrzej Skiba · RBC Global Asset Management

  Treasuries have reclaimed safe-haven status as long positions capitulated; long-end selloff unlikely from here.

  Treasuries rallied during a risk-off week, which Skeba reads as Treasuries reclaiming safe-haven status. He sees a capitulation trade in long Treasury positions that has been washed out over the summer and early autumn, so that risk-aversion trade is now advanced. With markets pricing in around three hikes, he argues much of the bad news is already in prices. He is positive on the front end of the curve. Long-end yields can still rise if investors fear the deficit outlook or bond vigilantes, but he finds a dramatic sell-off difficult to see because much of the adjustment has already happened.

  “This is the first time in a while when we see treasuries rally into weaker markets. So that safe haven status at least has been reclaimed for the last few sessions.”at 37:49

AI infrastructure & data centers

• Andrzej Skiba · RBC Global Asset Management

  AI-linked debt is in a bear market and new data center and chip financing is frozen until valuations clear.

  The AI and wider TMT complex has been in a bear market in credit for months, and an AI-related bond would have underperformed peers this year. Non-AI, non-TMT credit is trading strongly because investors like the yields and corporate earnings. Many pockets of the market are frozen. A high-yield issuer seeking to fund a data center or chip financing deal cannot get it done now, and the market is looking for a clearing level where valuations attract new buyers. Skeba says investors want earnings and stability first, and more than a trillion dollars of capex still needs funding, so the market must clear eventually. He says the flow of capital back will depend on evidence of healthy adoption and revenue growth, and will come at higher yields. He sees hedge funds capitulating on long AI credit trades, and says the price of these bonds reflects sentiment more than the value of the GPU collateral.

  “Many pockets of the market are frozen right now. ... when you are a high yield issuer and you would like to come to the market with a data center deal or a chip financing deal, right now, it's pretty much impossible.”at 41:08