Podcast Summary: "Bearish on Berkshire, Shutdown Risks and Big Tech on Deck"

Podcast: The Exchange (CNBC)
Date: October 27, 2025
Host: Morgan Brennan (in for Kelly Evans)
Featured Guests: Dan Clifton (Strategas/Baird), Kate Moore (Citi Wealth), Meyer Shields (KBW), Jamie Baker (JPMorgan), Victoria Greene (G Squared Private Wealth), Leslie Picker (CNBC)

Overview

This episode delivers a fast-paced overview of the day’s most pressing financial news, focused on:

• Record highs for US indices
• US-China trade developments
• Impacts of the government shutdown
• The Federal Reserve’s upcoming decisions
• The state of Big Tech and market leadership
• A bearish call on Berkshire Hathaway post-Buffett
• Disruption in air travel and airline industry outlook
• AI’s impact on enterprise software
• The ongoing US banking M&A wave

Key Discussion Points & Insights

1. Market Records, China Trade, and Macro Sentiment

(00:51–05:04, 13:26–14:16)

• Markets at Record Highs: S&P 500 aims to close above 6,800 for the first time, marking the sixth straight monthly gain. Nasdaq is tracking a seventh consecutive gain.
  • “Stocks starting the last week of October at record highs amid optimism around a China trade deal.” — Morgan Brennan [00:51]
• Big Tech Rally: Anticipation ahead of earnings from Apple, Microsoft, Alphabet, Amazon, and Meta.
• China Trade Deal Developments: A “very substantial framework” for an agreement may be signed during President Trump’s Asia trip. Focus areas include rare earths, AI chips, and tariffs. ASEAN trade deals are viewed as US leverage over China.
  • “A lot of these agreements are really strengthening Trump’s hands going into those discussions.” — Dan Clifton [06:26]
• Investors See Truce, Not a Deal: Experts warn that a large, all-encompassing trade deal with China is unlikely; both sides are seeking stability, supply chain resilience, and gradual “decoupling.”

2. Shutdown Risks & Political Stalemate

(09:19–13:29, 29:10–34:32)

• Prolonged Government Shutdown: Labor unions and federal employees sound alarms. Losses to workers, military, and low-income support could top $400B if not resolved soon.
  • “Those are usually the catalysts that begin to get you a resolution. I know it's very hard to look at what's going on in Washington, be like, hey, this government is going to reopen. Washington is paralyzed right now.” — Dan Clifton [10:51]
• Real-World Impact: Federal workers unpaid, military funding lapses, worries about food stamps running dry.
• Airlines & Shutdown: Staffing shortages at major airports spark delays; airline analyst Jamie Baker argues impact to financials is minor so far but warns about potential “disruptions and meaningful cancellations” if the shutdown drags on.
  • “If there are major disruptions and meaningful cancellations, that adds complexity to an already complex business…we don’t really see that happening.” — Jamie Baker [34:00]

3. Fed, Monetary Policy, and Stimulus

(11:33–13:29)

• Rate Cut Expected: Markets all but certain a 25bps cut is coming; focus shifts to possible end of quantitative tightening (QT).
  • “Quantitative tightening is the big takeaway from Wednesday’s meeting at the Federal Reserve…One way to ease those pressures is to end quantitative tightening.” — Dan Clifton [12:02]
• Multiple Stimuli: Rate cuts, QT ending, and fresh tax cuts create a “massive amount of stimulus” for the US economy heading into 2026.

4. Big Tech Earnings – A Make or Break Week?

(14:02–18:12, 38:34–43:39)

• Earnings Take Center Stage: Kate Moore (Citi Wealth) argues market returns have been driven by earnings and investor optimism regarding AI-fueled productivity gains.
  • “So much of what happens to the equity market is going to be about earnings…We need to hear consistently from market leaders...that they're getting benefits from AI and technology investment.” — Kate Moore [14:02]
• Capex Under Scrutiny: Upward revisions by Microsoft, Amazon, Alphabet expected; higher capex benefits both megacaps and infrastructure players.
• Domestic vs. International Allocation: US companies seen as higher quality; exposure to tech in China and select Japan/Europe names considered.
• MAG7 Analysis: Victoria Greene gives company-by-company insight ahead of a huge earnings week:
  • Google/Alphabet: Needs to prove AI is defending and enhancing search dominance. “I really want that 'we're better than them at search' attitude from Google on the call.” [38:58]
  • Meta: Strong AI adoption, robust global user base, ad revenue focus. Watching for Reality Labs spend and hardware strategy.
  • Microsoft: “A little expensive,” but Azure/cloud growth is key; investors will be highly sensitive to any miss [40:32].
  • Amazon: “A bit of a messy quarter” expected; concerns over US retail softness and AWS performance.
  • Apple: Catch-up trade; strong China iPhone sales surprise; strength in services and ecosystem; bullish outlook into the holidays.

5. Bearish on Berkshire – Analyst Downgrade

(20:17–24:19)

• Immediate Sell Downgrade: KBW’s Meyer Shields downgrades Berkshire Hathaway to ‘Sell’ for the first time, citing:
  • Looming earnings declines in car/property insurance
  • Declining investment income on lower rates
  • Question marks post-Buffett’s retirement
• “Without taking anything away from Warren Buffett’s track record… the insurance business is actually a secret sauce…To the extent that you have less profitability on the insurance side…you’re getting less of that capital to invest for free.” — Meyer Shields [23:01]

6. AI’s Impact on Software Industry

(35:21–37:40)

• OpenAI’s Enterprise Push: Seema Modi covers how recent AI product launches could disrupt companies like Asana, Hubspot, service and call center names, and others whose basic automation tasks are growing vulnerable.
  • “The color on the earnings call...will be much more important than the actual numbers because at this point, no one really sees the future of profitability...we’ll wait for what the CEOs have to say.” — Seema Modi [37:09]
• Key Question: Which software companies will adapt to (or get displaced by) rapid AI-driven automation?

7. Bank M&A Surge

(43:43–46:26)

• Wave of Bank Mergers: Huntington Bank’s $7B acquisition of Cadence continues a summer/fall flurry of regional bank M&A. Favorable regulatory and market tailwinds could spur more deals.
  • “Scale has become increasingly necessary in the quest for deposits and for absorbing the cost of things like regulation and technology.” — Leslie Picker [44:38]

Notable Quotes & Moments

• Trade Realpolitik:

  • “Are we ever going back to a big, broad, meaningful trade deal with China or is that in the past?” — Morgan Brennan [07:29]
  • “No, I think that’s in the past. We’re moving into a globalized world. It’s not bearish.” — Dan Clifton [08:06]

• On the Shutdown Math:

  • “Those are usually the catalysts that begin to get you a resolution. I know it's very hard to look at what's going on in Washington, be like, hey, this government is going to reopen. Washington is paralyzed right now.” — Dan Clifton [10:51]

• Fed Watch:

  • “Quantitative tightening is the big takeaway... They haven’t explicitly said that they were going to end QT, but what you are seeing is cost of funding is going up, bank reserves are going down, financial conditions are tightening underneath the surface.” — Dan Clifton [12:02]

• On Berkshire’s Secret Sauce:

  • “Without taking anything away from Warren Buffett’s track record… the insurance business is actually a secret sauce…To the extent that you have less profitability on the insurance side…you’re getting less of that capital to invest for free.” — Meyer Shields [23:01]

• Big Tech’s Role:

  • “We need to hear consistently from companies leading their sectors…that they're getting benefits from AI and technology investment they’ve made throughout the course of 2025.” — Kate Moore [14:02]

• Airline Reality Check:

  • “It’s hard to imagine someone deciding to drive to San Francisco for Thanksgiving because they’re worried about the security queues…Losses associated with this are negligible at this point.” — Jamie Baker [30:22]

Timestamps for Key Segments

• Market Open, China Trade, US Macro – 00:51–05:04
• Dan Clifton on Trade/Policy – 05:31–13:39
• Kate Moore on Market Leadership/Big Tech – 14:02–18:13
• Berkshire Hathaway Downgrade (Meyer Shields) – 20:17–24:19
• Shutdown, Airlines, Jamie Baker – 29:10–34:32
• AI & Enterprise Software (Seema Modi) – 35:21–37:40
• Mag 7 Earnings Preview (Victoria Greene) – 38:34–43:39
• Bank M&A Outlook (Leslie Picker) – 43:43–46:26

Conclusion

A dense, lively episode capturing the market’s major crosscurrents—trade realpolitik, shutdown brinksmanship, bearish turns on old stalwarts, and the relentless pressure on tech titans (and the rest of corporate America) to show how AI investments are changing the profit landscape. As the S&P and NASDAQ reach for fresh highs, the day’s guests offer plenty of urgency and realism, readying listeners for a pivotal set of earnings and policy decisions ahead.