Closing Bell - Closing Bell 1/7/25

Episode Date: January 7, 2026

From the open to the close, “Closing Bell” and “Closing Bell: Overtime” have you covered. From what’s driving market moves to how investors are reacting, Scott Wapner, Jon Fortt, Morgan Brennan and Michael Santoli guide listeners through each trading session and bring to you some of the biggest names in busines Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

All right, guys. Thanks so much. Welcome to closing bell. I'm Scott Wobner live from Post 9 here at the New York Stock Exchange. This maker break hour begins with this early year run in stocks with the markets chasing down some major milestones. We'll show you the square card here with 60 to go in regulation. Dow as you see is red today. S&P is two. Dow edging ever closer though to 50,000. We're tracking that. NASDAQ is green today thanks to nice moves in Invidia and Microsoft, Amazon and Alphabet. Housing related names falling. We'll tell you what hammered those names today. Cyber stocks are bouncing. One firm growing more bullish on that group. We have more details ahead.

All of it takes us to our talk of the tape, this record rally. How far can it really run? Well, let's ask Tom Lee. He is Fund Stratt's head of research. He's also a CNBC contributor, and it is great to have you on in this early part of the year. Welcome. Great to see you, Scott. Markets off to a pretty good start, which was not necessarily unexpected by you.

I didn't have any expectations, but it's always a good sign to be strong out of the gate, as you know, because what markets do in the first week or so give us a hint for how markets are shaping up for the year. Our base case was a rally, maybe to start the year, and then a big correction, and then a rally at the end. A big correction, if not a bare market. I think those are your words, not mine. Yeah, I think there'll be a point this year where it's going to feel like a bare market. Yeah. What about the way that the market looks as the year has begun? What do you make of it? I think it's encouraging because we have some breadth, right? Energy materials are doing well.

The MAG 7's catching a bit and crypto's doing well. But health care is strong. Financials, industrials are strong and small caps. I mean, it's sort of a broad market. I mean, almost want to say in everything, rally, it's not like tech is doing terrible. It's just being overshadowed by some of these other. moves the equal weight S&P ETF is coming off a fresh record high of its own. That says everything about what's driven this market. That's right. I think for investors and for institutional investors, breadth being good is always a good sign, actually.

Is it sustainable? Is this the way it's going to look for a little while? Well, I do think there's a couple of sort of macro tailwinds that should help stocks. One is I do think that the economic clarity is better. because the tariff disruption is more in the mirror-view mirror, even though we could get that overturned, but in general, tariffs aren't going up. They could be flatter down.

And the second is the Fed is really turning into a tailwind because the Fed is leaning dovish. They're focused on the job market. QT is over. We have a new Fed coming. And so all of these are in some ways, I think, and they're not fighting inflation anymore, a put for the equity market.

What happens if SCOTUS strikes down the tariffs. Is that a positive or negative for the market? It's a source of confusion. It's going to depend on how they were their decision, because, you know, there may be refunds involved and claims. And of course, we know the White House will seek to re-implement the tariffs. But I think on balance, it means that we put a ceiling on the tariffs, that they aren't going to be higher, but there's a chance they're lower. That's a net positive. I mean, there could be, you know, I was going to use, you use the word confusion, I was going to use a little chaotic. I mean, it could be in the immediate aftermath

of that and trying to figure out if, you know, you have to start giving refunds to people and then you wonder what the bond market may do. So there are a lot of things to consider as we could get this as early as potentially the end of the week. That's right. Now, you know, some investment firms have already been buying refund claims. They're offering to buy these claims from companies at 30 cents on the dollar. So in some ways, the economy, the economy, is pricing in some of these refunds. So one of the questions leaving 2025 was the valuation of the market. What price should you be willing to pay for what the expected earnings are?

22 times is where we were, which some had claimed to be rich. Barclays had a note out today which said they look reasonable. They say 22 times is not cheap by any stretch, in our view, current levels have not historically impeded returns. Provided EPS growth remains positive. We do think that estimates are overly optimistic, yet we still expect the S&P 500 to print double-digit earnings growth this year. Do you have any doubt on the strength that earnings will come in at? As you know, S&P earnings is a mix of all the 500 companies.

But I think in 2026, earnings quality is going to be stronger because revenue growth is increasing and the rate of earnings growth is higher. So you have both top line improvement and margin expansion. That should support multiples to actually be higher. What do you make of the way that banks have gotten out of the gate? They have just, you look at Goldman Sachs, for example. It's astounding. We're three and a half trading days in.

This thing's put in like 9%. Yeah. Already. What do you make of that? Well, as you know, one of our themes is that we think financials are going to be re-rated more like tech stocks over the next few years because they've proved. that they earn money through the cycle. They're big winners of AI, especially the ones that are tech forward,

and they have expanding margins and they benefit from lower rates. I mean, in some ways, I think they're pretty undervalued right now. What about tech? Since you bring it up and so much focus is on it, how do you feel about that right now? I think the earnings growth is the reason you stick with tech because these are companies with really good market position, good earnings quality, but we just don't necessarily

we just don't necessarily say the multiples should go up. So I think it's sort of like earnings growth with flat multiples means they still can do pretty well. Pretty well. But would you overweight the group? I mean, if you're if you still think that their earnings growth is going to be outsized relative to everything else, which it's likely to be, right? It almost has to be given what's happening because of AI. Doesn't that speak to the continued outperformance? Uh, 100% agree. Because let's say the S&P's earning growth is 16. Well, you know, if somebody's growing 25 or 40%, you know, you'd need a lot of PE compression to underperform the S&P. So I still like tech, but I do think groups like energy and basic materials which have been really terrible for the last five years can actually outperform tech.

What would you stay away from? Well, I think that this is a year not to be defensive. And then, of course, as you know, Washington picks winners and losers. Last year it was bad for consulting firms and bad for health care. it sounds like it could be bad for the housing, institutional housing buyers. So I think you've got to be careful what Washington deems is winners and losers. Okay. Well, it's a great segue to what we're going to talk about next. Thomas, great to see you here. Thanks for being here.

It's Tom Lee. We are following major market developments on a couple of fronts over this final stretch. A pair of social media posts by President Trump, one targeting defense companies, the other housing, and both having stock impact. Morgan Brennan and Amin Javvers are on that story for us. Morgan, we're going to begin with you. Hi, Scott. That's right. So the president posting on social media that he will not permit defense companies to issue dividends or stock buybacks. He's also looking to cap executive compensation at $5 million. The issue per the president, these have come, quote, at the expense and detriment of investing in plants and equipment.

He wants to see more investment. He also wants to see repairs that happen more quickly to weapons systems. And this post coming after weeks of speculation about an executive order on this very topic, something I've been reporting on. It's an EO, by the way, that according to some of my sources, originated with Treasury rather than the Defense Department. Prime contractor stocks lower on this news, but there's lots of questions being raised by all of this. How would this work? How do you define a defense company? Primes are one thing but are subcontractors or companies with big commercial arrow portfolios as well.

Are they going to be defined as part of this? Increasingly, you have non-traditional players. Also, is all of this even legal? Nonetheless, Scott, this speaks to massive changes that are taking root in defense. got the embrace of more commercial technologies, the possibility of equity stakes in some companies, and you have acquisition changes and reform. More new kinds of deals they're being struck, case and point just yesterday. This framework agreement that it was announced by Lockheed Martin and the Pentagon to triple PAC three missile production, a deal that's going to require

more upfront investment by Lockheed with a longer procurement cycle attached to it. So this is perhaps just the start. All right, Morgan, thank you very much for that. That's Morgan. Brennan, to Amon Javvers for more on what's happening today regarding housing. Amon? Yes, Scott, that's right. You've seen stocks moving throughout the afternoon on this. President Trump taking the social media today to try to put a lid on housing prices, saying the American dream of home ownership has gotten too far out of reach for too many young people.

He wrote, I am immediately taking steps to ban large institutional investors from buying more single-family homes. And I will be calling on Congress to codify it. People live in homes, not corporations. I will discuss this topic further, including further housing and affordability proposals and more at my speech in Davos in two weeks. Now, the White House so far not providing any details on what steps exactly the president is talking about here, what he's going to do or what the legal basis is for him to block investors from buying properties. Still, you saw Ohio Senator Bernie Moreno going on social media this afternoon to say,

I will introduce legislation in the Senate to codify this into law. So some quick reaction there on Capitol Hill. This idea, Scott, it's been gaining traction in the president's MAGA base for some time now. The late Charlie Kirk pitched it publicly over the summer as a way for the president to deliver on affordability for young Trump voters. And in an analyst report this afternoon, T.D. Cowen says, we will be watching if this shifts from a forward-focused band to the required divestiture of existing single-family home portfolios, Populists in both parties have sought divestitures in the past through legislation, though it's never gained traction. Scott, back over to you. All right, Amon, thank you very much for that reporting from the White House.

Now let's bring in CNBC contributor, senior associate dean for leadership studies at the Yale School of Management, Jeffrey Sondonfeld. It's good to have you join us. I'm curious your reaction first and foremost to both of these posts today. Well, Scott, thanks a lot. Obviously, it's tough keeping up with the headlines that come out of Washington. the ripple effect. And the impact on Wall Street and elsewhere is enormous. I have to say that while I'm getting a lot of alarmist feedback coming in from emails of CEOs, before I tell you some of the horrifying things they had to say, the positive side on this is that he's addressing

domestic issues on these fronts and ways, certainly on the housing front, as Amon was just discussing, where he's being criticized on getting caught up in the Caribbean and elsewhere in Greenland and saying, well, you know, how about the cost of housing and domestic issues and all these affordability issues? I will say that Bill Pulte, who's a controversial figure, has been meeting individually with each of the major home builders. He and Howard Lottnick Secretary of Commerce, of course, have had very constructive private meetings. I don't think they haven't met as a group, but they meet one-on-one, and they all tell me they haven't felt coerced. I should tell you, I'm on the board of Lanar, so if there's, not that there's any conflict there, but I am involved with the housing industry.

At some of these proposals, it's almost where left meets right, that there have been issues that, as Amon says, that both parties have talked about having to do with young home builders and the mortgage prices in a way of somehow eating those costs. There also have been some real concerns just about, you know, soaking up. And Invitation Homes is no longer owned by Blackstone. I think they had it for about five years, maybe, I think, 2012 to maybe 2019. They dispose of it. But they have a big exposure elsewhere. But these are realistic concerns.

What Morgan was getting to on the defense side, I'm getting more hostile blowback from CEOs there. The people that you and I, many of your listeners, are very familiar with. One of them has just said, this is where MAGA has gone, Maoist. He's a little upset. about this being like state capitalism. Well, defense contractors have gotten lots of initiatives in Washington. Even the late Ash Carter was very concerned about concentration in the industry as a Democrat. And right now, of course, this is such a strong industry.

I could go on at length. I thought Morgan raised some very good points about how you define it. Let me jump in. Let me jump in because he, you know, he, the president, may very well be targeting, you know, kitchen table issues that matter to people. Obviously, affordability of homes and other things, but he's doing it arguably by wrecking something that has been so sacrosanct in this country, and that has been the independence of business, that enterprise could make its own decisions on how it thought best to use its capital,

and now that seems to have completely changed, as Tom Lee was just suggesting before he left our set, quote, Washington picks winners and losers now. This is the concern, especially in our housing industry has had a lot of fluctuations of cyclicality, but it's still a bedrock industry. It is so much of a fundamental thermometer for the economy. When you get to defense, that's such a vital industry for us, but the two of them together with the concerns, of course, government forcing stakes whether or not it's on the percentage of business that's done in China for in video. or AMD having to take anywhere from 10 to 25 percent stakes or the stakes, you know, in terms of the profits, but also the forced ownership stakes, anything from Intel to U.S. Steel. People have been pretty upset about that as that is not Ann Rand.

That's not Frederick von Hyatt. That's not the Milton Friedman, the people who are these classic, I think, celebrants of conventional laissez-faire economics. This is a blending of an economy that isn't, it is not conservative economics. And it's a lot more leftist than it is anything else, the central planning. It's ironic, I'm trying to police myself from doing this. I have a new book coming out. This actually won't be out for another two months, so you're safe. But it's on Trump's Ten Commandments.

And we go through is it's not criticizing him, it's not celebrating him. But what are the tools he uses? And we see several of them in there. One of them is a hub and spoke system. Everything's centralized around this. One thing that you see for sure here is these are all coming from him, his head, and he's right in the middle of it. It's a hub and stuff, kind of like a tribal leadership.

You touched on it earlier, and some have called it state-sponsored capitalism, that everything essentially runs through 1600 Pennsylvania Avenue now. And because you do have such a good ear and are on the pulse of what CEOs in this country are thinking, if you are a CEO, you need to change the way that you are thinking about how you might run your business, how you might deploy your capital, and the decisions that you might make in the future, right? No, it definitely does, and you don't see individual companies speaking up. And this is where the BRT, the business roundtable, the BRT is MIA. The National Association Manufacturers just came out with a statement today. There's a very good statement having to do

with Venezuela, which is we're not talking about that right now, but they have been on trade issues, National Social Manufacturers, amazingly, has been quite open, and the U.S. Chamber of Commerce increasingly so. Both of those groups were considered to be very cautious at the founding generation of the Business Roundtable, which was back in 1960970, they were mad at those groups for not speaking up. Now, ironically, those are the groups that are speaking up, the Business Roundtable is mute. They're layered in staff paralysis, and they should have a voice on this, because it's collective action where these CEOs can speak up. They're very afraid of vindictiveness, almost every company of some of the most prominent companies that come on our airways here,

whether or not it's Bank of America or J.P. Morgan or Coca-Cola or Delta Airlines or Harley-David's. These are iconic brands that when an individual CEO speaks up, they regret it because of the vindictiveness. So they need collective actions. As what we have seen, the Business Roundtable gone mute. They've factionalized. The pharma meets with President Trump's late, and they've had mixed results. Finance, until today, has met with them separately, and they've been a little bit happier. The tech tightens have met separately. The retailers have been very frustrated, but they've met separately. That didn't used to be that way. They went across sector, across industry. But right now, President Trump's best defenses, I haven't heard anybody from the business roundtable complain,

and they haven't. So they need collective action. It's how they protect each other from getting beaten up. You know, the one CEO of Harley-Davidson lost his job because Trump told them that He's not, but his buyers, his followers, which are a strong magabase, is very enthusiastic about being a Harley rider, told him, don't buy Harley. Well, that's, the guy lost his job, Matt Levitage. It's a shame because sales dropped 10%. Why did he say that? Just because of reciprocal trade tariffs from Europe,

that Harley had to close one plant, and in Kansas City, opened one in Thailand to get vehicles in, they used to make 100% of their vehicles here. Stock plummeted 10%, and he got dropped. It was awful. And so other CEOs see that as a cautionary tale. do we want to speak out alone? It's just not worth it. So where's the collective action? But they're very concerned about the blending of sectors. And as Morgan said, by the way, it is very hard to separate out what's a defense stock. You know, Palantir, of course,

was founded as a defense tech stock. They do an awful lot, which is not tech now, but as Morgan was only beginning to develop the point. She's right on it. We could name 30 companies, which were not founded as tech companies, as defense companies, but a lot of people would classify much of their business, if not most of it is right now, how do you classify what is and what isn't? And also, if you're going to discourage the buybacks, which many in the left want, many on the left want what Trump is talking about, is what does that do to the free flow of capital? Are people going to still invest in these stocks if they can't get the same kind of capital returns? And why mess with an industry which is so strong?

And so we don't know. It could lead actually to disinvestment rather than the increased investment. Yeah, the idea of the buybacks, again, shareholder activists have for a long time complained about the buyback saying either give us our money back or invest in the business, but don't do the, you know, the buyback. Jeffrey, we'll leave it there. I appreciate your insights very much. Thank you. That's Jeffrey Sonnenfeld of Yale. We're just getting started here. Up next. Oil and refiners are on the move again today following some big developments out of Venezuela. The details when we come back. Welcome back to the developing story.

We're following this afternoon. Oil refiner is moving on the news that Venezuela will ship sanctioned oil to the U.S. indefinitely. It's a story we broke today on C&BC. Pippa Stevens has more on that. That's right, Scott. So we are seeing big moves in the refiners on the Gulf Coast that are equipped to process, the heavy sour crude that comes from Venezuela and is used for things like diesel, fuel oil and asphalt. That's names like Valero, which hit a record today and is the largest

Gulf Coast refiner, as well as PBF Energy Chevron, Marathon Petroleum, and Phillips 66. Now, more Venezuelan crude on the market could make sour crude cheaper, boosting, refining margins. And within the energy complex, the refiners stand out because while we did see a rally in some upstream players as well as services names earlier in the week, there are still a lot of questions on whether the called for investment into Venezuelan production will actually come to fruition. But for the refiners, there is a much more immediate and tangible upside from more Venezuelan crude on the market. Scott? All right, Pippa, thank you. Pippa, Stephen. Still ahead for solar getting burned in today's session. We'll tell you what's

weighing on that name coming up. The bell. We'll be right back. All right. Welcome back, Warner Brothers Discovery, once again, rejecting Paramount's takeover offer today as it continues to favor a deal with Netflix. And speaking of, CNBC's Julia Borsdon sat down with Netflix co-CEO Ted Sarandos is part of her new series, Leaders Playbook. And she is, as you see here at Post 9, with more. This is exciting. Tell us more. Well, yes, so Netflix's deal to buy Warner Brothers studio and streaming business,

which it's pushing forward with. This deal is a departure of Netflix's longtime strategy of not buying, but rather building internally. This is just the latest example of a leadership approach that Netflix co-CEO Ted Sarandos explained to me. He calls it Never Say Never. things change. Either the conditions change or your insights change. For me, the advertising one, I always looked at it like we were counterpositioning against television by saying no ads.

So we attracted all the people who are really irritated by ads. Everyone is not irritated by ads. And in fact, young people, they'll take a lower price to watch advertising because that's what they grew up on. But when you think about all this within the context of a company that's about innovation. How do you think about using things like never say never as a tool to continue fostering experimentation and innovation? It's you farming for dissent, which is part of the original culture that is alive and well at Netflix, meaning you have to create an environment where people can say there are no sacred cows here. And I know how you feel about this, Ted, but how about this? And people know that that's not a career ender. In fact, it's a great way

to position yourself as a curious thinker inside of our business is if you challenge conventional wisdom. Because I think Netflix was built by challenging conventional wisdom on almost everything. You can hear more about how Ted Sarandos has globally scaled Netflix tonight at 10 p.m. We're launching the first two episodes of Leaders Playbook with Sarandos and his chief content officer, Bella Bajaria. They'll be followed by Shake Shack founder Danny Meyer and CEO Rob Lynch. As you know, and we're excited about this, of course, is that the best business leaders, no matter who it is, they have to adapt to succeed. That, you know, stubbornness on certain issues at some point doesn't necessarily win.

And you could see it here, whether it's with the ads, as you talked about, or even the bid for Warner Brothers Discovery, which many thought wasn't going to happen. Yeah, the entertainment landscape has changed dramatically, and Netflix is looking at what is it going to take to amass the kind of content we need to continue our global expansion. Agility is something we heard a lot about from CEOs, whether was Danny Meyer navigating the pandemic or something we heard a lot about from Mary Barra, whose episode will be airing later in the series talking about agility navigating different presidential administrations. All right. Well, congrats on the series and best of luck with it. Thanks so much, Scott. And don't miss that. That's Julia Borsden. Up next, Ed Yardin, he weighs in on this record-setting rally, why he has high hopes for this upcoming earnings season as well. He's next. Welcome back, stocks chasing some big milestones, the Dow trying to get to 50,000, the S&P, looking for 7K. For more, let's bring in Ed Yardney. He's the president of Yardinney research.

Good to have you back. Happy New Year. Thank you. Same to you. 22 times. Some say rich. Others say not really because earnings are going to deliver big time, and you're one of those people, aren't you? I'm one of those people. And I think the most important lesson of the past few years so far in what I call the roaring 2020s is the resilience of the U.S. economy. And I think investors are incorporating that into the valuation multiples.

Usually what knocks valuation multiples down is concerns about a recession, imminent recession, or an actual recession. And I think investors are kind of coming around in my view that, you know, the economy has demonstrated its resilience for the past few years under all sorts of pretty intense shocks. And here we are with real GDP and an all-time record high and apparently productivity making quite a comeback. We talked at a halftime report today on the idea that the animal spirits

that everybody thought were going to be there, you know, at the beginning of 2025 were delayed, not denied. I mean, I even heard from a business executive today who told me that he was surprised at the amount of business activities after the holidays already. That speaks to that perception and point, doesn't it? Absolutely. Not only that, but in 2026 this year, in the next four to six months, we're going to have a lot of stimulus for monetary and fiscal policies. And that's going to keep the economy growing. And we saw today the purchasing managers for services was very strong. So look, I think there were animal spirits around last year.

I mean, earnings were fabulous last year. No, but you had the tariffs and that sort of, you know, negated some of the activity that you otherwise might have seen. Yeah, but the animals just chewed it all up and generated amazing earnings. Yeah. They went back to the bar and figured it out. Now they're ready to run. Yeah, so what else is you? But, you know, even Tom Lee, who's bullish, as you know, suggests that, you know, in the middle of the year,

you could go into a bull market. I mean, a bear market, excuse me. You could start strong, actually have a bare market, and then recover. There's just a lot out there. There's, you know, tariff uncertainty still, Fed uncertainty still. Earnings have a lot to live up to now. But these are known unknowns that we're going to know pretty quickly here. And I don't think they're going to be surprises of Supreme Court rules that the tariffs are unconstitutional.

Who's really going to be surprised? the administration is ready to come back with all sorts of ways to keep the tariffs going. And then that'll have to be tested, I suppose. And we all know we're going to get a new Fed chair, and the new Fed chair is going to be Trump dependent, I suppose. But the rest of the Fed officials are going to be still data dependent. And so that's nothing especially new. So, no, I don't think there's actually, other than a Black Swan event, I think all of the things that can bite us we know about. And then the market's ready for them.

Do you think we're poised for another double-digit percentage point return year? Yeah, I mean, you know, I thought we'd get to $7,000 at the end of last year. We're almost there now. And I think we could get a 10% increase at the $7,700. So Tom and I are using the same number by the end of the year. What happened at the end of last year? And you know what? At this point, it doesn't really matter that we didn't have a Santa Claus rally

because if you look at the prior periods when we didn't, the market's gone up most of the time anyway. Well, it depends. In the next year. I have maybe an unconventional way of looking at the Santa Claus rally, and that is sometimes it can come early. And so I like to look at November and December, and November and December, an average over the past 10 years, picked up an extra four percentage points. This time around, we basically did the same thing, but we did it early in that period. I've quoted your note of late, you know, several times already in the three and a half trading days that we've had.

here on the idea of AI fatigue. It's the word that you're tired. I'm fatigued. You're fatiguing and using fatigue. Is what's happening in the market here with, you know, the equal weight doing well and some of the MAG7 stocks not doing so great to start the year? Is that lasting? I think so.

I mean, that's kind of, that's my forecast for the year, is that it's probably time to go back to underweighting the, I don't know if anybody ever underweighted them because they just kind of kept growing. Well, I mean, those are going to be fighting words on, on. Wall Street. Yeah. You start talking about underweight the mag-7? I want to overweight the impressive 493.

I think the 493 are the ones that are going to benefit the most from all these technologies in terms of increasing their productivity and efficiency. And they're relatively cheaper. There are a couple of percentage points cheaper than the Magnificent Seven. And the Magnificent Seven, and we discussed this before, you know, it's kind of like the Game of Thrones where you got seven kingdoms that were all independent and did their own thing. Now they're kind of in each other's faces and starting to compete with. with each other. And maybe their valuation multiples is kind of high if there's going to be a lot more

competition. Yeah, I mean, speaking, I'll go back to your analogy of the horses back in the barn. I mean, Goldman Sachs is running. The financials are running. If we get to Dow 50K, what's that going to mean, Dow 50K? I mean, you put that in perspective. I know the Dow doesn't mean that much to many people, but when you look at a headline that says Dow 50K. I started my career in late 70s, early 80s, went on Wall Street. The Dow finally crossed above 1,000. So, you know, I've been around here for a tremendous increase. So maybe I'm a lucky charm here.

I don't know. I feel like I still have my Dow 20K hat, and it doesn't even have that much dust on it because the market's done so well over the last handful of years. I mean, the percentage changes become smaller and easier to achieve. Before you know, it will be at 50,000, and then 60,000 will be, a couple of years away, but I mean, I've got the S&P going to 10,000 by the end of 2029, and that's not a crazy forecast. It's just, what's crazy about it is it assumes that there'll be no recession, okay?

That's where the risks lie, but. And you don't think there's going to be between now and 2029? As you know, the past few years, everybody was seeing a recession. I didn't see it. I said the economy would be resilient. So why don't we learn from our experience and conclude, well, if it's hand, all these shocks since the beginning of the decade, why couldn't it continue to do so? That's kind of my shtick.

I don't know. I don't like when you make a prediction about the market, and you say it's going to end with a 29 at the end of it. Well, you know, that's a good point. That makes people nervous when you start doing that. But don't forget, it was the Smoot-Hawley tariff that really brought the economy down, and we just went through a whole bunch of tariffs, and the economy's doing fine. But don't worry.

All right. We shall see. We'll have many more conversations, of course, between now and then. Absolutely. Ed, thanks. It's Ed Yardinney. Coming up next, we track the biggest movers as we head into the closed today. Christina Parts of Nevelos is standing by with that. Hi there. Hi, Scott. Well, it chips off rallying on new AIPC momentum and a biotech M&A is heating up with one deal closed and another in advance to stocks. We'll have those stock movers next.

Got about 15 till the closing bell. Back to Christina now for the stocks that she is watching. Tell us more. I want to focus on Intel for a moment because those shares are leading the S&P 500 today and on pace for their best day in more than a month, as enthusiasm really builds for its new AIPC built on its 18A process, which Intel is calling the most advanced chip technology developed in the United States. Intel discussed its new processors yesterday at CES, and those comments are definitely helping the stock retail traders moving from memory into Intel shares up 6%. Meantime, Amgen is continuing to rise after an acquired cancer biotech from dark blue,

therapeutics yesterday for $840 million. Amgen is continuing its gain, jumping about, look at that 3% today. And Revolution is soaring after a Wall Street Journal report that ABVV is an advanced talks to buy the biotech firm. CNBC has reached out to both ABV and Revolution for comment. We promise to keep you updated. Revolution up 30% right now. Scott? We're going to hold you to that promise. Christina, thank you. Christina Parts of Nevelos. Up next, we're on record watch. Both the S&P and the Dow hitting fresh All-time intraday record highs today. We will track the moves right up until the bells.

As always, the market zone is coming up next. We are now into closing bell market zone. CNBC, senior markets commentator Mike Santoli and JPMorgan private banks, Abigail Yoder, and Maryland Bank of America, private banks Chris Heise are here to break down these crucial moments of the trading day. Pippa Stevens is following what's sending first solar shares lower today. We'll get to that in a minute. Michael, I'll begin with you. What do you make of this market activity today?

Just a little bit of a spillback from the very strong three-day start. We got value underperforming, high beta underperforming. They were the leaders out of the gate. The dynamics you'd see within the market give you a lot of assurance on the macro message, right? So it's still that cyclical leadership has been for a couple of months. I do think there's an interesting question as to when the reflation trade globally tips into something that might feel a little bit like potential overheating or an overshoot on that front, but that's probably not, you know, this week's business.

Yeah, so tech is doing a little bit. A little bit. And Vividi is holding a bid at this point, just under 190. So that's a little bit of a shift. Yeah, but you still have nice move today, Amazon, which has been the leader, is still out in front. Leader in the last couple days, laggard last year. Same thing with Microsoft. So the money's flowing around and it's picking up where things have been slightly left behind.

You starting to think about the job support now? For sure. I mean, the day and today we're fine. Joltz is kind of mixed, but, you know, not decisive. And I do think the unemployment rate is probably where you're going to be. we're going to have to fine tune our Fed expectations on. Yeah, we haven't talked about the Fed much yet, but we certainly will in a couple days' time. Come back to you in a little bit.

Pippa, tell us more about First Solar. Yeah, so Scott, it is sinking after Jeffreys downgraded the stock to hold, saying that expectations are richer than reality, adding that visibility into bookings is limited, and that policy support is not the catalyst Wall Street expects. Jeffries also lowered its target to 260, and the stock did outperform last year and benefits from domestic production, including a new factory that came. came online in Louisiana. The company has worked to move away from higher tax markets,

but India remains a wildcard. And when the company reports fourth quarter results, investors will also be looking for updates on demand, with Deutsche Bank noting that it seems most customers are waiting to receive legislative clarity before placing orders. Scott? All right, Pippa, thank you.

That's Pippa Stevens. We have our panel here, as we said, Abby Yoder and Chris Heisee, Abby seems like you're bullish, but you've expanded it. The breadth of your bullishness has why. You're now recommending five sectors up from three last year. Tell us more. Yeah, so inherently we're expecting more of a broadening out, which we saw last year, right? The contribution from the MAG7 and the tech in terms of both returns and earnings were less than they were the previous two years, right?

That's important. And as we head into 20, 26, to your point, we upgraded two sectors, industrials and health care. And what I think is interesting about the two of them, you'd think historically, industrials is a cyclical sector, healthcare is more of a defensive. But if you look at the leaderboard year to date, it's cyclicals, right? industrials, materials, financials, and health care is forth because it's been so depressed cyclically over the past three years that you're really starting to see that report. Well, plus, I mean, you understand the momentum that looks to be there in health care, which was so strong in the latter part of 2025 that you clearly think is going to continue. Well, I mean, we got policy clarity.

M&A really started to pick up post-Labor Day last year. And even to start this year, I mean, we've had four or five major deals already announced from large-cap pharma this year. So, you know, just really strong momentum, both fundamentally and sentiment. which is why, Chris, people talk about animal spirits being delayed, not denied, as I've been saying, because of deals, because of things coming out of D.C. that are going to be a stimulant for the market. I would agree, Scott. You know, following on what Mike was saying before, you know, we're in a growth boom. It's being denied every once in a while by some headline or some sentiment reading, but we're in a whole different world here. The entire globe is going for growth.

wider fiscal deficits, looser policy, concerns about liquidity, but we always point to what we go back to is fundamental profit picture and outlook. If you have higher revenues and you have higher productivity, guess what happens to profits? So animal spirits should feel good and they should be buying on weakness. All right. We're going to come back to this in just a moment. Speaking of buying, they certainly have been in the banks and we are getting some news regarding J.P. Morgan and Apple. Leslie Picker following that for us, Les. Les, what do we know here? Hey, Scott, we know that these negotiations have been about a year in the making. And I'm told, according to a person familiar with the matter, that J.P. Morgan has reached a deal.

They're near a finalization to take over that Apple credit card program from Goldman Sachs. That, again, is according to a person familiar with the matter. I am told that Goldman is going to offload about $20 billion of these card balances at a billion dollar discount. The Wall Street Journal first reported that this deal was pretty imminent within the week or so it should be announced. And this, of course, is kind of marks an ending of the chapter that Goldman had getting into consumer lending. Obviously, the Apple Card was a big part of that. And this negotiation took place over the course of a year, and there were many players involved. but I am told that J.P. Morgan has reached this deal to take over the Apple credit card

from Goldman Sachs. Of course, there will be a transition period, but at least the deal should be announced fairly soon. You want to just speak, Leslie, very quickly on the idea of J.P. Morgan, which is already a massive player in credit cards, is now getting even bigger? Yes. Exactly. Massive player and credit cards. Apple has a very loyal customer base. for J.P. Morgan, the idea would be that it could basically use that loyal base of customers and sell them other products as well. So it's helpful for them from a scale standpoint, and then also just tapping into a potentially new customer base that may not already be within the firm. All right, good stuff. Leslie, thank you for that reporting. That's Leslie Picker.

We'll go back to the panel. I mean, Abby, financials you like. They've gotten out of the gates really, really quickly. This is where a lot of the activity is. got a really strong momentum in that trade right now. I think what's important, though, going back to what's happening from an earnings perspective, we're going to start to hear from a lot of the banks next week. And we're still kind of operating in this data vacuum. So hearing from them what's going on with the consumer standpoint, they're really the beneficiaries of what has been a steepening yield curve,

and their beta to that yield curve is really increased as well. So I think everything's kind of setting up nicely for them, as with that yield curve, sterping with credit remaining really benign, and getting a clearer picture on what's happening with the consumer is important as well. Do you like that group? We do. We do. We'd be buying on weakness right now. Deal flow, business activity. Good not finding any. Today's a different example. A little bit of today. I mean, lately. Give it a week or two. I'm sure there's something that will come out. I would say this. Deal flow,

business activity, which we've all been waiting for, is a coiled spring. And as Abby was saying, the consumer, resilient, probably getting healthier too. Really? What about earnings, okay? 22 times is where the market's currently trading. Conventional thought, you're not going to get multiple expansion. You need to have a big year in earnings. So are we going to live up to the hype? Earnings will probably be better than what consensus believes, actually. Really better.

Because some say consensus is too high. Well, they always start too high, and then they correct, and then they go up above where they were before. That's the pattern that we've seen. So they start the year too high. They come down. They get nervous. They correct. And then it comes back.

And the reason is, is because margins could actually expand, Scott, which, you know, we're at record levels. And the fact that no one's really talking about it because productivity is so high. We haven't had this productivity surge like we're seeing. Yeah, that's for sure. Are we going to meet the moment with earnings? Yeah. Well, so we're actually below the street in terms of our expectations for earnings growth. We're at 11%.

We just don't, like right now, if you think about that breakdown, you've got, you know, tech and the mag 7 at 20% growth in the, let's call it, the 493 for simplicity's sake, at like 12%. there's probably some downside to that 12% growth in the 493. We're pretty comfortable with that 20% for the Mag 7, just some slight downside. But still, an 11% earnings growth is well above historical averages of 7.5% to 8%. So where do you come down on the Mag 7? What kind of year do you think big tech's going to have? I mean, I think that like the rest of the market, this is going to be very odysyncratic. It's not going to be this beta trade, right?

Like you're going to have to be very thoughtful in the way that you think about different names, different sectors and who's going to be a winner. We're in that third, you know, fourth year of a tech transition. That's when you need to be more select. It's funny. I mean, we hear a lot about it's going to be a more tactical year. I've heard it from some of the panelists on halftime. And Abby sounds like she agrees with that perspective.

I mean, the midterm election year pattern would suggest that. Fourth year of a bull market would suggest that, starting with elevated valuations. And, you know, the Fed, we keep talking. I kind of agree with the general thrust of all of this. Fiscal expansion is a global phenomenon. earnings growth looks pretty solid. You're not seeing downward revisions, all the rest of it. Into that mix, you're going to get two or three fed rate cuts.

Something in there seems like there could be something that knocks us into a disequilibrium. Whether that means the bomb market says no more rate cuts or because growth isn't as strong. We haven't traded well off of gangbusters earnings reports during the actual reporting season. You know, we traded last week down to where we were in the middle of third quarter earnings season when we were ripping estimates. So I just feel like maybe we paid for some of this up front and we have to see if the bomb, right now the bond market's perfectly accommodating and benign.

But, you know, people are looking at Japanese 30 years and saying, are we going to get some momentum in that direction? You think we have to be more tactical this year? Last word to you, Chris. You're going to have to be midterm election years, but Mike hit it on the head. We're going to start talking about, are we running too high?

Yeah, there's going. Welcome to the closing bell, guys. We appreciate you being with us, but this isn't the story. This place you're watching. This is what happens when you're in a bull market tool, where you seemingly set records every day, but you try to get to $50,000 on the down. And you try to get to $7,000 on the SEC.

We're not going to agree either today, but nonetheless, you go out with a green NASDA as we continue to apologize. I'll start you're going to go over time and go to you tomorrow.