Closing Bell - Closing Bell 6/16/25

Episode Date: June 16, 2025

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 business.

All right guys, thanks so much. Welcome to Closing Bell of Scott Wabner Life. I'm Post Knight here at the New York Stock Exchange and this Make or Breakout begins with stocks on the move bouncing from that steep Friday sell-off. We'll show you where we stand with 60 to go and regulation tells a pretty decent story today. Nasdaq's good for about 1.5%, all three are the majors in the green. A report that Iran might be seeking negotiations with Israel giving a bit of a lift to stocks

midday and we seem to be holding that. We're also waiting for more developments out of that region. Oil prices are rebounding today. Watched very closely, as you might expect. As we are, the G7, it's underway now in Canada. We'll have a live report there in just a bit. And the Fed meeting underway tomorrow morning. We'll discuss what's likely to happen there in the months ahead. So there's a lot on investor plates today.

It takes us to our talk of the tape. With stocks less than 2 percent from new highs, will the wall of worry prove too insurmountable or not? Let's ask Adam Parker. He is Trivariate founder and CEO, a CNBC contributor as well. It's good to see you. Thanks for having me. The last time you were on you gave us notes reasons and ways to get defensive in the market. Now you've given us four ideas to get to for

offense and you say you got pushback from some of your clients who asked why would we get defensive if the price momentum and everything else suggests we're going up. But what did you tell them? Well you know look I, the barbell is supposed to be some defense and some offense. So I didn't think it was crazy to offer some defensive ideas. I got a lot of pushback. I think people just said, well, what do you want any defense? Like, we're headed to highs.

That's inevitable. And it certainly feels that way. And I think the combination of just not seeing a bear case that can unfold in June and a belief that maybe the earnings aren't Going to really be impacted that much of the biggest 50 stocks as people thinking we're headed to high So I thought the right thing to do was now give the offensive side of the barbell in the work this week You know offset it did when they said why why get defensive? Did you did you give a list? Well, I think this and this and potentially this and that and that's why I think you need

a defensive tenor and I think the consensus view is that we're going to hit a soft pocket at some point August to October in that period. What we thought was going to be a weaker set of guides for July and now it doesn't even look like we're really going to see that big of a problem on the July guides for October just seems like I mean we've we we did this note a week ago, 50% of the gross profit dollars of the S&P 500, 50% come from the biggest 50 stocks. The biggest 50 stocks have proven

they're pretty resilient to growth scares, they're pretty resilient to higher inflation, and so that's half the battle, right? And then I think the rest of the companies are saying, well, until the last five days, we didn't really worry too much about rising input costs with oil and commodities and other stuff, currencies helping a little bit. So yeah, the median stocks margins might be hurt, but maybe the growth scare won't be

that bad. And I think that's why people are now saying, hey, look, we got to find some offense. And we wrote in the notice, it's not the most expensive decile. It's not the ones with the fastest 10% of growth. It's actually kind of things are going pretty well, but not crazy that maybe is the right off. You're looking to try and play what's worked since the April 8th bottom. But then the problem with that, if it's a problem,

is that some of the things that have worked seemingly have lost their momentum as tech has sort of carried the load again. Yeah, I think the problem is semis, utilities, power, the whole AI trades worked off the off the lows. Yeah, and it's continued to work. And I think I think it's because 2026 is going to be the year of the proof case, right? We're going to start seeing some of the investments hit the margins of companies.

And so the reason it's hard to get too negative during a soft spot if there's a pull forward demand from tariffs or if companies are hit by tariffs is I'm still playing for the same thing I've been playing for for two years, which is all this investment starting to help the earnings and productivity of the companies. And so maybe 2026 is a better earnings year than people think. Maybe 2025 is a little worse, but people just want to buy the dip every time because they're like it's still in front of me, the dream of the productivity. And so I think that's why it's hard to get too negative when you still have this kind of,

let's call it a 10-year trend that we're about to see the fruits of in the next 18 months. Are you still trying to focus on the trade situation ending in a positive way and then the tax bill and all the other things that we thought and you thought on election night with me right over there, that was going to be great for the market. That was a fun night.

No, I do think the tariffs stuff, nobody thinks that it's going to get worse than it was. So I don't know a single investor is like, we're going back to 145% with China, that we're going back to like the April 8th. I think people assume that there'll be some, we're gonna hold a sign up saying we got a deal. That's the administration's plan. And what that deal looks like and what it hits the companies now looks a lot more benign or less worrisome than it was a month or two ago.

If somehow that narrative changes, then I think that's not in the price. But I don't know anybody, including me, who expects that we're gonna get really negative news. I think the question is just how much damage is done already. There was a pull forward in demand. There was some pushback in spending, maybe some inventory built.

We've seen some companies every week, it's a Smucker's or it's a Target or it's a Ross. We're seeing some companies are saying it's hurting them, but not enough for us to think the S&P earnings are, you know, you know, incrementally impaired. We'll see what the the word is, if you will, out of the G7, which is taking place in Canada. As we speak, it did get underway today, President Trump, of course, there, so is our own Megan Casella, who has the very latest live from Alberta. Hey, Scott, good afternoon from beautiful Banff, Canada. We are well underway, well into our first official day of programming here at this two-day summit and already a number of events that we've seen the president take part in so

far. We saw him on camera sit down bilaterally with the Canadian Prime Minister and the host for this week, Mark Carney. We also saw he had a quick pull aside with the German Chancellor, that's Friedrich Merz. France is saying that there was also time somewhere for a sit down with the French president, Emmanuel Macron, a meeting they say touched on tariffs, the Middle East and Ukraine. And we also are tracking a bilateral coming up with the UK prime minister, that's Keir Starmer,

expected to get underway here in the next hour or so, and we'll bring you that as we have it. All of that, as you mentioned at the top, is happening against the backdrop of this ongoing turmoil in the Middle East, everything that's been going on between Israel and Iran over the past few days. The president has spoken about that so far today. He first essentially confirmed reports that he has heard from the Iranians reaching out and wanting to negotiate and then he said this. Take a

listen. They have to make a deal and it's painful for both parties but I'd say Iran is not winning this war and they should talk and they should talk immediately before it's too late. Fueling those hopes for some sort of a deal or at least getting back to the negotiating table and then Scott the other major topic here of course has been trade and tariffs, sort of the backdrop to every conversation that's been ongoing. Everybody here is anxious for a deal, both the White House and the other foreign leaders, wanting to strike some sort of an agreement or at least to have some momentum towards

a deal before that July 9th deadline when tariffs could kick back up to higher levels than before. As of now, not happening yet. We're not seeing much evidence of concrete deals at this point, but it still could happen. And we'll first at least see what happens with the UK when they sit down later this hour. Scott. Yeah, we will.

Okay, Megan, thank you. You'll keep us up to date. Megan Cassell at the G7. How are you thinking about all of this? This conflict now in the Middle East, and then maybe developments, that's maybe why your clients were thinking, well, why are you trying to get defensive

if you think that we're gonna get some decent outcomes on trade, maybe they're desensitized to it like some have tried to claim we all are. Yeah, I mean, it just hasn't been fruitful for institutional investors to overreact to anything in the last 20 years. I mean, just think about what conflict geopolitical, what kind of political issue had a sustained impact.

There haven't really been too many. And so when you get news like this, you say, well, what about the earnings of the biggest US equities? Am I really worried about Metta's path because of this? Maybe I'm not. And so people just use that opportunity to buy the dip until something derails them.

I haven't had a conversation today about the G7 at all with a client. So not one institutional investors mentioned to me, I don't think people are really worried about the tax or regulation part of this yet. They're just trying to figure out the tariff part and are we going to see production exceed consumption in any inventory problems? Are we going to see any kind of issues on the July earnings and October guidance. But short of that, I don't think people are viewing this political event as a stock market event. It's funny, you say, you know, you've been better served not overreacting to any sort of major events

over the last 20 years or what have you, largely because somebody's ridden to the rescue anytime there's been a need to be rescued. Yeah, fiscal and monetary policy are awesome. That's the Fed, which bringsden to the rescue any time there's been a need to be rescued. Fiscal and monetary policy are awesome. And that's the Fed, which brings us to the meeting, which begins tomorrow, decision on Wednesday. Not much expected, but the commentary, Steve Leesman, our senior economics report, will be closely watched

for where the Fed thinks it is in all of this. Yeah, I think that's right, Scott. You have to essentially acknowledge, the Fed will have to acknowledge, that the economic outlook's a touch brighter than it was before the last meeting. You have had some backing off of the tariffs. You don't know, though, what happens, as Megan was saying,

when those deadlines are reached, the tariffs go back up, or they put back on. So that uncertainty will remain. The inflation numbers have been a little more positive. The Fed Chair is going to have to acknowledge that, but I don't think any of that amounts to anything that would take the Fed off of its wait and see approach. And that's in part because most of the economists, Scott, that I continue to read and see their outlook, they still think that the tariff impact is coming. They've already seen some in the inflation numbers,

but it's been offset by other things that have been helpful in terms of keeping the overall numbers relatively muted. But that could change come the summer. And I think that Powell is gonna play for time despite what has been really enormous political pressure from this White House for the Fed to cut rates. Let me ask you about the events of the summer. Jackson Hole most specifically, and you know the history of Jackson Hole and what happens there.

Is it traditionally a place where the Fed likes to use it as a destination to telegraph what's about to come? Or is it a place where it has used that location and timing as a place to describe what they just did? You know, Scott, there's a lot of talk about why Jackson Hole ends up being as important as it is every year. And whether or not it's the timing that there isn't a meeting in the month of August or it just happens to be one year of coincidence after another. It depends on where the Fed is at. As you know there are times when the chair, this chair has telegraphed important changes. Remember back when he said I would get everybody get ready for pain. That was an important signal to the market that the Fed was willing to risk recession. This time around, Scott, we'll see. We'll see what the data show in route to Jackson Hole.

We'll see where the Fed is policy wise in route to Jackson Hole. Right now the markets and the Fed seem to be in relative agreement that come September, the Fed can begin to cut. Remember, the Fed is not going to be looking at one rate cut. It's probably going to look at two, and there's the two you can see there and the probabilities on your screen. That's more than 50% scop, but it's not overwhelming agreement. There are those in the market who obviously have a different point of view here and don't

think the Fed is necessarily going to come. But you can see two thirds believe they will. And I think the Fed is there as well, depending on if the data allow it to happen. This oil spike is another factor. Not a big one today, was a bigger one Friday. It'll be something else the Powell monitors Scott. Yeah we have time to think about it and talk about it and we will plenty on both accounts. Steve thank you we'll see in DC next. Pleasure. I presume as we wait for that Fed day in the news

conference and your question obviously to the Fed chair by the way don't miss our exclusive interview with double-line capitals Jeffrey Gundlach that'll be right after Chair Powell's news conference as usual. That coming up in an exclusive on Wednesday. Now let's bring in Invesco's Brian Levitt and Wells Fargo's Samir Samana. Trivariate's Adam Parker of course is still with us. Brian, you first. Offense or defense right now taking everything into consideration that we discussed

either with Adam or Steve Leesman or Megan Kasella at the G7. Well, I think you want to be in these markets, but if you look at what the leading indicators are telling us, things are going to be slowing here. So I would be focusing still more on the quality parts of the market. It was a year where the hope was we were going to see broader market participation. It was a year where the concentration of the market was likely to reduce, and we came in with a good setup for it. But we've created an environment where leading indicators are slowing a bit, and that's why

investors continue to bid up those larger cap names. It's more of a quality environment, probably, until we get a policy response and a re-acceleration and activity. We've gotten better than expected inflation data and the economy's held up better than most have thought, irrespective of what some of the soft readings have shown. It's like, well, who cares? Until it shows up in the real economy, don't get fixated on that. Keep your eye on the price. Yeah, I agree with that. Now

inflation is likely to move higher here I would view it more as a price shock akin to a war or a drought not necessarily a sustained move in inflation that is certainly not what the inflation expectations are telling us that's a positive but if you start to look at jobless claims continuing claims they're picking up so you're getting a little bit of cracks in the in the bond market. Nothing overly concerning I'd be far more concerned if corporate bond spreads were blowing out that is just not the case So it's an environment where things slow a bit but prices are up a bit And so there's not a huge catalyst for a significantly broader market to start to unlock some of the value

So I think the challenge for investors is trying to time it. We're not saying go to cash. Every time they try and time it, they get whipsawed. But it's an environment where quality investments probably continue to work. Samir, you sound a little defensive to me in your notes today that you broadly anticipate a downshifting U.S. economy. You talk about cushions for one's portfolio. Can you expand on that? Yeah, absolutely. And it's not too defensive. I guess it would be more kind of just dialing down

from kind of risk on to a little less risk on. So, you know, we do like equities and commodities over fixed income. But now that we've come quite a long ways, you know, we added quite a bit of money to equities through that March, April timeframe, both the mid-caps and the tech. You know, now's a good time to take some money off the table. So we downgraded consumer discretionary. We think the consumer will feel the pain most once the tariffs do finally take effect, whatever those levels might be. And then we upgraded utilities.

You know, that's one of these, what we call an offensive defenseman, right? With it being Stanley Cup season, you know, that's one of these what we call an offensive defenseman, right, with it being Stanley Cup season, you know, that's one of those defensemen that can kind of jump on and kind of skate to the other end of the ice and help out kind of on offense. So, you know, utilities do benefit from AI, they do benefit from the power generation demands that we'll all face over the coming years. So that was a nice kind of below the surface pick that we recently upgraded. Down discretionary, up utilities, that sounds like a Parker pick.

Well, we're a little bit the opposite of him, right? We've been underweight discretionary the whole year. Yeah, you've been negative. And I'm thinking that the Fed may not actually impact the overall equity market that much, because if we talked about, I think them cutting isn't gonna be like a massive risk on trade,

I think it'll be a reaction to a slowing economy. But I actually think that it could cause a rotation underneath and maybe that will be the time I upgrade discretionary when they cut or maybe right before they cut because then I can maybe buy some of the home builders or other things. So I think that that may actually form close to a bottom on discretionary.

I think the utilities thing is a bifurcated sector. It's really small in the S&P, you know, less than 3% of the index, but there are a pretty big AI component to that because everyone owns Constellation and Vistra and Verta and Givernova and that whole AI trade. So you gotta be careful if you own that. They don't also own semis

because they're 0.8, 5.9 correlated to each other. So you gotta size that AI bet appropriately. Samir, how are you factoring in the Fed and the events in the Middle East? Yeah, I mean, look, the Fed's just not going to do a whole lot of cutting unless the labor market deteriorates, you know, in a pretty big way. So they seem very content to just wait. So they're not a real catalyst for us, which I think will be one of those kind of pain points that the consumer feels along with tariffs.

As far as the Middle East goes, it seems like you've got the Iranians already trying to deescalate. So I would imagine from here things probably don't get any worse. Now, again, you know, we'll keep our eyes on the situation because it is fluid. I think it's also worth noting that, you know, look, if you've got kind of tech and large caps and mid-caps and comp services and energy and financials like we do as favorables, you know, those are all areas that are going to do well regardless of what the Fed does, and probably what happens in the Middle East.

I think you still want to continue to favor the cyclical areas that aren't as exposed to the consumer. The reality is these regional events that we so focus on, they tend to not derail business cycles. They tend to not derail market cycles. So I know there's a lot of hope right now about the Iranians coming to the negotiating table with regards to this. I would still be mindful to advise investors, even if that is proving, even if that ultimately

proves to be too optimistic, to still try and contextualize what's going on. If you think of all that we've been through on a geopolitical front over the last number of years, whether it's Russia into Ukraine, whether it's October 7, 23, or even now, you look back, Russia, Ukraine, you look back at October 7, the markets are meaningfully higher. So, I don't think that what's taking place in the Middle East, while it's obviously tragic, is unlikely to change the direction of the U.S. economy or what the Federal Reserve is likely to do.

Samir, how are you thinking about the move in interest rates? That's been one of the more interesting, if not peculiar, trades of late, the direction of rates. Yeah, you know, what's really interesting is just kind of that steepness that's building in the curve between 10s and 30s. I mean, the 10-year is almost flat kind of year to date, and the 30s, you know, slowly keep kind of grinding higher, which tells me that on the very long end you know there is some concern about the US is credit worthiness maybe their reliability maybe there's some you know country saying you know hey look we can either buy your goods or we can buy your Treasuries maybe not both so they're

focusing on the 10-year part of the curve of maybe starting to shun you know that the 30-year part of the curve so but it does matter it matters forations. And I think that's maybe the one kind of flying the ointment for markets is we're constructive, but valuations, but absolute and relative are starting to push towards kind of the upper end of the range. Yeah. Even figuring that the economy is stronger than we once thought and that earnings are far better than people had projected. Yeah. I mean, look, you're pushing 23 times on absolute multiples and you're pushing kind of those equity risk premiums back close to zero. Now, again, we do have a precedent in kind of the late 90s where we had equity risk premiums in the negatives. We had rates much higher and

everything was fine for a short period of time until the Fed decided to kind of end the party. This could be a repeat, but again again that's not our base case. Yeah for me I mean the median company has already seen the gross margins roll over. To me it makes sense the mega caps have worked and they're gonna continue to work probably I think until you can believe in margin expansion for the smaller companies. I don't in the mid-cap companies so I think you still want to own the highest quality biggest 50 biggest hundred US equities I think they continue to outperform. I don't think you get breadth until you're later in the cycle. Go big go home? Go big or go home and it you

know I continue to come back to this point though with regards to valuations that it is not all markets S&PP 500, yes. Equal weight, the same names, no. Median stock, no. But yeah, it's an environment right now where the economy's likely to weaken a bit and there's just not a catalyst necessarily for other parts of the market. All right, we'll leave it there.

Good conversation, everybody. Samir, we'll see you soon. Good hockey analogy, Samir. That was a good one. Well played. Stanley Cup final could be ending soon. We'll see. To Pippa Stevens now for a look at the biggest names moving into the close.

Hi, Pippa. Hey, Scott. Well, shares of Roku are surging after announcing an exclusive partnership with Amazon, enabling advertisers to reach roughly 80 million US households through the Amazon platform. The stock is up here almost 11%. And Coinbase is also in the green as the crypto company reportedly nears a deal to get the green light to operate in the European Union. That's according to Reuters.

It comes as some regulators have raised concerns with the speed of some EU countries' approvals, the report said, citing sources, those shares adding about eight and a half percent. Scott? Pippa, thank you. Pippa Stevens, we're just getting started here up next. More on the market. Snap back today with Mohammed Al-Aryan of Alianz we'll find out how he's sizing up the uncertainty in the Middle East what he thinks about the G7 and the Fed. Remember we talked to him in the midst of that big sell off on Friday we've been able to absorb that a bit

we'll talk to him now on the other side we're live from the New York Stock Exchange. You're watching Closing Bell on CNBC. Welcome back. Investors have a lot to keep an eye on this week from the events in the Middle East to another Fed meeting looming large. Joining us now, Alian's Chief Economic Advisor, Muhammad Al-Erin. Welcome back. Thank you, Scott. So how do you feel about the market today relative to our conversation on Friday, given we still haven't had a resolution to what's happening in the Middle East,

but the market certainly is taking it better. Yeah, I think two things happened today, Scott. One is behavioral. The markets has learned to fade geopolitical shocks because it has worked. And the second was the report you mentioned out of the Wall Street Journal saying that there are indications that Iran is looking to de-escalate, is looking to negotiate. I think ironically, on the ground, things have gotten worse, not better. So you have this contrast where the market

is looking forward and the market has learned to fade these sell-offs. The question's gonna be, is this time different or not? And I can't answer that question. I don't think anybody can answer that question. No, but if judging from history, investors have been correct more times than not to do what you just said, to fade the dark headline and look on the other side.

Yeah. And one of the reasons why they've been correct, and you mentioned it, is because there was a sense of someone coming in, and that someone was the Fed. And the Fed is in a very different place. Inflation has sidelined that it is paralyzed. You heard, Steve, about the wait and see attitude, play for time. It's paralyzed by three big uncertainties, data, and we've heard over and over again that it's not clear to the Fed where the data is going.

Second policies, Chair Powell listed the four policy areas that we need clarity on. Trade, of course. Fiscal, immigration deregulation. And now, geopolitics. So you have these three big uncertainties which paralyze the Fed. Well, I'm just wondering, I mean, is it really a paralysis or is it the Fed just feeling content with kicking its feet up and seeing how the situation unfolds because they do have time? They have time on their side based on what the data has been.

Whether they have time on their side or not, we're going to see. I worry that they may not have as much time, that too many things are piling on top of the consumer. And I do worry about the consumer. But I do think they're just waiting. They're waiting for clarity. This is not a decision of mission accomplished with fine. This is a decision. We don't know what to do. Our dual mandate are going in a different direction, and we don't know which one to respond to. So I think of it as more being sidelined by uncertainty rather than being actively happy to be on the sideline. Which do you think they would respond to if there's friction between the

two which the chair has said multiple times was always going to be a risk. They would err on the side of a labor market weakening further, wouldn't they? That's what I would have said a year ago. Today, I'm not so sure, because now we have the whole issue of Fed independence that has come into this. But a year ago, I would have completely agreed with you. Now I think they're going be somewhat more balanced also, keeping an eye on the inflation side,

because they do not wanna be seen as being forced to cut by the president. No, I understand that, but why would they be seen as though they were doing that? I mean, the inflation data, it's not like it's running away. The recent reads were not bad at all. So why would this all of a sudden become political

or politicized if they actually did cut rates because they could? Scott, we've been discussing this for a while. No one quite knows the following. Have we seen the impact of the tariffs, which was nothing to see, or are we about to see the impact of the tariffs, which was nothing to see, or are we about to see the impact of the tariffs? Depending on which company you speak to,

you get different answers. Those who don't have pricing power tell you, we just can't pass on the prices. The others who have pricing power say, it's coming. We are running down the inventory that we got before the tariffs went up, but wait for the summer. So we got to wait and see because that's the balance between those with pricing power and those who lack pricing power.

The other point you make is, you know, concerns that the consumer is either weakening now or will will weaken at some point. I'm wondering when you see what Goldman Sachs said today, that 49% households allocate 49% of their total financial assets to equities, the highest level on record. Does that play into your calculus at all? If not, should it? We're in a less than 2% away from an all time high

on the S&P 500. If households are allocating nearly half of their total assets to equities, which continue to elevate, maybe the consumer is in far better shape yet again than people want to give it credit for. Yeah, and that's what the economists call the wealth effect, that you feel wealthier because those 49% have gone from record to record. And as you point out, it's amazing to think from the April 8th lows,

we only 2% from the highs. It shows you how resilient this equity market is. It also shows you that the corporate side of the economy has been doing rather well. And that's the US magic that we've seen over and over again. But if you look at the consumer, if you look at the current income expectations, if you look at how hard they've been hit by inflation, if you look at the savings for the lower income, there isn't that much there. There's been a lot of resilience used up in recent years.

So we're gonna see, I've argued over and over again, we're not going into a recession. Will we grow at what the Fed is saying at 1.7%? The market consensus is 1.4%. If we stay above 1%, then we're fine. If we go below 1%, then we should start worrying. Mohammed, I appreciate it as always. Always enjoy our conversations. We'll have another one soon I'm sure of that. Thank you. Mohammed El-Aryan. Coming up next the next wave of the AI revolution. We're

going beyond big tech with one investor who says the next trillion dollar opportunity is in one of this year's worst sectors. We explain next. This race is happening with or without us. Right, look, it was an extraordinary piece of engineering that DeepSea put out, right, from China. What it also showed was that our adversaries aren't waiting around for us to get our act together. And so, you know, one way or the other, we don't have a choice but to win.

We're still in the very earliest stages, and with all of the excitement and potential of generative AI and agentic AI, we think that there's lots of opportunity for us to expand our infrastructure globally. If you think about all of the tech that we need to be invested in, it's gonna be autonomous vehicles,

EV, power, AI, robotics. I think those five themes are really going to take us through the next decade. We have the AI super cycle. We've seen a re-acceleration in both the top line and the earnings. You know, Oracle reported last night blockbuster numbers. 80% of the S&P that reported all beat. The MAG-7 all beat and accelerated. Every single company here pushes the cutting edge forward. They understand that there is room for a tremendous amount of growth

throughout the entire ecosystem. Our many headliners over the past week thinking about what the next wave of the AI revolution will look like, and most importantly, how to invest in it. So is our next guest. Jeremy Cotter was an early Facebook employee now hunting for the next big thing as a venture capitalist. He's also a partner at Urise Health.

It's good to see you. Welcome. Good to see you too, Scott. Explain what Urise Health is, first and foremost. Urise Health is an investment firm that invests in the most promising AI health companies before they go IPO. And our purpose is to help over a billion people improve their brain health and longevity, including those people that are watching today.

So the firm was founded at the intersection of my professional and my personal life. Professionally, I was at Google and Facebook, and I was a healthcare executive. Then I got a call out of nowhere that my mother was diagnosed with a neurodegenerative disease, just devastating news. But that was exactly what fueled the success of URICE. And you think that when we talk about these next major areas or sectors that are gonna be dramatically impacted by AI,

your focus is now squarely on healthcare. Scott, that's right. Research shows that in the US, healthcare is a four trillion market and globally it's 21 trillion. That's more than half the size of the U.S. and Chinese economies combined. And yet, as you've seen, healthcare is just getting slammed on the S&P right now. But that's exactly why AI is poised to transform it. In 1885, the X-ray was discovered.

And for the first time, we could see inside a human body. Now, with AI, for the first time, we're able to see inside massive data sets in a way that's going to completely transform both the cures and the therapies that we have. When you say that healthcare is going to be one of the pillars of the next wave, who is going to get there first in the most dramatic way, do you think, of we always talk about the hyperscalers, of course, CNBC.com reported late last week,

Amazon reorganizing its healthcare business into six pillars in order to simplify its structure. Where do they factor in? Where do the other big companies factor in in the way you see this race evolving? Absolutely, let's start with Amazon. Here's why they're poised to win. Is there an ecosystem?

It starts with a $3.9 billion acquisition of one medical. That's a physician group that's got doctors offices in almost every major US city. Why does that matter? Because it gives Amazon direct access to doctors in a way that very few tech companies have. But that's just one piece of a much larger strategic play. Amazon acquired PillPack, an online pharmacy,

they have retail stores like Whole Foods. So you can imagine, Scott, you have a telehealth visit with One Medical, they help you in half the time with none of the paperwork because of AI, and then you, from the convenience of your own home, you order your prescription medication, and then you're able to go to Whole Foods with AI recommendations. That's the journey of Amazon, all powered by AWS, Amazon Web Services, which is the

computing infrastructure. So that's the ecosystem that we're talking about. Let's not discount NVIDIA. NVIDIA is the picks and shovels behind all of this. They're powering all of AI health. And for that reason, they're doing things like looking at bone scans, MRIs, and analyzing them and making sense of them in half the time

with twice the accuracy. So when you step back and you just look at the landscape overall, how do you think about your former company, Facebook, now Meta, obviously, which the stock has done quite well. I mean, there's clearly a lot of optimism around where the investment base thinks that they can get. How do you see the whole pie evolving here?

Yeah, that's an interesting question. And interestingly enough, I don't see it necessarily as a winner takes all market. When I was at Google, it was very much a research institution feel. And I was working with brilliant engineers, and they've taken that approach to AI. Now powering all kinds of different AI applications and

having rivals like OpenAI, it's better at the consumer side than them, come to them for help. When I was at Facebook, it was move fast and break things. And then that later on got them into trouble, so then they scaled back and started to slow down. Now, they're jumping back in with a massive investment in AI that's putting them back into a position of leadership.

What about Apple? Where do you see it? I mean, a company that has made a huge effort as it relates to people's health, and they're trying to get their AI story right. How do you see that? Absolutely. You know, it's interesting you mention that

because Apple's strengths are also its weaknesses. Apple, unfortunately, has under-invested in AI. But you get devices like the Apple Watch amazing at measuring all kinds of biometric data, like fitness and sleep. And yet, they're doing that in a linear, rule-based way. If someone falls, they can measure whether they fall. But they're not analyzing or predicting the next fall. And so with 2.3 billion devices that people own, Apple devices,

this is a huge opportunity that's being missed. And again here, strength, privacy. But that's also their weakness because they're not able to bring together these different data sets. Again, Apple is strong on the consumer side, very strong, but they're weaker on the enterprise healthcare side. Amazon and Nvidia have inroads into healthcare organizations and hospitals, but Apple does not. So we're seeing a company that had potential

but is losing out on the AI race because of that. All right, thanks for coming by. That's Jeremy Cotter, appreciate spending time with you. Coming up next, we track the biggest movers as we head into the close. Pippa Stephens is standing by with that. All right. Thanks for coming by. That's Jeremy Cotter. Appreciate spending time with you. Coming up next, we track the biggest movers as we head into the close. Pippa Stevens is standing by with that. Hi, Pippa. Hey, Scott.

Well, one beauty stock is looking good. Two investors. The name that's up double digits coming up next. Let's go. Less than 15 to the close back to the stevens now for the stock she's watching a paper. It's got a state lauder is surging almost 10 percent after stronger than expected retail sales data out of China the company has faced challenges in China which is a key market including slowing sales and Sarepta shares are plunging 45 percent after reporting the death of a second patient receiving gene therapy treatment for Duchenne muscular dystrophy. This is the second instance in a matter of months,

and the biopharma company has halted shipments of the treatment. SIREPTA also suspended its 2025 guidance today with plans to update its outlook later this summer. Scott? Yeah, but thank you, Pippa Stephen, still ahead. Casino stocks on a roll today. Contessa Brewer breaks that down in coming up.

Bell's coming right back. Coming up next Lenar set to report earnings and overtime today the key numbers you need to watch for inside the market zone which is coming up next. Now the closing bell market zone CNBC senior markets commentator Mike Santoli here to break down these crucial moments of the trading day. Plus, Contessa Brewer on big moves in the casinos today. Diana Olic looking ahead to Lennar in OT. Markets rebounded pretty well today. Yes, been pretty resilient.

I think you could say it's both resilient. The market found no real major catalyst to kind of price in a lot more of a risk premium in the short term. On the other hand, I think we're also in a bigger picture way, kind of hesitating. We got to 6,000 on the S&P like a week and a half ago, or a half percent above that. We're not too far from the high. So I think you could both say this rally is decelerating, but it also feels pretty sturdy. And one thing that the scare on Friday does is it makes us that much more distant from the point

when sentiment gets over optimistic and excited, because I do think there was a pretty good sort of psychological shakeout, if not really anything that disturbed the overall price trend. Yeah, see what the Fed says on Wednesday, developments out of the Middle East, and even in some respects the G7 on trade. Oh yeah, it all it all matters and I do think that's one of the reasons we're hesitating here.

We're getting into a period where seasonally it's going to be a little tough. We're getting a little closer to the point when some of these things need to be resolved in terms of how the Fed's thinking about tariffs, how tariffs make their way into the economic data or not. So yeah, all that's still in play. All right. Yeah. Casinos having a great day today. Contessa, what's going on there? Yeah. Well, a surprise boost in retail sales in

China, Scott, juicing those casino stocks. Melco up about 6%. You've got Las Vegas, Sands up 6%. Wynn Resorts nearly the same. And MGM up 8%. Look, it's getting a double dose of fuel first from the Chinese economic numbers that showed retail sales rising 6.4% against expectations of a 5% expansion. Investors read into that a willingness by Chinese consumers to spend discretionary dollars or one, which of course is important for gambling and entertainment destinations like Macau. But MGM is also benefiting from BetMGM lifting its 2025 guidance for revenue and earnings. BetMGM said it has seen strong momentum through the first two quarters of this year

in both sports betting and especially iGaming, that's online casino games. BetMGM is MGM's joint venture with Entain and Entain shares traded higher by more than 15% today in London and I should mention, we're also seeing big moves for Penn as well up more than 5% Scott. Alright Contessa thanks for that Contessa Brewer. Diana Olek tell us what to watch for with Lennar in just a little bit no tea.

Yes Scott this could be a tough Q2 for Lennar. Analysts are expecting year-over-year declines in both EPS and revenue. Homebuilding analyst Ivy Zellman on CNBC Friday said there is not a lot of good news to report and the stock will likely come under pressure. We do know the builder sentiment is at its lowest level in more than two years. Buyer demand is weakening and the mortgage rate picture is not improving. The average rate on the 30-year fix started Lenar's Q2 March 1st at 6.74% and went up from there, really hovering right around 7% for much of April and May. And even now, add to that all the economic uncertainty

surrounding tariffs and inflation. While the builders can buy down interest rates, some borrowers just aren't qualifying for loans, even at those lower rates. We'll be watching specifically for pricing and backlogs. Even though housing starts have been dropping, the builders still need to unload a lot of that supply they've already built, Scott. All right, Diana, thank you.

That's Diana Olek. We'll watch for her when Lenar hits the tape in just a little bit. Watching rates today, too. I know you are, as many market participants continue to. They firmed up. So, you know, maybe not the greatest auction, a small auction, 20-year treasuries. I still think we're okay, because we're short of those kind of scary thresholds

that really destabilized the equity markets before, but we're not far from them, right? We're under four and a half on the 10 year. So I do think that the way that retail sales come in, and the way that the Fed outlook characterizes how restrictive or non-restrictive they are, is going to be relevant to all this.

I think it's interesting we have this very widespread eye of the beholder is the economy strong with good momentum or is it actually kind of at stall speed and we need the Fed's help? Bank of America says no cuts this year. The economy is going to be surprised to the upside. Whereas you have folks like Ren Mac and others, Morgan Stanley, feeling like we got several cuts in train. So it's a legitimate debate, and I think it just tells you something about this in-between

moment where you can have your own interpretation of what the influence of policy is going to be on the real economy. Well, let's see what oil prices do as well. Oil getting off the burner from Friday is in a happy place for the Fed. They don't want to get into a situation where they're trying to assess everything and oh, now we have to think about oil going to a hundred bucks. Yeah, fleeting pop up to the mid-70s per barrel is not going to change the equation in terms of headline inflation down the road.

Then we don't have to have the debate as to whether we should be ignoring that or not. But yeah, look at the inflation forecast embedded in the Fed's dot plot. Retail sales tomorrow. Again, you're going to get a little bit more fresh data on the consumer. The consumer has the capacity to spend. Savings rate went up in the early part of this year. Did they actually do it last month? That's one of the things we'll find out.

Big part of their money as we learn today in the stock market and equities, and they continue to run within 2% of a new all-time high. We'll go green across the board. Nice comeback for stocks. Bell rings. I'll see you tomorrow into overtime with John Kors.