Closing Bell - Closing Bell: 6/27/25

Episode Date: June 27, 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.

Thanks so much. Welcome to Closing Bell. Scott Wabner live from Post9 here at the New York Stock Exchange on this very busy Friday. Now this Maker-Baker begins with stocks hitting new highs but then take a look at that chart on the S&P 500. A bit of a different story here on those trade headlines that Brian was just mentioning. We'll have more on that in a moment and ask our experts over this final stretch including Ed Yardeni what all of it means he's going to join us in just a moment. We'll show you the major averages here collectively across the board again a little bit of a different story both the S&P and the NASDAQ did hit record levels earlier in the session. It's a technology story but not just that industrials and financials have also been around new highs today we'll track all of that individual stocks making news.

Nike certainly worth a mention today. That stock is surging investors betting the worst now behind that company and betting by 15% in the green today following the latest earnings report there. We'll track it into the close does take us to our talk of the tape. How high can this market really go when you still have those kinds of headlines out there about trade, about taxes, and about other things driving the market activity? We'll ask our experts.

We do first want to go though to Megan Casella in Washington. She has the very latest on those headlines, which have definitely impacted the market over the last hour or so. Megan. Absolutely, Scott. Potential now for the trade war to heat up again, this time specifically with Canada. The president posted just before about 2 p.m.

that because Canada is moving forward with the digital services tax, which will impact U.S. tech companies, he says he will then be terminating all discussions on trade with Canada effective immediately. He goes on to say that he will be letting Canada know the tariff that he will be letting Canada know the tariff that they will be paying to do business with the U.S. within the next seven days. So more to come

on this front but really shaking up the U.S.'s relationship with its second largest trading partner. And remember Scott, Canada does not face a July 9th deadline for reciprocal tariffs. It's currently facing only the 25% tariff that's still in place over fentanyl concerns. But all goods that are traded under the USMCA have been exempt from that tariff. There are, though, still ongoing trade talks, especially over the sector-specific tariffs, including on autos, on steel, and aluminum. Canada has recently been threatening additional retaliation against all of those if a broader deal wasn't reached soon.

So now, with this threat, the biggest questions from here are what the new tariff against Canada will be, what it will cover, and whether Canada retaliates since we already know they were threatening retaliation over what was in place already. And Scott, as you mentioned, we'll have Treasury Secretary Scott Vestent joining CNBC in the next hour to discuss all of it. Scott. Always an important interview, Megan,

especially so now given this movement in the market on those headlines you just brought us. That's Megan Casella in Washington for us. Now let's bring in Ed Yardeni. He's the president of Yardeni Research. Good to have you here. Thank you, Scott. Especially in this fast moving now market.

Well, this is a reminder of the risks that still remain. What do you make of this? Well, I think we're still very much in a bull market. I think the weekend is upon us. People are taking their profits once we got to a record high this morning. So I don't really think this is much to be concerned about. I think the market's gonna go higher

because I think the economy is gonna continue to prove resilient. I mean, it has shown some weakness of late, but that's really old data. It's data that's in response to all the uncertainties. And I think a lot of the uncertainties have dissipated. I mean, clearly trade isn't a done issue yet, but I think it will be by the end of the summer. I mean, you're talking as if this headline never moved today, that this is simply related to hitting a new high and nothing else.

I mean, the market would beg to differ. Well, it just begs to differ one day. That's okay. I've been wrong on a daily basis. You know what? One of the reasons why we've been able to continue to move towards these new highs and then ultimately reach it, we haven't had any trade headlines, right? And here they are back in front of us again.

I would say that the correction that we had earlier this year wasn't just all about trade. It's also about, I remember DeepSeq back in January. Do remember that. And suddenly there was all this concern that the tech companies were spending way too much money on AI infrastructure. And then they came out with their first quarter earnings,

which were great. And they said they were gonna continue to spend billions of dollars on the data centers. And so we've got Nvidia at a record high just recently. And so you put it all together and I think it's a, it's a pretty solid economy, pretty solid stock market. And you have no worries at all that whatever tariffs end up being in the end game of all this, wreck what you say is a still good and resilient economy.

Because no, we can argue with the fact that the economy is pretty good and that it has remained really resilient. But there is that hanging out there. Yeah, that's still hanging out there. There's always a risk, clearly, in the market, things to be concerned about. Sometimes the market goes up best when everybody's worried. And what's interesting is here we are,

basically at a record high in the market, almost at a record high, and a lot of the sentiment indicators are still very wary, very cautious. You're not seeing a lot of bullishness in the sentiment indicators. So that's a good thing that suggests that people just really haven't bought into this recovery from the correction. But if you look at let's say you look at the momentum factor and the momentum ETFs that are

record high. Let's say you look at the high beta ETF, you know, lower quality, higher risk names. Those have been flying high. Isn't that a bit of a concern to you at all of any sort of speculative nature behind this move? Yeah, well look, I think the big concern here is that it's as though the correction never happened, right? We're right back, what, at the 21 forward PE before the correction at the, before the correction, at the beginning

of the year we were at 22, so the valuation multiples have gone up. I think to me that's an indication that there are a lot of investors that are coming around to my thinking that the economy may be recession-proof. I know that's hanging out there with a concept, but I've been hanging out with that concept over the past three years when the Fed tightened, the economy remained resilient. And now the economy's remained resilient with the tariff issue.

All right, so you're like John McEnroe over there. You're just deftly volleying away anything that I throw at you, no matter where I throw it. I mean, you have no concerns? Because it doesn't sound like you do, other than the, oh, well, there's always something to worry about, or oh, yeah, there's still unresolved tariffs,

or oh, yeah, the tax bill still isn't done yet. I mean, I could be wrong. It's happened before. I could be wrong about the economy. I may be overstating the resilience of the economy. It's certainly getting stress tested here, but I think it's already starting to show signs that it's passing the Trump stress test. And now, if I'm wrong about that, guess what?

I'll be wrong about the Fed, because I don't think the Fed has to do anything. But the Fed could always save my forecast by lowering interest rates if necessary. There's a lot of pressure building up on the Fed to lower interest rates if things get any weaker. But things aren't all that weak. I mean, initial claims remain very low. Continuing claims suggest- A little bit elevated.

A little bit, continuing claims are elevated. It's taking longer to get a job. But the important thing is layoffs aren't occurring and that's kind of the key to any business cycle. But you have the safety, you just pointed the safety net the Fed put. Yeah, exactly. In a worst case scenario the Fed's going to come in and cut rates. It's still there, yeah.

And not only that but we're probably going to get Trump's extension of his tax cuts or maybe some additional tax cuts within that. And the bond market seems to be okay with that at this point. What about the dollar? What do you think the message of the dollar is? I'm not bearish on the dollar. Everybody seems to be. Well, everybody else is.

Everybody else is bearish on the dollar. Scott, you know I have a little contrarian streak in me, but I don't do just to be a contrarian. I look at the US and I see the world's largest capital markets. I see that the bonds, the bond auctions are going absolutely fine. Stock market, the bond auctions are going absolutely fine. Stock market, the world's largest stock market.

So I am not bearish on the dollar. But what's that about? What's that chart telling us? It's down 10% a year. So we're starting to a year decade. We're six months in decades. If you're looking at the DXY, the DXY, I think most people think it's a trade-weighted index. It's not.

It's a fixed-weight index. The euro's about 57% of that. So the euro's been very strong. I think the euro's been strong because there's a perception and a hope that they're about to enter a long period of deregulation of more fiscal excesses, which has worked for us. Now we're kind of hoping it will stimulate their economies. But I don't know about that. I'm not quite sure that they're going to be able to deregulate us anywhere near what

we've done over the years. I mean, the more that President Trump pounds on Fed Chair Powell, the dollar continues to go lower. You have any concerns whatsoever that if there is this so-called shadow Fed share appointed much earlier than people think, which could undermine the credibility of the Fed, that that's an issue for the markets? Well, even if Trump had, let's say, Christopher Waller, who's a board governor, but he clearly has aspirations to replace Powell. Even if he got Waller on there, there's still lots of other people on the FOMC and on the

board of governors that aren't necessarily going to go right along in lower interest rates. No, but you know, I mean, the Fed chair himself yields the, you know, if it's not an iron fist, it's short, darn close. Yes and no. I mean, I would argue we could have some real dissent at the board if in fact, Waller pushes for what Trump is asking for.

All right. We'll leave it there. Ed, thanks for coming by here. Thank you. That's Ed Yardeni right here, Post Night. We have a news alert now on the credit bureaus. Diana Olek has the very latest for us. Diana, what do we know here?

Well Scott, it was just a little under an hour ago that FHFA director Bill Pulte posted on X that he was going to do a comprehensive review of the credit bureaus and that of course sent the stocks of the bureaus like TransUnion, Equifax, Experience, Tanking. I reached out to Bill Pulte, who by the way FHFA is housing, That's the Federal Housing Finance Authority. And he actually said after the post in response to somebody else that it wasn't just housing. He was looking at credit cards and car loans as well. But he told me in following President Trump's executive orders to lower housing costs inconsistent with the law, we are ensuring there is a truly competitive market with credit bureaus.

This includes not just the price, but also we want to ensure that the bureaus are acting as true competitors of each other, which was interesting. Then he followed up and said, oh, one more thing. I'd encourage the companies to operate above board and not engage in any improper collusion as we seek to help the American consumer. That was a little bit more of a shot across the bow. We know he's been after the credit agencies because their prices have been higher. He talked a lot about FICO in the past. It's not really FICO. That's the credit score. And you can get that score for free.

It's that credit score that goes into those credit reports that when you're looking to get a mortgage or a car loan, etc., you need to get your full credit report and your full credit, you know, that to the mortgage lender. And that's where prices have gone up slightly, not incredibly, but they have gone up. So this is all, I guess, part of trying to lower prices, but it's probably gonna take a little more than that. Back to you.

Okay, interesting news. Diana, thanks for that. That's Diana Olick down in D.C. Let's get back to the market at large. Tech seeing some serious strength today. That sector hitting a new high, the NASDAQ as well. Steve Kovac is here with more we know about the mega caps but it's not just those stocks deep.

Yeah, it's it's a lot of tech and I'll echo what Ed was saying just a few minutes ago Scott that it's like that deep seek thing never really happened or at least a lot of these AI names that sort of shrug it off you got lots of MNA activity just optimism around the AI story and so much more going on. But not everyone is invited to the party. I'll show you that in a second.

But look, we have NASDAQ hitting new records this week, on pace to close this week up more than 3 percent. Let me give you some highlights from the Mag 7. You have Nvidia also hitting new highs, following its annual shareholders meeting. You had CEO Jensen Wong making these huge promises regarding AI and even beyond that, robotics. It's now on pace to close up more than 8% for the week.

Then you got Meta. We have all these headlines over the last couple of weeks that it's on this huge artificial intelligence hiring spree, spending enormous amounts of money. Now it's up 25% for the year. And then some of the lowlights out of the big tech names we got here Apple and Tesla still sitting out underperforming their peers for Apple it's the same thing we talk about all the time Scott still has the most exposure to tariffs and did not show off any major AI breakthroughs at WWDC it's down still nearly 20% on the year and then Tesla in a bit of a sales slump we saw the firing of that one VP yesterday and then the gains from the Robo taxi debut earlier this week. They pretty much got a race. Tesla not as bad as it was earlier this year, but it's still down about 20% on the year.

Scott. All right, Steve Kovac. Thanks for that. Let's bring in Evercore ISI's Mark Mahaney now for more on this big move in tech. It's good to have you on this record setting day. It's funny. You have your top picks of Alphabet, Amazon, and Uber.

We were just mentioning Meta there, which has had a really great run here. Why isn't that at the top of your list? Because it just had a really great run. I don't know, Scott, that. I look for these DHQs, these dislocated high quality companies, and actually one of the Max seven stocks that's really under

performed here today is Google it's still off eight eight percent something like eighty nine percent. They know here to date and I think there's a really interesting AI play that- that is under appreciated there's some major overhangs on

on Google related to the government in the anti trust case I get that and related to chat GPT. I'm just struck by the opportunity for that sentiment to change it it does the risk board on this is extremely strong extremely positive and

then- Amazon would be a number two pick- and then- Uber would be a number three pick look I like meta it's it's sort of smaller by for me now twenty five twenty six times earnings I think that multiple spine it is what there's a lot of

upside to the earnings so she's the quality compound there you want real output in the earnings. I think that multiple is fine. I just want to get a lot of upside for the earnings. So it's just a quality compound there. If you want real output in the portfolio, I think Google's a better bet than that. When you go to Google though, some stocks underperform for a reason, right? Your ifs, there are a lot of ifs there, right? AI disruption, the DOJ, the lack of cost focus. How

much of that they have to get right so that your ifs aren't too much of a worry. Yeah I know I laid out those three in a recent report I actually think the company's done a better job of managing expenses and I think actually they've got more credit from investors for that so it's really the other two. I think we're going to get a clearing event in August I mean I'm doing'm doing my best. We're doing our best to try to predict what Judge Meta is going to decide. And I don't think the worst case scenario is going to come to pass. The worst case scenario would be a forced sale of Chrome and then a banning on all search distribution payments. I don't think that's going to happen. If it doesn't happen, I think you've got a clearing event for Google shares. And then what Google then needs to do is prove

that they can monetize AI searches, GenAI searches, AI overview searches, just as well as they can, traditional searches. They've been saying that publicly, but they got to kind of show it in the numbers. How do you do that? You maintain this kind of 11 to 15% search revenue growth that they've done for the last two

years you keep it up at the same pace got and- I think the bears are gonna come we lose steam and you get a real chance for a re rating here trading at seventeen times earnings. I mean you remove these two overhangs this thing doesn't

stop at eighteen nineteen it goes twenty twenty three twenty five times or it's up where that is. That's why the stock I think the setup here so attractive on. For Google here I That's why the stock, I think the setup here is so attractive for Google here. I get the overhangs, but I think they could be removed as early as a month from now in the case of the DOJ case.

Wow, I mean, I thought it was interesting within the last week or so when Cotu management, and I've referenced this a couple of times on the various programs here, excluded Google from its top 40 tech companies when they're looking ahead to the next big things for the next handful of years. It left it off that list.

It was the only one of the biggies left off that list. And here's one of the most astute technology investors that we've known. Did you notice that? And was that a statement of some sorts in your mind as well? No, I have huge respect for Cotu. I just, you know, I'll stick with my thesis on Google. I think that the idea that they've been kind of left behind by J&E.I. is massively overstated. I think they've been, you know, 10 years into AI and now it's the matter of getting that fire lit where it needed to get lit for Google and I think they've been you know 10 years in the AI and now is the matter of getting that

fire lit where it needed to get lit for Google and I think it has and I think they've been accelerating their pace of product rollouts. As long as you can get search you can prove to people that search is going to continue with that growth then you get these amplifier effects that are really light on the stock. YouTube continues to gain share amongst all streaming assets. I think Google Cloud is going to show acceleration in the back half of the year. And then you've got this wonderful option value with Waymo that's going to get unlocked

and gets any sort of credit like Tesla does. That just adds to the kind of the multiple rerating potential for Google. So that's my Google's thesis, Scott. I'm going to stick with it. I look to these DHQs, these dislocated high quality companies, Google's at the top of my list right now. Yeah. Well, I mean, Amazon is too, right? I mean, it's your number one large cap long. And they have their own huge AI aspirations with AWS, as we learned when we spoke to the

CEO exclusively a couple of weeks ago out in San Francisco. I mean, they don't want to cede any any ground anybody. So yeah just like I don't write Google's number one pick Amazon's number two pick for at first Amazon is going to two overhangs on Amazon. Why it's trading at twenty eight times earnings versus cons like

Walmart that are trading ten times. Ten terms higher in terms of the multiple. You know with the Amazon they got to prove that they get to prove that they can get through these tariff issues, and they may not be able to, but I think they're just as well positioned, and probably better positioned than any company out there,

maybe with the exception of Walmart, but those two, I think their supply networks are sophisticated enough. I think they've been diversifying away from trouble markets for quite some time, so I'm less worried about them on that side. Bigger concern really is can AWS show this reacceleration that investors wanna see? Microsoft Azure has done a wonderful job

in the last six to 12 months, showing that they're riding the JNI way. AWS needs to show this too. I think they'll be able to do that in the back half of the year. If I'm right on that, you get a re-rating on Amazon, do well. Had a big debate on halftime today

over the next six months, which stock was gonna do better, Tesla or Uber? Uber's in your universe, Tesla isn't, and in the first six months of this year, it's been no contest, obviously. Uber is far outpaced, Tesla. What happens if Tesla gets autonomous right? Is that stock, what does that mean for Uber in the race for

autonomous? That would be a negative catalyst for Uber. What Uber needs, in order for Uber to work from here, they need to get more Austins. They need to get more Atlantis. It's not just rolling out with Waymo, although they've been pretty darn successful with the two rollouts, and that's what's caused the unlock in stock here to date. But if you get more of these rollouts with Waymo and you get other AED companies, there's more than just, you know, it's not just Waymo's world and it's not just Tesla's world. And by the way, of those two, Waymo is dramatically better in terms of what they've been able to show in rollout so far.

But if you get Zeus in the market and then you get a couple of Chinese players, not in the US, but in parts of the Middle East, maybe in Europe. And if you get more companies like Mobileye, Mobilewave, if you get these companies out there showing that you can get multiple AV vendors, maybe not two or three, but maybe four, five or six, that's better for Uber's economics,

better for it as a supply aggregator because it is far and away the biggest demand aggregate that's just on the mobility part of the business on the- on the- don't forget the delivery side of the business which is the world's- largest delivery company. So I just

think that business is a lot more insulated than- than people fear and I think that we're starting to remove these kind of robo taxi roadkill overhangs. I think there's a lot more room for overstock I know it's up 50% here today date, but this thing trades at like 18, 19 times free cash flow. It should trade at 25 times free cash flow. They're growing their free cash flow 25 to 30%. I think as you get more of these Austins, you're going to see that rerating continue. So despite how much it's risen here today, I'll stick with Uber. It's our number three pick. All right, we'll leave it there. Mark, thanks.

Good weekend to you. We'll see you soon. Now let's get to our panel. JP Morgan's Mira Pandit and CNBC contributor, Neuberger Berman, Shannon Secocia. Great to have you both with us. Mira, you first. You heard Ed Yardeni as we talk about the market,

which has given back a lot of what it had earlier on this trade headline that Megan brought us earlier. He wasn't too concerned. Ed wasn't, are you? Look, we're seeing some of those market jitters come back as soon as you see the first trade headline. And the market environment has felt eerily like the lead up to April 2nd.

Now I would not expect that in this lead up to July 8 or 9 that we're gonna see the same outcome this time again. But we do wanna be a little bit cautious that trade is not in the rear view. It's still in front of us. But I would say, look, the path of least resistance for this market is higher given the fact that fear is not an investment strategy. We know that there will be impacts to tariffs to the economy and profits. And yet right now, the economy and profits are still holding in months after the initial tariff announcements. And

so we do need to keep that in mind that their strength has been there. And when we think about where the risks lie, we need to be balanced because right now there are some downside risks, there are some upside risks and we don't want to miss out on potential upside. Shan, how do you see it given that, you know, the market does look a little bit different

than it did earlier today. And if nothing else, it's just a reminder of what's still out there. Yeah and it seems like we always get these announcements on Friday doesn't it Scott? So I think one of the challenges is that you know what we're really watching for and really the tariff impact that's most notable is going to be that that bleed through to CPI, PPI and CPI and we haven't seen that. But we have seen tariff revenue increasing. I mean, it's up $60 billion over last year in a year to date period.

And so you are going to see either companies digesting some of that or spreading that out or potentially passing that on to consumers. And so over the course of the next couple of months, we're gonna get those CPI numbers. I think most notably though, Scott, everyone's really looking at what's happening with this tax bill because there are aspects of that tax bill that are expected to be stimulative. And so perhaps there's a little bit of look through some of this tariff noise today and

into the next week or so, and perhaps past that tariff deadline as we look to see what the implementation of that tax bill is supposed to be and potentially catalyzing some more of that real deregulation that we were expecting would be coming into play around this time. I see earnings which are pretty soon kicked off with the banks in the next couple of weeks or so. Overall consensus expectations have remained high. We're still at nine percent earnings growth for the year and that feels a little bit high. I would have said a couple of weeks and months ago that that's way too high. We're still at 9% earnings growth for the year and that feels a little bit high. I would have said a couple of weeks and months ago that that's way too high. Now I think we're

probably in the realm of expecting mid single digits for the year. So perhaps expectations need to come down a little bit, but not all that much. And it will be interesting to see the pass through to the consumer, to the point about CPI, how much are companies absorbing this? How much are they looking to pass things on? That's my key question for earnings season. And you see that reflected in a lot of the consumer names right now, but there is some fear around demand. And there is some fear around those upper income spenders

maybe perhaps not being able to post the same results that they had. You've seen some of the weaker consumer spending and retail sales data. So that's the area I'd like to focus on most as we come into this earnings season. Second to that is, is it another year of Mag-7 outperformance when it comes to profits?

Because coming out of last earnings season, you saw some upward revisions there, whereas you saw some downward revisions to the rest of the market. So is that an area that does end up carrying us again? Shanna, what about what Ed was talking about, all else fails, You got the Fed. You still have the Fed put.

And if things go wrong, the Fed's going to come in and cut rates, and that's going to be a positive no matter what anyway. Right. And I think you have a number of different areas of the market that would potentially benefit from that. Now, the challenge always is that if you're looking at the Fed, no, not necessarily, because if you're looking for the Fed to come in and save the day, they're coming in and saving the day because of economic deterioration.

This Fed is loath to act too quickly and so they would only act and they would only act aggressively doing more than probably more than three three cuts if they felt that there was a an issue with the the labor market. So I think that there is a put in place. However, I do think there would be some offsets to the enthusiasm around rate cuts because it would indicate that some of this demand has truly been destructed and that we're seeing that flow through to the labor market. Yeah. But I mean, almost anytime the Fed theoretically

comes in to cut rates, it's because of some reason behind it. They don't say don't fight the Fed for no reason. I mean, in 08, I'm not equating this to then, but 08, 09, they cut rates. Market went up.

COVID, they cut rates. The market went up. COVID, they cut rates, market went up. They're cutting rates now. People think that, why fight it now? Well, I think that the Fed also would acknowledge, Scott, that they might be just a bit too restrictive right now. So we're in a little bit of a different dynamic because the Fed already started to cut rates,

and then they got a bit skittish based on tariffs, and then they pulled back. And so and so again we're at a little bit of a different inflection point. I think again though I think if you're looking at the Fed to catalyze additional gains in the equity market we're probably going to need a little bit more than that based on where we are from a valuation perspective and based on the expectation that growth is going to continue to accelerate. How do you see that, Mira? I mean, is the Fed coming in just an unequivocal positive or is it more nuanced than that?

Two cuts might be bullish. Anything more than that might be bearish because again, if they're seeing some weakness in the labor market that forces them to cut more than they originally anticipated, that's going to signal something negative to the markets, especially because what they've been saying essentially since December is two cuts this year and yet those individual dots of the individual participants have migrated higher. So all of a sudden to do a round turn relative to their expectations might have the markets a little bit nervous. Yeah I wouldn't disagree with that. I wasn't even thinking about more than two. Let's just get to two and see what happens. Mira, thanks. Shannon, thanks. Good weekend

to you both and we'll see you soon. We're just getting started here. Up next, Momentum names helping move the market higher. We talked about the MTUM hitting a record high today. We'll talk about the names within it that are driving the action. We're live at the New York Stock Exchange. You're watching Closing Bell on CNBC. All right, welcome back. Momentum, that factor and those names getting a big boost today. Pippa Stevens is here with more. Pippa, tell us.

That's right, Scott. So Momentum stocks are powering the market higher with the MTUM hitting a new record today. It's now up 17% on the quarter tracking with the MTUM hitting a new record today. It's now up 17% on the quarter tracking for its sixth positive quarter in the last seven. Now, since the April low, Robinhood and Roblox have been the top performers with shares doubling NRG, Vistra and GE, Vrnova rounding out the top five. And those power stocks are in the green again today with President Trump reportedly planning executive orders to boost energy supply to power artificial intelligence, that's according

to Reuters, which said that the orders would include making it easier for power generation to connect to the grid. Now, that is a major bottleneck for the industry with some grid operators having a years-long backup for new projects to enter operation. Now, GE, Renault, and NRG both hitting record highs today and then grid infrastructure names like Schneider Electric, ABB, Hitachi, Siemens and Eaton are also all in the green. Scott? Yeah, one of the big themes of this year.

Pippa, thank you. Pippa Stevens up next. 314's Warren Pies. He breaks out his second half playbook for us. Where he sees stocks heading now from here. He'll tell us next. Welcome back with stocks at record highs. What is the best way to play the markets into the second half? Let's ask 314 Research's Warren Pies. It's good to

see you. What's the first thing that's Warren Pies. It's good to see you. What's the first thing that comes to your mind? I mean, I feel like the market doesn't have a care in the world until it does, but today even with a little bit of a pullback off of a trade headline from the White House doesn't seem to be doing all that much. Yeah, thanks for having me.

I mean, it's easy to say that on a day like this, but you know, we've built quite a wall of worry, I think. So we've been telling our clients to stay bullish. You know, we look out at the second half and I think the first half was really defined by a bunch of events. And you know, one week we're thinking about tariffs and next week we're thinking about going to war with Iran potentially. And it's really, I think, created this wall of worry, all these events. But when we zoom out and look at the market and ask ourselves, where have we come from

the beginning here? We've basically consolidated. When you take all that stuff away for a minute, earnings, forward earnings are at an all-time high, which is unequivocally positive for the market. And what we've had is a sentiment reset. So we came into the year with the 6,800 target on the S&P 500. Our big concern was sentiment.

We thought we needed a 10% correction in the first half to reset sentiment. And we see that now. Strategists have dialed down their targets. And I think we're clear sailing at least as much as you can be in these markets for the second half. Are better earnings than expected?

Is that what at the end of the day will define the second half in the market? And in some respects it has to, correct? Yeah, I mean, I think that's a bet, right? We've brought estimates down a bit. I think there's some concern around tariffs and how those tariffs flow into earnings. And I think it's actually given us, oddly enough, kind of a lower bar

for the S&P to jump over. So yeah, I think earnings should be okay. I mean, our concern, our biggest risk, and we listed all the risks in our H2 outlook for clients is really the economy, which obviously indirectly is going to, you're not going to grow earnings if the economy falls into recession. And so that's where we're focusing most of our attention, but for now I think we're in the same kind of muddled through soft landing environment and I think S&P earnings are gonna surprise the upside. So what does the playbook look like then if we believe what you say and it actually comes to fruition? Where do I get the most out of that? Yeah I mean I think we're gonna

stick with high quality stocks. So one of the things that we've noticed, if you're going to pick nits in the market right now, breadth is kind of weak. So we've got the market at an all time high, the median stock within the market is still like 13% off a 52 week high. We did a bunch of analysis on that. That's odd historically, but what we found is that that's really happened a number of times in this bull market because we have this mega cap led bull market. So if we're going to advance to this like another 10% in the second half or something like that, you've got to get participation outside of just this very narrow mega cap world. Now I don't think, I'm not talking small caps or mid caps, I'm just saying within the S&P 500. So I like high quality still, I think we're going to broaden out a little bit. Still

going to be mega cap led. I do think oil is going to be weak in the second half. That should be a tailwind in the market, but we want to stay away from some cyclical commodity bruising stocks. And I think bonds are going to be okay. I think that the consensus was so concerned about bonds coming into the year, and this is something you and I have talked about over the months. And our view is that rates were going to fall. I think that's a nice mix for assets in general. Don't go crazy getting low on the quality spectrum, though. It's interesting because people are doing just that.

Whether it's you or others who consistently come on the network and say, high quality, stick to the better, the biggest. If you look at the high beta stocks, the high beta ETF for example, and lower quality names, they're doing incredibly well. What's the message or the risk in that? Well a part of that is normal off of a market low. You know beta is like the number one factor when you make, and we put in a pretty significant low. When we look back at this, it was a fast rebound, but we were down almost 20%, basically a bear market. So traditionally, as much as it feels weird, traditionally, this is what you would expect to see high beta lead. I think the

next stage of the bull market kind of by definition has to broaden away from that group though. And so if you ask me how to rotate your portfolio I think some of these underperforming quality names that have been kind of forgotten about in this crazy speculative run that's where we're going to get the most bang for our buck. The best risk adjusted second half return. Because some say it's classic late cycle FOMO moment when you see that performance from lower quality higher beta. Yeah I mean to me I would push back against that a little bit. When we study cycles and factor performance actually low quality leads

off market lows and we had a market low. I think this is part of that wall of worries that you have a pretty big consensus that doesn't recognize the event that we just went through. We went through a real important clearing event where we came in over optimistic. Maybe some of the, I think more of what we saw around the peak in November where we had small caps, people were trying to buy small caps and stuff like that after the election. That looked like toppy behavior to me. And now what we've had is a washout and no one wants to believe what's happening.

But in fact, I think this high beta leadership is a little bit like what you'd see off of a major market low. And so that tells me that we're still as crazy as it sounds like maybe in mid innings for this ongoing bull market. Wow. All right. We'll leave it there. Warren. Thanks. We'll see you soon. Warren Pies coming up next. We track the biggest movers into this Friday. Close Kate Rogers standing by with that

Hi, Kate. I got one group of stock sitting out today's rally and a retailer upgraded after a turnaround this year We'll have more after the break Well, that's the 15 from the bell back to Kate Rogers now for the stocks that she's watching. Tell us what you see Hi again Scott's so crypto stocks have been a laggard in today's rally Coinbase The worst performer on the S&P today after Bitcoin also fell today trading platforms Robin Hood and eToro will also lower Micro strategy though bucking that trend the Bitcoin proxy slightly higher on the day crypto stocks are still largely higher for the month and slightly higher on the day, crypto stocks are still largely higher for the month. And meantime, SA Lauder is moving higher after HSBC upgraded it to buy from hold and increased

its price target to 99 from 80. HSBC, seeing earnings per share doubling by June of 2027, citing cost-cutting efforts, they also cited a weaker dollar as benefiting the company because it exports some of its products from the US. Shares have struggled over the last year though, down around 28 percent, but they are off their recent bottom. HSBC says that rebound seems quote, credible. Scott, back over to you.

Kate, Rogers, thank you very much. Coming up, one firm turning cautious on Uber and Lyft. We'll tell you who and why. Plus don't miss an exclusive interview with Amazon CEO Andy Jassy. That is Monday. It is six o'clock Eastern time. It is all mad money. We are back on the bell right after this.

We're the closing bell market zone CNBC senior markets commentator Mike Santoli is here to break down the crucial moments of the trading day. Plus Gabrielle Fanrouge on the surge in Nike shares today and Kanakord turning cautious on Uber and Lyft. Deirdre Bost is going to bring us those details but Mike so we're following trade headlines. We have the Treasury Secretary coming up and maybe the markets following both of those things because we're still above closing record highs for both the NASDAQ and the S&P 500. We are, just a real intraday shakeout from those headlines

about maybe re-escalation on the China trade story, which I don't know that it changes the overall atmospherics of what's going on with the market making a run at these highs. What it does suggest though, as we've been saying for a while is, we've gone from pricing in worst case scenario 10, 11 weeks ago to now pricing in generally better conditions, which are substantiated by the fundamentals for the most part, but also assuming some

further progress on trade. That's not going to be the thing that starts to reescalate. You don't want to have the sense out there that the market has kind of gotten so far away from the perceived Trump put on trade that it's vulnerable. But right now it looks like it's going to confirm finally this this new high four months after the fact. I'll come right back to you looking at Nike there on the right side of your screen.

Better better than 15 percent. Gabrielle what's happening here? Yeah. Shares of Nike are soaring today after reported better than feared Q4 results. Even though sales were down, investors got the clarity they were looking for from CEO Elliot Hill. On a call with Analyst, he assured investors that the largest financial impact from its turnaround plan is now in the rearview mirror.

He said declines in both profits and sales will now start to moderate. He also shared promising details about new product launches and its move back into wholesalers. Now this is definitely a turning point for Nike but don't call it a comeback just yet. Sales and profits will still be down through the first half of fiscal 2026 and it's unclear when Nike can get back to growth. When asked about it on the call, Hill didn't share a timeline. He said the company is gonna take it 90 days at a time and it believes a full recovery will take time guys All right still a prove it story Gabrielle. Thank you. How about uber and lift D? What is can accord saying today?

Well, they're under pressure today after a downgrade from can accord as you alluded to the firm cut its rating on the stocks Both stocks to hold warning that the rise of rootaxis could rapidly erode their business models. Tesla's software for strategy, they say could drive ride costs below a dollar a mile compared to what Uber and Lyft are getting right now, which is $3 plus. And Scott, here's a twist that brings me back to the mid 2010s. Uber has reportedly in talks with its former CEO, Travis Kalanick, to help him fund a new autonomous vehicle deal. That is the same Kalanick over at Uber 1.0, who said robo taxis were existential to its future.

And of course, it was ousted back in 2017. Deep, thank you, dear, to both on those two stocks today. You know, what's interesting too, Mike, is that this has been both a high quality and in some respects, a low quality move to new highs. What do you make of that? It's fascinating. I mean, there has been this sort of parallel tracks. The market has traveled for a while.

It was also the case in the fourth quarter. One of the issues is high quality in this current market, the way this index is constructed, has tremendous overlap with the hottest technology themes that you'd want to play. So yeah, Nvidia's high quality, it's got 50% profit margins, okay? It has massive free cash flow and therefore it qualifies in that regard, but it's still adjacent to all those stocks that are

just running because they're part of having high leverage to those trades. Also, because of the speed of the comeback off the low, you know, I heard what Warren Paatt was saying, well you do generally have this sort of pendulum effect of the stuff that was lowest quality, beaten down, the most leverage, does snap back the most. So I think that you can go along that way for a little while.

It hasn't really penalized an investor to stay with high quality for a while. A lot of times in an exuberant market, it feels like you can fall behind if you are owning just quality, but it's not the same as defensive. It's not the same as low volatility necessarily either. So all of these distinctions are out there.

And it's fascinating, we're gonna close at the high, right? So we're above 61.70, we're less than a percent from where we were at the peak in February. Since then, earnings are higher, oil, dollar, and yields are lower, and you're closer to a Fed rate cut than you were then, whenever we eventually get one. So all of that bundled together suggests that the market has, you know, a decent base on it in terms of why we're here. The question from here on out is, are second quarter earnings estimates too low at 5% annual growth. Probably. And will the

market reward that obviously everything else in the mix in terms of trade re escalation or deals or whatever we're going to have I think could create an excuse for the market to cool off and back off because we are getting overbought again. Yeah.

A week away from the 4th of July holiday obviously whether they get the tax bill to the finish line before again. Yeah, a week away from the 4th of July holiday, obviously, whether they get the tax bill to the finish line before that. There is a lot of questions about that. The seasonal factors, July in general has been positive, especially for the NASDAQ. But we also just had an unusually strong April and May. So who knows if that's been pulled forward

or if you can count on that. Didn't we just have like the last 10 July's have been positive? Yeah, they've been up. Jeff DeGrap was pointing to that. Although mid-July last year was a bit of a peak, so keep an eye on it. Alright, new closing highs for the SNC 500 and the NASDAQ. That kind of record-setting day here. And that's how the bell takes you into the weekend.

The Treasury Secretary coming up in overtime.