Closing Bell - Closing Bell: 6/30/26

Episode Date: June 30, 2026

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

All right, guys, thanks so much. Welcome to closing bell. I'm Scott Wopter, live from Post 9 here at the New York Stock Exchange, and this make-a-break hour begins with this great quarter for stocks. The best in some six years, but one that ends with some serious questions about the months ahead and what the second half will hold. We will ask our experts what they think will lead and lag in just a moment. We'll show you the scorecard here, though, with 60 to go in regulation. We are, as you see, green across the board, and we are led by technology again, the best green. followed by industrials today. We'll get right to our talk of the tape, what this second half will hold for your money, and let's go right to our panel. Trivariates, Adam, Capital's Courtney Garcia, Invesco's Brian Levitt, Adam and Courtney, are CNBC contributors.

We're all here post-9. It's good to see everybody. Courtney, I'll go to you first. It's an interesting quarter that we've had. It certainly didn't end how it began. Well, maybe it actually did now that technology is leading the way today, but it's been an interesting month. People talk about the broadening,

wondering whether tech still has the leadership role as we make the turn, as they say? What do you think? Yeah, I think the broadening has been really significant. I think it's one of the best things we've seen in the markets here and indicative that it can continue moving forward. It had been that if the MAG 7 weren't doing well, the rest of the markets aren't doing well, and you're not seeing that any longer. When you look at this quarter, you're saying things like health care, things like financials, things like real estate. Those are all doing really well this quarter. And I think that's what you want to see is people starting to broaden this out. And I think when you're looking at the amount of CAPX of these seven AI companies are spending, people are really just starting to question at what point is that profitable? And especially if it becomes more efficient in the future. And so I like to see that people are adding money to other areas right now. Best quarter for the Dow since 22 up 12 and a half percent. S&P up 14. Best since 20 quarter. Nasdaq up almost 20. Russell, best quarter since 20. Best first half since 1991. We're going to get more on that all coming up. But How do you feel about the market as we finish off this quarter?

We make the turn. Well, you know, earnings are growing fast. The level of growth is really strong. So even if you have exogenous events or you have the price of earnings, multiple contracting some, the growth is right now strong enough to offset that. So, you know, we're expecting pretty strong growth in the second half this year and double-digit growth again next year. And the market doesn't usually worry about 2028 when it's still the first half of 26.

Pretty amazing. If I had told you, hey, we're going to have, you know, we're going to start off this year, and then we're going to have this war, and Iran's going to control the strait, and oil's going to go up. Oh, but by the time we get to June, and even though there's no real resolution to the war yet, we'll still be at a record high on the Dow, and we'll have all these milestones that we just pointed to. You probably would have said, I doubt that's realistic. Well, to Adam's point, the earnings growth has been so strong that the markets have, you know, been able to look past it. But if you think about, Scott, the leadership in markets, you started the year,

felt like a nice global expansion, moving into an easing cycle. That did shift a bit following the beginning of the war in Iran and ultimately what became the peak in oil prices in early April. You did get more of a move back towards, you know, higher quality mega cap names. What you've seen really since oil prices peaked, inflation expectations. peaked as you've seen a continuation of what had started earlier in the year. Yeah, yeah, the market's been willing to look past it. I would say because earnings growth is strong and inflation expectations are coming down. I do think we do make this turn with many questions. We're going to bob and weave a lot in this A block today. I want to bring in McKenzie Segalos because as we look at the Mag 7,

we did lose about $2.3 trillion in market cap in June alone. That tells a pretty big story as well about how this quarter is going to come to an end and be viewed. Yeah, you're looking at the NASDAQ and MAG7 stocks heading in opposite direction, Scott, as Q2 comes to a close. The NASDAQ on pace for its strongest quarter since 2020. Well, the MAG7, you set it in a race $2.3 trillion in June alone, the largest monthly market cap loss ever for the group. As investors scrutinized the cost of the AI build out specifically those names that are buying the chips rather than supplying them. Now, Goldman says hyperscaler Cappex is up 84% from a year ago. It now amounts to 98% of cash flow from operations, meaning that

almost every dollar coming in is getting recycled back into chips, memory, and power. And it's not just infrastructure. Hyperscalers are also writing massive checks to the frontier labs, Google committing up to $43 billion to Anthropic, Amazon as much as $50 billion into Open AI, but it is unclear when they get paid back, especially with OpenAI no longer expected to IPO this year. Alphabet set the tone early. in the month with an equity sale ahead of the SpaceX IPO. Now the fear is that others may raise equity on top of debt to fund the buildout, putting dilution risk back in the conversation, and buybacks, usually there to help support share prices are shrinking as cash gets redirected into AI infrastructure.

Alphabet, for example, skipped buybacks in its most recent quarter for the first time in nearly a decade. Scott? Mack, thank you very much for that. Look, so that's McKenzie Segalis. every Mag 7 name negative for the last month over the last 30 days. Does that portend what's to come? Or was that just a blip? And today's a reminder that this trade's still good as we end or what? Yeah, there's no way I could prove that one down month for the group has any subsequent return information.

I mean, you know, Micron probably gained a trillion of the cap. Or 750B from the lows in March. What stock was 350 bucks. And, you know, so some of it's just their spending transferring to the memory space. I wouldn't worry about it too much. If I think what hurts a lot of long-in-way institutional investors the most from here, it's probably if the MAG-7 starts outperforming again. Because most people are underweight either because they have 525 rules

or they have internal risk management or they need the broadening. So I worry a little bit that people were a little bit too negative on this group. Would you underweight the group for the second half? I would not. I would not. You know, I don't think that their gross profit dollar growth will be worse than the market excluding them. I think it'll be faster. And so, sure, you know, you can get fits and starts where they do well.

But I think you want to be kind of market weight this and then find your offense elsewhere. It's just too big of the market cap to let it kill you. When I analyze people portfolios, there always have a big active weight. You're underway to Apple or Tesla. And it's just, to me, that's just hard for you to really be right on consistently if you think about how quickly the narratives have shifted. Right. I mean, 18 months ago, it was like meta's awesome and Google stinks. And then nine months later, it's like metal stinks and meta stinks and Google is awesome.

And it's just so hard when you have that much capital to switch that around and get it right. So I'd keep the thing closer to market weight and then take offense other places in the market. How about you? Yeah, I don't think that we're at an end of the Mag 7 trade, but I don't know if it's going to outperform the way that it has in the past. And I think that's what you're seeing here is it's not the spenders of AI who are making the money. It's now kind of the picks and shovels you want to buy. It's the infrastructure. it's the energy, it's the commodities.

Like, those are the things that are actually doing really well this year. And I think it will continue. So it's not the end of Mag 7, but I think these other things are going to continue to do well. And I've actually seen a lot of the opposite where people are still really overweighted in the Mag 7. And I think, if anything, I don't want to get out of that, but this is just such a good reminder of why you want to be in some of these other companies. Like, think of, for example, a caterpillar. That was not an AI company. Now it's an AI company, and that's like one of your big beneficiaries.

So I think that's what you want to think, or one of your kind of old economy stocks that are benefiting from AI. Yeah, absolutely. I mean, I can remember sitting here in 2024 and everybody was worried that only seven stocks were driving the market. So, you know, the question back then was, well, what happens when those seven stocks peter out? Is that the end of this market cycle or can something else take the reins?

And so what we have seen is other parts of the market step up. I agree that we're, you know, it's cliche to say it. But have we considered enough who the beneficiaries are downstream on? on AI in your certain sectors like financials, health care that can be bigger beneficiaries are starting to see better performance. I think a real question is undoubtedly going to be what the chips do in the second half. I mean, that's certainly going to dictate a lot of what the momentum trade does. Christina Parts of Nebulos is taking a look at that for his best first half and quarter ever. I mean, that says it all. Mike drop. Yeah, mic drop. I'm done. Back to you. No, but it's actually

been a historic six months, six months for chipmakers. So specifically the SMH and ETF, we often follow up 83% so far this year, 65% of that gain coming just in the second quarter alone. That's the best to your point, first half and best quarter since the fund launch back in 2000. And leading the charge, you guys talked about it, Micron, up, but over 300% year-to-date. Marvell, Intel, Arm, all up over 225% year-to-date. And the run, of course, hasn't been without bums. For example, just last week, the SMHFL 7%. It's worst stretch since April of last year.

Analysts, though, are largely, you know, blaming that up to the quarter-end positioning rather than a change in fundamentals or change in story. And the ETF has actually stayed above its 20-day moving average throughout that entire term. The fundamentals, though, are backing this up and are mostly about memory, as Adam just said. A demand for high bandwidth memory and AI chips just keeps climbing. And some analysts don't see oversupply until the end of the decade. Broadcom also locked in a multi-year deal with Google for custom AI chips through 2031. that's also seen as a sign of strength. And then InVity, which was used as a source of funding, much with the mega cap that Mack just talked about, up about 2% today, primarily driven by a semi-analysis, a research saying that they're projecting data center revenue tracking 20% above consensus for the second half of fiscal 2027.

Now that earlier memory issues are resolved according to their research, not bad for, I guess, a sector as a whole that spent the first quarter dodging trade war fears and, sport control, Scott. Christina, thank you for that. That's Christina Parts of Nevelas. So what about this? I mean, can this, I don't think the pace can continue. Right. Did we pull a lot forward to deliver the best first half and quarter ever for chips or not?

Of course, of course. But that doesn't mean things are over. I mean, sometimes the numbers we throw out. It's like, you know, the Mag 7 or 36 or 7% of the SB 500, they're never been bigger. So, of course, when they go down a few percent, it's the number. most they've ever gone down ever, but that's just a math problem. I don't think it indicates anything. So this has been extraordinary. Like when you look at the, you throw up almost any chart, right? Micron, Sandus, Marvell. It's mostly, yeah, it's mostly been the memory and Intel,

less as you showed, you know, Invidia and Broadcom. But I think that the issue is compute probably grows a few percent above GDP at higher margin for the next five years. It'll be cyclical. The memory part will be the most sick of goals. So we spent a lot of time with portfolio managers on the institutional side thinking, are you even over or underweight AI revenue? What part of the AI revenue are you over or underweight? You know, I think the difference on the, on the, you know, retail side is a lot of people did participate in the Mag 7 and they are overweight.

I'm really talking about more the institutional investors long when you get some P, against the S&P, that don't have to wait. Look, you know, our call. The North Star has been, you know, owning semis over software for three years. I still like semis, but of course they're discounting, let's say the fundamentals or seventh inning, sorry, third inning and their seventh inning or something like that. They're clearly discounting more

and in advance of the fundamentals. What happens if the chip trade sputters, software is unreliable as an investment. I think people have obviously questioned that trade. The Mag 7 takes a bit of a backseat. Is there enough fuel everywhere else to still have this market perform really well in the second half?

If all of those things happen that I laid out, I do think so. I mean, I think this year has been a good example where you do have a lot of leaders of the pack that aren't just your like major names that have been leading. And I think what I see when I look at this is demand is not the problem. Like clearly what you're seeing every time these earnings come out, especially with these companies, AI demand is not the issue. The issue is the profitability. And especially if you see that computing becomes cheaper down the line, it becomes more efficient. That's great. We'll expand it into a larger market. But it's going to make it less profitable. And I think that's why people are questioning. It's the CAPX. It's the problem. It's not the AI. demand. I think that really reiterates that story and why the rest of the economy can continue to benefit from that story. How key are the chips in the months ahead for the market overall? The bar is very high. So I think that this year, you know, to your point, this year has been, we came into your people talking about a bubble. Well, it wasn't a bubble. There was a substantial amount of demand. The market had to catch up to where that demand was going to be. And you, you know, now the market's more focused on supply challenges than demand bar has risen to Adams.

point. I mean, if it's seventh inning, it's going to be harder. The reality is these markets are going to trade on whether things are better or worse relative to expectations. And so when we talk about software that had gotten beaten up, or you talk about cyclical parts of the market that were concerned about higher energy prices and couldn't participate, things are likely to get better in certain parts of the market. So I think that this market will continue to move higher. You know, when you look at things like financials, breaking out, small caps breaking out. That's all very good. But his question was, unless I'm assured you, was if semis and software are not great and the mag seven are not great, then the equity market work, I'm a no on that. Just to be clear.

Well, that was the initial question. Yeah, yeah, yeah, yeah. You're saying, what can it work? Yeah, but I'm saying, if you're saying all that stuff's not good, I'm saying, oh, the market's bad. How can the market be good if semis and the mag seven are bad? It can't. But my point was to say, so you, so you've had semis that. I know what you're saying. Yeah, the bar's been risen so the bar has increased so significantly in places like software and places like hyperscalers expectations have gotten have gotten weak so if things can start to get a little bit better there particularly on the software side to the extent that you know they're going to harness AI not have their businesses their business modes completely disrupted i just don't think there's

enough believability in that that you have a few weeks tied together where it looks great yeah and then it just reverses back because people don't believe the durability of of that trade that that's was exactly what my question was leading to that yeah if you lose semis right you don't have software mag seven looks like it's going to take a back seat maybe it doesn't maybe today whatever with tech is a reminder that we're still alive and well but don't you think the market would have a bit of a tough road if you lost that those those things are all the awesome things are bad will the rest of the non awesome things be good no but there's a belief that there's a lot of other things that look awesome it might be more of as awesome but it might be more of as awesome

a market cap question versus a, you know, an equal weight question, right? And if you, our view has been, you will see equal weight outperformance. You'll see a broadening of the market. It's hard to be negative. No, it's happening. Financials and small caps breaking out. Well, on the small cap note, I'm glad you bring it up. Best half in 35 years.

35 years. It's beating everything year to date. Seymomodi has more for that. More on that for us. Hi. Hey, Scott, we've been digging into this one. The outperformance of small caps certainly highlights this pivot. away from large-cap tech as investors search for lower valuation names. Take a look at this month.

Russell 2000 up nearly 4% compared that to the S&P 500's 1% decline. So a notable divergence, yes. And the Russell 2000 up about 21% this year. Top-performing names really span sectors. There's biotech, MBX, biosiances, names like new old brands. Plus the semis, yes, get this, chip-related names account for 16 of the Russell 2000's best-performing stocks amid this broad or AI build out. So AI is still a part of the small cap outperformance. Macrofactors also at play. The dollar is being cited multiple times by strategists we spoke to. It's the resilience that we've seen in the dollar the last few weeks and how that gives companies that have direct exposure to the U.S. economy just more purchasing power, Scott.

Seema, thank you. So, Cor, when are we going to give small caps to respect that they deserve? When they're up 40% in the next few months? I mean, they're up 20%. I mean, they're up, 22% is the rustle. And yet people, I feel like they're just not wrapping their arms around that trade. I think historically that's the case. Like nobody's ever as excited about small caps. Even though historically they actually do tend to do very well, if not outperform. But I think especially in this kind of environment where you're seeing forward earnings

of actually been rising on your small and your midcaps, that puts you in a really good environment. But especially with where rates are, if you're seeing inflation expectations come down and inherently rates coming down, your small caps tend to borrow at a lot more shorter term and floating term rates, which is why if that story comes down, that's specifically beneficial for your small cap. So yes, you absolutely want to have that in there. And I think that as part of your question earlier, is like, if those major things aren't doing well, what else is? I think this is an area that can perform in this environment kind of regardless. Yeah, it was our preferred asset class coming into the area.

It was our preferred part of the equity market. And it was largely because leading indicators were moving higher and the Federal Reserve was going to cut. So it got disrupted for a bit. But it actually, I mean, you look back to your point earlier, if I had told you that we would have a war in Iran and we were going to take out multiple rate cuts and the dollar was going to strengthen meaningfully, is that, you know, 20, 25 percent up on small cap. But again, to the point, there's AI within that trade. I think you're going into an even better backdrop for small cap, given lower energy costs, what that means for the domestic economy and what that has already meant for interest rates. I get a feeling you're not a believer in that. Oh, if I decided like small caps, you'll know the trade's over for sure. My upgrade will, if I ever do it, will signal the top. No, I mean, I think you're, I hear great call. I mean, that's a great call you made. I mean, I honestly, you know, I think the issue is if the Fed was supposed to be, you know, kind of cutting twice and they didn't, then the fundamental backdrop isn't as good.

And the stocks drop a lot. So people are discounting a lot of earnings growth and margin expansion. And it's possible, you know, when I look at the devils and the details, you know, small cap growth, median stocks got 6% short interest. There's a lot of crap companies in there. So, you know, I would pay somebody to do stock selection in there. I think you can generate alpha in the space. But, you know, back to your math problem, if the S&P is whatever, it is 16, 17 times as big as small cap,

it's not how you can sell Nvidia and pro rata, you know, invidia is way bigger than the Russell 2000. So it's not like a pro rata trade. It's more, can I add a little juice and a little alpha on top of it? Well, evidently, you know, but I'm not putting my mind. there. Yeah. Yeah. Well, the last question is, well, first of all, regional banks done pretty well, is this big part of what the Russell is. Financials in general have woken up. New note today, Leslie Cooker joins us now with a look at the first half for that group and what the second half might hold. Hi, Les. Hey, Scott. Yeah, bank stocks did really well in the first half of the year,

up about 11 percent year today, the KBWB. Those performance and, And valuations are causing some to say it may be time to sell a bit. Oppenheimer now broadly bearish on the big banks with a new note out today downgrading four of them. The firm took B of A and Citigroup down to perform from outperform and then said Goldman Sachs and Morgan Stanley were now rated underperform. Analysts there made no changes to its perform rating for J.P. Morgan. Oppenheimer's justification for the move is mostly valuation. that, quote, with Goldman at three times tangible book value in Morgan Stanley at 4.3 times, we think the risk of missing a lot of upsides in the next 18 to 24 months is relatively low.

And with BAC and Citigroup, the valuations are reasonable but not compelling. Oppenheimer also says that it doesn't see anything that would knock the commercial banks off their growth trajectory or break the investment banking cycle in the next four to six quarters. but analysts there say that, quote, trading is a bit more of a mystery and that, quote, our instinct is that trading activities currently probably pose a greater risk than traditional lending. Oppenheimer is recommending that investors redeploy the funds generated by selling big banks into alternative asset managers, specifically Ares, Blackstone, and KKR, Scott. Oh, Leslie Picker. Thank you very much for that. Back to Adam Parker. Reason not to like the group. capital markets crushing it capital return just got to go ahead to do more of that and they are lending up econ good regs down now's the time to downgrade banks like they did yeah i i well i mean changes in

analyst ratings have no subsequent predictive values no but the group looks like it's like just literally waking up i think the more controversial part of the call is to go into the alts right i think people have been dying to try to find the bottom for KKR and Blackstone in areas in Nepal for a while. The stocks have massively lagged. There are other kind of high quality named counter parts. And these stocks are have massively underperformed JP Goldman and Mortgage Stanley over the last, you know, 12, 18 months. So people want that. I think people are still a little concerned that the private credit market isn't, you know, fully healed and fully marked.

And when you see real companies, real like Morgan Stanley, Blackstone, and BlackRock, put Gates, on a private credit product, that makes people worried a little bit. So I don't think we were like all through that. And so I think it's too early to own the alt. But look, they've massively underperformed and maybe a lot of that's in the price. And if you have a two, three of horizon, you probably will get paid based on the fee structure and the growth rate. But I would prefer to own Morgan Stanley than the regionals or all the alts at this point in the cycle. Cora, what do you think about the group? Yeah, I think the other area, which Leslie noted here, which I think is important, is the MNA space right now. I mean, that has really heated up. And especially we would

talking a lot about that in the health care sector. So I think some of your companies, so think of like a Goldman Sachs who is much more of their revenue from like murders and acquisitions. I think that's the kind of company that it will likely continue to benefit here and you want to make sure you have a piece in your company. Could have a record year in MNA. And Goldman, if it did something this quarter, you know, aside from leading the biggest IPO we've ever seen, stock got above $1,000 and it sits there now, even though it's, you know, a little bit in the red today. Last year. Yeah, I'm with you. The backdrop continues to remain good for those names. To me, this feels like we're breaking out on financials, not rolling over.

All right. Good stuff. Look back. Look ahead. That'd be forced. Let's see what happened. Yeah. You guys too. It's good having everybody here. We're just getting started on the closing bill. Coming up next, a big setup for Nike ahead of its earnings in overtime. Brandon Gomez tracking that action for us. We're live at the New York Stock Exchange. We're watching Closing Bell on CNBC. We are back shares of Nike having a rough first half down 35% company preparing to report its results. In overtime tonight, Brandon Gomez joins us now with more on what to expect. Heading into the print, we'll be asking the questions and we'll want the results to answer the question is the worst behind it.

That's the question. Have we reached a bottom? But look, the stock has been one of the biggest disappointments in retail, wrapping up its worst quarter in four years and hovering near its lowest level since 2014. Now, Wall Street is expecting the sneaker giant to post Q4 earnings of just 13 cents a share on $10.85 billion in revenue down from a year ago. Now, that would be the eighth straight quarter of profit declines. The bigger focus, though, Scott, is on the turnaround efforts under CEO Elliott Hill since returning to lead the company almost two years ago. He's been working to revive growth after years of slowing sales, inventory issues and increasing competition, trying to shift sales back on wholesale after years aggressively pushing into direct-to-consumer. So what do investors need to hear today? Well, first, signs that sales trends are stabilizing,

particularly in North America and any slowdown in the bleeding in China and the EU. Second, updates on product innovation and whether new launches are resonating with consumers. And then third, perhaps more importantly, any guidance that suggests the turnaround is starting to gain traction. We expect tariff refund numbers too, but investors are looking beyond that one-time profit pump. Expectations already near rock bottom here. Nike needs a strong quarter and clear roadmap for how management plans to get the company back on track to move the stock hire stock. Just not a big belief on Wall Street that they can do that anytime soon. I mean, you follow the stock, you follow the company, you see what the analyst moves have been of late,

not finding any upgrades. I mean, they're few and far between if there even haven't been any, you know? And these are lowered expectations, right? So even if this was to be a beat of a quarter, it's on that lowered expectation going into it. I mean, I heard Josh Brown on your show this afternoon talking about how he thinks this could be a bottom and there may be some upside, but that's not what we're necessarily hearing on a broader street, Scott. Yeah, well, because it's now, it's just a full-on show-me story and maybe we'll get some of the show tonight. We'll see you.

We'll see you when the numbers come out. Brandon, thanks. Brandon Gomez coming up. The Dow on pace for a record closed and the quarter, Mina Flynn of Goldman Sachs standing by with her take on the state of the markets. What's ahead for the second half of this? We're back after this. Welcome back to Dow headed for another record closed.

today while the S&P 500 tracks for its best quarter in some six years. Joining us now, post nine is Goldman Sachs as Mina Flynn. It's great to have you back. Thanks, Scott. 8,000 by the end of the year on the S&P, so we have some juice to squeeze still out of this market. We do anticipate that the equity market is going to continue to trade up into the end of the year, and that continues to be driven by strong earnings. And so we anticipate that earnings are going to grow double digits next year, but actually

more than 20 percent this year. And so we're not expecting any multiple expansion, so it's earnings driven, but I would say that's going to come with more equity volatility. Why? Why so? There's actually more technicals in the market that are playing out right now, and it's important that we connect with our clients and help them understand the difference between fundamentals and technical. Because if it's driven by technical volatility, you can either stay put or take advantage of it. Why are the technicals actually driving markets right now? There's a few factors. One I would say that retail trading is now making up 30% of exchange volumes. You also have margin debt at all time highs.

The compounding factor here is you have sector levered ETFs. And so what this is doing is really levering the upside and the downside and amplifying the moves in single stocks. And so when you look at single stock volatility, relative to index volatility at an absolute high. And so we're really working with planning. and take advantage of that single stock volunteer. What gets us to 8,000?

And if you think that the S&P is going to do that, is the implication that tech is going to lead us there because they're the biggest stocks within the S&P. And if you think we're going to 8,000, you almost can't get there without that. So we continue to be constructive on technology. And so clearly we've got second quarter earnings coming up. But the hypers, we are constructive on my hyperscalers,

especially those that are vertically integrated. And so what we think you're going to continue to see, like we saw in their first quarter, is that the revenues continue to trend higher, gross margins continue to be stronger, but also their backlog is relatively substantial. And the more color that they can give on this backlog, you know, the better investors will be able to take it. And I think the more that we realize that the current revenue is being generated by CAPX that was spent one or two years ago and that we're going to see the revenues that from CAPX now, two to three years from now, You know, is one of the reasons we continue to be constructed, and, of course, because that falls through with the rest of the AI infrastructure names.

Are you, I mean, the market's obviously still constructive on the group. It just feels like it's trying to feel out as to whether other areas are going to be the outperformers in the second half. I mean, how would you address that? I do think that actually, everything should perform well, because I do think that these revenues will inflict higher. I do think that you're going to continue to get that cap-exp spending, and hence the AI-I. infrastructure names, but you are seeing a broadening out at the market. And so one of the ways that we actually see that also in terms of the confidence that people have in their companies is actually in buybacks. And so buybacks, we have one of the largest buyback desks in the business. And we're anticipating over a trillion dollars this year. Two years ago, we would have had 10 companies with

active plans at any given moment. Right now we have 50 to 60. So you have volumes that are going up, but you also have the breadth of the companies increasing. And to your point, that's one of the things that is driving the broader uptake in markets. So far, there's been absolutely no issue absorbing all of the supply that's coming on the market through issuance and IPOs and all that stuff. Is that going to remain that the story is we still expect these behemoth IPOs to come to market, whether it's in calendar 26 or early in 27? Sure.

So we're anticipating there's probably going to be about $700 billion of supply this year through 100 IPOs. That 100 IPO number is actually in line with the 25-year historical average. Yes, that number is the highest on an absolute level, but if you put that as a relative percentage of the market cap, it's 1% of the Russell 3,000. That's below the historical averages. Then like I said, you have this offsetting factor of buybacks, and then you also have M&A volumes. M&A volumes are at 40%. You could have a record year. I mean, John Waldron of your firm was here with me not that long ago and said, I mean, you could sense the excitement about capital markets and M&A. Said it could be a record year. Absolutely. And also how that M&A is happening, one,

its very large deals. Also, 70% is getting done in cash. And so that further takes supply out of the market. I think it's also interesting, your portfolio breakdown for the clients that you have, which are obviously high net worth people. 70-30 split. 70 in risk, 30% in lower-risk assets. Why that breakdown? How do you feel about that as you talk to clients about what they should be doing? Yeah, so that's like very much a long-term strategic target that we have.

And it's really meant to be a diversification in terms of really being able to stay put in terms of market volatility and actually use some of that 30% to gain more exposure when you do get that volatility. What we've actually done over the last year, a couple of years, is we actually increased our exposure to alternatives. So on the margin, our clients have actually increased the amount of risk assets over the last several years, more to public equities, and more to alternative investments. Okay. So if it was one 60, 40 traditional split, now it's, you know, maybe 10% going towards all, or whatever it does to skew to get you up to 70 and only 30. We're actually 30% to alternatives, roughly. 30. Yeah, and about 40% to public equities.

Why is the third one's portfolio then in alts? Why so? Because if you look at the absolute size of these portfolios, they can take the illiquidity and they're significant alpha to be generated in alternative investments. As you know, companies are staying private longer. So the amount of value creation in private markets is significant. Also, the number of public companies that you have the opportunity, private companies that you have the opportunity to invest in is much larger than in public markets.

And so there's just a tremendous amount of value creation that transpires there. And our clients can take the illiquidity premium. And you do have what you look at as new structural themes in that whole environment. Talk about sports investing all the time now on our network. We have a whole vertical dedicated to sports as an asset class. It plays right into that story. So we have seen sports actually move. from being a trophy asset to being a financial investment.

And our clients are investing both in fund form as well as direct owners, whether that's controlling or as minorities, minority owners. And the reason why is because if you actually look at the correlation of sports, it's relative to the S&P, it's like a point two. They have contracted cash flows through their media rights. And so the revenue stability and visibility is relatively significant, and it also serves as a nice hedge against inflation. one-way valuations, it seems, too.

Revenue valuations are definitely higher, but I would also say productivity. Productivity measures are also more robust than they've been in the past because there's also more ways to monetize this and better ways to be able to manage expenses. Good to have you back. And to see you again. Mina Flynn with Goldman Sachs. Coming up next, we track the biggest movers into the close. Christina Parts in Ovalos joins us with that. Hi.

Hi. Well, we have a biotech stock surgeon right now on a strong trial data. And then a solar name climbing on a potential import. I'll have those movers and more after this short break. 10 to the bell. Back to Christina now for the stocks that she is watching. What's on your list? Well, let's start with shares of AI data storage firm Everpure, which was formerly known as Pure Storage. Because these shares poppin over 8% on a Reuters report that activist investor Jana Partners has taken a new stake in the firm. Jana reportedly began building the stake back in Q1, but it's still unknown how many shares Jenna actually holds.

Nonetheless, it's still pushing shares much higher. Switching gears, U.S. traded shares of French biotech company Abivax, also soaring today on positive results of its ulcerative colitis treatment. Jeffrey's analyst called the update, quote, supportive, but said they actually questioned whether this would be enough for investors. Nonetheless, you can see shares are up almost 40%. And shares of Solar Edge moving higher, and Reuters report the administration is working on a ban against imports of foreign inverters. The effort to restrict purchases from China companies would be actually a, big boom for domestic producers. So you're seeing several names, including solar edge trend and higher 6%.

Scott. All right. Christina, thanks so much. Up next, closing out a winning quarter, Mike Santoli, standing by to give you his take. Plus, Brandon Gomez back with another notable earnings report on deck. We'll take you in the market zone next. Market zone time, Mike Santoli and Truis Keith Lerner here to break down these crucial moments of the trading day. Oliver Renick is standing by live in Chicago, Cibo Global Markets, and Brandon Gomez with what to watch for,

from Constellation Brands, according its results in overtime. Mike Santoli, you first. What do you make of today's action as we wrap up this great quarter for stocks? Yeah, I was going to say not anything really to complain about if people held tight in terms of the quarter and also just the half year. And what strikes me is that you really couldn't go too wrong in terms of whether you emphasize just the kind of the winners of the long AI bull market or if you decided to go a little balanced because both of those strategies managed to do fine. What strikes me as well is how little

we talk about the underlying economic trajectory, the macro, every little wiggle in treasury yields, or anything like that because it has just been so much about, you know, AI earnings forecast going up, everything's supportive in that direction. Yeah, sure, financial conditions are accommodated for the most part after a little bit of a tightening recently. I do wonder if looking into the second half, we might get a little more complicated on the macro front, whether it's because the Fed's got to push against some things or not. But right now, you have to say, you know, the bull market has absolutely retained the benefit of the doubt, even if the S&P sideways now for about seven weeks. Sets up well for you guys in overtime. I mean, you're going to, we'll finish with a record

close on the Dow right into you guys. What do you have coming up? No, for sure. And as a matter of fact, we have Vino-Krishna from Barclays. He actually just raised his year-end S&P 500 target as well. as his earnings forecast. So we're going to get into that and just maybe handicapped how much more of this move there might be left. All right. We'll see in about five minutes or so look forward to that. Mike, thank you to Oliver the Sibo. What do you see there? U.S. stocks just keep winning Scott. But for those in the market for a loser, maybe look for FXI or K-Web, the Chinese equities that are in bear markets. What's interesting is we see some serious bullish bets on those underdogs today, in particular in the K-Web ETF, which is trading almost three times,

its average 30-day options volume. Of the 515,000 contracts traded, 500,000 were calls, and more than twice as many calls were bought, then sold. 36 million dollars in premium traded and almost all of it's in calls. That is a hugely bullish skew that is very rare to see, in particular for a group with close to zero price action momentum. K-Web fell almost 50% from its high, but did bounce on Friday after China's PMI data flipped back to positive. 17 of the top 20 trades today were calls with the most popular trade by volume and dollar amount, the 29 strike call expiring mid-December, which needs a 23% rally from here to break even, Scott. All right, Oliver, thank you. That's Oliver Renick at the CBO. All right, Brandon, gave us Nike earlier,

now Constellation. That's right. It's a busy afternoon. Wall Street expecting the Medello and Corona Maker to report first quarter revenue of $2.38 billion in earnings, roughly $3.20 a share. but investors are looking beyond the headline. Last quarter, Consolation's beer business returned to growth after a prolonged slowdown, helped by improving demand from Hispanic consumers and continued market share gains from Medello. But investors will be watching to see if that momentum continues through the spring and how the World Cup may impact forward-looking guidance. Margins also in focus as higher costs in aluminum tariffs have pressure profitability. Outlook will be critical here too. Consolation is betting on premium beer

streamlining its struggling wine and spirits business. and targeting more than 200 million in annual cost savings by 2028, Scott. We'll see how the road map's laid out. Got your hands full and overtime. We'll see you then. Brandon, thanks so much for that today. Brandon Gomez, Keith Lerner, how we look, second half of the year after this record close, we're going to get on the Dow again.

Yeah, listen, I think Mike said it earlier. It's been our mantra for some time. I think the bowl still deserves the benefit of the Dowd. I think this month we spoke at the first day of the month, Scott. We talked about tech taking a breather. And as Mike mentioned earlier, we've been trading sideways for six weeks, but we have this kind of rotation, which I think is healthy that money's not leaving the market, it's staying in. And, you know, we're seeing small cats, industrials, technology, mid-cats making new highs. And I will say behind all that, the most important factor in our work is that earning trends for all those different indices are making fresh highs.

And now we're getting a peak into the 2027 earning estimates, and those are moving higher as well. So, listen, there'll be some hiccups along the way to stop, but I still think you've got to stick with the primary. trend, that primary trend in our work is still higher. Starting to hear more people talk about in everything, Rally, too. Like, forget the conversations of tech versus it's, well, tech's going to continue to do well, and then earnings expectations are going to only improve for the other parts of the market. And that sets itself up, sets itself up well for a lot of things to do well, especially if you get a real resolution to what's happening in the Middle East and you can focus solely on earnings.

Yeah, I think in some ways, if you look at the first half, it's already been in everything rally when you have small caps and emerging markets up over 20%. The S&P up 8 or 9% international developed 8%. So, yeah, I mean, and by the way, the Middle East situation, I don't think that's, I think even if we get a full resolution, the market's already looked past that. We always get something that is unexpected. Like no one had really Iran in the U.S. on their bingo card coming into the year. So I guess we'll have to deal with something that we're not talking about today,

but I think the main thing is company's ability to adapt, earning trends moving up. And at this time where tech has taken a reset, I think it's somewhat encouraging that he'd like to say the Mag 7, which is down this year. You're seeing those federal valuations

now below the March low. So I think this back and forth makes sense and we continue to believe a ballast of keeping a core position in the tech trade along with small caps makes a lot of sense here. It is amazing that you can have the best quarter for stocks in six years as we've had a war for the entire time.

As we said earlier, the Strait of Hormuz effectively closed. The price of oil spike, albeit now reversing, and a Fed question that seems to have taken a more dramatically and more dramatic and different turn than people had coming into the beginning of the year, and yet here we are. Why? Because you said it. Earnings, earnings and earnings. It's an earnings-driven move, not a multiple expansion move like we've had seemingly for the last handful of years. Yeah, that's right.

Sometimes as a strategist, I'm almost glad I don't have the headlines ahead of time because I think if you look at this more dichotomies, even more recently with interest rates moving up, that's normally kind of small caps are really not performed, but small cap is up over 50% this year. So, all in all, like I said, try to keep it somewhat simple. Follow the earnings, valuables are losingable.

And these kept, so again, give the bit more, the better, to the Dow into the second half. Good stuff, T. Thank you. That's two. Learner of tourists. Bell's ringing, and it's ringing in another record closed

for the Dow on this final steady day of the quarter. Endo the day.