Closing Bell - Closing Bell 7/10/26

Episode Date: July 10, 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.

Guys, thanks so much. Welcome to closing bill. I'm Scott Wobner live from Post 9 right here at the New York Stock Exchange. This maker breakout begins with the markets on edge of earnings. Anticipations building. Expectations are rising. Will they deliver and keep this full run going? That's the big question. And we'll ask Wharton Professor Jeremy Siegel coming up. In the meantime, the scorecard with 60 to go in regulation looks like that. Dow's pacing for its worst week since March. Tech's made a turnaround. The NASDAQ is green today. Text's the strongest sector of the week. That's notable because it's been volatile, as all of you know. Meta's a very big winner today as it makes that move into the cloud up 6% the best S&P performer. Korea's SK Hinex debuting on the NASDAQ as well. We'll have a report coming up on where the memory trade is heading from here. It takes us to our talk of the tape. Busy weeks ahead as earning season gets ready to kick off. Let's welcome in the Wharton School professor of finance, Jeremy Siegel. Welcome back. Good afternoon, Scott.

I love speaking to you on Fridays because we have a chance to have you taken all the events of the week and then put it into your market view and give us a great idea of where you think things are going. Last Friday you said I've never seen such volatility between sectors, growth stocks, value stocks, sharp pullbacks, sharp reversals. I mean, we've had some of those again. Yeah, we've had some of those again. but I'm feeling more favorable. I'll tell you, you talked about earnings. When the CEO Delta came on and said that, you know,

we're giving you the same earnings for this year that we did on January 1st, despite higher fuel prices of 30 to 40 percent, taking $2 billion out of our cash flow, I just said that, and said, wow. I mean, these earnings that are coming in and are not just the hyperscalers and not just tech. I mean, we're getting good results. We're getting good results everywhere.

The number of warnings, for instance, is very much lower. Usually, you know, a week or two below. If someone's going to come out below estimates, they give warnings. We've had a very low number of those. It looks very good. And don't forget, we're reporting on that second quarter when oil hit a high. 110 and 120. And by the way, I am still wondrous of the fact that despite conflict, you know, Hormuz basically still closed, you know, oil is in the low 70s.

So, you know, we are just going through all these challenges in such a way that all the average is right below that high. boy, if we push through, we have another 5, 10% leg up, I think, coming in the next few weeks. I feel like we were reminded, if nothing else this week, that the geopolitical situation is far from over, right? You had, you know, another flare-up of tensions and words and everything else as we wait for, you know, wherever this alleged deal is going to come to pass. and the market just isn't too obsessed with it. And that's part of your point, I think, is that oil has behaved maybe surprisingly well in the face of no definitive agreement yet.

Yeah. Yeah, the famous MOU, I think is MOM memorandum of misunderstanding. But nonetheless, now one of the reasons perhaps that crude is stay down is all the damage. and the previous hour, Brand Sullivan talked about it, the damage to the refining capacity. Listen, you know, we don't buy oil, we buy the refined products.

Especially Russia, which I heard 60, 70% has been taken out of the refinery. They are now importing the product. Well, if you can't refine it, you're not going to demand it. So some of the reason I think that oil is down is the lack of that refining capacity. capacity. But nonetheless, you know, the truth of the matter is, our nation has never run less on oil than it does now. I mean, the fracking revolution has put natural gas, which is, by the way, five to ten percent cheaper than it was at the start of the Iran war as the most important source of energy in this country. And so as a result, I mean, yeah, I know gasoline is up and diesel.

us up and all that. But in terms of everything else that's going on, we are not going to be suffering an energy recession. Who do you think has more to prove, Professor, this earning season? The tech trade, because it's expected to grow 60 plus percent, or all of these other areas of the market that are trying to draw capital to continue to show that this is a very capable market of broadening? Yeah. Well, you know, certainly we all know expectations are very, very high in the sense of you don't beat, you know, you're going to go down on that day. Now, when you go away from tech, you don't have, if you beat, you're going to, you're going to go up. And that's certainly one of the comfort.

And what we also are all waiting to see is beginning to happen is when are the non-tech companies going to take all the gains that they can make through the increase in. technology to the AI revolution and turn that into increased profits and lower prices for the consumer. I mean, that is yet to be exploited, the greatest exploitation. I mean, the hyper-scalers, they're already in the middle or late stage of building out what capacity we need. But the actual users of the AI, I think, are really just at the beginning stage. And that could, you know, keep me optimistic. And by the way, we didn't talk about the fact that Kevin Warsh's choices, I was blown away by the quality of the people that he's gotten for his task forces that have been reported at the end of the year, very, very, the top people. So, I mean, the Fed, I think is going to be on the right track.

And I see a lot of positive developments. So you said, you know, you could get maybe another, I don't know, 8 to 10 percent out of this market. is it going to be everything that gets us there or this earning season, are we going to be reminded once again why tech is the biggest game in town? And I do wonder whether we're back in that trade and trying to get in front of earnings season rather than reacting to it. Yeah, yeah. And as I say, I mean, you know, we need to break through. All the averages are near.

Now, if they turn down, that's psychologically a negative for traders and people who follow the technical aspects of the market. But, you know, given the way I just see it, it looks like a spring that seems to me ready to poke out and that the earnings are across the board going to drive another leg up in the market. Now, you know, what happens after that? We're going to have to see Middle East and all the rest. We do know that reserves have been brought down. Our own petroleum reserve has brought down. But you know what? The world has found other ways of getting oil and getting energy.

As I say, you know, the natural gas revolution as well as hydro, wind, solar, all that which is slowly moving forward have taken the bite away from what oil, which used to send our economies, we know. know, in the 80s and 90s and some of the worst recessions we have, now we can, you know, say, yeah, yeah, a tiny dent we're going to get through. Amazing. Yeah. And you're not worried at all that earnings expectations have just grown too optimistic? No, no, I'm not. I mean, certainly, I mean, I'm not going to say for the Meg 7 and some of the tech. I did talk about frothing some of the chips. And, you know, we were talking about,

are these ultimately still going to be commodities in the same? sense that these margins are not going to hold up. I mean, you know, the surge in earnings of the technology is unprecedented. And in some of those sectors, I do not think that some of those margins are going to hold. But the demand, and that's the whole thing, you know, you know, SK Hinex says, hey, this ain't a cyclical industry anymore. AI and agents and all that. This is a different industry, listen, we've got to listen to it. The AI Revolution is something that is a new industrial revolution that we have not experienced for perhaps centuries. Yeah, well, you've set us up well to move to our next segment. I'm going to leave it there. Professor, enjoy the

weekend. I hope this Friday condition, tradition continues. Thanks so much. That's Professor Jeremy Siegel. We'd love that, Scott. Thank you. All right, S.K. Hynix is trading up at the NASDAQ today. Nice open for that name as well. Christina Parts of Nevelos joins us. with Moore. I had a big interview earlier today, and that really is the critical question that the professor poses and what the Bulls are suggesting that this is different this time. It is not such a cyclical business anymore. This is a secular trend built on a revolution called AI. Yeah, he used the word AI revolution, and it seems like a lot of people are going with that narrative. But in regards to the NASDAQ debut, it was priced at $149. And to your point, Scott,

It's now trading, what, at 169? That's at least 17% higher than where South Korean shares close today. Keep in mind for every U.S. share, you need 10 of them to make one South Korean share. But this is the purest play on high bandwidth memory, the memory that feeds AI chips, and it's also the main supplier to Nvidia, a huge bull reason for why you should own this stock, according to analysts. Mycon shares, yes, they're lower, but barely, barely, let's say just almost flat. And before anybody assumes that money is rotating out of just one memory name into another,

you got to look at the entire demand picture. And then also, that goes to your point, Scott. Digitimes reports high bandwidth memory prices could more than double in 2027. Why is that? Well, InVDIA's Next Generation, Rubin platform needs more of this memory than suppliers can actually make. We've heard this narrative. And that supply does not exist or is the one that does exist, it's already spoken for. Long-term contracts are locking up global DRAM capacity years in advance.

So that is the squeeze. SK Group Chairman Che told me this morning he's doubling capacity within five years and his customers are telling him, man, that's still not enough. Yes, he used the word man. Wall Street is positioned for it. Jeffries in a note today says hedge funds remain very long memory and are very bullish on memory in the next few months. There is one thing to watch. Volatility in the share price. at least half a dozen leverage products tied to SK.K. Heinex launch next week.

They deliver twice the daily move, sometimes more, and some bet against the stock. These products have to rebalance every single day, and that could amplify swings in both directions every single day. But the big picture Scott really holds is big tech is set to spend roughly $1.5 trillion on AI infrastructure this year alone, or next year, too, I should say, 2027. Bank of America estimates roughly 35 to 40 percent of that trillion dollars goes to memory. The CEOs, the chairmans, the bulls of AI, we hear on our network all the time, argue there is plenty of demand to go around. As if we needed more volatility in this space, but I guess we should buckle up. Christina, thanks so much.

Thank you. We're reporting today. That's Christina Parts and Nevelas. To our panel now, Solis's Dan Greenhouse, Schwabs, Kevin Gordon. Both are here at Post 9. Let's have you, you know, take a look at this market, the way it's traded this week. We've had an interesting reversal in tech. People keep trying to write it off and it just comes right back.

What do you think? Well, we've seen a bit of a rotation. I think software is off the lows. Obviously, semi's off the highs a bit. We're going to start getting earnings in short order. And so we're going to start to see what I think we've already seen, the differentiation and the performance of application software against cybersecurity, et cetera, et cetera. I imagine in earnings, you'll probably see something that at least supports tangentially

that bifurcation. Obviously, we've got to get through the banks first. But I would also note that the market's been flat for two months or so. This is my favorite stat of the day. The market's been flat for two months. Obviously, that speaks to the Mag 7 having a bit of a pause here. Two-thirds of the index is up over the last two months, over the time that the overall index is flat. And of those names, of those two-thirds that are up, the median stocks up almost 10%. So under the headline, there's a lot of positivity going on here, even if the, the hesitancy in the mag seven price performance is holding back that headline index. That speaks to the broadening that we had seen.

I mean, there's a reason why, now granted, not this week, obviously, that the equal weight S&P 500, for example, had been hitting record highs at the expense of some of these other areas. That's been one of the best stories to tell for all those who were suggesting, oh, the market's too concentrated and too top heavy. Well, you got what you were asking for, so don't complain about it now. Yeah, and you know, what's interesting, too, is this broadening trade is not confined to the large cap space anymore. You know, few people that I come into interaction with know that Russell 2000, not just on a year-to-date or over a trailing one-year basis, but over a trailing two-year basis is outperform at the S&P 500. So it has expanded, you know, down the cap spectrum, which is nice to see. Some of it, I think, still, you know, a hangover effect from the rate cuts that the Fed initiated, you know, started a couple of years ago.

But also the profit story has improved for small caps. you're starting to see at least a fundamental broadening, not just a price broadening, you know, across the market. So I do think, yes, generally it's a good sign. At the same time, though, you know, as we get into earnings season, as you start to think about the outlook for the second half of the year, you may not have as great of a cap-weighted return in an index sense if you do see, you know, these hyperscalers and the memory names pull back a little bit, or at least not contribute as much.

So I think that's an important distinction to make because it could give the illusion that the market is not doing well, but the broader market, you know, under the surface could also be doing well, which we've been in that environment before. It just, you know, it doesn't feel as great from a cap-weighted index perspective. I can't remember a time in recent memory where earnings expectations have been so high. What does that mean going into an earnings season for a market to be able to prove itself and live up to that so-called hype? It's as, it's not, I would argue, it's not as important that earnings expectations are so high and you have to live up to them so much as what does the market do into the earnings season?

And as we just both mentioned, the broad market is at a headline level, not up that much. The rest of the market is doing quite well, as I just detailed. So there's some element of some portion of the index has not rallied super hard into this earning season. That should give you some cover. That said, we've had, let's call it just six or so consecutive quarters of double-digit earnings growth. It's going to be 20-something percent this quarter. even if you X out technology, you're going to get 10% growth. Even if you X out tech and comm services, you're still looking pretty healthy.

I think, obviously, for the more exuberant higher multiple stocks, you've certainly got at least meet expectations. But as we've seen recently with a couple of names, meeting and guiding fine is insufficient for some of them. Is that a cautionary tale for what may unfold over the next few weeks? Maybe. But we've had such a good run in the stock market. If we have to give some of it back over a short period of here,

partly because rates are backing up, partly because the Fed is now hawkish, supposed to, quote-unquote, all of a sudden, then maybe we'll give some of it back. But what I always fall back on is, what are the underlying fundamentals? And the underlying fundamentals are, in many cases, fine, in many cases better than fine. You have some warnings. Pepsi comments about North America, not great. One or two other companies, General Mills, not great. But these are also companies that are in structural decline, so I would rely on them a little bit less.

but on balance, the backdrop is still fine. So if you pull back a little bit, I would say, so what? How about that? When the earnings bar is so especially high, even with, like, let's just take tech, for example, 60 plus percent earnings growth expected. Then there's whisper numbers on top of things, too. Well, also, I think it's worth pointing out just the unique nature of the earnings cycle that we're in right now and the fact that when you consider where we're at in the business cycle,

the fact that we've been in expansion for a number of years, it is completely unique to be at this point in time where you see earnings estimates, but also trailing earnings, growing where they're at right now, this far into a cycle. Typically, you see that kind of strength coming out of a recession, coming out of a bare market. So the fact that you're still posting those kinds of results, but we are this far in a bull market, this far into an expansion, that does raise the bar a lot. That does kind of, I think, you know, probably trip up some companies if they can't, you know, meet, if they can't raise guidance. But at the same time, yeah, I think that if the broader fundamental story is still there, you do go through these periods over the past few years, it happens.

every year now where the investor community sort of puts a break check on a lot of these hyperscalers and a lot of the mega caps, if they're upping their cap-x estimates a lot, you go through a corrective phase, that washes out and then it takes some time to recover. Not to say that it's going to be that perfect scenario this quarter, but that has become a little bit more of the norm because it's not really earning season anymore. It's now more cap-x season. I don't think you're saying this, but I will remind viewers that what you just said about, it's unusual to have earnings growth this deep into it. We could have said a year ago and We did say a year ago.

We did take this far into a cycle. Yeah. We are, to echo Jeremy Siegel's points, originally, although he's obviously not the only one, saying this, we are in a unique moment here. Yeah. Where the economy is being boosted, not only by AI investment, where earnings are being boosted, not only by AI investment. And that's compensating for some weakness elsewhere. And that's how you get 20-something percent earnings growth for the broad market multiple years into an expansion. It is undeniably unusual.

And that's why I always say when we talk about what's more important, AI or something. the Fed or something, that AI story is driving by my math, 53, 55% of the market right now. Yeah. All right. Good weekend, you both. Thank you. Thank you. It's Dan and Kevin.

SpaceX falling below its IPO price. That's another very big story today. Seema Modi is following that for us. Hi. Been digging to the number, Scott, and SpaceX has now lost about a trillion dollars in market caps since hitting an all-time high back in June. SpaceX shares, as you said, as you pointed out, Scott, below its opening price of $150 a share, now trading at 148, just as it hits the one-time.

month mark as a public company comes just one day after a SpaceX released its newest AI model, GROC 4.5, which the company says is designed to tackle, quote, difficult and long-running tasks. It does follow the release of OpenAI's latest AI model, which CEO Sam Altman told CBC is 54% more token efficient, a sign that speed and reasoning are important for users, but so is cost. And yes, investors now counting down to SpaceX's first earnings release expected in August, despite SpaceX's recent underperformance worth knowing the analysts who initiated coverage this week on the stock, largely bullish on this name. All right.

Seema, thanks. Sima Modi. We're just getting started here. Coming up next, the stars are out in Lake Tahoe for one of the summer's biggest golf events. The American Century Championship underway. An American Century Investment's CEO, Jonathan Thomas. He joins us live next. One of the marquee golf events of the summer, the American Century Championship, which draws

big-name celebrities and athletes to Lake Tahoe. The primary beneficiary of the event is the Stowers Institute, which works to uncover the causes, treatments, and prevention of diseases. Jonathan Thomas, the chairman, CEO, and president of American Century Investment. He joins us now. I'm sorry we couldn't be there with you this year because it's just about as gorgeous as anywhere out there, man. Consider yourself invited for next year. We miss Dom for sure, but love to have you too, Scott.

That's what I was fishing for. so thank you very much for that. Tell me about the event this year. I mentioned obviously the primary beneficiary, and I know that's near and dear to you, but this is an incredibly fun event, as we've seen in the past. I'm still thinking about Steph Curry's hole in one, et cetera,

and I'm sure he's back there this year, right? Oh, he's here, and he's looking really strong. I'm going to definitely expect him on top of the leaderboard. About the cause. It's fun. You're going to give a lab coat to the winner. No green jacket. This is going to be a white lab coat, but it does have significance in all seriousness. Tell me more. Yeah, thank you. Yeah, so you know, American Century Investments.

We operate three brands, really, American Century, Avantus, and Income America. But no matter which brand you're using with us and what you're invested in, over 40% of our dividends each and every year go to fund medical research at the Star Wars Institute for Medical Research to find curate. for cancer and other gene-based diseases. And we've been using this platform now for 20 years to kind of tell that story of what I call prosper with purpose, where if you're investing with us, not only we're going to help you achieve your financial objectives, you're going to have a positive impact from a health

perspective on humankind. And to kind of solidify that this year is something we're new we're doing is we're giving away the Stowers white lab coat to the winner. So it'll be trophy, check, then lab coat. and then if everything goes according to plan, the winner will jump in the lake with their lab coat on as they've been doing since 2020 when Marty Fish won at last. Okay, we'll be on the lookout, certainly for that.

Can we talk some markets while we're at it? I'd love to do that with you and just get your view on how you see things. It's been an incredibly resilient market to say the least in the face of geopolitical challenges and so much else. And yet here we are. We're not that far from record highs at all. certainly on the broader market, and the Dow's been, you know, hitting that 53,000 level and closing above it in the last couple weeks, too.

Yeah, and it's funny. Everybody, it's always nervous to be investing when the market's at its high. But I was just looking the other day. We've had 24 highs so far this year. We had 57 last year, 57 the year before, zero in 23, zero and 22, but 70 in 2021. So it tends to be more of an indicator of a bull market. than it is an indicator of any sort of imminent decline. And resiliency is absolutely the right word, Scott.

You know, we're throwing everything we can at this market, you know, geopolitical issues, you know, new Fed chair who when he originally came in, everybody's thought he was going to be really hawkish. Then he kind of suggests that he's going to take a slight different approach to inflation, kind of adjusting for the shock factors that come from those geopolitical issues and whatnot. And my take is originally we might have slightly overread him as overly hawkish compared to what he's going to be. And the only thing that seems to be not really giving great indicators is the labor market. That was a little mixed last time.

But expectation for the next numbers coming out are actually pretty good. So I think, you know, we're in a pretty good spot. And from American Century's perspective, we're still focused on being fully invested right now under a kind of steady as she goes approach to the market. market. What does that look like in terms of what your clients are most interested in these days when they're trying to build those portfolios? Yeah, your previous guest was talking about it, and it's a really profound issue. We haven't seen this for years. There's a genuine broadening out of the market. We all been talking about the magnificent seven for many, a couple of years now, and they've been driving a lot. Certainly AI, the hyperscalers, are driving massive investments. But 50%, as of a couple

days ago when I was looking at 50% of the stocks in the S&P 500 are up at least 10%. So you've got a really broad base moving. And the money just continues to drive, right? The flows into the market from both active and passive investors are driving them very high. And then also, I mean, unlike some periods in time where the market highs have been established by multiple expansions, this has really been genuinely supported by the corporate earnings environment. Yeah, no doubt. It's expected to be robust again as we're going to start finding out next week. I'll let you go have some fun.

Have a great weekend. Continue to support the great cause, and we'll see you soon. I consider yourself the first person invited to 2027 American Central Championship. All right, well, Dom's going to fight me for that too, so we'll see. Good to see you. See soon. Yeah, likewise. All right.

We'll talk soon. Jonathan, thanks. Coming up next, Meta and Apple, leading tech's latest charge. Where does 314's Warren Pyes see this rally heading from here? We'll ask them next. As our country celebrates its 250th anniversary, CNBC spotlights the leaders driving business and the nation forward. I would summarize 250 years of America in one word as possibility.

I'm Sandhya Pajula, Chief Financial Officer of Intuit Inc. I grew up in India. I moved to the United States the week after I turned 12. My parents brought myself and my younger sister here because they believe America offered a broader set of possibilities for a better future for us. As I reflect on my own life, it is that sacrifice that they made and the platform that is the United States that enabled endless possibilities where your work ethic and your ability to underwrite your capabilities leads to you being able to pursue whatever ambition you have. The company was founded in 1983 at the kitchen table that today sits in the cafeteria at headquarters. It's there where founder Scott Cook saw his brilliant wife struggle to manage the checkbook. From day one, it was never about software.

It was always about delivering confidence. We serve 100 million customers across our products including turbotax, credit karma, quickbooks, and milchum. When I think about the U.S. economy, it is driven by small businesses and builders. It's folks who are at the forefront solving problems, employing people and making the communities better. And into it, we have a front-roast seed to enabling these builders. When I think about when my parents brought me here from India at the age of 12, they didn't come here for a set of guarantees. But the infinite level of possibilities that were available in America. Meta is leading the S&P today.

Apple hitting a new closing high just recently. Two of the stories of this week where tech resumed its upper hand. for more on where that trade's heading. Let's welcome in Warren Pyes. He's the co-founder of 314 research. Good to have you back. Nice to be here. You want to take meta first? I mean, this is a pretty sizable bounce. Yeah, I mean, to me, when I zoom out and try and make sense of what's happening in this market, it's really about seasonality. So this is kind of something we talked about going into our H-2 outlooks that July is a seasonally positive month. Everybody knows that. So we expect this market to make new highs this month. But under the surface,

the momentum factor struggles every July since COVID. And leading into this July, the momentum factor, which is synonymous with semis, has had a crazy three-month run. So our prediction was that we were going to see a rotation, a strong rotation in July, where some of the laggards, and specifically the Mag 7 were going to start getting a bid, and semis would have to cool off. And that's exactly what we're seeing. Meta's had some misinterpretation from the market. I mean, they had the news that they were going to begin selling excess compute capacity. And I think there was a, the market is so nervous about the AI theme. The immediate reaction was to sell meta on that or to worry about the overall AI theme.

And instead, Meta then got a bid. And that's just reflective of the fact that compute is still scarce and demand is off the charts from everything we measure. So I like what we're seeing. I think it continues through July for, for meta. What's with this seasonal weakness for the semis that led you to believe that the momentum factor was going to struggle this month again? I think it's about new dollars coming in and some rebalancing flows that also happen to rotate out. And this market is so, it's so much about pair trades. That's kind of how pod shops and hedge funds and many of the people who trade this market

positions that they want to be long something and short something. We see it in our data. So the beginning of this year, we've seen non-tech connection to semis at a record high. So, and this is especially true of non-tech stocks with a very deeply negative correlation to semis was at the highest we've ever seen it. And I think that's about we want to be long semis, we're going to be long AI and we're going to be short something else. And a lot of times they want to be short these big, liquid mag seven type stocks. So we go into July, new money comes in, and a lot of these trades get squared. And that's what we expected. That's what we're seeing play out. And I think narratives want to come in and fill that space, but it's really about flows.

Oh, there's a lot of narratives, that's for sure. I mean, flows are coming back to MegaCAP this week. Is that sustainable now? What do you think? I do think so. I think it's going to last for, you know, at least for this month and into the earning season. I think one of the themes we've seen is that, you know, there's just so much skepticism around the, around CapEx from hyperscalers from Mag 7. And when we track rental rates, when we track GP availability, so what we see is just crazy demand. think they're going to print massive cloud revenues, cloud earnings based off this AI business. And so it's going to start ratifying that CAPX. And that's part of the story we need in order to have this bull market go. You have the AI story, advancement in models, and then you get

compute demand, and that pulls forward memory stocks and semis and all the hardware. Well, then you have doubters about the underlying CAPX. And so when we have earnings season, you're going to start seeing these numbers come through. And management's going to tell everybody, hey, we're making crazy returns on these data centers right now. And so it's going to, you know, cure some of that skepticism. And that push and pull of, like, cooling off semis and bidding up these Mag 7, that's going to bring us to new highs, I think, this summer. Oh, and you think you must feel pretty optimistic heading into earnings season. Yeah, absolutely.

I mean, that is the story of this market. So we held our year-in target for the S&P 500 constant, 7850. That's where we've been since last December. I think the underlying fundamental story, the AI story has improved, and earnings are going to obviously blow the doors off. I think we're going to have 25% earnings growth this year. But with that said, I do think you're increasingly seeing some of the margin expansion and earnings that we're seeing coming from these cyclical names. And I want to discount that appropriately and be reasonable in our valuations, even though you can go back and check the tape. You and I were talking in 2024.

And I said, I'm not worried about valuation on this market. I thought we'd hit 7,000 by 2026, and we still wouldn't be overvalued. But you do have to be reasonable about how you put, what multiple you put on the stream of earnings. So we're not going crazy. And then you'll also have to worry about the Fed. I mean, we've gone from three cuts to one hike in the span of this Iran war. And so that does change the way you discount earnings, the backdrop. So overall, it nets out.

earnings are the most positive thing going for the market, but some of the macro has deteriorated. And so I hold my target constant. Wow. So if I took the Fed out of it, you'd be more optimistic in terms of S&P upside beyond 7850. I mean, you really think that they're going to the hike, but I suppose what you're saying even more so is they're just not going to cut like we thought. Yeah, so we're in a true hold environment. I don't expect the hike from the Fed. I think if we start hiking, then my theory or my mantra to clients has been, look, as long as the Fed's cutting and we don't see a recession coming, in our indicators, you can't be underweight equities. We've been saying this for years now. And if the Fed were to start hiking rates, then obviously we're out of that regime. And we have to take that serious. You have to start considering that big market tops do come when the Fed's tightening.

Now, with that said, I think that the voting block, the primary voting block on the FOMC, Warsh Williams, Powell, they're going to be, they're going to hold rates steady. That's what their view is. You've seen other voting members like Cash Carrey come out and say the same thing. So I don't see a path without the labor market really reheating in a meaningful way, which I don't expect for the feds to hike rates this year. But like you said, we're not getting cuts anymore and we have to respect that and then discount that in our fair value. Favorite thing in the market right now outside of tech is what? Health care. Health care. I think that we went from, look, the story on AI, and there's going to be ebbs and flows in this, the story on AI has been.

supply bottlenecks. That's been the story. And everyone wants to own the supply bottlenecks. I think what's happening is we're going to start talking about demand bottlenecks. Because what you want, this is a transformative technology, but many folks don't know how to use it. Some industries are better suited to use it than others. And I think the best area for disruption where we're going to see a lot of focus is in the healthcare space. And I like the chart there. We're starting to make new highs. I think it's the right corollary play with this AI. theme. So yeah, it's tech plus healthcare plus energy

as a hedge in my book. All right, good stuff, Warren. Be good. See you soon. Thank you. Appreciate it. Warren Pyes. Coming up next, the biggest movers as we head into the close, Christina Ports and Navilosz is standing by with that. Hi there. Hi. A biotech name. Wall Street wants to short. A British phone giant drawing in a French billionaire

and a budget airline caught in a private equity bidding war. Your stock movers. Next. Tend to the bell back to Christina. Now for the stock she's watching. Tell us. And Marjorna shares, because they're dropping right now, as J.B. Morgan, named it a top, short idea. While the firm predicts success with its MRNA-based treatment for melanoma, it says that with the stock's impressive rally, thus far, success is already just priced in.

Moderna is having its worst day since May, so not too bad, but down about over 10%. U.S. listed shares of Britain's biggest mobile operator, Vodafone, popping. After a French billionaire Xavier Niel agreed to buy a roughly $6 billion stake in the company, making him the company's largest shareholder. Aniel founded the French mobile provider, Iliad, and co-owns Le Monde newspaper. And EasyJet shares surging as it weighs a $7.7 billion takeover bid from Apollo, putting the budget airline at the center of a private equity bidding war. On Monday, EasyJet said it agreed, quote,

in principle to a $7.3 billion offer from Castle Lake. The budget airline cleared for takeover. All right. Nicely done. Christina thanks. It's Friday. Christina parts of us. Netflix tumbling today.

We're detailing that drop in much more in the market zone, which is next. Time for the closing bell market zone. Mike Santoli and Ned Davis researchers. Ed Klessold here to break down these crucial moments of the trading day. Oliver Renick standing by live at the Sebo Global Markets in Chicago today. And McKeel looking at the huge move today and shares in circle. Michael, begin with you. Give me your thoughts, please.

Yeah, I mean, just on a one-day basis, clearly it's this low-volume levitation, the kind of thing that makes. very difficult to fight an upward trend on a Friday in July when the macro is quiet, which is what we have right here. You know, Monday, it's basically two months since we started digesting and going sideways in the S&P 500. Over that period of time, I've been flagging some of the potential kind of dangerous rhythms out there, right?

It was like if there's going to be a stampede out of semis, are they going to trample other sectors? Is it going to cause some kind of a volatility spike? But it hasn't happened. So you have to give credit to we got. through this, at least to this point, the easy way. And maybe the bears missed a little bit of a window. I don't think we've taken care of some things like high equity exposures and the possibility that we're kind of setting the groundwork for some kind of a dislocation down the row with very

low correlations and all the rest. But right now you have to respect the market's action going into earning season, yields remaining tame, oil still tethered. So you've got to get a reach for something to look at to worry about with valuations. having actually come in a little bit. How do you take it on in about five minutes? Well, of course, we're going to talk a bit about S.K. Heinex, as we have to, and actually have an investment manager who told us a couple of months ago that the AI trade was moving to Asia.

That's where to look for the food chain plays. We're going to get an update on that view. Oh, good, nice and timely. Appreciate that. Good weekend to you. Mike, thanks. Have a great show. Oliver, it's Cibo.

What do you see there? Speaking of earnings, looking ahead to next week, Scott. Netflix is in a tough spot with a stock down 20 percent. this year and hovering near $70, a key level that served as a pivot point for sell-offs and rallies, including where the stock was when it ended its pursuit of Warner Brothers discovery. Options traders think the report will continue Netflix's history of big swings after earnings, averaging about 7.5% over the past year. More than twice as many calls traded versus puts today, with about three times as many calls bought versus puts, and three-quarters of the

dollar amount traded in calls. The most popular contract that captures next week's report is the 80-strike call expiring Friday. But be warned, plenty of traders are holding on to 70 strike puts with later expiry so it's likely to be a battle, Scott. All right, good stuff, Oliver. Thank you. Tenaa, tell us more about this circle move. Yeah, the highs in the rear view now, Scott, but share is still ending with a gain here after the company said it received approval from the OCC to operate as a national trust bank. So this lets us. Circle directly managed the reserves backing its USDC stablecoin versus having to rely on outside custodians. It's also a requirement, Scott, of the Genius Act, that's the Stablecoin law that

passed last year, for giant stablecoin issuers like Circle to obtain an OCC charter. Now, since that law passed, banks and traditional financial firms, of course, have been maneuvering into the stable coin space, many hoping to issue their own digital dollars and capture payment flows instead of relying on outside parties like Circle and its USDC. Just today, for example, Global Payments, Stryant Swift, announced a consortium with 17 major banks entering the stable coin race together. So institutional custody fees as potentially added revenue for Circle could be a plus. But of course, there is still a big competitive challenge for the company. And that may be why we are so far from the highest.

Scott. All right, good stuff today. I appreciate that very much. Thank you. That's tonight, McKeel. Ed, you sound a little bit cautious in your notes here. Only maintaining a modest overweight to stocks versus bonds and cash. Why?

Well, I think we've had a huge run, and over the last couple of months, we've consolidated that. Going into the next few months, we've only surprised that consolidation continues maybe a little bit of a bigger pullback. But I do want to say that this is within the context of an ongoing bull market. In terms of what some of those catalysts could be, you know, the expectations coming to this earnings season are as high as they've ever been. You can look at earnings and visions of the last three months on a market cap weighted basis. They've never been higher. We have a Fed who is trying to guide towards a rate type as well. So the macro is getting a little bit trickier here.

Again, I don't want to oversell the bearish point of view, but some more consolidation can be expected. Yeah, but you suggest that overbought conditions in some mega cap tech stocks exist. That sounds like so a few months ago, not now. Well, if you look at said last, at a three-month basis, the tech sector is still two standard deviations overbought. So we started that process of reversion an over-bought condition. I don't think we're quite through all of that. Now, what is a positive is that the rest of the markets held up pretty well. 75% of sub-industries are in uptrends.

That's not the kind of thing that happens at a bull market peak. It's the kind of action that really is more aligned. the consolidation and maybe additional pullback rather than a bull market peak. The other point of contention, I suppose I would have, is that you're expecting the Warsh-led Fed to actually hike rates? Well, yeah, we're thinking one hike that that could be a signal to the market, that they're serious about fighting inflation, but probably not enough to break the back of the economy for the labor market, which is okay, solid, but softening some.

And that kind of buys worse some time until all of these working groups have a chance to come back with their findings. And look, when you get these kind of one-and-done rate heights, the market does tend to have a modest pullback. But if it's just one or two, a year later, the market tends to be higher. Yes, and he's up on average over 11%. So again, we'll see. We'll take that into the weekend. I'll see on the other side.