Closing Bell - Closing Bell 7/21/25

Episode Date: July 21, 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.

Thank you, Kelly. Welcome to Closing Bell. I'm Mike Santoli in for Scott Wapner. This Make or Break hour begins with Wall Street's key benchmark playing for its 10th record close of 2025, taking advantage of a calm day on the policy front, supportive earnings results and tactical momentum. Here is a look at your scorecard with 60 minutes to go in regulation. There is the S&P 500 up close to the half a percent.

It's been around there most of the day. It is tacking for its first ever close above the 6,300 mark. It is joined by the NASDAQ at all time heights as well with the Dow Industrial. Still about a percent off its late 2024 peak that was just above 45,000. Semi's and consumer cyclicals are outperforming today. That affirms a pretty reassuring signal

about the underlying macro setup. The cyclicals in particular continuing to lead over defensive parts of this market, which takes us to our talk of the tape. Is the market's comforting message a trustworthy one? Or might elevated valuations, less friendly late summer seasonal patterns, and some still unsettled policy debates spoil the mood.

Here to get into all that is Dan Greenhouse of Solace Alternative Asset Management. Dan, good to see you. Thank you for having me. Thanks for coming by. Listen, there's always something to worry about. We can always make a list of the concerns. We talk about that all the time.

But really the market's an aggregate, whether you look at credit spreads, you look at volatility levels, you look at the all time highs on a weekly closing basis, the breadth of the market even. The market's kind of telling you to relax. I think the question always is, is it safe to do so? Are we missing anything that could spoil this?

I mean you touched on it right at the outset there, that you and I and you and any number of guests have constantly talked about All the various things that we've been told to worry about over the last 1 3 5 even 10 or 15 years if you're as old as we are and each time the market has defied those odds It's not just the Fed. It's not just earnings. It's not just geopolitics There's a little bit of everything that has helped drive markets to the all-time highs at which we currently find ourselves I would say as someone who's been relatively optimistic

on assets for some time and certainly since the bottom, the market rally is not quite as broad. Excuse me. I checked my investment account earlier. I'm choking. We're at all-time highs. It's not quite as broad as I think I would like. I look, the market's at an all-time high.

Only about 50 stocks in the index are at all-time highs Previous instances you'd like to see double or even more than that But year-to-date the S&P is up whatever seven and change percent Roughly half the index is up more than that half the index less which is perfectly normal in any given year, right? And I think I mean granting that you know the longer term your outlook and the broader your aperture You know the more comforting it is to say listen. Don't worry stay the course And granting that, you know, the longer term your outlook and the broader your aperture, you know, the more comforting it is to say, listen, don't worry, stay the course. But I do think along the way, you want to go back 15 years, we talk about lots of 20%

sell-offs, we can talk about lots of genuine macro scares. So I think to me, the question is, look, three months ago, it was possible to say we've priced in something like peak uncertainty on the policy front. We've had this panic, this liquidation type move, all you need are things to be less bad and we're fine. Now above 22 times earnings we can slice and dice the valuation all you want. It's hard to get around the idea that it's not a full valuation and with everybody seemingly taking the bright side of the tariff question I just wonder if it's about sure sure, we may continue to get positive developments,

but the market now is sort of positioned for them. Well, listen, I'm with you on the tariff side of the argument. There's a lot of optimism about tariffs, and somewhat deservedly so. The macro data hasn't really reflected it, and so there's, you look at the import number the other day, if you're someone who looks at the macro data,

that's evidence that maybe some exporters are bearing their share of the burden, so to speak. I disagree on the valuation side of things, and you know this, I mean, we've been told the market's been overvalued for five to seven years, ever since the tech breakout really began, certainly post-COVID, and the valuation at no point has prevented the market from making new highs.

And I would also add, look at Caterpillar, look at Boeing, look at Tapestry and Ralph Lauren, couple of the utility names, granted they're AI derivative utility names. There's a broad swath of companies that are doing quite well. Netflix, Delta and United just reported. Now obviously the reaction to some of these names

has been less optimistic and part of that's because we've had a big rally into earnings and so there's some element of digestion here. But you look at the swath of companies that have reported, obviously the big banks, but also, as I mentioned, Netflix, Delta, even something like SL Green, which talked about strong demand for Manhattan real estate. They're telling me things are okay.

And I get it that conference calls are, in some respect, marketing gimmicks, but when you take them together, they're telling me things are okay, and when things are okay, and earnings are doing what they're doing, and the economy is doing what it's doing, why shouldn't stocks be higher?

Yeah, you definitely don't typically get some kind of real reckoning on the valuation front. Until it's time to have. It's growing. That's right. Or the Fed's tightening hard, or something like that. On the other hand, I mean, look, I'll make fun of like, CFA's all day, but like, what's the point

of doing investment analysis if what you pay today does not have some bearing on longer-term expected returns? Well, listen, that's perfectly fair, and as someone who has completed two-thirds of the CFA and gave up on the third level, I, listen, the CFA Institute, fine. It does great work, I'm kidding. Sure, it does great work, although someone just got

convicted of embezzling money, but that's fair, surely didn't take the ethics portion of the test. But, I mean, listen, valuation tells you something about the risk and risk on sentiment, et cetera, et cetera. And when the time comes for sustained equity decline, obviously there's further to fall from higher valuation levels than lower valuation levels. That is what history tells you.

Not that in any given six month or one year period that valuations are a binding constraint, they're not. And so to the point about the work that we do, I mean, listen, we're a single stock manager, a single credit. We're trying to find names that do well in any environment. And so that type of work is what we do and obviously what millions of people

across the investment landscape do. But you have a tailwind at your back right now in the form of an economic story in the form of the AI development and a risk on sentiment that pervades the market. And with that, a stock that normally trades it 1.2 times the market, 1.3 times the market on a PE or an EBD basis might trade at 15, 16, 17.

And when I say might, I mean definitely because that's what we've seen. And so in that sense, the work needs to be done, but until, as you mentioned, the Fed raises rates and cracks the economy or something like that, until then, it doesn't really help inform the investment process. You're looking for companies that are performing

in the environment in which we find ourselves. And in that sense, the companies that have been doing well are doing well for a reason. Dan, stay with me. Let's bring in Empower's chief investment strategist, Marta Norton and CNBC contributor Stephanie Link of Hightower. Welcome to you both. And Marta, just give your assessment of the risk reward based on the fundamentals that we're starting to see in terms of corporate earnings

coming in for this quarter and then what we can reasonably expect them to be, let's say, over the next six months. Yeah, well, I love this debate on valuations because I think it's the important debate to be having right now, because as we're taking a look at what we're seeing from earnings, of course, the bar was set very low. If you're looking at facts at numbers, for example,

we entered the earnings season with an expectation for earnings around 5% or less, and of course, we're seeing a lot of those beats. That's what we would typically see in an earnings season. And with a bar so low, it's hard not to continue to expect that. At the same time, the rally has been really fierce that we've seen since the bottom, since April 8th. And so I think this juxtaposition between companies

are continuing to perform, and yet a lot of that is already priced in, is where I kind of come out with this grinded out market. When we're talking about valuations, I completely agree that they're not necessarily going to be a great short-term indicator. They're especially unimportant when we're looking at very small dispersion and valuation. But when we start to get to those more extreme levels, that's where we start to see them be predictive of three-year returns on a prospective basis. And I would argue that, generally speaking, we're at those more extreme levels today.

And Stephanie, as you look at, you know, obviously it's early so far in the earnings season, but we've had the beats by the S&P 500 over the last couple of quarters by a wide margin, six or seven percentage points. It seems like it's plausible to expect something similar now. Have you been able to read anything into the early reactions by the market to what we've gotten on profit results yet and in terms of an indication of whether, you know, we're going to shrug or we're going to celebrate?

I think we should celebrate. If we get bad reactions to good numbers. That's an opportunity. And so in a two and a half percent GDP world, Mike, you know we can probably grow mid single digit revenues. And I think you can get about 10%, maybe even 11% in earnings growth if you get margin expansion. Dan and I have been talking about this for the last year or so. And so I think earnings estimates going into the quarter were only up 5%. If they're going to be 10, numbers are going to get revised higher.

And again, if you have good numbers, like from the banks, where estimates for the most part for the big six went higher, like for some of the industrials like GE, like 3M, where estimates are going higher, and they all sold off on the news. So I thought it was a buying opportunity last week, and I added to Wells Fargo, and I added to GE. I'll continue to add on weakness if the fundamentals are still good. And when you have the banks beating and their growth rate, the big six is up 20% for earnings and expectations were for 5.5%.

That's why earnings are going to get revised higher and the stocks are cheap and the companies are buying back a lot of their market cap because they can because the regulatory environment has calmed down for them for the most part. On the industrial side, I have never seen GE report such a good number before. Dan, I got to get you a cough drop by the way. GE is the best in show so far of all the companies that have reported and who would have thought that? Not a lot of people. So I think you're going to get opportunities. I call earnings season silly season for that very reason. I think Steph's exactly right and I apologize for coughing. I'm still in disbelief it would

market at all time highs. But I think Stephanie's right about the margin expansion. You look at what United said about in the last couple of weeks as macro uncertainty has declined, they've seen an increase in demand. Netflix saw no trouble with the consumer. Any number of other companies I mentioned earlier, the banks had very good things to say. JP Morgan talked about looking for some signs

and not able to find it. Bank of America effectively said the same thing. So I think to the extent that people have been nervous about earnings in the next couple of quarters, because you're going to see the effects of tariffs or the immigration debate, whatever it is, to Stephanie's point, you're probably going to see some revisions upwards on the earnings front and probably more than this as well. Now, that said, you touched on it earlier. I think we're all very optimistic about the tariff story right now.

And it's very possible that the inventory building is being worked down, that the goods were on ships in transit, and of course any number of the tariffs were delayed from earlier to upcoming, for instance August 1st. And so there's still an impact yet to be felt. So I don't want to get too over our skis here. And to the point earlier about, listen, we're at an high, spreads are tight, valuations are high. If you start to see some of that complicating factor

in the data that comes out in August and maybe in September, then with markets where they are, you could easily get a five to 7% pullback. With the caveat that that's like a perfectly normal development for stocks and would set you up well for ultimately an end of year rally. Right, perfectly normal, and then when you get past 3%,

it starts not to feel normal. And so we always know how that works, and the reason you get the opportunity is because it seems like it could be the part Of something bigger usually it's not Marta I wonder what your thought is about the prospect for a profit margins going up as Dan and Steph have mentioned me on the one And we're saying hey companies look like they're gonna absorb a lot of the tariffs and they're not talking about raising prices very much Is there is there room for some kind of across the border or just general profit margin enhancement from other means, maybe it's a productivity thing

or do we have to kind of look at organic top line growth to get us out of this? Well, I think on the profit margin side, this story that I'm watching, and I know everyone is watching so closely, is on the AI front. I mean, what we're seeing, what we were looking at in 2024 was the CapEx spend,

but looking for where the deployment actually was of AI. And what we've seen over the course of 2025 is actually those green shoots, when it comes both to the hyperscalers and their deployment of AI within their own business models, and then with that expanding into these various areas across the economy. So I think when we're looking at profit margin expansion, that's the thing that I think we can get most excited about. Of course, there is that tariff question that's out there.

I would argue, I don't know if we're necessarily going to get great clarity on tariffs and what their true cost is over the course of Q2. I would imagine that's something that's more to be felt over the longer term and fits and starts as, you know, to the idea of working through inventory and that kind of thing. And, you know, Steph, you mentioned that, you know, you call earnings season silly season

because of maybe sometimes the non-intuitive reactions of the market and maybe things get over traded off of the earnings number. But I wonder what your thought is about other aspects of Silly that are erupting in the market. Everyone, we've been talking all day about Opendoor. We've been talking about these sort of retail-propelled stocks that are at the fringe, the unprofitable tech stuff.

And I know this is part of the bull market. This is kind of par for the course in terms of when you've been up for a while and you're at record highs. But I wonder at what point you might worry that that's morphing into a potential risk in terms of speculative activity. Yeah. I mean, look, I worry about that a lot and I'm watching it very carefully. But when stocks like a Palantir or a Coinbase go up every single day and some of the cyber security companies

they go up every single day and of course anything tied to AI there's a underlying trend that's happening in the market. There are these massive themes Mike that you have to have some sort of involvement in. You don't have to own Palantir but you can own a lot of the other AI companies that are focused on defense and aerospace and that sort of thing. So you can pick and choose. Of course, though, the speculation is certainly something that worries me, but it's not rampant, not at this point in time, something though to keep an eye on.

I'm just focusing on high quality blue chip companies that are delivering really good results with margin expansion and with market share growth and great free cash flow. And if those stocks sell off, I have no problem whatsoever adding to them because I know no matter what happens to the meme-like stocks,

these companies are gonna deliver and they're going to take share and that's where your opportunities are And Marta before we go I mean as much as the US market has really proven resilient and we have these kind of you know Mega growth stories at the top of our index non US indexes have still outperformed in a year-to-date basis, right? I mean, obviously it's making up for a lot of years of laggard behavior But 10 percentage points nonUS versus US this year. Is that something that you would fade or lean into?

Well, listen, I think you putting tactical questions aside, I've been marveling at how much US investors have preferred US companies. And that is, I guess, rooted in common sense when we've seen the massive outperformance that you're alluding to within the US market, vis-a-vis what we've seen outside the US. But you could argue that there's this strategic shift to the US that maybe could use some

kind of adjustment. And we see the value of it in a year like 2025, especially with the currency diversification that has added value to investors' portfolios. So I do think there's a rationale for a globally diversified portfolio, for having some exposure overseas. Not only are you getting the currency diversification, but you're also just kind of broadening your net to capture other companies that aren't listed here in the US. So I do think there is some value to that, not just on a tactical, but on that strategic basis. Right. So participate, but maybe don't chase too aggressively in the short term.

Absolutely. Marta, Steph, chase too aggressively in the short term. Absolutely. Marta, Steph, Dan, really appreciate the chat today. Thank you very much. Thanks. Let's send it over to Christina Partsenevales for a look at the biggest names moving into the close. Hi, Christina.

Hi, Mike. Well, let's start with block surging today after it was selected for inclusion in the S&P 500, replacing Hess, which was acquired by Chevron. That's why it's out. Stocks often rally when they're added to a major index as fund managers need to rebalance their portfolios to reflect the changes and that's why you're seeing shares up 7%. Let's talk about Cleveland Cliffs because it's also Surgeon's Day after it reported its Q2 results with its CEO saying quote, it started they started to see the positive impact that tariffs

had on domestic manufacturing. The stock right now is on pace for its best day in more than a month. This is the intraday right now. You can see shares up 13% but still down around 30% just over the last year or so. Mike? Alright, Christina, thank you. Thanks. We are just getting started here. Still ahead, investors gearing up for a parade of big tech earnings. We'll run you through what to watch after this break and later we'll discuss what might be next for the Fed with former St. Louis Fed president Jim Bullard. We'll run you through what to watch after this break and later we'll discuss what might be next for the Fed with former St. Louis Fed president Jim Bullard. We are live in the New York Stock Exchange you are watching Closing Bell on CNBC.

Music Welcome back. Earning season ratcheting up this week with closely watch reports from the likes of Tesla, Alphabet, IBM, and Intel. Here to share his outlook, Northwestern Mutual Wealth Management's Chief Portfolio Manager, Matt Stuckey. Matt, great to have you here to set things up. And, you know, first when it comes to the very large. Tech platform companies you know the top six worth

about a third of the overall S. and P. five hundred part of the rationale for paying a premium for them is they're so predictable any one quarter doesn't quite matter they're so dominant what is there to say in terms of trying to have a

differentiated view on one company versus another in that context. Well thanks for having me look I mean I think if you're looking at the puts and takes of what is different between these companies they do have a lot in common between you know the

earnings profiles and the margins the quality of the companies sometimes there's there's ones that are a little bit higher than others but I think if you're really looking at kind of. What might differentiate this earnings

season it goes public investor expectations heading into these quarters. I you know look at the difference between Google might differentiate this earnings season it goes probably to investor expectations. Heading into these quarters. I you know look at the difference between Google and that as an example of this- over the last seven or eight years. You know these have traded. You

know sometimes one's more more value than the other but right now we're at near a seven year differentiating high in terms of the valuation. Of meta being about five to six turns higher than Google- that is

kind of setting the bar higher for meta and saying the bar lower for goals we had into the course let's just one example there. And then when it comes to Google to alphabet- I mean that is the one that really does stand out

right trades in a discount to the market it's being seen right or wrong as you know more disrupted. Than disruptors so how do you play it in that context. But I think you try and set expectations at a reasonable level for Google- and understand going into it

that. The company is not likely to be able to you know take away some of the concerns that investors have about search being disrupted- post the print and so we don't expect the multiple to jump back up to

a durable twenty X. forward. Like you will has historically enjoyed after this quarter however. If you're looking at earnings really being the driver of the stock there's a better story there you just look at the last five years of

what Google's been able to do in terms of the full the Ford earnings base. Projection for the company is gone up two hundred fifty percent you know the market overall has been up you know roughly ninety five percent or so and so just by owning it you

can can out earn essentially what the market's doing there so- again the unlikely to be- dispelling all the investor concerns but continued innovation displaying progress as well as delivering earnings growth is the key for alphabet

here. And you know I've been kind of amazed and remarked a few times about how this market is willing to reward the spenders and the vendors, right? The spenders on the AI infrastructure build out, they're kind of doing it with their own cash flow, Microsoft, Amazons, all the rest of them, and Nvidia and Broadcom to a lesser degree. All of them basically being treated as winners in this market is that sustainable I mean we have in video now pushing 8% of the S. and peace

weight- obviously the earnings power is remarkable the growth is huge but is that going to remain kind of the core default way. To participate. That's good question I you know I think the spending towards. A.- AI based compute is sustainable at this point if you look at the hyper scaleless collectively what

percentage of their free cash flow are they spending on cap backs it's roughly half of that- so certainly they can afford to spend it the willingness is also there as well. They don't want to be- five as a loser in the kind of race towards- super intelligence or- being relevant in artificial intelligence overall- so you know they're taking a multi

year view in terms of this cap X. cycle we expect that to continue I think one of the keys for. Companies like Nvidia companies like broadcom is what. You hear from hyperscalers this earnings season- after Q. one what

analysts did was revise up cap X. guidance over the next 12 months for these hyperscalers this earnings season- after Q. one what analysts did was revise up capex guidance over the next twelve months for the cyberscalers by twenty percent. That continued message and some early indications on what twenty twenty six looks like in terms of capital spending. Is almost

what's required for this kind of trade towards the new the new videos in the broadcast to continue to work in the market. Yeah it feels like the confidence in that in that team- has to be refreshed every three months as you suggest there. Would love your thought about, you know, some of the

unprofitable parts of tech that really have been ramping lately. There's been a grab for risk and just leverage within the growth stocks and low quality stuff. Is that something that bears on what you do as you look for ideas or as you assess the riskiness of this market. I think it's a good temperature check for where the market is- you know the fuel for the fire in terms of the junk trade is

really kind of what happens with credit spreads. You know right now we've seen almost a full recovery in terms of the blow out that we saw in April. And we're back down to near twenty to thirty basis points off the year date tights and so how

much additional fuel is left for. For this trade that's really propping up. You know the non profit will parts of technology and just. For reference we think quality works in markets specifically it also works in

in- technology and so- you have sooner or later you know there is there is likely to be a turn in terms of performance and it has been a sharp deterioration in terms of how. High quality companies in the technology space are trading relative to

the nonprofit once it's almost been a 20% drawdown in in recent weeks and that's that's pretty. Significant in a historical context. Yeah and that's- that's a real. You know helpful thought comparing it to what's going on- in terms

of credit spread compression. Matt, great to catch up with you. Thank you very much. Up next, former St. Louis Fed President Jim Bullard breaks down his take on the big battle between President Trump and Fed Chair Jay Powell. He joins me after this break. Indexes have lost a little bit of altitude. Small caps are in the red S&P up point three percent closing bell be right back. Welcome back the Wall Street Journal out with this headline today the U.S. economy is regaining its swagger pointing to a rebound in sentiment and strong retail sales joining me now to discuss is former St. Louis Fed President Jim Bullard and Jim, it's great to have you on.

I mean, I wonder if that suggests that as Chair Powell and other Fed members are fond of saying lately that that policy is in a good place and they can kind of afford to wait and see how things develop before making any moves. Yeah, I think that's certainly the committee's judgment is that with the unemployment rate at something very close to the natural rate of unemployment for this economy and inflation. Maybe not quite at target but certainly much better than it was a couple years

ago and coming down. Things look pretty good from the Fed's point of view. And so therefore, you know, the Fed is sort of saying they have the luxury of waiting and not responding to any emergencies. How do we reconcile that with, of course, the drumbeat of pressure coming from the administration to say that Powell is being remiss in not having already lowered rates. I think that the committee does need to lower rates further. They had a campaign, a recalibration campaign in the fall of last year, and some of those effects are coming on board right now. And they should re-engage with their recalibration campaign

and this fall probably starting in September. And that seems to be where the committee is at right now. Yeah, it does for sure. I mean, it's interesting because for as loud as the back and forth has been, it's not as if there seems to be that much room separating the committee and maybe where things will end up in terms of getting rates a little bit lower.

And in that context, however, Treasury Secretary Besant this morning on our air said, you know, it's time for a wholesale look at the Fed as an institution, that it essentially misplayed its policy back in the inflationary times and therefore we need to kind of have a top to bottom review of things. Is that something that makes sense or is that just another way of saying they'd like to kind of keep the Fed did misplay the 2021 episode, but a lot of that was actually the

Congress and the White House at that time authorizing a lot of expenditure in that March bill there in 2021. And that turned out to ignite a lot of inflation in the U.S. economy in conjunction with the low rates that the Fed had at the time. So, but I do think the Fed recovered with its 2022 policy, which I advocated for a very sharp increase in the policy rate, brought down the inflation rate without a recession. So that's a huge success story for the Fed that we were able to get rid of that level of inflation, the 80s level of inflation without a Volcker type recession.

So that was a big success. Yeah, no doubt. I mean, clearly, as you mentioned, full employment and inflation is down in two point something, not terribly far from target. It's hard to complain long term. Also though, when it comes to talking about how, the Fed interacting with fiscal policy did seem to get caught off sides.

Is there a developed economy central bank that did better? I mean, if you just look at the inflation experience across similar economies, it wasn't notably different. Yeah, well the rest of the world followed the Fed, and some of the emerging markets actually moved ahead of the Fed in anticipation, and you got a pretty good response really around the world, but that was all led by the Federal Reserve, I think. That's my Jim's interpretation, anyway. Sure. No, I mean, it's totally fair

and that would kind of fit a certain pattern of history. When you say that the Fed has embarked on this recalibration process, beginning last September, it brought rates down one percentage point, how much farther do you think they have to fall before they get to something reasonable in terms of neutral?

Because look, if we have a nominal GDP right now of five-ish percent, what do we need to expect from short-term rates? Yeah, I think the committee says it's down at 3%. So they actually would have quite a ways to go if they really believe that. I think probably 3.5 is a better guess for where some of the committee is, maybe 3.25. So they've got some room to maneuver here. They don't want to go down too fast because they've still got a little bit of inflation to get rid of. But you'd like that inflation to come down to the lower part of the 2% range and then asymptote to 2%,

that would be the ideal outcome if you could get it. So I think they're following, from the central bank's point of view, is a very natural policy of trying to get to a neutral policy rate. That's perfectly sensible if inflation's at target on the unemployment rates at the natural rate of unemployment.

That's exactly where you'd want to be. Yeah, we'll see how that moves. I know, you know, it's one of those neutral is one of those concepts that you kind of maybe know it when you see it. You can only estimate it in advance. We'll see how that that plays out. Jim, thank you very much. Appreciate the time.

Excellent. All right. A pair of big interviews to watch out for tomorrow. Don't miss the CNBC exclusive. The Federal Reserve vice chair of supervision, Michelle Bowman, that is tomorrow morning at 730 a.m. Eastern.

And former Fed chair and former Treasury Secretary Janet Yellen will also be on Squawk Box at 8 a.m. Eastern. Up next, we are tracking a big divergence happening in the crypto space. We'll drill down on that move after this break. Closing bell, we'll be right back. Less than 20 minutes until the closing bell. S&P sitting on about a quarter percent gain. Ethereum has been on a tear, rallying nearly 50 percent this month alone. Tanea McHale is here with more on this big move and how it relates to the rest of crypto. Yeah, Mike. So the crypto market just kind of taking a breather right now after the

moment to speak that we had last week but I do expect that to come back a little bit as the public markets open up to crypto. Let's talk at crypto treasury companies. This morning we saw another group come out the Ether machine they've got plans to list on the NASDAQ through a merger with Dynamics or Dynamics those shares up, getting a nice boost today. Their focus being on Ether and staking of that ETH. Mercurity Fintech also entering an agreement to fund a Solana treasury, sold today's standout

in crypto up about 7%. And then there are IPO's, Bullish and Grayscale filing last week to go public and then BitGo again today. So still my class of interest in Bitcoin, but interesting to see the leadership pendulum in crypto shifting a bit here as the industry gets a chance to invest and innovate in the crypto market without so much worry about the regulatory risk. That's been manifesting, as you said at the top,

in ETH-related names. So ETH is trading at December highs. This is an interesting spot to watch because that $4,000 mark has been a real psychological and technological test for investors. I mean, IPO's with company named Bullish, buying crypto, I mean, I think you have to at least just sort of take note of what's going on here.

Now, when it comes to the way ETH has traded relative to Bitcoin, I see people kind of convey that there's some kind of fair value ratio or some tendencies about how they should trade relative to one another. But yet, I don't know, they're kind of used for different things, are they not? Ethereum, I mean, the supply is not fixed and predetermined. So how should we think about that relationship? This has been so interesting because for the past year

or so we have been going through this narrative issue with ETH. Initially, it was this idea, you know, a year ago, people were not really sure what Bitcoin was. They were like, is it a sort of value? Is it something that trades as a risk asset? And then ETH was this asset that people understood a little bit more.

They said it's like a web three app store. You can build apps on top of it. That was much easier to understand for investors. And then somewhere along the way, people just got the Bitcoin narrative and it completely flipped. And then with all of the regulatory uncertainty, investors kind of just pushed ETH off to the side.

And now we are seeing the ETH ETFs come back to life over the last three months. We've got all of this regulatory clarity. We have gotten regulatory clarity and I think we will be getting more. And you were starting to see that narrative, brands and institutions coming back in and saying we are interested in tokenization,

we are interested in stable coins. So I think three months ago, it seemed like the ETH narrative had kind of flipped. Now it kind of feels like 10 years on from its inception it's going full circle. It's interesting. I do wonder what the market will kind of look toward to sort of put in front of itself as the next thing after we get this law passed. Yeah, you and I both. All right, today. Thanks. Thank you. Appreciate it. Still ahead, JP Morgan Asset Management's Jack Manley standing by to break down the final moments of the trading day.

Closing bell, we'll run you through what to expect when NXP reports in overtime. The index is fading a bit, the S&P up only 1 6th of 1%. We'll see how it closes. The market zone is next. We are now in the closing bell market zone. Verizon heading for its best day in more than a year. Julia Boruston has more on that move. Plus Christina Parks and Evelyn slips ahead to NXP earnings. That is after the bell. And JP Morgan Asset Management's Jack Manley breaks down the crucial final minutes of the trading day. Julia, this move in Verizon,

sometimes a sleepy stock, not today. Yeah, well, today's shares popping over 4% on Verizon's top and bottom line beat in the quarter. The company also hiking its second half guidance, raising the lower end of its annual profit and free cash flow forecast, setting strong operational execution as well as favorable tax reform impact. This morning on Squawk Box, Verizon CEO Hans Vestberg said the company's strong results speak to the resilience of the industry. People need mobile and broadband services more than ever.

He also said he believes that Verizon has the highest quality customer base in the industry. The quarter was driven by demand for premium plans and broadband growth as more customers opted for plans with Netflix and other streaming perks. Now on the downside, the company's loss of 9,000 wireless subscribers rather than the gain of 13,000, which is what was expected, showed churn after the company's price hikes back in January. But Verizon management said on the call and Vestberg said on Squawk Box this morning that they are confident about their work to retain customers.

Back over to you. All right. Yeah. Making up a little bit of ground against AT&T on a year-to-date basis. Julia, thank you. Christina, NXP, what should we look for? Yeah, the expectations for this name are pretty muted, I would say. Shares are up about 10% year to date versus the broader SMH chip ETF,

which we often use as Brommer. That's up 20% over the same timeframe. But Cantor Fitzgerald says this could be the last quarter before a real turnaround. Yes, near-term auto demand is still soft and the CEO transition for NXP adds some uncertainty, but bulls really are focused on the long game, a path to higher gross margins and eventually a re-rating of the stock. NXPI is still trading at just 19 times earnings, well below analog peers that fetch anywhere between 25 to 50 times.

And I'll say strong execution, especially on margins, could really help close that gap. The company has laid out a plan to nearly double earnings per share by 2030 and gross margin expansion really is a big part of that conversation they plan to move it from about mid 50s to above 60% just in the next few years but guidance Mike will be key especially around Q3 and any signs of recovery in auto and industrial given this is an analog name investors spent sentiment though has been pretty low that that maybe a positive setup or surprise of downside risk looking a little bit limited, and any strength potentially being rewarded

if we start to see this recovery in auto. And, Christina, would this be the first analog player or those with those end markets that we're gonna hear from for this quarter? Yeah, well, TSMC last week gave us just, I guess, a barometer for just how the market is doing overall with really AI in the conversation, and ASML is the equipment maker of last week gave us just, I guess, a barometer for just how the market is doing overall with really AI in the conversation, and ASML is the equipment maker of last week,

but this is the first one, and then Texas Instruments is another big player that's out tomorrow, and then we have Intel on Thursday. Yeah, well, they will help to fill in some of the gaps. Christina, thank you very much. So Jack, real short-term tactical stuff here. You did see this fade in the indexes here. We're at highs for the major indexes.

The atmospheric conditions seem pretty favorable here. What's your read on what we're seeing? Yeah, I mean, I think right now, it's a pretty quiet data, pretty quiet week from a data perspective. There aren't a lot of policy headlines hitting us, at least not expected to this week. All markets can really focus in on is this earnings season and the earnings season has

been pretty darn good. I think analysts really lowballed it coming in here. They thought that the macro economy would be in worse shape than we are right now or at least they thought that some of those implications would hit us a little bit quicker than they have. I think they also really underestimated just how good corporate America is at protecting margins. And so for right now, right, I mean, the earnings story is good.

The guidance has been encouraging. I also think it's important, though, Mike, to take a step back here and realize that, yes, we're back at all time highs. We've reached 6300. We're probably going to close the day north of that milestone. And that is a huge accomplishment. But how do we get here? I mean, we are looking at forward priced earnings ratio on the S S&P, north of where it was before the sell-off,

22 times and plus. This is a market that's working well right now, but it's also priced for perfection. And how do you then approach it? In other words, what's the takeaway from, hey, this is a fully valued market, it really doesn't owe us very much from here on out. On the other hand, one of the hardest things to do

is to kind of continue to give the benefit of the doubt to a trending market. Yeah, I mean, this rally, the one that happened sort of since those April lows, it has been driven overwhelmingly by multiple expansions, so not encouraging. On the other hand, though, when you compare it to the previous rally, the rally that occurred in the aftermath of those October 22 lows, the breadth of this recovery has been a whole lot more impressive. The Magnificent 7 accounting for 60% of all the returns

in 23, 60% of all the returns in 24, it's about half of that from a contribution perspective so far this year. We're seeing that broadening out in price performance. We're seeing a broadening out in earnings growth, just helping to support that. Very, very difficult right now to figure out, is this a growth market, value market?

Is it tech versus financials or energy versus healthcare? This to us is a bottoms up security selection market. This is all about active management being able to weed out those winners and losers. If I look at things like, and a lot of the broad market analysts who want to sort of discern the message of the market and say, okay, Secagoals have consistently been leading defensive sectors of this market. Credit spreads are compresseder goals have consistently been leading defensive sectors this market. Credit spreads are compressed, gold's back above 3,400, the dollar has

been on its back foot, although bouncing a little bit recently. All of that suggests loose financial conditions, plentiful liquidity, and generally favorable macro. Is that an environment in which we should be screaming for the Fed to cut rates? So, I mean, I think frankly the answer is no. This economy very clearly does not macro, is that an environment in which we should be screaming for the Fed to cut rates?

So I mean, I think frankly, the answer is no. This economy very clearly does not need lower interest rates right now. At the same time, though, Mike, I don't think lower interest rates would really hurt this economy. My kind of crackpot take on a lot of this stuff is the Fed has a lot less control over the economy than it thinks it does. It's got a boatload of control over asset prices. It makes a move on its balance sheet

on the short end of the curve, and it can dramatically alter values for stocks, bonds, real estate, crypto if we want to go down that road. But CPI, inflation, actual GDP growth, this is an economy that seems to be almost agnostic to rates, at least on the margin. So, I mean, yeah, the economy probably doesn't need lower rates, but why not? Especially with how out in tanks

are borrowing costs are as a country. Right, it seems as if, I guess another way to put it is, we're at a moment where the Fed is just not gonna be the swing factor necessary with a make or break what the economy does. Now, there's a counter to some of those points, which is, look, we have a housing market recession by many measures, and the consumer is hanging in there,

but real spending levels seem like they're decelerating, market recession by many measures and the consumer is hanging in there but real spending levels seem like they're decelerating and maybe even the labor market is kind of softened up. Yeah I mean I think you know I think on the housing side of things we have to acknowledge that homes are unaffordable right now and buying activity is dwindling and yes that is a function of where mortgage rates are right now but the reason mortgage rates are punitive at the moment is because of where home prices are and home prices are where they are right now because we are simply not building enough homes and that's not something that's going to change on the

margin anytime soon and you know what if you drop rates down and push let's call it 30 year treasury yields lower benchmarking against mortgage rates maybe you get a short-term windfall maybe all the sudden homes become a little bit more affordable but then all those people that buy their homes, they're going to hold on to those things for dear life as soon as rates go right back up and you're right back to this initial problem. So I don't think that's like the solution to all this. From a consumption perspective, that's a kind of messy story, Mike, honestly.

When you look at this economy and you look at who's doing the spending, the top 20% of the earners in this country, they spend anywhere between 40 and 60 percent of all the bucks. And when that happens, they're getting tax cuts, stock prices back at all time high. And confidence is up. Got to leave it there, appreciate it. Got about 20 seconds into the close and the rally has faded to some degree. The S&P 500 trying to hold that 6300 level off about.15%. The small cap had led the downside off about.4% of 1% on the day. The Dow is around flat. That does

it for Closing Bell. We're sending you to overtime with Morgan Bredt.