Closing Bell - Closing Bell: 7/2/26

Episode Date: July 2, 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, Kelly, thanks so much. Welcome to closing bell. I'm Scott Wobner, live from Post 9 here at the New York Stock Exchange. This make or break hour begins with stocks in the second half, whether this long-awaited market broadening has legs. Not everyone a believer today. We'll ask Wharton, Professor Jeremy Siegel, what he thinks, when he joins us momentarily.

Look forward to our conversation, as always. Let's show you the scorecard here with 60 to go in regulation, new high for the Dow, new high for the equal weight S&P. And we are continuing the trend we've seen over the past month, that being chips are lower, mega caps, a little bit mixed. Apple's popping, though, and that's a big story. We'll tell you why a little bit later on. It does take us to our talk of the tape while losing momentum might actually be a good thing for the markets.

Let's welcome in Wharton School Professor Finance Jeremy Siegel. Welcome, happy fourth. It's good to have you on our program as we head into this holiday weekend. Thank you, Scott. Good to be here. You've been bullish, obviously. You're still feeling pretty good about a market that seems to have a little bit different make up to it. Yeah. I have never seen such volatility between sectors and between value stocks and

gross stocks. Normally, you know, you shift 20, 30 basis points, relative indexes on a day. We've seen 150, 200, 250, sharp movements where the tech goes up and the rest of the stocks go down and then sharp reversals. Not only that, within the tech itself, I've never seen, you know, all of a sudden the chip stocks will go up and then the hyperscale go all the way down.

I mean, this sort of relative volatility on might be all these people playing with these one-day options, these, you know, perpetual futures. It's something really to behold. Does it inform your opinion in any way on what that means for where the markets go from here? Well, you know,

I guess it tested, it did test that 25,000 level beautifully bounced up. It's for technicians. And I'm not saying I'm a chartist, but I do look at that. It's a very interesting type of charts. I mean, it's going into what we call kind of a triangle. It could be breaking out one way or if it breaks out downward. You know, that could mark a intermediate term top on the NASDAQ. But, you know, generally, you know, as you know, I've mentioned on this show, I actually don't think rates are going up this year.

As long as we had a six handle on oil, I think that Warsh will keep those rates constant. That's basically good for value stocks. It's good for economy stocks. There's enough liquidity provided by the Fed. So, you know, I'm still basically bullish. But as I mentioned a few weeks ago, you know, I'm beginning to see those. those signs of those rotations becoming more pronounced than what we had before. Oh, interesting, because we have in fact seen, you know, for example, the top three sectors in April and May were in the bottom four in June.

So the market, that's what I was alluding to with this changing makeup of the market. And it sounds like you're a believer that that could continue. Yeah. Yeah, I'm definitely a believer that that could continue. And I also want to mention we had that labor market report that the household survey is not credible. The data that came out of that makes no sense to me. They said that basically we lost 700,000 jobs on the household sector, but only 500,000 people were not looking for any jobs, so the unemployment rate fell. We also had the participation rate, which is something that basic health and the economy, outside of COVID,

fell to the lowest level in 50 years. And it's all this 25-year-old to 35-year-olds. The drop was something out of anything we've seen before. And I wonder, are they all going to World Cup parties and quit their jobs for a month? I think they're going to join next month because I'll tell you, I mean, I mean, Trump, you know, I think he had fired the head of the data, the statistics department, you know, a year ago because the data didn't look good. Well, I'll tell you, this data from the household survey, I think is very distorted. That's not going to pull out. I think Kramer was sort of a head scratcher in his mind, too, when he looked at the numbers.

He's like, wait a minute. We're in the midst of this historic data center build out. And I mean, all you've got to look is a chart of, you know, Caterpillar, for example. And where are all those jobs? Like, why aren't they registering within the data as well? So your points well taken and others are scratching their heads trying to figure out what all that means. So speaking of AI and data centers, what about this tech trade, professor? What do you make of how it's been acting of late?

It's been acting, you know, and I'm not a person that, you know, calls at top on just tech. I look at a lot of the macro trends, but it seems like it's spent most of its power and more questions than answers in terms of can these margins stay up. What about the competition, the spending on tokens? what's going on in China? I mean, you know, all of a sudden, are they breaking through with computers better than ours? And why is that? And, you know, I think that that is basically holding back. And so even though their valuations might be more reasonable than we've seen for very many months,

I think there's good reason why we've seen some pullback in those valuations. Now, I've spoken before about, you know, chip stocks going up 100, 200%, just because their earnings. up 100%. And I say, you know, stock market theory says that, you know, one, two, three, or even four years of super earnings does not make for doubling and tripling of stocks. And so in a way, you know, that froth also somewhat concerns me in the market. But listen, I'm a firm believer in the AI revolution, you know, transforming everything that we do. The question is, Is that going to continue to increase the margins of all the players that have been profiting from it so far? Well, we'll have more on the chips coming up as well, because your points well taken,

and a lot of people are watching that space. And I think it's pretty clear one of the reasons we've had this rotation into other areas of the market outside of tech, and the fact that it's become even more pronounced is because earnings expectations continue to go up. and they continue to go up outside of tech as well. So they're expected to be robust. So why wouldn't you expect those types of stocks to be robust as well, right? Yeah, that's true. But the tech sector is approaching margins of profit that we've just not seen before,

that invite competition to bring those down from resources. I mean, you know, that isn't on our capitalist system, what drives is competition. And when a discovery is made, yes, that increases profits for firms in the short run, but in the longer run, it lowers prices to the consumers as firms compete and bring down those prices. And margins generally then revert back to more normal levels. What we've seen is just margins going up, up, up, and I'm just, you know, we have not seen that sort of margins of any second. rise the way they have, I think, in history. And that brings me to a question about how sustainable

the price movements are. Well, we shall see. In the meantime, we'll talk to you again soon. And I wish you, again, a great holiday weekend. Professor, thanks. Thank you, Scott. You too. All right, thank you. Professor Jeremy Siegel. Biggest story, as we said in the market over the past month, this unwinding momentum stocks, just as the professor was talking about what's happened with some of these semiconductor names. The question now, where do we go from here? Let's ask top technician Jonathan Krenski just published on that topic. It's good to have you. Welcome back. Before, Scott. What are the charts tell you about this unwind? Is it about to get more serious? Yeah, so we're now, depending on how we close here, we're looking at about an 18% drawdown for the

high beta long short momentum factor over the last two days. And that's going to put it, you know, right around the top fifth or sixth worst two-day decline in its history, which goes back, data back to 1999. So it's a historic unwind, and I think it is a result of obviously the extreme move up. If you look at how the quarter ended, the semis, you know, had already been up strongly, kind of had that parabolic surge. We saw a micron last week. It reported blow at earnings, but it traded pretty poorly on massive dollar volume.

We put out a note talking about how it traded back-to-back days of $100 billion. in notional dollar volume, which is the third highest of any single stock in history. And now the stock's down about $300 from those blowout earnings. So I think on the one side of the coin, you have the semi-AI trade that is coming unwound. You also have the optical names, which were a big part of the AI buildout. Those are rolling over. But the other side of the coin, and the good news, as you guys have been talking about, is this rotation under the surface.

You have health care on an equal-way basis breaking out of five. year trading range. You have insurance breaking out of an 18-month trading range, and the reeds have still not been broken out yet, but we think those are next. You know, those are basically unchanged over the last five or six years. So at this point, it's still rotational nature, but I do think there's more to go. Right. That would be more concerning if you had this money coming out of momentum and not finding a home anywhere. It actually is, which is why people are still so supportive of the market, right? Yeah, and I think that certainly can persist. I think everyone's highlighted the seasonal tailwinds in July.

I think that could run into a little bit of an issue in the back half of the month, especially when you look at the correlation index. So a three-month correlation index, which looks at how stocks trade relative to each other over the next three months, we're basically at all-time lows in that, meaning there's a lot of dispersion. And ultimately, that's a good thing initially because you get that rotation. But once the rotation runs its course,

then that is where the market becomes vulnerable to a higher cost. correlation sell-off. We don't think we're there yet, but that's moving up our radar. Talk to you soon. Good holiday weekend to you as well. Jonathan, thanks. Jonathan Krenski. Now to our panel, CNBC contributor FundStrat's Tom Lee. CIBC Capital Markets, Chris Harvey. Gentleman, it's good to have you here at post-9. What do you make of, you know, this point of the conversation we're having, rollover and momentum and how the makeup of this market seems to be changing a bit? Well, one, I think there is probably, you know, it's a new quarter, so there's people are going to reset their positioning.

But in terms of market composition, I think two things are really going to work in the second half. You know, one is anything correlated to the ISM above 50, which is positive earnings revision that follows. And that's industrials, financials, and tech. So I think those are the earning stories. But I also think investors are going to buy the laggards, right? So there is a relative value trade to be made. And some of that's in small cap, but it's also introsector. So I think both work, but I actually think it's a broadening, but it still means tech works.

I mean, you're talking about in everything rally for more or less, aren't you? Yeah, and I can see the conditions because inflation, I think, the risks are diminishing with today's jobs report, but also oil lower. So that means the bond market, which has been hawkish and leaning hawkish could actually lean doveish. That's a tailwind into your end. You agree? Yeah, I think that's right. So I think Fed Fund expectations are too high. They're coming down.

That's broadening things out. If you look at the banks, they got through the stress test quite well. They're starting to pay out dividends, buyback, so and so forth. Yeah, immediately, right? The news came out, and they were like, okay, here's this for you and not for you and not for you. And let's go, right? And so what we're also talking about is M&A, MNA activity is going to start picking up. That's going to help out the broadening.

So I think it's all fair. You know, what we're looking at is housing, housing stocks, which have been beleaguered for a long time. And we're also looking at gold in the material space, which will do well as that hawkishness comes off the table. What do you think about the role in momentum? It's been the dominant theme. We've been pro-momentum for a long time. Yesterday, we took a step back and said, something doesn't feel right.

And so I think it's time, at least tactically, to take a little bit of money off the table. Is it over, over? I'm not quite sure. But in the short term, I think it's prudent to just take some money off the table. Wow, and you made this decision yesterday. You've seen enough here to make that kind of call.

It's been a heck of a run. Yesterday was really unusual. And what it was is we went from not having enough compute to wait a minute, maybe we have too much. And you can't, it takes a while to pull that back out of the marketplace. I mean, the M-T-U-M, the ATF, down 8% in a week, 4% in the last month. The DRAM ETF, first back-to-back weekly declined since inception, down 23% in a week. That's the kind of stuff that's making this guy to your left a little nervous about that trade. What about you? You know, you never want to be trying to catch a falling knife, but to me, I'm, I'm, I'm, I'm

I'm going to probably guess that those pullbacks are viable. I think that momentum still has a long-term history of working very well, and it's really central to a lot of quantitative systems, so I think it comes back. And then on the DRAM trade, I know people are trying to call the end of the cycle, but what we still haven't decided is they're a new cycle because robots and machines are going to be semiconductor and RAM intensive much more than people.

So it might be a long cycle. Well, I don't know that people like the professor, for example, are trying to call the end of the cycle as much as they're trying to call the end of the craziness. Right. I mean, stocks going parabolic that can only go on so long. There is that thing. It's the pause that refreshes, right? They say that for a reason.

It's true. But what they have to keep in mind is that multiples of stocks like Micron are still, you know, eight times or probably today seven times now. Well, maybe with the pullback gets me down a bit. Yeah, I think it's probably close to seven times. But it sort of got from like eight to ten. Yeah. Which is historically maybe rich for stocks like that that are generally

deemed to be more cyclical in nature. We're making the call. Many are that, no, this is different. This is different this time. Now, now this is a secular new cycle, as you said. Yeah, I mean, so invidies at 16 times. It reminds me of how Apple was viewed as a hardware, phone stock for hardware maker for a long time. People thought it should trade it 10 times earnings until it re-rated towards 30. So to me, I think there's still that re-rating that's going to come with stocks like Invidia. Speaking of earnings, you're going to get them soon, right? The banks are going to start. It's hard to believe they're already right here, around the corner.

Good things are expected. Actually, that's a misstatement. Great things are expected. Yep. So that's the one thing we're worried about. Rolling into 2Q, fantastic war, right? We roll into July, and everyone's telling me, seasonality, seasonality, this is a great month, great month. And when I hear that...

It is, because you haven't had it down July in a long time. In a long time. But when I hear that, I get a little bit nervous. And I go back to 2007. And in 2007, in June... We had a down month. We had credit spreads less than 100 basis points. We had real rates rising. We had we had quants doing quite well. And let's just say the summer 2007 not so great. Well, I mean, there was a little something going on there that, you know, had something to do with that.

Yeah, you had a lot more leverage. You had credit spreads, widening for very low levels. Yeah, something called the housing market was starting to roll over. The housing market might have had an issue. Yeah, speaking of understatements. A little bit, a little bit. But, but. The point being is, just don't get comfortable here. Because you're right. Fundamentals are quite good. Expectations are even higher in some cases.

We think the market does go higher. But some choppiness, some pullbacks, some repricing of risk, it all makes sense. But see, I ask you this every time, Tom, you're with me because people, they hear you and they assume that you're always bullish. And directionally, you are with the caveat this time of you still are expecting. a meaningful pullback in stocks at some point before another significant ramp up into the end of the year. And you haven't changed that, have you? And I ask you every time. Yeah. And again, you know, I think we're still in this up phase. So I think near term, I think we can be 77, 7,700 first. Okay. And then a 10 to 15% pullback, but for understandable reasons. Because, you know, the Fed is something the markets try to understand,

and we've got an unlock of a major IPO coming. And there's cumulative shortages now in Petro. products that becomes a pricing risk later this year. But I do think the earnings momentum is very strong and investors are still off sides. In fact, fund managers are having one of the worst years, actually in almost five years. This is one of the worst years for growth managers. And so I think they're going to buy that dip. Are we vulnerable to something like that? I think the pullback. I think Tom's right, but I think the pullback comes from a higher level, right? We're still looking at the fundamentals. We're still looking at credit. We're still looking at sentiment. And it's just not that far stretch. In certain areas, yes, and we're seeing that in semis, right? The semi-pullback is

pretty aggressive right now. Yeah. But the market's still doing quite well. Is the Fed a risk? I don't think so. I think people are overestimating the Fed. I don't think Kevin Worse does anything. And if you listen to what he said yesterday, hey, prices are high, but inflation directionally is coming down in the direction we want it to. And if you look at where oil is going, break-evens, it's not telling you to be hawkish. Yeah, I mean, we don't really think the Fed, that's going to hike? I don't. But I think there's, like, going to be a communications tantrum, you know, because the Fed is trying

to move away from forward guidance and maybe not even having press conferences after FOMC meetings. And so the market's operating in a vacuum. They're going to try to sort of find implied pricing or predictions, and that's moving away from the Fed. So I think it creates volatility. But didn't Warsh the chair respectfully, didn't he already sort of put his hand on the, put, unveil his hand? I mean, we know that the communication's already changing. What's going to surprise

us now? If they get rid of forward guidance, we expect it. He alluded to it again this week in Portugal. So you get less Fed speak. I think there's a chance that even Fed governors are asked to communicate less, because each of those communications can be viewed as forward guidance. I don't disagree with you at all, but don't we know that? I think until we get into a situation where we have no real comms, and then there's inflation uncertainty or a macro risk that emerges, and then we see that there's no Fed comms. That becomes kind of a potential crisis moment for markets. We need to get rid of the blankie every now and then, right? I agree. I think we need to stop talking about the Fed put. I need to let the markets trade, and this will be a good thing for

active management and for the markets. We stop talking about it, as long as you know it's always there. Gentlemen, good to see. Have a good holiday weekend to you both. Shares of Apple, they're popping today in a big way. Mackenzie Sagalos joins us now with exactly what's behind this significant move. Hi. Hey, Scott. So Apple bucking the sell-off in the triple Q today shares up nearly 5% at the intraday high, even after a report that iPhone 17 production was cut 15% on softer demand.

But investors are looking past that for two reasons. One, Apple's actually been climbing since last week's product price hikes, as the street takes comfort in the company protecting margins by passing some of the memory cost increase onto consumers. And then, two, Apple's actively looking for workarounds to the memory squeeze. A need made more urgent by the next iPhone lineup, which is expected to require up to 50% more memory to run Apple's new Siri AI. That includes holding talks with Chinese suppliers currently blacklisted by the Commerce Department and the Pentagon. Still, the street is bullish on Apple locking in forward pricing, leaving the iPhone less exposed to the spot market spike in DRAM.

It also helps that Apple is getting more aggressive with the iPhone roadmap. Mika says Apple's planning at least five new models, including its first foldable device, a category especially popular in China market where Apple's gaining share now neck and neck with Huawei because it is the one premium device maker, not hiking prices, at least not so far. Scott? That's a good look, Mac, at a big move in the market today. Thank you. Mackenzie Sagal. Shares a blue owl.

Meantime, we're also moving higher. A lot of focus still on the private credit space. who better than Leslie Picker to join us with the latest here. What's going on with this one now? Hey, Scott, yeah, they're off the session highs, but Blue Owl investors. Happy to see some improvement in the redemption picture. Those shares currently up about 4.2%. Blue Owl's semi-liquid private credit funds did still face elevated redemptions in the second quarter.

The firm's smaller tech-oriented fund, O-TIC, saw redemption requests totaling 38.1%. Its larger one, OCIC received requests of about 18.8 percent, and both funds' redemptions were capped to 5 percent, as is typical with these structures. While those redemption amounts were higher than peers, there was some quarter-over-quarter improvement. OTICs declined by 230 basis points, while OCICs were lower by 110 basis points. And in both letters to shareholders, Blue Owl notes that the Fed's updated outlook that includes potential rate hikes would bode well, for portfolio yields. So shares of Blue Owl have plummeted about 40% this year

over concerns about the wealth channel. And today's redemption numbers for Q2 representing a slight improvement on that point, but still working through these desires of skittish investors that have carried over

for a few quarters now for Blue Owl, Scott. All right, Leslie, thank you. Leslie Picker. Just getting started here. Up next is a crypto comeback on the horizon, or will things get worse?

A little bit of a bit of bounce today for Bitcoin. Miller values Bill Miller the Fourth joins us next. We're back. Bitcoin's higher today, but it has been a brutal run for the cryptocurrency. It's around 50% now off its all-time highs. For more on where it might head from here, we're joined now by Bill Miller the Fourth. He's Miller Value Partners, CIO, and Chairman. Welcome back. Thanks for having me, Scott. Why is Bitcoin performing so poorly? I think the main reason right now is the fact that Clary Act, like it could be stalling on ethics concerns, but you look at it over a much longer time horizon,

the fundamental case for Bitcoin has never been stronger. So the CBO this year is projecting $1.9 trillion in a deficit. So let's look at that from a different angle. The marginal obligations being created that are unfunded by our country is 50% bigger than the entire market cap of Bitcoin. So you have to think, is this the best way of accounting for capital when we can just come up with new obligations year in and year out, the debt cycle gets worse and worse. I think there are better ways to account for capital that are based on consensus, energy, and transparency. So we're still very optimistic about the technology over the long term.

I know, but I didn't hear you say anything about the use case of it. I mean, what if there was never really a credible fundamental story to begin with? Well, then it might not exist, right? So Bitcoin came into existence in the heels of the 2008, financial crisis when everyone saw all of the money printing coming down the pike. And that's what happened. So the fundamental use case is stronger. And you have to look at the underlying sets of dynamics out there around you when you make market calls. And so, you know, the fundamentals are still incredibly strong. What if the biggest problem here is, it's simple. And that there's

just a lot of money going into other more durable, fast-growing areas of the market around the AI trade. and Bitcoin just can't compete with that. Well, I think AI very, very long term is incredibly deflationary. And to make up for that, you're going to have to come up with a whole bunch more dollars to fill in for all the debts that are out there. So one of the ways out of the debt spiral is inflation. And Bitcoin is a hedge against that over the long term. So I think overall, that's a very good thing over the long term for Bitcoin.

What do you make of other parts of the market here? I saw you, you know, posting on social media about small caps, you know, the Russell 2000s up 20% year to date. It's just blown the doors off everything else. How do you feel about that trade right now? No, we still think market broadening and small cap values likely to lead the way. If you look at the valuation discrepancies between large cap growth stuff, it's getting hit pretty hard today. And the small cap value space and you're looking at a long-term economic acceleration between fiscal stimulus, deregulation. The embedded expectations in small cap value are so much lower than the expectations

for all of the AI stuff. So we still like that as a place to participate. You know, consumer discretionary has, it's in the toilet. It's smallest percentage of market cap. The S&P as it has been in a long, long time. There's a lot of good values in that space. And financials also look pretty good too. This momentum rollover that we began our show with, and it's really hard to get away from because it feels like it's the prevailing theme in the market right now. That has more legs in your eyes if you have the views that you do on the other parts of the market? Yeah, momentum, I think, it's had one of its best runs in 50 years. And so I think it's time for value to shine.

Just give you one quick idea on that front. You know, a year ago, I think I was on the show and I said Google was the value investor's way to quote unquote play AI. I think right now the value investor's way to play AI is meta. It trades at a three-turn discount to the market. It has two of the most compelling networks in the world in terms of Facebook core and Instagram. They're going to be a major beneficiary of AI, even though they're obviously putting a lot of money into it. So we think that's a really good value investor's way to invest in AI at the moment. Well, the Google call was a good one.

It's up like 100% almost in any year. We'll see you soon. Enjoy the holiday weekend. Thanks, Scott. You too. All right. Thank you. Bill Miller, the fourth.

Speaking of Meta, good segue. We do have some news regarding it. Julia Borson joins us now with more. Hi. Hey, Scott, some headlines leaking out from a meta internal town hall. They're being reported by Reuters right now. Reuters saying that Zuckerberg said that the 2026 reorganization of the company wasn't as clean as it could have been. And also saying this internal town hall that AI agent development over the last four months has not accelerated in the way we expected.

This is a continuation of some commentary we've heard from him in the past. He said that in this town hall, according to this report in Reuters, that top executives were worried in early 2026 that we weren't going to move fast enough and that the best the company made on its reorganization have not come to fruition just yet. So see, Meta share is now trading down around 4.5 percent. We have reached out to meta for comment on these leaked headlines from Mark Zuckerberg's commentary in this internal town hall have not heard back. yet from the company. Back over to you. I mean, Julie, the market's obviously concerned to at least some degree about what's actually happening in the direction in which Mark Zuckerberg is taking this company towards the whole AI buildout. Yesterday you got the big jump on the cloud business. Then you got some

cautionary words today from some of the analysts community. Like, well, we'd really rather them spend their money more targeted towards their core or other parts of their business. it seems as though the jury is still out from an investor standpoint, that all of this is going to pay off. Yeah, I mean, that absolutely encompasses it. I mean, Scott, there are so many ways to approach, especially these headlines yesterday that I reported on about meta moving further into the enterprise business

with this cloud AI business. And some analysts yesterday celebrated the fact that this would be a new revenue stream, a new way for meta to monetize. It's up to $145 billion in CAP-X for this year. But other analysts have been pointing out, specifically today, the red flags this might raise. Does this indicate that meta maybe is not adequately, you know, in deploying its own AI tools in such a way that it's using up its own capacity? What does the fact that it has this extra capacity say about the fact that its own AI endeavors may have fallen short? And that's the concern that has been weighing on the stock today.

These apologies from Mark Zuckerberg reported in this town hall speak to something greater. The fact that meta has been lagging in AI about a year ago, just over a year ago, he hired Alex Wang, did this big aquire of Alex Wang to totally revamp Meta's AI division. And there has been some output from that. We saw Muse Spark. But they've always said repeatedly that this is still very much the early. days of Mehta's attempt to remake its AI approach. All right. Julia, thank you.

Julia Borson. Ed Yardinney, after the break. All right, we're back. Earning season just around the corner. Estimates continuing to climb. It is the reason many, including our next guest, are bullish. Ed Yardinney, President of Yardinney Research, joins us now. It's good to see you. Welcome back.

Thank you. That's the story, right? I mean, this is an earnings-driven market. That's right. I've coined a word for it, and that's FEMA, fabulous earnings momentum, not to be confused with FOMO. FOMO is a valuation multiple going up, irrespective what the fundamentals are. FEMA is all about fabulous earnings momentum, which is what we're seeing.

And I'll just interrupt you for a minute, because you know what goes on here down on the floor on special days like this, especially ahead of the 250th birthday for the United States of America. You're having the International Naval Review is here in New York City. It's going to be from the third until the eighth, and you have several members of the armed services, especially, obviously the Navy here. Admiral Darrell Caudill is the U.S. Chief of Naval Operations. He's going to ring the closing bell today, but there are many servicemen and women who are here, and that is what has drawn this great applause, as it always does. That's great. Let's get back to business for a moment, Ed. So as we said, earnings-driven,

market. And the thing now is that, yes, while tech is going to account for the largest percentage of the beats and the earnings growth, other parts of the market are now, I mean, they're not going to catch up the tech at 50 plus percent, but they're not like so that far behind either. That's correct. Yeah. I think the market definitely is broadening. I think we have AI fatigue. People are getting quite confused about where, where, what AI is doing between all the capital spending, some of the competition is bringing token prices down, the government smettling in the whole game. At the end of the day, AI is a great new technology just the way the Internet was, and it's going to benefit a lot of companies. I think that's why

you're seeing the Dow continue to go to record highs. People have a familiarity with the Dow. They know what their business is. There isn't as much uncertainty in confusion as you're seeing with the AI trade. How are you assessing this changing makeup of the market, the fact that momentum's rolled over, and you've had the areas that were laggards in, let's say, April and May, come back to life in June, and whether we think that's going to continue or not? Yeah, well, at the beginning of June, we thought there might be a June swoon because it obviously rind, but it also made sense, and I think we did see that in some of the laggards catching up.

I think July you're going to see more of it. I'm still looking for 8,250 on the S&P 500 by the end of the year, but I will not be surprised if the Dow actually outperforms the S&P 500. Wow, well, we had a new record high on the Dow today as well as the equal weight, so that tells a story in and of itself. Ed, you enjoy the holiday weekend. We'll see you soon. You too. Thank you. Edgar Denny. Up next, we tracked the biggest movers into the close.

We're back right after this. About 10 to the bell. Back to Christina now for the stocks as she's watching. Hi there. Hi, Scott. Well, let's start with Palantir shares because they're on pace for their fifth straight positive session after D.A. Davidson upgraded the company to buy from neutral, also raising its price target to $175. Shares are trading roughly at $130 right now up over 5%. Now let's talk about shares that are bubbling higher after the Lacroix Sparkling Watermaker declared a $3.25 per share special cash dividend.

This is national beverage sales and earnings. falling from a year ago, but investors feeling refreshed. It's Friday. Shares are up over 9%. And Genuine Parts in O'Reilly Auto are moving in opposite direction. Specifically on a Bloomberg report, O'Reilly is interested in a bid for Genuines' Auto Parts Arm. The unit could be valued roughly at $10 billion or more. This according to people familiar with the matter in the report. And so that's why you're seeing just such a divergence, genuine up 14%. Christina, thank you. Prasina. Up next, we're on Dow, record closed watch yet again. Shares of Tesla also getting slammed today, despite strong deliveries and production numbers. There you go down 8%. We'll tell you why in the zone,

which is coming up next. We are now in the closing bell market zone. Mike Santoli in 314's Warren Pyes here to break down these crucial moments of the trading day. Oliver Renick, standing by live from the CBO Global Markets in Chicago. Phil LeBoe on what has Tesla and Rivian shares moving today. Michael will begin with you on this, you know, I suppose the continued momentum Unwind remains the story to follow. It does for sure. You know, it started, you know, let's say last week, maybe the week before, but really accelerated with the turn of the month, turn of the quarter. You know, we don't even have to talk about semis, caterpillars, down 10% in two days. That was one of those kind of leading names that helped the Dow get where it was. And I know that there's

an embrace of this. I think it makes sense that people like the idea that it's not just one tiny segment of the market driving things. And you have a broadening out. and other sectors are participating and breaking out. That's all to the good. I just think when things move fast, they can break things, and you have record low correlations within the stock market that sometimes sets a scene for something more disorderly. And so I'm just on alert for that kind of thing,

even though right now it's keeping the market on the rails and it's not really changing the trend overall, even if, as I will continue to accentuate, the S&P 500 has been stuck in place since the middle of May. Sure, but the money is finding elsewhere to go. And that's a key to keeping the market to where it is. It's staying in. Another new high for the doubt, another new high for the equal weight.

But the S&P 500 measures the aggregate wealth of equity investors, and it's not moving very much. That's fine. I just feel like sometimes when things are going very fast in opposite directions, that's when you start to see the gears start to get stripped. As I say, it hasn't happened yet, but we'll watch. All right. We'll see at 4. Look forward to that on over time.

time. Mike, have a good holiday weekend. Oliver, where's the options action at Cibo? Some alert to Scott. The options story of the year has been the spread between volatility in the NASDAQ 100 and the S&P 500, which has been blowing out as stock market returns concentrate around big tech. But the reason for this latest stretch of the gap is different from a few months ago when NASDAQ options were being skewed by extreme demand for calls. This time, The gap is widening from demand for puts. The spread between the implied vol of puts that have a one-and-four chance of expiring profitable is over four times bigger today than it was less than two months ago and the widest since 2008.

Most traders are reading that as a sign that volatility in the S&P is more likely to go up than NASDAQ vol to come down. Think about it like this. In the middle of a hurricane, the price for umbrellas is always going to be expensive, no matter which way. the wind is blowing. Our hurricane, the NASDAQ 100, it could be a sign. Those winds are reversing, Scott. All right, good stuff. Appreciate that, as always. Oliver Renick, thank you to fill the bow with more on Tesla and Rivian. What's happening? You know, Scott, Tesla's shares moving lower down about, I think, a 8%, a sizable move lower as you take a look at shares. Part of the issue is, well, are they really going to see a year-over-year increase in deliveries or it'll be another decline? Look, Q2, way better than expected.

almost 481,000 vehicles delivered. There's the estimate at 406, up 34% compared to the first quarter. Also, energy storage deployments, 13.5 gigawatt hours. That's an improvement compared to Q1. We'll get the results on January 22nd, and that's when we'll get a better sense in terms of what the quarter was like for Tesla. In terms of Rivian, beat the street in terms of delivery guidance. And they raised their guidance for full-year deliveries to 65 to 70,000. That's an increase of 3,000 vehicles. They are ramping up R2 production. They get the, we get their results on July 30. Scott, thank to you.

Billabot, thank you very much. As always, Warren Pyes, momentum has had a record run and a record unwind. What happens next? I think that I'm not so concerned. I hear the concern in Mike's voice. I'm not so concerned about this rotation we're seeing. I actually think it's positive. We have the equal weight making new highs.

And when we step back, you know that July, everyone talks about it. July is a bullish month seasonally. So you can kind of check that box. New money flows in. I think that's happening. The thing that people miss, though, is that July is a month where the momentum factor has struggled the last five years. So we've had this tendency, last five years for, and this would be the sixth, for the momentum factor to fall apart. And really when you dig into that, the reason for that is the beaten up names really get a bid in July.

So that's what we were alerting our clients for coming into this. This is not scary to me because it's kind of what we foresaw happening. I think that this pullback in semis is really, when you zoom out, it's a healthy pullback. You need this. We're at risk of blowing a bubble if we don't have days like this. And so to me, when I zoom out and see the equal-aid at new highs, this is constructive. I expect the market to get back into gear before July is over. Sure, but to Mike's point, the S&P is what it is, a proxy for the over.

overall stock market, and it's been a nothing burger over the last month, as, you know, mega caps have sputtered. Now you have some of the other, you know, big names outside of the tech orbit that are sputtering a bit, too. Yeah, and I think that, but to me, this is the way we consolidate without a really serious correction. So yeah, we've been kind of a neutral gear for the S&P 500 for a bit. But, you know, to me, when you zoom out, this is the recipe for this bull market. This is going to be a bull market that's going to go as far as the AI theme takes it. And semis are the tip of the spear for that. So when you see new models come out, compute demand ramps up, semis get a bid. And that's what we saw. We saw a three-month pre where the SMA GTF that we're

showing right now was up like 60% in a quarter. You need to get, you need to take some of that off and cool that down a little bit. And it needs to spread back into the hypers and see these hypers scaleers come through and have people believe like, okay, they know what they're doing. There's going to be a return on all the spending. And so to get that mix happening right now, I think is healthy. And so there will be a give and take. But when we zoom out, I expect this to be the recipe that leads the market higher. So you think earning season drives people back into the hypers?

Yeah. I mean, I think that they've been, when you zoom out, you can do the math and you realize there is an ROI coming on the this money they're spending. And to me, yes, you're going to see that. And there's going to be some great earning seasons coming out. And I think that ultimately, investors are going to see what management sees, which is that there is an opportunity in front of these guys. Of course, it's scary. We talk about spending a trillion dollars every year and doing this generational, whatever you want to call it, industrial revolution. Yeah, that's scary. But when you look at the projects, and you look at what's happening in the technology, there are returns. And so you have to

build confidence and that's where you're going to get your conviction. So yeah, I think hyperscalers are part of the broadening. It's just, that's been the beaten up area this year, which is a little weird. So they're getting good right now along with the healthcare section from the road to me.