Closing Bell - Closing Bell: Bubble Trouble? 5/13/26

Episode Date: May 13, 2026

Two key questions swirl as the tech trade continues to run – bubble trouble or don’t fight the tape? Alger’s Ankur Crawford tells us what she thinks. Plus, top wealth advisor Sherry Paul from Morgan Stanley breaks down the key parts of the market beyond tech that she’s betting on right now. And, we drill down on two big stock stories of the day: Cerebras’ IPO and a mega move from Alibaba. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to closing bell. I'm Scott Wobner, live from Post 9 here at the New York Stock Exchange. This maker breakout begins with the remarkable run for tech. The NASDAQ hitting another record high today. It's up better than 1% on the day. We'll show you the full scorecard here with 60 to go in regulation. That hot PPI print upending the chance for a broader move today. That was pretty clear from the outset. Dow's not even down that much, though. It just gives you an idea of how the momentum is behind this market.

Yeah, rising rates are part of the inflation story today. We're watching that. There's the 10-year 447. The 30-year remains above 5%. It's been really, though, otherwise, all about tech today. Apple and NVIDIA hitting new highs of their own, both Tim Cook, Jensen Wong, traveling with the president over to China and those other tech CEOs who are there as well.

We'll have live reports coming up on both fronts in just a bit. It does take us to our talk of the tape. Bubble trouble or don't fight the tape? key questions as tech continues this remarkable run as we said let's ask anchor crawford what to do she's with alger and she's here with me once again on sets good to have you back how would you answer that don't fight the tape or bubble trouble what do you think i'm going to say don't fight the tape you got it you're not worried at all about possible bubble no no it's just too early scott i mean um numbers are going up for all of these all of the AI related stocks the numbers

are still too low. They will be low. I think they'll probably be low for the next two to three years. Wow. And I had said, I remember coming on here in 24 and saying CAPX is going up in 25, 26, 27, and 28. And we're only in 26. CapEx is going up. 27. We know CAPX is going up. I believe 28 is also going to go up because we are simply short compute. And the entire supply chain needs to adjust for the compute demand. So when some say, you know, be careful that this earnings momentum and the numbers are huge, undeniably so in tech, and be careful about the CAPX numbers because they're undeniably huge, but at some point they'll become more cyclical than secular. Now, you're painting a scenario in which this is a years-long from here outcome,

which leads you to believe that this is almost a more secular thing because of this transformation that we're going through. If you can define such a period of time of three to four years as being a secular change in the economy at large and the way companies are spending on AI. Is that fair? Yes. It's definitively secular. And look, that's where the opportunity for us lies where the market, let, I'm quite happy

that the market actually thinks it's cyclical versus secular because it gives us the opportunity. I'm not sure what the market thinks, but some of the stepdics out there, Right. And what I would argue is that this is such a sea change in the way we actually compute and the amount of intelligence that's coming out of the computation that it is a, you know, secular change. It is not a cyclical change. So, yeah, I'm just not that anxious about that narrative. What about the narrative? It's sort of like it's AI and everything else. Is that, are you fine with with that? the way that the makeup of the market looks right now? Well, look, I think that we're in a really interesting period of time because we used to be a consumer-led economy. And I mean, the consumer is a very important aspect of our economy. But two-thirds of it. That's right. But what we're seeing today is actually a little bit of a baton pass into a more industrial-based economy. And that

industrial-based economy is actually driven by AI. And so you are seeing the shift in in our economics of the U.S. and therefore you're seeing it in the market where, you know, the consumer is no longer what's dictating what the market's going to do. It's actually this very, very separate AI trade because it too has its own cadence. Do any of these moves in any of these stocks

give you pause at all? You sat down and you said, Nebius, and you show me your phone with the stock move on it. And it's like remarkable. As I said the other day, what used to be special now feels routine, that you see these kinds of moves every single day. You can show this.

I'm also, you know, I guess inferring to like a micron and things that have just gone parabolic. I get the excitement, but is some of this a little too much or not? Well, so here is what I think, it looks like it's too much when you look at the stocks. But you have to understand, we have to deconvolve the numbers and how much the numbers have come up versus how much the multiple has come up. So for Nebius, the reason that it's up

as much as it is today is that they raised how much power that they'll have access to, which means that's directly correlated to the numbers in 27 and 28 and beyond. And so when you're seeing earnings revisions that are on par with the stock moves, then the multiple is staying the same, if not shrinking. So I think the market, and we have to deconvolve the interaction between the numbers and the multiple. Right, right. Price action versus what the price is that you're willing to pay for these stocks. Right.

And there is a big swath of companies that the numbers have moved up faster than the stocks have moved up. So, I mean, Nvidia is a classic one, right? The numbers have moved up and they'll continue to move up. And so it has never gotten expensive. And in part, the multiple has stayed kind of. flat. I don't know if I'll speak to you again before they report next week. I mean, what are your thoughts is, you know, you got Jensen Wong over in China now with the president. I don't know what he's going to come home with, if anything, that's material to the business. But how are you thinking

about this report, which is now another bellwether at a really interesting moment in time for the space in general? Yeah, I would say if we circle back to initially what we said about where short compute, Well, the biggest beneficiary of being short compute or a big beneficiary of being short compute is Nvidia. So, I mean, if I expect to hear anything, I expect to hear they still have unsatiated demand on this call. And, you know, their supply constrained. All right.

Well, we will see you soon, I'm sure, and we'll continue to talk about this in other stocks. Anker, thanks. It's Anker Crawford. As we said, Invidia shares, they are hitting new highs today, earnings one week away. And as you know by now, and certainly we just mentioned it,

Jensen Wong in China with the president. Christina Parts of Nevelos joins us now with more, with perhaps some fresh reporting on what he, actually, he being Jensen Wong, may be coming home with, if anything. Hmm. Hmm. The big question is probably, or the answer is probably not a lot. So to point out, Jensen CEO, or InVIO CEO, Jensen Wong, joined President Trump, like you said to China after a last-minute call from the president.

A source familiar with the trip tells me Jensen Wong was not originally part of the delegation. Trump called him and asked him and, asked him to come. So to your point, Scott, what can this trip actually do for NVIDIA? Possibly just not much. The issue isn't on the U.S. side. Invita has its export licenses specifically for H-200s. The hold-up is actually coming from China. At GTC in March, I ran in to Jensen Wong in the hallways, and he told me NVIDIA had purchase orders for the H-200s and approval from both governments on both sides of the U.S. and China. Then those Chinese orders stalled on April 20, 22nd, Commerce Secretary Lutnik testified before the Senate that no H-200 chips had been sold to China.

Both were actually telling the truth. The orders existed and then fell apart on the Chinese side. Now, NVIDIA's own 10K is warning shareholders that export controls are hurting the company, saying customers worldwide are starting to design out U.S. chips to avoid compliance risk. NVIDIA is telling investors that foreign governments are actively steering buyers towards competitors, like Huawei, for example. And Vedia has its licenses, but the ball is in China's court, Scott. And I think there's at least a level of optimism on Jensen Wong's part, which he has talked about, that they're going to be able to do business there at some point. It's just getting over these hurdles, right? It is getting over the hurdles, but the problem is many of them don't even know what those hurdles are.

It seems like the Chinese customers had their orders blocked, and then there's been no communication as it has been in the past as to why these orders were blocked. Is it because of security risk? in chips? Is it because of climate concerns and power usage? Is it because of an old Melanox acquisition? None of those actually came up. So I think there's just a little bit of confusion as to why China is blocking it or is just China using Invidia as a bargaining chip, which I think they have been doing for quite some time. Interesting insights. Thank you for those. We'll see in a little bit. Christina, thank you. Several other tech CEOs making that

China trip as well. Amin Javers live from Beijing with what expectations are. And it is a loaded a group of big-name CEOs from many different industries that are part of this trip, Amen. Yeah, it really is, Scott, and you can take a look. We've got a graphic here showing all of the different CEOs that are on this trip with the president. It came together pretty late. A lot of these invitations went out late last week, and of course, we saw Jensen Wang

catching up with the president on a refueling stop in Alaska, which was kind of a dramatic moment. But, you know, I agree with what you heard from Christina. Parsonavilos that we're not hearing here, and that's a little bit difficult because the communications here are tricky and the White House has not been really talking to us in detail about this trip. But we're not hearing here any sense that there's some big Nvidia announcement around the corner. So I think a lot of people are looking at his attendance here and saying, well, does that indicate something is, you know, in the offing in terms of a deliverable,

a big announcement at the end of this trip? We're not tracking that right now. That could change, but it feels like the president simply wanted Jensen on the trip, called him up and asked him to go and he went. And I think it might be as simple as that, Scott. Meanwhile, all of this is getting more complicated because this trip was initially set up to be about trade in the wake of the Busan meeting that we saw back in October. Now we've got the Iran War on top of that complicating matters quite a bit. The New York Times just dropped a story a few minutes ago, which folks can read themselves, but which, says that U.S. intelligence has evidence that Chinese companies have been talking among themselves about weapons exports to Iran, maybe through third-party countries. That's a concern for the U.S. that the Chinese industry and the might of the Chinese industry might be getting into this war.

They want to keep that from happening. That might be something we see the president pressing Xi Jinping on in their meetings tomorrow. It all starts with a greeting tomorrow. We'll see a bilateral session. We'll also see a state dinner and some other events associated with Chinese history throughout the day tomorrow. So a lot of opportunities for the president to continue to press that case. But it just shows how much the Iran war overlay here is really going to complicate the negotiations on trade, Scott. All right. We'll look forward to all of that. Amen, thank you very much. It's Amon Javra's in Beijing, as you see. Let's get to our panel now. Treasury partners Richard Sappristine and J.P. Morgan's Abigail Yoder. It's good to have you both with us. So what

What's your take for somebody who's been making the case repeatedly to just keep leaning in to the mega caps? Anything changed? No, we've had three themes for a long time. Number one, look past the fog of the news, whether it's Liberation Day tariffs or the Middle East crisis. Number two, stay fully invested. Don't try to time the market. Number three, overweight large cap tech, in spite of the concerns about the large cap X deployment. We've held to that conviction.

The 800 billion they're spending this year, the $1.1 trillion they're going to spend. next year, it's all reinvested for future growth. I don't feel like that differs that much from what your current view is, does it? No, not really. I mean, I think when you, and this earning season has been spectacular. I know that we have some very large names on deck next week, but I mean, tech is growing earnings 50%. 50%. It's like, it's unbelievable. It's unbelievable. Even if you X out these one-time gains that a lot of these companies had, I mean, now the overall SMP 500 is growing 20% this quarter. This is the sixth consecutive quarter of double-digit earnings road. The only other time that that we've seen that is coming out of a recession coming out the global financial crisis, right? So this

really is a step function change in terms of the earnings profile of the SMP 500. And again, we're at all-time highs, but we are not at all-time high valuation. Is that why this is not a bubble? Is that how you would answer that question? I would answer that yes, because you're also starting to really see an ROI on the AI businesses of these companies, right? Like, you're starting to see a sequential change. Like backlogs basically doubled for these companies quarter on quarter. Sequentially, not year year, quarter, quarter, right? Like they're closing in on one trillion dollars. That's essentially revenue locked in for two years, right? So that, to me, doesn't sound like a bubble. Nor do you? No, I think you have to go and look at a couple of metrics. First of all,

they generated $184 billion in operating cash flow this first quarter, and they're redeploying it. Secondly, if you look at the peg ratios, the PE ratio versus the growth rates, compare large-cap tech versus 493. So Walmart, Procter & Gamble, Kimberly Clark, those peg ratios are four or five times, whereas large-cap tech, it's one, one-and-a-half times. So even though they've gone up quite a bit, their earnings are growing and the peg ratio is remaining very, very low. And on a relative basis, those stocks still are attractive. So you think we're getting thrown off a little bit by the tremendous price action we're seeing, and it's causing us to sort of take our eye off the bigger ball and just fall back on the analog to the late 90s? Is that part of what's happening here, you think?

Yeah, there's a lot of discourse about the magnitude of large cap tech in the S&P, how large it is. There's talk about the market being at 22 times earnings, six times book, three and a half times sales. I mean, there's a lot of narrative out there, but we're seeing tremendous earnings growth. And this is where you want to have capital if you want to grow your portfolio. When you look at some of the moves that we've seen, though, and like, you know, we show nebious for this program's sake, but you could show any chip stock almost any day, and it's straight up to the right. What am I supposed to do? Like, what do you tell clients and people who look at that

and say, this just doesn't feel like it's sustainable? Well, so when you were having the conversation earlier about particularly the memory space, right, because that's been the newer kind of group that's been doing really well. And I'd say it's only been going on for like eight-ish months, right? And for the most part, a lot of those companies are still trading it. Like South Korea is a great example of a market that encompasses as that, right? It's trading it seven times, right? Because you've seen earnings revisions north of 100%. The micron is at eight and a half times. Yeah. And- But the market cap over the last year has literally gone from like 80 billion to 800. Well, the argument is, okay, so memory in particular was like a quarterly pricing, you know, market for, it was very cyclical to your conversation

earlier. Now that pricing dynamic has changed materially. These companies are signing one-year deals in terms of pricing and volume contracts, right? That's a totally different situation that garners a higher multiple, quite frankly. You don't really have any exposure in semis, do you? Not, I have it through ETFs, but look, this is that whole vortex that's being created by hyperscaler, CAPEX, and data center buildout. Every company that supports that buildout has been going higher. And so the parabolic moves at some point will be corrected. But in the long run, the names make sense to own as long as you're seeing the CAP-X continually going into the data centers. Look, the single most important decision this year has been whether or not you believe the

cap-X is going to have a return to the large hyperscalos. And they're obviously doubling down with $1.1 trillion next year. By the way, that's going to remain the question for the next few years. I mean, it's going to be the question until it isn't. Exactly. And you're seeing a divergence now between those that produce chips and those that don't. So Google and Amazon are producing chips, Google GPU, Amazon Traneum versus Microsoft and meta, which do not. So you're seeing a divergence in the performance of these stocks since the last earnings season. They all reported great earnings.

Yeah, everything kind of did. Where else should I even waste my time looking elsewhere? It's like this is sucking all the oxygen out of the room. It almost feels like looking at other parts of the market. Abby are just becoming too difficult for people. And that's why they keep playing the same tune here. Yeah, it's been pretty painful. I think like the, when I think about our most contrarian recommendations are around financials and health care, right, the two worst performing sectors you're today. And there are different reasons for that. But I would say, like, there is a big push just in terms of money

flowing into tech. I think one of the interesting stats this week was when you think about all this inflation narrative and this concern around the war and Iran is, you know, looking at the retail E-L-E-T, the XRT, that had the worst one-day relative performance to the S&P 500 in almost 10 years, right? So I think there is very much a divergence in terms of underneath the hood as it relates to the market. And it's creating opportunities. I think health care again and financials are the ones that stand out does. What are your contrarian place? Four alternatives, okay?

All right. Number one, just like she said, is large-cap financials. Economy is going to do well, and large-cap banks will do well. Number two, we still have a crisis going on in the Middle East. So oil is protective versus any portfolio or any, you know, ripples that come out of that whole event. Number three would be pharmaceuticals where a company like a lily or some other names that are growing 20% a year growers are very important. And finally, municipal bombs. They still like those.

For investors where the return to capitalism more important than a return on capital. Right now, it's still four and a half percent tax-free. And none of this stuff with inflation bothers you at all, either on the Muni side or the financial call side of this? It's a function of the war, okay? And it will likely be transitory. Not all of it. Well, it'll diminish over time. But what's happened in the muni market is yields for foreign.

a half percent tax rate, when rates for four and a quarter, 430. Well, rates have gone up to, let's call it 450, and the muni rates have gone down, actually. So the ratio between the two has actually changed and gotten lower. So munis are getting more valuable, even spite of rates going higher slightly. Lastly, now that we know, you know, Kevin Worse has been confirmed by the Senate and it's going to be the next Fed share, what are your expectations? Do they factor in any way to your outlook for the market? I mean, we don't have a cut in 2026 anymore. We took that out. The market's pricing in, what, like 10 bips? You didn't replace it with a hike, did you? No, we did not. We are not there. I don't think it changes the narrative. He's one person on a committee. And, you know, I think they're going to be very much

watching what's happening with the labor market as they have been, you know, and it remains kind of weak at the margin. So I think that's something that they're going to be focused on. All right. Well, we'll watch it. I really enjoyed the conversation. Thank you. Both Abby and Rich. We'll see you soon. Let's set it now to McKenzie. Gallos for a look at the biggest names moving into this close today. Hi there. Hey, Scott. So four shares soaring more than 15%. Despite no clear catalyst behind the move, we are seeing some bullish action on the options market with notable call buying at June strikes. The stock is the S&P's top performer today. Accomi shares are climbing about 9% after Bank of America

upgraded the cyber and cloud computing stock to buy from hold. The firm said the company has successfully shifted from a legacy delivery network. to a credible AI infrastructure platform, B of A, also hiking their price target on the stock to $175 from 130. And next, power shares are higher by about 13 percent after the solar tech stock posted better than expected earnings and raised its guidance. The company also announcing an $81 million acquisition of two power businesses. Scott? All right, Mack, thank you, Mack, againsties Segalis. We're just getting started on the bell.

Coming up next, the countdown to the biggest IPO. of the year thus far. Yes, there are some other names looming. We'll tell you about the key numbers to watch when chipmaker's cerebrous prices after the bell tonight. Plus, we have more on Baba's big move in today's session. Dear Jibosa, tracking that for us, live at the New York Stock Exchange. We're back right after this. All right, we're back on the bell following two big stock stories. One, the pricing of the biggest chip IPO since Arm. Christina is back following that money for us. What can you tell us? Well, our audience should follow the ticker CBRS. a NASDA. A source familiar with the deal actually tells me this afternoon the IPO is going to

be valued at roughly $50 to $60 billion right now, at least $150 to $160 a share more than double its private valuation from just three months ago. Seribis is built entirely, though, around inference, the part of AI where models respond to users in real time. The company makes a chip with memory built directly onto its silken, so it's a little bit larger than other chips, but eliminates, according to the company, the bottleneck that slows down GP. systems. It sells the chip, the full computing system, and it runs its own cloud. So it's not just a chip firm. Open AI did sign a $20 billion compute deal back in January. AWS has a binding term sheet, though the deals aren't, details aren't worked out. Demand for the IPO is more than

20 times oversubscribed. But of course, there are risks. 86% of last year's revenue came from two customers in the UAE. Margins are in the low 40s, and the competition is coming. NVIDIA's CEO spent roughly $20 billion to acquire the IP from GROC that specializes in fast inference. The same market Cerebus is targeting. That technology is being built into NVIDIA's next generation Vera Rubin chips. Cerebris will definitely need to prove it can stay ahead of that. Updated pricing, though, Scott, is expected in the next hour and a half or so. Okay, well, we'll get for more reporting then.

Christina, thanks so much. That's Christina Parts of Nebulos. By the way, early Cerebris investor, Brad Gersner, is going to join me live on halftime tomorrow. he'll be on set, which we're very excited about, 12 noon as we watch for that stock to open its trade. Nice move as well today from Alibaba following earnings. Dear Jabosa with that story for us, hi, Dee. Hey, Scott, so Alibaba's making essentially the same trade every hyperscaleor on Earth is making right now. That is torch near-term profits to pour everything into AI infrastructure and trust that demand shows up on the other side. So Alibaba said it will surpass the $56 billion in Kappex this year.

And last quarter, adjusted profitability basically went to zero. CEO Eddie Wu telling investors that AI-related product revenue will cross half of the cloud business within a year. Now, that setup, the setup exactly, that Microsoft, Google and Amazon are selling over here. What may actually be helping the stock search today, Scott, is the Trump-Shee backdrop reports of progress on lowering U.S.-China tariffs ahead of that summit. Baba up 8%. But you've also got Baidu and JD.com getting a lift, which tells you where we are in the cycle.

Bill Scott, AI CapEx story. A loan is not enough for investors. Similar again to how they're judging the American players. They want CapEx plus monetization. Same for Chinese companies. Everybody does. Dee, thanks. Dear Jibosa.

Thank. Still ahead, top private wealth advisor, Sherry Paul. She'll be here at Post 9. Tell us about the key parts of the market beyond technology. She's betting on right now. We're back after this break. Stocks at record highs, despite the fact that under the surface, things aren't that rosy, hasn't seemed to matter.

As long as tech continues to carry the load for this market. For more, let's welcome in Sherry Paul, top advisor with Morgan Stanley Private Wealth. Welcome back. Thank you. Kind of how it is. I mean, tech's the whole game or almost. Yeah, at least after the last two weeks.

I mean, you know, that was quite a reversal for tech not being the best performing sector and now, you know, almost doubling the last few weeks. We tease this segment, though, as you having your eye on something else out of this space. Like what? Well, you know, the way I'm seeing this is sort of more of the same, but then something very different is happening in terms of us importing inflation, you know, through this Iranian conflict. That feels very transitory, you know, overall in terms of, you know, it's not really sticking into earnings. Is that why the market's looking past it because it believes exactly what you're saying? I think so. I mean, these are like political headfakes, policy volatility that sort of transcend the thematics. That's why it's hard to time the thematics. So you've got to make a commitment to tech and the thematics within tech, I think that continue to be really enduring over the next few years. So make the case then for your industrials, your financials, your health care, to some, because those haven't worked, they're just too complicated to try and figure out now.

Like, why lean into areas that haven't performed? In some respects, they haven't performed for a reason. And why is that reason going to change? Yeah. Well, I'm glad you asked because, first of all, there's a pretty cheap. barriers in the market. They play a good dividend. We want to be adding income to portfolios where we're waiting for transitions to occur within the sectors. Really, we've got a couple things weighing on financials really around rates and M&A activity that we would expect to kind of pick up in the

second half of the year. I really wouldn't expect, though, that I think off the table or rate cuts, you know, as we're importing inflation, I think the market's now digesting that. So you think they're off the table. They feel very off the table. I mean, I think at this point, it would be a hard thing to see a rate cut at this point. That's Morgan Stanley's position. Yeah, I think most people's position is forget it. I mean, I know the hike word has entered the equation too, but I don't think people are taking that really seriously. No, and this is why you just can't trade rates. I mean, I've been advising clients for years to not trade the rate market. And even the last time I was on the show and that we had an intra-year decline,

I think at the last time I was here, we were down 8% that did these reversals and trying to trade rate policy is, you know, is not something that's going to be beneficial when we have these strong thematics that people can lean into. Is there any reason to believe that all of these other areas of the market that seems so promising like six months ago? Yeah. Are we going to come back? Or are we just in this game where the AI trade is going to work? And eventually it may not, but that horizon feels like it's far. Well, it's like right around the corner, but I think people are feeling like it's a mirage. You asked about health care earlier, which I think just has sort of an 800-pound policy girl on it right now.

I was like, one of the worst-performing sector. It is. And, you know, the worst performers ultimately can become the best performers. I think that that's about margin and policy and GLPs and weight loss drugs and pills versus shots sort of thematics. And don't forget, healthcare kind of behaves like a tech stock. All of a sudden, the approvals come through and the stock spike in any time we get good dividends. But I will say, though, what you said earlier is that we're already looking at 2027. Like from where I said as a portfolio manager, this year's over. We should be looking at what do we think is going to happen the second half of next year.

Second half of next year. So you're looking a full year ahead. I'm looking a full year ahead. What do you see? Well, I see the lemon getting squeezed out of productivity enhancement and cost reduction as a way to increase earning per share margin expansion. And any company that's not doing that right now by installing tech and investing aggressively, getting that accelerated depreciation through the new big tax bill and taking all of that on so they can see where they sit are going to be disadvantaged because I think that next year we should start to see that AI actually becomes deflationary, that if you want to pick up market share, that you're going to have to

go back to the table and start changing your pricing structure to steal business from your competitors. And the setup for that is now. And companies that aren't setting up for that are going to be disadvantaged and behind. But don't you think that this productivity ramp is going to last for a matter of years. When you say that the juice being squeezed from the lemon, are you suggesting that the gains from productivity or eventually going to all be squeezed out? No, I'm saying that companies that haven't really started squeezing that lemon are way behind right now. So the companies that have, and they've invested heavily in tech and innovation, productivity, and this is the case for industrials, too, going back to your earlier question, are going to be left behind in the next

phase of this, which is going to be grabbing market share through price competitiveness. And that's how capitalism works. Like, I'm looking forward to that. And you look out now, and we're, you know, three years in now we're heading to four years of gains, right? I mean, I think for all intensive purposes that we should be looking at single digits. But we could conceivably go into that late 90s chapter of five years. And inflation, we're importing it. Rates kind of stay where they are. There's still a 20-year lows. And we can see earnings per share continue to increase we've got 16% you know we've got like people raising raising earnings and and the market doesn't go into a recession necessarily if the economy does these things are decoupled so I think it's a

better outlook than people feel or how they're feeling even in their own pocketbook do you like non-AI industrials because there's you can break that group and I think two at least two categories now I mean the obvious ones that are playing into the AI build out and boom are the ones that are going up might the caterpillars of the world some of the power. players, et cetera. Well, those are great. I mean, like, these are hand and glove, right? I really are playing industrials and materials is this convergence between the tech buildout and the military of the future. Because even when, you know, the running conflict gets resolved, the military buildout continues without the conflict. And that's stimulative across the board for industrial

and materials. Yeah. Very simple. Well, we'll see if it all materializes. Sherry, it's good to talk to you, as always. You too. Sherry Paul here back at Post 9. Up next, tracking the biggest movers as we head into what looks like another record closed for the NASDAQ and the S&P continue to track that of course. Mackenzie Segalis is standing by with the names we need to keep our eye on here, Matt. A shoemaker getting stomped on, Scott, after earnings and a top website developer is seeing its shares crash. The names to watch just after the break. Less than 15 to the bell. Let's get back now to McKenzie for the look at the stock she's watching. Hi. Hey, so Birkenstock shares sliding about 13% after the shoemaker reported worse than

expected earnings and revenue. The company saying that the war in the Middle East weighed on growth in the region and across Europe and Africa, shares pacing for their second worst day on record. WIC shares are plunging more than 25% after the web development platform posted a big earnings miss for Q1. The company blaming investments in its app building platform and soaring marketing costs, but also likely seeing some selling on continued AI disruption fears. And finally, Echo Star shares are higher after the FCC said it approved the company's $40 billion sale of wireless spectrum to AT&T. And SpaceX shares were up as much as 6% today, but have cooled off, now up just about 3%. Scott. Okay, Mack, thank you. Mackenzie Segalis.

Up next. Cisco hitting all-time highs ahead of earnings. What to look for when that company reports top of the hour, we will tell you in the market zone, which is next. Now the closing bell market zone, Mike Santoli and Howard Capital Management's Vance Howard are here to break down these crucial moments of this trading day plus Oliver Renick live at Cebo Global Markets in Chicago with a look at the options action in the transports today. And Diana Ollick is tracking the home builders on the back of today's rate moves. Christina Parts of Nevelos watching Cisco's report, which is coming in overtime. Michael, I'll go to you. Your observations on this day are what? I mean, same song only louder, just in terms of the relatively narrow leadership, at least in terms of what is.

contributing most of the upside oomph to the S&P 500. Seventy-five hundred, not that far above where we are right now. That was sort of one of those upside objectives. A lot of the bulls were looking at once we did kind of pull away from the March 30th lows. A 20% move off the intraday low from March 30th would be like 7550. So you're starting to get obviously a little bit stretched in the short term. Over the course of the day, breath actually got a little bit better.

So even though it's rough and there's more new lows than you'd like to see with the index making a new high. It seemed like it moderated, but I can't escape banks down 1% on the day. Consumer cyclicals just really cannot get out of their own way. So it's a K-shaped market as well as an economy. Yeah, I was just going to say, it's hard to fight the tape on both sides. It's hard not to lean into the winners, and it's still hard not, you know, to lean against the ones that are down and take a shot at some of those names. Well, it's hard if you're trying to outperform. It's hard if you're trying to show monthly, quarterly, even annual performance numbers, but arguably things get cheap enough or out of favor enough that they do create, you know,

their own foundation for something to go higher. It's not happening yet. Clearly, macro has a lot to say about this and, you know, yields being elevated oil where it is. It feels like it doesn't allow for the clearance narratively for the rest of the market to do much. What do you and Mel have coming up in about six minutes? Well, we are going to, to certainly dig into Cisco, which of course has been rediscovered again as an AI play to some degree, as well as talk to a hancho in fixed income at BlackRock about really how it's a new regime when it comes to rates and inflation. All right, good and timely on both accounts. We'll see at the top of the hour of the court of that. Mike, thank you very much. Oliver, let's play some options action

at Cebo in the transports today. Scott, it's a China story in disguise. The transport we're watching as Ford as it's turning out to be the surprising American winner of the day, as China stocks have just kept rallying throughout the session. A Morgan Stanley analyst this morning said the company's licensing deal with Chinese energy storage giant CATL could be a major catalyst for Ford's new energy business and a model for U.S. China partnerships. The stock's up 15% on pace for its best day since 2020 and traders are all over it. Options volume is 10 times the daily average. and more than five times more calls are trading than puts and twice as many calls bought than sold.

One trader I saw spent a quarter of a million dollars buying $7,000 of the $16.85 strike calls expiring in mid-January. A bet the Ford will add 25% over the next six months. I keep your eyes on this one. It's a $14 stock, which means options are nominally cheap, and we know retail traders have been loving the theme of refreshing American classics.

All right. All of it. Thank you. Appreciate that, Oliver Wrenick. Now to Diana Oleg on the homebuilders' rising rates and nemesis of this space. How many times are we going to say that, Guy? I think a lot more time, Scott. Look, builder stocks are reacting to climbing mortgage rates. The home building ETF ITB, which is a mix of home builders and building products manufacturers,

is down about 1.5% on the day. And shares of the big three builders, D.R. Horton, Lenar, and Pulte are all also down on the day. An exceptionally hot read on inflation early today sent bond yields higher and mortgage rates followed. Rates had already been surging higher earlier this week on news of more trouble in negotiations over the war with Iran. The average rate on the popular 30-year fixed mortgage rose Wednesday to 6.57 percent. That according to Mortgage News Daily, it is now 15 basis points higher than it was last Friday and is sitting at the highest level since March when falling rates reversed course due to the start of the war. Scott. All right, Diana, thank you very much.

Diana Olik, now to who, Christina once again as we wait for Cisco after the bell. What should we look for? Well, first of all, Cisco shares are trading above $100 for the first time ever. But remember, the stock actually fell 12% the day after earnings last quarter on rising memory costs really eating into margins. So the bar is high. Three things to watch.

First, AI orders. Cisco has been building momentum going from essentially zero share in AI back-in switching to winning business at the server layer with customers like meta. Second, margins, memory prices have surged. The cloud mix is shifting. And while Cisco has pushed through multiple rounds of price increases, those take time to flow through the backlog. And then third, security. That business has been shrinking just the last two quarters, partly because of Splunk's transition to cloud pricing.

And also because newer products like XCR have not necessarily kept pace with competition. All right. Christina, thanks. We'll see you, Christina, parts of nevertheless. All right. Got Vance Howard next to me is we've got less than three minutes to go. before close up. What are your thoughts as you watch this market, for the most part, go straight up. We're going to have record closes again for S&P and NASDAQ today. Well, you know, our call, Scott, was around

7,700, 7,700 on the S&P. It looks like we're going to get there by, you know, Ben Summer or maybe next week. Go back to the calculator. Exactly right. But the point being is, this is a, if you're trading technicals, that's what you need to be trading now, not fundamentals, because the fundamentals you can throw out the door. You know, we were talking about Rocket Labs the other day, and I wrote about it in my Welk watch that I write. And I said, it's a classic William J. O'Neill breakout above 93. It broke out of 93 about three or four trading sessions ago. Now we're at 125. So you can't really justify that on a fundamental basis. You've got to start trading technicals. And that's the market we're in. Yeah, but the technicals are confounding the technicians too, because they look at what the

market's done. They see tech going straight up at the expense of almost everything else. And they're like, something's got to give. One of the top technicians said as much today, when is something going to give? And it will. There's no doubt that tech's going to break, and it's a break to the downside. And you want to make sure that when the music stocks, you have a chair. And from the great, you know, hard cash and stay nimble. Yeah, but there are people who think, okay, it may break, but it's not going to break for a long time. You're not suggesting that this is coming anytime soon, are you? I'm not saying it's coming anytime soon, but you need to be walking behind your stops on technicals, on the different technical analysis. Like, we were buying quotes about a week ago just to hedge our bets. Are we long tech? We're very long tech.

Are we having a good time? Yes. But I tell my traders all the time, I said, when it starts to become too much fun, something's going to happen and it's not going to be good. But what else now, sort of at the expense of tech, looks attractive to you? I love the Mag 7. You can't hardly not like the Mag 7. And by the way, I've nicknamed them the Seven Kings of Seven Nations because that's what they are. They're so big, they're so powerful. They have so much capital behind them. Not only that, Scott, they've got a tremendous amount of human capital behind them, a lot of smart people working there. So they're going to gain things. And I think the MAG 7 is going to be a great place for any investor to invest. So what, but I know, but elsewhere, what's attractive now? If you think this is

eventually going to break and you want to get ahead of it, how do I do that? Well, I think the way you look at is you look at good ETS like DVY, which is a high dividend paying, high quality ETF that's going to buy, you know, it's going to be the opposite of tech. And I think you're going to see, tech starts to roll over. You start to see tech give back some of those gains. You're going to see some of that money going into high quality stocks like DVY and dividend pay stocks. All right, Dancer, I appreciate you being here. Van Tauer, ring a bell, ringing another record high. So I'm like a broken record.

Because I've been saying that almost consistently because the market has been doing...