Closing Bell - Closing Bell: Mid-Summer Stall? 07/11/25

Episode Date: July 11, 2025

Is the market’s week-long pause working to refresh the bull for a further climb? Or is the market undergoing a midsummer stall as it did this time last year? We discuss with Avery Sheffield of Vantage Rock, Requisite Capital’s Bryn Talkington and HSBC’s Alastair Pinder. Plus, some big news in the fintech space breaking this afternoon – that group of stocks sinking midday. Top analyst Dan Dolev hops on the CNBC newsline with his instant reaction. And, one top technician highlights what he says are the three best charts in the market right now.  

All right welcome to closing bell on Mike Santoli in for Scott Wapner today this make or break hour begins with stocks trying to hang tough against another bout of hawkish tariff talk. The S&P 500 near its high of the day you see it's down just about a quarter of a percent has a shot to break even for the week that's somewhat thanks to Nvidia's powerful breakout. That stock up close to 4% on the week, of course, did surpass $4 trillion in market cap. Also some lagging defensive parts of the markets and value finding a bit of relief. Here is your scorecard with 60 minutes left in regulation. The NASDAQ has spent some time in the green today. It's right just below the flat line right now.

It has taken up the slack from the Dow, small caps, other cyclical groups, which are taking a step back after that other threat of high Canadian tariffs that was overnight. Treasury yields set to go out near the weekly highs as investors look toward a CPI report next week and puzzle over the inflationary implications of whatever tariffs we end up getting. This all takes us to our talk of the tape. Is the market's week long pause working to refresh the bull for a further climb or is the market undergoing a midsummer stall much as it did this time last year? Let's ask Avery Sheffield, co-founder and CIO of Vantage Rock Capital.

Avery, good to have you here. Great to be here. What is your read on this? It's so, you know, we've gone from three months ago, this moment of kind of maximum uncertainty to now having a little bit of perceived clarity out there is the market have it

right that we should feel that feel better about things. Well I think it depends on the stocks you're talking about right. So a lot of stocks have priced in tariffs not really being much of an issue. Interest rates coming down. In the economy kind of smooth sailing along with AI,

you know, leading to happiness for everyone and spending for everyone. So those stocks, I think, can be vulnerable in the earnings season if they don't have perfect results. But what's really interesting about the market is we still have a lot of relatively valued to inexpensive stocks More often in the cyclical areas not always that I think are pricing in, you know

A more bearish scenario and I think could run from here It's interesting you say that in part because if I look at people who try to read the market Signals in terms of what leadership looks like what types of stocks are outperforming They will point to consent continued strength in cyclicals already that they've kind of indicated, you know, whether it's parts of industrials, even consumer cyclicals have perked up. So I don't know if that's a matter of the market maneuvering for, oh, we're going to get a Fed rate cut in a few months and the economy's hanging in there. Or if you feel as if that's just a little bit more some speculative stuff.

Well, I think that everyone's speculating on what the Fed is gonna do and whether we are gonna need rate cuts, right? So I think the announcements like, okay, Canada's going to 35%, oh, it's not gonna be 10% is the baseline, we're talking 15%, 20% more or more. Those things do concern the market,

and of course we've seen bond yields move up a little bit. And so if we weren't to get a relief in rates, I think that we would see a correction in all areas of cyclical stocks, whether they're expensive or not. But what's interesting to me is you've had certain areas, especially with industrials, within transports, where you have kind of trough multiples on earnings that have

actually like been fairly stable for the past few years but aren't at the COVID peaks on this expectation of a meaningful recovery but I don't think the fed's going to be able to cut rates enough to lead to a cyclical like major rebound because in that case the 10-year would move back up and you'd have this reinforcing or you'd have this countervailing force keeping the cycle from getting too strong so I think the most likely cyclical outlook is fairly steady and so if that is the case you're really going to see a bifurcation performance between those much more expensive cyclicals versus those that are still pricing and some uncertainty.

You have seen a little bit of a migration. I mean, this week was pretty stark about this. You know, the S&P comes into the week near record high running pretty hot. And you've seen the best performers like the momentum stuff back off a little bit. A move from growth toward value more from large towards small. Is this just the market, you know, kind of finding a way to stay afloat and just making sure nothing gets too out of whack? Or is there some macro driver to all that?

So, yes, right. Is there a macro driver to the momentum falling off? Or is it just like a technical happenstance? That we get a good jobs report and all of a sudden Fed expectations are coming in looking like they might be more friendly and this is what happened a year ago, the Russell took off. Yes, well I think the issue is that there's so much crowding in those stocks that have been the momentum drivers.

They increasingly need additional positive data points to push them further. And so if they don't have that and they start to move down, there's so much leverage in the market that that just has a self-reinforcing cycle to the downside. And at the same time, we have seen some upswing, again, of the more of these value stocks, more of these less expensive cyclicals that's kind of picking up the slack.

And I think people are looking out there and they're like, wait a minute, do I really believe in the valuation of all these stocks I've been buying up to ever higher highs, or was I just in it for a ride? And so it just has this technical dynamic of correcting, and unless the earnings prints of those companies are much better than expectations,

you could continue to see some softening in those leaders, in those momentum stocks. You mentioned a couple of times, more reasonably priced cyclicals as well as transports. So I know airlines have been a focus. We got some, I guess, reassurance from Delta this week. How are you positioned there? Yes. So we like premium airlines.

And so we are, the discounters are, you know, having a tough time. Delta's results suggested that they could continue to have a tough time. The main cabin was actually quite weak. It was really premium, the credit card business, the maintenance business, the cargo business that drove the results. So what we're seeing is this bifurcated economy

in airlines, right? The premium business customers, business individuals can continue to spend, and those that are more budget constrained are struggling. The premium airlines, though, are trading at less than 10 times earnings, and what's really interesting about the airline space is that capacity is coming out. Delta's results were weak, right?

Relative to expectations at the beginning of the year. Better than expectations. Expectations are now going up, but we'd already priced in the weakness. And so those are the types of stocks that are interesting to us, but I would be very careful and pick your spots in airlines.

And I think you've seen that kind of, so many airlines moved up yesterday that are actually correcting more today because maybe they don't deserve, you know, all of that move right now. But elsewhere in transports, like places we'd be more conservative, would be for example, within trucking,

you have companies that are training at 20 some odd, 30 times earnings. You really need to see a meaningful, cyclical recovery for those to play out. So you just have much lower expectations in airlines, which is why we like that better than for example, in companies in the trucking space. Yeah, makes sense.

Avery, stay with me. Let's bring in requisite capitals, Bryn Talkington, and HSBC's Alistair Pinder, Bryn, of course, a CNBC contributor. Alistair, you still think that it makes sense to favor risk assets that you feel like almost the pain trade is still higher. Why is that the case after the move we've had the pain trade is yeah definitely

higher from here I think you know a couple of reasons you look at positioning our positioning indicators say that the systematic funds still neutral not necessarily massively positive at this point and for me the setup going into the earnings kind of as Avery was saying is it's very favorable right now I think if you look at what the consensus is expecting, it's just way too low. Actually, Q on Q is going to be, it's basically expected to be its deepest decline since COVID. And that is with a lot of analyst pricing in margin compression as a result of tariffs. And I think the one thing that we've seen in Q2, which has been a surprise to everyone, there hasn't really been that

much of an impact from tariffs so far. A lot of the retail sales data is still stronger, inflation not picking up. I think there's going to be a huge beat on the earnings, particularly in the tech, particularly in the Magnificent 7, which have one big huge tailwind, and that's the weaker dollar. We talk about how the US is more domestically focused, but 30% to 40% of revenues still get from overseas, and the tech sector in particular has that highest overseas exposure right now. So I think the momentum is continuing to rise. I think the market's been amazingly resilient to all of these risk factors, be it the one big beautiful bill, be it tariffs.

And I think we still have more money to come into the market at this point. And Brent, are you taking your cue from any of the various rotations that are going on right now, whether it means kind of lightening up in the winners or really just maybe waiting for some of the quality stuff to come in? It just seems like there's like these mini rotations. We'll see how long value or small caps can actually run.

I mean, we own RSP, we have a free cash flow yield ETF, you know, that have really struggled versus the tech or NASDAQ or the S&P. And so I still think, especially when you're getting these big breakouts today in crypto with gold and silver and Ethereum, the momentum is definitely on these go-go names, these story stocks, cryptocurrency. And so it feels like that's somewhat just getting started, especially as you're starting to see some pretty strong breakouts across, once again, these areas I just mentioned. Yeah, there's no doubt that some of that spicier stuff in the market or just things that really are out the risk curve are doing pretty well, Brandon.

I guess when do you know that it's time to sort of take that as a contra signal as opposed to thinking that you want to ride it? I think, you know, markets are overbought. You can look at a lot of different metrics, but as we all know, markets can stay overbought for a long period of time. And so I just think as an individual investor,

you have to just, when did you buy? What's your performance? Where are you comfortable with? You know, I sold Roblox the other day. I was up, I owned it at 30, but I fell at 100. It had just gotten ahead of itself. And so I definitely think going into earnings this quarter, there is some risk with these names

because you've had such a big monster return from April, that if these types of names, the Robinhood, the Palantir, the Roblox, even like Microsoft, I think if they don't absolutely crush it, I feel like there's a lot already priced into these names right now where they could get a rest. But once again, the retail, the hedge fund momentum could surprise us and these names that are overbought just continue to go higher. So I wouldn't be surprised either way, but I definitely feel like there's been pull forward. And I do agree that going into earnings,

make sure you know your earnings dates before you put on new positions. I admit I had missed that Roblox was up like 175% in the last year, up to $72 billion market cap. Alistair, what do you have to be assuming about tariffs where they settle what their impact is, in order to continue to believe that you have this favorable outlook?

I think you've basically got to assume that the effective tariff rate is somewhere between 10% to 15%, which is slightly below, I guess, what Trump has been announcing over the last few days. I think in that baseline scenario, I think we would basically estimate a 5% to 6% hit

overall to the S&P 500 earnings, which is manageable in this situation. It's completely manageable. I think the big risk for us is actually going into Q4. I think what we've seen across all the data is a big pull forward from companies building up inventory, from even the consumer going out and buying early, particularly after Liber liberation day, to try and get ahead of these price increases. And the risk for me is that for now the data keeps on coming better than expected, but that might start to fade. At that point, I suspect it's going to be around Q4. A lot of companies already in their earnings, both in Q1 and the last few days, have been

highlighting that the inventory pressures really are going to start coming through in that six to 12 month period. And so that I think is the big concern for us. And Avery, we've alluded to what the Fed might do. And I guess how does that fit into the overall picture in terms of why the Fed might be moving? How quickly does it have to do what it's going to do? And really, should we be rooting for a more dovish Fed right now? Right. Well, I think it's a very tricky position and really should we be rooting for a more diverse Fed right now? Right. Well, I think it's a very tricky position for the Fed to be in, and because if they

do cut too early, you're going to have the long end, and too much, you're going to have the long end blow out, and that's not going to be favorable. It's going to have definitely a negative reinforcing dynamic. So I think that, I mean, what I think that they're a goal of watching how the tariffs play out and being more patient is probably the more rational thing to do. Now we do have multiple factors in the economy that suggest that absent the tariffs you potentially should be lightening up a little bit, right? We're seeing unemployment claims continue to rise. We

even have, you know, the worn notices of layoffs kind of really spiking up you have consumer credit card delinquencies while not terrible like they're back to kind of pre covid highs so we have these signs of weakness in the economy that could continue to get worse if we don't provide a little bit of a relief valve but if if the inflationary impulse from tariffs is higher than anticipated, you want to be careful there. Now, I would say the data that we're seeing from retailers, including earnings that came out yesterday, suggests that they're only gonna be probably

selective price increases. And I do think that the impact from tariffs as currently constructed is probably gonna be manageable and not that inflationary and allow the Fed to maybe getting the two cuts this year, but three, four, or our president's hope for significantly more cuts quicker, I think would probably be unwise.

It's remarkable when you think about it. I mean, Alistair, if this level of tariffs, which were not really conceived a couple of years ago as being likely, is absorbable, and we just sort of have a little bit of a ruffle in the markets for a while, and it's effectively a bit of a corporate tax hike, or it's a VAT tax, whatever you wanna call it.

I mean, we've been leaving money on the table, if that's the case. I mean, I actually think, you know, I don't want to talk about AI, because everyone wants to talk about AI, but this is maybe one of the offsetting things here as well, which is that there's a great study by the US, the Census Bureau, who basically asks the amount of companies

that are, are you using AI to replace business? That's gone up from like 3% to currently around 12% over the last 12 months. And that's a huge amount of companies that are using AI. And I think that actually might be activated by tariffs. Like if you're a company and you're facing higher costs, how do you get around that? Well, let's start being more efficient.

Let's start investing in AI to reduce some of our costs here and there. And that again, I think can navigate some of these problems for corporates at this point. And Bren, just to kind of wrap up on this big picture note of AI, how the market is currently playing it and what it believes and what maybe the next phase might be, how are you starting to think about it? Because really, the AI theme over the last almost three years has completely covered

up for a lot of these macro hiccups and other things that the market might otherwise be contending with. Well, if you look at Nvidia as a proxy, Nvidia has really been flat for the past year. June to June, it was at 140, went to 100, back to 140. It's just broken out of that. So that longer the base, the higher the run up. And I think between China is not existential. And so you have Nvidia breaking out. And I think that Dovetails to Mark Zuckerberg spending

a hundred million as a signing bonuses on multiple engineers, poaching people from OpenAI and Apple. I think that this is still just getting started. And I feel really confident as Google, Meta, Amazon, and Microsoft in particular come out over the next couple of weeks, they are going to reinforce that narrative that they are all in here. And so I still feel it's early days. And so it does feel like maybe it's like 1997 versus the 99,

but we still had those corrections back there in the late 90s. So I think that we'll still get corrections, but it does feel like early days for this space. It's getting confusing because I've been thinking about the April sell-off is 1998 and then maybe in the tech cycle we're earlier than that and who knows but it is remarkable that you have all these companies giving all their free cash flow growth to Nvidia this year and next year and the markets willing to put a 30 multiple on all of them so I think you know for now it's it's there's sort of like no, no pain, all game.

We'll see if that can continue. Avery, Brent, Alistair, thanks so much. Appreciate the time today. We are getting some news on the fintech front. Pippa Stevens has that for us. Hi, Pippa. Hey, Michael, take a look at shares of PayPal and Robinhood, both moving lower here on a report from Bloomberg.

The JP Morgan is set to start asking the FinTech companies to pay up for their customer data. According to this report, that could amount to hundreds of millions of dollars in fees for the FinTech companies. Now the report says that those fees will vary depending on how the FinTechs are actually using that data with higher levies for payments focused companies.

Now, of course, this will drastically reshape the entire business model for those fintech firms that do rely on access to those customer bank accounts. You see here PayPal down now nearly 6%. Mike? Fascinating. Yeah, the incumbents trying to flex a little bit here. Pippa, thank you. Let's send it over to Christina Parts-Nevelis for a look at the biggest names moving into

the close. Christina. Hi, Mike. Well, Kraft Hein shares for a look at the biggest names moving into the close. Christina. Hi Mike. Well, Kraft Hein shares are a little bit higher on a Wall Street Journal report. The company is preparing to break itself up. People familiar with the matter said the food maker could spin off a large chunk of its grocery business into a company that could be valued as much as $20 billion. Shares are up, oh no, a little bit more up, almost 2%.

Sun Run continuing its volatility again today shares down but the stock has really got up and down just over the last week or so as president trump's sweeping tax and spending bill was signed into law last week the bill includes cuts to tax credits for renewable energy projects and so that is why you're seeing shares down almost six percent mike christ Christina, thank you. 7%, I should say. Almost 70%. There you go. These move fast, the alt energy names. Thank you, Christina.

We are just getting started here. Up next, Intelligent Alpha's Doug Clinton is here breaking down how he's playing the AI trade. He'll join me at Post 9 after this break. We are live from the New York Stock Exchange. You're watching Closing Bell on CNBC. Welcome back. It's been a banner week for the tech space.

The sector hitting all-time highs again today as Nvidia pushes even further above its record four trillion dollar market cap. Joining me now to discuss intelligent alpha founder and CEO, Doug Clinton. Doug, good to see you. I mean, obviously that's a landmark. It's obviously representative of just the sheer

massive economics that are flowing in Nvidia's direction. But I wonder to kind of weigh in on what we were just talking about with the prior panel, which is, where we are in this process of all these other tech platforms handing their free cast flow for a year or two over to Nvidia, and the market being good with both sides of it. Yeah, I think we're still, in terms of the AI trade,

you think about the long term, I think we're probably still in ending three-ish. And we've actually been saying it's inning three for like three or four months. I feel a little bit like the boy who grabbed it. Quite a rally, keeping the inning alive. I think we keep seeing these breakthroughs with new models. I mean, GROK4 just came out.

It's performed very well on benchmarks. I think just objectively too using it, it is a step forward, a small step, smaller than we've been seeing, but it's still a step forward. And so I think the market is seeing, on one hand, Nvidia is powering the brains. Every brain that will be artificially intelligent

over the next five years will probably be powered by Nvidia. And on the other hand, the companies that are building these brains, I think they stand to have large cash flow in the future, even though right now they're very much in investment mode. How much should people concern themselves with which model might win? What's gonna be the structure of this business

once we finally get to some further state of maturity? The way that we used to think about it was there were sort of four real players to win this model war. There's OpenAI, obviously. There's Grok, Meta, and Google, right? So I think at this point it feels like Meta is a little bit in desperation mode.

I mean, Mark Zuckerberg has been out buying a lot of really high-end talent. I think they've thrown out the playbook and they're just reinventing what they're doing. So they're not out of the race, but they're certainly at the bottom of the list now. The other three, I think, are tightly clustered together. And what's interesting amongst those three, actually,

is Google is the one everybody is sort of assuming will lose. I mean, look at the stock price. It trades at the lowest multiple of all the Mag-7 companies. And so I think the consensus is search is dead, Google's not going to figure out AI, and so don't own the stock. At Intelligent Alphar, models actually like Google. So it's one of our top 10 holdings in our Livermore ETF.

We also own it in our long short hedge fund. And so I think Google is the one that is actually sort of interesting to look at here and even look at it today, it's up with the market kind of sideways. Maybe the narrative is beginning to shift there. It's definitely a differentiated view to say that they will be a net winner.

I just wonder if, even if you believe that they actually have a solid head start in AI or whatever it is, that simply because the search business has too much to lose, people are unwilling to pay up for it. I think over the next kind of 12 to 18 months, we'll see a lot, we'll learn a lot about how well they're navigating this transition. Can they sort of gently land this plane

where people are used to 10 blue links and now they're getting an AI overview and 10 blue links? And can they make that plane where people are used to 10 blue links and now they're getting an AI overview and 10 blue links. And can they make that transition where people say, hey, you know what, I actually really like this experience much better. And in fact, it may even be better than OpenAI because I still have some autonomy I can choose some of the things I see in the search results. Right.

It's not take it or leave it here. That's the answer. Yeah. What else is your model kind of settling on at this point in terms of what's surfacing in terms of you know opportunities? It's also really like Marvell MRVL. So they're also in the chip space. It's as a human It's one of those stocks you want to pull your hair out owning so AI doesn't have hair Luckily, it doesn't have to deal with the kind of craziness It feels like every week we get different information about how Marvell's dealing with one large customer

in particular, which is Amazon. It still seems uncertain what exactly will be the long-term relationship there. But I think when you look at a stock like Marvell and AI space relative to many other companies in the AI trade, the stock hasn't really done very much over the last three months, whereas many of the other high-flying AI companies are up 50 to 100%.

Yeah, looking at the chart right there. And so I think this is one where if they kind of get anything right or if they win another customer that markets are not pricing in right now, this is a stock that could work in a big way where other stocks have already worked in it. And just quickly, is the AI model trying to incorporate all that in terms of the product stuff

and customer relationships, or is it just a financial breakdown? It looks at both. And I think that's what's really important about this new era of AI. The old era of quantitative trading, right? Pre-LLMs. That was really about looking at the financials.

And so the large language models are capable of that, but they're also capable of understanding that qualitative aspect. I think that's what's really important. And that's what we really try to optimize around an intelligent office. All right, Doug, appreciate it. Thank you very much. Alright, up next we are all over some big moves in the fintech space, the details and what's at stake for that sector coming up. As we enter a break, a quick look at Tapestry, that stock hitting a new

all-time high today. You see it there up almost 1% today. Closing bell, be right back. I'm high today. You see it there up almost 1% today. Closing bell, be right back. Welcome back. We are watching FinTech stocks sell off into the close on that headline we brought to you earlier in the hour. JP Morgan is planning to start charging FinTech companies for access to customer bank account information.

See PayPal down 6%, Blockdown 5%. Joining me now to discuss is Mizuho analyst Dan Dolev Dan give us your first impressions of what this might mean for these companies. Hey Mike, how are you? It seems like it's a very defensive move by JP Morgan. And I think it looks like you know, it's actually a testament to the fintechs doing really well. They're stealing customers, self-filing stealing customers on the banking side.

A firm is taking business away from credit on buy now, pay later. So to me, this seems more defensive than offensive. It wouldn't be surprising if it were defensive, but would it be impactful for those companies? I'm just curious, what sorts of customer data do the fintech companies rely upon that a big bank such as JP Morgan can be a gatekeeper to? Yeah, so that's actually a great question.

When you open up in a firm account or a Coinbase account, then your data through Plaid, a company called Plaid, which is private, they're able to get into your JP Morgan account or any bank account and get the data out of the account to make sure that you can be underwritten properly. So they do have a lot of like, there's a lot of value in that data, but that's exactly the... I see.

And the fintech. Yeah, I mean, I guess the question is, you know, do you could you approach the project of trying to price in what this might mean in terms of these business models at this point? We don't know exactly how much they're paying. Remember, Visa tried to buy plaid back in 2019. So. So there's definitely a lot of value in what Plaid offers. It's definitely, it could be an added cost to the fintechs if it actually were to happen. But I think what's gonna happen is, you know, the explosion in the account growth and buy now pay later

is gonna more than offset any extra costs here. So I'm not particularly worried about this. And it feels to me again, as a very defensive move and not an offensive one Right. So basically try to get paid something for the possibility that your customers are diversifying their business with other other players We'll see Dan. Appreciate you jumping on and giving us some some perspective on this Thanks Mike. All right. Have a good weekend up next, the three best looking charts in the market right now according to one top technician. He joins me after this break.

Closing bell, be right back. We're at the market sitting near record highs. The big question, of course, is where are we headed from here? Let's ask B of A's Paul Siana. He is head of the firm's fixed income currency commodities and equity technical research. Good to see you, Paul. Good to be here. A lot on your mouthful, huh? you, Paul. Good to be here. A lot on your plate.

Yeah, exactly, thick is fine. S&P 500, we've obviously broken out. You've had like eight record highs this year. New highs, I guess, tend to be more of a positive sign than not, but where are we in terms of maybe this rally being exhausted or leading to more upside? Sure, well, there's always an overbought market somewhere. And yes, the S&P 500 is getting a bit overbought and we're seeing signs of tactical weakness

But that's okay We're also seeing plenty of signs for a bullish trend If we think back to May when we initiated our bullish outlook for this summer We had a very nice head and shoulders bottom in the daily chart of the S&P 500 that like the technical textbooks would say measures up to About 66 25. So we've been looking for a rally into the 6,500 this summer, maybe with a little upside risk to that. And should we be bracing for any consequential pullback along the way here?

I mean, we've had nice rotation this week that's kept the overall indexes in place. We have a good rotation. I think keep an eye on the Dow Jones Industrial Average and the all time high level at about 45,000. If you want to see more rotation, we need Papa Dow to break out. Another thing to look at in favoring the breadth narrative is the percentage of stocks above the 200-day moving average has trended to higher highs with the S&P 500 going to higher

highs. So there is some growing breadth within the space. What I think scares me a little bit or intimidates me a little bit is the 2018 narrative. So in technicals, we like to say that the rule of alternation occurs with corrections and there are a lot of parallels between 2025 markets and macro with 2018. In 2018 we had that shallow correction in the first half, big rally to all-time highs and deep correction at year-ends. So I think the rule of alternation suggests we get this rally to new all time highs and

we have a mean reversion towards year ends. So maybe if we get up to $6500, $6600 towards year end, maybe we come back down towards $6200. So in other words, the inversion means we got the big correction early this year. And it would be a more modest one later on. Exactly. I got you. In terms of some individual leading stocks, Uber is one that you've focused on.

It's been fascinating to me. One, it's in the industrial sector. It's been a big source of upside there. And obviously it's got other attributes as well. How's it set up? I mean, the Uber chart's amazing, right? 2022 to 2023, very nice uptrend. And then 24 to 25, you have this broadening out

and then contraction, right? And that's an awesome technical pattern that really represents confusion in the fundamental space. And as you start to contract, we started to get the breakout to the upside, both in price and relative performance of the S&P, and we initiated upside targets of 101 and 113. I think it's going there.

So basically, the chart's telling you the confusion has been resolved to the upside to some degree? Absolutely. Wanna get your take on the dollar. Obviously, been persistent weakness, but then some bounces along the way here. In fact, recently as well. Yeah. Well, the dollar index at about 110 in February.

Euro is down at 102. We caught the bottom in the euro in the peak there. And it's come screaming lower. Bad year for the dollar to secular trendline support. So I'm telling all traders and investors, keep an eye on the 97 figure, even on the dollar index, because while we're above that, there's about five reasons

why we may see a good Q3 bounce. Aside from secular trendline support, we have bullish divergence from the relative strength index. We have a slew of trend exhaustion signals from the market indicators. We have bearish sentiment of trend exhaustion signals from the mark indicators. We have bearish sentiment, very stretched bearish sentiment from the B of A global research fund manager surveys

and FX and rate sentiment surveys. Asset managers are stretched short to record extremes. So one really good data print, for example, could just create that Q3 seasonal dollar strength which is another reason seasonally speaking Q3 is a good quarter for this kind of wound tight yeah I guess that makes sense and then just quickly you mentioned you know watch the Dow for signs that you know we have a little more upside you say five 45,000 that's 600 points up from here yeah how

soon does it have to happen does Does it matter? Not really. No. Sooner is better. Right. Makes it easier to stick with it. Sure. But look, last week Dow had a great rally right up to the figure. This week a little pause. Sure. It's alright. Okay. Give it a little room. Alright. Appreciate it Paul. Thank you. Good talk to you. Alright, still ahead. We'll break down the big bounce in Bitcoin and find out if this record rally is just getting started. And as we head to a break, a quick look at Dollar Tree. This stock hitting a new 52 week high. You see it up 1.2% today.

Closing bell, we'll be right back. We are getting some news on Musk's XAI. Pippa Stephens is back with that. Hi, Pippa. Hey, Mike. So XAI is reportedly sticking up to a $200 billion valuation in its next funding round. That's according to the Financial Times.

It does come after just this last March, the company was valued at 80 billion. So the FT is saying they're now looking for that $200 billion valuation and that those fundraising talks have begun and that they could start formally next month. This would be the company's third large share sale in less than two months.

Of course, the company did raise 10 billion through loans and cash investments in July after selling $300 million of shares in the secondary offering in June. Mike? All right, Pippa, thank you. Up next, Levi rallying on strong results. What that move might mean for the sector coming up.

Market zone is next. We are now in the closing bell Market Zone. Bitcoin again hitting a record high today. Taneya McHale has the details plus Courtney Reagan on Levi hitting its highest level in more than a year and cross marks Victoria Fernandez on what she's watching as we close out the week. Taneya, good to have you here. I mean, I guess Bitcoin doesn't always need a specific driver to make new highs, but what's behind this move?

I mean, I really think it got a boost from the tech rally that we saw on Wednesday. I think that pushed it to that $110,000 level that's been so difficult for it to push past this year. That of course triggered this huge wave of short liquidations that just kind of sent the price higher and higher for the rest of the week. And then of course yesterday, the biggest day this year for Bitcoin ETF inflows over a billion we saw. So this of course, this trend that we've been seeing Bitcoin, I think traders a little frustrated with how stagnant it's been, but it really has been supported.

It stayed above $100,000 for more than 60 days. The corporate buys, the ETF inflows. And I think this really started back in April, the middle of April, which marks both the rebound in crypto from the market low that was driven by the initial tariff announcement, as well as when President Trump began to put the pressure on Fed Chair Jerome Powell, hinting at his, quote, potential termination. So I think rate's really a focus for Bitcoin here, while brighter, shinier things kind of take place in the rest of crypto world.

I think it's going to be interesting to see of take place in the rest of crypto world. I think it's going to be interesting to see the Fed meeting at the end of the month to see what happens to Bitcoin ahead of then, if it finds a floor or if it rallies after that. Yeah, tech up and rates down. It's probably a pretty good formula in general for Bitcoin. And then you've seen the outperformance relative to gold, which sort of defines the Bitcoin's character as well.

Yeah, absolutely. Yeah. All right, Tanya. Thanks so much. Courtney, quite a move in Levi. What's the street liking here? Yeah, absolutely, Mike. I mean, Levi far and away, the outperforming retail stock, it looks much different than its peers today after its results and guidance after the bell Thursday. So the denim maker shares of about 11% on the day after a stronger than expected quarter for revenue earnings and margins. This was driven by strength here in the United States, but also in Europe. And Levi Strauss also raised its full year forecast and believes it can mitigate almost

all tariffs, assuming an additional 30% tariff on China and additional 10% for the rest of the world with possible select price increases on some new styles. Now, Levi's AUR or its average price per item that rose year over year suggesting consumers are willing to pay up for what they're offering. And while wholesale does remain a key part of the business to be short, its push towards direct to consumer is gaining traction. Clearly, analysts like that it's now half of total revenue they just have more control and higher margins there now analysts are bullish at least three raising price targets on Levi today Mike.

I wonder court what we can say about what's driving Levi and then maybe if there's any relationship to some of the other stronger apparel and accessory type names if I just look at the performance of of like a Ralph Lauren or tapestry they've been out performers is there anything that that sort of unifies those things whether it's you know the way they can deal with tariffs or anything on the demand side. So I think actually it is a confluence of factors I think the diversification that Ralph Lauren has as you bring up here as well as Levi and its supplier base is helpful. Also remember they're international sellers.

So they produce internationally, they sell internationally. So a lot of the production that is done in China, for instance, and some of those names doesn't actually come to the United States. It goes to other areas that are not necessarily facing those same tariffs. And so that also can play in its favor maybe more than others. A lot of them would, them as in the companies themselves, would point to sort of their own operational work that they have done to sort of get back to strong fundamentals. But I also think there is something to be said about sort of this 90s resurgence and the trends and that has really helped Levi.

Also we've gone through a big change of denim cycle. I know I'm still hanging on to my skinny jeans but I'm supposed to be moving on to my straight legs my wide legs because everybody else is apparently and they're paying up for him so I think that's helping Levi too. That's the millennial thing I guess right? Yeah I'm an elder millennial I don't know. Oh yeah well Gen Xers we never got rid of the 90s stuff. There you go. I guess is the question. And is there a net loser then in terms of this fashion turn that we're looking at? Is it more like the athleisure types or something else? Yeah, that's such a good question.

I think the athleisure is actually starting to spread out. I think everybody's getting a little bit maybe bigger piece than they did before. Lululemon obviously still fairly dominant in the market, but then you've got some of these insurance players like the Vioris and the Alos and they're private. So we don't really know as much about them or their finances maybe as we do some of the others, but Athleisure is pretty ubiquitous. But then again, as we came out of the pandemic,

people were saying, hey, like I wanna get back to sort of dressing up nice blazers. We're actually really trending for some time and still are to some degree. So there's kind of a little bit for everyone right now when it comes to sort of the fashion trends which is quite helpful obviously when you go through sort of these dips and starts in that apparel business. Yeah for sure appreciate it Court seeing a bit on fast now Victoria markets expressing a little more comfort I guess with the macro outlook

we've obviously had this big recovery. I've folks seem to think we can sidestep the worst of the tariff effects is that encouraging to you or is it making more cautious. Yeah Mike I think it actually makes me a little bit more cautious or a

little nervous to the fact that the market is really so comfortable with what we're saying granted we've seen some positive're seeing. Granted we've seen some positive things in this market. We've seen the breadth widen out which is great. We've seen about 80% of the S&P above their 50 day moving average. We've seen some of the uncertainties that people were worried about

start to diminish. So those are all positive things. But there's still those underlying elements. There's still weakness in the labor market when we're looking at things like continuing claims, the lack of hiring, we're seeing slowdowns in industrial production, we're seeing prices paid move higher. So all of these elements combined with an equity valuation of about 24 times forward earnings, that leads me to be a little bit cautious. I'm not saying I think we're going into recession or anything like that but I do think you need to take a little

bit of a step back and still have a little bit of defense in your portfolio and let the rest of these elements kind of play out for the next couple months. What does defense look like at this point I mean obviously the market is run along a couple of

tracks clearly the big expensive AI driven technology areas and then even financials have done okay and some areas of cyclicals as well. But where do you think the market has got a good risk

reward? Yes, I think when you're looking at where to put your money to work, you've got to say what are the sectors where we've seen solid uptrends even when you had the momentum start to turn about a week and a half ago, what are those sectors where we've seen solid up trends, even when you had the

momentum start to turn about a week and a half ago, what are those sectors that are still doing well, that have that momentum behind them or the trends that upward trend going? And I think financials are still there, especially in the banks, you've got the deregulation coming and other elements that insurance companies have pulled that down a little bit, but the rest of the financials look well and we'll see what happens with earnings next week. Industrials continue to do well. We're just now starting to see materials start to do well.

And tech, like you mentioned, is still there, communication services. So when I say defense, I don't necessarily mean staples, but I'm saying those sectors that have those upward trends and the solid balance sheets to back up any kind of volatility. Sure. And of course, we're going to start to get earnings as a test on how achievable some of those high expectations are. What's your thought right now in terms of how the bond market is digesting all these

things that's going on, whether it is expectations for the Fed, the inflation implications of tariffs. I mean, 10-year yields have kind of been sideways for a while. Yeah, there's been this consolidation, really, within the 10-year, but we have seen a steepening of the curve, and 10 to 30s have steepened, twos to tens have steepened,

but I think the bond market is kind of sticking with Powell and doing that wait and see right now. Are we gonna get inflation coming into CPI and PPI numbers next week from tariffs? Have we seen that yet? We've had members of the Fed say it's going to take three to six months after we get clarity before they can actually make a move and see inflation flow through. So I think there's a long runway here to wait and see how the numbers shake out before the bond market makes a big move and will probably stay consolidated in that 10 year somewhere between around four and a quarter and 450 for the foreseeable future. And just quickly, if you think there's that long a runway, do you think that expectations

for a September rate cut are misplaced? Well, it's priced into the market right now. I think as long as we don't have any wild numbers come out that show inflation moving significantly higher, you might have enough pressure from other members of the Fed to convince Powell to do a 25 basis point cut in September, but I would not say it's a done deal at this point. All right, still going to have some suspense through the summer, it appears, Victoria. I appreciate it. Thank you very much and have a good weekend. Final 30 seconds of the week into the close.

The S&P 500 is down just about one third of 1%, both for the day and for the week, hanging right around those all-time highs, but not quite there. And take a look here, our own Jim Cramer and the CNBC Investing Club team ringing the closing bell here at the New York Stock Exchange to celebrate the club's third annual meeting. Let's send it over to overtime with Morgan Brennan and John Ford.