Closing Bell - Closing Bell Overtime: Charles Schwab’s Liz Ann Sonders On What’s Next For Global Markets; JPM’s Tusa On Top Picks 7/8/25

Episode Date: July 8, 2025

A flurry of headlines from the Trump cabinet meeting pushes tariffs back into the spotlight — including a 50% levy on copper. Our Megan Cassella tracks the latest from Washington. Liz Ann Sonders of Charles Schwab joins to break down market momentum, and JPMorgan’s Stephen Tusa weighs in on why industrials are the S&P’s standout sector in 2025. Plus, Afsaneh Beschloss on global diversification and Katie Stockton on key technical levels three months after the market’s last big pullback.

And that bell marks the end of regulation. Morrison-Cabot winning the closing bell to the New York Stock Exchange. Skage Future doing the honors after an out-dash. Stocks end in the day mixed. The president's saying there will be no extensions beyond the new August 1st tariff deadline. Energy and materials lead. Utilities and consumer staples are your laggards. Nearly every member of the S&P utility sector closed lower.

Treasury yields rising today with the 10-year back above 4.4 percent that's hitting the highest level since June 20th, the 30-year approaching 5 percent. Copper hitting an all-time high after the president said he would most likely impose a 50 percent tariff on the commodity and oil holding steady at a two-week high as traders continue to assess the impact of the OPEC plus output boost. Well, that is the scorecard on Wall Street. Welcome to Closing Bell Overtime.

I'm Morgan Brennan, along with Jon Fort. We are three months from the S&P closing low, a 25% gain for the index over that time. We're gonna talk to Schwab's Lizanne Saunders about whether a pullback could be coming. And if you can't beat the heat, maybe invest in the company's powering the air conditioners. Utilities have been on a huge run from the lows today aside, and it could be just the beginning.

Well, small moves today for the major averages, but we do have a lot of individual stocks making big moves today. Christina Parks-Nevalis is here with those names. Christina. I got to start with Nvidia inching closer and closer to the once unthinkable four trillion dollar market cap. Shares would need to hit $163.93 to get there today, but you can see they did close at 160.01,

so still a few dollars off, but investors are just continuing to bet on its AI dominance. Sticking with chips, let's talk about Samsung for a second because they warned of continued delays in high bandwidth memory chips which are really critical for Nvidia GPUs. That's bad news for Samsung because of those delays but really great for rival Micron and that's why you're seeing its shares up almost 4% higher today. Let's talk about solar stocks slumping after former President

Trump, or I should say President Trump signed an executive order rolling back tax credits and regulations that support wind and solar. It follows the GOP's tax bill phasing out clean energy subsidies after 2026 and that's why you're seeing names like Enphase, First Solar, Nextera. They're among the biggest losers on the S&P 500, First Solar down over six and a half percent. FinTech firm SoFi closed higher for a fourth straight day. It launched a private market fund aimed at retail investors with buy-ins as low as $10. The goal is to give everyday investors access

to buzzy names like SpaceX, OpenAI, and Epic Games. And that's why you're seeing shares close almost four percent higher. Last but not least, shares of Fair Isaac or FICO dropping today after the, uh, federal housing finance agency said it would immediately begin accepting Vantage score 4.0 for mortgage sold to Fannie Mae as well as, uh, Freddie Mac posing serious competition to FICO's longstanding monopoly.

And that's why shares are down almost 9% guys. A big move for that name. Christina parts and Evelyn, thank you. Thanks. Speaking of big moves, copper prices jumping midday as President Trump announced a 50% tariff on copper imports. For more on what we heard from the president at today's cabinet meeting, let's head over to Megan Casella. Hi, Megan. Hey, Morgan.

So that was the biggest news out of the cabinet meeting that even though these country specific tariffs have now been delayed until the end of the month, the sector specific tariffs are moving forward. The president said that he's decided to put 50% tariffs on copper imports, and we expect that to be formally announced later today. He also then said he's considering tariffs of up to 200% on pharmaceutical imports, although those would have

a lead time of 12 to 18 months to give companies time to adjust. Commerce Secretary Howard Lutnick then told CNBC after the meeting that copper tariffs will likely take effect before the end of July and that the investigations into pharmaceuticals as well as semiconductors, two of the six other ongoing national security

investigations should be completed, he says, by the end of the month. And then elsewhere on the trade front, the president says the August 1st deadline will not be changing again. He said more letters to countries will be sent today, maybe in the 15 to 20 range. And Lutnick says that he, the Treasury Secretary Scott Bessent, and U.S. Trade Representative James Sinclair will all be meeting with their Chinese counterparts for more trade talks

in early August. So, guys, lots of movement on all parts of the trade front. Yeah, lots of movement in Washington's been been the story lately Megan thank you well despite all of the Signals from President Trump on tariffs the markets didn't have the kind of reaction that we've seen in the recent past So is there a sign that there might be too much complacency less to ask? Charles Schwab chief investment strategist Lizanne Saunders. Lizanne, good to see you. How do you read this market?

We're just below all time highs on the S&P. Tariff threats loom, the investor class did get the tax cuts they were hoping for to offset the rough stuff. How does it look? So I think the setup is what you need to consider given the inability for any of us to gauge in advance what announcements might be related to tariffs and deadlines. If you think back to that first, fateful first week in April, the setup going into April

2nd was one of a bit of complacency, especially with regard to tariffs. So the setup was one we're almost inevitably going to see more downside to the extent you got negative news, which is clearly what we got on April 2nd. But then fast forward to only a week later on April 9th, the setup was one of way oversold market breath had washed out, sentiment had washed out. So even though really what we got on April 9th was just incrementally better news via the 90 day delay, it was enough to send the market higher. Retail traders have been a big part of this move.

Over the last three months, you can see it in areas of outperformance like non-profitable tech and retail favorites and meme stocks and heavily shorted stocks. But I think the setup right now is maybe not to the opposite extreme of what we saw on April 9th, but a decent amount of complacency.

And I think that was one of the factors leading to not just the weakness we saw in the market yesterday, but where the weakness resided, which were the same cohorts that got crushed in the first week in April. Okay, well right now on the tariff front, you point out there are no signs that countries targeted with tariffs are adjusting their prices down,

but there also aren't clear signs that higher prices on individual products are yet resulting in inflation at the macro level. So will second quarter earnings, you think, give investors a clear signal on what all this means? Or do we have to wait for whatever happens after August 1st or whenever these full tariffs actually end up coming into effect?

Yeah, well, I guess that's one of the rubs, as we assumed given that earnings season starts in earnest next week, that we would have more clarity on the July 9th deadline. That got pushed to August 1st, so there may still be some muddiness in the comments we get from companies, but analysts are definitely going to press companies

on what their strategy is with regard to passing costs on I think they're going to be pressed for questions on their pricing strategy on the protection of profit margins the good news is is that the better than- initially expected earnings for the first quarter weren't

extrapolated all into the second third and fourth quarters to analysts. Kept estimates fairly low which means the bar is set low. So I think the reports could be actually fairly positive for second quarter. That's now in the rear view mirror.

I think it's what companies say specifically with regard to profit margins, John, because the point is that we, and we wouldn't have expected to see the targeted countries adjust their export prices to U.S. importers. That's not been done in the past. We had no expectation that that would be done. Now we try to try to put some meat on the bone as to

how much do you try to pass on, how much gets eaten out of profit margins. Yeah, along those lines, I mean, both Bank of America and Goldman Sachs raising price targets for the S&P 500 in the last 24 hours. Is this a market you invest into or do you wait for a pullback. I think that the pain trade as it's called is probably still a bit higher from a positioning standpoint. You know the retail trader

cohort- there there by the dip mentality has been. Kind of dead right- since the- you know post covid bear market era. And in this most recent three month rally, it forced institutions to change positioning a bit, cover shorts. But now I would suggest there are no more risk on position

than maybe neutral. So in terms of just positioning, I think the pain trade is probably still higher, but there is general complacency and that suggests some vulnerability, maybe more days like yesterday versus a kind of major drawdown like we saw in that first week in April. What is the takeaway from the fact that the S&P 500 equal weight index is still 2% below its record highs from last November? Are we going to see breath widen out here? How meaningful is that to this

market? This is still a large cap market. And, you know, I've heard so many people say, well, it's all the growth stocks. It's actually the large cap stocks, because if you look at

Russell 1000 growth and what Russell 1000 value, they have almost identical performance this year. And small cap growth has done quite poorly this year. So it's the cap factor that really has been at play in what's been working, more so than the growth versus value factor.

And when you have that cap factor working, given the dominance in terms of contribution to returns in the cap weighted indexes, it makes it difficult for equal weight to play catch up to those cap weighted indexes. Lezanne Saunders, always great to have you on and get your insights. Thank you for joining us. My pleasure. A mixed day for stocks, but the S&P did turn higher in the final hour of trading. Well, coming up or not, excuse me, the Nasdaq. Did I say the Nasdaq? Coming up more on the markets big rally from those April lows. The Nasdaq is up 33% in just three months since the tariff threat took down stocks but now

the president is standing firm on his August 1st deadline and announcing new rates. Should investors fear tariffs again? And check out shares of Moderna up 9% nearly today. It's best day since early March now 20% in a month outperforming every mag 7 name. Will the rally last? Our technician is going to weigh in when overtime comes right back in too. Welcome back to overtime. We've got a news alert on mobile eye. The company announcing a 45 million share secondary offering by Intel overseas funding corporation that's a subsidiary of Intel.

And of course Intel owns a big stake in mobile eye. At the same time, mobile I announced a share repurchase program and conversion. Shares initially fell steeply, but they're now up about 7%. Okay. Well, President Trump holding firm on his August 1st deadline for tariffs to kick in, saying today on Truth Social, quote, no extensions will be granted. Despite the threat of tariffs on everything from semis to pharmaceuticals to copper, volatility remained low. Stocks were fairly muted.

Our investors starting to believe tariffs won't have a meaningful impact on the world. We have seen the growth of the world's economy and the growth of the world's economy. We have seen the growth of the world's economy and the growth of the world's economy. We have seen the growth of the world's economy and the growth of the world's

economy. We have seen the growth of the world's economy and the growth of the world's economy. We have seen the growth of the world's economy and the growth of the world's

economy. We have seen the growth of the world's economy and the growth of the world's economy. We have seen the growth of the world's economy and the growth of the world's economy. Welcome. Great to be with you, Morgan. Nice to see you. Let's start right there, because not all tariffs are created equal. And you do see copper trade at a record high today, perhaps

because that's seen as a much stickier tariff that maybe potentially won't go away. How do you navigate this as an investor, and how are you assessing what this means for the economy? So tariffs in and of themselves

are not necessarily a bad thing. They can be helpful in making trade more equitable, especially when there's unfair trade practices by some countries. I think the bigger issue is the shocking way that we're communicating tariff changes and some of the drama around it. So 50% tariffs around copper probably

is not a reasonable number, but also the market is, as you said, treating it carefully. The big question will not necessarily be what's happening to copper prices for obvious reasons that we saw, but what is going to happen, for example, to markets like Chile, like Mexico, like Canada, that are copper exporters to the US. The other number that the president did throw out today was maybe 100% tariff on pharmaceuticals, not immediately, but down the line. That would be potentially disastrous for every person because we need those pharmaceuticals and it takes those companies a very long time to produce them here in the US.

For most companies, they need much more certainty about tariffs, about other policies like permitting and regulation to move into the US and to start producing in the US. And we've heard this about the uncertainty from CEOs. It's certainly gonna be something that gets watched as earnings season gets underway as well. How is all of this spurring investor shifts?

We're seeing a lot of money move into international markets and we're seeing outperformance in international markets. We're seeing a lot of volatility across a number of asset classes. How is trade dynamics and the policy dynamics that we're talking about contributing to it? So Morgan, basically investors have been coming into the US to the point that US equities are more than two thirds

of the total world equity index. So that has happened, for example, over the last 20 years, but in the last 10 years, they went up about 10%. What does that mean? It's that investors think we are a US, US is a safe haven. It means that US has higher growth in its economy, innovation and higher returns. That's why they come here. So as the safe haven question becomes one that people are dealing with and grappling with.

As potential innovation becomes a question that people are dealing with, will there be continued innovation if we're cutting back on certain kinds of research? And so all of those are impacting investors in looking at diversified markets. Every investment committee I'm part of or attend or our clients at Rock Creek are having these kinds of conversations around the table. Should we look outside of the U.S. how much and should we be hedging our dollar holdings? So Afsana, good to see you. First of all, it's been a little while. How do you hedge balance your portfolio against the idea that a muscular, newly transactional United States is going to bend the world to its will?

What are the country's regions indices that benefit if this approach doesn't stick? So, John, I think what is happening is in some cases people are continuing to buy U.S. equities in certain sectors. They're excited, let's say, about AI. So, John, I think what is happening is in some cases people are continuing to buy US equities in certain sectors. They're excited, let's say, about AI in the US. So they will continue to buy stocks around data centers, around chips, around other areas that are US-based securities. However, what they might be doing at the same time, a number of particularly larger institutional

investors are hedging their activities by putting on large swaps and reducing their overweight to US dollar FX holdings. So they're using swaps as a way to reduce their exposure to the US. The other way investors are looking at, this is something that used to happen like 20 years ago when investors invested into European or Japanese markets, they wanted to have it hedged back into US dollars. Okay. Exactly the opposite.

If they're invested in US in European securities or Japanese securities now, they're trying to not be hedged into the US dollars and stay in the local currencies. Let me slip in one more here. I wonder your thoughts on what is the longer term investor impact of a couple things. First, you're borrowing more and spending more on its own defense

and then this shift where low cost manufacturing economies can no longer count on the US as a convenient end market. Exactly, so I think those could have huge impact on growth, both in the US and outside the US. So the negative scenario, John, is that our own growth will be down for the reasons you said plus the fact that tariffs will impact our consumers. But then interest rates would come down in the US as there is a potential in September or later in the year. And that will show you what's going on in terms of investor acceptance of US policies.

The other side is what is happening also at the same time is investors are trying to see what else can I do except for US currency. So they will look into stores of value like gold. It's not just central banks buying gold, but kids going to buy gold in Costco. Oh, Sonni Beschloss, great to have you on, thank you. Great to see you. Rich kids. All right, markets completing a huge three-month rally off the April lows, the NASDAQ up 33%.

Up next, Mike Santoli is looking for signs of froth in the market. And even the worst performing sector still turning in a gain in the past three months. But within the group, we saw some steep losses. We're gonna dive into that. It's coming up next.

Welcome back to Overtime. Okay, so here's that mystery sector that hasn't participated in this record three month rally. It is healthcare, especially the health insurance companies, the four worst performing stocks in the S&P 500 over the past three months, all managed care, Centene and United Health losing nearly half their value as many stocks soared. Centene plunging earlier this month after an earnings warning. Morgan.

All right, now let's turn to senior markets commentator Mike Santoli. We've seen a huge bounce off the April bottom a 25 percent move for the S&P 500 but investors always want more. So are we seeing signs of speculative excess Mike? You know Morgan it's obviously in the eye of the beholder we can define what the extremes are but certainly there's been a little bit more kind of speculative activity and aggression in the markets. It's to be expected after such a violent move higher. This shows the ratio of assets under management and ETFs that are leveraged long, which give you two or three times the return of an index

or a sector or an individual stock, to those ETFs that are basically short the market or an index. So that ratio is now up to around 10. Todd Sonne of Strategus keeps track of this. You see it's below where we were in the fourth quarter of this year. It's a bit above that previous crescendo top, which was in early 2021. I think the thing you have to do is kind of grade this on a curve,

because you can see over the long term, there's an upward bias to this. So whatever the extremes were a few years ago seemed like you have to have that higher threshold now. So I would say you wanna watch this. Obviously people are feeling pretty good about how far and fast the market has moved and maybe you're starting to get

a little bit reckless about it now. Here's a slower moving indicator, which is the percentage of S&P 500 stocks that now have a price to sales ratio above 10. That used to be considered a super extreme level of high valuation. Well, here you see is the year 2000 bubble peak, about 40% of the S&P had a price to sales up there. We're above that now, but again, we're well below where we were in that time in 2021 in the pandemic when basically people just sort of wanted to buy everything that had minimal profits

and it was really max speculation. Now, these aren't necessarily flat by night upstart companies. I mean, Microsoft has a price to sales above 10 right now, Meta has it. So it's really also saying that these are very profitable companies that can earn a lot on their sales. Their margins are very high.

But again, just a little bit of a metric out there in terms of how much credit we're giving the market for long-term fundamental strength right now, Morgan. Yeah, I feel like we keep revisiting this topic, but I'm gonna do it again. And Liz and Saunders touched on it with retail traders and buyers earlier on the show too. But I did see this stat today

that large speculators hedge funds keep making their bearish bets. Net positioning for S&P 500 futures most negative since March 2024. So is this divergence continuing here in the market between different types of investors? Yeah, the professionals seem like, first of all, the hedge funds are hedged. And so they're not necessarily just heedlessly riding the upward move in the market. They're not chasing it. And that does mean that there's latent buying power out there.

And so it's not as if everybody is maxed out into this market. So, yep, there's a lot of kind of offsetting factors in this. And again, I mean, a lot of this is just the bull market acting like a bull market. It doesn't necessarily get to an unstable extreme overnight. So it has to probably build from here. OK. Mike, we'll see you again in just a bit.

Time now for a CNBC News Update with Bertha Coombs. Bertha. John, the Supreme Court is allowing the Trump administration to go ahead with its mass layoff across federal agencies. In an unsigned order, the justices overrode a lower court ruling that temporarily blocked those cuts. Justice Katanji Brown Jackson issued a dissent accusing the other justices of, green-lighting the president's dubious actions. Yale University has been declared a undesirable organization in Russia.

Russian authorities said today its activities are designed to quote, violate Russia's integrity and have been banned in the country. Opposition leader Alexei Navalny, who died in a Russian penal colony last year, studied political science at Yale. And SpaceX is reportedly about to increase in value. According to Bloomberg, the company is discussing plans to raise money and sell insider shares in a deal that would value the Elon Musk private venture at approximately $400 billion. That's up nearly 15% from $350 billion valuation set during a share buyback last December.

SpaceX has yet to comment. Meantime, Tesla shares are down over 25% year to date. So at least SpaceX is reportedly moving higher. I'll pick this up, Bertha Coombs. Thank you. And SpaceX is not commenting, and I should note note very rarely, unless something's particularly wrong, and Elon Musk sounds off on it on X, very rarely comments on its financials.

I'd also note that this is a company that tends to do tender offers, John, two times a year. So I'm digging into this one, one to watch, but no comment and no comment to be expected from SpaceX. Okay, that valuation, if it were a public company, we'd put it above Palantir and just below Netflix. Well industrials have been the top performing sector in 2025 and we're up a whopping 28 percent in the past three months. JP Morgan, Stephen Tusa gives us the top picks for the rest of the year that's coming up on Overtime.

Welcome back to overtime Dow and S&P both a little lower today their second straight day of losses very small gain for the NASDAQ and Nvidia just pocket change away from an all-time high kissing distance of a four trillion dollar market cap as well and while tech has had a huge run over the past three months, the power company is also surging and with two months of summer left, demand for power could keep these stocks amped up. We'll see. I see what you did there. Sticking with that theme, industrial is trading near a record today.

It is the top performing sector so far this year, up some 13%, more than doubling the S&P 500's return. The move is driven in part by several names hitting all-time highs today. GE, Vernova, Johnson Controls, Transdime and Uber. The sector moving higher, overcoming any investor concerns about global growth in the face of tariffs. Well, joining us now is closely followed by industrial analyst Stephen Tusa of JPMorgan. Stephen, it's great to have you back on the show. And let's start right there. What is powering industrials and why?

Yeah, thanks for having me. It's been an interesting year, pretty volatile one, but we're kind of back to where we started at the beginning of the year with the optimism around around growth, except what's changed is during liberation day and that entire period estimates got reduced actually by 2-3%. So expectations were kind of artificially reset the stocks are back to where they are which means that they're Definitely more expensive the valuations are at all-time highs 23 times forward earnings, which is a pretty big number But going forward into earnings you're gonna see probably some beats and raises on the back of tariff costs coming down

Pricing remaining strong and foreign exchange is a foreign exchange is probably a one to 2% tailwind. So while the multiples are high, it's not a bad setup as far as earnings beats are concerned. Okay. What do you like within the space? And I ask that knowing that a lot of these are global manufacturers. You just mentioned tariff costs potentially coming down,

but these are the types of names that can be hit by those types of supply chain dynamics on the one hand. On the the other you have a number of secular growth stories playing out in the sector Yeah, sure. We still like the growth names, even though they're at our price targets today Based on data center utility demand, which is you know kind of linked that would be eaten and verative Those are the two we've been recommending for a while now and the data center story is still I think we talked I don't know maybe a year ago Those are the two we've been recommending for a while now. And the data center story is still, I think we talked, I don't know, maybe a year ago, ferocious. This investment cycle is nothing like we've ever seen

as far as the intensity of it, and the pipelines continue to expand, and that's gonna require, as you said, more power. So we still like that theme for sure, but with these valuations where they are, we do have another side of the barbell. And in the last few months, we've been talking about some idiosyncratic margin stories.

JCI is certainly one of those. That stock is now above our price target. So we're kind of turning the dial a little bit here in the last several weeks to a bit more value and defensive names. One of those is 3M, which we likened to the second half of the year. And another one would be would be fordive

which just spun off a business that is trading at close to a 6% cash yield and That's really uncommon right now versus the group at a 4% cash yield So just turning the dial a little bit more towards defense given that Optimism is is pretty widespread right now Optimism is pretty widespread right now. Steven, how exposed is the overall sector to a hiccup, a kind of valley of doubt, and the timing of the AI story, maybe reminiscent of what we saw happen with the internet

20, 25 years ago? It's definitely vulnerable from a sentiment perspective. And I think what's interesting about this is that I kind of caught the tail of that in the beginning of my career. And there was a lot of belief in the beginning of my career. And there was a lot of belief in that bubble until it burst. I would say that this time around there is a dramatic amount of skepticism. It seems like every couple months somebody wants to call

this a bubble and call it the end of the story. And I just don't think that a long tailed infrastructure cycle like this, which is, you know, it takes 18 to 24 months to build one of these facilities now, these big one gigawatt facilities, it's very hard to overbuild in a period of one to two years. And we're kind of in year two of this. So I'm pretty confident that this is going to have a longer tail to it.

And typically, bubbles don't burst when people are watching for that. I'm pretty confident that this is going to have a longer tail to it and typically bubbles don't burst when people are watching for that. So I think the skepticism is great for the stock and it's given for the stocks and it's given us plenty of opportunities in the last 12 months to double down on this call. Duly noted. Stephen Tusa from JP Morgan. Thank you. Now we have some breaking news on Apple and the executive rank.

Steve Kovach has the details. Steve? Yeah, there, John. Apple is saying in a press release here that COO, Chief Operating Officer, Jeff Williams is going to be stepping down from his role at the end of the month. He's going to be replaced by longtime executive Sabi Khan and will take over as COO. Now Williams is going to stick around reporting directly to CEO Tim Cook for some time. He'll continue to oversee the design group

and some of the other operations, also some of the health operations over there at the company before Apple says he retires towards the end of the year. And then at the end of the year, those groups, including that design group, which we've actually been talking about quite a bit lately, there, John, is going to end up reporting

directly to Tim Cook. So some executive shakeups going on here. I will also note that Jeff Williams was considered one of the potential successors for Tim Cook whenever he steps down from that role. So that also throws a little bit of a wrench into succession talk as we talk about who takes over Apple once Tim Cook is through, John.

Interesting, yeah. Okay, Steve Kovach, thank you. Shares of Apple down fractionally right now. Well, coming up, we're gonna talk technicals and whether a recent event makes it a prime time to buy Amazon stock. Overtime, we'll be right back. Okay.

Welcome back to Overtime. The annual Allen and Company Conference in Sun Valley kicks off today and our Julia Borsten is there. Just caught up with OpenAI CEO Sam Altman. Julia? Hey, John, that's right. Sam Altman arrived on the heels of a number of reports about engineers leaving AI for Metta. I asked him about competition for engineers

and AI talent with Mark Zuckerberg. How are you feeling about the battle for talent with Mark Zuckerberg and Metta? Fine. Fine? Good. And are you concerned about hiring or not having enough people to hire in this market?

I think we have an incredibly talented team and I think they really love what they're doing. Obviously some people go to different places. There's a lot of excitement, I guess we could say, in the industry. But no, I think we feel fine. Altman said he has not talked to Mark Zuckerberg personally about this AI talent battle yet, but he expects to see Mark here and talk to him here. I also asked about his relationship with Microsoft as Satya Nadella is expected

to be here. Take a listen. Relationship is great. We're going to talk about how we can build more computers and you know like just man the growth rate in this industry is like nothing I've ever seen and trying to figure out how to support it with infrastructure is is really hard. When I asked Almond about concerns about state by state regulation of AI and what kind of regulation he would advocate for, he says he has no idea what to expect in terms of AI regulation,

but he would advocate for something at the federal level, not at the state level, to keep a check on what he said would be the biggest safety risks. Now, just a couple minutes ago, I also caught up with Warner Brothers Discovery CEO David Zaslov who talked up the new Superman movie which is opening this weekend. He was really focused on that and wouldn't comment on the split of the company and what other

assets might be needed by both parts of the company as they complete that split. But he said he didn't need any approval for the split and that they're happy with assets they have as they focus on content. Morgan? Alright Julia Borson I always love your Sun Valley coverage off to a strong start as usual and of course the live shot for the win. Julia thank you. We have a news alert on AES and Pippa Stevens has the details. Hi Pippa. Hey Morgan well shares of the power producer are surging here up 16% following a Bloomberg report that the company is exploring

options amid takeover interest. This comes as AES has invested heavily in renewables and so it has been a laggard over the past year following about 38% relative to the overall utility sector gain of 18%. So once again, they seem to be exploring options here according to report from Bloomberg. Guys. All right, Pippa Stevens. Thank you. Shares up 16%.% up next Mike Santoli is back He's looking at the historical link between the federal debt burden and the rise of new political parties like Elon Musk's

To or that he's trying to create And as we head to break check out shares of royal gold under pressure after announcing its buying rival gold under pressure after announcing its buying rival gold royalty company Sandstorm and an all-stock deal worth 3.5 billion dollars. Both companies make money by financing gold miners in exchange for future royalties. We'll be right back. Well this is overtime and Mike Santoli is back to look at federal interest costs, which could eclipse the prior peak from 1991. Could that give Elon Musk's threat of a new political party a boost, Mike? Well, maybe it's part of what's motivating that third suggestion of a third political

party. And there's a little bit of synchronicity here. If you look at the interest burden from the federal government relative to the size of the economy that's what this shows right here it is almost up to that 1991 peak which was around 3.1 percent of GDP was paid out in federal interest now keep in mind that's largely because rates were a lot higher they were above 8% short and long term and you've been building deficits throughout the 1980s.

You had a recession in 1991, all of that's built into that. And of course, Ross Perot ran as a third party candidate in 1992, took a substantial share of the vote. Bill Clinton, of course, ended up winning that election. What you're seeing now is the aggregate size of the national debt, as opposed to the rates themselves, is driving this interest cost burden higher more than anything else.

So right now, the average cost of the debt in percentage terms is like 3.6%. That's the average rate paid on treasury debt right now. So we'll see if there's any synchronicity here in terms of what really did motivate things. Because Perot was all about the trade and federal budget deficits. Really, that was to the exclusion of most other issues. He had

some charts too Mike so I know that must have a place in your heart. Yeah right there but Elon Musk can't run for president right? No that's exactly right so I mean clearly it's it's not gonna match up perfectly although one other little parallel that I find interesting is Ross Perot's business EDS was heavily reliant on the government. In fact it was created almost as an outsourcer to the new Medicare program in the 1960s. So if you want to say Elon Musk also has a little bit of an interest in government backing for some of his businesses, you know, maybe that's another little rhyme. Does the formation or not in the speed of that have any impact on the market of the third party? or not and the speed of that have any impact on the market of the third party? I don't know that it does.

I mean, I think a lot of things have to fall into place for that to matter. You know, it'll be interesting to see how it goes from here, you know, it's notable that that interest burden really fell fast. Why? Cold War ended, defense spending went down a lot, taxes went up a little bit,

and then you had the investment bubble in the late 90s that really did work to the benefit of capital gains tax Collections and things like that. So not sure if we can follow that exact that exact path this time. All right, mike santoli Thank you Stock soaring since the recent closing low three months ago up next We will break down the charts to see how much upside is left And don't forget you can catch us on the go by following the Closing Bell Overtime podcast on your favorite podcast app.

We'll be right back. We'll be right back. Welcome back. Today marks the three month anniversary of the S&P closing lows. It's up nearly 25% since then, one of the fastest recoveries on record. So could more upside be on the way? Let's take a look at what the charts are saying with Katie Stockton from Fairlead Strategy. She's also a CNBC contributor. Great to have you here, Katie. Good to be here. So

do the charts tell you that we can continue buying here? What should we? What shouldn't we? I think we wait to add exposure, but what we did see recently is a confirmed breakout to new highs, and that's something I wouldn't want to fight against. There's been, I'd say, a loss of momentum relative to the first push off of the April low, and that's pretty natural,

but even still, the breath was strong enough, the momentum was strong enough to lift the major indices to new highs. So we feel that we have to honor this breakout because as a technical analyst, we also use a lot of indicators. And price is king. All of the indicators are based on price. So even if they're telling you one thing that contrasts what you're seeing in price, you

want to defer to the price action. So we have big breakouts. What are the charts telling you about those big technology stocks that powered the major indices to these levels? Well, indeed they did power it. We saw such a push higher from them at the end of June. And it struck me as something maybe like window dressing, right, where people are trying to boost their portfolios

with these positions. They want to show that they own the winners. And then we saw the very next day as we started the second half, this so-called great rotation. And what it showed was that the mega caps came under pressure as the relatively oversold areas or segments of the market caught a bid.

So I thought that was really interesting and sort of a theme in the market right now where the mega caps, the large cap tech names are actually poised to lose relative strength still to participate but not maybe the source of upside leadership that they have been. Are there exceptions to that? I mean we have a golden cross in the technical charts for Amazon right now even as we have Prime Day rolling out. We even had one for the S&P 500. So a Golden Cross is bullish, it's bullish long term, but in fact it tends to be a very poor short-term market timing device. We actually had death crosses in both the

S&P 500 and Amazon within a few days of the April low. So if you think about that, they're just not great short-term timing devices. So we do see that as validation of the strength of the relief rally, but we don't see it as a reason to add exposure right at this moment, but rather we wanna take that next pullback following the breakout in the S&P, use it to add exposure to stocks that are quality.

How about Moderna? So I know you came with that chart here today too. You see a breakout there? Yeah, and along the lines of the theme of looking for relatively oversold opportunities, we culled the S&P 500 and you can find a lot of names that are advancing from downtrends breaking through short-term resistance that look far less overstretched perhaps than the mega caps and Moderna's one name that stands out to us as a long-term turnaround play broke through some short-term resistance on its charges recently,

and that acts as a positive catalyst. What do you make of Nvidia? We love big round numbers here, and it's approaching this $4 trillion market cap, and it had been neck and neck with Microsoft and Apple for a long time. Now Microsoft's down at around three points down, at $3.7 trillion in market cap.

Apple close to just three even. So, I mean, Nvidia opening up a nearly trillion dollar market cap lead on Apple. What do the charts tell you about that? It is wild. So such an extended up move, and yet it keeps going both for Nvidia and also for Microsoft.

So we don't want to fight that momentum. We actually have been fighting that momentum to some degree, but once we see the breakouts to new highs, you have to honor those breakouts and Nvidia does have one. We're a little bit more interested in the likes of the oversold semiconductor equipment names right now, the names that have advanced from the cyclical downtrends, because they have a little bit less of a proof point

as they come into their earnings report July August and you know they're coming in with that relatively oversold condition that I think will benefit them as they go through that that proof point. I'm going to put you on the spot a little bit here but DXY we've seen some technical breakdown there we're having a conversation with Afzani Beschloss earlier in the show about rotation away from the dollar and hedging against the dollar and this being a dynamic for institutional investors right now. How closely you're watching those charts? Very closely, always. Anything that affects equities we watch on a daily basis and the dollar index has a proper downtrend in place.

It has broken through some very long term support to suggest that the cyclical downtrend will keep hold. In terms of the short term, it's more neutral to positive actually in the short term. And yet I don't think that it's a tradable counter trend move that we're necessarily looking at. And if you flip it over, look at the euro, the euro of course has this major breakout. So I do think that euro trend of strengthening is something that will characterize much of this year.

All right, Katie Stockton, great to have you here on set. Thank you. Thank you for being here, of course. Good to see you. Well, let's take a look at shares of Starbucks because Bloomberg is reporting that the company has received proposals from prospective investors in its China business. Reports say that the company is now in the process

of sifting through those proposals to come up with a short list of groups of potential investors. You can see those shares are up about half a percent right now. Oh, yeah. Well, let those shares are up about half a percent right now. Oh yeah. Well, let's get you set up with tomorrow's trade today. No earnings on tomorrow's calendar,

but investors will be watching for the May wholesale trade report, as well as the minutes from the Fed's latest meeting, which will be released at 2 p.m. Eastern. Also tomorrow, Datadog will be joining the S&P 500, replacing Juniper Networks. Datadog's up 8% since the announcement earlier this month. And don't miss Worldwide Exchanges interview

with the company's CEO, that's tomorrow, 5.30 a.m. Eastern Central on Morgan. Yes, we'll be doing that. I also just know, I feel like I keep beating the drum here since the start of the week, but treasury issuance, we had 58 billion in threes today, not necessarily the best auction. Tomorrow it's 39 billion in tens, so that's gonna be one to watch

because we know that the bond market has been relatively benign despite all of the dynamics that could be contributing to deficits and debt and some of the moves we're seeing in the global bond market right now. So there's a lot to watch there, even as things have been relatively calm. Yeah, a bit of a hurry up and then wait mode again.

We approached the tariff deadline and then it got extended a bit. But this time August 1st is firm maybe for everyone or just for some, we'll see. But the markets seem to be reacting to the pattern more than the latest news right now as the president and his policies continue to have a big impact overall on the markets, though maybe not so much day to day. Yeah, and of course, mixed picture today, four stocks, the S&P finishing fractionally lower, the NASDAQ higher. Keep an eye on OPEC and what we're going to see in oil markets here over the next couple days, too. That's going to do it for us here at Overtime.