Closing Bell - Closing Bell Overtime: Rally rolls on, Tech Takes Off & The Final Frontier 8/16/24

Episode Date: August 16, 2024

The major averages posting their best week of the year as recession fears ease following last monday's massive sell off. Tech the big outperformer this week and Wedbush's Dan Ives explains why he thinks there is no stopping the tech rally. Unlimited CEO Bob Elliott weighs in on the market rally and why investors are underexposed to gold which keeps moving higher. And the all civilian crew of the Polaris Dawn, including Billionaire Astronaut Jared Isaacman, discuss their upcoming historic first ever private space walk and the impact it will have on the space economy.

That's the end of regulation. Comerica Bank bringing the closing bell to New York Stock Exchange. YXT.com group doing the honors at the NASDAQ. That's the scorecard on Wall Street. The action, though, is just getting started. Welcome to Closing Bell Overtime. I'm Morgan Brennan. John Ford is off today. The market comeback rolls on following last Monday's massive sell-off. It's like a distant memory. The major averages posting their best week of the year. Of the year. That's thanks to easing recession fears. Tech leading the way at more than 7%

this week. Coming up, Wedbush's Dan Ives on whether tech has more room to rally and how you should trade Palo Alto shares ahead of its earnings on Monday. Plus, we will hear from the all-civilian crew set to launch on a SpaceX rocket and attempt the first ever private spacewalk, Polaris Dawn. But first, let's break down today's action with our market panel. Unlimited CEO Bob Elliott and Tracy McMillian of Wells Fargo Investment Institute. Great to have you both here. Bob, you're on set. I turn to you first because you say the the bond market signaling one thing and stocks are

signaling another. What do you mean? Well, I think if you take a step back, this move that we've seen over the course of the last couple of weeks is a rejection of the immediate recession fears in the stock market. We've bounced back to basically where we were. If you'd been out for the last two weeks, you probably wouldn't even notice anything in terms of how the stock market has moved. And that stock's basically at highs, largely consistent with a 100 percent probability of no recession ad. Right. On the flip side, turn and look at the bond market, particularly the short rate pricing. And what you see is seven cuts priced in over the course of the next year. That type of cutting, that pace of cutting is the sort of cuts that would happen deep in a recessionary environment. So essentially,

the short rate market is pricing in 100% probability of a recession. Stocks pricing in a 0% probability of recession. Probably both are a little overstated on either end. And that could be challenging for either on a forward-looking basis. I was actually just going to go there with you. and that is, which one's right? Especially when we know the bond market is big and mighty and tends to be the leading indicator most of the time. Well, the bond participants have been the smart money for maybe a few decades, but they haven't been the smart money over the last couple of years. I think we may be seeing that play out again here where, you know, growth data that's come in has been pretty good over the course of the week. And so maybe it's the bond, the bond bulls that have overstated the weakness in the economy.

Tracy, how do you see this market right now, especially as you do have this data this week that has supported the soft narrative, soft landing narrative? You've had strong or at least solid earnings so far. And we've had some dovish Fed speak ahead of Jackson Hole next week. Yes, that's right, Morgan. The data so far this week have pointed to an economy that is slowing enough really to tame inflation. But it is also indicating that it's unlikely we're going to fall into a recession here. We saw producer prices fall. That should help margins. We saw a consumer that's continuing to spend.

That should help the top line. So we see double digit returns for equities through the end of 2025. So, you know, we say that any opportunities presented by volatility, like what we saw last week, is an opportunity to move maybe some fixed income into equities. Okay. So what specifically would you be buying? So specifically, we are overweight large caps. We've been overweight U.S. large caps now for the better part of two years. What has changed, though, is we've taken some of our dry powder and we have increased our allocation to small caps. We have moved that from an underweight position, where it's been for the better part of the last

two years, to a neutral position. We do think that as the Fed lowers interest rates, as we go through a soft patch here, probably a growth recovery in 2025, that that sets the stage for better performance by small caps than we've seen over the past few years. Okay. Bob, what do you like here? And I ask that knowing that you look across assets, including gold, which continues to rip higher. Yeah, well, I think gold is a very interesting story, totally underrepresented in the vast majority of investors' portfolios. And it pushing highs is a reminder that one of the best assets, most diversifying assets you can have in your portfolio is gold, relative in particular to bonds here, where, you know, I think gold might be sniffing out some of the tail risks that are still present there. And so that's why you're

seeing the bid in a way that, you know, bonds are probably overpricing that dynamic. And so if you if you have the ability to rotate your positioning, moving a bit away from bonds where they are currently priced with all those cuts priced in to gold, which still, you know, while it's making new highs, could still easily have considerably more room to run, given how underrepresented it is in most portfolios. Tracy, how much does Powell at Jackson Hole matter next week? Not to mention the fact that we get minutes. We also have a DNC. We have a few things next week. But in general, the Fed speak. How much does that matter here? So certainly markets are watching everything that the Federal Reserve is saying, especially what Chairman Powell is saying. So Jackson Hole will be important. But we think that he's probably just going to reiterate that they are still on track to keep inflation moving towards their target. They're still on track to cut rates in

September. Probably won't give us any magnitude there, but just reaffirming their message that everything is moving along as planned. Certainly, we get the minutes that could give us a preview of what he is going to say in Jackson Hole later in the week. But overall, we think that what the markets are going to be most focused on is the labor data and inflation data. All right. Tracy McMillian and Bob Elliott, thanks for kicking off the hour with me. As we did have major averages finish the day fractionally higher, but strong on the week, best week for all the major averages of the year. Well, the ongoing battle between Apple and Epic Games is heating up as the Fortnite maker launches its own app store on iPhones in the EU. Steve Kovac has the details on how Apple is trying to fight back.

Steve. Hey there, Morgan. Yeah, this is a big deal. That Epic Games store, of course, from the maker of Fortnite, is on the iPhone and Android. And on the iPhone in particular, this is in the European Union. And it's challenging Apple on its own turf, competing with the App Store for games. Now, gaming is the most lucrative part of the App Store. And this is all possible because of a new

law called the Digital Markets Act in the EU, which went into enforcement earlier this year. It forces Apple, among other things, to allow third-party app stores on the iPhone for the first time. But the European Commission says Apple is likely not complying with the DMA. Their problem? Well, Apple is still collecting fees, though they're less than before. Despite that, Epic says it's going to launch anyway. On a call with CEO Tim Sweeney telling CNBC, he said the fight is far from over and Epic's goal in the near term, at least, is 100 million installs at this new store across iPhone and Android. Now, it's going to be starting with its own games, including Fortnite, and eventually wants to offer more games, but it's

just going to be in the EU. That's because there was a legal battle between Apple and Epic, and that case was lost here by Epic in the United States. But some good news here potentially for Epic. The Department of Justice is suing Apple in a big antitrust case, and it overlaps many of the issues the DMA already regulates. So that is Epic's best hope here in the United States. But for now, challenging Apple for all that gaming revenue, Morgan. I mean, shares of Apple still finished up at about half a percent on the day. But if I take a step back, Steve, just remind me, how much of the services revenues is the App Store, especially when we do talk about all the growth

that that provides for the company? Yeah, they don't actually break that out, so it's a little hard to tell. There have been some estimates that people have kind of come up with. It's in the tens of billions of dollars a year. But again, it came out in that court case between Apple and Epic that 70 percent of the app store sales that go through, that's all gaming. Those are the microtransactions you pay when you buy new lives and Candy Crush or you name it. That all Apple gets a slice of all that. And that's why

Epic has been fighting them on this. They think those fees are unfair, but they also say with in Europe, because there are new app stores allowed for the first time, they can finally compete on price. So that is that's what's really going on here. All right. I feel like that was very telling comment when you mentioned Candy Crush. Yes. Thanks. Have a great weekend. Thanks. Now let's bring in senior markets commentator Mike Santoli. He joins us on set. He's got his dashboard. Mike, it's good to have you here in the house. Yeah, great to be here, Morgan. So here's where we ended up with the Nasdaq 100, of course, led us up into the all time highs in July and a pretty strong snapback rally. But right up to its 50 day average, that's not necessarily a barrier, but it's sometimes a logical place for a relief rally to pause, maybe see if it can break through there. That would suggest that there was not a lot of pent-up selling or profit-taking after this rally. You see, it kind of takes us back to levels hit in the springtime for the

first time. So still some repair to be done. It's one month ago today that the S&P 500 hit its all-time record high. Here are various parts of the market as they've done in the last month. Equal weighted S&P didn't go up as much ahead of time, didn't fall as much, has held more of its value on that one-month basis. S&P down 2% off the highs. And you see there, NASDAQ 100 still lagging a bit. And semiconductors right here, I mean, they had like a 25% drop in total, and they've only gotten back a portion of that. So maybe a little bit of a leadership change we might expect. Take a look here at a chart, an updated version of something, Morgan, that we looked at a

couple of times earlier in the summer when the market was incredibly calm and it was sort of protected by the MAG-7, and it had very low correlation, record low correlation among big stocks and the index itself. Well, everyone said that can't last. It didn't last. That was your volatility spike where every stock moved together in that unwind a week ago Monday. But what has happened since? It's come back to what you would consider more normal levels.

Now, not the extreme lows. This is now kind of a more normal give and take within the index relative to times of stress when everything seems to be trading as if it's one stock. All right. You're hearing some of this chatter in the market right now that we're seeing cleaner positioning. Is that what this is signaling? Absolutely.

I mean, this has represented a purge of crowded positioning in a lot of different strategies, most of them linked to betting that the market would remain calm and that volatility would remain low and correlations would remain very, very minimal. So, yes, you've cleaned some of that. I'm not sure we got, like, totally washed out, bear market low type stuff, but it was a very compressed little correction in the market. So definitely on firmer footing, the pullback did part of its job, if not all of it. All right, Mike Santoli, we'll see you a little bit later this hour. Good to have you here.

Well, up next, former Ford CEO Mark Fields on the challenges facing EVs in both the U.S. and China right now as WeRide pushes its IPO to next week. Plus, tech has been roaring back since the huge sell-off last Monday. But is it rallying too far too fast? Well, Dan Ives weighs in. That's coming up later on Overtime. We're back in two. Welcome back. Hitting the brakes. While EV adoption in the U.S. is growing, the pace is decelerating as range anxiety and affordability remain key challenges. But the demand in China remains strong. This comes as China's self-driving

startup WeRide pushes its IPO to next week. It would be the second major China EV company to seek a U.S. listing. EV maker Zeker debuted on the New York Stock Exchange back in May. Joining us now, Mark Fields, former Ford Motor Company CEO and a CNBC contributor. Mark, it's good to have you on the show. I do want to get into the autonomous driving piece of this and what we're seeing in China. But first, the slowing demand we are seeing for EVs. We've been talking about it for a number of months. But what what breaks us out of that doldrum, if you will? Well, I think what's going to break it out of the doldrum is two things.

One is obviously the continued build out of the charging infrastructure, because, you know, people talk a lot about range anxiety. I actually don't think about it that way. I think it's really about charging anxiety on the side of the consumer. So as that continues to get built out and the average consumer can actually see that on the streets, because a lot of the charging stations right now actually are hidden in certain places. So I think that's the first thing. And the second thing is more affordable models. I mean, you're starting to see automakers like GM introduce more lower-priced models, which is the key to getting mass adoption. That's why you see such a huge uptake in China, because there's a lot of mainstream models at reasonable prices, whereas here in the U.S., most automakers have started at the luxury end of things and then had planned to work their way down.

And if we broaden this out above and beyond EVs, if you look at the North American market, the U.S. market specifically, we are waiting for a Fed cut. You do have borrowing rates that are high. I realize the prices are starting to come down on cars, but those are still elevated as well. Auto insurance continues to tick higher. How much hinges on a Fed cutting cycle to see some of the demand that's starting to build up for the automakers actually be worked through? Well, it's a great question, Morgan, because I think, you know, you've seen a lot of the pent-up demand from COVID essentially been worked out over the last year or so. So I think going forward, if the Fed cuts, I mean, obviously that will help the consumer to finance their cars.

But if you look at it on the EV side of things, you know, clearly the biggest inhibitor right now on EVs here in the U.S., besides not having kind of mainstream models, is, you know, that they're higher priced than their ICE counterparts. And the other thing, and you mentioned, it's very important when people look at buying EVs, they also look at the insurance piece of it. And insuring an EV is much more expensive than insuring an ICE vehicle. So the bottom line is, I think a Fed rate cut will help the overall industry. I don't think it's going to benefit EVs over internal combustion engines, but clearly it'll be a net positive. But you are seeing some of the steam kind of come out of the growth of the industry. The industry

overall here in the U.S. combined only grew a little over 2 percent, and a lot of the steam kind of come out of the growth of the industry. The industry overall here in the U.S. combined only grew a little over 2 percent. And a lot of the forecasters expect about a flat market for the second half of the year with increasing incentives from manufacturers as they look to move out those units. We talked about the robustness of EV adoption in China, but we also know China has taken steps to continue to facilitate autonomous driving capabilities as well. Case in point with WeRide, which has, and we don't know why, but they have postponed their IPO here in the U.S. by a week as of today. When we saw Zeker go public, I mean, stocks down almost 50 percent since that debut. We know that the tensions between the two countries, including where some of these new driving technologies

are concerned, are getting more taut. So why go public if you are a Chinese company in this area in the U.S.? Well, again, it's a great question, Morgan. I think it's pretty simple. You know, the IPO market in China is essentially, you know, completely dried up. These companies need money and they need capital to scale and to stay competitive. And they're going anywhere they can. And they look at the U.S. market and they say that that market's open. Let's try it. And oh, by the way, let's get in there before the elections because you never know. So I think that's the main reason they need that capital. VCs have essentially kind of closed their pocketbooks to funding autonomous vehicle companies that have a very long pathway to profitability. But, you know, I think any investor that's going to potentially invest in a WeRide, they have two risks there, right? They have the business risk, which is around, can this company have a business model to make profitable growth consistently and master the technology? And then the second risk, and you mentioned it, is the geopolitical

risk. It's going to be really challenging to win investor support with a lot of these geopolitical risks, which can impact a business with just the stroke of a pen. Mark Fields, great to get your thoughts. Thanks for joining me. Thanks, Morgan. Up next, find out why Goldman Sachs is making a big bet on Bitcoin ETFs, even as many of its Wall Street rivals pull back from their positions in crypto funds. Plus, we are nearing the final countdown for the first ever private spacewalk. The all-civilian crew of the Polaris Dawn mission is going to explain what this means for the space economy later on Overtime. Welcome back to Overtime. Bitcoin bouncing back a bit

today, although it was a rough week overall for the cryptocurrency. Meanwhile, this week's 13F filings revealing which Wall Street banks and hedge funds are making bets on Bitcoin spot ETFs and which are cashing out. Mackenzie Segalos has the details, joins me on set. Hi. Hey, Morgan. So let's start with who's buying in. You've got Goldman Sachs going from zero exposure in Q1 to $418 million invested across seven different spot Bitcoin funds with more than half of its shares in BlackRock's Bitcoin trust. HSBC, Bank of America, UBS and Wells Fargo all took on a minimal stake in Q2. In terms of the hedge funds that are jumping in, Point72 bought $57 million worth of BlackRock's ETF and Citadel doubled its holdings, diversifying into multiple BTC funds in the second quarter.

Renaissance Technologies lifted its Bitcoin position, buying into eight of the spot funds. And Capula Management, one of Europe's largest hedge funds, had the biggest position increase for the quarter. Now, as for who's cashing out, Morgan Stanley trimmed its stake by $80 million. JP Morgan also slashing what was already a pretty small investment. Millennium Management, which has been one of the biggest buyers of these products,

cut its holdings to $1.1 billion from $2 billion in Q1. Also seeing significant outflows from Jane Street and Paul Singer's Elliott Management. Well, it's out of the trade altogether as of the end of June. This is really fascinating to me. So we did, when the spot Bitcoin ETFs launched, we saw pretty heavy flows in. Where are we at now? And how much is Ether, now that we have those spot ETFs, perhaps taking some of that activity? So we're at around $52 billion collectively across all those U.S. spot Bitcoin ETFs.

It's down from the high of $60 billion. But analysts keep saying, hey, there's this imminent second wave of inflows. And that's because up till now, you had the wirehouses and asset managers largely staying on the sidelines while they did in-house due diligence looking at these spot crypto products. Then a week and a half ago, you've got Morgan Stanley unleashing its fleet of 15,000 FAs saying that, hey, you can product the products from BlackRock and Fidelity to a subset of clients. The expectation is that this will force the hand of other players. And ultimately, Morgan, that's what's been the biggest price driver this year for Bitcoin. You saw it hit its highest price ever in March, north of $73,000. And that was in the absence of interest rate cuts, which has been the biggest driver of

prices in the last few years. It coincided with the influx of tens of billions of dollars into these ETFs. And to your question about the spot Ether ETFs, we've seen on certain days flows eclipsing that of the spot Bitcoin ETFs. We'll get a read on what that actually looks like in November when we get the next set of 13F filings. All right. Looking forward to it. Mackenzie, great stuff. Thank you. Thanks. Well, it's time now for a CNBC News Update with Seema Modi. Seema. Morgan, former Secret Service Director Kimberly Cheadle has been given a security detail due to continued threats following the attempted assassination of Donald Trump last month.

The threats against Cheadle included in-person confrontations, threats posted online, that according to CNN. The step came after Cheadle and the agency came under heavy criticism for the security failures the day of Trump's shooting, the Secret Service declining to comment. Senator Bob Menendez is dropping his independent reelection bid for Senate as he prepares to resign next week following his conviction on federal bribery and corruption charges. It comes as Governor Phil Murphy announced earlier today that his former chief of staff would serve out the rest of the disgraced senator's term. And Eugene and Dan Levy will make history at the upcoming Emmy Awards as the first ever father and son co-hosts.

And they'll be the first duo to do it since Saturday Night Live stars Colin Jost and Michael Shea hosted the awards on 2018. The 76th Emmy's awarded on September 15th. Looking forward to it, Morgan. Back to you. Yeah, that'll be fun. Sima Modi, thank you. Up next, Mike Santoli breaks down the latest economic surprise index for a look at what gas station visits are revealing about the state of the economy. Plus, tech was the top performing S&P 500 sector this week. Well, coming up, Dan Ives on whether there's still time to get in on this tech comeback. And FuboTV rallying into the close after a federal judge temporarily

halted the launch of a sports streaming service from Fox, Disney, and Warner Brothers Discovery. Those shares up almost 17%. Stay with us. Welcome back to Overtime. Let's bring back Mike Santoli for a look at two pictures of the economy. Mike. Yeah, Morgan, we got some reassurance, of course, with retail sales coming in better than expected. Even consumer sentiment clicked higher today. But it's important to note that the city economic surprise index for the U.S. is still operating below zero here, which means, on balance, the recent run of data have been coming in below economists' forecast.

A little bit better than it had been a month or so ago, but still sort of hovering below the zero mark. Now, again, this is relative to forecast. It doesn't mean absolute activity levels. We're still maybe in a two percent real GDP economy, give or take. But this is why we're still sensitive to the idea that we could have more of a slowdown than we're trying to engineer, or at least the Fed is trying to engineer. Take a look at this here from RBC, which is a tracker of gas station visits in the U.S., meant to be a proxy for travel activity, general economic activity. So the current year, 2024, is right here. And why that's relevant, of course, is that it's running below the pace at this time of year the past three years. Now, 2020, of course, the economy shut down.

We're not really comparing with that. But it is an indicator that, again, just the edge has been taken off things like travel and other economic activities. So this is where we sit as we head into Jackson Hole next week. I like the fact that we're looking at past years. I would be curious what this looks like before the pandemic as well. And we do have this debate about whether we're reaching or hitting a new normal in those travel dynamics post-pandemic. Yes, I think it's sort of stabilized a little bit below pre-pandemic levels only because there's so much work from home right now. There's also a sense here we're talking about gas demand is that there's a bit, every high in demand is probably a little bit lower than the last one just because the gasoline intensity of the economy is going down with better fuel mileage and things like that. That's true, too.

Well, my family would be hitting the road and hitting the gas stations this weekend. That's right. Mike, thank you. Good stuff. Up next, a historic mission to the final frontier as the All-Civilian crew of Polaris Dawn prepares for the first ever private spacewalk. We will hear from them straight ahead. And speaking of space, Rocket Lab rocketing higher after shipping two spacecraft to Florida's Cape Canaveral ahead of their planned launch to Mars next month. Those spacecraft will be studying how the Martian

atmosphere interacts with solar winds. Shares finished up 12.5%. Speaking of launches, Reuters reports Sierra Space is in talks to acquire United Launch Alliance. That's the joint venture between Boeing and Lockheed Martin. Sierra Space telling me no comment. Stay with us. Nearly three years after Shift 4 founder and CEO Jared Isaacman made history with the Inspiration4 spaceflight, he is headed back to space. Polaris Dawn is scheduled to launch as soon as August 26th, and it too will be historic. The all-civilian crew will spend five days in orbit inside a SpaceX Dragon capsule, flying higher than any humans have since the Apollo era.

And they will conduct the first- ever private spacewalk using brand new SpaceX spacesuits. On board, Isaac Min, the mission's commander, Scott Kidd-Poteet, mission pilot, and Sarah Gillis and Anna Menon, both SpaceX engineers, as mission specialists. Now, I spoke exclusively with the crew as they wrap up training inside SpaceX's headquarters and begin to quarantine ahead of their journey to Kennedy Space Center and beyond. Welcome to our simulator. We have spent, I don't know, probably hundreds of hours in here over the last two and a half years. This is where we do everything from science and research experiments to running through simulations of launch and reentry and then all of the, you know, Apollo like apollo 13 like

emergencies they can uh they can throw at us so um this has become like a home away from home for us i think it's uh especially significant because just a couple days ago we put our our our mission patch sticker on the outside of the simulator and signed it which is what you get to do when you're you're certified to for flight so from here we we're heading to Kennedy Space Center in just a couple of days and getting ready for launch. The fact that on this mission, part of the objective is to be flying three times further out into Earth orbit than the International Space Station currently is right now. What has gone into the training to be able to do that? What do you expect in terms of some of the experiments and some of the testing and some of the health outcomes?

Yeah, great question. So the training program we've been at, this journey is about two and a half years long. You know, we spent a lot of time in this capsule going through the procedural training, the checklist procedures, working together as a team, crew resource management, handling the contingencies, just working together in order to have a successful mission.

Along with that, we've done a lot of practical training to get ready for the EVA. So we've dedicated a lot of time, a lot of resources. The team here at SpaceX has done an awesome job to prepare us for this mission. And as you mentioned, setting, we're gonna continue to push the envelope and setting that higher altitude as an objective is critical to a successful mission. So we're all looking forward to it

and excited for what the journey has. And speaking of EVA, we're talking about Spacewalk. This will be the first time we've ever seen a fully private spacewalk. Jared, you'll be doing that. Sarah, you will be as well. I realize the spacecraft is going to be vented, so everybody's going to be having that exposure to space. But, Sarah, what's gone into this?

What are you expecting to get from being in space for several hours? Yeah, thanks, Morgan. This entire objective, this spacewalk that we're hoping to accomplish has been such a tremendous team endeavor over the last two and a half years. SpaceX didn't even have an EVA suit when we started. And over the last development, we have slowly been iterating on the suit design and it has been this back and forth between coming in and testing brand new joints brand new features every week and so at this point we've spent probably well over 100 hours in the suits and i can tell you they're incredible but a lot of that training has happened right here you know

all four of us are going to get suited up, pressurized, and that's what the simulator does. It allows us to train end to end the response, how the suits pressurize, the full sequence of software that will go through. And I don't really think there's any rock that the SpaceX team hasn't looked under at this point. Now that you're seeing the capsule during the spacewalk, this is up above us is where we'll actually go out into the vacuum of space. So we'll all be in this volume and then depressurize our atmosphere and climb up through that forward hatch.

So I think it will be incredible and I think we're ready. I mean, space is not without risks. The Boeing Starliner situation sort of sheds a light on the risks of testing new technology, for example. Has that situation changed how you think about spaceflight and your own mission? You know, I think we are certainly needing to continue to explore. We can't stop making progress and continuing to push technology. You know, there's so many critical objectives on this mission, and I know we're really excited to get to them. I also know how much work the entire SpaceX team has put into ensuring there's absolutely nothing we haven't assessed and

looked at. So I think we're all ready. The SpaceX team, our mission control team is ready. And so we're ready to launch at this point. And sometimes we just actually crave a normal simulation where nothing goes wrong. In fact, like when you think about the last two and a half years of development and training for this, almost every scenario that we're approached has multiple things that are going wrong to kind of stress the situation and make sure we're prepared. Even yesterday, which was a final confidence test of the EVA operation, two different things went wrong. So, I mean, the reality is, is that when the actual mission comes time to fly, most of these things, if not all of them, are going to go exactly as planned. But if not, I mean, we spent the last two and a half years preparing for, you know, unexpected developments.

And Jared, with the last mission, we actually saw the milestones of that mission play out in the stock of the company that you founded and that you run, Shift4. And you've told me in the past that inspiration for that first mission did raise awareness, perhaps continue to fuel the momentum that we've seen in Shift4's growth as well. Does that flywheel continue here? You know, I think there's just a lot of carryover benefit from one to the other, but at least for the next week, we're going to be pretty focused on one in particular, and that's a good mission for PlayerStone. I mean, we were just talking about risk management, all the preparation that's gone into this from the actual spaceflight side and the SpaceX side, but I do wonder what that

means from the Shift 4 side, Jared, whether it's conversations with the board, whether it's contingency plans, succession plans, etc. This is obviously a new development. You know, we had a very successful mission to space almost three years ago. So I'd say since then, I would think only the public markets, our board, and investors have grown even more confident with the rest of the management team. So I fully expect to come back after my five-day short vacation. But I'd say the organization is in incredible hands. We were just talking about conversations with the board, but conversations with family and loved ones. How are they preparing for your mission?

We approach this conversation in a really open dialogue. We continue to talk about it. For our family, we continue to bring our kids along on the journey. My husband and I speak really openly with them and try to engage them in every step from two and a half years ago when this journey started and through the next few weeks too, so that they can really understand what's happening here and learn from it, be inspired by it, hopefully. And Mennon will be reading a book that she just authored as well while she's on that space flight.

All of this with a very earthly ambition of raising money for St. and awareness for St. Jude Children's Hospital as well. This is a cause that Isaacman also supported with inspiration for. Now, the launch is scheduled for August 26th, and there's more to this conversation as well. So for more of my exclusive interview with the Polaris Dawn crew, check out my podcast, Manifest Space. The full interview can be found there. Well, up next, Wed Bush's Dan Ives on what he's expecting from Palo Alto's earnings on Monday and how you should trade the stock ahead of those results. Plus, Cisco keeps chugging higher. It's leading the Dow higher. HSBC and New Street both upgrading the stock to buy from hold on its cost-cutting conservative growth and margin expansion. Shares finished up 2 percent. The major averages posted their best week of the year. The Nasdaq was the major outperformer. One stock missing out on today's rally, though, is Palo Alto. It's the biggest loser on the NASDAQ 100. That company

reports earnings right here on Overtime on Monday. But joining us now ahead of that is Dan Ives from Wedbush. Before I get to Palo Alto specifically, just got to ask about the rally we have seen in tech. It was the strongest sector today, and it's really been leading this turnaround, this rebound, after we did see a pullback in the S&P and a correction in the NASDAQ. It's a golden age for tech. I mean, in my opinion, we are just in the early stages of a bull market. And if you look at what we've seen from AI revolution, just some broader tech, it's been strong from an earnings perspective. And the growth scare that we saw, it's just a bump in the road to what I believe is really this fourth industrial revolution playing out.

And that's how we've handheld investors through this. This is the time to own tech. And I believe it's really just the start. Still 9 p.m. in an AI party that we believe goes to 4 a.m. We're in an election cycle. We're already starting to see some of the signs of cybersecurity issues and hacks as we do move closer to that November election day. On the flip side of that, we saw the debacle with CrowdStrike a couple of weeks ago as well. So how does that position us for cybersecurity earnings when we do have Palo Alto kicking them off on Monday? Yeah, I actually

think as a subsector, it's one of the strongest ones to own. And not just in the year end, but in the early 2025. In terms of what we're seeing in more and more movements to the cloud, cyber is actually a benefit. Names like CyberArk, Checkpoint. I think Palo Alto, it's actually one of our top names the last few years. It's a table pounder in our opinion. This is a name where I think Glass Half Empty is still on the street, but now they're going for platformization. And I think when the cash in the team are doing, they're going to gain more and more share. And even when you look at the CrowdStrike situation, a black eye for CrowdStrike, Powell out that could benefit from that.

Do you expect to see that show up in the results we get next week? Not in terms of what we see in terms of results, but I believe as we go into fiscal 25, there's just going to be another talent for them. You look at that free cash flow story. This is just what I believe is sort of the second inning of this game playing out for Palo Alto. They are going to be a share gainer. But you take a step back. When you look at Zscaler, Checkpoint, Cybrar, Palo Alto, this is really actually just the beginning of really the second, third stages.

What I view as sort of this AI revolution. Cyber security is going to be a big beneficiary there. So I think it's a subsector, could be the best outperformer going into year end. And something I think that gets overlooked sometimes, you and I have talked about it, is the growing government book of business for some of these cybersecurity names. I mean, you saw it. They're a different piece of the AI software business, data analytics, Palantir. But you've seen it with Palantir recently as well.

How meaningful is it to be seeing the federal government dole out more of these contracts? I mean, you are and we've taught the two or two area could. It is just a different mood that we're seeing from a spending perspective. Look, pal out Alto, Messi of AI, you saw it firsthand in terms of what they're doing. Government is now really more and more focused on AI, next generation technology. That's going to benefit not just Palantir. It's going to benefit Oracle. It's going to benefit a lot of the cybersecurity names, names like Zscale, names like Palo Alto.

And that is going to be for the September quarter important, especially in that fiscal year end. And of course, they struck this classified cloud deal with Microsoft, too, just, I guess, a week or so back as well. NVIDIA earnings later this month. What are we expecting here? Have expectations been tempered? Is the bar a little bit lower going into them? I think it's going to be a drop to Mike in terms of August 28th. Probably the most important earnings that we've seen maybe even the last four or five years from any company.

Because when the godfather of AI, Jensen, speaks, that's the best barometer for what we see in terms of spending. But we just got back from Asia. We are continuing to see demand accelerate. And I think that is very important because as we go into year end, we think tech rips higher. And that's why it's our view. We will still see that NASDAQ 20,000 as we go into early 2025. When you say demand rip higher in Asia, are you talking about China or are you talking about elsewhere? I'm talking about broader, what we're seeing from the supply chain, what that's showing on the chip perspective. It goes back to the growth scare. We just focus

on what demand looks like. And if you look at NVIDIA, you could, it goes back to the growth scare. We just focus on what demand looks like. And if you look at NVIDIA, you could, we saw from Microsoft, the broader cloud players, the massive AI palantir, all the breadcrumbs now, service now, it's showing acceleration from an AI perspective. And I think that is something the street is still underestimating relative to numbers, which is why, in my opinion, it's still the time, table pound, to own our winners in tech, despite many of the bears coming out of hibernation mode over the last, call it, week and a half, two weeks. Okay, we just covered a lot of ground, but we haven't covered the hyperscalers. Are those a buy right now, or is it some of these

other areas that are benefiting from AI that we just talked about? I mean, I think when you look at the hyper, you look at especially Microsoft and what Nadella has done. And then you look even now with Google, is there a benefit in significantly? You look at Amazon. That is the key to the next layer of AI. And that's why I think when you look at that basket, you have to look front and center at Microsoft. We believe a year from now, three, four trillion dollar markups. It's Microsoft, godfather of AI, Jensen, NVIDIA, and then, of course, Apple with Cupertino and then AI-driven SuperCycle.

All right. Dan Ives, thank you. Good to have you here on set. Thank you. Well, Palo Alto Networks isn't the only big name on next week's earnings calendar either. Up next, all the names that need to be on your radar and why the Fed will be in focus once again, kicking off next Thursday. 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. Welcome back to Overtime.

Monday kicks off another huge week of earnings. When I stay louder and Palo Alto Networks report. Tuesday brings Lowe's, Toll Brothers, Medtronic, Amersports and Cody. Target, TJX, Zoom, Macy's and Urban Outfitters are the big names on Wednesday. Thursday features Peloton, Workday, BJ's, Kava and Advanced Auto Parts. And clothing retailer Buckle closes out the week on Friday. Housing takes center stage next week on the economic calendar. We will get the weekly mortgage applications data on Wednesday. Thursday will bring weekly jobless claims and existing home sales. And new home sales will

be released on Friday. And then, of course, investors will be paying close attention to any news coming out of the Fed's Jackson Hole Symposium, which kicks off Thursday. Mike Santoli is back with us. It may kick off Thursday, but Powell speaks Friday. Yeah, exactly. So all those things you mentioned build toward Powell on Friday. It's going to fill out a lot of the macro picture. Probably worth remembering exactly how much we can get whipsawed by, you know, one set of data sets the narrative that, oh, we have a dangerous slowdown. The Fed's going to be too late right back to, hey, they can take their time and maybe only a quarter point in September. So we're going to be, I think, on that edge for a while.

It could be worse for two percent off the record highs in the S&P 500, even as all this sort of macro flux has flown through the system. Does election volatility inject itself back into this market, too? We've got the DNC at the beginning of the week. We're starting to get the trickle of policy from Vice President Harris and that camp. It's very interesting how the seasonal patterns usually are a little bit of summer unease in terms of the market as it anticipates the various probabilities for the election. And then usually the market locks into some kind of a view of either a probable winner or whether the stakes are high or low. It's hard to generalize, I think, about how that goes. One thing that might make things a little bit less jarring this time is you have essentially

a quasi incumbent running against a quasi incumbent. I mean, it's like the known quantities of the policy priorities on both sides are kind of right in front of us and not really wild cards. So it's difficult to say. Obviously, more talk probably should start up about, you know, the tax cuts that are expiring. That's going to force the new president's hand no matter what happens. But it's a little early for the markets to care about that

when we're trying to figure out Fed and the pace of the expansion here. Fair. I mean, we did just have the best week for the major averages of the year. It's like it's like the correction, the pullback of last week didn't even happen, essentially. But I mean, do we have a cleaner slate going into the rest of the summer? We do have a cleaner slate. The market action itself has been steady and encouraging. You probably should remember, though, last year you had a big pullback in August, regained it all by September 1st. You weren't out of the woods. You did end up having a full correction into October. All right. And because, you know, we can't get enough of Mike. Make sure to tune in for tonight's CNBC special, Taking Stock.

That's going to feature Dan Greenhouse and Liz Young-Thomas. That's coming up at 6 p.m. Eastern. It's overtime after overtime for Mike Santoli. Well, major averages finished fractionally higher today. That does it for us here at Overtime.