Closing Bell - Closing Bell Overtime: Return of the IPO?; Getting Ready For Big Tech Earnings 7/21/25

Episode Date: July 21, 2025

Schwab’s Omar Aguilar shares his latest market outlook. Madrona’s Matt McIlwain discusses whether the IPO window is opening—and why crypto companies are jumping into the public arena. Courtney Garcia of Payne Capital Management joins for a market check, and Truist’s Patrick Scholes explains his downgrade of Royal Caribbean. Finally, T. Rowe Price’s Tony Wang looks ahead to a crucial stretch for tech earnings.

Well, that's the end of regulation. Western Union ringing the closing bell at the New York Stock Exchange. Tectonic Therapeutic doing the honors at the NASDAQ. A mixed day here for the market. The S&P and NASDAQ hit new highs to start the week amid earnings optimism. You can see, though, the Dow finishing fractionally lower. We get results for profits so far for the second quarter. They're tracking for five percent year over year growth.

Communication services, materials and discretionary where your S&P 500 sector leaders Energy and healthcare lagged bonds rallying today with the two-year and the 10-year falling to nearly two week lows That was thanks in part to election outcomes across the world in Japan on the commodity front Gold hitting the highest level since June 18th copper and silver also rallying with silver at more than 2% June 18th copper and silver also rallying with silver at more than 2% Ethereum though that was the big mover in the spotlight today hitting the highest level since December last week ETFs tracking the price of ether Hit a record two point one eight billion dollars in weekly inflows. That is the scorecard on Wall Street. Welcome to closing bell over time I'm Morgan Brennan. John Ford is off today. Ahead, equities are at the highest.

The bond market is stable and economic growth looks to be intact. But could this be the summer calm before the storm? Well, Schwab Asset Management's CEO says yes. He's gonna join us to break that down. Plus, tech earnings kicking off the week with Google. The main event on Wednesday is the Sector Price for Perfection. We've got your setup for this week.

And is it time to jump ship on the cruise trade? One analyst says yes. He's going to join us ahead as well. Let's start though with Christina Parts-Nevelis. She's looking at some of the individual names making moves today as the market continues to hit these new highs. Christina. And I have a smorgasbord of names.

Let's start with Trump Media Shares. They're jumping more than 3% today after the market continues to hit these new highs. Christina. And I have a smorgasbord of names. Let's start with Trump Media shares. They're jumping more than 3% today after the company revealed it now holds about $2 billion worth of Bitcoin and related crypto securities. That means crypto now makes up about two thirds of its total $3 billion in assets, so pretty much a crypto proxy. The move marks an even deeper financial tie to crypto for President Trump, as Washington considers more industry-friendly regulation. That's why you saw shares clap about 3%.

CoreWeave stock, though, let's talk about that close hire after the AI infrastructure company announced plans to sell $1.5 billion in bonds. The cash would go, of course, to general expenses, paying down debt. Some investors have raised some red flags about CoreWeave's debt load, but the stock's more than tripled since its March IPO, helped by big name clients like Nvidia and Microsoft. And let's talk about shares a block. They closed higher today, about 7% higher after ahead of the stock joining the S&P 500 this week,

replacing Hess. And then let's talk lastly, we also have two more actually, Cleveland Cliffs moved up over 12% despite a bigger than expected quarterly loss. The steelmaker said full year costs will come in lower than previously projected. That overshadowed the losses. Investors like that and that's why he saw shares up over 12%. And for more on the quarter, be sure to tune in to Mad Money tonight at 6 p.m. Eastern for an interview with Cleveland Cliffs CEO who will be on the show.

And then I want to end on a weak spot because I had a lot of positive names, natural gas names, shares of EQT, other producers really dropped sharply as warmer weather forecast and rising output sent natural gases prices sliding. And so that impacted these names. They were some of the worst performers

on the S&P 500 Morgan. Okay, Nat gas tends to be pretty volatile in both directions. Christina Parts-Nevelus. Thank you for that breakdown Meantime bond yields falling today as stocks move higher Rick Santelli has the details. Hi Rick Hi Morgan indeed now before we get to the charts remember global rates are moving lower and there's a lot of similarities But one thing I want to point out last week It was not only the u.s. That had inflation data the UK had their CPI and

guilds Definitely had some activity, but the UK inflation was warmer than expected We also had the Japanese with CPI out and it was as expected in Japan But at elevated levels and the eurozone we also had inflation out Generally as expected and of course we know in the US it was kind of a split decision. The CPI was a bit warmer, PPI was a bit cooler. Why did I bring that up? Because now look at the charts of the 10-year maturities and all four of those economies. The UK, the

guild, the Japanese, the Japanese government bond, the euro, boons, and the US and the treasuries. So you see all of them have that kind of hump in the middle. That's when they were nervous about the inflation data. Now they're moving down because we are past that and, indeed, starting to look at all the central bank meetings that lie ahead. But maybe there's something even more important on this chart, and that is that even if the inflation data is as expected as it

was out of two out of the four it still is a lingering issue that's going to remain a big deal in the US and in the UK because of issuance. The UK is thinking maybe they're going to stop QT quantitative tightening because they're having a hard time finding solid demand for their long-dated issuance. So that's what we really want to pay attention to here. And as far as the dollar index, let's look at a two-week chart of that dollar index. It followed the inflation data as well. It followed rates, no surprise there. Right now, should it close where it is, it would be closing at a one-week low.

But maybe the most important issue of all is even though it's had a rocky start and it's under a hundred, it really has been mostly a sideways orderly market and now many are starting to express the notion, might be time to start looking at the buy side of the dollar. Morgan, back to you. Rick, it's a great breakdown, a great summation. I want to go back to Japan for a minute because you did just come out of a weekend with Japanese elections and certainly it shook out, I think, according to expectations, but perhaps not quite as stark a defeat as had been anticipated.

How much is that factoring into, and I realize Japan's markets were closed today, but how much is that factoring into this global bond market dynamic? Well, you know, the global dynamic with the Japanese is they managed manipulated squashed interest rates for the better part of a decade. So many are watching that because should the compressed spring pop more aggressively, and it has been rather aggressive, it will definitely be an issue for all global rates

due to arbitrage. But as you can see there We're still not at anywhere near the same actual level But with the currency differential it is important and with the ruling party not winning But not doing as badly the fiscal notion that should the ruling party lose and they did that it would be a nasty issuance profile and that Potentially, it would be detrimental, but thatance profile and that potentially it would be detrimental.

But that isn't what's moving the market today. What's moving the market today is that the current prime minister and key government officials will remain at their post despite the elections to work on the U.S. trade deal. And that is one of the reasons the dollar is weaker and the yen is stronger. All right. Rick Santelli, thank you. Yeah, you gotta keep an eye on the domestic politics in these different countries as we do track

these trade deals, because that factor is in here too. It's key. Well, let's stay on bonds. Let's bring in our first guest who says, the two dominant trends of this year will be a weaker dollar and a steeper yield curve. Joining me now is Schwab Asset Management CEO and CIO, Omar Aguilar.

Omar, it's great to have you back on the show and let's start right there. Why is that your thesis? Yeah, our fixed income research team, you know, has done a lot of work on, you know, how these things, you know, have operated. And let's start with the basics of, you know, where the economy is. So the economic backdrop on where that drives a lot of the yields and the activity in bonds, you know, has these cross currents that have, on one hand, the tariff uncertainty, the inflation and real rates,

putting a lot of pressure on future growth, and certainly forecasting a potential slowdown in the US economy. And on the other hand, you have the expansion of fiscal stimulus that can propel capital expenditures together with consumer that is heavily resilient,

that creates additional productivity and more profitability for companies. So when you have these cross currents, that only puts more pressure on what activities that central banks might do as it was actually related before. So that puts pressure on the lower end of the curve. So as we anticipate potential activity

in the lower end of the curve, the short part of the curve, you know, we think that that steeper year curve, which has already occurred, you know, continues to have. Now the other piece that goes into the the yield curve is the fact that inflation expectations have actually come down. Inflation itself is actually on a trending lower, not at the pace that the Fed may want to, but it's definitely on the trade down. What is actually coming down faster is those inflation expectations. So again, that puts a little more pressure onto that lower end and short end of the curve that maintains that particular piece of the of the yield curve to be steeper. So why do you say this might be the summer calm before the storm then? Well, you know, a lot of what we are expecting is, you know, we have seen incredible recovery in equity markets, a lot of that because of these, you know, what I call resilient but complacent investors. In other words, investors have been in these

or giving a lot of attention of trying to just understand and hope that things will continue to go well. A lot of the discussion about uncertainty around trade policy has actually gone into the fact that nothing has transpired directly yet on inflation and nothing seems to be at least in this part or early part of the earnings season in profit margins if you actually think about it at some point something is got to give and in our perspective while we don't necessarily know these will basically be potentially positive or negative,

we actually believe that more volatility is yet to come. As I said earlier, if these fiscal stimulus translates into a higher cycle of capex, that could be incredibly powerful for productivity and profitability that will potentially give an extra leg. So you can imagine the scenario that there is increasing capex, higher productivity, higher profitability with a Fed rate cut, that could be incredibly bullish for equities. On the other hand, if we see the continued pressure on tariffs, inflation is higher than expected, that could actually be the catalyst to go negative. So what do you invest in right now? So our approach continues to be in both

in fixed income and inequities to stay on higher quality. Right now, our view is there's really no reason for anybody to be a hero. There is a lot of uncertainty still in the market. We have enjoyed quite a bit of recovery of the last three months. I think going ahead, we continue to encourage investors to stay in,

you know, high quality companies, companies with high profitability, hopefully that have high free cash flow yields and companies that can't pay dividends as a way for them to protect for future volatility down the road. We also, you know, like the intermediate bonds with higher quality, mostly investment grade, there is really no reason to go into the high yield part of the market just yet and again you know take advantage of the fact that interest rates is still pretty

attractive. All right Omar Aguilar thank you for joining me. In a mixed start to the week four stocks today well we've got our first earnings report to bring you NXP Semi those results around Christina parts and Evelis has the numbers

hi Christina. Hello again NXP Semiconductor beating on earnings and revenue. Earnings per share of $2.72 adjusted on revenues of $2.93 billion, so $2.93 billion, higher than expectations. NXP, just as a recap, is an analog chip company and it's really highly exposed to the auto industry. Their auto revenue actually came in line with expectations, but industrials, mobile revenue, and Q2 non-GAAP gross margins coming in higher than street estimates. Investors sentiment

them into this name has been relatively low when you compare to the broader SMH and chip sector, and so the street was looking for signs of recovery and guidance, which did come in higher across the board. Q3 revenue midpoint came in at 3.15 billion dollars, so higher, the same for Q3 earnings per share, as well as gross margins of 57%. Perhaps that beat wasn't enough, and with auto in line, which is why you're seeing shares drop about 3.5% more. All right. Christina Partson-Avalos, thank you.

Thanks. Well, we're just over a week away from President Trump's August 1st tariff deal deadline, and the EU is reportedly preparing retaliatory measures if those tariffs are imposed. Megan Casella has the latest details. Hi, Megan. Hey, Morgan, that's exactly right. So news of that retaliation coming as commentary from both sides of the Atlantic suggests the U.S. and the EU could still be a ways away from striking any kind of agreement. Here's CNBC's Joe Kernan asking the Treasury Secretary

about the prospects of an EU deal earlier today. Do you expect the deal to be done before August 1st with the euros or could it get ugly? Well, Joe, it doesn't have to get ugly. It's the nature of a negotiation. There's a lot of back and forth. Now, Besant also held relatively firm, I would say, to the August 1st deadline, saying higher tariffs taking effect that day

could actually help by pushing countries to offer more concessions. And as of now, it appears that even if the two sides do reach a deal, tariffs would be a part of it. Commerce Secretary Lutnick on Sunday said the 10% baseline will definitely remain and that larger partners should expect to pay even more than

that. So as a result, as you said, the EU is prepping its response and officials have said they're working on a list of goods that would be hit with retaliatory tariffs. So think things like meat, dairy, bourbon, clothing. But Reuters today is reporting that the EU is also considering what's called the anti-coercion instrument and that would target services. Think about digital services, companies like Netflix or Uber that could be caught in the crossfire here,

as well as broader investment in the continent. Morgan? All right, so retaliatory tariffs, possibly two US retaliatory tariffs. We'll see how all this shakes out over the coming days. Megan Casella, thanks for bringing me the latest. Well, the tech IPO market is showing signs of heating up. Up next, we've got a top venture capitalist

on which names he thinks will take off as they go public. Plus, why there are maybe troubled water ahead for one of the hottest names on Wall Street, Royal Caribbean. We've got the analyst who just downgraded that stock. That's coming up over time. He's back in two. Welcome back. A flurry of IPOs are on the way. Several companies have filed plans to go public like Figma and Firefly Aerospace,

but the one sector seeing lots of momentum is crypto names like Grayscale, BitGo and the Peter Thal backed Bullish, which filed for IPOs. Joining us now to discuss the IPO window in general and this pipeline is Matt McElwain, managing director at Madrona. And Matt, it's great to have you back on the show. And let's start right there because we have four IPO offerings this week. We're starting to see this bubbling up of SPACs as well. And then we know we have more waiting in the wings

through the next, through the rest of summer, I should say. Do you see this as a moment where the floodgates are finally perhaps opening? Well, I wouldn't quite call it floodgates, but I do think that we're seeing a good opening here and we're seeing it both on the crypto side, as you point out, as well as on the broader technology side. I happen to favor a little bit more

the broader technology companies, I happen to favor a little bit more the broader technology companies, Figma in particular, but BitGo, Bullish, some of these companies that are coming soon, it's certainly an upmarket with some of the regulation certainty coming into place around crypto. And so I think there's good reason for some of those companies,

especially off of how Circle traded in just six months or six weeks after it went public for those folks to be going now. Okay, to go back to Figma specifically, how much of a test will that name be for more growthy tech and specifically AI-oriented names to come to market here? I mean, you couldn't pick a better company.

Tons of customer diversification, 820 million and trailing 12 months revenue, about 50% growth over the last 12. And I think expectations that it'll be at least in the mid 30s, if not higher, 90% gross margins, cashflow generating. I mean, this is the perfect company on the more pure tech side to be able to go public and open the doors for some more companies in the fall time frame. So love the Figma story, incredible what they've done, especially given the unsuccessful merger with Adobe. Those can be really tough on the culture of a company.

And so give Dylan and his whole team an incredible amount of credit. And the one other thing I would add is while they are not a AI native company, they've done a good job and probably better job than most of incorporating AI capabilities into Figma. So you can go from Figma design to produced end product and an end to end basis.

And that's impressive as well. Now, you mentioned crypto and certainly we're starting to see a flurry of these crypto related names file to go public. We're also seeing space and defense tech names. Some of these what I would call maybe more frontier tech areas of the market and emerging areas of technology. Do you think we start to see more of that in this environment given how successful

so many of these debuts have been? I think so. I mean, I wrote a piece back in January expecting that this was gonna be much more of a risk on year and for a while it looked wrong. And part of the reason it looked wrong was because we had more of a risk on year. And for a while it looked wrong. And part of the reason it looked wrong was because we had more tailwinds on tariffs, we had a lot of uncertainty around Doge,

we even had uncertainty around tax policy. And when we still have questions to ask about tariffs and we still have things like a massive deficit, a lot of those other areas have become more certain and predictable. And not only that, but especially with the passing of the so-called big, beautiful bill, you've got a bunch of investment in areas like defense.

And so I think that becomes a tailwind for defense-related companies to go public. I think also the bills, now the stablecoin bill being passed are a tailwind for the crypto sector. And then you pile on top of that, the very, very strong, I mean, circles up almost 6X since it went public in early June. It's got an over $50 billion market cap.

And there are a lot of things I'm cautious about in the crypto space, but with that kind of performance, I think you're gonna see others try to hurry up and hit this window. How about for the companies that are already public? We're really seeing the ramp up of earning season for tech start this week. What are you watching for?

Oh, I think it's gonna be a fascinating time. And if we talk about big tech, I think it's gonna be the growing dispersion of performance in big tech. You know, I was on your show this week last year and was more bullish on Microsoft and Amazon and more skeptical about Apple. I was again, a little bit wrong in the short term,

but if you look back at the last 12 months, Amazon is up 25%, Microsoft's up 15%, Apple's down 5%. And I think that's a continuing trend in the dispersion between those three companies and how they're going to perform. I think the most interesting, uncertain one, and the one that's actually trading at the lowest PE multiple, is Google. They're trading around 20 times PE, those other ones are all up and around the 30 times PE zone.

And I think there's some bull case and some bear case on Google, but that's the trickiest one to guess on. But sadly, I think Apple's really got a challenge. Okay. Matt McElwain, thanks for joining me. And of course, you get those alphabet earnings on Wednesday. So we're watching those extra closely then. Well, up next, Mike Santoli is back

and he's looking at a trio of market indicators that could be signaling a stock breakout or a stock breakdown. Plus three high flying stocks seeing a surge of insider selling last week. We've got those details when overtime returns. Welcome back to overtime. There was some notable insider selling last week that we want you to know about.

Morgan Stanley CFO selling three and a half million dollars worth of stock which is up more than 30 percent over the past three months. Arrow environments CEO selling stock as well worth roughly $4.5 million shares the drone maker up nearly 90% over the last three months. And finally, the executive chairman of airplane parts and aerospace supplier, Heiko, selling $18 million worth of stock. Heiko is up nearly 40% during the past three months. Well, the Dow and S&P are on pace for their third straight monthly gain.

The Nasdaq is heading towards its fourth positive month in a row, but some market indicators are showing signs that we could be headed for a break. Well, let's bring in senior markets commentator, Mike Santoli, for more. Mike. Yeah, Morgan, some of these macro market indicators are getting coiled pretty tightly.

Take a look at the 10-year treasury yield. Now, it's been kind of range-bound really even for two years But one thing folks are looking at is this sort of pattern here You got lower highs and then higher lows that kind of compresses as you see in there and a lot of times this will Just sort of proceed until you get to a point and then maybe Some indecision results in a breakout one way or the other whether it's about the Fed or the next inflation report or what? Have you so that's one of them the VIX now is Interesting because it has declined massively of course since the depths of the tariff panic sell-off

But it sort of stopped going down and we're sort of just bumping along in a sideways fashion Arguably with the S&P making successive new highs, with actual experienced volatility being very low in recent weeks, you would expect maybe this to be even lower than it is right now in the 16s, suggesting maybe the market is getting ready for the potential, perhaps, of some seasonal storminess, which sometimes comes in August or so. And then the dollar index,

a little more complicated story. It's been mostly on the decline, but again, has flattened out here and bounced recently off the lows. And some folks are saying, maybe it's basing again, who knows if it's about the Fed, if it's about larger fund flow questions, or it being the today anyway,

the inverse of a little bit of a bounce in the Japanese yen market. If we dig down into equities, in light of all of these charts, how does it break down with growth versus value? I mean, growth has largely, of course, continued to dominate, although less so than it did, let's say, going into the peak a year ago in mid-July.

In theory, I guess, if you're talking about something where the bond market would be anticipating Fed rate cuts, that could give the spark for a little bit of rotation into value. Value is held a little bit better. In fact, one of the places you see that is non-US stocks doing a little bit better than they did last year.

Probably a little too early though, to argue that we have a sort of long-term reversal or trend change there. All right, Mike Santoli, thank you. Well, it's time now for a CNBC News Update with Bertha Coombs. Bertha. Morgan, three Republican House lawmakers today

asked the CEOs of Alphabet, Meta, Amazon, and Microsoft if they have adequate safeguards to address concerns about China and Russia targeting undersea communications cables. There are more than 400 subsea cables around the world that handle 99 percent of international internet traffic. No comment yet from the companies contacted. Sad news out of Hollywood today.

Malcolm Jamal Warner has died. Police say he died in a drowning accident while on vacation in Costa Rica with his family. The actor first rose to fame as a child playing Theo Huxtable on The Cosby Show. He recently starred in the Fox medical drama The Resident. Malcolm Jamal Warner was just 54 years old. And the Marines are leaving Los Angeles. The Pentagon announced today that they will be withdrawing from the city more than a month after President Trump made the controversial decision to send the Marines and National

Guard into the city amid immigration raids and protests. Last week, the Pentagon announced it was releasing more than half of the 4,000 Guard members deployed to the city. Morgan? All right, Martha Coombs, thank you. Retail stocks showing signs of life lately, outperforming the S&P this month. Up next, we will discuss whether you

should be shopping for these stocks as the back to school season gets underway. Plus, we will hear from the analyst who downgraded Royal Caribbean and why he calls that move, quote, not an easy decision or one we take lightly. Overtime we'll be right back. Welcome back to overtime. There was some notable insider selling last week that we want you to know about. Morgan Stanley CFO selling three and a half million dollars worth of stock, which is up more than 30% over the past three months.

AeroVironments CEO selling stock as well worth roughly $4.5 million. Shares the drone maker up nearly 90% over the last three months. And finally, the executive chairman of airplane parts and aerospace supplier, Hyco, selling $18 million worth of stock. Hyco is up nearly 40% during the past three months.

Well, the Dow and S&P are on pace for their third straight monthly gain. The NASDAQ is heading towards its fourth positive month in a row, but some market indicators are showing signs that we could be headed for a break. Well, let's bring in senior markets commentator, Mike Santoli, for more. Mike.

Yeah, Morgan, some of these macro market indicators are getting coiled pretty tightly. Take a look at the 10-year treasury yield. Now, it's been kind of range-bound really even for two years but one thing folks are looking at is this sort of pattern here. You got lower highs and then higher lows that kind of compresses as you see in there and a lot of times this will just sort of proceed until you get to a point and then maybe some indecision results in a breakout one way or the other, whether it's about the Fed or the next inflation report or what have you.

So that's one of them. The VIX now is interesting because it has declined massively of course, since the depths of the tariff panic sell off, but it sort of stopped going down. And we're sort of just bumping along in a sideways fashion. Arguably with the S&P making successive new highs, with actual experienced volatility

being very low in recent weeks, you would expect maybe this to be even lower than it is right now in the 16s, suggesting maybe the market is getting ready for the potential, perhaps, of some seasonal storminess, which sometimes comes in August or so. And then the dollar index, a little more complicated story.

It's been mostly on the decline, but again, has flattened out here and bounced recently off the lows. And some folks are saying, maybe it's basing. Again, who knows if it's about the Fed, if it's about larger fund flow questions, or it being the, today anyway, the inverse of a little bit of a bounce in the Japanese yen market.

If we dig down into equities, in light of all of these charts, how does it break down with growth versus value? I mean, growth has largely, of course, continued to dominate, although less so than it did, let's say, going into the peak a year ago in mid-July. In theory, I guess, if you're talking about something where the bond market would be anticipating fed rate cuts, that could give the spark for a little bit of rotation into value.

Value's held its own a little bit better. In fact, one of the places you see that is non-US stocks doing a little bit better than they did last year. Probably a little too early, though, to argue that we have a sort of long-term reversal or trend change there. All right. Mike Santoli, thank you. Well, it's time now for a CNBC News Update with Bertha Coombs.

Bertha? Morgan, three Republican House lawmakers today asked the CEOs of Alphabet, Meta, Amazon, and Microsoft if they have adequate safeguards to address concerns about China and Russia targeting undersea communications cables. There are more than 400 subsea cables around the world that handle 99% of international internet traffic. No comment yet from the companies contacted. Sad news out of Hollywood today.

Malcolm Jamal Warner has died. Police say he died in a drowning accident while on vacation in Costa Rica with his family. The actor first rose to fame as a child playing Theo Huxtable on the Cosby show. He recently starred in the Fox medical drama, The Resident. Malcolm Jamal Warner was just 54 years old. And the Marines are leaving Los Angeles.

The Pentagon announced today that they will be withdrawing from the city more than a month after President Trump made the controversial decision to send the Marines and National Guard into the city amid immigration raids and protests. Last week, the Pentagon announced it was releasing more than half of the 4,000 guard members deployed to the city.

Morgan. All right, Martha Coombs, thank you. Retail stocks showing signs of life lately, outperforming the SMP this month. Up next, we will discuss whether you should be shopping for these stocks as the back-to-school season gets underway. Plus, we will hear from the analyst who downgraded Royal Caribbean and why he calls that move, quote, not an easy decision or one we take lightly.

Overtime, we'll be right back. Welcome back to overtime. Here's a recap of today's market action. The S&P and the NASDAQ both hitting record highs once again as communication services and discretionary stocks led the gains. Yields falling today both here and abroad with a 10-year and 30-year Treasury yields hitting the lowest level since July 11th. Verizon was among your top performers today following a second quarter earnings beat and a boost to full your guidance.

Block surging as well on news that it will join the S&P 500 beginning July 23rd. It's going to replace Hess. And let's get a check on NXP semiconductors cuz right now that stock is moving lower here in overtime. It's not about 4.5%. That's despite reporting an earnings beat. The company giving revenue outlook that was above estimates as well. Nonetheless, investors are hitting the sell button right now. Well, let's turn to retail because that sector is on its way to recovery. It's outperforming the S&P 500 month to date,

but it's still underperforming for the year. June retail sales showing consumer resiliency despite any economic uncertainty or inflation concerns. But our next guest says that while consumers may be shopping, investors may still be cautious and not shopping, at least on the sector. So let's bring in Payne Capital Management, Senior Wealth Advisor and CNBC contributor, Courtney Garcia.

Courtney, great to have you back on the show and let's start right there. Why the recent rally in retail? What's propelling it? And what do you think of it? I think the biggest thing that's propelling retail right now is the fact that the consumer has continued to remain strong. Everybody's expecting that the consumer

is gonna fall off a cliff at some point. Inflation is gonna start to kick in, but they've been a lot more resilient than people have expected. Inflation is not impacting consumer spending as much as you think. And also we now have this big, beautiful bill, which actually arguably has a lot of stimulus in there, which could actually reinvigorate even more consumer spending. So I think that's kind of what's leading it right now.

And you bring up a good point here that while it has been outperforming month to date, it has not been one of your good performers this year. It's really lagging the S&P 500. And when you look at a lot of your big names, so think of like your Macy's, your Kohl's, your Abercrombie's, your American Eagles. And these are still down about 25% since the beginning of the year because what's happening is consumers are still spending, but they are being very choosy on what they are spending right now because inflation is affecting the consumer. So they're not necessarily going to your big buck retailers, but they are being very choosy on what they are spending right now because inflation is affecting the consumer. So they're not necessarily going to your big buck retailers, but they are starting to trade down. The thing that's been working this year are your Walmarts, your Costcos,

your Dollar Trees. People across all income cohorts have actually been going and looking for value this year, and that's the trade that has been working thus far. And so you expect that trade to continue. So this is where I'd actually look for some other opportunities here. So the other end that we haven't really talked about is your luxury space. And this also is a space that's really been hurting, especially post-COVID. Because what happened in this world is they actually really increased prices during COVID. Because people were home, they had money to spend, so they raised prices to remain exclusive.

But now, people are back out and about and increasing those prices actually hurt their demand. So take us something like a Louis Vuitton. This is down about 40% over the last two years, but it now trades at less than 20 times forward earnings, which is historically low for this stock. And this is where people I think have really discounted the luxury space more so than the fundamentals justify. And in this income cohort, which is your higher income consumer, they've been holding up a lot better with inflation.

And also as you're seeing stock prices are doing well, it creates this wealth effect where people feel like they have more money and can continue to spend. Additionally, if these tax cuts come in, could benefit them. And of course, a big part of the space is China, which if you start to see the Chinese consumer come back, that's absolutely going to benefit the space. It's like you took the question right out of my mouth, Courtney, because I was going to say we're going to get LVMH results later this week. We get some of the other high-end fashion brands names here over the next couple of

weeks as well. And China has been the soft spot. It's almost been like strong earnings for these companies, ex-China. So how much do you need that to kick in here? You do. You are going to be able to kick in to see like some sort of like really big catalyst here. But that's where I think what you're seeing with China is I don't think you have an optimistic consumer there yet, but I do think you're starting to see a shift there where they're definitely a little less pessimistic and you might start to see that corner be

turning. And this is something you want to be in there before that happens, not after. And given these valuations, I think people are so negative on it. I think any sort of upside is gonna bring those companies further. Okay, Courtney Garcia, thank you. Great to get your take on the retail trade. Well, cruisin' for a bruisin'. Up next, the analysts who just downgraded Royal Caribbean.

It's one of the top performing S&P 500 stocks over the last year. And why he says it was not an easy decision. Plus, we've got a top portfolio manager on how you should be trading the big tech titans on this week's earnings calendar. Stay with us. Welcome back. We want to show you shares of Steel Dynamics,

that stock falling after reporting an EPS end revenue miss. The CEO saying quote, the uncertainty regarding trade policy continues to cause hesitancy in customer order patterns across our businesses, despite healthy underlying demand factors such as manufacturing, on-shoring, infrastructure program funding and increased regionalization of supply chains in the U.S. Well, let's turn to discretionary stocks. The Invesco Leisure and Entertainment ETF has outperformed the broader market over the last three months. The top stock in that ETF over that time, Royal Caribbean.

Uphill whopping 83%. Our next guest says, is downgrading the name, I should say, to hold, calling it a, quote, not an easy decision, nor one we take lightly. So joining me now is the analyst behind the call, Patrick Schultz, lodging and leisure, managing director of Truist Securities. Patrick, it's great to have you on.

So why the downgrade? Great, thank you, Morgan. You're absolutely right, not an easy decision. This has been one of my favorite names over the last several years, and not only our performance this year, but the last two years. and not only our performance this year, but the last two years. So why the downgrade?

Well, number one, stock has had a great run here, but it's also combined with our research showing, hey, things in the cruise industry are decent, but certainly not as good as they were entering the year. And when I talk about decent, I'm referring to the booking volumes here. To quantify that, as we look at the booking volumes for the industry over the last couple months, they've been up low to mid single digit year over year.

Not a bad level. But if we go back how they were entering the year, you're looking at roughly growing at a rate of about 20% year over year. So certainly we're seeing some normalization that combined with a stock that it's trading at valuations at all time high multiples. I just couldn't justify my buy rating not anymore.

Again, hard decision, but it really is a great company that has really come up with some creative ideas and executed on those as well. Yeah, you just used the word normalization. And I just wonder, does that mean that consumers are pulling back or that we're just getting back to more normal patterns that we saw, maybe even going back to before the pandemic? Yeah, I would say it's actually a combination of two things. One, normalization in the sense that it was really cruise companies and cruise vacations that were late, very late to the game as far as recovery. I mean, they were really the last to recover here. And on top of that,

you do have consumer confidence down, obviously, from where it was entering in the year. And I think it's sort of the combination of those two factors where we're seeing booking trends that are more similar to, say, pre-COVID than they were certainly six or eight months ago. That's interesting to hear, to read your call today, because on

Friday, the American Express CEO Post Earnings made the comments that while spending some of the travel categories like airlines and lodging was soft to read your call today because on Friday, the American Express CEO Post Earnings made the comments that while spending some of the travel categories like airlines and lodging was soft overall, that they're seeing spending was still a quarterly record. We are starting to see this in different parts of the travel trade, if you will,

the softening after a number of years of just really strong results. If that money's not going into travel and lodging and perhaps not so much into cruising anymore either, where is it going? What do you like here? What do I like here? Well, I like, I would say within cruise, there's definitely a catch up name here and it's been certainly the under performer would be Norwegian cruise lines. And then within hotels, like Hyatt Hotels, hasn't quite performed as well as the Outperform

and the group Hilton. You know, as I've been telling clients, we do a lot of research on underlying travel trends and they've been pretty mediocre and lethargic. I wouldn't say there's anything I'm really pound the table like I was, but there's still some relative value names again, Norwegian Cruise Lines secondly being high. Okay. Patrick Scholes, thanks for joining me. Thank you Morgan. Up next, Mike Santoli is back. He's looking at whether there's a correlation between the significant underperformance of small caps and the lackluster IPO market in recent years. Stay with us. Welcome back to overtime.

Shares of surreptit therapeutic's under pressure again today, finishing down about five and a half percent. The company refusing the FDA's request to stop shipments of its controversial treatment for Duchenne muscular dystrophy. Now that's following the death of another patient taking its gene therapies. Sarepta says it will keep shifting the drug for use by patients who do not have an advanced stage of the disease. Sarepta shares falling by more than a third on Friday

and they're now down roughly 90% this year. Several analysts slashing their price targets on the stock with one from H.C. Wainwright taking it all the way down to zero, predicting the company will be forced to remove the drug from the market. Right now it's voluntary, and that would leave the stock with, quote,

zero intrinsic value. Well, going back to the IPO market, it is showing some signs of life, but the total number of public companies is way below its peak in the 90s. So let's bring back Mike Santoli for a look at whether there is room for a rebound. Mike.

Morgan, yeah, there seems like there's room whether we'll get a big make-up in the number of companies listed publicly. That's an open question. A long-running trend. This is the total number of companies listed on all public exchanges in the US. Obviously peaked in the late 90s,

around the time of the peak of the dot com boom. You see a previous peak there, that's in the 80s before the 87 crash. And you see there's often a purge, a cleansing of the market. A vast number of those companies that are no longer here are basically penny stocks, insubstantial. But it has not been backfilled by a big rush

to go public by younger companies. And you see that was the case through the 2010s. Something else was happening, the growth of private equity as an asset class, they became buy and hold investors of smaller companies and they just did not have to exit quite as much. Also, the cost in terms of regulation and financial cost of being public went up with regulation,

Sarbanes-Oxley in the early 2000s. This little bump right here, by the way, that's kind of the SPAC and IPO boom of the early 20, let's call it 2020 to 2021, largely reversed. So we'll see if that can move from here. Now, there's an argument to be made that maybe there's not as much demand for smaller companies as evidenced

by the way over the last 10 years. The small cap Russell 2000 has way underperformed things like the NASDAQ 100. It's a winner take most type stock market or is it that the Russell 2000 just doesn't have a lot of those young exciting companies that maybe would help support it because they're staying private for longer Morgan. Yeah and to your point I mean the Russell 2000 is still trading like something like 9% below its 52 week high. We haven't seen it sort of make that that rally to to catch up to the SMP.

The late twenty twenty one. I even. Yeah. All right. I just to stick with I.P.O.s here for a moment. Mike, we've got four I.P.O.s on tap this week. Two of them are P.E. carve outs or P.E. backed including McGraw Hill which is coming to market and we've been

talking so much about these sort of splashy growthy you know techie names and how successful that those those debuts have been how much of a test is it now this week to see names that maybe aren't in that bucket. It's interesting because I often

feel like the early wave of an IPO phase is those so called reverse LBOs. When private equity firms want liquidity for big established companies, slow growth, they're more sold than bought. But we're in a moment now when actually you could have these stocks like McGraw-Hill that could be a little more blue chippy. You think back to things like Hilton that was taken private and then public again,

stocks done really well. So I do think it's a good test of whether sort of bigger institutional investors looking for fresh names that are not already in the S&P 500 and therefore could be a source of outperformance if you like the company, whether they do have good uptake. So it's not as much of a indicator of true animal spirits,

risk appetite as the unprofitable tech move and the high short interest stocks have been, but it's definitely gonna be interesting to see if there is an appetite for these names that just are fresh on the sheet, so to speak. Okay, Mike Santoli, thank you. Well, tech earnings began taking center stage this week, and up next, we've got a top tech portfolio manager

on how investors should be positioning their portfolios ahead of those results. What's up? What's up? What's up? What's up? What's up? What's up?

What's up? What's up? What's up? What's up? What's up? What's up? Welcome back to overtime. Let's get you set up for tomorrow's or with tomorrow's trade today rather.

There's no big data on the economic calendar, but the slate is chock full of earnings. Dow components, Coca-Cola and Sherwin Williams will report before the bell along with GM, Home Builders, DR Horton and Pulte, as well as defense contractors, RTX, Northrop Grumman and Lockheed Martin. Then right here on overtime, we're going to get numbers from Texas Instruments,

SAP, Chubb, and Intuitive Surgical. Well, let's drill down into this week's slate after the S&P tech sector hit an all-time high today. So joining me now is Tony Wong, T. Rowe Price Science and Tech Fund Portfolio Manager. Top holdings include Alphabet and IBM, which both report this week. So Tony, it's great to have you back on.

And let's start right there. What are you watching from Alphabet? Yeah, so I think that Google is at a crossroads here with a new technology coming out, generative AI. I think of it as like, you know, Google search like a librarian goes and looks through the books and gives you a bunch of books and then you have to figure out kind of. And then generally AI is like the library, it's like an expert and they can kind of tell you off the top of the head. And so I think that what we're going to be looking for on the long term in the market probably is looking at this is that what that search revenue does as they do more AI mode and then how do you think about their kind of capex spend and whether they're going to

have a really creative kind of capex fan and whether they're gonna have a really creative kind of result due to that. So, I think there's a few things, but the most big thing is like the disruption risk behind Chatchatoo Tee that's likely coming. IBM has been just a stealth and maybe not even stealth at this point. It's just been hitting new all-time highs

and has been on a tear recently. Does that continue? Well, I think that what you have with IBM is that it was a value idea that was getting better. And so the mix improved and more consulting infrastructure software. I think that what they're doing with the consulting arm is essentially they themselves are customer zero. So they figure out how to use AI

and then they then teach it to their clients. And so I think that, you know, that has been an improving story. And so they've got multiple levers and they've done an auto M&A to essentially like improve the returns in the business. And so I think that's why the stock has worked well and perhaps it is set up better than people expect.

How about Tesla? I think for Tesla, what matters is autonomous driving. When you think about their AI first, camera first approach, that's very differentiated. When they're launching a robot taxi and they're seeing some sets, I think the market likes that. You think about it, what they're doing is really game-changing

if AI and camera can replace a lot of the sensors in the car that the rest of the field has taken on. So, you know, to me it's less about how well the car business does, you know, in terms of how many Model Ys are sold because that kind of has been more mature. It's more about their innovation pipeline and how to think about that bigger tam around AI and robotics. What do you think about the Semi space, especially after we got NXP results earlier this hour where they basically beat across the board, but the stock's still under pressure here.

And as we get Intel, which we know continues to be a turnaround story under a new CEO. Yeah, well, Semi's has had a really big run. And so when you think about that in the context, expectations are obviously gonna be a lot higher in the near term. When you think about the cycle, though, like the broader industrial cycle, TI and XPI, they are guiding to improving fundamentals. I mean, the real question is, though, the valuation has a mark on ahead of itself. I think that's what you're alluding to.

But overall, long term, there should be more demand for industrial semis. The issue is that China, that was a big tailwind over the last 10 years, could be more of a headwind or even a flat market. And so I think that's what people are wrestling with. In terms of Intel, I mean, that is a really big turnaround story. I think that's a little bit more idiosyncratic versus what's wrestling going on in the cycle. To me, they've really got to fix the TikTok, working on the architecture was the node. So I think that we are excited to hear what Livboo has to unveil in terms of what his priorities are to get

the product roadmap back on track to how are they going to attack AI and then how are they going to stabilize the balance sheet and cut costs so that Intel is in a better position. Okay. Tony Wong, we've got lots to watch. Thanks for setting it up for us here. And it was a mixed start to the week. The Dow finishing fractionally lower today.

The S&P and Nasdaq both finishing higher after hitting fresh highs in the session. That's gonna do it for us here at overtime though. Fast Money begins right now.