Closing Bell - Closing Bell Overtime: Tech Faces a Test as Investors Reassess Risk and Look to What's Next 6/26/26

Episode Date: June 26, 2026

Markets wrestle with renewed pressure in technology as investors reassess leadership across the sector. Bob Elliott, CEO of Unlimited, breaks down the latest tech turmoil and explains what it means for positioning as the rally enters a new phase. Apple's memory strategy moves into focus as Mackenzie Sigalos examines reports that the company is turning to Chinese suppliers and what that could mean for the global semiconductor industry. Steve DeSanctis of Jefferies explains where opportunities may emerge as money shifts across the market. Kevin Smith of Crescat Capital argues a market pullback is approaching and makes the case for owning gold and biotech as defensive plays. Healthcare takes center stage as Angelica Peebles previews a pivotal week for big pharma. Evan Seigerman of BMO discusses whether the recent weakness has created a buying opportunity and where investors should focus across the sector. Plus, our Mike Ozanian's look at the world's most valuable sports empires and a preview of the key market catalysts coming next week. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The bell is bringing an end to the trading day at the NYSE Customers Bank Corp. And at the NASDAQ, the CEO of Futsi Russell, ringing the bell to conclude the semi-annual Russell Index Reconstitution. We'll talk about the impact that will have on the markets in just a bit. Welcome to closing bell overtime live from Studio B at the NASDAQ market site. I'm Mike Santoli. Melissa Lee is off today. Another day of muted action for the major averages, the Dow and the S&P 500 falling just modestly, just below the flat line. And the NASDAQ did extend its losing streak down almost half a percent.

The NASDAQ 100 down a full percent. That's a five-session losing streak now for the NASDAQ composite. Once again, we did have big moves under the surface and a reversal of what we saw yesterday. Today, the memory names, including Micron and Western Digital getting hit, while Apple bounces back a little and Microsoft gains 6 percent. That's its best day in more than a year. And while we've seen a rotation within tech, there's also been a rotation away from tech. The health care sector up again today, 7% on the week, in fact, a big game for

Moderna today. Eli Lilly, the rare trillion-dollar company outside of big tech, also up big. We'll discuss whether drug stocks are the right antidote for a volatile tech trade right now. The Dow and the Russell 2000, finishing the week up almost 1% as investors continue to shift money to sectors like financials, health care, and industrials. S&P 500, down almost 2% while the NASDAQ off 4% so far for the week. Will this market rotation continue? What does it say about the economic fundamentals? Let's bring an unlimited CEO and CIO, Bob Elliott.

Talk about all that. Bob, good to see you. Good to see you. What's the message, first of all, of this rotational action? I mean, there's sort of a rethink of the AI trade, whether we've overcapitalized it in the short term. But you are seeing other parts of the market step up. Well, I think the big picture is who's going to win for the overall economy. And the question is slicing that up, is it going to be the hardware providers,

is it going to be the hyperscalers or is it going to be the real economy companies who are selling into it? And I think what we're starting to see is that idea that essentially the semis and the hyperscalers could charge whatever they want for compute and hardware and basically take it out of the real economy companies, that's starting to come off a little bit. And so this rotation is both fundamentally driven because it suggests that maybe access to that technology is going to be a little cheaper, but it's also flows driven. I mean, pretty much every levered player has been all in on the semis trade, and now they're rushing for the exits in a very small door. And that's creating a lot of squeeze away from those trades that have done very well and into

the rest of the market. Right. In the context of getting into quarter end, in the context of the index rebalancing. Now, one of the storylines of the last week and a half since Kevin Warsh's first press conference as Fed chairman has been, uh-oh, it's an incrementally hawkish Fed. they're going to be on inflation watch pretty intently. And bond market's repriced in that direction. So you think that's a little bit of a mistake? Well, I think if we're looking at the primary drivers of the run-at-hot or inflationary dynamic that we've seen over the last couple months, oil prices as well as compute costs, those

are reversing, right? And oil prices in particular, which is the primary driver of inflation, certainly at the headline level, you know, we're down significantly from where we were. We're not far off of before the war. And at the same time, you're looking at bond yields and even short rates that basically are where they were before we had a huge fall in oil. And that just doesn't make sense. If you're looking at the market, what do you go after? The thing that's up a ton, like semis, or do you look at bonds that have actually gotten beaten up and have a lot of favorable disinflationary condition? I was going to say, so the takeaway from that is that, you know, the bond market

might be mispriced and therefore a buy and yield should be coming in? Well, I think people are confused about the Fed's rhetoric, which is being derived from looking in the rearview mirror. Talking about inflation scares when oil prices are down 30 or 40 bucks over the course of several weeks is confusing, let's say. And very unlikely that we're going to get the sort of hikes that at least were talked about a little bit or some concern that was talked about, much more likely. that we might even get cuts through the end of the year.

You say that the run-it-hot scenario has got some holes in it now, as you can observe. Does that mean you think there's actual underlying risk to the pace of the economy in the second half of the year? I think probably the real economy itself is doing fine, and, you know, every day kind of prints 2% real growth. And, you know, certain sectors do better or worse, but it's mostly fine. I think the real issue here is expectations. And if particularly some short-term expectations but medium-term expectations, where we have earnings growth, expectations that are at the highest that they've been ever. 25% expected earnings growth for the next five years, each of the next five years,

is what analysts are penciling in. That is an extraordinary outcome. That would be the single greatest earnings growth environment over five years of the U.S. has ever experienced by quite a bit. Right. And I think that's where the risk lies is it's not necessarily that the economy slows down. It's that those very high expectations just aren't met. Does that mean that this scenario that supporting this broadening out of the market,

which is that earnings growth will also become more democratic? Is that suspect at this point? Why, I think that's the question, because in order for it to become more democratic, you've got to see productivity growth. And not just to get 25% earnings growth at the economy-wide level. Yeah. It's not just a point of productivity growth, or it's not just a little bit of margin expansion. We're talking about a radical reshaping.

The market is priced in. AI will totally transform the economy and we'll see extraordinary. ordinary earnings growth. That is the baseline expectation in the market right now. And, you know, in the range of different possible outcomes, probably that's a possibility, but it's certainly not the probability. From already record margins and such. Bob, good to talk to you. Thanks so much. Appreciate it. All right, breaking news from Washington, new comments from President Trump, Amon Javers. How's the story. Hey, Amos. Mike, that's right. President Trump says, you'll find out. That's his answer to the question of the day for a lot of people around the

world after that strike by Iranian forces on a cargo ship in the Strait of Hormuz yesterday in the announcement by the Iranian regime that they do intend to assert sovereignty over the Strait of Hormuz. The question of the day was, will the U.S. respond militarily to that strike? Does it mean the end of the ceasefire in the Strait of Hormuz? And we saw the president saying earlier today that this does breach the ceasefire. He said that on social media. And just now, asked by reporters in an unrelated event on religious liberty, whether or not the U.S. military will respond directly. The president said, you'll find out.

He said that twice, but he wouldn't go any farther than that, Mike, in terms of saying what specific action he might be contemplating. But it definitely sounded like saber-rattling at the very least from the U.S. side. So something to watch for as we go into the weekend. I was going to say maybe a little bit of suspense yet again going into a weekend, Amen. Thank you very much. Well, oil falling again today, below $70 a barrel. Pippa Stevens joining us now with more on this market.

Hey, Pippa. Hey, Michael, oil is wrapping up its third straight week of losses with Secretary of State. Marco Rubio saying today that Israel and Lebanon have reached a framework agreement aimed at achieving lasting peace and security. That does come after a vessel was hit in the strait yesterday, leading the International Maritime Organization to pause its evacuation plan with the Secretary General saying they think the shipping lane could have around 80 mines. But that is still not enough to turn around the bearish narrative that's taken hold as

traffic through Hormuz picks up and the market focuses on materially higher physical volumes. A ramco today resuming loadings at Rastanura after a nearly four months top, pointing to a restart of exports out of the Gulf. Now, Barclays is the latest firm to bring down its forecast in a note titled Opening the Floodgates. The firm now sees Brent at 96 for the year, but they still did say that full freedom of navigation has not been established and that Mike, that is really the thing to watch going forward. So wait, $96, that's average Brent for the year? Yes.

So we're at 72 or so at this point. So clearly people are slow to, I guess, believe the current market message of being well-supplied with a lower risk premium. Yeah, well-supplied for the time being. But I think the key question is what happens after that 60-day period. And when you have all this talk coming out of Iran about the need for things like verified shipping insurance, which you've seen some reports of, or just going through specific lanes and all of that. I think there is still some question about what happens after this

backlog is cleared. So there is clearly a bunch of ships exiting that were there essentially serving as floating storage within the Gulf. But once all of those flows come out, then how does the picture look, especially as we see in countries around the world need to rebuild their inventories? But it is notable that we had so many calls early on about we could see a $150 or $200 dollar oil that certainly did not pan out. And so now firms are definitely cutting their forecast, but I think still the tendency here is for higher than previously expected, but certainly not above, you know, the $100 levels that some of those early targets considered. Yeah, exactly. Yeah, the price really did undershoot most steps of the way here. Pippa, thank you. Let's turn to the

bond market as yields are giving back more of their post-fed gains. Let's get to Rick Santelli in Chicago with all that. Hi, Rick. Hi, you know, when you're you were talking to your guest, Elliot, it was very interesting because there's this feeling out there that Worse being tough, and that's a good thing on inflation, has really changed the dynamics of the entire Treasury complex. Not necessarily true. Look at a month to date of twos and tens. The two years still sort of above the yield of the first meeting of Chairman Warsh, but look at the 10 year. It's on pace. Let's do the next chart for the lowest yield close since May 8th, Mike. So this is a big deal. And I think

the 10-year is on par with what we've seen in oil. But there's another issue out there that I find really fascinating. We saw University of Michigan today. It's super weak. It's basically hovering near the lowest level since the 70s. But there's a fly in the ointment. Here's a chart of 10 years. Dow Jones against University of Michigan headline confidence.

And you can see it correlates except for right in the beginning of 2025. January of 25, it started to diver. What happened in January of 25? I'll tell you what happened. Here's what happened. President Trump. I rest my case. This is making a huge difference in a variety of areas that have become politicized.

Stocks? Well, stocks in confidence usually go hand in hand, Mike. Back to you. Yeah, no. And I know that there were, you know, methodology changes in the Michigan survey. It's not necessarily a kind of random sample the way it had been before. And I know, I mean, it's been tough to really find a lot of meeting in that, which maybe even includes the inflation expectations component of it. You know, you can point out the 10-year yield having gone down, definitely oil helping that.

But don't you also think that if the market says, you know, net hawkish message from Warsh means credibility on inflation, and you might actually see longer-term yields come in on that? Absolutely. Credibility on inflation is the key, in my opinion, you nailed it. So being talking tough on it is a good thing, and having the market listen is even better. Fair enough. Rick, appreciate it. Thank you very much. Have a good weekend. Well, Apple, snapping a four-session losing streak. The stock hit hard yesterday as it raised prices due to the high cost of memory. Up next, what Apple can do to avoid paying the memory tax. You're watching closing bell overtime.

Live from the NASDAQ market side. Cheers of On Semiconductor losing a quarter of their value today as the company agrees to a requires synaptics in a deal initially valued around $7 billion. Because it's an all-stock deal, synaptics not getting the usual deal premium. Several analysts weighing in with confusion about the deal for OnSemi, suggesting it will distract from its current focus on data centers, which had helped the stock doubled this year before today's decline of almost 24%. Well, we want to show you exchange financial access ringing the closing bell at Cebo in Chicago.

That ends the regular trading day for options. and, of course, the trading week as well. Apple and Microsoft bouncing back today, recovering from big losses as both had to raise prices due to the surging cost of memory chips. Both are still down big in June. This would be the worst month for Apple since 2022, and Microsoft downed about 17%. You'd have to go all the way back to the year 2000 to find a worse month. But do these companies just have to grit their teeth and absorb the rising memory costs?

Or is there a workaround? Mackenzie Segalos is looking at that for us. Time Act. Hey, Mike. So one workaround getting a lot of attention right now is Chinese memory. I'm told by a person briefed on the discussions that Apple is actively lobbying the administration for more flexibility to work with Chinese memory suppliers. It's part of a broader push underway now by American tech companies to appeal to commerce in the Pentagon for room to qualify those vendors without running afoul of U.S. restrictions. And it's not just Apple. HP told Bank of America in January, it was looking at qualifying additional Chinese memory suppliers.

Dell and Acer have also reportedly been looking at Chinese memory as the shortage threatens PC launches and pushes up costs. The idea, though, is to use those chips and devices sold outside the U.S., especially in China and parts of Asia, where the political and regulatory risk may be lower. Now, Apple, it has been here before. In 2022, it explored using Chinese storage chips in iPhones sold in China. then backed off under pressure from Washington. But the supply crisis has forced Apple to reconsider its options. Still qualifying a new supplier, especially in China, it is not a quick swap. It can mean months of reliability testing, security review, and factory audits.

And I'm told by experts, it can take up to two years to work into the supply chain. Mike? I was going to just ask that just exactly, you know, what this would look like if it were even set in motion. First of all, did Chinese memory providers have a bunch of capacity that would loosen up the global supply demand imbalance? It's actually tremendous to look at the market share and how much they've been getting the last few years. Counterpoint has research speaking to exactly that.

And in the NAND and in the DRAM categories, you're seeing these two companies, CXMT and YMTC, really come up and, I mean, neck and neck with some of the players like Micron and Samsung. That being said, CXMT, it is headed for the public markets in Shanghai. It's looking to raise $4.3 billion. It is subsidized by the Chinese government. Part of why Washington has been so resistant to the idea of U.S. tech companies tapping them as a potential supplier. But the point is that they have a government behind them.

Now, another potential headwind to using them is, of course, Beijing wanting to prioritize Chinese-based handset makers, especially in a year where the smartphone market is headed for its worst year on record, a time when Apple's really been gaining share. So a lot of a lot to this calculus, Mike. Oh, for sure, very complex setup. And, you know, given the constraint that the high memory prices and the lack of supply are presenting to the hardware makers, I was fascinated by this Wall Street Journal article. It's something I've been wondering about, which is, isn't that just going to create tremendous incentive for these companies to find workarounds,

just engineering or technological ways to minimize their need for as much memory? Yeah, the long-term bear case that they lay out in that story is the fact that, the high bandwidth memory customers are finding their own workaround. So you've got Qualcomm pitching high bandwidth compute as a way to avoid HBO in video reportedly tweaking the Vera Rubin to use less memory.

Cerebris has been flexing on the fact that its chips don't use HBO at all. That makes the market extremely jumpy around memory efficiency breakthroughs because if that happens, that frees up the wafer to then again focus on chips that Apple wants.

And I will say Micron, earlier this year, back in March, it lost a third of its value after Google published that TurboQuot paper, which was all about reducing memory use without hurting AI model performance. That is a big headwin for a name like Micron. Yeah, exactly.

No, it's really fascinating. And who knows me, Micron hasn't been able to make too much headway beyond Monday's highs, even with that great quarter. We'll see how it goes. McKenzie, thank you so much. While the Red Hot Russell 2000 Index has been significantly outperforming the S&P 500 since the beginning of April.

Up next, we'll discuss how much more upside there could be for the small caps as the index rebalances tonight. Welcome back. Momentum names getting hit hard today, including Bloom Energy and Credo Technology. Both stocks are up big in the second quarter, making them the two biggest stocks in the Russell 2000. And you see there today giving back a fair amount of their gains quarter to date. While the Russell indexes reset after the close today, it's the semi-annual reshuffle that decides which stocks move into, out of, or between those indexes? Is this just a technical trading event or something bigger for investors to watch? Joining me now is Stephen DeSantis. He's Jeffrey's managing director and U.S. Small Midcap Strategist.

It's great to have you on. Stephen, first off, talk about the rebalance, just in terms of what it's going to mean for the character of the Russell 2000 and how it might behave after today. Thanks, Mike, for having me on here. Happy Friday, everyone. So basically what end up happening is that we are going to lose a lot of beta. You're going to lose a lot of momentum, which I think is actually a really good thing for the small cap market. It continues, it should continue the outperformance. If you get higher for longer due to higher inflation, Fed raising rates, long duration assets, like the high beta momentum stocks will start on to perform. And that's actually not, that's going to move up to the Russell 1000. And the small cap Russell 2000 is going to have a little bit higher

quality, cheaper valuations. It'll be more garpy of an index, which I think is actually what's going to work in the second half of the year. Yeah, and I guess it bears mentioning that, you know, the alternative small cap measures like this S&P small cap 600 has actually performed pretty well, you know, of late in recent months. So it's not as if it's just been, I guess, the high beta momentum stuff in the Russell. Now, in general, I think you're pretty favorably disposed toward small calves to continue to outperform? You just raised the Russell 2000 price target? Yeah, so we moved it up to 3190.

We're a little behind for our halftime report here. So about 6.5% gain depending on where we shake out today, which is a little bit better than the average second half return. I do think that small is going to continue to outperform. We're seeing, you know, small beating large base on the Russell at over 1,100 basis points of outperformance. is the best start to a new year since 2001. When you look at the Russell 2000, specifically you look at the new index,

it's going to be basically trading at 20 times earnings versus 24 times. So basically getting a cheaper benchmark, which I think is going to work in the second half of the year. Earnings growth is starting to reaccelerate for small, getting a little bit closer to large cap. So we raised our earnings forecast to 15.7%. I think we've seen a lot of upward revision there. Again, we're seeing good sales growth. We're seeing big beats. You've got leading economic

indicators turning up. That's actually good for small cap. M&A activities off to a really good start. So there's an awful lot of positives for small cap going forward. There's a lot of rules of thumb that people maybe talk about or follow that may not be true. One of them is, you know, that if the Fed is going to be incrementally tighter, maybe that's not good for small caps. And I guess what is what is the underlying economy have to do for the small cap outperformance to continue? You know, that's a really good point, Mike, because we were actually, we looked at it. So in the first six months prior to the Fed raising interest rates, small caps up about 10 percent, it actually beats large cap. And again, it comes down to the fact that the Fed is raising interest

rates because the economy is doing well. Small caps are more economically sensitive. So it should do well into that, you know, into the rate height. The other thing I would argue is that Higher rates are not bad for small cap, though, you know, a lot of people would disagree with me there. If I look at small cap balance sheets, if I look at borrowing costs, balance sheets are in really good shape, borrowing costs are coming down. Capital markets are wide open. Small cap companies over the last couple of years have done really smart things. They've kind of held on to their cash, no buyback, no dividends. M&A activity has been more large buying small. So the setup is really pretty good for the second half of the year.

And I think you do get that rotation. Yeah, sure. And you know, you mentioned the M&A activity. I know part of that is often biotech, which are heavily represented in the small cap indexes. We're going to get into some of that dynamic a little bit later as well. Maybe that's a favorable input as well. Stephen, really appreciate the time today. Thanks very much.

Thank you. And in early weekend, enjoy yourself. You as well from Jeffries. Thank you. Time for a CNBC News Update now with Kate Rooney. Hi, Kate. Hey there, Mike. The Republican-controlled Texas.

State Board of Education today approved a plan to require students to read Bible stories in school, expanding conservative efforts to bring Christian teaching into the classroom. Supporters say Christian traditions are fundamental to the country's founding, while critics argue it blurs the lines between the separation of church and state. The new mandate, which applies to more than 5 million students, is likely to be challenged in court. Meanwhile, Elon Musk just got regulatory approval to buy startup mesh optical technologies. That is a startup that was founded by a former SpaceX engineer aimed at optical data center communication technology. The engineers previously worked on laser-linked communications for the Starlink system.

A technology SpaceX is likely to employ in its plans for data centers in space. And finally, tennis-grade Novak Djokovic is now working in private equity. General Atlantic just announced it's hired the 24-time Grand Slam champion as a strategic advisor. General Atlantic manages $126 billion also says it plans to use Djokovic in his connections to expand its presence in the health and wellness center. It's a sector, I should say. Wellness center, that makes sense. Something he knows about, I think, is conditioning. It's kind of legendary in the sport.

No doubt. Kate, thank you. All right, the NASDAQ down every day this week for a loss in total of about 4.5%. Is this a healthy pullback for what has been a red hot tech set? sector or just the beginning of a bigger decline. That discussion is next on overtime. Welcome back to closing bell overtime live from the NASDAQ market site. It was a flat day for the markets, not even a tenth of a percent lower for the Dow and the S&P 500. The NASDAQ, though, down for a fifth straight day. That's its longest losing streak of the year. The memory names,

which have been the high flyers, getting crushed today, Micron with some huge moves in the last few days, but for the week, down a tenth of a percent. Bigger losses on the day. and week for Sandysk, Western Digital, and Seagate. And Oracle losing nearly 20% of its value this week, that makes it its worst week since 2001. While with tech losing traction today, the XLK tech sector ETF down nearly 2%, the semis under even more pressure,

with tech leadership starting to show signs of cracking, is this just a routine reset in the market's biggest winners or the start of the bigger pullback? With me now to share his thesis on all of this is Kevin Smith, founder, CEO and CRECAT Capital. Good to see you, Kevin. Thank you, Michael. So let's, I mean, get right down to it.

You actually think there's more risk that this is a consequential peak in the markets potentially. Lay out your case. Well, potentially. I mean, we have a number of conditions that show record, record valuations, record fiscal imbalances, record tight credit spreads. I mean, the imbalances are definitely there for something bigger to unfold. But the question is, you know, what's the timing indicators? And, you know, we have a hawkish new Fed chair. We've got, we have this, you know, exuberant, bullish sentiment across the markets.

We've got, we've got the, you know, all these buybacks, you know, turning to record new IPOs and share issuance and secondaries. And we also have, you know, the deteriorating market, market breadth. And the cap-x, you know, the CAP-X issues with the hyper-scalers, you know, turning to negative free cash flow. So this is a setup potentially for something much bigger. Yes, we are concerned. I was going to say all of that, they're kind of atmospheric conditions. And I guess to what degree would you want to let that dictate your overall positioning as an investor? Or is it a matter of be mindful of the risk and then maybe hedge away some of it?

Well, I think having some tail risk protection here is really critical. And in our global macro and our long short hedge funds, we do have that. tail risk protection. You know, S&P 500, you know, put options, you know, with volatility is still cheap. And I think that's a good place to look, you know, as well with the record tight credit spreads. I think, you know, looking at, you know, some credit spread blowout type strategies or maybe

put options in something like high yield ETF also makes a lot of sense here. Yeah. It's interesting because you look at certain things like tight credit spreads. and people will derive from that a message that say, oh, well, the bond market thinks the economy is in really good shape, and you have really strong projected earnings growth. And you mentioned the weaker breadth, which had been an issue for a while, but almost seems as if it's getting sort of rectified a little bit with this broadening out of the market. Yeah. Well, we do see some rotation opportunities into small caps. Oh, you do?

There's two particular small cap value-oriented sectors of the market that we like, and that's, and that's, you know, That's the metals mining industry, especially the exploration-focused mining segment. And then there's biotech. Okay. What biotech, it's really fascinating because it feels like it has been a beneficiary of some of the backup in pure tech. But is there anything else going on that you feel like it makes it a good diversifier here? Well, I think, you know, in the wake of COVID, you know, there really emerged a steep value opportunity in biotech. But that was like three plus years ago.

And it took more than a couple years for the sector to finally perk up, you know, towards the end of last year. You know, initially you could buy these companies for like, you know, less than cash in many cases. And so that for us was a catalyst to start a theme really three years ago. We brought in a new analyst, Lars Tyle, who's a Ph.D. biochemist to help us flesh this theme out. And I think there's a lot of opportunity still ahead. And in the mining idea, is that purely a play on precious metals, which I guess have been more out of favor recently? Well, precious metals have had a big pullback here recently since that high in February, but they got ahead of themselves.

Yeah. And I think the, in terms of this bigger, great rotation idea that we have rotating out of the large cap and mega-cap tech stocks into undervalued commodities. And the one commodity sector in particular that we like the best is the pressure. and critical metals space. But the exploration side of the industry is really where the deep value and the high growth potential is. And so we're most focused there. Got it. So in other words, their own economics give them an advantage if you get a good price move in the underlying metal?

I think it's very early still in the cycle for precious and critical metals in general. It takes 15 years to take a new mine from discovery into production. 15 years, and we basically had a 15-year drought in exploration dollars and CAPEX going into the mining industry. It's very counter-cyclical. I mean, it's like the opposite of the tech sector. And so, you know, that's really the setup for, you know, with the demand from data centers and AI, from onshoreing and defense. And, you know, their electrification, there is really a need. And that supply demand imbalance, you know, portends much higher prices still. but it's the smaller cap companies to have the new discoveries, the new Tier 1 discoveries,

and Tier 1 deposits in the world. A lot of these are still hiding out in small cap clothing, and that's where the real opportunity is for us. Interesting, yeah, certainly a neglected area. Maybe interesting. Kevin, appreciate you coming in. We'll have you back when we see these risks surface as time goes on. Thank you very much, Kevin Smith. All right, up next, much more on this week's biotech boom, as we were just discussing,

and which stocks still look attractive following the recent rally. Plus, this mystery stock is up nearly 50% this year, but one Wall Street firm says it's still cheap. Details from closing bell overtime returns. We have some breaking news on Iran. Amon Javers has the details, Amen. Mike, Sencom has issued a statement saying U.S. military forces have conducted strikes against Iranian targets around the Strait of Hormuz today.

Sencom issuing the statement saying that this is a response to U.S. Yesterday's Iranian attack on a vessel in the strait. And what they're saying is that U.S. aircraft struck Iranian missile and drone storage locations and coastal radar sites in the wake of Iran's strike on the motor vessel ever lovely on June 25th with a one-way attack drone. The statement goes on to say the Singapore flagged cargo ship was exiting the Strait of Hormuz along the Omani coast at the time of Iran's attack yesterday. They say the unwarranted aggression against commercial shipping by Iranian. forces clearly violated the ceasefire. Furthermore, Iran's dangerous behavior undermined freedom of navigation as commerce increasingly flows through the vital international trade quarter.

Mike, based on this statement, it seems like the U.S. military response is now over. CENTCOM says U.S. military forces are standing by in the region and prepared to take further action, however. So we'll wait and see if anything additional takes place here. but we heard the president in the past hour asked on camera if the United States was going to respond to that Iranian attack. Yesterday, he said, you'll find out. And, Mike, I guess we just found out. Yeah, there you go. There was something behind that. I guess we'll have to see whether this is considered settled or not as the days go on. Amen, thank you. You back.

Well, Crocs, a big winner today, continuing its big run. The stock is up nearly 50% this year, and Piper Sandler sees more upside, upgrading the footwear maker. to overweight from neutral and hiking its price target to 150 from 95. Stock closed above 127, you see. The analyst there is citing green shoots in its direct-to-consumer business and valuation, noting the stock is inexpensive. It's still just eight times PE. From a hot stock to a pair of hot groups in health care,

pharma and biotech having a huge week and significantly outperforming the broader market. Angelica Peebles looks at the stocks driving this rally. Angelica. Hey, Mike. Well, health care is up across the market. the board this week with the S&P health care sector index, gaining 7% on the week versus a nearly 2% drop for the broader S&P. Pharma saw some of the largest moves, and today alone, shares of Madurna rose over 12% leading the group higher. And even Lilly, already the most valuable

health care company, gained 7% on the day. Biogen and Insight also saw large moves, and it's not just this week, Micah. Healthcare has outperformed the broader S&P the past two months, though it's still underperforming on the year, and biotech is another bright spot. The The XBI is up almost 83% in the last year, getting another boost this week from AbbV's nearly $11 billion acquisition of Apogee therapeutics. And that stock gaining 17% this week after that deal was announced. And the deal is just the latest that we've seen this year. And the thinking is that Big Varma needs to keep buying to replenish their pipelines.

And also, health care has been struggling. So this could be part of that rotation into underperforming defensive names. Mike? Yeah, there's no doubt that stock move in Abvi after they made. the acquisition, definitely got a lot of attention. It's sort of the market saying more of this, I guess, and maybe signaling to other companies as well. Thank you very much, Angelica. As she just mentioned, it's been a hot few weeks for the health care stocks, especially in biotech with the XBI hitting more than five-year high today. Pharma also has mostly lagged the

broader health care trade, Bank of America flow data this week showing record outflows for its clients from the sector. So we're the best opportunities. in this group. The high flying biotech names or the out of favor pharma giants. Joining us now is Evan Seeger. And he is BMO, head of healthcare research. Evan, great to see you. First, I kind of love to see if there's a storyline that you can perceive among clients attached to this rotation into health care beyond, I guess, just the sort of to and fro of sector moves. Well, there's a few things that we're focused on. First of all, you know, you mentioned M&A and the ABV acquisition of Apogee is definitely reigniting excitement.

Other names have to buy. We talk about Merck and a lot of our recent research. We also point to Amgen, for example, all these companies have capacity to buy and the will to do so. I'd also want to highlight there's been a bit of a turn at the FDA for the positive. So names like Replemun, for example, their filing has been re-accepted by the FDA under a kind of quick review. We could get a decision on that come August.

So I think there's some hope in the biotech names that the FDA is functioning a little better. And that allows health care investors to really put money back into biotech without worry about, you know, if there's issues in D.C. So we're focused on M&A? Yep. No, that makes a ton of sense. And then, you know, obviously when it comes to, you know, big pharma, as I was just mentioning, you know, Advi not being penalized for doing a deal, but being rewarded. I mean, is that going to be a self-reinforcing dynamic among other large? larger companies? I would think so. I think the right deals get rewarded. The wrong ones get punished.

I think if a company buys a company for just synergies, they're going to get punished. When we look at Big Pharma, it is a bit of a defensive play, right? Some of the issues going on in the Middle East, you know, investors put money into pharma names that are seen as safer. But I think from a theme perspective, definitely, you know, excitement around rebuilding pipelines, you know, enthusiasm to two queue, we haven't even mentioned that. That's happening very soon. For example, you know, Novo Norda sounds really good heading into the quarter, potentially a guidance upgrade there. Same thing with Lilly, obviously up 7% today. A lot of enthusiasm around their oral launch and what's next in their obesity franchise. Is there anything outside of the

GLP-1 dynamic that is exciting investors in terms of, you know, refilling that pipeline, as you say, or areas of fruitful exploration? I think a lot in I and I, so inflammatory disease, look at the Abbe deal, a potential competitor to regenerate Sanofi's DuPixent. A lot of the other companies I focus on are always working in I and I. I think that, you know, you have a lot of focus

with, for example, J&J's Tramphi and their drug, Icotide, which is an oral drug for psoriasis, partnered with protagonist, potentially competitive to Abbe's franchise. A lot of investors that are talking about, talking about that. There's still more companies to acquire in that space, for example. I'd also point to rare disease. That's getting a bit of a bit, especially with the FDA and some more clarity around

that. I think the regulators seem to be more apt to be flexible when it comes to proving drugs for rare disease. So that is now somewhat back in favor as well. I know Merck, you mentioned, is favored at your firm, and it's been a great performer. What's the key driver there? So the key driver there is they have an LOE, like all of their other peers, with Kutruda going off patent later in the decade. And they've done a very credible job of refilling that or starting to refill that, right? There's some smart acquisitions. I really like the SIDARA acquisition. Prophylactic for flu. You know, flu is still a problem. I think they had a pretty good ASCO with their SAC TMT data. And so not everything's going to work, but they're doing a very credible job of putting together, you know,

a portfolio of assets for life beyond Katrina. Kutra's not going away in the 2030s, it's going to decline. But if they keep kind of getting some winners out of the things that they've acquired and developed internally, they will have enough to grow come 2032, 33. Got it. And one more. What is iron? That's another name that you've been pointing out. Our biotech favorites, ticker IRON. So they were involved, they were awarded one of the commissioners prior to review Vatchers, and then they were given a CRL. So it's been a bit of, you know, up and down with this stock, but they are on track for data for one of their key drugs called Bitter-Purton and a rare kind of skin blood disorder. Data is coming later in the year and could

set up for an approval come next year beyond that they also have drugs for some blood to diseases called mild fibrosis and PV. So multiple shots on goal, small-cap name with a drug potentially in the market come next year. Yeah, all right. Just under $3 billion. market cap. Evan, great to talk to you. Thanks very much. Thank you, sir. Evan Seagerman. A good weekend. You as well. Thanks. Buying up sports franchises across multiple leagues is becoming all the rage. And up next we'll reveal CNBC's new list of the most valuable sports empires. And here's a look at some S&P 500 stocks hitting new highs today. Include Live Nation, Monster Beverage, Centerpoint Energy, Alliance, and Pinnacle West Capital.

Closing Bell Overtime, live from the NASDAQ Market site. It'll be right back. Welcome back to overtime. When it comes to sports ownership these days, just having one team isn't enough. Mike Ozanian is here to break down the world's most valuable sports empires. Mike, pretty unique way of looking at this world. Hi, Michael. Thank you for having me. Yeah, this is the ultimate scorecard on who's winning the game of investing in sports assets.

Combined, these 20 empires are worth $269 billion, 20% more than last year. 20% is a pretty good return for any asset class in a year. Talk about some of the top ones. And I mean, are there common threads in terms of what makes these work? Yeah, the most valuable ones, as you might guess, Michael, are the ones that own teams in the National Football League and the NBA because those teams are the most valuable. But really, when you take a step back and you look at all the investments,

they're in a whole host of sports-related assets. You know, a lot of these investors are in up-and-coming leagues like the WNBA. Mark Walter, who's a new entrant on this year's list, he owns the National Woman Professional Hockey League all by himself, which is an upstart league that's expanding by four teams next year. He just raised $100 million to invest in that league from outside investors. Rogers Communications, the Canadian outfit, they're a new entrant this year. They bought a majority stake in the Maple Leafs, the Raptors. They own the Toronto Blue Jays and Sportsnet, which is a way they're going to great synergy in Canada by broadcasting their games.

So one of the key things, if you look at the team, the empires at the top is they tend to be spread geographically. So number one, Kronky, he's got teams in Europe. He owns Arsenal, the English football team. He owns the Rams. He owns two teams in Colorado, the avalanche and the Nuggets. And perhaps most importantly, he controls the real estate his team's play on. So he gets to maximize the economics of the stadiums. You just saw there on the list, you know, the Dolans.

I mean, Knicks and the Rangers, we talk about that a lot, it's publicly traded. It would seem like they don't really anymore have the direct connection with the media business, but they're just playing the same building. Exactly. And he's talked about spinning off and separating the Knicks and the Rangers to maximize value because as a publicly traded stock, although MSG Sports has done very well recently, it's still undervalued when you look at the enterprise value of the stock versus what these two teams would fetch separately if they were sold. So they may do something like that. We just saw Fenway Sports Group, which is ranked fourth on our list. They just unloaded the Pittsburgh Penguins. a team five and a half years ago, they paid $900 million for. They just sold it for $1.7 billion. That's about an 88% increase over what they paid. Over the same time span, the S&P 500's gone up just a little bit over 60%. So very, very good investment. Yeah, as these have proven to be over and over again. Mike really appreciated. Excellent look at this asset class. It's going to do it for overtime. We actually had another

down week, the S&P 500 goes into quarter end in a few days, down at about three and a half percent from its high. Got the jobs Thursday next week as well. Everyone have a good weekend. Fast money begins after this quick break.