Closing Bell - Closing Bell: Primed for a Second Half Surge? 7/7/25

Episode Date: July 7, 2025

Are stocks primed for a second half surge or a disappointing six months ahead? We discuss with Trivariate’s Adam Parker, NewEdge’s Cameron Dawson and Payne Capital’s Courtney Garcia. Plus, we break down the latest in President Trump and Elon Musk’s reignited feud. And, Mohamed El-Erian from Allianz breaks down his second half playbook.

All right, Kel, thanks so much. Welcome to Closing Bell. I'm Scott Wabner live from Post9 here at the New York Stock Exchange. This make or break out begins with this tariff and due sell off in stocks today. We'll show you the majors here with 60 to go in regulation. There's the picture about 1% declines across the board. The slide started getting worse midday when President Trump announced tariff levels on South Korea and Japan.

It only intensified within the past 30 minutes or so with even more tariffs announced elsewhere, though we have come off the worst levels and that's important to note. It is a reminder though the risks that still surround this record-setting rally we'll discuss. Tesla shares, they're sharply lowered a day after Elon Musk says he'll form a new political party. President Trump not reacting too kindly to that, which is why we're debating where all of that goes with Kovac and Kantrowitz. That's coming up in just a bit as well.

It does take us to our talk of the tape. Are stocks prime for a second half surge or a disappointing six months ahead? Let's ask Trivariate founder and CEO Adam Parker, New Edge Wealths, Cameron Dawson and Payne Capital Management's Courtney Garcia. Adam and court are CNBC contributors. Welcome one, welcome all. All right, so we're reminded today, well the tariff stuff's still out there.

I mean the market's not reacting all that terribly, is it? No, not really. I mean if you go through the details, I don't even know if anybody understands the difference between what was announced today or what was there previously, and if it will actually be implemented, and which companies it actually impacts.

It doesn't appear to be the ones that are down the most. So I think it's just a little bit of selling as we got to highs and kind of recalibrating before July earnings season. But I don't think this is the sign of a new regime at all. Well, that's the thing about Cam, this market, it doesn't seem to believe the worst of the tariff story anymore.

Yeah, because we had the worst announcement in April 2nd. We've moved past that and people said, at least it's not that. But you look at some of the tariff story anymore. Yeah, because we had the worst announcement in April 2nd. We've moved past that and people said, at least it's not that. But you look at some of these tariff rates that were announced, they're actually slightly higher than some of them that were on April 2nd, the Japan one certainly is. So with a market trading at 22.3 times forward,

there was certain amount of complacency that had set in at that valuation, which just meant that there's not a lot of room to absorb any kind of negative news. But again, Courtney, we have, you know, the deadline of all of this is still allegedly August whatever. So the market is still doubting somewhat, I'm sure, as to whether it even believes

that these numbers are going to be in play then. Well, how can you place your bets on really anything too negative before we get to that point and see what's what? And I think that's what the market is really starting to realize is these just keep getting pushed down the line. We thought that this was going to be the week that tariffs were coming in place. Now you're seeing letters are going out. You're seeing that extensions are being made.

There's no really tariff deadlines that are coming. That just keeps getting pushed out indefinitely. And that's where markets are saying, okay, this probably isn't going to be as bad as we expected, at least in that first week of April which markets have already moved past. And I think at this point markets are more focused on almost a Goldilocks scenario that interest rates are probably coming down later this year. Growth is actually still strong if inflation starts to come down.

I think that's actually what markets have started to price in and seeing a pullback after such a good week last week I think is pretty normal. But I think that's really the myth of our markets are focused. Goldilocks. So Goldilocks I, is that what we're gonna have to get our arms around? That all of that stuff that everybody says was gonna be bad, is just not gonna show up

and the environment's pretty good. Gross gonna be good enough, earnings are gonna be good enough, tariffs are gonna be low enough, deregulation's gonna be good enough, the Fed's gonna cut enough, and stocks are gonna go up enough. I mean, if earnings grow 10% next year and the year after,

the stock market's going way higher. And we can say all we want about tariffs and all that, but you're about to get into two years of the fruits of the AI investments that were made in the previous two years. And you're going to start seeing some efficiencies. There's some revenue possibilities and a lot of cost cutting. So as long as you're not derailed from a dream that earnings are up next year and up the

year after, it's hard for the market to go down sustainably unless we do things that are back to the worst 100% plus stuff with China. I tend to think most of these tariff things don't matter that much except for the China one. And so if we get anything incrementally worse there, maybe I'd have a positive concern. But right now I just think earnings are gonna grow year over year and maybe a lot, maybe even a step change in 26 and 27

and the market will go up a lot if that's the case. Have you turned to the point where you're the most bullish now that you've been in a few months? Is that fair? Yeah, I mean, look, we started the year saying the market will be down in Volodo with things like Tarasana to price. I felt great on April 7th. And then Trump said buy stocks and I didn't believe him for a few weeks. I thought, who listens to the president on buying stocks?

And turns out in the first half of the year, that was like the single best signal you needed to know is when he said buy stocks, you just buy them, right? And it didn't, it actually wasn't a very good stock picking environment in Q2, you bought low quality hyper growth junk stocks. It wasn't, you know, kind of hiding the quality name. So I think maybe you can get a different kind of stuff working underneath a little bit, but I think we could be going way higher if the AI stuff starts rearing its head.

I go back to the point, I think Adam's kind of alluding to it. It's like, fool me once, shame on you. Fool me twice, shame on me. The market feels like it's already seen this and it knows how the ending is going to play out and it's placing its bets. Some parts

maybe a little early but it's still willing to place it because that's what the market does. And I think you got the big cut to GDP growth estimates immediately you started the year at 2.3 percent expected that got marked down to 1.6 percent. So

maybe you've seen the worst of those cuts but on the earnings front consensus already has 12% growth for next year with a surge of over a hundred basis points the margin expansion to record margin and an acceleration in revenue growth. So how much good news is already priced in on the earnings front with consensus at those levels. And note that's also already including a big deceleration in mag seven growth. Mag seven growth is supposed to be cut in half in 2026, which just means that the market is expecting for 93 to do amazing. Sure. But I keep hearing how the economy is slowing down. What happens if this is an accelerant, all of this stuff,

the tax bill and everything else to even stronger economic growth. Thus the multiple doesn't look as expensive tomorrow as it does today because it's not so sure about where earnings and where growth are going to end up. That's the dream scenario in which Adam has painted isn't it? And I think that's what investors are trying to figure out right now, but I think you bring a really good point about the MAG-7, right? Because that is one of the more expensive areas

of the market right now. When you look at forward earnings growth, it has come down this year. And so I think that's where you're seeing investors are very excited. It's kind of like that FOMO trade has just come right back in again, or I guess the YOLO trade has come right back in again.

Both. It's really those high risk, like long duration assets. That's what everybody's pouring their money into is all of these AI stocks. But I would actually caution investors. I don't think that trade is over by any means, but I do think you want to brought it out because I do think at a certain point, if those earnings growth starts to slow, that might not be where the next best performing asset is. Well, not only that, but what happens if that high beta, low quality stock rush that Courtney's

alluding to, what happens if that's put this thing quality stock rush that Courtney's alluding to, what happens if that's put this thing on a little bit of thinner ice just because if it caves a little bit, well if that's one of your pillars of the last part of the move to record highs, does that do anything? You know, it's interesting. When you really, I focus a lot on the S&P 500 alone and three biggest sectors are 58% of the S&P. that's tech, financials and comm services.

Those three are 58%. The four sectors that are energy, reach, use and materials are less than 9%. So the constitution is such that if you're at all bullish on equities you got to own tech and financials. In fact, I think about half your S&P fund should be in just tech and financials alone and I think those two look like they're gonna have earnings growth. You know their earnings are growing

and nobody said that they weren't. But that's the reason to stay optimistic is the two biggest blocks are gonna grow pretty well. Let's put that back up what we just had there, the sector performance guys, if you could please. Because it leads me to the next question in part. If you've had a lot of these sectors do incredibly well year to date, or this is over the last three months.

So you have like, these are four on this list, but there's another one too. If you have like five of the sector leadership up more than 20% over the past three months, do you look at that in any way and say, well, that's got to be a little froth now. Three months? Well, they also got killed in the first quarter, right? So that, you know, you're good at math, you go go down in half you have to go 100% get back to where you started so Q1 especially March was terrible for a lot of those names in there so I you know the whole thing's only up what's the Nasdaq up six six

percent whatever plus or minus here today so I I look at it you know I don't know if everyone knows this but five of the 11 sectors in the market are gonna have down year over year earnings in Q2 if you look at the bottom of consensus so I actually there could be some easier comps in there. Some of the input costs are low. Wages aren't going to be as big of a problem. The dollar maybe helps the multinational. So there are some tailwinds that weren't here three months ago on the earnings front. I agree with Cameron. I'm a little worried about the estimates in certain parts of the market. They're certainly not low in parts of tech and

comp services. But if they grow 10% in absolute terms instead of 15, I still think they're certainly not low in parts of tech and comm services, but if they grow 10% in absolute terms instead of 15, I still think they're going higher. But this quarter's numbers, right, I mean we've already taken down estimates by almost half across the board, so the bar is lower. It's only 4% growth that's expected and I think people are conditioned to say we should be able to beat because look at last quarter. Last year you went in expecting 7% growth and you got 12 and so I think that there is optimism. I think the buy-side whisper numbers are probably higher than maybe sell-side consensus's which just suggests that maybe that consensus number is a low bar but people are expecting those beats and raises.

That is the funny thing about earnings that the market tends to pay less attention to where earnings were relative to where they are and more so on whether you beat where they now are versus where they once were. You know what I mean? Yes. Did everybody follow that? I did. Perception on reality.

Look, guys with, I mean, I hated this when I worked on the sell side where guys would say, well, I don't want to raise my numbers because I don't want, you know, to get expectations too high, right? Because they had a buy rating on it. So people weren't even publishing what they believe at the big firms, right. It used to be back in the day you'd publish what you believe. And I think now it's just all about trying to keep sentiment low enough that the company you have an overweight rating on can beat it.

So there's a little of that gaming going on. We didn't see any prenegs here, I would say, into July 7th. I think if you were going to miss, you would have done it already. So I think if you'd asked me four months ago, I would have thought, man, July guides for October will be a mess and then we've seen most of companies been able to navigate through What is what is the principal risk then court that's in front of us as we look ahead over the next? Let's just say few months. We don't have to game out the entire six that remain I think the biggest risk is facing the markets is these tariffs, right? So that's still the biggest unknown is what are those rates gonna be?

When are they actually gonna go in place? But I do think you're starting to see companies are getting through that and I think as we get into earnings season the markets is these tariffs, right? So that's still the biggest unknown is what are those rates going to be? When are they actually going to go in place? But I do think you're starting to see companies are getting through that. And I think as we get into earnings season, you're seeing how last quarter was affected, but also if we see more guidance this quarter, because last quarter,

most companies weren't really able to give you too much of guidance because those tariffs were so new and so fresh. But I think if we can see some of that optimism moving forward, I think that actually should be a good thing, especially after we got a very mixed labor report that came out, right? We had a miss in private sector, we had a beat in public sector, but I think there is a lot of confusion of where is the economy right now and when we actually hear from companies

earnings, I think that's going to be the next big catalyst. I just feel like you still have, even now, it's like, well, so far you haven't had anywhere close to the level of tariff-induced inflation. So if you don't have to worry about that, and then if the economy and the labor market slow a little bit more from here, the Fed's coming to the rescue, right? The Fed put comes back into play. The biggest question is, are we being complacent on tariff-related inflation? And we simply don't know yet.

These things happen with extraordinary lags. We wouldn't expect to see it in the data. This next month's data is supposed to show an acceleration. And then the question is, are you complacent on the growth front? How much is this going to weigh on consumer behavior? Real consumer spending is negative in the first six months of this year. So how much should we be concerned about underlying growth? Those remain open questions for the second half of the year, but there's not been data

to support them yet, which is why that tariff complacency crept back in. Also the dream of next year, I hear that and I think there could be a growth scare August, September, but I still think any time a good company goes down, people are going to say, well, isn't there still that the 2026, 2027 AI induced earnings dream is still alive independent of a mess here. So I just, I don't know if these good stocks go down very much because people are looking for a five, 10% lower to buy a good name heading into next year. So I think, you know, we could end up way higher, you know, 12, 18 months from now,

you know, as long as the AI stuff comes through. Well, I mean, there's tech, which has done incredibly well. Financials have done incredibly well. Industrials are trading at a record high as well. I want to bring in capital Wealth Planning's Kevin Simpson, who has a new trade in that area. It's good to see you. Welcome to our program. Scott, thanks so much. We added to Boeing this week.

Okay. Tell me why. Yeah. I mean, your conversation was great. There's so many things to think about. There will be volatility for sure, but it just creates opportunity. And this, to me, is no longer a turnaround story, Scott. We're looking at this as a complete recovery story. Now they've got to deliver, that's for sure. But we think that the company can.

We're looking at the pipeline here that's unbelievable, about $500 billion of orders, which represents about 6,000 airplanes. Now their objective is to be able to deliver on the max, maybe 47 planes per month, which a couple of years ago would have sounded like a big stretch, but they actually delivered 42 planes in June. So we think they're heading in the right direction.

We think the free cashflow is improving. We expect them to be cashflow positive next year, which is incredible. They're bringing down debt. They want to get that down to about $50 billion next year. Sounds like a lot, and it is, but keep in mind what this pipeline looks like. And from a valuation standpoint, because we think valuation matters, it's trading at about a 12 multiple. And if you compare that to a competitor like Lockheed Martin, they're trading around 20. So we think that there's value here. We think if they hit just a few lucky, lucky streaks that the next five years can look

a whole lot different than the previous five. Hang on. Hang with me for a moment. You shaking your head. You don't, you don't buy the story or what? First of all, everyone got some email about wearing a light blue and white high fashion thing. I didn't get it. The textured look today is very much in.

I have a little bit, you have none. Yeah, so I feel already the wrong guy at the poker table. No, I mean, I don't disagree. It's a very idiosyncratic story, though. I thought you were setting up more as like a cyclical industrial call with like collective equipment or other stuff. I think Boeing is that.

But this is a stock specific call in his mind, but what about the broader story in yours? You know, I started off the year thinking, man, like earnings were down in absolute terms. There was actually an industrial earnings recession in the second half last year. So we'll comp that in the second half this year. We'll probably get some earnings acceleration.

You can anticipate that. And it sort of worked for the first few months of year. You got a nice trade, but I'm worried the fundamentals, if a little bit of what Cameron's worried about is gonna hit some tariff stuff, there's a lag. It probably hits this sector more than any other sector. So I just wanna take a look and say, all right, what is the China competitive landscape supply and demand?

What inventory levels are higher in a lot of parts of the industrial space? So I think it's more of a neutral for me, and I'd still rather own more financials or more tech than industrials. What is your exposure to the space broadly look like, Kev? We also own a full position in Caterpillar, Scott, which again is a little bit of a sneaky AI play if you think about what these data centers are going to be looking like from

construction standpoint moving forward. Caterpillar also trades at a discount to John Deere. So our exposure here is Raytheon, Caterpillar, Boeing. Not to say that Adam's wrong. I mean, technology, people will always pay up for innovation. But in a diversified portfolio, we're going to look for opportunities where we see the earnings delivering. Revenues at Boeing last quarter were up 18% year over year. They report report on the twenty ninth i think they can be really good this is a company literally we sold this five years ago in our dividend strategy this was during cold that they wound up cutting the dividend late marches

stock was under a hundred dollars a share and for five years it couldn't get out of its own way got a new c e o in here is really hitting on all the cylinders that we that we look for uh... from a value standpoint. Adam was so bullish until I came in and brought the Boeing trade here. I didn't mean to bring the negative into the conversation.

Are you using stock products three times a week? It's ripped from the spring. If you look at a shorter chart, you get a great idea at the three month. Cam, what do you think? So I think the best gut check within industrials is to look at things like machinery versus waste stocks. So the

cyclicals versus the defensives. And what you've seen coming out of the April lows is that machinery has really outperformed waste stocks. So Caterpillar doing much better than waste management, which is a very pro growth, pro cyclical kind of environment or kind of backdrop, which just suggests that this market is believing that the tariffs will not hurt the cyclical story for these companies. And I agree that I like the industrial space here and I do think if we do continue to see growth improve or be better than people are expecting that will be positive for the space. And the trouble with Boeing is it I mean has an attractive valuation but they just cannot seem to get out of

their way. Every time you think they're getting ahead there's another headline that just keeps putting it down. They're still nowhere near their 2019 levels like before they had that plane crash has really sent it downwards and as much as this is a duopoly and you would think okay at some point they're gonna come back and adjust them in Airbus they just haven't been able to get it there and I don't know what it is that's gonna bring there what it is that catalyst it's gonna be I've been hopeful it's gonna happen it hasn't so I'd probably take a caterpillar over a Boeing. It looks like you could have a bit of a breakout though if you look at the, I mean in the progress,

in the midst of what has already obviously been, not trying to call a fresh one obviously, but if you look at the chart over the three month period, what do we show, 57, 58% for that name? I like the Boeing long more than the industrials overweight just to be clear because I think, look, you can't be over with everything. There's 11 sectors, you can't be overweight everything. It's 11 seconds. You can't be overweight all of them. So if you like tech and you like financials and you're going to take a shot at health

care, which I like, you got to be equal weight or underweight, some other stuff to make the math work. Kev, what else do you like? And you like the market as a whole. I'd say the commentary has certainly seemed to have turned much more bullish than it was. There's a degree of certainty more than there was not that long ago. Yeah I mean you're looking at yeah Scott I mean you you nailed it earlier when you talk about the rallies off of the April lows I mean it's hard

to get that kind of trajectory to continue so maybe the second half playbook is some volatility here at the outset there's going to be reposition. It's really everybody's first day back kind of digesting end of quarter, end of first half. But I look at the second half still with the realm of possibilities that tariffs won't be as bad as feared. That the earnings bar has come down low enough that we can surpass it.

Cameron talking about growth coming down, but still being there. I would expect the market to end the year a little bit higher than where we are now. To Adam's point, people are going to buy the dips and so will we when they occur. Kev, we'll talk to you soon. Thank you. That's Kevin Simpson. He's at a little bit higher. You were with me the other day. You threw out like 7,000 was not even out of the realm of possibility. Whether it was by the end of this year into into early next. Guess what I was thinking about was we surveyed a bunch of our clients and

asked them for ranges they thought we could be at your end and nobody took 10% or higher and I just always think to myself like, what's the greatest thing for anyone here, right? It's you're super bullish, it's contrarian and then you end up being right like that's the dream Combo and so if you want to say it's up 10% plus and obviously there's a few guys who are there But I I think there's a real chance in the distribution of outcomes that could definitely have it's been a contrarian type year You come in not you but the collective you come in all bulled up Trump administration pro-growth things gonna be off to the races We heard it on election night from some of you

everybody came in the consensus was be bullish the contrarian call was correct then everybody started to get really bearish then here we are I was at record I was couple of us were there together yeah I was for some reason was seeing the ball clearly that night I was like by the elections saw the inauguration I got more confused around the by the you know The when the president said buy stuff in April I think now I sort of feel like all this investment is gonna pan out next year and the year after and it's gonna cause a Step change in productivity for a lot of companies And so I don't want to get too negative on US equities in the face of that

Maybe step change in margins for the average company I also read today that there were some calls that the outperformance in international stocks, particularly Europe, someone trying to say it's over. Like now it's going to be the US's time. Like we're done with all the nonsense and now we're going to get to growth and we're going to ride that wave. Europe stopped outperforming in May.

Overall, IFA stopped outperforming in March. So you've seen this outperformance fading, even as the dollar was making new lows. So if the dollar really is entering a big, huge protracted bear market, you can be more optimistic on it in the US, but if the dollar is sideways from here, likely the US leads.

Last thought to you. I think one other thing you wanna think of with international, especially in the longer term, is this can be an AI play, because a lot of these countries, especially like emerging market countries, are really rich in rare longer term, is this can be an AI play. Because a lot of these countries, especially emerging market countries, are really rich in rare earth materials, et cetera. And I think that actually will be bullish for them

as you're needing more of this AI infrastructure. So short term, I think, is a question, but longer term, I absolutely think you want that international play. All right, we're gonna leave it there. Courtney, thank you. Cameron, thank you. Adam, thank you.

Work on the outfit, otherwise you're great. Yeah, get me the text next time, guys. Email me. Otherwise you were good. Come on, guys. To Christina Parts-Nevelis now for a look at the biggest names moving, guys. Email me. Otherwise you were good. Come on, guys. To Christina Parts-Nevelis now for a look at the biggest names moving into this close today. Christina.

I'm not wearing blue. CoreWeave's $9 billion all-stock acquisition of Core Scientific signals really a strategic shift from tenant to landlord in the AI infrastructure race. The deal offers a 66% premium in positions. CoreWeave to own its own data centers it increase its footprint like hyperscalers such as AWS market reaction you can see on your screen pretty red mixed rumors have been circulating really since early June perhaps triggering profit taking today investors may also be questioning whether core weave is overpaying given they reportedly pursued core

scientific for one billion dollars just last year so So $1 billion to $9 billion, that's a big increase. Additionally, Core Scientific shareholders will own less than 10% of the combined entity, adding to the selling pressure that you're seeing in Core Scientific, which shares down over 17%. CoreWeed CEO discusses the deal on mad money tonight. Tune in. Scott. All right, we will.

Christina, thank you. Christina Partzanevalos. We're just getting started here on the bell. Coming up next, the reignited feud between President Trump and Elon Musk taking center stage once again. What chapters is this? Chapter three, chapter four. Kovac and Kantrowitz, they're standing by with the latest in that ongoing drama.

We're live at the New York Stock Exchange. You're watching Closing Bell on CNBC. We're back. Tesla shares down sharply today after yet more back and forth between Elon Musk and President Trump. Joining me now, big technology founder and CNBC contributor Alex Kantrowitz and CNBC tech correspondent Steve Kovach. Kovach and Kantrowitz. I like to ring to that and it's great to have you both with us. Alex, you first. What do you mean?

Are you surprised that we're back here? No, we were speaking about it last week in fact. And you said, look, logic would dictate that Musk and Trump doesn't fight. Actually, you didn't say that. I think it was Gene Munster who said, logic would dictate that Musk and Trump doesn't fight actually you didn't say that I think it was Gene Munster who said logic would dictate they don't keep fighting and what do we say yes they're gonna keep fighting logic hasn't dictated anything along this path up till date and clearly that's not what we're seeing right now we're seeing Elon Musk take further shots at the president attempting to start his own

political party which I think is going not is not going to work he doesn't have the political capital for it his unfavorability is on the rise he has a capital for it though not that he has the money but not the political capital he spent all this money in Wisconsin didn't work he could spend all the money that he wants in this race the fact is his unfavorability is increasing among Republicans and independents according to morning consult it's actually increasing in time his favorability is increasing a bit with Democrats, but Democrats hate him.

So, over the, across the board, he just does not have the political muscle to usher in a political revolution the way that he's talking about. So then what, Mr. Kovac, does all of this mean in the bigger picture for Brands Musk? Yeah, it means investors and Tesla shareholders, they want to see him talking about robo taxis and optimist robots and things like that. They do not want to see him sniping at the president and taking all these political gambles

that we know Musk has said over time that he just doesn't care about what kind of reactions his political activity or statements on social media have and we're seeing that in action today. Remember a couple weeks ago right off those robo taxi tests got down in Austin. There's so much optimism in the stock that Monday we woke up and saw the stock rising because at least as far as we could tell on those tests it seemed to have gone well and then as soon as we learned about some problems there and Musk losing focus and talking about the president and the big beautiful bill and so forth Uh, that's that's when they get punished

So what happens here it sounds like he's just going to keep tweeting his way through it and the brand destruction Who cares? He he does not seem to matter about that. And then I also want to talk about like what changed here Uh with musk whole posture towards the president and all this. If you look in the bill that just passed or that signed into law on Friday, it's still we got to go back to how it damages Tesla, the company, including the tax credits that Tesla relies on in order to drive sales. And sales have been sluggish.

We got those delivery orders a couple of days ago. We know the challenges in China and the competition competition from BYD and and Xiaomi and and so forth So it's it's right up It's kind of a pickle that he keeps putting himself in here Scott and tweeting all night through it Is clearly showing up in the stock price today to Steve's point? I mean when Faber sat down with them my colleague David Faber many months ago for the first interview that he did. Musk said straight to his face and to the camera when asked if he thinks his tweeting is going to have a negative impact on the brand or anything else and he followed by

a long pause said, I don't care. Maybe he shouldn't care. I don't know. XAI, SpaceX, Starlink. What if people are just simply making too much of this looking at the way Tesla stock trades from a day-to-day basis? I think he should care, because it's not just the numbers on the stock charts,

it's actually the vehicles being delivered. We know in the second quarter, Musk had a 13.5% decline in vehicle deliveries and is facing what could be the second straight year of vehicle declines with Tesla. So this should have been a moment where Elon Musk said, I'm leaving politics, gracefully step down, focused our attention on the, on the robo taxis, focused voters attention and

customers attention on what the Tesla cars could do. And instead he's back in the malaise, back in the muck talking politics and it's not going to be able to fund these bigger bets, the bets on robo taxis if you can't sell cars today. There are always people though who are going to, Steve, believe in the dream. And that keeps people engaged in the stock and everything else around Brands Musk. I say Brands for all the reasons that I mentioned, whether whatever he has in X and X and AI and then Starlink and SpaceX.

Yeah. And I would go back to the last earnings call, Scott. That was before he technically left Doge and the government altogether, and he talked about joining Tesla a little bit more at a full-time basis, and then shortly after that, he was there full-time, and boy, that was a great reaction, and he was talking about all those things.

That earnings call was just all the greatest hits of Elon Musk, you know, just this, what is it called, the abundance issue and talking about how this is going to provide sustainable abundance with these robots helping around the houses and building stuff in factories and so forth. And then of course the robo taxi thing, kind of applying these software margins to the vehicle business, not having to spend enormous amounts of money per vehicle like Waymo does. They just use the same vehicles, they're rolling off the line and delivering to customers anyway.

When he talks about that kind of stuff and the believers get excited and it trades like a meme stock, this whole stock trades on the whims and behavior of Elon Musk more so than the fundamentals of how many cars they're selling or what's going on politically. And we saw that when he talks about all the futuristic stuff, he gets rewarded financially, investors get rewarded, and when he gets distracted with things like this, we see it in the stock data, it's down nearly 7%. You have a last quick thought.

Look, I'm not riding off Elon. He is really smart, he has faced death, or sort of the end of his companies before, and he's managed to pull it out It's almost like he wants to be put against the wall so he can fight his way back from it But I would say this is the biggest challenge of his career, right? It's he's got the political side of things and that's not just the challenge from the president looking at his businesses But also the voters and the and voters are customers at the end of the day

And if you see Elon as someone who doesn't like the Democrats, doesn't like the Republicans, is fighting against the Democratic establishment, is fighting against Trump, ultimately a car says more about you than almost any purchase that you're going to make. And I think he's tied that car to his political views, which are very unpopular in the country right now. So again, Elon might find his way out of here, but it's not going to be easy. Interesting thoughts from Kovac and Kantrowitz. Stephen Alex, thank you once again. We'll see you soon. Up next, Alianza's Mohammed El-Aryan is back with us.

He'll give us his forecast for your money in the second half. We're back on the bell after this. We're back. Today's tariff news, yet another reminder of the challenges that could still cause volatility for stocks in the second half of the year. We're joined now by Mohamed El-Arian, Allianz Chief Economic Advisor. Welcome back. It's always good to see you.

Thanks for having me. Should we be optimistic or cautious or what as we make the turn here to the back nine of 2025? So look, Scott, we've had these uncertainties all year long, tariffs, inflation, you name it, we've had it. But we've had three drivers. We've had confidence about margins, we've had good technicals, and we've had this notion that no matter how messy the sovereign is, corporate America is fine. So what you need now is not the demand side. The demand side is fine. You need the supply side to respond.

You need productivity to go up. You need also the front loading of the stimulus package. And finally, we need this deregulation package. If we get that, then yes, we'll be volatile, but okay. But we really need the supply side now to respond. I mean, the administration would say, what do you mean we still need? We just gave it to you. We just passed this tax extension, the tax cut extension, and now we're going to pile on deregulation, and this is going to stimulate economic growth that's going to send this stock market to the moon.

So, we'll say you've absolutely given us on the demand side, fiscal stimulus is significant and monetary stimulus is on its way. We don't have an issue with demand. We need to understand better what's the big deregulation coming. We need to see the impact of the productivity gains and you need to see the private sector respond to some of the incentives it just got. Look, don't worry about the demand side. We will get the rate cuts

and we have six to 7% deficits for as long as you can see in the future. It's the supply side that has to come and we still don't know how much the regulation we're gonna get. I mean, this is always the great bet and the great wish when you do some of these types of policies and you say this is at its essence supply side economics.

If you build it, they will come. Well, it's going to take a little while to see in fact if they come and continue to spur this economy onward. But I mean, we're going to get the productivity gains. We already know that, don't we? Because of AI, it's just a matter of when and by how much. We definitely got to get them. The issue is diffusion.

How quick is diffusion through the economy? And that is still an unknown. And I talk to people who have embraced it, and I talk to other people who are nowhere near embracing it. So you're going to also get sexual effect. Look, Scott, we want an experiment. It's not often that you have pedal to the metal on the supply side

and pedal to the metal on the demand side. It's you know, this is going to be new and it's going to be really interesting to watch. You think that these tariff rates announced today will be the ultimate tariff rates that are

in play because that is at the heart of this whole conversation, how investors are trying to game out the market. They're like, well, we've seen this movie before. I don't care what they say today, because we know it's not going to be the case tomorrow. And by August, it's certainly not going to be the worst case scenario, and that these are just going to be negotiated lower,

and the market's going to figure it out before not. Yeah, that's certainly the narrative. The conditioning of the market has been let's wait and see, nothing is final. And you know what? We learned the lesson in April. We sold off violently in April only to see highs, record highs within 80 days. So that's certainly the conditioning of the market. And that's why you're seeing a relatively muted response to what we're hearing today.

Because what we're hearing today are quite high tariff rates. Well, then the other fuel, of course, is the one I know you like talking about more than anything else, is the Federal Reserve. Whereas those who say, okay, fine, they may be late. He may be, in fact, too late, Chair Powell, but it doesn't matter, because he's gonna show up if things even get a sniff of bad, and that's gonna be another perfect thing

that keeps this market going higher. Yeah, but there again, we are in uncharted water. Look how politicized the whole thing is becoming. The problem we have, the fundamental problem we have is we don't know what inflation is going to be. You've had people talk about, oh, who's going to swallow the higher tariffs? Is it the exporter? Is it the importer?

Is it the consumer? Is it somebody else's profit? No one knows who it's going to be. What we do know so far is we haven't seen much of an effect, but that's because the tariff impact really comes in during the summer. So this inflation uncertainty has to be resolved before you can be totally relaxed

about how many cuts are we gonna get. We're gonna get cuts. The question is how many? Also, you think Jay Powell's right in waiting to see what happens with the tariffs. No if I was J-PAL I would be cutting but I would be cutting at a steady slow pace.

I worry that he's going to be proven late. I really do worry about this. But let's see. Late but right is better than late and wrong because there are much more dramatic consequences to being wrong.

Yes, there are certainly consequences on both sides but if you do it typically that asks is type one error or type two error, you're more likely to be able to catch up on the type one error means you're early than the type two error which means you're late. Appreciate you as always. We'll see you soon, Mohammed. Thank you.

All right, Mohammed El-Aryan. Up next, we track the biggest movers into the close. We'll go back to Christina for that. Tell us what you see. Well, we see a ride-sharing giant surging to record highs on a major price target boost, while an automaker slides on tariff fears and competition concerns.

Details when we return We're less than 15 from the bell back to Christina now for the stocks that she's watching top on your list today is what? Uber shares right now because they're hitting a record high after Wells Fargo upped its price target on the stock to $120 from a hundred bucks. That's a really just an implied 20% upside from last close last week. Analysts though at well citing strong ride growth Solid bookings and tailwinds from favorable currency trends. And so that's why you're seeing shares up about 3% It's not the same though for Stellantis because those shares are pulling back on a downgrade to neutral from buy at Bank of America

Analysts over there concerned about what else tariffs in the US and growing competition in its European business. And that's why you're seeing shares down quite a bit down 5% Scott. All right, Christina, thanks. Still ahead. One casino stock soaring to a new 52 week high today. It's following a big buy call. The details coming up next. We're now in the closing bell market zone CNBC senior markets commentator Mike Santoli here to break down these crucial moments of the trading day. Plus Courtney Reagan on what has retailers on the move today and Contessa Brewer watching big shares I mean a big run for shares of wind big shares right again whatever.

Mike Santoli not a bad day, not horrible. I mean, it looks probably worse than it really is. It's not horrible. In fact, the market was gonna be backing off a little bit from the record highs at the open, even before we got a little bit of the growling on the trade front. The issue is, of course, it was a very clean story

going into this week. Technically, we're at record highs. Obviously, jobs report was positive, we get to turn our attention away from DC and the budget and now this complicates the factor. I don't think the market is really extrapolating too much from the tariff measures because essentially the way I would read it, maybe the market's reading it is, if you were going to defer the deadline to August 1st and not make it seem like a complete retreat,

what you do is reiterate the hard line that you had on paper with these letters. So I think that's why we're taking it in stride for now. And we'll negotiate from here and see what happens. It's like, wake us up on the 1st and we'll see where we are. Right. But we do have yields higher, you have the dollar higher, you have oil higher even when OPEC is increasing production. So I do think it's a little bit of a reason to hesitate and say, you know, we got a little overbought, let's calm down.

Well, let's see what earnings start to be too, right? I mean, you've got the group that kicks it off, banks have been trading at a record high. Yeah. So let's see if there's proof in the pudding, right? We've rebuilt valuations, mag seven's done a lot of the work and this is, you know, seasonal strength is still there,

but really only for another week. All right, Courtney Reagan, what's happening with retail? Yeah, you know, Scott, retail stocks moving around a lot. I mean, there is a lot to digest, to be fair. The tax and spending bill largely positive for the retail sector, the various tariffs announcement, and this week's deal events. So the XRT is down on the session,

really falling throughout the day here, down about 1%, maybe a little less here. Now, low-price retailers like Walmart, Dollar Tree, Dollar General, Costco, they're actually a little less here. Now low price retailers like Walmart, Dollar Tree, Dollar General, Costco, they're actually among the leaders here. Specialty names though, Lululemon, Abercrombie, RH, Wayfair among some of the losers.

Now Amazon's Prime Day event does start tomorrow. It goes on for four days. That's the first time we've seen that ever, double what's normal in around 20 countries. But Target of course also holding its circle week. There's Walmart deals, events from Costco, BJ's wholesale, Best Buy Kohl's, and many others that fall either before, during, or after Prime Day.

But still, eMarketer predicts Amazon's gonna claim 75% of all U.S. eCommerce sales during the event this year compared with 58.7% for the event last year, albeit two days shorter, but it will also see sales grow 52.7% over last year. Again, these are estimates Amazon never tells us exactly, but it's become kind of a parlor game to see what the impact would be.

All right, Court, thank you very much. This is Courtney Reagan. All right, Contessa, so wins at a 52 week high and one firm says you could still buy it. Yeah, Goldman Sachs today initiated coverage of win with a buy rating, a price target of, are you ready for this? $122. The analyst says Wynn offers best in class assets for a high-end customer demographic.

Plus the analyst points out there's a significant upside still to come for this because the casino company has not been given credit for the opening of the Middle East's first integrated casino resort in the United Arab Emirates. That's supposed to happen in 2027. We're also seeing a big boost in gross gaming revenue in Macau and the company seeing steady business in Las Vegas and taking advantage of marquee events like F1 shares up 25% year to day. Much of that momentum, Scott, since the shares hit a low of 65 bucks in early April right after Trump's tariff announcement so you can see that the Macau results have really lifted the shares

all right contestant thank you that's contestant Brewer we had the two minute warning we got about 90 seconds I mean on the casinos that's the argument from the bulls is like you're not giving us any credit like this is a good example of when is the bulls would say on Vegas, on these other properties. Everybody's been so fixated on Macau because of China. Yeah, it's funny. I was looking at you, if you look at the equal way to consumer discretionary and what has the higher weights because the stocks have done so well,

it's all casino and travel related. Casinos and cruise lines are the strong pockets, not really tariff affected within consumer discretionary. Now, that part of the market is taking a step back today, right? You have the Russell 2000 down a percent and a half. It's a little bit of a mini gut check on this trade in terms of just exactly how strong you think the economy remains, whether it's with the tariff suspense or just in general. Fridays or Thursday's jobs report, it did provide some encouragement,

but it was soft enough under the surface that I think you have people spinning it the other way, which is we may not be that far from a first Fed rate cut in September. Anything that looks a little bit rough from there, economy-wise, you're kind of backstopped by the Fed. I think it all makes sense. You're back to 23 times earnings.

The bar for second quarter earnings is kind of low, but I wonder if the market has already figured that out. So that's what we'll be figuring out in the next few weeks. Thank you, Mike. That's Mike Santoli. We'll go red, and we will be across the board, obviously, as the bell rings us into this Monday close. We make the turn into the second half of the year. In the red, we are at the worst levels of the day,

and that was important to know about Singularity.