Closing Bell - Closing Bell: Record Rally Rolling Over? 8/8/25

Episode Date: August 8, 2025

How much more does this record-setting rally have in the tank? Is it already in the early stages of rolling over? We discuss with Tom Lee from Fundstrat, Payne Capital’s Courtney Garcia and Ali Flynn Phillips from Obermeyer Wealth Partners. Plus, Renaissance Macro’s Jeff DeGraaf tells us why he thinks stocks could feel some pain ahead. And, the White House is reportedly reviewing new contenders for next Federal Reserve Chair. Steve Liesman explains – and Vantage Rock’s Avery Sheffield tells us what it could mean for the market. 

All right, guys. Thanks so much. Welcome to closing bell. I'm Scott Wobner, live from Post 9, here at the New York Stock Exchange. This makeup breakout begins with the S&P on pace for its best week since June, even as it appears investors have a more sobering view of stock. So what gives? We'll ask fund strats. Tom Lee, that very question. He'll join me momentarily. We'll show you the scorecard here with 60 to go in regulation today. We have been green for most of the day, but still not a ton of conviction around the major averages. That's been pretty clear lately and pretty consistent. One bright spot. Speaking of consistent Apple, it's having its best week in five years. It's up again today by another 4%. And tech is outperforming Alphabet Tesla Micron among the other solid performers there, which we will follow into the close today. It does take us to our talk of the tape. How much more does this record setting rally have in the tank? Is it already in the early stages of rolling over? Let's ask Tom Lee. He is Funstratt's head of research, a CNBC contributor, and he, as you see, is at post nine. What's up with this market? We're tired? Have we run out of gas? What's the story? I think the market's consolidating and maybe trying to get direction from what the market does because we did gain 28% from the April lows. We got to digest that.

Now we're in August, like the dog days of August, where liquidity is lower. And I think that we're still holding our breath because we're in a period where the Fed isn't going to make an interest rate decision until September. So some of the key macro is kind of on hold. So I think markets are at wait and see, but I'd say that pullbacks have been shallow. Is it fair to say there's a more sober view from investors about stocks? I mean, you've been suggesting that this is a hated V-shaped recovery, even as we continue to climb this wall of worry until most recently where we've sort of sputtered in place.

That's right. I mean, it's definitely the most hated. I can attest to it from our conversations with clients. We can see it measured in surveys like AAII where there's stubborn, bearishness net still. And then we did the rounds, Fundstra, did the rounds with a lot of our institutional clients the last two weeks. And I think folks are very cautious, which is actually good for stocks. They're cautious because, of course, markets have moved, and our clients tend to be valuation sensitive. But I think adding to their frustration is that during that April downturn,

They were selling their best names because they were trying to get defensive and then they haven't fully reloaded yet. So I think that's why there's still room for stocks to go up. So your clients are valuation sensitive, which makes me almost want to laugh because is anybody valuation sensitive to what's been going on in the market? We're historically well above the averages on the prices that you're willing to pay for stocks. Yes. I mean, what we usually tell our clients, but really at the core, any fundamental investor is going to use valuation as really. one of their anchors, is that the stock market had six stress tests in the last five years, from COVID to the bullwip supply chain, to the fastest inflation cycle in history, to the fastest

fed hikes in history, then to the Trump tariffs, and then, of course, U.S. bombing nuclear facilities of Iran, those are things that could cause catastrophes for earnings, but instead the S&P earnings have actually grown. So I think we're in the process of re-rating the S&P. So I actually think multiples that continue drifting higher. Okay, so let's talk about other so-called knocks on the market. Valuation, obviously, one of them. They say there's too much speculation. You look at some of these stocks, meme stocks, low-quality stocks,

cult stocks, and other things that have gone up a ton. Now, you're the chairman of Bitmine, which is new, right? Your role there is new. And I'm sure there's a lot of great feeling about you and the role and what's taking place there. There. Bibb mines up 65% this week. Okay? It's up 1,000% since you became chairman.

Respectfully. I mean, come on. What's happening with these stocks? What's happening with some of this fervor that feels like it's in the market? Well, I think the dearth of IPOs over the last five or six years has shrunk the number of stocks in the U.S. stock market. There's not even 5,000 listed stocks anymore. So these names that are IPOing are scarce, and that's why they go up. Bitmine is really, in a simple way, you can value it on how much Ethereum it holds.

When I joined as chairman, it had $4 of Ethereum held per share. That number is well over $25 today. So the stock isn't even trading at a high multiple of its Ethereum holdings, and it's well north of 25, but we've disclosed $25 previously. So it's actually in a way less expensive now than it was a month ago. But I don't bring this up to put you in a defensive position in any way. I bring it up as a vehicle to have a conversation about what's been taking place in certain parts of the market. I mean, does what you see make you kind of step back? You could take BitMind out of the conversation.

Yeah. I give you 50 examples of other things that have just gone absolutely parabolic. Yeah. Well, I think like a circle is a good example of scarcity because, That was the best IPO, really, in five or six years, but it's a blue-chip company. They are the biggest compliant issuer of stable coins in the U.S., and it's growing prodigiously. So in a way, it makes sense that it went from, you know, a $20 IPO to $200 today because it's scarce. It's just as scarce as a Palantier, but with a different market size.

And I think that these quality names, like a Figma, represents that same scarcity because we actually have a shrinking number of stocks out there. There's a lot more privately held companies, but the public market's small, and then if you think about it, there's every year dividends are paid on the S&P, that's getting, sitting on the sidelines. There's seven trillion of cash on the sidelines. People make income and they're saving 10%. If they don't buy stocks, and they haven't been able to buy homes, this cash is piling up, and that's why it probably goes into the stock market. Okay, so the knock valuation, the knock speculation, what about the knock of concentration.

Invidia has the biggest weight in the S&P 500 of any individual stock since 1981, since data was being collected. The largest 10% of U.S. stocks now account for 76% of total U.S. market cap. That's the highest concentration in history. The top 10 names in the S&P account for 40% of the index. That give you any pause? I think when people cite these numbers, and I've also heard Max Myers say that like two stocks are bigger than like Tokyo's entire stock market, um,

Max is going to love the shout-out, by the way. Yeah. Anyway, please go ahead. We have to think about the earnings contribution. NVIDIA is producing incremental earnings at an incremental margin that tells you it's an incredibly scarce company. They're not making enough chips, and they are the center of the AI revolution. So I'm not surprised it's the biggest stock. I think from an earnings growth contribution, it's so big that those previous measurements aren't accurate.

Okay. Okay. Last one. The consumer. Not as great as everybody says. Brian Moynihan, Bank of America, comes on the network this week, has great things to say. I always say, don't listen to what people say they're going to do. Listen to what they actually do. And what they're doing is still spending money. Hugh Johnson, Disney says, I know there's a lot of concern about the consumer. Well, we don't see it. Our consumer's doing very well. Under Armour Crocs, Ralph Lauren, Pinterest, restaurant brands, sweet green, Wendy's, Chipotle, Jack in the Box, Young Brands, I can go on and on even further than that. might tell a little bit of a different story. So how do I square that? Well, I think there's consumer preferences could be shifting because you remembered post-COVID there was this boom in eating out and dining experiences. And we shouldn't say that that's a permanent change

and that's why you're seeing some of these. I don't think consumers are over levered. To me, that's the sign of a peak in consumers because they can't amplify their spending. That's what the banks are going to tell you. And if you look at the Fed's debt service ratio, we're still below COVID levels. People keep saying delinquencies are going up,

consumers stretched. I think that, of course, at any moment there is, but really an aggregate, you can't get a levered consumer until you have a housing boom. So consumers might be on short-term credits, some of these being stressed, but that's very different

than us actually peaking, really from long-term credit borrowing in a binge. So that's why you say we're going to hit 6,600 by year end on the S&P year. year, it's almost 64. Now, that's not like a tremendous move from here. Yeah. I mean, I think our year-end target is probably low, because I think we could do $65, $6,600 this month. I think this is the month. Yeah, I think we're going to have a breakaway move in the S&P this

month. Even in what is a historically, you know, not the best seasonal period for stocks, as we know. August is usually like a nothing burger, and then September is usually a reversal. That's right. I think that's everyone's playbook, that August should be weak in September down, But precisely for that reason, with the economy being stronger than people realize, Bitcoin made a breakaway move on July 9th. It has led the S&P for the last five years by almost one month. So I think a breakaway upside move in the S&P is coming. It might start tomorrow, I mean, start next week. That's your call?

I would say that's our base case, yes. Starts next week. I mean, I can't give you the hour and the day. You said it might start next week. That's five days. You want to put yourself out there by all means. Yeah, but I think it, yeah, I think it starts within the next week, yes. Okay. Stay with us. We'll expand the conversation.

Let's bring in CNBC contributor, Courtney Garcia of Payne Capital Management and Obermeyer wealth partners, Allie Flynn Phillips. It's great to have you both with us. Court, you sat here. You heard everything that we talked about. He went right down the checklist. Valuation, that's not a problem. Too much speculation, not really. Too much concentration's justified. Is a consumer bad? No. Consumers find seasonals. He's a contrarian. He said we could have with this rally starting next week. What do you say? Yeah, I do think that we are well positioned here for a good second half of the year. I mean, we just continue to get good data on the economy. There is some questions with the labor market, and so I think we want to continue to see how

that comes out. But I think at this point, we're just not seeing the consumer fall off a cliff, to your point. Like, yes, credit card balances are going up, but we're nowhere near, like, the peak levels we were before COVID. So I really don't see this issue where we're going to go into some sort of a recession. And I also think if the Fed starts to lower interest rates, which is widely expected they will in September, those money market funds are going to be paying less and less. So that's one rate cut, but especially if we see multiple rate cuts, you're going to start to see some of that money coming back out and making its way back into the markets, which has not been happening over the last year, but at some point you're going

to start to see that as well. And that's something that I don't think is priced in at this point in time. Allie, what's your take here? I don't know. I think the best way to describe this environment is like a tug of war between the economic drag of tariffs and then the U.S. corporate earning strength. You know, the latter's winning so far, but getting granular is key to see in terms of which companies and consumers are going to eat these tariff costs. If you look at the earning seasons, so far, it is largely fueled by artificial intelligence and financials. Around 80% of the company's exceeded expectations, which led to in terms of revenue margin growth surprisingly resilient and increased in terms of estimates for 25, 26. But there's this huge bifurcation. As we talked

about earlier, you know, the magnificent seven stocks, average earnings about 26% versus the rest of the market, 5%. We should see that convergence, but this sort of imbalance of power to us in terms of disturbing long term. As much as I love the bullish sentiment today, we wouldn't be surprised if you see a little bit of this tension between in terms of the earnings and this sort of tariff framework. I mean, tariffs likely are set up about 19%, which we do think is an economic drag. But for us, we wouldn't be surprised if we see a pullback, but in that case, we think you have to be poised to take advantage of some good opportunities. By the dip, Tom, is like even those who suggest you could be in for a period of bumpiness,

maybe some turbulence, maybe some kind of a pullback, the suggestions have been that they would be bought pretty quickly. Yeah, I mean, really since 2020, the dips have been shallow unless we have structural problems. I would say it's a good sign that investors are cautious, which is what we're finding. And as Laura was mentioning, there's tariff concerns. People just want to get through and see what tariff impacts there are. But we also know that consumer expectations around inflation are cooling.

I mean, it's prevalent in the UMISS surveys, the Consumer Conference Board, and also the New York Fed. So I think the Fed correctly is being patient, but that's a catalyst because if we think there's cuts in the fall, that's good for stocks. I did also see today, it was Bank of America's flow show, which showed a fair amount of money moving to cash. Maybe there's some anticipation of a pullback. Maybe not a full-blown correction, but a pullback that wouldn't feel that great. Yeah, and I think pullbacks are normal, obviously, especially after this kind of run-up that we've had since April.

So I do hope that this turnaround happens next week, which you're calling for. I would love that. But I do think if there is a pullback, it absolutely is going to be a buying opportunity. But the question is where you're buying into. Because, yeah, there's this huge concentration we talk about right now, those 10 stock about 40% of the markets right now. And that's where something, I don't know if that trade is over. I'm not saying get out of those stocks, but a lot of clients have looked at their portfolios and they have no idea how concentrated they are. If all these different mutual

funds, a bunch of stocks they own, if you look at them an aggregate, you own so much exposure to these 10 companies. And that's what I want to caution investors to say, own those, but make sure you're not owning so much of it that if those things start to pull back or you do start to see international continue out to perform. If there's this rotation to small caps, whatever it is, you want to make sure that you're diversifying your money, especially on any pullbacks that we see. Allie, where do you come down on that? There's a reason why they're concentrated. The earnings season pretty much just told you why the money continues to go there. Do I just want to stay there and play whatever offense I think I can get still?

And look, the defense that these stocks have provided investors is a draw as well. The nice thing about it is there's other opportunities out there. And we've had a lot of talk about Navidia, which we like is a great company, but why do we pair it with something like Taiwan Semiconductor? You know, complex, high performance, computing chips is a growing industry where a TSM has about a 90% market share in growing. It just beat expectations across the board, but it's trading it 22 times earnings, not 30 times earnings. Eventually, it actually should really trade a premium to the S&P, given its moat. But right now, to us, something like that looks like a deal. moving into a different sector, animal health, zoetis, a resilient and growing industry.

Animal health is probably GDP plus. As we know, many people will forego their own health expenses for pet expenses. Long term, we see this humanization of pets. And because everyone's been so focused on Mag 7, you've seen in terms of real earnings compression in a company like this, to us, that's a great entry point. And then also, remember, we can look overseas, something like in terms of some of the data centers to us would be attractive as well. Tom, what about a big, beautiful, broadening this market? Does that come? I think we're primed for that because the equal-weighted S&PPE is 16.9 right now.

It was almost 18 on the eve of COVID. So the market has gotten cheaper after facing all these stress, even at an all-time high. So is the case for stocks having better earnings performance there? Yes. If the Fed starts cutting and we're on-sharing and the ISM's been below 50 for almost 30 months now, we haven't really seen a peak of a cycle until ISM breaks above 50 for sustained period. That's earnings broadening. Yeah, and that's great. That would be great for industrials, financials, and dear, you know, as I quietly say, small caps, you know. I knew you were going to go there, which I've had a pretty good week on rate cut expectations.

But the reason why the equal weight has gotten cheaper, it's the cheapest since COVID, is because AI happens since COVID. So it's inflated the PEs of the top heavy stocks and made all the others appear even cheaper because so much money has been going to the large cap tech names. True. So it's skewed a little bit simply because of the AI trade. That's true. But then we should think of it and sort of second order effects.

The first is that the earnings growth of the median stock has actually been very good. And we saw it in earnings season because 83% are beating. And now the stacked earnings 2Q versus 2Q is over 12%. That's not just the mag 7. But the second is that we know that the AI is progressing at a pace that it's delivering real benefits to companies. So companies are now going to see the benefits. I can't point to what it will be, but it's probably margins. And so that's a story that should be broadening earnings performance.

Well, depending on the impact of tariffs. Correct. And tariffs are things that are well telegraphed and socialized. And as soon as markets view it as one time, we will actually look through those. Yeah, but maybe from a price increase standpoint, but not necessarily a margin hit. As you're already hearing from some of the retailers, they're just trying to get their arms around exactly what all this is going to mean for their margins and their prices. That's right. So, Scott, let's keep in mind tariffs are going to create winners and losers because the companies that – 10 tariffs are – imports are 10 percent of our economy. And the companies that are highly reliant on imports are going to have effects, that they have to reprice their business and margins.

But that – if someone said that should take down S&P earnings and the S&P earnings, and the S&P – 500, they're overlooking that the S&P is a broad set of companies. Earnings are going to hold up? I mean, so far they have been, and I do think we're probably well positioned here. And let's not forget, we're looking at this concentration that's been happening in the markets. But when you look out about 12 months out, 12 months from now in the past, I'm trying to say, but you're saying things like financials, industrials, consumer discretionary, those are all up over 25%. So, yes, tech is doing well, but you have actually been seeing money go into other areas.

think in some way here you are going to continue to see that again especially interest rates coming down are going to be a big key of this which is likely happening in the fall I mean the the earnings picture that tom paints is is right our our markets desk passed a no doubt today referring to the results as stunning earnings performance up 13.2% versus the year ago quarter almost 9% above earnings expectations so there is data to support this picture the question is does it maintain itself and you're seeing that in guidance where companies have had really strong earnings but they are being a little cautious moving forward saying we don't really know how tariffs are going to impact us we don't

have tariffs are going to impact the consumer I think that's where you are starting to see people aren't sure exactly how it's going to come out in the next couple of months in the next couple of quarters here but I am hopeful that we are going to continue to see these earnings coming in stronger than expectations I think the bar is likely lowered because of the tariffs and especially if you start to see all this come in towards the end of the year I think it's just really really setting up for a strong second half and a strong next couple quarters. All right, we're going to leave it there.

Courtney, thank you. Allie, thank you. And, of course, Tom Lee, thank you. All right. We're watching gold prices today, too. They're pulling back from record highs on some news out of the White House today. A very interesting day in the gold market. Emily Wilkins following that for us.

What do we know? And Scott, well, yeah, so traded gold bullion bars in the U.S. They might now be subject to a country-specific import tariffs. Now, that is according to multiple news organizations, as well as a ruling on the U.S. Customs and Border Protection website today. Now, this is expected to hit the Swiss gold industry, and the Swiss Association of Manufacturers and Traders of Precious Metals issued a statement today saying that the imposition of tariffs on these gold gas products makes it economically

unviable to export them to the U.S., thereby eliminating any future trade deficit arising from gold exports. Now, a White House official said that the administration does, intend to provide more clarity around this in the near future via an executive order about the terrifying of gold bars and other specialty products. We are waiting for that. But in the meantime, Scott, we actually have some more breaking news out of D.C. The New York Times is reporting that Trump will replace IRS Commissioner Billy Long. He's been in the job really for only about two months. And the New York Times suggests that he might be in line for an

ambassadorship. In the meantime, Treasury Secretary Scott Bessent will serve as acting commissioners. the latest person in Trump's cabinet to be getting multiple jobs over multiple agencies. Scott? All right. You got to wear many hats. Emily, thank you. Emily Wilkins down in Washington, Forest. To Christina Parts of Nevelas now for a look at the biggest names moving into this Friday

close. What do we see? I got a bunch. Investors dumping Sweet Green. Shares plunging to their worst day ever after the salad chain slashed its 2025 forecast for the second quarter in a row. They're blaming on loyalty program issues, tariffs, of course, and shaky consumer sentiment. Sweet Green has now lost half of its value since May, and as my colleague, Adrian puts it,

that's a lot of lost lettuce. Shares down 27%. Twilio, also tumbling down about 19% right now, despite reporting strong revenue. Investors are focused on falling margins, flat profit guidance, and this is as the cloud communications company ramps up spending on AI and messaging tools. You can see shares, 18% lower. And then sportswear firm Under Armour seeing shares down about, Same thing. Almost 19%

after management warned of trade policy uncertainty and macro headwinds, something we hear in all earnings reports these days. And they also pulled their full year forecast, and that's why you're seeing the big drop. So some negative ones. I promise I'll have some green later on. All right. We'll come back to you in a little bit.

Christina, thank you. Christina Parks and Nubloos. We're just getting started here. Up next, Renaissance Macros, Jeff DeGraph. He's back. He's tracking the technicals to tell us what the charts are signaling about the future of this rally. We're live with the New York's Exchange, you're watching Closing Bell on CNBC. S&P on track for its best week since June.

Activity, though, under the surface, suggesting stocks could be on more shaky ground. Jeff DeGraph, Chairman of Renaissance Macro Research, joins us now. It's nice to see again. You have been pretty positive on the market. Has that changed at all? No, you always want to be really careful on these calls, Scott, because it's really at the margin. It's more tactical than anything else. It kind of tells us how we want to play things. But look, we're still in an up trend. We're still bullish. I think we'll end the year higher

than where we are today. It's just a matter of the next six weeks are probably going to be a little bit choppy. And we say that because, you know, we're not seeing the type of internal momentum that tells us to really chase stocks here, just as we probably pause and catch a breath. And we want use that weakness to leg into it instead of, you know, get aggressive on chases, particularly on things that have popped around earnings and the like. So that's really the genesis of the call. What about the so-called lower quality nature of parts of this rally? I mean, what are the charts tell you we should be thinking about? Well, you know, I'll tell you, I just got back from vacation and I went through a bunch of charts today. And I was really shocked. In fact,

I was talking to my group about this, that there were a lot more shorts that I'd be interested in, you know, getting on the other side of here than I've seen in, you know, probably six months or so. And so probably longer than that, frankly. But it's everything from, say, Chipotle to Salesforce to intuitive surgical. Lily just created a big top, even though I think it bounces. So I do think that this is a bifurcated market. That's probably great for hedge funds. It's great for, you know, stock pickers and portfolio managers. And I think there's opportunity on both sides of this tape. And that's the first time We've really seen that since the lows of April.

And it's pretty typical. You know, we're seeing this kind of fade of beta, if you will. And I think that's going to create a lot of opportunities between now and the end of the year for both sides of the tape. I mean, definitely more choppy since the massive rebound from the April low. That's obviously what you're referring to. I want to hit more on Lilly for a moment, if we could, because I referenced without saying your name today on halftime report of what you see in a chart that obviously, has shown to have broken down. We can throw Lily up here and what you think might be the next move for a name that was for a time, Jeff, grouped with some of the mega caps because this market

cap had continually gone up. And now we have some questions about certain drugs and results of studies. And this thing looks like it's heading in one direction. Yeah, it is a big top formation. very careful because from a tactical perspective, it's very oversold, and you could rally this all the way to 700, 730, really, and not change the chart. So obviously that's a huge move, and I would not be pressing on a short right here, but it has created a top. And it's completed that top as you got down through that 700 level. And that's a big formation. That's not just something that's developed in the past few weeks. I mean, keep in mind, the 50-day moving average crossed below the 200-day moving average on Lilly in December, right? So we're talking about eight

months of technically a downtrend if you want to use that as a barometer for trend. And it really is just, you know, it is just continued to weaken. And I would say, and this is a problem for the stock, is it is now being lumped in with other pharma names, all of which have been weak. So it's very hard to own stocks that will do well if the group is poor. And now you've got Lily, who is kind of the standout, acting a lot more like the rest of the names in the group. And I think that's going to make it extraordinarily vulnerable, not to mention, it's probably overowned by every single portfolio manager out there because it was one of the hiding spots. So I think there's a lot more distribution to come.

Again, I'm more interested in shorting it on a rally than I am right here, but I certainly think that the trend has been set, and it's lower from here. And it's interesting when you talk about Lilly being overowned from an institutional standpoint, I feel like Apple is the exact opposite, that it's been underowned by portfolio managers because it really hasn't done anything. You're not so convinced that the move that I'm looking at and our viewers are looking at right in front of our faces is something to really bank on. From Wednesday to today, this is not confirmation yet of any sort of meaningful breakout. Is that the bottom line? Yeah, that's the bottom line. The relative performance isn't

there. I think it's okay. I don't think you're going to lose a lot of money with it, and I don't think it's a disaster waiting to happen. But I just think there are better places to be. And you've had a weak trend, and we've obviously had some decent near-term momentum, but the trend is still weak, and what happens is you get this near-term momentum, which tends to create an overbought condition within the context of a longer-term downtrend, and those are usually vulnerable spots where the market, or sorry, the stock itself is likely to consolidate, pause, and probably weaken, reasserting the trend, and that's where we see little, I'm sorry, where we see Apple here. We'll see you soon. Jeff DeGraff. Good to see you. Thank you. All right. Up next, buy the dips or sell

the riffs. Advantage Rocks. Avery Sheffield will tell us the answer to that question next. Welcome back. The pool of potential next Fed chairs is growing. Steve Leesman has that for, Steve. Yeah, Scott,

according to the Wall Street Journal and then there were five. We thought it was four, but the Wall Street Journal out with a list that says there is with a report that says there's a list now of five potential candidates to replace Fed Chair Jay Powell. They include names we've heard, Kevin Hassett, Kevin Warsh, those are the two, Chris Waller, the Federal Reserve existing governor right now, but also a gentleman named Mark Summerlin, who was a former Bush Economic Advisor back in 2000 in the administration back then,

who knows Scott Besson, apparently, the Treasury Secretary, in his current role running an economic advisory firm, and also our friend Jim Bullard, the former St. Louis president, who is now in charge of Purdue University. Trump earlier this week on our air said there were four candidates, now appeared to be five on this list. We have not been able to confirm this list. We have asked the White House for confirmation. Waller apparently talked to Bessett four days ago, or two weeks ago, sorry, and Bessett

is the one now in charge of the process, is what we know for this article, Scott. I think what's most interesting to me, Steve, and maybe so to you, is Jim Bullard, being on the list, considering when he was a member of the Fed, he was usually one of the more hawkish people on the Fed. And we know from the president making the arguments that he's made certainly of late, and maybe his even deeper beliefs than that, he likes lower interest rates. he wants rates to be cut. Jim Bullard often went against the crowd and was more hawkish than not. That's an interesting observation, Scott. It actually goes back further.

The St. Louis Fed itself is known for being a kind of hawkish fed. I can go back to Bill Poole back there years ago and then Bullard and others. And now even a better Muslim. I don't know if you heard him today, but he said the situation has not changed to the point where he thinks the Fed ought to be cutting

anytime soon, or at least at the next meeting. And Jim Bullard has been hawkish during the pandemic, though. He did turn and see the need for rate cuts. So I'm not sure he's dyed in the wool on that score. But, Scott, you start to get at a more interesting question. What is it the president wants? Does he want to affect a total wholesale shakeup of the Federal Reserve?

Does he want to keep the institution more or less intact? What's he looking for from a Fed chair? If it's loyalty, that kind of goes along with a shakeup at the Fed. because remember the Fed is supposed to be independent. And I don't think he's going to get loyalty from a guy like, I hate to say this, Jim Bullard, probably even Kevin Worse, but Hassett I don't know about. And I don't know this gentleman Mark Summerlin, I can't say. But it's a real question.

I think the markets are going to be very carefully watching who this person is and the extent to which this person will be able to assert Federal Reserve independence from the president. I think I've discussed with Bullard, as a matter of fact, the last time he was with us on this program, I think he's spoken out about forward guidance, whether it's a good idea, whether there's an overhaul that's needed. I think Kevin Worse has big thoughts about that as well. And when you mention the idea of a broader thing at work here about what the future of the Fed itself is going to look like, I think that remains a very open question, Steve, very much beyond who the person in the biggest chair is.

It will affect the value of the dollar and its ability to remain the world's reserve currency. It will affect the trillions of dollars in debt outstanding, U.S. stocks as well. It is believed to be a very important feature of the Federal Reserve and of all of the things that underpin our economy and our financial markets at the Fed is independent. At the same time, the President has shown no lack of willingness to basically unsettle, shake up, or other. shake down any of any institution in the in the government right now and it seems to bother him somewhat that he can't do that at the Fed and hasn't been able to do it but he will get his chance right we know he's going to put mr. Myron on from the CEA and then he's going to have another position in May when Fed chair Jay

Powell's term ends so he'll have four of seven seats on the board but he won't have control by the way of the district presidents those remain a by the district boards out there with some consultation with Washington, so they will have some impact there. But it really is a question, Scott, that you have to watch for. And the president can send a signal here, Scott. A guy like Jim Bullard would, I think, underpin the belief in markets that the president wants independence at the Fed and supports the current institutional setup over there, whereas perhaps a Kevin Hassett would send a different kind of signal. you. Steve, thank you very much. Steve Leesman reacting on the fly with us as this news continues to

develop about who will be the next Fed Chair. Avery Fisher, Avery Sheffield, excuse me, Avery Sheffield is with us. Vanage Rock co-founder, CIO, and senior portfolio managers. Good to have you. Great to be here. You care who the next Fed Chair is? I think it, well, let's see. I think over the long term it matters. Under the Trump administration, the next Fed Chair I think is going to be, you know, chosen to be as compliant with Trump as the markets will allow that person to be. So, yes, I think if he, if Trump does pick someone who would have more independence, I think that the markets would probably respond better to that, feeling like they're making the right longer-term decision.

Don't we think, though, that he's more likely? Everything is speculation, of course, but just judging by his own actions and his own language, that would in and of itself suggest that he wants somebody who's going to advocate for cutting rates. Absolutely, that's what I'm saying. He wants that, and he wants someone who will cut rates a lot. The question is, will the market allow him to do that, right? Because the bond market might push back. It actually has pushed back when there have been suggestions of very significant short-term rate cuts on the long end of the curve.

So, yes, he wants that. he thinks it the short, the long end of the curve would come down with the short end. But if the bond market reacts differently, that might impact his decision. How do you think the Fed factors into whatever the market's going to do for the remainder of the year? So I think the market reacts best when the Fed reacts appropriately to the economic data. And as of now, it seems like the Fed is looking carefully at the risks on the economic side, balanced with the potential acceleration of inflation from tariffs coming through. And so at the moment, from the data I'm seeing, the economy is starting to weaken.

The revisions we had to pay rolls last week suggested weakening. We have weak construction spending. We have the Challenger layoff reports. Actually, for the first half of the year, all of last year, we have corporate bankruptcies at 10-year-high in June. We have a lot of signs that we maybe should cut rates a bit. And yet, I don't know that they'll go strong with a 50 basis point cut because of the uncertainty about the impact of tariffs. Do you think the market's vulnerable right here?

I do think that the market is vulnerable. Yes, I think we're seeing a lot of signs of that, right? We had so much froth build up from post-Liberation Day. We had the Bank of America Fund Manager survey, right, in July, had. the fastest move up in the three-month risk appetite that we've had since the survey began in the early 2000s. We've had a five-month high on risk appetite. We have lots of meme-like behavior in the market that then is correcting. So those factors together suggest that there's actually a lot of bullishness. We also have cash levels into July at lows. So I think that does

suggest that we could we have a lot of bullishness built in to a market to an economy that is weakening and is expecting the Fed to bail us out okay and that can be you know tough needle to threat how do I want to if I believe your your perspective I'm listening how do I want to express that in the market if I feel like okay well I believe everything that Avery's saying I need a more defensive posture what how do I do that yes so I would take a more defensive posture through two means. First, I would really pay attention to valuation because we are seeing highly valued stocks really get pummeled on any slight misses. So valuation is mattering and the actions we're seeing. I expect that to continue. So I would look for less

expensive stocks, but I wouldn't just look for less expensive defensive, traditionally defensive stocks. I would look selectively in defensive and selectively, actually in cyclicals that could benefit from an economic recovery should the Fed, you know, loosen out enough to stabilize things. Good to see you. It's nice to have you. Avery Sheffield. Thanks for reacting to in real time to that news that we were following as Steve Leasman right here. Up next, we tracked the biggest movers into the close. Closing bell will be right back. All right, less than 15 from the bell. Back to Christina for the stocks that she's watching. Tops on your list is what?

Pinterest? I don't know if that's top of my life, but Pinterest is plunging right now about 12%. The social media firm missed expectations on growth, especially compared to stronger prints, of course, from meta, Google, and even Reddit. While Gen Zs do now make up over half of their user base, the company said that they're going to be planning bigger investments in the second half, and that's going to weigh on margins, which is why shares are down actually 9%. And Monster Beverage surged to its highest level in over a year after reporting record sales and a 21% jump in earnings. Analyst at Piper and Bank of America both raise their price targets, pointing to strong consumer demand and innovation driving growth across the

energy drink space shares up 6%. You don't strike me as an energy drink kind of guy, though, Scott. I don't know what to make of that comment. Well, I don't know what to make a bit at all. I don't know if you drink coffee. I don't know very much about you at all, but in terms of what you drink, but you don't strike me as the energy person. All right. I'm digging a hole, so I need to go. Goodbye. Exactly.

I was just going to let you go. Just please go, go more. Go ahead. No, no, no. We're running out of time. I'm just going to slip away right now. We're not running out. We ran out.

We ran out. I'm still here. I'm still on TV. We'll tell you what's driving that. The market zone's coming up soon. All right, we're now in the closing bell market zone. Cnbc. Senior Markets, Commentator Mike Santoli is here to break down these crucial moments of

this trading day. Plus Contessa Brewer is tracking shares of Expedia and TripAdvisor. And Contessa, it's nice to see you here. Start with you. All right. So Expedia has a pretty phenomenal earnings beat. It was a great quarter. Beats on the top and bottom lines. Total bookings up 5% year on year. Adjusted EBTA up 16%. Okay, that's notable. The high level trends, though, are mirroring what we've already reported on CNBC, softer travel market in the U.S. pretty good at the high end. We heard that from Wynn as well, but budget travelers are really more cautious. And the company is reporting that there is pressure on inbound travel to the U.S. shorter booking windows, higher cancellations, that international contingent is a problem.

Of its brands, Hotels.com, feeling the pinch the most, though a relaunch in April helped. And CEO Ariane Goren has been especially intent in growing the B2B part of operations. Bookings there grew 17 percent outpaced the market. It delivered 16 consecutive quarters of double-digit growth. I mean, I'm looking at these shares. They're up almost 5%. It really popped after the earnings. But by the way, TripAdvisor, Scott, I'm looking at this today, 11%.

Both companies really employing AI to increase the flywheel and efficiency. Contested, thank you very much. Contestatea Brewer, to Mike Santoli. We're trying to make sense of exactly how the consumer is feeling. Yeah. You look at travel things. It tells you a different story than maybe what restaurants do. It's a little bit spotty, obviously, depending on where you look, and whether somebody's levered to kind of commuters or employment trends or office workers or, you know, stuff.

And I think that the market is expressing a little bit of a bright side view in general on this, equal weight of consumer discretionary. It's up like 1.7% week to date. It's hanging in there, especially relative to staples. Mostly the story this week, though, is in the absence of full resolution on is the consumer slugher. down is the U.S. economy at stall speed and can the Fed act quickly enough to support it, we just go back and let our old friends carry the index. That's what's going on this week. Apple itself is probably responsible for about a third of the upside in the S&P. What a day again.

And we first got to this level in the S&P two weeks to go today. So we might be in one of these periods if bulls are very lucky where we have an overbought, overloved market at the end of July, and we just kind of have to go sideways and cool off for a couple of weeks, as opposed to sustain any further damage at the index level, at least. That's happening, even as you have a lot of stocks getting punished on sub-part earnings. What's so unique about this particular thing, too, is that what was a reasonably unloved name, like Apple, also happens to be one of the largest. One of the largest and most under-owned and has a lot of room to catch up.

So it came right on time to have this jail bridge. Good stuff, Mike. Thanks again. Everybody, have a good weekend. We're going to O.T. with Morgan and John.