Closing Bell - Closing Bell: Stocks Surge in Final Hour of Trade 6/11/26

Episode Date: June 11, 2026

Blackrock’s Rick Rieder maps out his forecast for the market, Fed and upcoming IPOs. Plus, Goldman Sachs’ Tony Pasquariello gives his instant reaction to the Dow’s big jump during the last hour of trading today. And, Oliver Renick looks at the options in space stocks ahead of SpaceX’s highly anticipated market debut. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

All right, Brian, thanks so much. Welcome to closing bell. I'm Scott Wapner, live from Post 9 here at the New York Stock Exchange. This maker breakout begins with what else? The markets, this late day surge and where things really stand with tech still very much unsettled. We'll ask Black Rock's Rick Reeder. He'll join us in just a moment right here at Post 9. In the meantime, we'll show you the scorecard. Looks like this. We're already having a pretty decent day, but now we are decidedly higher. We took a leg higher mid-afternoon. the president posting that he calls off those strikes against Iran that were scheduled to happen this evening. Market jumped as you see. It's pretty descriptive on the screen there. Oil falling on that news tells a similar story. Industrials, materials among the better performing sectors today, though everything, frankly, right now, but two sectors, energy comm services in the green. So really the tide over this day has turned a bit. Oracle standout name, not for great reasons. Stocks down almost 10% after earnings. News of a coming Equity offering, stock that's been in the crosshairs around the AI trade for a while, takes a leg lower this afternoon.

It does take us to our talk of the tape, the world according to Rick. Reeder, that is, BlackRock CEO of Global Fixed Income, head of the allocation team, a good eye on all points within this market. Welcome, it's good to have you here again. Thanks for having me. We spoke a little more than a week ago at our CEO Council Summit down in D.C. for a fireside. And even in the midst of, you know, some selling and tech and rotating around, you were pretty sanguine about the overall picture.

Anything different since I last saw you? I mean, I will say one thing, you know, I feel like every day I can't keep up. I mean, there is, I mean, part of why this is such an exciting environment, you've got, I mean, the news flow is dynamic, to say the least. But the, you know, how technology is changing and the world is changing, it is pretty incredible. Am I sanguine? You know, I call it the way I typify or I like to describe the way we're investing today. It's this concept of dynamic patience, meaning you've got to adapt to the news flow, you've got to try and manage your risk, you've got to think through when things overreact one way or the other. And then you've got to stay in my mind two things.

Technology's changing the world. You've got to stay in the position. You've got to stay, and I still think equities will do their thing this year. You've got to stay in that. And then income is phenomenal. And so, you know, I've learned it maybe took me four decades to be. figure this out, but compounding income works, and as long as you get that, so pretty good environment. What is trickier is when everything correlates, when rates, equities, gold all correlate

together, you can't really, you've got to manage your risk differently because you don't have that traditional hedging dynamics. So you can lean in a bit, but you've got to be a bit careful about left tail because you don't have a lot of hedging. What is the market going through right now, do you think, as it relates to a lot of these tech stocks that ran up a ton of. now we're correcting a bit, whether you feel it's over or not. I mean, just from your lens, like, what do you think it's going through here? I mean, Scott, one thing I've said, we're doing this a long time. I've never seen markets being driven by momentum, people getting on one side of the boat,

chasing the theme of the day, and then everybody going, and then people getting a bit overexposed. So, you know, we talked about, I think you asked the question, we're in a bubble. There's no way we're in a bubble. I mean, the earnings are still really good. It has some characteristics of a bubble because you get this. over demand and then and then everybody's got to get out at the same time. Listen, I think this week, and in fact, I would argue last week, you've got a couple of very big issuances, equity, but also

you're getting debt finance convert. Obviously, it was a very big convert. There is a lot of clearing space that's taking place for that. So I think when people said, like the, you know, Friday went a very tough day in the equity market, a bond market. People say it was a payroll report. The tenure moved six basis points. It killed the equity market. There's a lot. There's a a lot of clearing space, there's a lot of crowding. And I still think you've got to go through a bit of that digestion. And that being said, you've got to stick in your core position because you know it's going to work because the fundamentals are so profound. A positioning thing, if nothing else. Hang on for just two seconds. Speaking of, you know, headlines and a lot of things that are

developing today. We do have some more breaking news out of Washington. Megan Kisela has the latest for us. What are we learning here, Megan? Scott, markets have been celebrating President Trump's announcement earlier this afternoon that he'd be postponing strikes against Iran. He was saying, we were moving towards a final agreement with Iran. But now both Israel and Iran, there are reports coming out of both places, that they are not recognizing that any agreement has been reached. Israeli media, Channel 12, cites a senior Israeli official, saying, quote, we do not recognize reaching an agreement.

And then Iran's state media, this is Farr's News Agency, which is closely aligned with the military, saying Iran has not yet approved any text for the agreement. That's according to an informed source, they say, close to Iran's negotiating team. So while, yes, markets have been reacting to this all day, the president was signaling that a deal was close. And he even cited, in his true social post, 11 countries that he said had approved the deal. Iran and Israel were not on his list. Israel actually was on his list. I'm sorry, but Iran was not on that list, nor was Lebanon. Scott, as you know, so many parties are involved here that would have to all sign on for something to happen here. Now both Israel and Iran saying there is no agreement that's been approved.

Yeah. Megan, thank you very much. That's Megan. Casella down in D.C. We've sort of seen this movie before, if you will. You know, social media posts of deals reach, deals close, deals this, that, or the other. I think, you know, the market, I know wants to see something concrete, but it's also afraid to be negative because it assumes I would suspect that a deal is going to happen sooner rather than later. and that the reason we haven't been all hung up from an equity market standpoint on rising oil prices

and headlines out of the Middle East is because it assumes that, and it's more hanging on the earnings story. Is that fair? 100% right. I mean, I think the market, you know, you go through, it oftentimes happens with geopolitical. The market, particularly when you have liquidity in the system, people want to be long, people have money to put to work. If you don't have the significant left tail, people are willing to look through it,

When the left tail is significant, meaning you get a very significant headline that could really be devastating position, then you've got to factor it in. I think there is the disposition in the market today is, as you said, we're going to move on. I think it's going to be a messy way we move on. I don't think, you know, similar to the way Ukraine has taken so long. It's going to take some time. But what is significant in terms of the big left tail event, the big risk, I think markets have said, listen, the earnings are good. We're going to focus on top line revenue. U.S. economy is doing quite well. I mean, we're talking about 6% nominal GDP growth.

If that's going to be the case, top line revenue should be pretty good. Your flow-through earnings should be pretty good. And so markets have become much more comfortable with that. The rates market is a bit more sensitive at times, obviously given the inflationary impulse. But you don't worry about a cause and effect, if you will, of even a projection like you just stated of this going on for some time. The longer it goes on, the more elevated oil prices remain. One could make the easy suggestion that that's negative for kind of everybody. I mean, consumers at some point may buckle under that. Corporations, it could be more relevant to their earnings picture and their input costs and all of that.

So how do you reconcile those views? So when you break down the structure of the U.S. economy and you break down the structure of the U.S. stock market, it is quite different than it was 20, 30 years ago. when you had a goods-oriented economy versus service-oriented economy. Look at the companies that are driving three-quarters of the performance of the equity market. They're service-oriented, their technology-oriented. This is not like you're back 60s and 70s. They're about the big auto companies.

It's a big manufacturing companies. So you have an economy. The consumer, no doubt, has some pressure. But today you have something that's very different. You have an asset-driven economy. And what would really hurt the economy is if the equity market, if you had asset prices, came under significant pressure, that retailing dynamic, the consumer dynamic, I don't mean to say it's not important.

A lot of what drives consumption today more than anything we've ever seen history is higher income, older net savers. That energy dynamic is just not going to have that big an impact. You see the dispersion, the equity market, companies are doing well that cater to high end, and then the lower end is having obviously a harder time. So a point being, I think the structure of the fabric of the economy in the markets is very different than it used to be. I'm going to break away once more. We spend this kind of day of breaking news. So just sit tight for two more seconds.

The SpaceX IPO. More breaking news related to that. Our Leslie Picker is at the NASDAQ with more. What are we learning here now, Leslie? Hey, Scott. I'm told that the finalizations are being made for SpaceX allocations. They're mostly decided ticking a few kind of finalizations at this point in time. but as of now, so things could change, but I'm told as of now, retail is going to comprise about

the low 20s percent of the book. And that includes private bank clients, e-brokers, international retail. So all of the types of retail that we've been talking about, we've been reporting that retail was targeted to be about 30 percent of the book. So this would be a bit lower than what had initially been targeted in terms of allocations to retail. I'm told that long-only institutionals are a high percentage of the allocation, a high percentage at the top of the book, and that it's a pretty well-concentrated book between mutual funds, long-only mutual funds as well. I'm told it's kind of the usual suspects that you would tend to see at the top of these types of IPOs. I'm told there are pretty healthy cutbacks

through the middle and the bottom of the book. That means, you know, people were seeking more shares and couldn't get them. A lot of that involves kind of the hedge fund cohort that were getting cut back here. So, you know, the idea is if you do cut back a significant portion of the allocation, hopefully they'll come in and buy on day one, and you'll see, you know, the stock go up tomorrow. Again, Scott, I would caveat, this is not 100% finalized yet, but this is looking to be kind of how the allocations are shaping up for the SpaceX IPO. Okay. That's a good window just into the whole story on what will culminate tomorrow in the actual opening of this IPO.

Les, thank you. That's Leslie Picker. So, you know, just coming back to you on this, and you said as much earlier, you mean, you think some of what's been taking place within the tech universe is related to positioning around the biggest IPO that we've ever seen, correct? Correct. By the way, this is all the way my normal day goes. It's like, you think everything's on the rails, then all of a sudden, oh, my God, something

else is happening. Welcome to our work. Yeah. No, it is, listen, I mean, it is, by the way, it's just not the only one. There are others coming down the pike. There was a lot of equity issues in one name last week. So, yeah, I mean, this is, you know, there's not unlimited amounts of money that sits around. I mean, money people have to replace in, and particularly places where technology, and you think about, everybody thinks about, what is your allocation of technology?

What is your allocation to, you know, what is at least tangentially related to chip, et cetera, and the way the new world of technology will work. So it's a big deal. By the way, I was in Atlanta yesterday, but a series of meetings. We talk about different parts of fixed income, emerging markets, and then invariably, okay, that's great. Can we talk about the new IPO that's coming to market? Captured the imagination of a lot of people.

100%. Which I wonder, you know, obviously we're talking a lot about the retail angle of this, and we're going to be focused so much on that, you know, tomorrow when the stock opens, see how it does. I mean, how are you thinking about how that cohort has changed, change so much. It's more engaged than ever. IPOs like this capture the imagination of a whole new set of potential investors and the impact that they can have on market swings, on volatility and volumes and how it sort of shapes in many respects how these markets trade these days by how

engaged that cohort has been in a way they never really have in the past. So a big part, you know, I've argued, particularly in the short term or intermediate term, what drives the markets is technical. The fundamentals obviously matter over the longer term. Technicals are much more important. That cohort has become such a, I mean, every deal we look at, everything we look at in the market in terms of where it, how it's doing versus not, is driven off of that cohort, including, you mean, look at the growth of single-day options. And, you know, there's some volatility that's come into the market. So you've got to watch it like a hawk. I would argue as well, you have so much of this momentum chasing.

It's actually presented real opportunity because everybody moves to one side and then, gosh, what's really hard and I wouldn't say we're perfect at it is when everybody moves to one side, you've got to ride with the consensus and then there's a real art like, okay, time to get off and go the other way

and you see some of these things that are driven by retail cohorts and otherwise that you've got to sort of fade it when it gets extreme. Did we get to some of those points in certain parts of the tech trade, like memory and semiconductors. Was that an obvious moment to sort of sit back and say maybe this is a fade moment? You know, I will say from an earnings multiple point of view,

not really. Like, I don't think those multiples are exaggerated given what the forward demand is, what the backlog is for the next two to three years. So I don't think this was, oh my God, this was a meme stock orientation that, God, we got to get out because it doesn't make any sense valuation-wise. There was a little bit of, we talked about freeing up room for the other things, there was a little bit of too many people piling in, including double-evered ETFs, including every way you can get that on. So that was a bit extreme. But from a multiple, like this is a, this is tulip mania, not really. I mean, you get pretty comfortable with these earnings numbers and the multiples are still okay. What do you see as the principal risk to

a story that you've already suggested is pretty darn good? Is it a Fed that actually sort of defies expectations under a new chair and actually moves closer to hiking interest rates. I mean, you've made the argument, you made the case with me yet again 10 days ago or whatever it was at this point, that the Fed can cut despite the fact that inflation remains elevated, though I looked at your notes today. And I wondered to myself if there was a little twinkle of a change in any respect where you said, we think the Fed, even with a new chairman, will continue to be persistent in its view of keeping rates high or higher in order to try to moderate this above-target inflation condition today.

Explain that in the context of what your prior views have been. So I would say there are two things. One, there's what you would do, and what I would do is I've talked about the interest rate tool is not terribly functional in terms of how it brings down inflation. Look at the CPI report. There's no inflation core goods. A three-month, six-month moving average are pretty close to zero. It's services, education.

I mean, look at the insurance numbers. The inflation is high. The interest rate tool is not terribly effective. And then you look at inflation, what was used cars. Things that are already under pressure. Housing, automobile, low-income, small business. They are. So the point being, if you are managing it,

I think there is how you think about the interest rate tool, how the new chairman is going to think about using the money supply, the balance sheet. They're more elegant ways to deal with the full construct of how do you work monetary policy today. What are they going to do? You have a committee that today that is, is quite hawkish. You have a committee and with a new chair coming in, you've got to protect

the back end of the curve. Do you have to be respectful of you've got some near-term inflation in? You want to make sure the back end stays contained. So I think in the near term, you've got to be respectful over the fact that this Fed may not be what I would do, but this Fed will probably lean on the side of fighting this, you know, what he is today, a bit elevated inflation. Is that why you haven't really embraced the idea of some dramatic broadening of of the market. You never, not never, but I mean, we've had many conversations. And, you know, you've been on the no way side of the small caps, for example, relative to other parts of market. There's the very reasons that you just said about, you know, inflation's elevated. The feds

certainly turn more hawkish. Does that prevent a stronger broadening move in the market? Or how does that work? Listen, I mean, I think the core thesis is, There is technology change in the world, and the top line revenue that's going to come on the backside of it. And the moat that these companies can build is extraordinary today. And if you look at what drives returns, when I think about my portfolios, I look at smaller companies and I say, interesting, I got to get this tech thing right. They become so big, they're driving so much a top line revenue. By the way, they're also driving so much of CAPEX in the country today. That to me is a much more.

Now, at some point the Fed, I think sooner, they should sooner. But at some point the Fed's going to move to a rate-cutting dynamic. You're going to see inflation come down, employment. Do you then broaden out a bit more and say, gosh, now I can own that small-cap orientation a bit more? But until the Fed is in that posture, by the way, you've got the ECB is hiking, you've got the Bank of Japan is hiking, pretty hard to, whereas these companies that are not really interest rate sensitive, they're going to spend on Capax, they're going to spend on GPU, TPU, memory, compute. Like as long as that is in place, it's not that interest rate sensitive and you can be, you can own them.

So your point is bank on the durability of the earnings picture to continue to be what it is. You just get better earnings growth relative to everything else. I mean, we had 50% plus earnings growth in tech. That's not really expected to dramatically change anytime soon. In fact, the overall earnings picture is supposed to be pretty good for the foreseeable future, too. North of 20% across the board, obviously skewed by what you expect tech to continue to deliver, right? Yeah. You got a couple of smart guys coming on who are very thoughtful about.

But I think about multiple in earnings growth, et cetera. My personal view is these multiples are not terribly stretched because that earnings growth is so robust today. And as far as I can see, the backlog that companies have, I mean, some of the cloud backlog that some of the big hyperskills that are involved with, I mean, it is epic. And I think for the foreseeable future, that will continue. You know, you can debate, you can say, what's a risk.

There's a circular dynamic to someone's capaxes somebody else's revenue. So you've got to be careful about where that is. is and what the ultimate return on invested capital is. But for now, I feel pretty good about where we are multiple lives. It feels okay to me. All right. We'll leave it there. I appreciate the time, as always. Thank you for being here in person, too. Thank you. Rick Reader of BlackRock. Let's go to McKenzie Sagalos for the biggest names moving into the close today. Hi there. Hey, Scott. So shares of Intel rising on a Bank of America double upgrade to buy from underperform.

Analyst say the company could capture a larger share of the market for server CPUs. The firm's also bullish on Intel's boundary business, which is still unprofitable, but gaining traction with customers. Shares of Zillow and Co-Star Group, which own Homes.com, moving lower after Google said it will show home-for-sale ads at the top of mobile search results across all 50 states. The development adds to concerns of Google taking away market share from homeless companies. And some fast, casual names are gaining. As city research report says that GLP-1s are likely to be a significant headwind for the restaurant industry, specifically naming Starbucks, Dutch Bros, Sweet

Green, and Kava as beneficiaries. Those stocks, all moving higher, Scott. Okay, Mack, thank you. That's McKenzie Segalis. We're just getting started here on the bill. Up next, much more on this market action today. It's late-day surge in stocks. Dow's up more than 900 points now near 2%. Russell's 2 and 2 thirds percent, so pretty decent finish here is developing, and Stephanie Lincoln, Adam Parker are standing by. We're also going to touch the big money battle in sports World Cup kicking off today, NBA finals heating up. That's an understatement, Alex Sherman following the action.

And later, Goldman's Tony Pascarello weighs in on this market action. We'll join us live at Post 9 as well. All right, welcome back, stocks higher as we head towards the close. today. Now let's bring in our panel. High Tower, Stephanie Link. Trivari, it's Adam Parker. It's good to have you with us. Steph, thanks for being here. It's good to have you on set. Great to be here. So, I mean, readers pretty positive. As you heard, it's hard to be negative if you believe what he believes, that this will pass whatever's happening. However, the Middle East comes to a conclusion. And the earning story is so durable as it relates to tech. Like, pretty good. Do you agree? Yeah, I do. I do. I do. I mean,

I think the price action tells you, right, when you get an announcement that we're going to go bomb Iran, you don't see as much negative price action as when we say we're not going to bomb them. We get more higher price action. The market's telling you it wants to go higher if we can get a resolution. And so I think you have to pay attention to that skew and what the market's telling you. Yeah. Steph, do you agree with that? Yeah, I do.

Look, we want a deal on war. But, you know, what's interesting, Scott, is that even with the war, oil prices have peaked. They peaked on April 7th at $112 a barrel. And if you think that oil has peaked, and I know a lot can happen, but let's just say we get a deal, if you think oil has peaked, then we don't have to be as concerned with the inflation data that we got yesterday and today. And then we can just focus on the good earnings growth that Rick Reeder was just talking about. Lanofed Fed tracker at 3.3%. Credit spreads are very benign. The 10-year yield is in a three-bases, move from the beginning of the year. So I think things are telling you that things are getting

better. If we can get resolution on the war, we can go back to focusing on earnings, which have been good. And I am very excited just in the last couple of weeks. We have been seeing a bit of a broadening out. My fingers are crossed because we've seen this before, but I have no idea why we wouldn't see a broadening with the economy growing where it is, and hopefully inflation peaking. Do you have any reason to doubt the broadening story? Well, I mean, corporate earnings have been pretty good. I think the issue, the index level is always different than what's going on underneath. And that's why, you know, people like Steph pick stocks well, like there's individual stories. I think the challenge is, um, the penalty for missing has still been pretty harsh.

70% of companies beat earnings. So you just have to make sure. You better be in the 70%. Yeah. Yeah, I got to make sure that you don't do that whole while. I know conditions aren't very good now, but I can see through until next year because I think it's cheap. It's not even the penalty for, for just missing. It's like the penalty for not living up to some magical expectations. Like Broadcom, for example, it's not like they missed, really. It's just, where was the bar? The by-side whisper was much higher than the sell-side numbers, exactly. But I agree with this notion that we're not in a bubble because of the fundamentals. I mean, if earnings grow low 20s this year, mid-teens next year, and you look back at the history, 100 years of the S&P, where he had double-digit earnings growth both years, the market never really does that. badly, only five times ever has been down in the first year where you had double it.

So unless earnings you're going to crater in 2028, there's still a positive upward bias to the market. I think the question is, can I buy some non-AI cyclicals? Like if ISM's picking up, you know, if we start getting better economic news, that's the broadening, I think, you know, that stuff's talking about a consumer and industrials and other parts of the economy. But are we, Steph, as long as we sort of hang out in the uncertainty category, which I guess is fair to, you know, say that we're in that, just because we don't know exactly what's going to happen with the war. Are we going to have just this volatility down 900 one day, up 900, the next, post, social media post says this, others say not true. Next day we get a reversal on all sides of that, and the market

just doesn't really know what to do. It's entirely possible we see volatility and the VIX move around, But that's why I always talk about long-term themes. And not only is it the AI and the food chain that we've all been talking about, and by the way, Oracle's report confirms that the food chain is going to be just fine, by the way. But this also, it's cybersecurity, and it is also quantum, and it is a little bit of Bitcoin getting an opportunity with that pullback. It's robotics. And so if you have these big themes and you can find stocks that are based off of these themes,

and they get hit on these volatile days, that's when you want to be buying the Qantas and the Vortives and the Palo Alto's and the Rockwell Automations. There's a whole bunch of names out there that are based on, and I have a million other themes too, but you want to take advantage of when we do get the volatility, Scott. I think the problem, you know, it just was in Toronto doing a couple days of meetings, and I think the problem people are having is like, let's say I want to get defensive. what do I even do? Right?

Like there's so much more of the market caps in the AI trade, so it's hard to move that much into defense. And then a lot of the defensive stocks have been missing. So there's nothing grosser than, you know, you sell something that's awesome with upper revisions to find something that's not awesome that misses. So I think people are worried about that a little bit. How about this?

Some four minutes ago, CBS News tweeted out that a memorandum of understanding between the U.S. and Iran is likely to be signed early next week, paving the way for further negotiations on a longer-term deal. That being reported and now picked up by many by CBS News, which may account for that last little move hire we had in the market. Therein lies the danger of getting too negative on most of these headlines because one has assumed that this is not going to take a larger turn for the worse and that it will eventually be settled

why oil has remained, you know, reasonably in a ranch. I think the danger is it's easy to be short these low-quality consumer companies that have oil's high input costs and then all of a sudden, if you get a resolution, pick your worst companies that are up the most. Let's listen to the president here at the White House now. It's a great thing. Stock market's up 1,000 points.

That means they like the deal. See, that means they like the market goes down. That means they don't like the deal. But it's been up. Oil's dropped. Oil will start coming down to, I think even lower than it was before. I said I was in Iowa.

It was $1.85 a gallon. And I don't know if I'm going to get there, but we're going to get pretty close. It's going to come down. And when oil comes down, everything else comes down. And most importantly, we have a deal that Iran will never have a nuclear weapon, which was the whole purpose of what we had. to go through to get this. So it's a very big thing. But we have a signing soon and the documents

are in pretty final shape. So we'll see. We'll see. Very good. It should be done. That should be done pretty quickly. They want it every bit as much as everybody else wants. And I think a lot of good relationships can ensue from this. They just spoke with the leaders of many of the the countries that were mentioned in the release. I just spoke to Beebe. I spoke to the head of great heads of nations, Qatar, UAE,

Saudi Arabia, Bahrain, Kuwait, and others. And we're going to be talking to Turkey. President Erdogan is great. And it's really a wonderful thing. With a lot of spirit. Pakistan was fantastic.

The minister and the I call him the general he's a general he's a great great general he's so great that they that he's actually a field marshal step above and they're all very happy the whole middle east is happy and along beyond the middle east the straight will open as soon as we have a sign we've been taken out many ships that nobody knew even the fake news didn't know it but over the last month We've been taking out ships, big ships, quietly at night. You guys didn't know that. Pretty cool, right?

As a captain, he knows more about ships than I do, but it's pretty cool. They turned off the lights. We bombed their radar and everything, so they couldn't see what was going on. We took out some nights 25 ships, some nights 15. Last four or five nights we did 25, 22, 21, 26. 18 and 14. Who else would remember those numbers? Nobody.

But a lot of ships, a lot of oil is at. That's why oil, even before this, the market, couldn't understand why it was so free. There was more oil than they thought. We took them out at night. And that was the straight wall officially open as soon as we signed, which could be soon, very soon. maybe over the weekend in Europe.

I won't be able to be there, but JD will be there, Vice President and some of the people. Steve Whitcuff did a great job, Jared. So we'll take some questions, but right now we're here to talk about fishermen and fisher women. Okay, we have, they're great people. And I guess I'm a little prejudiced because they all voted for me. Would you say I got 100% or just not?

110%. If I didn't, it would have a surprise. Would have a big surprise. So it's my honor. Okay, that's the president there at the White House, as you see. Certainly talking as though a deal is in fact near. He said could have a signing maybe in Europe, maybe by the weekend that the vice president will be there,

along with negotiators, Steve Whitkoff, Jared Kushner as well, cited the stock market move, which is certainly reacting to these headlines. that have been coming out for about the last 10, 15 minutes or so. Dow's good for more than a thousand points. You see the move lower in oil, which the president suggests will continue to come down. Gas prices will as well.

So maybe we're progressing towards something more concrete that the market can truly believe in. And that means what then for what this market can do after we get through that? two-week trade for low-quality consumer companies that have really lagged. I think I'd probably add to some crap consumer. Why, only two weeks? Well, we'll see. I mean, it could take longer. We've got to see, you know, I think you get an initial pretty strong move,

but then after that, you're back to the fundamental story. We got some conferences this week. You know, when we start thinking about July earnings season pretty quick, you know, you get back to the fundamentals. But isn't the fundamental story, the fundamental story is good on mostly all accounts, isn't it? I think that this directionally, oil input itself is about 10% of the companies. And they know that it really hurts. And a lot of them have really lagged.

Like the Eagle Way consumer has been awful. So if you've been correctly negative on a lot of the consumer complex or even shorting them, I think you cover those shorts and you say, wait a minute, like I probably got to add to something like a cruise or let me stop making fun of some of these low quality consumers. But why aren't those trades more durable if you have a resolution? and then you have a pathway to oil coming back, if not where it was, closer to? I think it could be. My suspicion is that the stock's discounting so rapidly these days, they move so quickly. I mean, earlier today, I was looking at coals, which was up a ton, like a company that probably goes to zero eventually, but it's going to fly higher in this kind of trade.

So I don't know how long the trade will be, but I think you've got to sort of add to some of the weaker consumer names as an immediate reaction, and then wait and see if it's real or not and how real it is. The damage has been done already in terms of input costs for some companies. So I think I want to certainly cover some shorts on the consumer side and then maybe buy some low-quality loans. Steph, why don't you give me a quick last word as well? Looking what you may see now is a little more light at the end of the tunnel here. Yeah, I mean, if we're growing 3.3% in GDP with the war,

just imagine if we don't have the war and the overhang there. Look what's working today, Scott. Semiconductors, AI industrials, metals and mining, and some discretionary, particularly housing, which has caught a bid in the last couple of weeks. So I think that's where you want to go in addition to financials. All right. Good stuff. Steph, thanks.

Adam, thanks. See you later. Talk to you again soon. Markets are surging. We'll take a quick break. Goldman's Tony Pascarello on the other side. For stocks today, obviously heading into the close here. And we are going to have a pretty.

solid clothes, as we know. Tony Pascarillo runs Goldman's head, their hedge fund client coverage, excuse me, and he's here at post nine. That was in eloquent, but welcome. I'll take it. All right, well, here we go. I mean, you know, headline-driven market. Firmative. Sometimes multiple headlines in a day-driven market. What do you do with this one? I think there's the big picture, and then there's the path. I think the big picture is everything we've been talking about, which is Enricate. This U.S. economy is performing well. The labor market's picked up nicely over the past two or three months.

Earnings remain. I use the same word choice from last month. Terrific. Flow of funds has been very positive led by U.S. households. And as you said earlier, the AI narrative continues to capture the imagination of the market. Then there's the path, which as we see day-to-day, intra-day, intra-week, is getting a little bit more interesting. I've had this instinct this summer might get a little bit more turbulent and a little bit more. gapy in each direction that may be kind of settling in a little bit and so in terms

of what I call the tactics of navigation I kind of like this idea simplify your portfolio a little bit I think you want to have an up in liquidity bias of the names you own and when the market gives you insurance as I've been saying take advantage of that so it's still like a long Delta long vol construct for me what does that mean in practice simplify your portfolio a little bit because I think people were pretty simple buy tech, buy AI, and get out of my face with everything else for the moment. Yeah, correct.

And that effectively has been a momentum trade, which point to point has performed incredibly well. You know, the extreme thing, semis versus software. The realized volatility of that factor has been picking up. And so I just think you want to ask yourself the question, you know, am I set up to manage what could be just, again, as summer liquidity starts to wane, as we process more and more deal flow, I just don't see any reason not to live a little. little bit cleaner, but to be clear, very much still in the saddle, still long. You expect liquidity to drain in the summer knowing that we have, you know, IPOs, massive ones

in the pipeline. I mean, how does that impact positioning and flows in what would, you know, traditionally be a time of draining liquidity to people just moving liquidity in different ways to advantage of whatever, you know what I mean? Sure. Those IPOs. So to take it head on, because this is the question, I think the market's rightly asking. So last week, we were proud to lead the Google capital raise, $50 billion,

largest capital raise in the history of U.S. equity capital markets. That record will last exactly nine days and be eclipsed tomorrow. Okay, these are big quantums of dollars. I think we should acknowledge that. I like to think about this in market cap terms. So this year we think there's about $675 billion. total issuance in the U.S. IPOs comprise about $225 billion of that. Maybe those numbers are a little bit low, but nonetheless, we're talking about like 1% of U.S. equity market cap.

And so I think broadly speaking, the market's ability to process these assets should be totally fine. Buybacks, a trillion dollars, $850 billion of M&A already this year. So I still find it, feel fine about the broad balance of demand of supply. We still have more demand than we expect supply. But the summer's the summer. We just got to kind of work through it. Right. And you know, you think that anything, I mean, I think the prevailing view is what's been happening in the market lately has been, at least in part, driven by positioning ahead of SpaceX and some of these other bunch of supply to your point that's coming on the market. Do you buy that as well? And then once the IPO happens, maybe it's a bit of a clearing event for that. And then we can just sort of settle in and get back to, you know, dance with Ubrungya sort of thing. and the reason we got here in the first place? I think that's the right general take.

Yes. Again, 50 plus $75 to $85 billion, like I said earlier, it's a large quantum. The capital has to come from somewhere. So, of course, I think in a very disassociated sense, the funding has been happening for this. But again, I feel very, the U.S. equity market's got,

it's $75 trillion of market cap. It is unfathomably large. Country number two on that list is China at $14 trillion. So I do feel good about the market's ability to absorb. all this. Where does the risk lie? If the war settled, what is it, two hawk is fed, a hike, how do you see that? Could be a slowdown in growth. We don't anticipate that, but the reality is the front end of the year was a little bit flattered by tax stimulus. That's now going to,

now going to wane. We still think growth is fine, but I think you might feel a little bit of a slowdown. I think you might feel a little bit more pressure on household through the prism households to the prism of real income growth. Look, the big thing is what you and I've been talking about, earnings have carried the day. That has been an overwhelmingly positive force. For the market this year, I mean, on net, the multiple has shrunk. So all of the lifting in what is shaping out to be another good year has been done by earnings. If for some reason, a few big names pulled a hamstring and earnings growth slow, that would give me a pause. We do not, I do not, I expect that. We do not forecast that. I don't think that anybody foresees that in the near term

at all. Right. I mean, the earnings projections, unless there's a shocker, are just going to continue to blow away prior expectations. Like, I think coming into Q1, weren't we at like 14% expected earnings growth? We did like 28 or 29 or whatever it was, obviously skewed by 50 plus from tech. Yes. You look at the numbers for the next few. quarters and then full year, you're well above 20%. Well, always, sometimes I think you have to take a half a step back and think about everything we're talking about, which, as Rick said, has such a heavy tech bent to it. We think about the capital raise last week what's coming up.

There is this incredible affirmation of American ingenuity and innovation and risk-taking and creativity. That is the narrative that's carrying the day. I was just looking over the weekend. Again, last year in the UK, there were six IPOs, six. That'd be like a pretty good week in the U.S. to say nothing of these deals that were so excited about. And so I do think that is ultimately the most powerful tail when the markets had and we'll continue to enjoy. Now, the market will pressure test the return on this. I think we saw this in a couple names just in the past couple of weeks.

So it wants to know all this CAPX is going to good use. The takeaway from Q1 was companies were attaching that to revenue growth. So the return story around to Google or Amazon was there, that needs to continue to hold. You would almost think that, you know, you're painting the picture of we finally get to some level of animal spirits. You know, capital markets, as I was speaking with John Waldron of your firm last week, like big smile when I mentioned capital markets because they're like wide open for business. IPOs, deals, M&A, you could have a record year in M&A. yet another potential tailwind behind the enthusiasm of these markets, no? I think so. Again, affirmational of unbridled American innovation that is shot through everything

we're talking about. Hopefully that continues. We'll see. We'll talk again soon. Thanks, Scott. All right, Tony, thank you. Tony Pascarillo, Goldman Sachs. Coming up next, your overtime set up, Adobe and Lanar reporting top of the hour. Market Zone next. For now, the closing bell market zone. PNC's Young Yuma here to break down these crucial moments of this trading day. Plus Oliver Rennick standing by at the CBO Global Markets in Chicago.

And on the earnings front, Sima Modi is watching Adobe. Diana Ollick is covering Lenar for us. Oliver, begin with you. You're watching space stocks for us ahead of Space X. That's right. Yes, sir. Scott, it's going to be a big one tomorrow. Markets are rallying just in time for the IPO and options trading in two key problems.

Cuxi names suggest appetite is strong for SpaceX options that will begin trading Tuesday. We're watching Echo Star, ticker SATS, the $35 billion networking business that owns 3% of SpaceX shares following a spectrum deal with Starlink and AST Space Mobile, a $30 billion company whose satellites are expected to take flight on a SpaceX rocket next week. Options, bulls can't seem to get enough of either. Calls are outpacing puts 5 to 1 in Echo Star and 4 to 1 in AST. And both more than 10 times more calls are being bought than puts today. And like many of the biggest winners this year, implied volatility is Astronomic,

which is also what we expect for SpaceX options out of the gate next week. That is not stopping speculators, though, like one trader who we saw in SATS, who put on a call spread buying $1.2 million of the 130 strike. calls expiring tomorrow that are nearing the money after today's 10% rally and selling just under 200,000 of the 150 strike calls that expire the same date, Scott. Love it. Love the options action. Oliver, thank you.

Oliver Renick, Cibow. Cima, tell us about Adobe. I think it's well documented at this point that, you know, the stock has just had a really tough run. We'll see what tonight can do to reverse that. And it's interesting, Scott, leadership is the topic. of concern who is going to lead Adobe through its next phase of growth. That is top of mind for the street. Last quarter, longtime CEO Shantanu Narayan announced he was stepping down after a 28-year tenure.

Since then, there had been rumors of the board appointing one of its C-suite executives to the job. Beyond leadership, two things Wall Street will be looking for. Evidence of continued enterprise adoption. In other words, no signs of corporate clients trying to reinvent the wheel with AI. That will be key. and whether Adobe will back its full year guidance, given these broader concerns around AI displacement and competition. Even despite the broader rebound we've been seeing in certain parts of software, Adobe is down about 30 percent so far this year and down another 6 percent today, Scott, which is notable. Yeah, yeah, this one just hasn't really been able to bounce all that much. We'll see what happens in OT when those numbers hit. We'll see you then.

Seema, thank you very much. That's Sima Modi to Diana Oleg now for a look at. ahead to Lenar. What do we know here? Well, Scott, the focus for Lenar's fiscal Q2 will be less on the top and bottom line numbers and more on margins. Lenar's margins have been falling sharply as the company pushes incentives. Its strategy has been sales, pace, and inventory turnover. Now, previous guidance for Q2 home sale gross margins was 15 and a half to 16 percent. The question is, does that hold or does it get worse? Of course, we're watching for commentary on mortgage rates, which rose sharply at the start of March, came back a little bit in April and then began climbing

again in May. And then, of course, the effect of the broader economy and the war on consumers. That'll play in new orders, sale price, and cancellation rates. Now, KBW recently downgraded Lenar, citing the builders' focus on entry-level buyers, a cohort that is particularly squeezed by the current economy. Meanwhile, it upgraded luxury builder Toll Brothers. And Scott, that's something we saw this week in the existing home sales numbers, where the high end of the market was doing very well. That's where Toll lives. But the mid-to-lower, where Linar lives, but the mid-to-lower, where Lennar lives, not doing so well. Okay, Diana, we'll see what happens there as well.

Thank you, Diana Oleg. Okay, young Yuma, come to you now. Your notes, I'm guessing, came to our producers before the headlines moved about possible, legitimate end to this war, and then a commentary from the president. So how does that shape your view on how you see things here? Well, our thoughts aren't primarily driven by the conflict in the Middle East right now.

We think there's a lot of uncertainty still that remains in terms of the sustainability of the KAPX spending that's taking place in a multiplier effect. I think that's rippling through the economy on that is probably a little bit underestimated. We think the AI trade here is probably more of a hold. We like the action today. We welcome it. And it's nice to see. There's a lot of enthusiasm about tomorrow's IPO.

But we do think that it's not the time for investors to go full throttle here. Wow. So why do you have concerns about the CAPEX when not a single company in that orbit would have you believe anything other than the story that has been told and the narrative that has been pervasive and understood by investors? What's the problem there? Yeah, well, I think when the one of the world's largest cash cows alphabet comes and taps the equity markets, you do have to pause to wonder whether or not the spending is sustainable. And you have a lot of companies right now that are full steam ahead. I don't believe that a year from now, we're going to have this many companies full steam ahead with KAPX spending. So I think we're going to level off.

And I think that multiplier effect that's having a big impact on the economy, a big impact on earnings throughout the whole supply chain of AI and the buildout of AI is probably going to come under a bit of moderation in the coming quarters here. So we're not negative. We're just more cautious, I think, than. and turn more cautious in recent weeks. You're doubting the durability of the story? Well, look, you have a few things happening at once. You have major companies talking about limiting token usage by employees.

You have token prices coming down a bit. You have talk of some of the major model providers cutting prices. I think these are early anecdotes that perhaps the peak thrust is behind us, if we're thinking about that second derivative in the positive change, we've seen a lot in the past few quarters. We think we're probably going to level off here in the coming quarters. Got about 30 seconds left. I mean, does that mean that you would move money out of tech and into other areas of the market that are either perceived to be value or would lend one to think that the broadening trade is going to work away from technology?

I do hope the broadening trade works away from technology. That would be a very healthy sign for the market if that took place. If the conflict in the Middle East does get result, that would probably be helpful for that broadening trade. I think there's been a lot of nice money made in technology here, and it probably pays investors to think about the versifying that at least balancing from a lot of portfolios that probably gotten out of balance in the last couple months. All right, John, we'll talk to you soon. That's young Yuma joining us. Bell's going to ring, and it's going to ring a strong game for the majors today. Certainly picked up late afternoon. news suggesting that we could actually be near a revolution.