Closing Bell - Closing Bell: The Rebound Gains Steam 8/15/24

Episode Date: August 15, 2024

The stock market’s remarkable run extends with retail sales data fueling hopes around a healthy consumer. Trivariate’s Adam Parker, Virtus’ Joe Terranova, and BNY Wealth’s Alicia Levine navigate what lies ahead for the Fed and investors. And, Bernstein Research’s Stacy Rasgon breaks down what’s fueling the move in chip stocks including market darling Nvidia. Plus, activist investors setting their sights on Apple and Nike among other widely held names. 13D Monitor’s Ken Squire brings us highlights from this week’s filings.

All right. Thanks very much. Welcome to Closing Bell. I'm Scott Wapner live from Post 9 here at the New York Stock Exchange. This make or break hour begins with this remarkable run for stocks, which are higher again today on hopes consumers are going to hang in there. Retail sales better than expected. Walmart results better than feared today. We're going to ask our experts over this final stretch whether data on the economy this week means the rally is really back on for the time being. In the meantime, take a look at the scorecard with 60 minutes to go in regulation because it certainly is today. Nice gains across the board. We're higher all the way around. The Dow is working on its best week now since December. There's the Nasdaq up more than 2%. S&P is good for one and a half. We're above 5,500. Discretionary stocks, No surprise there. They are leading the way today. And I did

mention the Nasdaq tech is a close second with several of those names posting solid gains today. We are watching shares of JP Morgan as well. They're going for eight days in a row and they look like they're going to get that, too. We'll follow. We'll follow it over the final stretch. It does take us to our talk of the tape. The rebound gaining even more steam today. So let's bring in our panel to discuss. Adam Parker is the founder and CEO of Trivariant Research. Joe Terranova, chief strategist with Virtus Investments and Alicia Levine, head of investment strategy at BNY Wealth. Excuse me, Joe and Adam, CNBC contributors. All right, Adam, I turn to you first. We're back. We're back. Like

you were you were growing more cautious, I, by the day, if not week. And here we are. It's unbelievable. You know, it's great to be alive. It's beautiful outside. I'm with you, wonderful people. The market's ripping. I mean, this is our moment. You're a happy American. Yeah, I mean, this is, you know, God bless America. Exactly. Were you wrong to be that cautious? After that preamble, you opened the door for me to ask you that. You know, I don't like to, I'm not like a victory lapper.

I think in our second NFL look, we got more cautious, and I was probably lucky. But if you look at the data, the consumer is worse. I get today's retail sales data is better. Walmart is a different entity. It's a $600 billion revenue company. So I wouldn't use that as like everything else is fine. Oh, but what do you mean worse? Worse than what? The consumer is definitely worse than people thought on July 1st, and it's definitely slowing.

I don't need to look farther than restaurants, travel, housing, autos, or Visa to get data points. Yeah, but for every Brinker, there's a cake. Or, you know, there's another stock. Sure, but for every McDonald's, there's a Shake Shack. Sure, but the aggregate consumer in dollars has slowed, for sure. And my view is the world's changed. Every growth manager in the world would say, I use momentum. Every value manager in the world would say, I look at mean reversion. I think it's going to be the opposite for the rest of the year. I think growth managers are going to use mean reversion.

They're going to buy these things up. When they get to some level below where they peaked before, they're going to sell them. I don't think people are walking in today as a growth manager at Big Fund saying, I love NVIDIA more than I've ever loved it before, and I think it's blasting to the moon. But you're not moved in any sense by the fact that where we were a week ago Monday to where we are today. No, I think it's been a strong rally. And the inflation data, and now the economic data. This is not a warped view of what's happening with the consumer.

I mean, I understand there are obviously two ends to the consumer. Sure, you don't get 100 consecutive data points in the same direction. We got a couple positive, but I think there's 60 negative and 40 positive right now. It's not 80 positive, 20 negative. At least that's how I'm looking at it. I think the rally got a little sold off, a little hard on some fear, carry trade, other positioning things. As we kind of get toward where we were, I think people are going to sell some of the growth stocks. I do.

I don't think it's straight to the moon. You saw a pretty big rotation in real estate and banks and health healthcare services and housing before the sell-off. So I think the market was primed for a little rotation anyway. So I'm not like, bear it up. I think the rally's great. Our view has been same probability of 10% upside to 10% downside. Got a little more cautious during July because the data got worse. Today's a good day. I agree. But I don't think it means all clear because I think the earnings estimates for Q4 are too high. So the way institutional investors work is they go on vacation. They go to the Hamptons. They go to the Cape Nantucket. They come back after Labor Day and they hear the big conferences, Citi Tech, Morgan Stanley

Healthcare, Consumer, and they're going to lower the numbers for Q4 in 2025. So I think you have a pocket of, you know, everything's wonderful here, but the estimates have to come in for Q4. That's my view right now. So I think risk reward is not amazing at the current moment. Okay. I don't know that, you know, that might not be a consensus. No, I don't know. I don't know because look, Rick Reeder, Alicia sat on this desk the other day too, and where he was pretty bullish during the sell-off a week ago, Monday, he's little more cautious now, too, because of the run that we've had, the fact that the Dow's now above 40,500. The NASDAQ is up 5% week to date.

So that makes people like Rick and Adam obviously take pause. What about you? So, look, we did not change our positioning at all, even given the labor day, the August 2nd labor force data or the sell off on the Japan yen carry trade. We never changed our positioning. I will say there is evidence of the economy slowing and the Fed probably has room here to cut 100 basis points because real rates are simply too high. And you're feeling the squeeze at the bottom end of the consumer and it's moving higher. So there is a bit of a race here for the Fed to get going on this. But having said that, we think the market ends higher into the end of the year. We're confident on earnings through

the end of the year. We still like U.S. large cap. I think I'd add to that here, financials always outperform when the Fed cuts into a soft landing. It looks like we're going to get that. So, yes, do you move away from large cap tech? Of course you do. So you go into REITs, you go into financials. That looks great, too. And I think the cyclicals can be okay here.

So you don't think that earnings estimates for the fourth quarter are too high like Adam does? I don't think they're too high. I think the earnings estimates actually have been moving higher. And And yes, people go on vacation, but they're not brain dead. And so I think it's been a very good year where earnings have come in better than expected and earnings are moving higher for this year and next year. And if the Fed sticks the landing, we don't see why that can't happen. Now, technically, the S&P went through that 50-day moving average, which was acting like resistance and went right through it this morning. Now, technically, the S&P went through that 50-day moving average, which was acting like resistance, and went right through it this morning. So I think we're looking good for now.

So you say to me, so what could go wrong? Well, what could go wrong is, you know, you've got Jackson Hole. You have other data prints ahead of you. You've got another jobs print in September. And so that can be bad as well. This morning was about as good as it gets, since everybody had moved the positioning from no recession, Fed's going to stick it, to there's a recession coming. And so now you're just moving back to the middle there, where there's a two-sided risk rather than the one-sided risk that we basically had going into the end of July. I feel like, you know, we have a little bit of delta in the views between Alicia and Adam. So, Joe, you fix it. What do you think? On Friday, April, on Friday, August 2nd, the market expected 50 basis points. Today,

the market now expects 25 basis points. We've got this schizophrenia in the eco data that's driving the tape all over the place. 50 basis points probably was indicative of the consumer weakening to a level that we were extremely uncomfortable with. 25 basis points acknowledges that, yes, the consumer is weakening, but maybe not to the extent to where we're all going to ring the alarm bells. I think what has happened since Monday, August 5th is that, and I think this will be the pattern as we move through the entirety of the year. Anytime there's a correction in the market, we had it in April. You're going to see corporate buybacks. Corporations are going to come in. I think upon reflection, we're going to learn that corporations were aggressively buying back

their stock last week. I think the retail community that has been sitting it in cash, anytime you give them a 5% correction, I think they're going to come out of cash and they're going to buy equities. And then I think the last thing is the systematic funds, how to move in a way, and I'm sure Adam understands this well, they had to move in a way that they've never historically had to move. Volatility is measured by the VIX went above 55 last Monday morning. There's only been two other instances when that has occurred. October of 08, it took 14 months to get back below 20. March of 2020, it happened again.

It recovered and got below 20 in November of that year. We got below 20 in five days today. I don't think it's ever moved from like 65 to 15 and where it is now. Five days never has happened in the history of volatility. Why is that important? Because a lot of these systematic funds that are utilizing volatility as a factor until the VIX returns to under 20 after being above 55, their equity exposure is never going to be full. Now, within five days, they had a return to a full equity exposure. So I think we learned a lot about who's going to come in and support the market. And for long-term investors, I think that's what's mattered,

because not as much has changed for long-term investors. You've got a Fed that's not going to get in your way. You've got earnings growth, disinflation, and the innovation which is supporting semiconductors. So there's a lot that went through there. I think, you know, obviously I'm not like a bared up guy. We've never had a one-day move in the VIX like we had in the last 6,000 observations. If you take like the 1% most extreme, every single time we've had an aftershock to that. So it's not like we had three days and data history says, oh, we're going to be smooth forever. So when you have these big moves in the VIX, usually there's some

turbulence. The Q4 estimates this year for 14.5% year-over-year growth, there's always a Q4 rebound to the estimates, but this one's higher than normal. Because we just did 11, right? So we're expecting even better. It's higher than normal. There's always Q4. The gross margin expectations from the sell side analysts, the number of companies expected to have gross margin expansion are the highest they've ever been for mega caps, the highest they've ever been for large caps. So either the margin numbers are going to have to be great because of pricing power and all the costs come lower, or the estimates are too optimistic. So we'll see. Alicia and I have a different view at the current moment.

We'll see what happens. I think the key issue is going to be pricing. You've seen we've been publishing a lot at Trivari about pricing, scanning every transcript for every word related to pricing, dynamic pricing. So far, the companies and the consumer have really, the consumers have rejected price increases, whether it's in restaurants, you're seeing it in travel. So we'll see how many of the businesses can really maintain the pricing.

That's the key to getting the margins to be achievable. So I'm not saying she's wrong. I'm just saying the estimates are high. Either that's awesome or they come down harder. And I'm a little bit worried that they're going to come down for Q4 in a big way. The other thing that some say is high is the valuation of the market. That it's just come back too fast, too much. Now valuations are really stretched. That's sort of Rick Reeder's perspective.

Again, why he says the market's full and all of the good news like cuts, it's already in. Are they wrong? So they're not wrong. I just think that you have more of a two-way trade here than you did coming into the end of July, meaning there are plenty of people who are out there, like Adam, who are simply more pessimistic on where this is going. And because of that, you don't have everybody on one side of the boat. It's just a better market. I think what we've learned over the last 15 years, if you buy down 5%, 6%, 8%, it's never a bad decision 12 months

later. And, you know, the speed with which it came down was tempting for a lot of investors to get in. Now, I think if you go back in time, you know, September is never a great month. And I could see us retesting where we were a week ago on August 5th for data, whatever is going to happen there. But I don't think we really come out of this till the end of September simply because we're in an election year. It's really close. The policies are so different that you could just see different ways the market could get weaker here. But the overall picture is that it's moving higher. And the lesson is, let's talk about the last 15 years. In the last 15 years, there are only two years. Don't fight the Fed? Is that the lesson?

Don't fight the Fed. There are only two years where tech underperformed the S&P in the last 15 years. I don't think we're out of that world yet. I just don't think we're there. The margins are too high. The earnings growth is too high. The investment is too high. So I think we're still in that world. What if, Joe, the Fed does cut by 50 basis points, but they do it simply because they're just too restrictive? To Alicia's earlier point, they don't do it because the economy is weakening to a degree that they're forced to do 50. They just do it because they should, because they're just way too restrictive. Let's see what the labor report for the first Friday in September shows us before we make

that determination. I think, as I said before, I think there's the schizophrenia and eco data. By the way, I think all three of us are saying the same thing. I think all three of us are saying 12 months from now, the equities market is going to be higher. I think in the interim, what Adam's speaking towards and what I kind of agree with is that you could go through a period where you're watching two professional tennis players play tennis and you can't play tennis the way they do. This is really a trading circumstance. There's a lot of speculation that's going on in the market right now. And the market could whip 5 percent higher from here five percent lower from here it doesn't change the fundamentals which are good fundamentals that suggest 12 months from now the market's going to be higher and i don't think you have to play just in the mega caps i love the mega caps i run an equal weighted strategy the mega caps are crushing me i acknowledge that

i'm not going to trade down to small caps but there are areas outside of technology in large cap that you could go to. Consumer discretionary, you talked about that being one of the leading sectors. We own Mercado Libre. We own Coupang. You could look in industrials, Haumet, train technologies, Axon. That's all working well. Financials, you've got your JP Morgan. You've got your Goldman Sachs, KKR, interactive brokers, new holdings. So there are places that you can go outside of technology if you stay high up in the cap size. Why not small or mid cap? If I told you that the data this week for many is going to confirm the belief that you're going to have the soft landing.

Fed's actually going to pull it off, right? Growth is not fully stalling. I know Atlanta GDP came down today to 2.4 from 2.9. But nonetheless, that's not bad. The Fed's going to actually pull this off. So why shouldn't I go to these other areas finally and believe in that? Yeah, I mean, I guess I think Joe did a good job of what he asked me to do, which is bridging what looked like a gap.

Because I think the market will be higher in 12 months also. I just think it's today the best day to deploy fresh capital with the US equity market I don't think so I think we're gonna get lower entry points a lot of names in the next couple months till we get through this volatility but I told months I agree if I were running a hedge fund I would have covered some shorts earlier in the month you got stuff down a lot and you made some money and then you're like saying which longs do I like can I maybe I'm not to feed in but I'm starting to add to the ones I like so I think we're you know that environment

makes sense to me. But we've gotten a lot. You saw Starbucks move 25%. Do you like it as much now as you did before? No. Nelson Peltz said, I'm good. So I think the big moves, you have to monetize these things, and we're in a trading range. In terms of the small caps, you have to believe that the margins are going up more,

and the estimates are more achievable than they are for large caps. What if I just believe that the margins aren't going to collapse anymore, that they're more stable? So what is going to stimulate that trade? You need the economy to accelerate from here. I don't think the economy has the ability to do that. We all know we can't wait for it to accelerate. Joe knows we've got to buy it three to six months before it accelerates. We just got it decelerating now.

So I need to believe, let's say it picks up in the second half of 2025. Q425 is a really acceleration fundamental quarter. I'm going to buy this stuff in April, May next year, not in August when I got an election of volatility and estimates that are crazy high. Did anybody take note of any of the 13 F's, which are dangerous to look at in and of itself because they're backward looking. You never fully understand what the current timestamp is today on whether the positions are still being held or not by the most notable investors in the world. But it was interesting that many, Alicia, had been trimming these mega cap stocks, you know, or selling outright, you know, Druckenmiller making moves and Tepper making some moves. And again, the all star list of

investors making moves in that space. And I think for the most part, it was to decrease size rather than increase. Right. I mean, look, you have to protect the gains. If you judge annually on your performance, you have to protect the gains when you have the kinds of outsized gains we saw in the first half of the year. But I would just agree with Adam here on small cap. We're allocated across all the sub-asset classes and equities, including an equal weight on small cap. We're allocated across all the sub-asset classes and equities, including an equal weight on small cap. I'd say this. Small cap, not only do you need the economy to reaccelerate, but you also need the Fed to cut 250 basis points. Those two things have to be true

to get really bulled up on small caps. So you're getting one or the other. You're getting either the economy's fine and the Fed's cutting maybe 100 basis points, or you're getting the economy's not fine and the Fed's cutting more. And either way, the small caps work as neither defense nor offense in those scenarios. Where's more offense right now? I mean, what about the what about treasuries? I mean, if you use the the rise in yields on some of this stronger data, maybe the better is the better value there. Just figuring if the Fed is going to embark on this trend of cutting interest rates, the yields are going to go down. Bonds are going to go up from where they are here. I don't know. These guys are better at rates. So you have an opinion on bonds i did the economy slows the ten-year yield comes lower that's what the

history would show me so what if the only doesn't slow but the feds cutting wouldn't want to you'll go lower anyway but now i think in a risk off world yields go with a world's first place yields go lower and uh... by you know if if you had a failed our that auction last week you think yields back up because that that, that's bearish for equities. I mean, the two-year Joe's at 409. Yeah. Where's your bet that that's going? Is that a good buy here? The short end of the curve? Yields are going lower. I've been saying that to you for the last three months. I agree with Jeffrey Gundlach. I think you've got two powerful

catalysts to bring yields lower. Number one, a deceleration in business investment and consumer spending. And then the Federal Reserve is going to begin a cycle of lowering rates. So is that a yes or no? What is that? Rates are going lower. But you mean as a trade or do you mean hold to duration? Like, I never was a trade. I'm an equity guy.

I never, ever want to hold a 10-year duration ever for my entire life. So as a trade, yeah, sure. As a trade. I think it's going lower. I do. Because I think that the economy's slowing. I think when people get nervous, they buy the 10-year, and they're probably going to cut, and it moves the whole thing lower.

But I think in terms of equity, like what do I do to deploy for the equity market? I don't know if that means I want to buy banks. Maybe I disagree with Alicia on that. I think banks went up because They were cheap and economically sensitive the economy's slowing. I don't know if they'll act so great I don't want to buy the corporate debt on banks because I think we're corporations are in a good enough condition that they are going to benefit from strong credit quality and relief coming from interest rate Stanley's up six percent on the week. Citi's up almost 5% on the week. I don't want to chase that move is what I'm saying. Of other things that are up,

I'd rather own other things than that. All right, I'll say something crazy. I think in the next couple of years, the tech companies being the leaders will shift to healthcare. When I get dreamy about where all the potential is for all the investment on AI, it's in healthcare applications, life sciences, drug development, monitoring. I feel like you're going to get a bid and a shift in psychology in the next six months where people are going to say, I love the potential for AI to impact healthcare. One of the reasons the market sold off in your list of reasons, yeah, Buffett, Apple, consumer slowing, Japanese carry trade. There was a cocktail of things. But one of the things was the CapEx and AI ain't going to be worth it. That was like a thread going on last week. And I think that's wrong. And I think the benefits are going to be in health care. And I think you want to be adding for long-term positions

in services and in life sciences, because they're going to be the big winners in the next five years. I have a name for you. Is that mic you can just try variant research edwards life sciences we sold it last week it's been awful it felt like a mic drop moment thank you i'll take that from you what a day this is a compliment that's where i started a great day all right that's adam parker alicia levine joe terno thanks everybody i enjoyed that all right let's send it to julia borsten now for a look at the biggest names moving into the close hi julia Julia. Hey, Scott. While Dell is adding to its gains up nearly 20% this week, the stock's on pace for its sixth positive session in a row. Bernstein named Dell a top pick, and JP Morgan added the stock to its focus list, noting the potential for upside. And shares of Robinhood moved higher

after Deutsche Bank upgraded the company to buy from hold. The firm cited long-term earnings potential and an attractive entry point. Robinhood is up more than 55 percent year to date. Back over to you. All right, Julia, thank you. We're just getting started here. Up next, navigating the chip trade. The SMH seeing big gains this week. Now, star analyst Stacey Raskin is back to break down that move today. He's going to tell us what he's expecting from applied materials. Those results are out in OT. That's just after the break. We're live at the New York Stock Exchange. You're watching Closing Bell on CNBC.

Welcome back, chip stocks. They're on a tear amid the broader market bounce back up 15 percent just since August 6th. S&P also up 7 percent since then. My next guest says the steep move in stocks is making him a little nervous. Joining me now, Stacey Raskin of Bernstein Research. Welcome back. It's nice to see you. You don't usually get nervous about these moves in chips because you've basically come on with me and said they're justified. What has you noticed now? It's not even the move in the last couple of weeks. Remember, the reason for the move the last couple of weeks is a couple of weeks ago,

everybody was, you know, things were just collapsing, right? So you've kind of bounced back from that. This is more a general kind of thing. If you just look at the valuations of the space, I mean, the SOX right now is out 31 times forward earnings. It's like a 40 or 45 percent premium to the S&P. The overall SOX is at, you know, 10 plus year highs in terms of valuation. And frankly, like we're still it depends on the end market that you're in. But there are still big parts of the market, especially in the analog space, industrials and autos and

everything else that are still rolling over like really hard. So earnings are still getting cut. And that becomes the question, like, are we at the trough in earnings or not? Everybody's been playing a lot of these stocks like on that bottoming theme, which is fine. People love to buy by the bottom in semis. But the question becomes if the recovery isn't quite as good as we thought. Now it's no longer a bottoming call. Now it's a recovery call that isn't quite no passing muster. And that's not a great scenario when it comes to valuation. So I actually think I'm not nervous about everything. I just think you need to be selective about where you play in the space. That's all. I mean, your points are well taken. If you look at some of the moves here, for example, Broadcom up 5% today. Yeah. Well, I mean, lots of things are up 5% today. It's

not just Broadcom. I actually like Broadcom. This is one actually that we've been pushing pretty hard. Like I've always liked it, but I mean, you look at it, you know, there's been a general, like for a while, there was a bit of a risk off in terms of the sentiment around AI, but it's coming back now. Broadcom, I think, has the second best AI story in the space. Like after NVIDIA. They sell networking and they sell compute offload ASICs to the hyperscalers. That business is good enough for them this year to cover up some nastiness that's going on in their core business. General networking and things is pretty weak. They're not the only ones.

But the AI piece has enabled them to kind of bridge that over so numbers have continued to go up rather than down. I think their AI guidance this year is conservative. They've been buying software companies. I think the VMware numbers that are in consensus, I think, have upside to them. Highest margins, highest free cash flow in the space. And I think the valuation is still really attractive, like relative to the sector, given you've got a company that's like almost half software and, like I said, a great AI story. This is one that actually I do really like. If Broadcom is number two

for you, behind obviously NVIDIA, AMD's up 4% today. Where does that rank? You know, so as you know, we've talked about a little bit. I've been a little more lukewarm on AMD. As I said, I like it better at 140 than I did at 180. They reported earnings a few weeks ago. It was a decent enough print. They took the AI guidance up a bit. They're at $4.5 billion. They'll probably do $5 or $5.5 this year. And I'd say at least versus their larger competitor, Intel, at least on their core business client and data center and everything, they're actually doing well within the confines of those markets. I do worry a little bit about the

health of those markets. Intel actually called out channel inventories and client is impacting their numbers. And I think AMD's guidance likely implies some channel fill in the back half. And this is something I've been generally watching in that space, since that's something that makes me a little bit nervous. And to be fair, while they took the AI guidance up, I don't think it was above where people already were. People were already higher than where they're guiding. I think with AMD, it really just depends on what you think they're going to do with that AI business. If they're going to do $14 billion next year, the stock's probably a buy. If you think they're going to do $8 billion, it's probably not. But again, I don't

want to take away too much from them. Even if they do $4 billion this year or $5 billion or $6 billion, it was zero a year ago. It's small relative to, again, NVIDIA and some others, but it was nothing a year ago. So that's still fairly impressive to ramp that up in the timeframe that they've had. What about AMAT after the bell tonight? What should our viewers watch out for most? Yeah, I think it should be okay. Most of the rest of the WFE space has already reported, and numbers in general look fine. People will be watching like the sustainability of China. They'll be watching DRAM growth where AMET actually has a bit more exposure on the back of AI and what's called high bandwidth memory.

They'll be watching that same thing around advanced packaging. I think people are wondering about Intel's CapEx cut and what that may mean. I actually do think that everybody that's reported so far already incorporated it. And frankly, I'm actually wondering, you know, I didn't actually I actually to take my Intel CapEx numbers up this year rather than down. They were apparently targeting a CapEx this year that was quite a bit higher than I was expecting the target. So but those are the things that people be watching for. But in general, like everybody else has reported the general environment in semi-cap or at least in the near to medium term seems fine. I don't think sentiment around Intel could necessarily be any worse than it seems to be now.

Since you mentioned that name, I mean, you somewhat reluctantly upgraded it, I don't know, a year ago or something like that. It was a year, a year and a half ago, yeah. And I say reluctantly because I think you admitted as much. It was just like it was less awful in, it was less awful in your in your mind. What about now, though? I mean, you still have that same rating on it. Market performed with twenty five buck target. How do you how do you see it here? To be fair, I don't know what the heck to do with it.

So, you know, it's it's it's twenty bucks, give or take. It's a tangible book value, which is some measure of liquidation value. And by the way, I've said this before. I don't think they need to be liquidated. They'll live. I don't know what kind of a life it'll be, but they'll live. If you add up the CapEx cuts and the OpEx cuts and the suspended dividend and all the cash that's coming in, both from the government sources as well as they've been selling off

pieces of their fabs to private equity, if you add all of that cash up it's like like 40 billion dollars of incremental cash that's that comes under their balance sheet by the end of 2025 so i think they'll be okay from that standpoint but at the same time i don't know what to do with it like the the current like business could easily get worse um i think it's gonna be a slog like it's gonna be a long time before we know if their process roman which they're betting the company that 18A, which is their next generation process, fixes everything. And even if they fix it, it's a necessary but not sufficient condition, like, to make sure that they deliver. You know, it's a slog until we find that out. In the meantime, things could still get worse.

You know, at the same time, I don't know, we get, you know, Taiwan headlines or something and like the, you know, the U.S. centric manufacturers take a bit like I'd be afraid kind of a short to short in here, but it doesn't feel like a long to me either. So I've kind of been preaching avoidance. I think there's easier ways to make money at this point. All right, we'll leave it there. Stace, I appreciate it. Thank you. We'll see you again soon. That's Stacey Raskin joining us once again here on Closing Bell. Up next, big moves made by Wall Street titans. We referenced some of them. Apple, Nike, Southwest, just a few of the names swept up in the activity. We'll bring you the highlights from this week's 13F Filings. With 13D monitors, Ken Squire.

We're back on the bell after the break. Welcome back. 13F filings revealing the big moves hedge funds and asset managers have been making of late. Among those, Warren Buffett's Berkshire Hathaway betting on Ulta Beauty, while Bill Ackman's Pershing Square ended June with more than 3 million shares of Nike. Here with reaction on where the big money is moving is 13 D monitor founder and president Ken Squire and CNBC senior markets commentator Mike Santoli, Kansas CNBC contributor. Ken, welcome. It's good to talk to you. You obviously 13 D's. I mean, you generally follow activists. These 13 F's are nonetheless interesting. Anything surprise you out of what we've learned over the

last 24 hours or so? Well, you know, 13Fs are obviously 45 days delayed. And activists, when they have something really material, get confidential treatment on their 13Fs. But, you know, Bill Ackman in Nike is interesting. I think, you know, Bill is Pershing Square 3.0, acquired a type of activism. I think he sees this as a great company that he probably got at a good price when the stock went down at the end of the quarter. And I don't think we're going to see the type of vintage Bill Ackman CEO agendas like we saw at Canadian Pacific or at JCPenney. Mike, you're not surprised by the Ackman news at all, whether it takes on an activist role or not. You thought this stock was pretty ripe for somebody of that ilk to get into it.

I did just on an opportunistic basis, simply because, you know, kind of the the fallen angel effect of Nike and the fact that it was a serial disappointer, arguably, you know, maybe there was some strategic kind of course corrections that were necessary. And, you know, for whatever you think about its growth path, it got cheaper relative to the market than it has been in most of its history. You know, during the second quarter, people thought that the bad news was out and then a disastrous earnings report that actually had that extra leg lower. So, yeah, it doesn't surprise me.

Not clear what you'd say should be done. But I think that's what's interesting about this whole set of changes is that a lot of money in motion for these opportunistic opportunities in a split market. Because I think that's the makings of these moves is, you know, you had seven stocks driving the index. We're later in the cycle. If you haven't done it now, when are you going to actually get returns? On overall activism, Ken, what should we look forward to over the remainder of the year and into next? Yeah, well, activism is having a banner year.

We've already had 80 activist engagements through the year, which is a record number in the U.S. And we only had 52 last year at this point. I think with interest rates higher, with the stock market flatter down, which it is for most stocks, and with the rotation from growth to value, it's a great environment for activists to come in and really get other shareholders to support them and engage. One last thing I'd say about Nike, I also think it's similar to Chipotle in that it's a great brand that's a little bit out of favor temporarily. And I think Bill is drawn to situations like that where he can see the bigger picture. And if he can affect the outcome in the C-suite,

I mean, like I think he thought he could do and maybe did in some respects at Chipotle by getting Nickel there, or certainly playing a role in getting Nickel there in the first place, and thinking maybe he can run that playbook back at Nike. Yeah, well, he definitely did it at Chipotle. He got four seats, which led to the hiring of Brian Nickel.

And yeah, I don't think he's going to be as aggressive as Nike as he was back there. I don't think he's going to take board seats, but I think he'll definitely be in the ear and he'll be listening as well to the board members. And what do you make of what happened with Starbucks? I mean, we've learned that, you know, Starboard was obviously there. I reported the other day that Tryon had amassed a sizable stake, according to sources, and had some conversations. And then when the stock jumped as much as it did, they bounced. Yeah, I think that Starbucks is a great activist story.

You know, it starts off with Howard Schultz publicly criticizing the CEO. Then Elliott comes in and over a couple of months are actively engaging with a very large position, talking with the board with similar concerns as Howard Schultz and try and like you mentioned, Nelson Peltz is having calls with the board over a couple of months. And the board acted quickly and decisively. They brought in a rock star CEO that did great for the stock. And I actually think that Melody Hobson deserves a lot of credit here for not only doing something so quick and so decisive, but also giving up her role as chair to get the deal done. And, you know, in a world of activism, a lot of times ego and job security is what's paramount.

You have someone that's acting a little bit selfless for the benefit of the shareholders. And I think she deserves a lot of credit. And then, Mike, we look at, you know, the multitasking ability of an Elliott, for example, in all of the different hands that they've been able to play at the same times. Remarkable in and of itself. And here we have Southwest is sort of the next one. And a company that I wonder how you view that in terms of being right for. It's a little tricky in the sense that, you know, actually selling it seems like it's a little bit off the table. It's not really, you know, who and seemingly things that you could do to either become like other airlines or just fix operationally, it does make sense from

there. Whether it's, and you're not doing it as a bet on the cycle. You're not doing it as a bet on a reacceleration of consumer travel demand. It's much more about a company-specific fix. Ken, how do you view what may happen here? And also, you know, how formidable Elliott has become in the activist space? They must fill the pages up of your reports. Yeah, I agree a lot with what Mike had to say. This is a situation that's company specific. It's not it's not it's going to be sold the company. It's a company that needs outside airline experience.

Their management and board is all Southwest people for many, many years. Elliott has a slate of a lot of outside airline experienced veterans. They they would like them to come in and show a different perspective. And as you said, Elliott is the you know, the 800 pound gorilla in activism right now. They have the resources, the money, the experience to to basically engage with anybody. And I expect that they they'll get seats here. I don't think they'll get 10 seats, but a win for them will be some board representation and a CEO change. And I think that's likely, you know, Elliott, you know, Elliot and since 2022 has and people don't realize this has removed 12 CEOs quietly without a proxy

fight at 12 different companies since 2022. So it's it's they have experience with this. They sure do. We'll follow it. Appreciate it always. Ken, thank you. We'll talk to you soon. Ken Swire. And of course, Mike Santoli, who's coming back for the market zone. Up next, we're tracking the biggest movers as we head into the close. Julia Borsten is standing by once again with that. What do you see now, Julia? Scott, a steelmaker and a coffee company are both climbing after upgrades and a cryptocurrency is sliding. We'll tell you all about it coming up next. so i've got less than 15 till the closing bell. Back to Julia Borsten now for the stocks that she's watching.

Julia. Hey, Scott. Nucor edging higher after getting an upgrade to overweight from equal weight at Morgan Stanley. The bank's saying the company should benefit from rising steel prices. Morgan Stanley is cutting its price target for the stock to 176 from 187, but that still implies a more than 20% potential upside for Nucor. And UBS says Dutch Bros has a, quote, energizing growth potential and thinks shares could jump up nearly 30%. The company upgraded the drive-thru coffee chain company

to buy from Neutral. And has crypto run out of steam? That's what Wolf Research is saying. Bitcoin is off by 3% today. Wolf says the cryptocurrency's path of least resistance is to the downside. Scott? Interesting. Risk on day. NASDAQ ripping. Bitcoin down.

Julia, thank you. Appreciate that. Still ahead, Walmart is jumping today thanks to strong earnings. We'll drill down on that report. What it might signal about the consumer as well. Closing Bells coming right back. It's time now for the Closing Bell Market Zone. CNBC Senior Markets commentator Mike Santoli with us to break down the crucial moments of this trading day.

Plus, Melissa Repko on shares of Walmart hitting record highs and fueling retail gains today. And Philip Oh taking a look at the big moves in the auto space. Several of those stocks are on the move as well. Stocks on the move pretty much across the board. For sure. You know, 24 hours ago, I thought it would be pretty hard to undershoot expectations for retail sales because they had grown pretty skeptical.

But I also thought it was surprising how fast the market had come back to that level. Obviously, a lot more doubt had built up in the market about the feasibility of the soft landing than I had anticipated then. And we got confirmation on the inflation and the growth front today. And also, we got through these events that were sitting ahead of us. And now, it seems like you're kind of safe for a while in terms of a big revised view of the underlying economy because you're not going to get the major economic releases until a couple of weeks from now. Obviously, you have NVIDIA earnings out there. So if the comeback from the technical, concentrated,

mechanized selling of a week ago Monday bought you a little bit of positioning tailwind, now you have a little bit of a fundamental cushion. I still think we have an issue back at the highs. We have an issue with valuation. We have an issue with how much better things can get in the short term. But you've definitely now shown bull market resiliency on display right now. A week out from Jackson Hole, too. Yeah, exactly. That's going to be really interesting as we lead in to that. Melissa Repko, tell us about Walmart. What a day. Hi, Scott. Yes, shares of retailers including Target, Best Buy, and Macy's are up today after Walmart's quarterly results defied fears of the consumer slowdown. Walmart raised its forecast to reflect a strong first half of the year after beating on the top and bottom line.

CFO John David Rainey told me that consumers remain choiceful, discerning, and value-seeking, but he added we don't see any additional fraying of consumer health. Coach's parent Tapestry also beat expectations despite roughly flat year-over-year sales, with CFO Scott Rowe telling me consumers are willing to pay full price for innovative products. But not every retailer had a good day. Dillard's stock fell after the department store's sales disappointed. That raises questions of how other retailers will fare when they report in the coming weeks, Scott. All right, Melissa, thank you to Phil LeBeau. Now we're looking at Tesla squarely in front of me, up 6%.

Yeah, we'll talk about Tesla in just a little bit, Scott. But let's start first off with the legacy automakers. Look, they don't get a whole lot of love very often from the market on a single day. That's what they're getting today. And this is an extension of what we've seen over the last couple of days, up anywhere between 2% and 3% today. I want to show you what some of these stocks have done over the last six months. Go back to August 6th. That's when they hit their 2024 lows. And since then, they've all started to move a little bit higher. Yes, they're nowhere close to where they were at the start of the year,

but they have, to a certain extent, bounced back since those August 6th lows. And finally, with regard to Tesla, it, too, has bounced back since its August 6th low. And look at that. It's a nice move higher, now trading, what, above 213, Scott? Remember when it gets down to that? I love when it gets down to that 190, 180 level, and I hear from people and they go, what's going on with Tesla? Relax. It'll be back. And that it is today. Yeah, Phil, thanks. Up 15% week to date.

We still got one more day to go. We'll turn back to Mike Santoli. A little over a minute to go now. So those are really the two catalysts now over the next couple of weeks. It's Jackson Hole and then NVIDIA the week after that. For sure. And, you know, Jackson Hole, presumably they're going to reiterate. We think

we see room to become less restrictive. I don't think the market truly wants an aggressive 50 basis point cut or doesn't want the conditions under which that's an obvious move. And it's always been the bull case to me that slow, steady, deliberate Fed cutting cycle is the one you want. And so if that gets affirmed, more or less, probably so at Jackson Hole, because I don't think any numbers in the interim are going to really disturb that understanding of how they think about things. It's probably OK. You insulate yourself.

But this is what the path to soft landings are like. And I keep reiterating this. It's not everything looks great all the time. It is mixed messages. Sometimes things look great. Sometimes it looks like we're faltering. And somehow it sort of tacks in the other direction. So always on your toes.

NASDAQ up 5% right now, week to date. Amazing. Yeah. Although still work to do to get back to the high. No doubt about that. But what a good day for the market to cross the board here. Dow's going to go out above 40,500. I'll see you tomorrow.

End of overtime.