Closing Bell - Closing Bell: The Road to Records 7/13/23

Episode Date: July 13, 2023

Are stocks on the road to a record high – as a strategist at Goldman Sachs suggested earlier today? Adam Parker of Trivariate, Hightower’s Stephanie Link and Veritas Financial’s Greg Branch give their takes. Plus, Wells Fargo’s Mike Mayo breaks down what he is watching ahead of tomorrow’s bank earnings. And, professional golfer Annika Sörenstam joins Scott Wapner live in Lake Tahoe to talk all things sports, equal pay and more.

Welcome to Closing Bell. I'm Scott Wabner, live here in Lake Tahoe for the American Century Championship Celebrity Golf Event. About 90 or so actors, athletes, and entertainers are playing in this tournament, which is owned, operated, and produced by NBC Sports, including SNL's Colin Jost. He's going to join me a bit later with yet another Hollywood strike looming. In the meantime, this make or break hour begins with Rally Watch as stocks extend their gains on more positive inflation numbers. Your scorecard with 60 minutes to go and regulation looks like this. Dow's been up all day long. Really, though, it is the broader market where the action is. Another new 52-week high for the S&P 500 and the Nasdaq led by Communication

Services. Technology stocks continuing today. Their incredible run run there's a nasdaq up nearly one and a half percent brings us to our talk of the tape whether stocks are on the road to new record highs as someone at goldman sachs today said they are let's ask adam parker he's the founder of tri-area trivariate research a cnbc contributor as well ap it's good to have you here welcome how are you looking. I'm looking good out there. How am I? How beautiful is it here? I'm good. Thank you. I love being followed by Colin Jost, you know, just another person who's better looking and funnier than me. Thanks for that. Here we are. You're neutral U.S. equities. Why? We just did our second half outlook, and as you know, we were bullish on the first half.

I think now it's just harder for us to get there on the valuation. So what we wrote is we see the same probability of 10% upside and 10% downside. And to get to, say, 5,000 on the S&P, which is about 10% up where we are today, it looks to me like you have to pay over 20 times the 24 earnings at the end of this year. So it's hard for us to get there on the valuation front. I don't think things are falling apart. I mean, early signs of earnings season, I imagine you're going to get into that, look pretty good. And so I just think things slowly erode, don't implode, but I just can't get there on the multiple side.

But why is the probability the same, do you think, of 10 percent up or 10 percent down? In some respects, couldn't you make the argument, as I said earlier on halftime, that you've gone from a glass-half-empty market to what I think you can make a compelling case is a glass-half-full market at this point? If you think the Fed's done, if you think inflation's coming down, if you think earnings are holding up, the consumer's going to hold up and the economy's not going to fall off a cliff. Why are the probabilities equal? You know, I just think the challenge is figuring out what's going to happen

in the second half of 2024, like a year from now. So if we're being very simplistic, the stock market sold off hard at Q2 and Q3 last year because earnings decelerated three quarters later. Stock market ripped Q4, Q1, and into Q2 of this year because earnings accelerated from the lows. I think the current estimates are sort of flattish, meaning they don't accelerate or decelerate Q2, Q3, Q4 next year. So until I have more clarity on the rate of change of earnings next year, it's just a little harder for me to see a clear path for the market. I think what you said is right in terms of the probability that bear case is lower for earnings, the severity of the bear

case if one forms is lower. But I think what you're different now is you're playing like 15 times in October of last year, you're paying 20, 21 times now. When you hear Mary Daly, obviously of the San Francisco Fed on our network today, suggest that it's too early to say that we can declare victory on inflation and talk about the probability of two more hikes before they're all said and done. Do you say, you know, here's a Fed that appears that it was, you know, way too late in the beginning and it's going to be way too hard at the end? Is that a fair assessment? Do you think the Fed should just declare victory at this point and do nothing?

You know, I think there's thousands of people who look at everything that everyone on the Fed says and try to create a path. I think it's a hard way to make a living. What I can do is measure Fed fund futures or the perception about rates and compare them to price-to-earnings ratios for the market. The observation I have is that was a very strong relationship for a long time, right? Hawkishness was bad for multiples. And very recently, it's interesting, the perception about dovishness has caused multiple expansion, but any hawkish commentary has not caused multiple contraction. So I think people are just, no matter what they say on the Fed, just think we're very

close to the end of the cycle. Whether it's one more hike or not, they don't care. And as long as the earnings aren't collapsing, that's the current mindset. I think that'll change, Scott, over the second half of this year. But currently, no hawkish commentary is causing a multiple contraction. Well, I mean, you could also make the argument that with what we're seeing in the NASDAQ today, couldn't you, that NASDAQ right now highs the day. It's up 1.5%.

On this idea that yet another positive inflation print, the market obviously doesn't think that the Fed's going to have to go even two more times. Maybe at the end of this month, the Fed raises rates one more time. But this seems to be a clear bet that the market is making, that the Fed's not going to do what Mary Daly or, for that matter, almost anybody else in that room suggests they still might. I think if you flip your question on its head a little, I like the question and just say, you know, why aren't you more bearish? Why is it, you know, given things have ripped. And I think the answer to that is that as inflation comes down, some companies can start seeing a change from headwinds in their margins to tailwinds. Think about what's happened

to commodities. The dollar's weakened. Labor costs probably can't rise at the rate they did. So my explanation, simple explanation for this breadth issue that comes up every day, why is only a few stocks work, is because those mega cap growth stocks weren't hurt by rising inflation their gross margins were up in most cases whereas the rest of the companies that weren't mega cap growth had margin pressure so to the extent that some of these things um you know cpi ppi coming down wages peaking to extent that can start to moderate um you know head turn it to tailwinds, maybe that's the case for not being negative. It's just you'll see more companies show some margin progress into next year. I'll tell you one person who is not wavering at all in his bearishness. I think it's fair to

say that is Greg Branch. Let's bring in, let's expand our conversation. Stephanie Link is with us, of course, of Hightower. Greg Branch of Veritas Financial Group as well. So we spoke the other day, Greg, and you were pretty much unwilling to even change your tune in any, even incremental way. Now here we are, a CPI later, a PPI later, and a couple more days of a stock market that seems to want to go higher. Are you still unwilling to change your mind? I do not yet have the data to change my stance, Scott. And, you know, I'll address two things that were underpinning the bull argument. You know, the first underpinning of the bull argument, and we heard this a lot over the last two weeks, was that core was going to drop down to the mid twos.

We didn't see that. And the other part of the bull argument was that housing was going to drop down to the mid twos. We didn't see that. And the other part of the bull argument was that housing was going to roll. We didn't see that either. I wish we had. That would have me reconsider my stance. But when we have housing still up 40 basis points in this CPI, when we've lapped the 5.4 from June 2021 and the 9.1 from June 2022, and now we still have 3% top line and 4.8% core, I just didn't see a lot to celebrate. And I don't think that there's a lot in there that the Fed will celebrate, which is why you're starting to see them become more hawkish. So I think what will happen, and this relates back to what Adam was saying, is that I do think we'll see some earnings degradation, not only in the

back half, but for 2024. I think earnings for the S&P looks more like 220, 225. When you put a 17 times multiple on that, I just can't get above 4,000 based on the macro views that I have right now. Who said that the core was going to be in the mid twos by mid- of 2023. I can't think of a single person who made that prediction. I'm not going to name names, but Joe asked me about it yesterday morning, said that a noted bull said the core would be two and a half percent this print. And we're nowhere near that. And so unless look, unless you believe and it's not that any bear or bull thought that we wouldn't have any disinflation after 500 basis points of Fed action. It's just the magnitude of the disinflation, whether it's consistent. So, yes, it's a relief that core only grew by 20 basis points, but core is still growing.

And airline did a lot of work in that core number. And so when you still have the areas that the Fed is targeting growing pretty meaningfully, it's hard to say that they can stop here. And if it's hard to say that they can stop here, then the market's wrong. And the market's been wrong before. It was wrong several times last year. And so that has to be my position when my outlook on estimates is meaningfully below where consensus is. Well, at what point do you admit that you're wrong and the market's right? I'm wrong right now. I've been wrong. I've been wrong for six months.

You know hopefully one of the values I provide is that I'm fairly consistent in my views based on the data and the market has been detached from I think with where the macro fundamentals are. Unlike Adam I did not catch this. I did not. I did not participate. Stephanie Link. So you've gotten two views here thus far. What is yours? Is it time to be

glass half full at this moment because you think that these really positive reads that we've had on inflation this week are just the beginning of even more such things? Yeah, I mean, it's not just inflation, though, right? I mean, if you look at it, certainly CPI, PPI, look within the PPI today, the services number really strong. We had stronger initial claims. The four-week moving average fell 7,000. That's good. The Atlanta Fed wage tracker is running with wages up 5.6 percent. So real income is going higher as inflation is coming down.

That's very good for the consumer. And I think overall the general economy is holding up better. That will mean that you see better than expected earnings. I mean, look what we did today. Look at Delta and Pepsi. Delta had 19% total revenue growth with operating margin expansion. Everybody thinks that margins are going to fall. This company just expanded margins.

Pepsi had 13 percent organic growth. That's like unheard of at a consumer packaged goods company. So we're off to a good start. It's not we don't know what the whole picture is going to look like when everyone reports earnings. We're certainly going to have some disappointments, but I think overall earnings are going to hold up much better than expected. Adam, when you hear somebody like Greg, you know, talk as negatively about the market as he has, and it's not like what he says doesn't make any sense. I mean, inflation at the core is sticky, right? So he says it's going to remain that way, and earnings just don't make sense.

Their projections just don't make sense for how optimistic people have seemingly gotten in a reasonably short period of time. What's the pushback on that? Actually, you know, like when you're a little kid and you have the math answer, but then they tell you to show your work. I mean, our numbers for 2024, we're using $225 in earnings. So I feel like he and I might have got the same answer on earnings. Maybe we're just showing our work a little differently. I think that earnings next year

are going to be at risk. I don't see a V-shaped recovery. It's more that there's a drumbeat out there, a consensus view from some or several of the big firms that earnings could collapse and be $180 or $190. And relative to that sort of sentiment, earnings look like they're much better. I think Steph's totally right that you're seeing good numbers so far, and it's hard to get your earnings that low. So I think one of the reasons the market's up, that's a legitimate real reason, is the probability of the bear case and the severity of the bear case, if one forms, are just much different now, mid-July, than they were on January 1st. And so in that kind of classic statistical expectation, I'm now assigning a lower probability of the bear case.

And there's no way if you started the year saying, oh, I think the bear case is 3,000 on the S&P, that you could say that today. I think your bear case is higher. So that's a real reason the market's up. The second is, if you look at every economic outlook and equity strategy outlook from a big firm last year for this year, that's a real reason the market's up the second is if you look at every economic outlook and equity strategy seller from a big firm last year for this year the words ai were mentioned zero times and we can we can debate whether the stocks are fairly valued and what's kind of

the where the phrase is being used correctly or incorrectly but we can't debate that there's some actual impact on companies earnings i mean nvidia had the largest upward sales revision of any mega company ever so there's no reason that things are different now and i could say that a legitimate to be more optimistic than on january first the part that's built the i think the park hard to justify it's just a multiple now

multiple turns higher than it was uh... you know nine months ago clearly one of the toughest questions is is going to be where to be over the remainder of the year, Steph, whether it's ride the mega caps, which you don't have as much exposure there as others do, or you lean more heavily into cyclical names and more industrial stocks. And some of the ones that are more tied to an economy that you say looks more and more likely that it could have a soft landing. It brings me to a new position you have in 3M, which seem to have turned a bunch of pages over the last several days in how people

are viewing this company now and the prospects going forward. And it sounds like you're one of them. Yeah, well, stock has certainly lagged and it's lagged for years, Scott. It's down 15% year to date. It trades at 12 times earnings. And I do think that the progress on the water contamination is a very good start. There's still a lot they have to get through with regards to settlements and the ear plugs issue as well. But I think you're at least at the right point right now where expectations are really low and they're starting to make progress there.

That was a very big overhang for the shares. In addition, in the past, when settlements have occurred at other companies like Bayer and Monsanto, those stocks tend to stabilize and actually move higher. They also have a restructuring program. You know I like restructuring stories and cost cutting stories. And they're going to spin out their health care business at the end of this year or early part of next year. You know, I like spins as well. So I think very low expectations. Oh, by the way, there are no buys on the sell side for this stock. There are 20 holds and sells.

So I like that risk reward a lot, too. Yeah. I mean, some of the commentary, you know, earlier in the in the week was finally some some good news. You added the target as well, which I find interesting, too. But lastly, Greg, let me give you the last word, if I might. Sure. What would you buy within the equity market right now, even as negative as you are for the overall direction of where you think we could go there's got to be something out there that looks reasonably attractive to you that has a valuation that's more attractive to you than some of the areas that have gotten as as you would probably suggest ahead of themselves yeah look and i think both stephanie and adam have have hit it on the head to some extent uh if if i believe that earnings will contract throughout the back half and throughout 2024, then what

I'm looking for are companies that do have some margin expansion potential and that will grow earnings. One of the few safe spots where earnings will grow. To some extent, that remains large cap tech. Adam talked about AI. NVIDIA is different than everyone else talking up AI or AI washing in that they're at the infrastructure level and they are seeing real meaningful change in their business now because of AI versus just talking about it. and earnings growth next year. And I think that we will see breadth re-narrow around those names as we start to see the macro environment deteriorate the way I think. There are other sectors as well, like healthcare.

We saw in that CPI report, that was one of the areas where inflation remained because they get to pass costs on. So I think any company that can pass on costs, maintain margin and can grow earnings, regardless of multiple, are going to see a tailwind at the end of the year. All right. Good to have it, everybody.

And I should also note we have the S&P and the NASDAQ at session highs as we speak right now. New 52-week highs, of course, for them as well. Greg, thank you. Steph, Adam as well. I'll see you back in New York. Great to be here. One day soon. I know that.

All right. Let's get to our Twitter question of the day. We want to know, will stocks hit a new record high in 2023? You can head to at CNBC closing bell on Twitter. It's simple. It's yes or no. The results are later on in the hour. In the meantime, let's get a check on some top stocks to watch as we head into the close.

Christina Partsenevelos is here with that. Christina. Well, thank you. Let's talk about Shopify joining the AI rally right now. The e-commerce company announcing a new AI chatbot assistant called Sidekick to help store owners with questions like sales trend. That's why shares are up over 6%. Shopify joins the likes now of Zoom, Dropbox, Alibaba, who have all launched their own AI assistants. Shares of auto insurance firm Progressive are down double digits, about 12.5%, even though sales were up because insurance is more expensive these days.

But fixing cars is also getting more expensive, pressuring profits. Top-line growth also slowed for this company. And Progressive is setting a negative precedence for all states. You can see on your screen Travelers and Kemper. All of those names are down at least 1.5%. Scott? All right, Christina, thank you. We'll see you in just a bit.

We're just getting started right here from Lake Tahoe. Up next, your big bank setup, J.P. Morgan, Citi, and Wells all reporting their results tomorrow. Now we hear from top analyst Mike Mayo today. He's got the key factors he says could impact those earnings. We are live from beautiful Lake Tahoe today, and you're watching Closing Bell on CNBC. We do have some late-breaking news we want to share with you this afternoon. St. Louis Fed President James Bullard is stepping down effective next month.

Bullard leaving to take on a new position at Purdue University that starts on August the 15th. He's been a member of the St. Louis Fed for the last 33 years, a national executive search firm being hired to assist in finding Mr. Bullard's replacement, that according to the St. Louis Fed. Big banks are in the green today ahead of the unofficial start to earnings season. J.P. Morgan, Citi and Wells all reporting their numbers tomorrow morning. Bank of America, Morgan Stanley reporting next week, along with a slew of regionals. Let's bring in top bank analyst Mike Mayo of Wells Fargo ahead of all that. And it doesn't seem like there's much expectation that we're going to hear a lot of greatness out of these numbers.

Is there, Mike? You know, second quarter bank earnings, it's a battle. I term it the three R's, rates, recession, and regulation. The battle with higher for longer interest rates is going against banks, and that's why estimates have been going lower for almost all the large cap banks, except for J.P. Morgan, by the way, this year. The battle with the recession, it's still potentially to come. I think that'll be a positive story, though.

I don't think you'll see too many signs of a recession from the banks. And the third battle was regulation and the new rules that are about to be put in place. And you just had the stress test. And only a few of the largest banks are buying back stock. Many of the regionals will not be doing it. So, you know, rates, recession, regulation will be top of mind. And that leads to a fourth R, which is realism. So I expect most banks to guide for lower net interest income or interest rate driven banking revenues just due to higher funding costs, which are taking a toll.

Now, having said that, these stocks have derated by 25 percent over the last three years. And, Scott, you're talking about this high stock market. The P.E. on the stock market was 23 years ago. It's 20 times today. And the bank P.E. has gone from 12 to 8. That's getting to kind of ridiculous levels, especially if we're not having a hard landing. So our top pick has been J.P. Morgan. Goliath is winning. The larger the bank, the more sticky the deposits, the more they're equipped for a recession, and the less regulatory changes to come. And some other of the big Goliath or G-SIB names that have had regulation for a decade

and won't have too much to come. The sleeper pick for the quarter here is State Street, Scott. They're what's called a trust bank or a banker's bank. And, you know, the average stock price globally has gone up 8% in the second quarter. So that should help the likes of State Street, which also by the way, is buying back over 15% of its stock this year.

State Street had a terrible first quarter. The stock was down 7% after that day. So we just think that State Street has the chance to at least be better than the first quarter. And even if it's not good, they'll be in the market, I think, buying back their stock. And then their Citigroup, which is proving that it's not your parent Citibank. This is a company that is outperforming the regional banks. It's outperforming many of the European banks. It's outperforming certainly Credit Suisse. It won't

be perfect. I don't think their guidance was very good for expenses or capital markets. But what will look good is that they're showing resiliency despite some of these headwinds that have hit the industry. And I do think we're in the seventh inning of these downward earnings revisions. And I know a lot of investors say once the negative revisions are done, and again, I think you're going to get more over the next week, week and a half, then more people will be ready to step in. And as you can see, people are already buying these banks before the earnings. All right. Well, you gave me one answer with your entire view off one question.

So we're going to leave it there. Mike, thank you. That's Mike Mayo. We'll see what happens up next. Making the case for caution. American Century Investment, CIO of Multi Asset Strategies, maps out the biggest risks he is seeing in the market. That's right after the break. Closing bell right back. Welcome back to Closing Bell Live from the American Century Celebrity Golf Championship Tournament here at Lake Tahoe. Stocks building on gains after back-to-back better-than-expected inflation reports. Our next guest, though, staying cautious on risk assets. Joining me here in Lake Tahoe is Rich Weiss. He's American Century Investments

CIO of Multi-Asset Strategies. Good to see you. Good to see you, Scott. So if you're CIO of Multi-Asset Strategies, do you see many assets that look better to you today other than stocks? How do you see the landscape? Yeah, we see a lot of assets, including fixed income, at least as good as stocks, certainly on a risk-adjusted basis. Still, because the argument over the first part of the year, and certainly most if not all of last year, was bonds are better than stocks, cash is better than stocks, look where rates are, you're going to get a better return in cash equivalents and things like that. That hasn't changed? Well, let's go back a few steps here.

If you look back to the peak back in August last year for stocks, peak to today, stocks are up about 5%, 6% right about what cash has done over that time period. And that's not even getting into the details about the, what is it, the magnificent seven wonders of the world driving the stock market, right? So without those stocks, unless you were 25% weighted in those stocks, you didn't get that return anyway. I would still say, looking back over the last 12 months or so, cash has outperformed stocks, certainly on a risk-adjusted basis. And given what stocks have done today, P.E. ratios up at 18, 19, very optimistic. It's not that we're

ignoring what stocks have done. It's just I'm heavily discounting it. What stocks have done in the past bears no weight for us on what they're likely to do in the future. The economic stats not looking good. So you don't think the future looks brighter for the equity market is because the environment and the economy doesn't look right? I don't think we're out of the woods yet. We have inflation granted. Good news recently. Hope it's a solid trend, but still a little too high. Manufacturing statistics as bad as they were back in 08. All right. Labor market last shoe to drop. Haven't seen it yet. I don't think the stock market being up year to date, 15, 20 percent denies the economic cycle. We have one more spate of bad news to come after that. Maybe we'll we'll

get a little more excited. Do you think the strength of the labor market and the apparent strength of the consumer still defies some of the negativity that you're seeing in other parts of the economy? I mean, manufacturing has been weak and in recession for a while now. Yes, as was housing. And hopefully this is turning. Yes, it's arguably starting to turn. Right. But there are leads and lags in the economy, as we all know. It takes weeks, if not

months, for monetary policy, fiscal policy to feed through or factor through the economy. I don't think we've seen the worst of it yet. We're just holding out in cash for the most part. We'll wait for one more dip. So is it only a dip that changes your perspective and when you can say, OK, for the first time in at least your mind in a long time there now equities look like a better bet than, say, that 5 percent that you can still get in cash. We'll give it one more shot here. We're still holding out in cash at the margin. We're not out of stocks, but we're just leaning in cash, waiting for one more pullback and then we'll find stocks more attractive. But right now, prudent caution, we think, is the word of the day. Just give me your last view on, as you said, we call them the Magnificent Seven. We have an index that tracks those stocks. It's been

remarkable what the gains have been. Do you see that persisting? And does that sort of top heavy nature of the market make you even more uncomfortable about the market? What I'd say is we are not overweighting those tech stocks, at least the mega caps. I know they've done very well. We'd prefer to be positioned in the near term more defensively. And by the way, I looked it up, Magnificent Seven, the 1960s movie, Yul Brynner, et cetera, all of the seven now deceased. I don't know what that tells you. Well, they had long and prosperous careers and lives. Rich, it's good to see you. Thank you for being here. Thank you, Scott. Rich Weiss, American Century Investments. Up next, we're tracking the biggest movers as we head into the close. We're going to bring you the names to

watch just after the break. And be sure to catch NBC's coverage of the American Century Championship. It's Friday through Sunday on the networks of NBC, the Golf Channel, Peacock as well. Plus, coming up on July 25th, another big announcement. Join me in Los Angeles as CNBC and Boardroom team up to host Game Plan. It's a high-powered event bringing together the most influential leaders across the sports landscape. For details, go to cnbcevents.com slash gameplan. We're right back. Do have breaking news out of Hollywood this afternoon, the actors union voting to go on strike, basically halting production across Hollywood.

Members of SAG-AFTRA will join the more than 11000 already striking film and television writers. Media stocks holding steady at this very moment on the news as we look across the landscape at names like Disney and Paramount, Warner Brothers and Netflix. To remind you, we're live today from the American Century Championship Celebrity Golf Tournament here in beautiful Lake Tahoe. Joining me now is one of the top athletes competing in this week's event. Winner of an astonishing 94 international tournaments, widely considered one of the best of all time, Swedish golfer Annika Sorenstam. Welcome. It's nice to see you again. Likewise. Thank you. Great to be here.

You just finished your last U.S. Women's Open ever at Pebble. Well, that was last week. That's amazing. You've had an amazing career. Thank you. Thank you very much. Yeah, I mean, it started, my first win was a U.S. Open in 1995. And then, you know, I finished, you know, full time in 2008. And then I nibbled in two of them and Pebble Beach was, I would say, the cream on the top. What's been the secret to your longevity success?

Well, I love the game. I'm super competitive and, you know, very disciplined, very focused. But overall, just wanting to push myself and see how good I can get. Yeah, it's interesting. That's a good segue in terms of you've tried to push myself and see how good I can get. Yeah it's interesting that's a good segue in terms of you've tried to push your yourself as far as you could go now you're trying to push others to see how far they can go in a sense with your foundation which you started in 2007. Can you tell us a little bit about the efforts that you're doing there? Yeah it's called the Annika Foundation and we've been trying to inspire young girls around the world for the last 15 years. We have seven global tournaments. We have over 60 countries represented in these tournaments, and we've raised more than $8 million to give back

to the game of golf. And many of the players you see on top of the LPGA now are called Anika alumnes, you know, whether it's the Korda sisters or, you know, you could just mention a few of them, Maria Fassi. And, you know, but it's fun to see the next generation blossom and be able to provide these playing opportunities. And because I wouldn't be here if it wasn't for golf. Yeah. You've given eight million dollars back to junior girls golf over the last 15 years. Congratulations on that. And girls are still fighting for equal pay. We see it in all sports. And the Women's World Cup is just around the corner.

They've achieved equal pay. The Pebble Beach purse for women, two million. Men's purses are about four million, maybe even more for some of the most marquee of events. What kind of steps do you have to do? Yeah, we're going to keep pushing. I mean, it's nice to see the purse of the Pebble Beach, the USJ, stepped it up two million dollars as a big step. But I also think playing the venue at Pebble Beach was a big success, a big winner in this whole thing. And it's just going to grow from here. We've got to keep pushing, keep being out there and, you know, fans out there go watch women's sports. I mean, they work hard and they're committed, they're disciplined, and it's fun to watch and they're good.

You were, I don't know, it's not even an argument, the most popular female golfer for so many years because your dominance was extraordinary. How, when you were playing, if at all, did you think about what life after golf was going to mean from an entrepreneurial or business standpoint? Well, in the beginning, I was so focused on golf. I mean, that's all I cared about, sleep, eat, and practice golf. It showed. Yeah. But then you realize there are other things in life. I got married to my husband, Mike, and we have two kids, Ava and Will. And then, you know, I do have an entrepreneurial spirit. I like to build things. I mean, Anika Foundation is one of them. And now I'm spending a lot of time on Fizzy Bees, which is a drink that we created literally 30 minutes from here during COVID. It's a vodka-based, full of sparkling classic cocktails. We're women-owned. We get back

to the bees. So I continue my hard work, my discipline, and we're selling here in Nevada. And we're expanding and we're talking to distributors. The goal is obviously to be very successful there too. You launched it during COVID? Yes. What are the challenges that came about with that? Well, I mean, we had a lot of time, so that was not a challenge. And we were drinking and eating, having fun. And my husband has a lot of allergies, so we have organic honey at home. And I said, why don't we just make some drinks and make them healthy with good ingredients? And then, you know, there was a lot of products on the market, but I really didn't like any of them. So I looked at him and I said, hey, why don't we make our own? He said, sweetie, you're such a busy bee. We don't

need more projects. Therefore, the name Fizzy Be a busy bee. We don't need more projects. Therefore, the name Fizzy Bees. Yeah, so you sell in four states. What's the outlook in what is, without question, a very competitive marketplace? I have realized that, yes. The only thing I can compare it to is golf, and it's very competitive. And, you know, I like to say I'm a winner. I work hard.

I'm dedicated. You know, we're trying our best. It feels like we are doing well. You know, I don't really know what to compare with, you know, but my goal is to shoot 59 in that business. Yeah, and I'm sure you'll get there knowing your past. Thanks so much for spending time with us, Anika Sorenstam. And best of luck out here. Thank you. Appreciate you joining us. Last chance, by the way, to weigh in on our Twitter poll today. We asked, will stocks hit a new record high in 2023? You can head to at CNBC Closing Bell on Twitter. The results coming after this break.

Closing Bell back from Tahoe right after this. 15 minutes before the closing bell, Christina Partsenevalos is back with us with the key stock she is watching. Christina. Well, we got to talk about Coinbase because this stock is skyrocketing right now after a partial win for crypto this afternoon. So what happened? A federal judge found that Ripple Labs crypto token wasn't an actual security when sold

to members of the general public, although not institutional investors, hence the partial win part of it. But Coinbase is fighting the SEC about its unregistered token sales, and this ruling could bode well for its own regulatory battles. That's where the stock is up over 24%. Got some news, some bad news. Some people might be having internet trouble. Viasat said an unexpected event could materially impact their satellites, which provide broadband

connectivity. No details on the actual issue, but they said they're working on it, and that's why that stock is down almost 29% right now. Scott. All right. Thank you, Christina Partsenevelos. Let's get the results now of our Twitter question. We asked, will stocks hit a new record high in 2023? The majority of you said yes, they will. Near 65%. Wow. All right. Up next, Alphabet's AI push. That stock is soaring in today's session. Got the details behind the move and what it might mean for the other big tech players. We'll do that next. That and much more. You know where we're taking you next.

In the Market Zone. We are now in the closing bell Market Zone. CNBC senior markets commentator Mike Santoli here to break down the crucial moments of the trading day. Plus, what a potential ABC sale could mean for Disney's future. And Steve Kovac on the AI driven search today in Alphabet shares. Mike Santoli, though, what is your final thought today as we count down to the close and we have stocks having a pretty good day today? Yeah, kind of in levitation mode in the last couple of hours, Scott. Market is definitely hunting for remaining pockets of caution. People have been disbelieving in the upside case. That being said, yeah, short term, you're getting stretched. We might be hitting the near term overshoot zone just in terms of how far

the index has come in a short period of time. We've gotten the positioning swung around toward the bullish end. I came into the month you know saying looks like more of a two way market. It feels like the embrace of the soft landing scenario is is getting complete. And now I think even more so. As the fees

up by two percent less than two percent. This month so we'll see. Where it goes from here it is only though. Six and a half percent shy of that. Record high from January of last year. So, you know, I know you've been kicking around. Is that possible? I mean, I'm never going to sit here from any index level in any market environment and said the market can't go up six and a half

percent in five months. And at some point we get too close not to test it. Probably not on this run, though. It would be pretty extraordinary, though, like you're still getting this hawkish Fed talk, you know, daily on our network today. Still can't declare victory. Maybe have two more this year. The market's just not paying attention to that anymore. Well, the market knows that's exactly what they have to absolutely say. And because of what's already in the books in terms of how much the Fed has tightened, how slow they're going right now, all the data that's come up behind it. We know that, you know, that's come up behind it we know that you

know that's the that's the rhetoric and that's the party line and it may or may not actually play through and if it does so what 50 basis points over three months you know we can shrug that off if the fact that the fed is going to go too far they've probably already gone too far so it's not the next 50 basis points that matters that said it's pretty much the same economy we had six months ago in terms of gdp pace pretty much the same economy we had six months ago in terms of GDP pace, pretty much the same expected earnings level. You know, everything has changed. Nothing really has changed as much as perception of the downside risks and where we are in terms of beating inflation. I want to get your thoughts, too, on Disney. The shares are just slightly higher today after CEO Bob Iger sat down with our very own David Faber in a wide-ranging

conversation this morning. One topic, the potential sale of what Mr. Iger called non-core TV assets, including ABC. Listen. They may not be core to Disney, yeah. Now, there's clearly creativity and content that they create that is core to Disney, but the distribution model, the business model that forms the underpinning of that business and that has delivered great profits over the years is definitely broken. And we have to call it like it is, and that's part of the transformative work we're doing.

Mike, what's your reaction? Seems like the writing is on the wall when it comes to this. Yeah, I mean, certainly an acknowledgement of the structural decline and overhang on the wall when it comes to this. Yeah, I mean, certainly an acknowledgement of the structural decline and overhang on the stock that people have been trying to sort out with Disney for a while. I had been thinking and saying for some time that, look, Disney has reduced the cost embedded in things like the broadcast network for 20 years now. I mean, it's been an ongoing process. They've tried to do it at ESPN. It probably feels as if there's just kind of no next act for the distribution side. Might as well take the medicine, separate it out, become a pure content creation company

and obviously direct to consumer along with that. It's sort of painful. It's a lot of, you know, suboptimal options that they're dealing with at this point. But I do think if they say we are a entertainment direct to consumer and sports media company, it at least cleans up the story. And we'll see. Look, it's earnings estimates have been coming down. The valuation is neither here nor there. So it's tough to see it as an immediate catalyst. But it's probably a grudging management measure that needs to be considered. Would you take on this, the CEO succession issue, that now we learn he's going to stay for a couple more years, and I'm sure people are like, maybe it'll be a couple more after that.

They just can't seem to find the person they want, they being the board, I suppose, to take over for Bob Iger. Right, and I think even more so in the current situation that Disney and the industry find themselves in right now. You have to sort out the Hulu situation. You have to figure out exactly what the core of the company is. Obviously, theme parks are always going to be part of the core. I should have mentioned that as well. But it just seems like that much tougher a time to be spending the next six or eight months basically doing a CEO search and succession search. So I don't think that anyone is sorry to see it happen in this way, but it does

leave the very legitimate question of exactly how they're going to execute the succession process. When is it going to be the right time? Yeah, good stuff, Mike. Thank you. Steve Kovac, Alphabet, what a day, near 5% now. Maybe people wrote this company and its AI aspirations off too soon, thinking that Microsoft was going to grab the whole pie. Yeah, this one's interesting, Scott. So they're up about 4.5%, 4.75% today on what it is calling the biggest expansion of its barred AI chatbot since it launched back in February. This is the product that Google rolled out after Microsoft and OpenAI stole the early headlines with ChatGPT.

Now, today's news, BARD is now available in more regions like Europe and Brazil. It's available in 40 languages, and they added the option to change the style of response, think simple, short, or long. And they added the ability to upload images as a prompt for the chatbot, so you can ask Bard to give you more information about the picture or suggest a caption. Now, it's worth noting most of those features I just listed off are catching up to Bard's main rival, ChatGPT, which has major backing from Microsoft, of course. With today's moves, though, Alphabet and Microsoft are both up 40% year-to-date, obviously outperforming the S&P, Scott.

Well, we'll see what the next move from Microsoft is, because I feel like you're going to get this continuous anything you can do, I can do better as it relates to AI, Steve. But it's not just that. It's not just doing this tit for tat feature thing, Scott. It's also who has the monetization plan. And right now it's Microsoft. Microsoft, in addition to rolling out new features for its chatbots, has plans to sell it to enterprises and so forth. We have not seen that yet from Google. That doesn't mean Google isn't going to unveil theirs sooner than later. It just means they're still behind here.

Yeah. Thank you for that, Steve Kovach. Mike Santoli, with just about two minutes to go in the session. It is. I'm glad we ended there with Alphabet because it's all about tech and comm services. Again, NASDAQ's been the strong suit for much of the day. Doesn't seem like that story wants to end anytime soon. No. I mean, certainly if you're looking at where most of the dollars worth of upside are coming from, it is that same story.

I don't think that necessarily has to change. We talk about a broadening out of the market. It doesn't mean like discrete dollars running from the big popular momentum names back into everything else. As long as everything else doesn't go the other direction, it seems OK for now. Again, though, if the S&P is getting a little bit stretched, the Nasdaq is that much more so. So there's no doubt that we have the bulls in control, and people are very slow at this point to sell into it because they're saying we have an uptrend now.

The S&P is up almost 30% from the intraday low nine months ago. So it feels as if people are playing with more house money. The psychology has changed. As I said, it doesn't really mean that the earnings picture and the economic backdrop have changed very much. I'm sure at some point the market will go in search of something to be afraid of or something will come along. But for right now, it seems as if the sort of self-fulfilling stories are there. I also think it's important you have names like Alphabet that, yes, they're looking like they're on this great

run, but they were more expensive, you know, a year and a half ago. So you can cover yourself with that idea that you're not paying absolute top dollar maximum valuation for these stories that everyone is now all of a sudden energized about. Talk about things that are coming along. The banks are coming along, right? Front and center tomorrow morning. I don't know if that's the thing that brings people to some level of a reality check on where things are.

What do you think? Yeah, it's going to be worth asking the question. If the market's verdict on where we are in the economy, soft landing, you know, Fed is almost done. If that's true, the banks shouldn't be this cheap. So one or the other probably has to move in the other direction. We'll see which way that ends. All right. Yes, we will. Mike, thank you.

That's going to do it for us. Dow is going to go out with a game. NASDAQ's the big winner. One and two-thirds percent. Does it for us.