Closing Bell - Closing Bell: The Tech Takeoff 7/9/25

Episode Date: July 9, 2025

Can tech continue to lead stocks higher? We discuss with Wharton Professor Jeremy Siegel, JPMorgan’s Gabriela Santos and Obermeyer Wood’s Ali Flynn Philips. Plus, top technician Jeff deGraaf charts out Nvidia’s $4T record run. And, Elizabeth Burton tells us where she is finding opportunity in the second half. 

Welcome to Closing Bell. I'm Scott Wobbler live from Post9 right here at the New York Stock Exchange. This make or break out begins with another market milestone and the trade that just keeps on giving. NVIDIA hitting four trillion dollars in market cap as you surely know by now. It is the first company to ever do that. It's leading the NASDAQ to an all-time high and we are picking up some steam as we begin the final stretch. Let's show you the majors with 60 to go in regulation. It's been a mixed day from a sector standpoint But even that is starting to turn more green than not all but two are now green on the day Services leading the way today big winners in some terms of single stocks toast and Vistra and app loving There you go. Some nice gains

It does take us to our talk of the tape, Tech's Amazing Run, and whether that sector can continue to lead stocks even higher than they are now. Let's ask Jeremy Siegel. He is the Wharton School Professor of Finance and the Wisdom Tree Chief Economist Professor. I always enjoy speaking to you. It's a great time to do it. Welcome back. What about this market?

It just continues to defy a lot of odds, doesn't it? Absolutely. It really tells you don't try to time the market because it will fool you and in the long run it has a lot of positive forces. Listen, Nvidia is an absolutely incredible company and deserves a four trillion dollar valuation. What I'd like to see Scott is not just the producers of AI benefits so much. I want to see the users of AI, the firms actually implement the AI advances to cut their costs. And I think they're going to have to do it very soon facing some of these tariff price increases. Well, that's likely to happen, isn't it? I mean, you're also alluding to a tremendous

productivity boom, are you not? Yeah. Well, I think it's a productivity boom that is born out of necessity. If they're going to maintain their margins and maintain their prices in face of some of these increases and some of these threatened increases, they're going to have to really implement AI. So this could be that kick in the pants to boost productivity that we all need.

I mean, COVID, as I said before, boosted a lot of productivity using factors, just like what we're using right now, Zoom, which we didn't use beforehand. And AI might be exactly what is needed to counteract the any price increases from the tariffs. I think not that the big tax bill is over as a story. I think tariffs are going to be the story of the third quarter. In a negative sense, what do you think? Well, again, how well are the firms going to navigate? It's going to be, you know, starting next week, I want to hear how firms say their guidance

is going to be for third quarter. And I think second quarter earnings are going to be fine. I always thought that any effect from tariffs really would not be felt until the second half of this year because of all the pre-buying that took place in that first quarter. So we're now, right in July, this is the time that if tariffs are going to have a negative effect, we will hear from it, from the firms,

we will hear it from the consumer. And I think that that's really gonna probably be a big part of our focus in July. If we don't hear much bad effects, boy, this bull market certainly, I think, has further to run. If we begin to hear while there's some hurdles that are harder to overcome, then we're going to see choppiness, I think, this quarter. You feel like, you know, for the most part, the market has become a bit desensitized to the tariffs, Professor, because it just doesn't believe that the president's bark is ultimately

going to be as severe, you know, in the end. That the bite's not going to be as severe as the bark. Yeah well you know there was the famous taco trade it still does though interestingly enough move when he does speak of you know higher tariffs I mean certainly they you know we all have to discount it because he often backs down. Now, it's my belief that all countries that come to the table in some way, even if they haven't gotten a finalized deal, will probably be given a delay. And I think that is exactly what the market assumes. And if that happens, that certainly is a positive.

But even at the current levels, remember, you know, 10% across the board, selectively more. I mean, you know, he threatened copper. I don't know if that's going to come through, but certainly, you know, aluminum and steel, we already see those higher prices. So we're dealing with 10% base, 30% from China, maybe 40% from China. There's even at the best case scenario, there are hurdles. They are overcomeable, but it requires work by firms. And I want to hear how they're going to do it. I'm trying to think also, you know, as you were talking about the boom in AI and productivity

and the like, I can foresee a scenario in which that doesn't sound so great for the American worker. It sounds really good for the American investor. Because companies are going to have the ability to get leaner, they're going to be able to preserve their margins, they're going to be more efficient, people are going to be more productive,

but the boom in AI itself is going to have a negative impact on the American workforce, like has been already discussed since this whole thing burst on the scene a couple of years ago. Right. And the question is, is it more evolutionary or revolutionary? I mean, you know, there were a lot of people, as we all know, when the internet, you know,

came on the scene in 2000, said there wouldn't be a single retail store by 2025, well, here we are. Now the internet, it's one third of sales are close to it, but we still have a lot of others and we still have a lot of other demands. And you take a look at the Joltz report, there's still a lot of job openings for those people. I think a lot of those people are going to be told, you increase your productivity by AI and you've got a job. If you can't, well, then we'll replace you with someone that can. And I think that that is going to be the force for technology for some time to come. Professor, stay with me.

Let's broaden the conversation and welcome in a couple more guests. J.P. Morgan's Gabriella Santos and Obermeyer Woods, Ali Flynn Phillips. It's great to have everybody with us. Gabrielle, I'll ask you first. What do you think of this market here at record highs? It seemed to be in agreement with a lot of what the professor had to say as we were having the conversation. That's right.

I think there are two force, interrelated forces going on here that got us back to all-time be in agreement with a lot of what the professor had to say as we were having the conversation. That's right. I think there are two interrelated forces going on here that got us back to all-time highs. The first is better understanding the policy landscape. I feel like we understood the equilibrium here around trade policy, immigration, fiscal, and importantly that the worst case has been avoided and recession risk has come down. The second interrelated aspect is I think, you know, the tech sector proxied by the Mag-7

had quite the indigestion that started really back in January with DeepSeek Monday. And so reemergence of these long-term themes like AI and automation as the main market driver. That said, I think the theme has come back, but it isn't unchanged in terms of the way that it's manifesting itself in markets. It is not as concentrated as it used to be.

It still is somewhat though, Ali, concentrated at the top. It may not be solely concentrated in tech but it is concentrated in very large cap stocks whether they're from tech or comm services or industrials or financials. That's true I mean one thing even we're all talking about this bullish sentiment right now we've just mentioned it but, but we have to remember three months ago, people were talking about, you know, bear markets concerns. And so just the fact that investors have had this sort of gut wrenching past 90 days has been pretty incredible. And the fact that while it's uncomfortable, staying invested truly has been really proven. So now we're in this talking this bullish sentiment,

but there's some things that we're looking at that we're a little bit concerned about. As the professor mentioned, sort of this looming global tariff deadline could introduce a lot of volatility, particularly with the unresolved US and EU tensions. Further Middle East conflict, that's always a risk of escalation, which could disrupt oil supply. And then also in terms of really what's going to happen to growth, I mean, we have much more clarity on the tax front right now, but really with the tariffs, does that slow growth and how does that really come

through inflation? What we're really looking at, the positive, and we can go into a little bit more, is in terms of this AI buildup, really is still in its early stages, with companies like Broadcom projecting, you know, 60% revenue growth through 2026. But outside technology, the other things

that we should talk about a little bit is investors during those 90 days really overly punish certain companies, whether it was in healthcare due to regulatory issues, whether it was in retail due to in terms of tariff policies. Small caps have always still struggled. And the key thing, what we're also seeing is really attractive opportunities on the international front, knowing that on a relative basis, you're having much better valuations there. Gabriella, you have had a nice international trade, though. I feel like the commentary's changed.

Now that you've gotten the tax bill done and you're going to focus more on growth and deregulation and then coming rate cuts, that now the bulk of the gains are likely to come here, not there. I would somewhat disagree. I think now that we're back to all time highs, 22 times in the PE, I think from here,

the further gains in US equities are much more incremental and beneath the surface. I think where you can still have room for plenty of outsized gains is where you have underappreciated positive stories, a lot of which does end up leading us back to international. So the first half of the year international performed by a thousand two hundred basis points, half of that was the dollar weakening 10%, the best

start since 2007, but that was after 15 years of an over appreciation of the US premium and discount of everything overseas. I think a good parallel to keep in mind is the period of 2002 to 2007, where you had a long lower dollar cycle by 40 percent, and you had a long period of international outperformance that went on for about those six years and 70 percent. So a lot more to go. And we like some international laggards this year,

places like Japan and India, where there's still good stories, but where the multiples haven't expanded as much as Europe. Professor, why don't you grade that trade? You are the professor after all. I mean, US versus international. And the perspective that you just heard from the ladies on the show,

that maybe international is gonna give you a better value at this this particular time even with the gains that it's already had. Well as I've always said Scott in the short run investors should chase earnings and if they guess them right they're going to do really well. In the long run if you go with valuation that's proved to be the winner. And you might have to be extremely patient, just as Gabrielle mentioned. It has been the longest time that we've had in 100 years where growth has outperformed value or even the US outside of international wars and etc. has really outperformed for so long Europe. And Europe is still selling 15

times earnings outside the US. Basically you're at a 15, 16 times earnings world, in many cases 12, 13. You don't need much growth with those valuations to generate returns that is good enough as the S&P 500 once you reach 20 P.E. So I say in the long run, I absolutely agree. And we should also realize, even though we had a sigh of relief with that Friday employment report wasn't as bad as we feared, once you strip out that local government growth, it was below expectations. The St. Louis GDP now, second quarter, they said it's 2.5%. Well, I remember first quarter was minus a half. That means the average of the two, we had 1% growth in the first half of this year,

which is really not very fast. So you know, I mean, we were facing the tariffs, we're facing slower growth. You know, I've been a proponent for the Fed to let up. And of course, that's an ongoing war, which I think is gonna heat up between Trump and Powell. Heat up more than it's already had. It's so funny you went there

because that's where I was gonna go. And I was gonna turn to Gabriella who says that we as investors in the stock market shouldn't want and doesn't even need rate cuts. That's your principal argument, right? Professor, you're gonna debate this on the other side, but let's hear Gabby's view. Yeah, I think so.

I mean, we were so worried about what the stock market would do as rates did the opposite. They went up and we had a very the stock market would do as rates did the opposite. They went up and we had a very resilient stock market because over time the economy and large cap corporate earnings have become less sensitive to moves in rates. And why would we expect anything different on the way down when interest rates are gradually coming down? What we don't believe is really an investment to chase here is much more the pockets of the market that require lower rates and re-accelerating growth to actually work. So to your question,

still large cap over small cap and still avoiding areas of the market that have gotten beat up but that are still challenged like retail, like home builders. It's just not quite that environment. It's still a soggy economic growth with elevated rates. This doesn't sound, Professor, like a run-to-the-rescue environment, right? Not yet. No, it's not a run-to-the-rescue,

but outside of tariffs, I see prices going down, and as I've mentioned, tariffs are like a tax. And I don't think the Fed should keep a tight position in the face of a tax. And growth is definitely slow. What was the average GDP growth last year? It was 2.5% to 3%. I said 1% this half. I mean, a big slowdown in immigration that we've had. We have tariffs,

payrolls down to about half to a third of the average growth of last year. Again, we're not in recession mode by any means, but again, X tariffs, prices going down, slower economic growth, inverted term structure, where the Fed funds rate is above the 10 year, that's not historically the best place to be. I think there's a lot of persuasive arguments for having lower short term rates. Ali, are you counting on rate cuts for your small caps pick because it doesn't seem as one can work without the other.

No, I mean, to us, we were very much, we've been for a this. I have a longer environment we actually think rates right now in some of the overall sweet spot. For investors you're no longer being punished for being a saver. For lenders you're able

to get attractive rates on a stark old basis. And it actually is that the label to able businesses to continue to expand- our thought on small cap is not necessarily just dependent on interest rates decreasing, but it is very much more of that valuation disconnect between those

mega cap companies and the small companies. And knowing as the overall economy feels better, the overall families feel wealthier, as we see economic progress, that's really benefits of smaller companies as opposed to just an interest rate call. All right. We'll leave it there. Ali, thank you, Professor. It's good to see you as always and Gabrielle, you as well. It's good to have everybody here with us on Closing Bell. NASDAQ hitting another record high today as we said, S&P 500 not that far behind either. The Renaissance Macro's Jeff DeGraff says, well, I'm not going to tell you what he says.

We're going to ask him what he says on where expectations are right now, because I don't want to give it all away before I hear from you directly. Are we primed to go higher or are we too complacent or what's the story? I definitely don't think we're too complacent. Most of the indications that we look actually show that there's still room,

there's a gap between people missing out in that second quarter rally and where they are today and what they want to do. There's a lot of people waiting for a pullback and usually when there's a lot of people waiting for a pullback, you're just not going to really satisfy that. So one of our favorite things to do is look at what expectations are from the consumer standpoint and as counterintuitive as it may be, low consumer expectations actually result in higher equity prices historically. So we love the idea that this is just coming off of what's essentially a two to three standard deviation

downside move and it just hasn't caught up yet. So I don't think there's too much complacency. I certainly don't think there's too much speculation or over exuberance. And I think we're actually still in a pretty good spot for the remainder of the summer. What are the charts? I mean, you look at the charts obviously as the remainder of the summer. What are the charts?

I mean, you look at the charts, obviously, as the head of technical research. Let's take Nvidia, for example. Even when you wear a cowboy hat. Nvidia, okay? $4 trillion in market cap. Does the chart still look good? Is there a correlation between how you feel about the overall market and how you might feel and how the chart might look around a name like Nvidia,

which is now the biggest in the market? Yeah, look, I mean, that just happens to be coincidental today, but let's look back over the last year for Nvidia, right? And really this time last year, we were warning clients about the excess enthusiasm that we had seen. We took a lot of heat for it and just said, look, that to take a beat you're gonna find that there'll be excuses something will happen And it'll probably get oversold and the oversold conditions probably viable

But you know we want to be very careful of that and now here we are 12 months later a lot of that excess enthusiasm has dissipated it's starting to come back for sure But I think more broadly what we saw this time last year where every semiconductor was doing well or practically every semiconductor was doing well. Now it's a lot more selective. You've got Broadcom, you've got NVIDIA, you've got Credo, you've got KLAC, you've got a handful of names and several are being left in the dust and I think that's the differentiation

here. I look at NVIDIA as not necessarily a proxy or a bellwether for the market, but certainly it's helpful. And we're seeing it across the board. I mean, a lot of people complain about breadth. We just don't have those same problems with breadth here. I think it's people making excuses, frankly, and from what we see, it certainly seems fine. It's in gear and it looks like

this market wants to trade higher. Well, you don't care about the concentration. I mean, you'd admit it, it has been a large cap stock rally. I mean, S&P's dramatically underperforming the equal weight for a reason, as I mentioned at the top. The biggest names in finance, the biggest names in tech, the biggest names in industrials. But they're all going in the same direction, right? You're always going to have relative outperformance

and underperformance. What I'm most interested in, if I get the mega cap or the cap weight index making a new high while the equal weight is trending downward, that's a problem. We're not seeing that at all. So you're going to have that concentration effect just from the mega cap names.

I don't worry about that. There's probably the last three or five years, we've had plenty of clarion calls around that that just didn't come true. So I'm always skeptical on that and more careful. I would say at the same time, Nvidia is making a new high, the Apple chart is not that great, the Google chart is floundering a little bit.

So there's a trade-off that takes place here and we're certainly seeing that. This power play that's been really at the forefront in terms of AI is on your radar too based on a chart looking like it might be breaking out again. It's Vistro. I mean a couple years ago it was the best performing name in the S&P if I recall. Why again now? Well, we were looking for charts that looked similar to Nvidia. I know you wanna talk about that. And so, they're not all semiconductors.

Obviously, Clac looks great and Novago looks great. But here you've got a different name or a different industry group and Vistra looks good. It's again, a long consolidation, starting to come back around. A lot of that speculative enthusiasm was burned off. You could see it in the options market You know people just kind of fell

Let's call it dormancy if you will around the name and now it's making a new high and I think that's really important here Scott that then we've talked about it before but right now is the point where you want to be chasing relative strength leaders You don't want to be chasing laggards because it's going to be a much more challenging environment. What you want today are the leadership names because they represent the narratives of tomorrow. And I think that's exactly what you have with both these names that you're talking about. Yeah. Why make it more difficult on yourself? In other words, Jeff, we'll see you soon.

That's Jeff DeGrab. Thank you. Good to see you. Rem back. We'll see you soon. We're just getting started here. Up next, wow, a couple big stories from the world of sports business Including one that our very own Alex Sherman broke about a local hero

All right, welcome back big news from the world of sports business today on a couple of fronts Amen Javer is joining us first with the latest on a bombshell indictment of a leading name in that industry Amen, what did we learn today? Hey there Scott the Department of Justice unsealed a criminal indictment of sports and commercial real estate executive Tim Lyeweke today. The charge involves Lyeweke's alleged participation in a bid-rigging scheme related to the construction of the $375 million event arena at the University of Texas at Austin. The arena is known as the Moody Center. According to the indictment, Laiweke, as CEO of developer Oakview Group,

allegedly entered into an agreement with another potential bidder for the arena to drop a competing effort in exchange for lucrative subcontracts at the arena. Now, the documents say Laiweke allegedly reneged on that promise and did not come through with the subcontracts per that agreement. Now, a spokesman for Lewecki released a statement saying in part, Mr. Lewecki has done nothing

wrong and will vigorously defend himself and his well-deserved reputation for fairness and integrity. Lewecki's own firm, Oakview Group, released a separate statement saying that they cooperated with the Department of Justice inquiry and are, quote, pleased to have resolved this matter with no charges filed against OVG and no admission of faults or wrongdoing. Now, DOJ also says two entities are expected to pay penalties related to the underlying conduct here, Stadium Operations Company, Legends Hospitality, which is expected to pay a $1.5 million penalty, and then Laiwecki's own company, Oakview Group, which is expected to pay a $1.5 million penalty, and then Leibwecki's own company, Oakview Group,

which is expected to pay a $15 million penalty, Scott. Back over here. Really interesting. Eamon, thank you very much for the latest there from our bureau in Washington, Eamon Jarvis. Now to another big story. Giants legend, New York Giants legend, Eli Manning, and his aspirations for NFL ownership.

Alex Sherman breaking news today. He's here with more. What have you learned? Yeah, I spoke with Eli Manning this morning. The New York Giants are out in the market For NFL ownership, Alex Sherman breaking news today. He's here with more. What have you learned? Yeah, I spoke with Eli Manning this morning. The New York Giants are out in the market looking to sell a minority stake in the team among a small handful of teams. Eli Manning has been interested in buying a minority stake.

So I asked him about it and I said, hey, Eli, are you still interested in this? Take a listen to what he told me. Basically, it's too expensive for me. I mean, these numbers are getting very big and 1% stake. Yeah, 1% stake is something valued at $10 billion. You know, it turns into a very big number. So, you know, I love the Giants and I think it, you know, is deserving of that valuation. So you like telling me he's out so you can cross him off the list of individuals at least that are interested.

He also went on to say there were potentially some conflicts of interest with his media aspirations. Of course Manning is a member of the Manning cast the alternative Monday Night Football broadcast that airs on ESPN with his

brother Peyton Manning. He has also been the coach of the Pro Bowl in the past. He said look if I had done this I may not have even been able to speak to the other players that were on the Pro Bowl team because I'd be an owner of the Pro Bowl in the past. He said, look, if I had done this, I may not have even been able to speak to the other players that were on the Pro Bowl team because I'd be an owner of the Giants.

So that sale continues, but Eli Manning will not be one of the buyers of a minority stake of the Giants. I mean, we have heard of others like Mark Lazry, very well known to our audience, who was said to be in the mix, maybe with Michael Strahan another Giants Hall of Famer. Do we know how large the field of

perspective share buyers would be? Not yet but the interesting part of this I think is that Eli Manning's point here was that this has just gotten too expensive even for him. I mean Eli Eli Manning made about $250 million in playing salary alone. Then you add on the endorsements over the years, that's gotta be tens of millions, if not $100 million more. So there's only a pool of a certain amount of individuals

that can foot the bill for this as they sell up to 10%, unless of course you're going the consortium route, like you mentioned there with Mark Lazari and Michael Strahan potentially doing a joint bid but even that bid is going to be quite expensive so the higher and higher that these teams valuations go the fewer and fewer individuals are out there that can afford to buy in. You know you can't help but think as well that the result of all of this is the inclusion of private equity as a new bidding pool.

Absolutely. In the game, which has only upped the valuations and upped the number of people who have deep, deep pockets who can do what Eli Manning apparently feels he can. And to your point, Scott, right now, so the NFL legalized this private equity buy-in, but they capped it at 10%, this was last year. It would not be a surprise at all if that cap went up in the fairly near future to

say 20 percent or so as we keep seeing the valuations of these teams skyrocket the Philadelphia Eagles sold at an eight point three billion dollar valuation earlier this year the San Francisco 49ers sold a six percent stake in a valuation that was approaching 9 billion. You heard in that sound bite that Eli is pegging the New York Giants valuation at 10 billion dollars. The Lakers just sold the majority stake at 10 billion dollars. It wouldn't surprise me at all if when the Giants do announce their sale their valuation

is in fact quite close to 10 billion. We'll see where it all progresses. Good scoop today Alex. Thanks for coming on and talking about it. Alex Sherman from CNBC Sport up next. Goldman's Elizabeth Burton maps out the big opportunities that she still sees in this market. Welcome back. Dazdeck hitting a record high today. Nvidia becoming the first company ever to reach four trillion dollars in market cap. Question now, should you continue to lean into that trade or diversify elsewhere? Joined now by Elizabeth Burton, Chief Investment Strategist for Goldman Sachs

Asset Management. Welcome back, good to see you. Good to see you. You're on the diversification train, right? Yes. Don't just lean into tech or large cap. We're always on the diversification train. Yeah, but I mean, you know where I'm going with this. It's like we've gotten to these record levels.

Right. And we're talking about Nvidia today for a reason. Those are the stocks that got you here, but what's gonna get you to the next level? Okay, I think there's a couple interesting things happening right now. One, the breadth in this recovery has been pretty narrow, which for one means that there's opportunities

for more downside ahead, but it also means there's opportunities for things to sort of catch up. And the other thing that we've been saying is this U.S. exceptionalism narrative is sort of overblown. We don't buy into that. One reason for that is when you think about the US and the reinvestment into their businesses,

so the US, Mag-7's around 56% on cash flows from operations. If you think about the remaining 493, they're at 36. Outside of the US, they're closer to 26. So while we still think there's diversification, they're at 36. Outside of the U.S., they're closer to 26. So we still think there's diversification. We're not saying get out of the U.S. In terms of the diversification story, I remember a year or two ago when I was saying we're suggesting going down and out, going down in cap and outside of the U.S. And I think that's still a large part of the story and is only getting more interesting. Can down in the cap work in the US?

Yes. I think that's the biggest question, right? Because it hasn't worked well. So we think there's a couple reasons why it could work well now. For one, those smaller cap companies, and I'm not necessarily talking the Russell 2000, I'm talking about an active approach to small cap, but those smaller companies tend to be more domestically oriented, so maybe you get some benefit from being isolated more from trade impacts. If we do see a decline in rates, the small caps should take advantage of that opportunity sooner than the larger caps because they have you know more floating rate debt. I think another thing that we're saying is you know big companies you want to implement AI that

might take years and a bunch of people getting together in rooms. At a smaller companies that probably goes a lot faster. And then finally on an EV to sales ratio, small caps are actually about half the value of large caps there. So there's a pretty big discount. So there's reasons for earnings growth there and there's reasons for valuation expansion.

Better economy plus rate cuts helps that trade? It should, better economy should help a lot of trades. But I think that small caps can't help more. Sure, but I mean you can't have one without the other in terms of small caps, right? Yeah. I mean, I think that there's a lot of potential tailwinds there and adding some exposure in small caps certainly makes sense as long as it's within the broader themes that we continue to be talking about.

So I think security is one that we're really... Like cyber? All sorts of security. I mean, it's been a while, but I can old enough to remember the California wildfires like there's food security, water security, defense, cyber, AI. We're now a big part of the AI trade is now thinking about how security and data security is really involved in that. Do you worry at all that the markets just moved on too quickly from the the tariff story that it's made up its mind that it's not going to be as bad as once feared and it's just going to go until it can't.

It's going to go on the assumption that it's not going to be as bad and if it is it'll just deal with it when it has to. Well I think July 15th and thereafter will be sort of telling when we start getting earnings reports. There wasn't really a whole lot for the market to really react to on the tariff front yet. And even though we've had a couple of deals, there's still quite a few more to go. So I think the earnings season will really tell us what we need to think about when we hear from the management. And look, on the earnings, I believe a colleague of mine was saying this the other day, it seems to be like investors are seeing the tariff trade as more of an idiosyncratic company-specific story, not a beta story for the broader market. So we'll see if that's true. Yeah, I mean

We may not know for a handful of months. Are you confident with earnings that that earnings are? Right. No, the expectations have come down so much 4% I think that's a pretty low bar to beat so I Think we're pretty optimistic that the market will be able to beat those expectations, but we'll have to see. What do you think about a group like the Financials, for example? Can you go down in, it's been, you know, look, JP Morgan, Goldman Sachs, your firm, been trading at record highs.

Can you go down the cap space in the banks, do you think, as part of your small mid cap area to expect better things from? Well, look, I'm not a small cap bank expert here, but I would say we do- But you can't get the small caps to work without the banks. That's the largest part of the small cap. Right. I agree with you. I think there's a lot- look, the bank trade is interesting, by the way, not just in the

US. It's interesting in other places too. And I think there's certainly tailwinds behind that. I think there's a lot of other places to look, by the way, that just in the US. It's interesting in other places too. And I think there's certainly tailwinds behind that. I think there's a lot of other places to look, by the way, that might have been overlooked by the market where people need to start taking a broader look. One thing I'd like to start investors thinking about pivoting to, by the way,

is taking a quantitative approach to looking at these markets. It's really hard to synthesize all these data, particularly in small-cast, which you know are undercover. On a global and a local basis, thinking about a quantitative lens for those investments can help you get some scale. Alternatives. Private credit is on your list.

And frankly, we haven't talked that much about private credit lately. I feel like it's all we talked about, and then we didn't, and here we are still getting suggestions. What about it? Private credit is an all-weather strategy, and I think that's something I've really been trying to communicate to my clients. I think a lot of folks thought, in a rising rate environment,

they understood the story for why private credit works. Well, in a declining rate environment, that's better for the borrowers and repayment, right? What I think is happening on the client side for us is they're migrating from the 1.0, the direct lending, to more sort of niche sectors in private credit. And I would anticipate we'd start to see a broadening out of that, more interest in real estate debt potentially.

For example, we're seeing a lot of interest in asset backed. So I think that should continue. All right. Good to have you back. Thanks for having me. Nice to see you. We'll see you again soon. Elizabeth Burton from Goldman Sachs.

Up next, we're tracking the biggest movers into this close today. Christina Parchenevalos is standing by. What's at the top of your list? Well, we have a pharmaceutical giant dropping billions of dollars on a respiratory drug maker to beat a looming patent cliff and clean energy stocks surged on federal tax incentive news. I'll have those details next. We're 15 out from the bell.

Back to Christina now for the stocks that she is watching. Please tell us. Verona Pharma, shares are soaring right now after Merck agreed to buy the UK drug maker in a $10 billion deal. The move really aims to strengthen Merck's respiratory treatments as part of a push to reduce dependence on its cancer drug, Kachura.

US listed shares of Verona, you can see, are up 20%. Merck is up just 3%, still higher. Bloom Energy shares also in the green on an upgrade to overweight from neutral. JP Morgan, they raised their price target on the stock to 33 bucks from 18, so quite a dramatic increase. Analysts say that companies should benefit from tax credits for fuel sales and President Trump's sweeping tax and spending plan and that is why you are seeing shares up almost 18 percent. So a lot of green, Scott.

Christina, thank you very much. Christina Partzanevile is still ahead. We get you set up for Costco numbers. They're out in OT. The bell is coming right back. All right, coming up next, Home Builders moving higher in today's session. We'll tell you exactly why those stocks are up

better than 4% across the board in the market zone. We're now in the closing bell market zone. CNBC senior markets commentator Mike Santoli is here to break down the crucial moments of this trading day. Plus Diana Olick on today's rally in the home builders. Courtney Reagan looking ahead to Costco's June sales numbers. They come out in overtime and we've had a pretty good day today and we're finishing stronger than we started. Yeah just a little bit of a lull midday and then sort of reloaded. You know, yesterday was that day when the big stuff took a break.

You had pullbacks and all the high momentum, mega cap names. The majority of stocks were up today. The cleanup hitters are back and they're actually putting you on the board. It's bull market activity. It's sort of comfortable rotation, hanging around the highs. Most of the atmospheric conditions, I would say, are favorable. The thing I would look toward is, you know,

has a name like Nvidia given you as much as you can expect in the near term? I was looking back to last year, it was a 75% gain until a broke out went to this vertical move to 135 over two or three months. Then it went sideways for a while. This time, same type of percentage move in a couple of months. move to 135 over two or three months, then it went sideways for a while. This time same type of percentage move in a couple of months. I'm not saying it has

to flatten out from here, but you have to ask the question. So mag-7 has been doing its part, but I think dispersion remains the story. Of the mag-7, they range from up 25% year-to-date to down 25%. Three are up, three are down, one is flat. So basically the market is picking and choosing and kind of doing a little more buying than selling, but I'm prepared for the seasonal tailwinds to abate pretty soon, and then maybe you realize we've priced in some things breaking in our favor.

Are you counting Tesla in that down 25%? Tesla is down around that much. It is, but that's sort of idiosyncratic too, right? No, it absolutely is. In fact, I mean, I would totally endorse going to the Mag-6 because in a lot of fundamental characteristics as well, Tesla

doesn't really fit in that group. Yeah, although, you know, Apple's trying to prove itself too. Yeah, Apple, I mean, Alphabet's been kind of a struggle as well. Yeah, Diana, what's happening with the builders today? So, Scott, a couple of reasons

why the home builders are getting a boost today after a rougher start to the week. First and foremost is bond yields coming down and consequently mortgage rates coming down. After rising for the last four business days, the average on the 30-year fix dropped a bit this morning to 6.77%. It's not a lot and we're still in this kind of tight range where we've been for the last several months, but there had been a concern that the recent fall in rates was over and we'd turned higher. We'll see. Another reason is

this morning's report on mortgage demand. We saw purchase applications up 9% last week for the week, up 25% from a year ago. Some of the home builders have been lowering prices. This has prices on existing homes also soften a bit. So you see the home builder ETF, it's up just over 3% on the day to its highest level of the week. And names like Lennar, D.R. Horton and Palti also up over 4% on the day. For the builder stocks, it's all about rates. And that turn back lower today clearly had an impact, Scott. All right, Diana. Thank you, Diane Olek. Hey, Court, what about Costco? Those numbers after

the bell. Hey, Scott. Yeah, so Costco is the last retail man standing when it comes to reporting those monthly comparable sales. Those will be out after the bell. We still like to see it, right? Though even if shares don't typically shift much on the news, but at least it gives investors a little snapshot of the cadence as the quarter is progressing. Now Costco is up about 6% year to date versus flat for the retail ETF, the XRT, over that

same time. And right now Costco is is having its members savings day to compete with Amazon's Prime Day. Costco's electronics discounts among the deals most likely to attract shoppers. At least that's what I've seen in some of my research. Now, the Wholesale Club has been a very steady retailer, turning in positive quarterly comps

for at least 12 years running. That's as far back as my data goes. Last quarter comps grew 6 percent. So again, looking at another positive month going forward. And while it attracts a higher income shopper, it does also grab more shopper interest during what we might consider tougher economic times because of the value proposition that a warehouse club brings, even if you do have to pay to enter the store. Scott. All right, Courtney. Thanks, Courtney Reagan. that a warehouse club brings, even if you do have to pay to enter the store. Scott?

All right, Gord, thanks. Gordney, Reagan. Mike, I'll tell you what, I'm looking at the sector breakdown, and I know tech gets all the oxygen industrials up near 14% year-to-date trouncing everybody else. Yeah, it's true. And there's some pretty decent themes inside of that. It's not just, oh, global economy looks okay. We talk about the power theme. GE, Vernova, top of the list every time you look. Uber, we talk about that too.

That's broken out. It's a big part of the XLI at this point. And even transports have started to firm up. I think that is something interesting to look at. You look across the global indexes, and cyclicals have been bid pretty well. I mean you know you maybe you have to try to say it's because we're anticipating rate capture. You're gonna get a real fiscal push all over the world, whatever it is, but even autos globally have been strong. So I think that's a net positive figure or positive theme that you can hang your

hat on. I would say too though, spicing up the mix. You look at the leaders today in the NASDAQ 100, and it's app loving, it's Palantir, it's micro strategy, it's trade desk. It's these stocks that have been on a 40, 50% heater for three months, so the momentum instinct is there. It's the kind of for entertainment purposes only type part of this market where you just wanna buy

the stuff that's up the most. And that's part of a bull market as well. I just think that there's a risk at some point that we've gone from early April maximum moment of perceived uncertainty and you get pretty much to a point where the perceived certainty about all the fundamentals and all the policy questions, you know, gets to an extreme. And that just means you're vulnerable to some downside surprise or some sell the news type activity on earnings. I mean, there are some who would say, well, that looks in part

with classic late cycle activity where you start, you know, you start to reach in the run. Exactly. And, you know, it's very open ended to how far that can go. You know, you never can just put a flag in the ground and say, now it stops because of the high beta ETFs up like nine out of 10 days or 10 of 11. It's one of the two. And frankly it's funny because it feels like we've come so far and we haven't a short period

of time but also the S&P has just barely broken out after a seven month sideways move and it's really not up that much if you go back a while. So I think you have to be open minded about how it plays on both sides of things now. But again, you're assuming things on tariffs somewhat rationally break in favor of the market and the economy, and you need some of the positive follow-through in the news, not just the hope for it. All right, good stuff, Mike.

Thank you, Bill. You're going to win this out. A record day for the NASDAQ. A record day for Nvidia, the first company ever to hit $4 trillion in market capital with that.