Closing Bell - Closing Bell: Trading the Market Resiliency 6/8/23

Episode Date: June 8, 2023

Are the bears suddenly sweating as stocks stay resilient? Greg Branch of Veritas Financial Group defends his market stance. Plus, EMJ’s Eric Jackson breaks down Tesla’s latest hot streak and the two things that he thinks could mean further gains for that name. And, Pippa Stevens explains what’s behind crude’s big move today.

Welcome to Closing Bell. I'm Scott Wapner. This make or break hour begins with another run at 4,300 for the S&P and whether the bulls are now fully in control of this market. We'll ask noted bear Greg Branch that very question in just a moment. In the meantime, here's your scorecard with 60 minutes to go. In regulation, strong day for Boeing, UnitedHealthcare, McDonald's and Merck sending the Dow nicely higher today. You can see those stocks right there. In fact, healthcare, one of the better sectors overall today. Pretty good bounce back, too, for tech after the Nasdaq suffers one of its worst days in some time. Yesterday, there's your Nasdaq today. Good for just about 1 percent.

Does lead us to our talk of the tape. Whether the bears are suddenly sweating as stocks stay resilient and the VIX drops again. Well, let's ask one. Greg Branch of Veritas Financial Group is back with us today. I don't know. I can't see the picture very well. Are you sweating? Because you are a bear. And this market's been getting away from you, hasn't it? It has, Scott. But I am sweating no more than I was sweating in August of 2022.

And it seems a lot like August of 2022. Shall I count the ways? Well ways well i mean you don't have to go through all of them but surely you you had to have looked at this market and wondered to yourself am i wrong in fact do the the bulls now have control based on way things have been been trading honestly yeah look and i think uh i think we we ask ourselves that question every day, Scott. So the question is there whether the market's going towards my prediction or not. But I think it is important to count the ways I'm going to do that. But just like in August, we have kind of this erroneous policy expectation that we've had to fight. Then it was talk of a pivot. Now it was the market

looking for interest rate cuts in the back half, which for six months I have been incredulous about. It's not seen that as a possibility. We fought the notion that the market was cheap back in August, that it was 17 times. And just as then, the estimates are wrong. So, no, the market is not trading at 17 times. The market is likely trading at 20 times forward. And then as now and we're all built this way, we're all human beings. We all want the market to go up. But, you know, when these things are powered by emotion and not the substantive data that we're receiving, it's hard for me to envision this as having any legs

as the narrow breadth. Greg, your your your view sounds to me like the one that's potentially being powered by emotion, not by where the market has actually gone. Right. You've been negative for some time. The market's been going in the opposite direction. You know, the economy's been I think I think it's fair to say more resilient than most have expected it to be. I think earnings have remained more resilient than most have expected them to be. And I think AI is potentially a bigger earnings dryer than almost anyone expected it to be because we weren't even having this conversation back in August of 2022. And I could see everything you're saying, Scott. The problem is in the first two things you said. The economy has proven to be more resilient than we thought it would be.

Admittedly, we have a we have a stronger than expected first quarter. We're likely to have a stronger than consensus second quarter. But we have to examine why that is. And I think part of that was the Fed spending down 700 billion of untaxed and unborrowed money, which was a shot of adrenaline. And so it doesn't really you know, that that's not what plays into our forecast. What happened, what's going to happen is more important to our adrenaline. And so it doesn't really, you know, that's not what plays into our forecast, what happened. What's going to happen is more important to our forecast. And right now, consensus took the opportunity on an unexpectedly strong first quarter to raise estimates, when likely what we should be doing

is looking at that third quarter with 2% growth and 9% in the fourth quarter and starting to decrease those estimates. And I do believe that we'll see significant downward earnings revisions. I do believe that the Fed has to they have to do one of two things. They either have to raise rates or they have to abandon the search or the quest for two percent inflation. There is no third possibility. And you guess there is. Yes, there is. There is. There is that they that they they don't raise raise in June, which seems like that's the likely scenario.

And they don't have to raise nearly as high as you still think they'll go because inflation actually is coming down faster than you want to admit or are willing to say. I want to read you something that Barron said today. I want to read you something that Barron said today, OK, because I want your reaction to it before we open this up. Quote, investors are positioned for the worst. The only problem, they may be positioned for a bear market that already occurred. And the higher the S&P goes, the more likely it is that bearish investors will have to start buying. Are you one of them? I'm not. And it does acknowledge something that I will also acknowledge. Right. We are sitting on historically high cash positions. You know, B of A's investment management survey had fund managers at near peak 6 percent, which is usually around 4 percent cash. Accredited investors are sitting around 35 percent cash or cash equivalent in their portfolios. So I get how that could be construed as the powder

for a continued bull market. But I think it's going to be more of a trend, Scott. And just to dispel some myths here, I have exactly one point above where we are right now. I set a terminal rate of six point two five percent projection. We're at five point two five. So I'm not nearly as draconian as you make me out to be, my friend. I mean, another full point to many would sound like it's draconian. You wanted to go another 100 basis points. I mean, we don't want it. I just think it will. I don't know. I don't know why. I don't know why the Fed. Now, maybe they will be forced to. Nobody has a crystal ball. And I can't say that they're

not going to do that. But I would say it seems more unlikely than not, just given where we currently are, that they're going to have to go that high on the terminal rate. Greg, I'll take the other side of that, Scott. And I think those three hundred thirty nine thousand jobs we saw last month had something to say about it as well. Well, we're sitting at historically low unemployment. Well, we're sitting at historically low claims. That is not a good sign for us coming closer to the Fed's 2 percent target. And so, look, you win and all those things will be true if the Fed says 2 percent is no longer important. But we're simply not going to get there with the wage inflation and the jobs creation that we see going on now.

That's going to continue to power inflation. Now, I'm looking at the major averages right now. So you forgive me for looking uh away from you dow jones industrial average is the highs of the day it's up 182 and climbing as we speak and the s p 500 may very well hit 4 300 by the time we're finished with this show today we have about 54 minutes to go you are unmoved by the resiliency of this market, by the technical hurdles that this market has gotten over, to the point where you still think we're going back to the October lows, because the further you get away from that, the less likely it is that we're going back to that.

That's what the math says to me, Scott. I do want to differentiate between things that I want and things that I see. And you keep typifying this as something that I want. I, like everyone else, wants the market to go up. Yeah, but you want to be right, too. Everybody wants to be right in their calls, Greg. I've been right. I'm not going to be right all the time. I don't expect to be right all the time. And so, no, my view isn't powered by that. If the Fed comes out and says that 2 percent is no longer important, then I'm happy to become bullish. But as long as that's the case, and as long as we see unemployment where it is, and as long as we see wage growth

where it is, then I have to stick to this reality. All right, let's broaden the conversation out. Let's bring in Emily Rowland of John Hancock Investment Management with us here at Post 9. Joe Terranova is as well, Virtus Investment Partners and a CNBC contributor. Emily, you get the first go. Do you agree or disagree with Mr. Branch? Look, markets are fighting the Fed right now and they are winning. And I think that there's a few things going on. One, the data have come in better than feared. You know, I think that that's the mantra or the bumper sticker of 2023 when you look at the earnings data, when you look at the economic data. We're seeing the Citi Economic Surprise Index here seeing a bounce.

The other element here is there were headlines that came across at the end of last week that China may be stimulating. I mean, that has caused a huge risk on bounce across markets. And then the final thing that we see is that there's almost a pivot party happening going on where markets are celebrating this idea that the Fed is getting towards the end of their hiking cycle. And it doesn't matter where you see it. It's all across risk assets. It's Japanese equities reaching 30-year highs. It's small cap stocks seeing a huge run over the last few weeks here. It's, of course, the AI names catching a bid here.

So there's definitely been a very swift and sharp and almost violent rotation across different parts of the risk assets. And this is a period where it gets pretty easy to get whipsawed and pretty easy to make mistakes here. Are we fighting the Fed, Joe, or are we understanding the Fed? Are we understanding the fact that they're probably not going to hike next week or the week after? And even if they do hike again, they're much closer to the end than the beginning. Are you in agreement with Greg Brantz or not? So Greg mentioned August, and let's remember exactly what happened in August. Chairman Powell smacked the market. There was the Jackson Hole speech on Friday, August 26. Eight minutes. He used the eight minutes and he told us what he said there would be pain for households and businesses. That's why the market fell. The VIX at that time was somewhere around 19. The VIX today is at its lowest level since before COVID.

So if, in fact, Greg is correct, not with what he wants, but what he sees, the insurance that you could buy to defend against a significant downfall in the market is ridiculously cheap. Let me ask you this just straight up. The premise that we laid out at the beginning of the program, the question, who's in control of this market now? The bears were undeniably in control for the better part of the last, geez, I don't know, 17, 16 months. Are the bulls now in control?

Have they taken the reins of this market? I think the bulls are in control if you rely on a quantitative approach. If you rely on technicals, that's where the bulls are actually in control. You can't make a fundamental assertion beyond technology that looks overwhelmingly bullish. What is bullish is the technical formation of the market. Emily, I mean, the market's trying to broaden out a little bit. Bears like Greg would say it's, you know, the Magnificent Seven have carried the entire market higher. And that's a valid point. But it does feel like it might be on the verge of broadening out a bit.

What do you make of that? Do you think it's legit? If that does happen, is that another bullish signal in your mind? Yeah, the broadening out is definitely a positive development. We still like mega cap tech. You know, through our conversations, we've been there. Technology stocks are the poster child for quality. Quality is companies with great return on equity, great balance sheets, tons of cash on their balance sheet. If you're

a company right now, you don't want to need to tap the capital markets in order to grow as the cost of capital has risen so extensively. So that's why we've remained in tech. But we do think diversifying away from that makes sense. Now, we talked before about this pivot party. It's being celebrated across risk assets. If I'm somebody that's attending the pivot party, I want to go to it. I want to be there because these late cycle environments can feature incredible bounces across risk assets. But I would suggest maybe sipping a light beer instead of reaching for the tequila right now because you might have fewer regrets the next day. OK, so, Greg Branch, I mean, you're an astute investor, right? You are looking for signs as to

where this market is going. At what point do you say, I think it's going to turn now? Because the market starts to anticipate things six to nine months in advance. At least that's historically how it works. It's not an exact science, but generally speaking, that's how it works. Now, I'm gathering that you must be a similar type of investor. You're trying to look ahead to where the puck is going rather than to where it is today. So at what point do you say, you know what, I am wrong. The market is in a is in a new trend and I better embrace it or I'm going to get run over. And this thing's going to run further away from me than it already has. Right. And so whether I'm right or whether I'm wrong,

I still have a target that I'm looking for to become more bullish. And for me, Scott, what that is, is when the expectations of consensus are in line with the reality I think is going to happen. So one of those things has happened already. The Fed funds futures used to discount up until a week ago, interest rate cuts in the back half you know i've always thought that to be ludicrous the the market doesn't discount that anymore the thing i'm waiting for now is typically we bottom in a recession and it is arguable i mean obviously we're not in one now i think we will be in one many people think we will be in one back half of this year. And if I look at consensus for 2024 and it's not at 245 anymore, it's at 220, now I can

start to talk about valuation in a logical and reliable way. That presents an opportunity to me. But let me also answer another question you asked. I do think that the bulls are in control right now. I will concede that. This is broadening. When you look at performance in June, the 600 has outperformed the 500. I think that there are reasons for that.

And if I'm a bull, that is encouraging to me. I knew you'd come around. It only took 14 minutes, but we're good. That's why I like having you on. On your recession call, I mean, it feels like we're moving away from rather than into. You don't feel that at all? I mean, net worth today that came out from the Fed certainly helps to explain why the consumer has remained as robust. And I think more so than you've expected the consumer to be to this point.

That is true. The consumer balance sheet has not deteriorated as quickly as I thought we would. That said, let's again look at the data that we have. We've put in historically low savings rates for several months. We have historically high credit card debt at historically high APRs. And as you look across the banks, they are starting to whisper about this. We're seeing credit card delinquencies in the 30 to 89 day range tick up pretty significantly. We're starting to see losses in auto. We're starting to see losses in mortgage tick up pretty significantly. I do believe that we are facing some negative macro trends in the CRE, and that will likely become a problem this year. And so watch these banks. I think we're going to see a lot of provisioning in these next couple of quarters.

And I think that most would agree that we're starting to see, at least for the lower socioeconomic groups, that balance sheet deteriorate pretty quickly. All right. Emily and Joe, you get the last quick words. Emily, you first. Yeah, we are looking for signs that the lagging economic data catch up to the leading economic data. The lagging data looks awesome. The services side of the economy, employment, the consumer continues to spend. But the leading indicators are telling us that a recession does likely unfold. So for now, participate, join the pivot party, but get ready for a period in which the Fed is going to win in this fight. I think there's a distinction between stocks and fixed income. And maybe if you're bearish,

you want to affect that bias in fixed income. But I don't think you could affect that bias anymore in equities. Guys, that was fun. I appreciate it, Emily. Thank you. It's nice to meet you in person, too, Joe. See you in a bit. Greg Brantz, thank you. I appreciate it. Always do. We'll talk to you soon. All right. Let's get to our Twitter question of the day. We want to know who do you think is in control of this market now, the bulls or the bears? You can head to at CNBC closing bell on Twitter to vote. The results are coming up a little bit later on in the hour. Let's get a check on some top stocks to watch. Meantime, as we head into the close, Christina Parts and

Nevelos joins with that right now. Christina. Hi. Well, let's look at Adobe shares. They're moving higher after the company announced its artificial intelligence tool. Firefly would be available to large business customers. The Firefly program allows employees, regardless of their creativity skills, to instantly generate images or copy from text-based descriptions, which can then be used in marketing campaigns. Firefly can also be trained to integrate with said firm's own brand, assets, fonts, images, you name it. Pretty cool stuff. The stock is up almost 5%. Shares of online furniture retailer Wayfair are up almost over 9% on a city analyst upgrade, or price target, I should say, upgrade from $65 or $265 from $57. They say the home goods industry may still be working through inventory,

but that order growth is improving. Scott. Christina, thank you. We'll see you in just a bit. Christina Partsenevelos. We're just getting started. Up next, Tesla stock surging again today. EMJ's Eric Jackson has been a big believer in that company, as you know, and now he's flagging two key reasons he is remaining bullish on that stock. Makes his case after the break. We're live for the New York Stock Exchange. You're watching Closing Bell on CNBC.

We're back. Tesla on track to finish higher for the 10th straight day, with shares gaining more than 25 percent over that period. My next guest, he is a Tesla shareholder, has called himself a big believer in that stock since the end of last year. Let's bring in Eric Jackson of EMJ Capital. It's good to see you. What's behind this move, do you think? 10 straight days is something to pay attention to. What's driving that? I think there's two things, Scott. I think it's the fact that we've gotten away from all the worries and angst about Elon and Twitter. We've gotten away from, you know, fearing that, you know, price cuts. That's sort of in the distant memory now. And I think people are looking ahead to the fact that they've already sort of guided to record deliveries this year, which everyone likes.

And also, I think the biggest part of the move has been the AI story in relation to Tesla. They obviously have a huge gob of data from everyone using the cars. And there are some intriguing ways which they're going to be able to leverage that in the coming years. I think that's getting people excited. I know, but at what point do you sit back yourself and say, well, you know, Tesla's apparently getting an AI bump.

XYZ company's getting an AI bump. I ran into somebody on the street who's got a company who wants an AI bump. You get my point? Like everybody thinks they're going to get an AI bump. What's justified, really, and what's not? Well, I mean, listen, Scott, I believe in AI. I'm eating the dog food.

I've spent the last two years actually building our own proprietary AI and ML-driven stock-picking model to use in my long short tech hedge fund. And just on June 1st, we went live. We burned the boats. I turned my back on being a kind of a fundamental manager to rely on this model because the results that we were seeing, especially this year, had gotten so much better from a performance perspective, from a risk management perspective, that, you know, I was convinced and I thought my investors are going to be better served by trusting the machine rather than, you know, Eric Jackson's views on Tesla deliveries. So, you know, so far it's going well. We're only one week in. We got to, you know, crawl, you know, walk, run. But, you know, it's already paying dividends big time, not just with Tesla this month, but

also Carvana. You have to explain to me more how this works. And you'll forgive my skepticism, but I don't know. I don't know how to respond to that. You are now taking yourself out of this entire stock picking model and relying on machine learning to do it? Yeah, well, you had Leslie Picker was on the network earlier today talking about how a lot of tech hedge funds were up in May because they made big bets on AI stocks. That's sort of like first derivative way of playing AI. I think, though, obviously AI is going to disrupt the whole financial industry, including the hedge fund industry. And I think the traditional hedge fund grows. You know, the latte sipping, gray fleece vest wearing 20 something MBAs who crank out, you know,

spreadsheets are going to see their jobs in peril from AI simply because machines can keep more factors in their brains going much easier and spot opportunities. So Carvana was a number two holding for me when we flipped over on June the 1st. Now, I guarantee you, if I had a team of 20-something MBAs working for me and we had an investment committee meeting, none of them would have come up in a meeting and pounded the table to go long Carvana, let alone make it a number two holding in the fund. And the reason why is that Carvana was down 98% last year. Yeah, it was a disaster. They were scared for their own career suicide in making the case for it. I trust the machine.

The machine doesn't get embarrassed. The machine just gives me the facts. I would rather go with that rather than someone who's trying to curry favor with me. But I mean, you've owned Carvana for a while, haven't you? Off and on, off and on. Obviously, you know, it was down 98% in 2002 if you bought and held Carvana.

So, you know, obviously, you know, you would have been run over if you just kind of stuck to your guns as a fundamental manager and believed, believed in the stock, believed in the story, even if you were right, the market wasn't agreeing with you. I know. But what did the machine, what did the machine possibly tell you to do? I don't, I don't, I don't get it. Well, the machine tells me, you know, basically there are 300 stocks globally, Scott, that are tech stocks, the largest ones. And every every stock, every one of those stocks,

the factors that go into what drives a stock up and what drives a stock down, you know, is unique. And so the machine learning program that we've built over the last couple of years identifies kind of the optimal strategy for each one so if I only traded that model for Carvana last year I would make four percent. You know trading in and out of the stock. This year the model caught the hundred fifty eight percent up

move in Carvana in January in the first five weeks of the year. So when the model flagged Carvana on May the. It was a seventh when it was eleven eighty five. You know I took it very seriously. And so, you know, this is a volatile stock. It's up whatever it is today, 67%. It could be,

you know, down 20% tomorrow or it could be up another, you know, 85% tomorrow. But, you know, I would rather place my trust in the machine, you know, giving me my instructions on when to get out rather than, you know, the hedge fund, bro, 20 something. But what could the model possibly know, for example, about Tesla deliveries? The things that you rely on to make decisions as to whether the stock is going to go higher from here, whether it's justified to be up to 10 days in a row that we said it was, what could that possibly know at this point, especially about a stock like that? Well, I mean, it's only right

over the last six and a half years, 52% of the time. So it's gonna get a lot of trades wrong. However, when it gets it right on days like today, it can be really right. When it gets it wrong, the results are not that bad. And so if you're compounding at a 52% hit rate with big wins when you do win, you can make a lot of money from that. So in terms of the secret sauce of the model, obviously, that's for my investors and accredited investors that come into the market. I'm not going to ask you to reveal

whatever secret sauce you might have. Although I don't know. Heinz was talking about ketchup, getting a boost from AI. Maybe it's a lot of ketchup. Your new buys in the last week, DraftKings, Roku and then a crypto play. But to what degree did the model tell you to buy DraftKings and Roku? All of them, Scott. So on June 1st, it was the burn the boats moment. We totally switched over to the machine. And so all these picks are coming from the machine. When the machine says to get out of them, we'll get out of them. And that's tough to do, obviously, for a manager that is sort of used to

having their strong opinions. But if I go to my investors and I say, these are the back tests, this is how well this thing has worked, I really believe in it, I couldn't take their money, start watching with the model, and then say, well, no, actually, Eric Jackson knows best, so I'm going to intervene here. So all those picks you mentioned came from the model, and we're going to stick with it and see how it goes. You you will no longer make any personal investment decisions based on your own fundamental analysis or that of the analysts that you may employ.

And honestly, I don't know how many you have, if any. But is that what you're saying? My job, I see my job, Scott, is is I oversee the model and I oversee the team of software engineers we have that built the model. And so my job is to kind of check and double check for bugs with the engineers and make sure that this thing works as well as we hope it works. But that's the job. And I think the new model for all hedge funds going forward is going to be teams of software engineers that know AI, deep learning, neural nets. The 20-something, you know, MBAs, hedge fund bros are going to be out of work in a lot of cases. They're going to go the way of the dodo bird. We'll leave it there. We'll just continue to have this conversation. A very interesting one it is.

Eric, thank you. Eric Jackson joining us once again. Up next, bracing for a breakdown or a breakout. We'll ask J.P. Morgan's top technician, Jason Hunter. He's here with the key level. He is watching what it might mean for your money in the second half of the year. Plus, we'll tell you what's behind crude's volatile day today. And it has been one. There's your intraday chart. And for the month of June, we're celebrating pride, sharing stories of corporate leaders with you. Here is House Global Head of Partnerships, Brian Lipp. The amount of stress and the emotional baggage that comes with hiding your own authentic self

at work, it's immense. For the first 10 years of my career I didn't come out and it just stopped me from performing to my true skills and my true capabilities. The second thing I would say particularly for folks in hiring positions in organisations is to go out and seek folks in the LGBT community particularly in positions of leadership. It's really important for us to be able to look up to somebody who is in our community because it helps us have aspirations just as all of us have aspirations in life. Welcome back to Major Averages Rallying today. The S&P trading back towards 4,300 right on the

doorstep now, having its third positive week in four. But our next guest believes that stocks could be approaching stall speed and setting up to give back some of those recent gains. Joining us now, Jason Hunter, head of technical strategy at J.P. Morgan. Welcome back. It's good to see you. I started this program with somebody who suggested we're going back to the October lows. Do you see that? Well, that's been our base case, Scott, is the last few times I've been on the show.

Really, since the start of the year that we've had that as our base case, that 3,500 would be retested. That would set the cycle low. But all the while, what we did say is if the S&P sustains above 4,200 and cyclical leadership really starts to come to the forefront, that would really cause us to back off, at least from the technical side. The support for that view, that macro fundamental view, starts to wane. And really, what we've had since late last week, starting on Friday, as the S&P pushed above 4,200, you saw small cap and cyclicals really catch a bid. It's unclear whether that, after two weeks of better than expected economic data and the J.P. Morgan Economic Surprise Index basically going straight up, it's unclear whether this is a, let's say recession themed position squeeze that potentially could whipsaw

much like August of 2022 when you saw that last you know push higher in the S P toward 4300 or if this is something that's sustainable so we feel like we're at a bifurcation point you know granted we are back on our heels here this is not what what we wanted to see, given our view. You know, that said, we wouldn't stop into long. It's just a matter of reducing, you know, bearish exposure and waiting for a better time to reset that when the pieces, you know, they really fill in to support that bearish view on the technical side. But when do you use your words back off your more bearish view and think that we're going back maybe to 3,500? Yeah, so, I mean, the reality is you're already $4,200. You saw that push in cyclical leadership. There is the ambiguity of the breath signal here. I mean, if you look yesterday, you saw NASDAQ come off, basically the winners funding

the rotation back to small cap and really a down in quality trade. So oddly enough, you had the S&P down. But if you look at the breath metric, 70% of the S&P 500 was up on the day. So there is this ambiguity right now. We'd like to give the market some time to trade here. If the S&P is able to stay above 4,200 and you see cyclicals really start to build support and start to rally, but not at the expense of the recent winners, the NASDAQ, the mega cap growth, if they're both able to go up together, that would be a clear signal to reduce that exposure. For right now, we're willing to give the view the benefit of the doubt, though, because, you know, the reality is when, you know, we do have a macro fundamental overlay that we

use on our technical signaling, and that still doesn't look good. You know, I can't explain why the market's been so sticky up here and why it's rallying. But when you look at things like the yield curve, the probability of recession, looking at the economic data, you know, all of those things don't point to a rosy period in the months ahead. No, but how many days do you need? I mean, you guys, you know, you technicians are pretty specific. You look at things, I think, in rather absolute terms. I mean, how many days of this broadening out of the rally would be enough to say, OK, that's confirmation for me. And now I am backing off my earlier projections. Well, I always like to use a broader brush. And, you know, we happen to look across all four of

the major asset classes and have the benefit of that. So if you look, you know, let's say if we look at the commodity market, copper's rebounded strongly with the cyclical push higher. That's back into its 200-day moving average. The March-April lows, if that pushes above, if you see the energy sector, the industrial sector, the financial sector firmly move out of its March-May holding pattern along with that, it's an accumulation of things,

and it's definitely not a set number of days. It's definitely not a level on the S&P. It's an array of things that we like to look at. It's much more analog than digital in our framework, rather than saying here's a specific level. All right. We'll talk to you soon. Maybe we'll be there or not. Jason, I appreciate it as always. Jason Hunter, JP Morgan. All right. Thank you. Up next. All right. We're tracking the biggest movers as we head into the close. Back to Christina Partsenevelo standing by. With that, Christina. Well, let's talk about shares of EV maker Fisker.

They're stuck in reverse today. Can this name compete in an already saturated market? We discuss that next. We're less than 20 away from the closing bell. Let's get back to Christina Partsenevelos for a look at the key stocks she is watching at this moment. Christina.

Well, competition in the electric vehicle market is revving up and that doesn't make it easy for a company like Fisker, which makes all-electric SUVs, but only delivered to their first customer just last month and recently lowered their production targets. Wolf Research downgraded the name to sell, citing competition from Tesla, Ford, Rivian, Chevy. In other words, a saturated market. Shares of a firm still soaring after announcing a new deal with Amazon Pay yesterday. Merchants on Amazon Pay can now allow customers to pay their bills over time. And you can see the stock is up 16 percent. So here's a sneak peek of a new CNBC interview with CEO Max

Levchin and his thoughts on consumer credit quality. We saw a certain amount of weakness in consumers' ability to repay about a year ago and adjusted our credit underwriting standards right around that time and have been managing credit very, very carefully. That said, we have seen no real deterioration in our user base over the last six months or so. The full interview with Affirm CEO will be on Overtime in less than 30 minutes. Scott? All right. We'll look forward to that. Thank you, Christina Partsenevel. Last chance to weigh in on our Twitter question. We asked who's in charge of this market right now, the bulls or the bears?

You can head to at CNBC Closing Bell on Twitter. The results are right after this break. The results now of our Twitter question. We asked who's in control of the market. The bulls or the bears? And the majority of you, overwhelmingly so. 75% say the bulls. Up next, alternative AI plays. Wall Street's been buzzing about big tech's push into the space.

As you know, we're highlighting another sector that's all in on AI. We'll find out how it's impacting that group of stocks just ahead. That and much more when we take you inside the market zone. Here we go. We're now in the closing bell market zone. CNBC senior markets commentator Mike Santoli is here to break down the crucial moments of the trading day. A wild day for crude. Pippa Stevens is on that for us today. Sima Modi on the industrial companies benefiting from the AI gold rush. And Steve Kovach looking ahead to DocuSign earnings in OT. We begin with Mike Santoli.

75% say the bulls are now in charge. Yes. As we try and push towards 4,300 for the first time since last August. There definitely has been a phenomenon where belief has started to encroach on skepticism. Now, we came into this year, and even until about two months ago, I think,

really weighted down with a lot of doubt about this market. People had bought a lot of short-dated recession options, so to speak. A lot of those expired worthless for the time being, and the market just wouldn't quit, and therefore, the resilience of the market itself, I think, has dragged people's attitudes in the direction of, hey, maybe this is the time being. And the market just wouldn't quit. And therefore, the resilience of the market itself, I think, has dragged people's attitudes in the direction of, hey, maybe this is the real thing. Maybe the landing can be soft. Maybe the Fed is our friend and not our enemy. All that

makes sense. Now, I do think we've lost a little bit of the tailwinds of having that skepticism there, that reservoir of doubt that sometimes can help prices go higher, which means something else would have to take over, which is, I think, a further embrace of risk in the credit markets, in small caps, in cyclicals. It can kind of reinforce where we are in the market. I am encouraged by the manner in which we've gotten to 4,300 or thereabouts relative to August. In August, it took three weeks to get from 4,000 to 4,300. It was a squeezy, emotional, hey, we got this type move. And the market, of course, had really been oversold at the beginning of that. Here, it's been like three months or two months, let's say. Two months plus to get from 4,000 to 4,300. It's been a grind. It's been, again, kind of accompanied by a lot of

yeah, buts, because not all stocks were participating. So I think it's been a grind. It's been, again, kind of accompanied by a lot of yeah, buts, because not all stocks were participating. So I think it's OK for now. The market's not cheap. You can kind of throw a lot of things at it. It's hard to see us escaping this late cycle psychology of, yeah, but unemployment is going to tick up, right? Yeah, but earnings maybe can only be flat. So I think that's good. That's good. The wall of worry remains in place, at least at a shortened level. You heard it on our show today. Yeah. Greg Branch at the top, Jason Hunter near the end.

So there are plenty of people who are skeptical of this move. And moving them is going to take some work. That's right. A lot of people focused, as I said earlier at noon, on the retail investor survey that had the biggest jump in bulls since November of 2020. What was November of 2020? It was eight months after a major market low, and it finally got us this burst of belief maybe we're not going to go right back to the lows. You know, the market did fine for a while after that. I'm not saying we had the same conditions otherwise. But I don't know. Keep it simple is the S&P is where it was two years ago.

Nominal GDP is 15 percent higher than it was two years ago. It's not insane that we're here. Yeah. Pippa Stevens, to you on this wild trading day for crude oil, I've seen some pushback on some of these rumors about talks between the United States and Iran. What do we know? And look at that intraday chart you're standing in front of. Yeah, Scott, let's start taking a little bit of a closer look at the movement in oil today. So this morning, prices did start trending lower. And then right around noon, Middle East Eye reported that the U.S. and Iran were close to reaching an interim nuclear deal

that would have also eased sanctions on the country's oil industry. Prices fell almost 5 percent, with WTI dropping below 70 and getting down to $69. Then prices started drifting a little bit higher as traders were a little bit skeptical about whether or not this deal would actually come to fruition. Then right around 145, we learned that the White House called those reports false, and WTI ultimately finished the day about 1.75% lower. But what I think is more interesting is if we look at a one-week chart,

you can see just how bearish the sentiment in oil is right now, because today's drop to the downside was more extreme than that move to the upside we saw earlier this week when Saudi Arabia announced that surprise one million barrel per day production cut. So once again, Scott, it really just does speak to how bearish sentiment is here and how there's much more risk to the downside versus any positive momentum to the upside. Yeah, Pippa, thank you. Pippa Stevens, quite a day for crude oil. Mike Santoli, I mean, energy is one of those negative spots on the day, and it's been one of the big disappointments of the year. Yes, really a payback phase. Let's remember the sector was up 60 percent last year in a down market. And it really, I think people have been encouraged to some degree from a macro perspective

that crude has not completely broken down below these levels, but it really has been slippery, has not been able to get out of its own way. In theory, energy stocks, if oil stabilizes, should be able to perform okay if we get excited about cyclicality. But again, the rest of the world is not cooperating so much with that trade. Big tech, Simamodi to catch up companies to hedge fund managers. Everybody's in on AI, including industrials. What do you see? Well, Scott, NVIDIA may be the favored way to play AI, but it surged this year, so that's really prompting analysts at Milius to highlight the less obvious names that are playing a critical role in building out the AI infrastructure.

Names like Vertiv, which rallied following NVIDIA's report. Eaton, Schneider in the electric Controls as beneficiaries as AI data centers consume far more power and run far hotter than traditional centers. And that's where their technology can play a key role. Just taking a step back though, Scott, industrials following a dismal May have had a pretty strong start to the month of June. You look at some of the widely held names like John Deere, Caterpillar, already up double digits in the month of June. Rais look at some of the widely held names like John Deere, Caterpillar, already up double digits in the month of June, raising some more questions about this rotation. Yep. Seema, thank you for that. Seema Modi, Steve Kovac on DocuSign, moments away in OT.

Yeah, that's right, Scott. One of our favorite pandemic darlings and hasn't really seen a big rally this year like other tech names. Shares are only up less than 6% on the year and still off 35% from their 52-week highs. Now, here's what the street's expecting. EPS of 56 cents. That's up from 38 cents in the year-ago quarter. Revenue expected at about $641.8 million. That's up from $589 million a year ago. Now, we're expecting to get these results five minutes or so after the bell,

and I'll be back with them and with the results here in overtime, Scott. All right, Steve Kovach, we'll be looking out for that, obviously, in OT. You have a take on stocks like this, the DocuSigns of the world, right, Zoom, the rest? Affirm. It's interesting that we're back to focusing on them because it seems like there's another theme we want to use as a prism to look at their performance through. My rule on all these stocks is use the two-year chart, maybe even the three-year chart, because this kind of stock peaked in the first quarter of 2021. So there you see that. And that can make you seem like, well,

things are ugly. This is still kind of a down and out stock. But also it's kind of sideways to up recently. So they've been sort of finding their level. So many charts look like that. And I think that that's something that it'll be a part of the market that money gets around to picking up. If, in fact, we're in this mode of this is a sustainable theme in terms of AI or these companies have grown into reduced valuations. And I don't think it's necessarily the kind of thing where it's where, you know, we're going back to the fun times in exactly the same way. But, you know, it's certainly worth keeping in mind because you have had a bit of a Darwinian process along the way to figure out who's for real. So you knew that there was going to be some resistance as you approached 4,300.

And maybe that is the line in the bull-bear sand, which if you get over that and you can sustain it for any period of time, more bears turn into bulls because they feel like they have no choice. Yeah, at least on a short-term basis. I think people are saying 4,325 was the intraday high before. There's also these other longer-term technical barriers up in that zone, which are basically the 61.8% retracement off the low, all that kind of stuff. People are finding excuses to say this is where it should end.

I'm not as concerned at going much higher quickly or necessarily having an upside target as you've built yourself a cushion. You go down 3% or 4% from here, it's absolutely no problem. The healthiest thing would probably be the big caps taking a rest and settling back and everything else just kind of firming up a little bit. And we'll see if we get something like that. You've seen it like on a day-to-day basis, it's been working or not working. Today is a very mixed day, but you have had yields lower after that unemployment

claims increase, and that has mechanically gotten the growth stocks moving again to the upside. So it doesn't look like we're going to do 4,300 today, barring a burst of these last 15 seconds or so. Well, we're certainly going to watch that as we approach tomorrow.