Closing Bell - Closing Bell: What Will Drive Stocks? 7/1/25

Episode Date: July 1, 2025

What will drive the market for the remainder of the year? We discuss with Trivarite’s Adam Parker, Schwab’s Kevin Gordon and Robinhood’s Stephanie Guild. Plus, we break down the latest in the ongoing drama between President Trump and Elon Musk – and what it could mean for Tesla’s stock. And, Abby Yoder from JP Morgan Private Bank breaks out her playbook for the second half. 

All right guys thanks so much. Welcome to Closing Bell. Scott Wobbner live from Post9 here at the New York Stock Exchange. This Make or Breakout begins with how best to position your portfolio as the second half gets underway. We'll ask our experts over this final stretch that very question. In the meantime we'll show you the scorecard with 60 to go in regulation today. The majors are mixed as you probably know by now. The Dallas Strongest of the three as many of the recent laggards get a leg up today and just the opposite for those stocks that have led the S&P to these new highs. Nvidia's down, Apple's up, Tesla, it's a big loser today. Elon Musk and the president are sparring once again over the administration's tax bill.

We'll have more reporting on that coming up in just a few. The automakers are higher today and the casinos are too after some good McCown numbers. We'll watch all of that over this final stretch and it does take us to after some good McCown numbers will watch all of that over this final stretch and it does take us to our talk of the tape what will drive stocks for the remainder of the year. We will begin that conversation

with Emily Wilkins on Capitol Hill as the Senate does pass the big tax bill M. Hey Scott. Well yeah the Senate did pass that bill very narrowly 51 to 50 with J.D JD Vance coming in for that tie breaking vote. But they have moved ahead on that $3.3 trillion package, which of

course now goes to the House where opposition to it is growing and tiebreakers of course do not exist. So House members, they're still actually digesting the bill at this point. There were a number of changes, especially just in the last 12 hours. So a couple things in and out of the bill. What is in is a couple different pieces on the clean energy tax credits. That would be a longer timeline for them, as well as about $50 billion for rural hospitals, something that was put in there to help get a few senators into the yes column. But what was taken out of the bill was that excise tax on wind and solar that was in there.

It would have impacted some of the projects whose supply chains were tangled up in China. Also out is that 10 year moratorium from states implementing AI laws that was removed a just, actually not last night, but very, very early this morning. So now that the bill is in the house again Republicans are still really digesting it. We've already had a number of lawmakers tell me that they don't think they can vote for this or

have serious concerns. So the bill does appear to be in trouble both from the fiscal hawks who are worried about the cost but you also can't ignore the more moderate members who are very worried about Medicaid cuts and what those are going to mean. And the real trick of this is that as Speaker Mike Johnson hopes to hold a vote on this tomorrow, if he wants to appease some of these members, if he wants to get them to yes, his goal is to not change the bill text. Because if he changes anything about the bill at this point, he has to ping pong it back to the Senate and then it'll just go back and forth. Certainly won't be done by July 4th and then it will be a race to get it done before they're

supposed to leave for August. So Scott, a big milestone accomplished today, a big hurdle cleared and yet still a ways to go before we might see final passage in the House. All right, sounds like we have some work to do. Emily, thank you. Emily Wilkins, you'll keep us up to date. Now let's bring in CNBC contributor Trivariate's Adam Parker. He's with us.

It's good to have you here. Oh, it's good to be here. On this first day of the second half. So the tax bill has to be viewed by some as one of the catalysts for stocks in the second half, right? Yeah. Along with what? Earnings?

Rate cuts? Tariffs not being as bad as first thought. What do you think? Maybe what overwhelms all of that is just the dream that the AI game is still on for 2026. And so, like, that's what I've learned a little bit in Q2 is it was just too, it was hard to get too negative when all the investment that happened in 23 and 24 has a two to three year sort of period until it's realized.

And you want to get negative, do that at your own peril because 26 numbers might actually be good. So you tried to get a little more cautious. You weren't downright negative, but you tried to get cautious and the market kept running. Yeah. I mean, we had January and the year had all of them. We said the market would be down and volatile. Tariffs aren't in the price.

And I felt like a genius on April 7th and then kind of a jerk by mid-May right and so what I learned is like you know the tariff impact didn't hit you know as much as I thought the big 50 companies are mostly immune the financials are in great shape and there's some positives offset it and also we didn't really implement the most negative parts of what the words were on the tariffs either so So I think you can look at pretty good risk award as long as you dream 26 is the year of margin expansion for a lot of AI deployment. Are we a little complacent now that we've run to new highs?

It's not like under the surface, this whole market has played along in the run to the highs. For sure. And maybe the price action of the big ones leading is telling you there's some tariff issues on margins for stocks 250 through 500 or something like that. So it's easy to say, well, I want more breadth, but there isn't more breadth for a reason.

Those companies are a little more vulnerable. I think the median stock has seen about 110 basis points of gross margin contraction the last couple months. So I think most investors I talk to think we'll have a bit of a growth scare sometime August through October, but they don't want to get too negative knowing that we could have all this AI productivity stuff

by 26 and 27. So I think that's how people are set up. I held a huge conference at my firm last week with a number of investors, and the ideas that were pitched were definitely a little more non-US than I thought, a few more short ideas than I thought, a few more value stocks. It wasn't like we've seen in previous, you know, let's just buy a bunch of tech.

And so I think people are a little bit positioning for a bit of a growth scare, but don't want to get outright negative knowing, you know, the AI stuff's still coming. Well, let's say, I don't know, three, four weeks ago, you're here, you said you had one of these idea dinners. And people were's say, I don't know, three, four weeks ago, you're here, you said you had one of these idea dinners. Yeah. And people were pretty negative, right? The institutional investors that you are close to and talk to often have they come around? Is there a FOMO element to this also where you if you're negative, I mean, you see this train running, you better get on

or you're going to miss your station stop. Yeah, I thought people's rhetoric was negative a few weeks back, but maybe they weren't positioned as negatively for it. Now, look, momentum makes us all in a better mood or in a worse mood depending on the direction. I think people are saying the market is a leading indicator and the market's telling me earnings aren't going to be as bad as I thought three months ago. I think that's true.

And so I think people are afraid that in your scenario set we could be 7 thousand intent at the end of the year that's in the possibility set and you got a position seven thousand in the next six months you know one thing was interesting is I surveyed the room what percentage of you guys in the room think will be down five by year end you know up up plus or minus five five to ten nobody took up ten percent or more what's the dream scenario we talk about this all the time you're a contrarian bull and you're right. That's amazing. So now you come back and you say,

well maybe if I think the market's up 10 or more, I am a bull. I know you got, you know, Tom and Dan and some certain guys are always bullish on tech, but I'm saying the broad institutional set was not that bold up. Lee and Ives respected that.

Yeah, yeah, well, you know, channel favorites, I know. Just making sure people know what you're talking about. So yeah, I need Adam Parker. I need both names, but those guys only need a first name. But no, so I think people aren't positioned for that scenario, and I think it's a chance. And so you gotta ask yourself, could the earnings, do I buy the low margin businesses

where AI can help the productivity? I think so. And maybe for the first time in my whole career doing the macro stuff, I think I can outperform just within financials. I see so many offense and defense ideas in financials. That group of companies looks like it's in much better shape than almost any time in history.

So I feel like there's ways to have upside that maybe I didn't feel as confident about three months ago. Wow, you sound pretty darn bullish. I mean, financials are at highs, industrials are at highs, tech's highs, even the lower quality, higher beta stocks have been ripping. Does that make you nervous at all?

Biggest three sectors in the market are 57, 58% of the total. That's basically the highest the big three have been in 25 years. That's tech, comm services, and financials. So you can't have an optimistic view on equities and not be overweight at least one or two of those three sectors, for sure.

And financials are one of those, and I look and I say, okay, you're right, like JP's back at highs, but there's tons of names I can own, whether it's Capital One because of the Synergies from Discover deal, or there's Progressive because they're adding like an insurance or AJ Calgar, or maybe you want offense that's not at highs,

you can go buy Jefferies, because if M&A rebounds, they got a healthcare business and there's a franchise there. You know, so there's just, no matter where I look, I see like offense with a recovery in M&A, or I see kind of quality defense with insurance. So I feel like financials are a really kind of good risk reward. Maybe don't participate fully in a downside

and totally do participate in the upside. So I like them. Yeah. All right, stay with us. Now let's bring in Charles Schwab's Kevin Gordon and Robin Hood's Stephanie Gild. It's great to have all of you with us too. Kev, you're sitting here listening to all this. Does it match up with your view? Yeah, I think the discussion around institutional versus retail positioning is really interesting because at least in the data that we have seen throughout the sell-off and then throughout the recovery, and we're more attuned to the retail world in terms of our client base,

the retail, sort of average retail investor was pretty quick to latch on to the rally. And actually, even if you look at the selling throughout it, it didn't reach that kind of typical panic level that you would see associated with either a near bear market or a full-blown bear market. So the willingness to stay on and sort of hang on throughout that time period was actually much stronger in the retail crowd versus the institutional crowd. So that kind of buying power that you sort of add in after you got the pretty strong rebound from April 8th has been a pretty important fuel for the rally, we would argue.

And actually, when you look at aggregate positioning across the retail universe, you're still not back to where you were pre-liberation days. So there's arguably a little bit more left to go from a positioning standpoint. And I would add too, what was added in terms of positioning wasn't necessarily concentrated or as concentrated in the Mag-7 type names and the mega caps that it was before. So you actually probably have even more firepower, a little bit at least in the short term for those areas, because those are the ones that have started to lead a little bit more, you know, in this recent like hire. That's why you had the resilience of this market as institutional investors, hedge funds,

big name people got more negative or cautious retail hung in. Stephanie, that plays right into your story at Robinhood. I'm guessing that you saw the same thing. Yeah, we saw when liberation day happened, we saw our customers jumping in and doing it in a way where they were using broad-based ETFs more so than kind of playing single stocks. But since that time period, we've seen them

continue to invest in single stocks, even as recently as last week, our customers were net buyers. So it's not really, it's along the same lines. I would say that our customer base, however, has been really excited about some of the newer IPO names in the last week or so. And they do tend to buy things on a dip, right? So they may have core positions, but for example, last week, Palantir and HIMS were the top

buys because they had dropped, particularly HIMS, as we saw last week from some of the news that came out. So our customer base tends to really try to take advantage of the short-term dips, but then also continues to believe in the the long term secular trends of AI, of quantum computing, for example. And so, you know, we're just here to support them. Yeah, I mean, do you worry that that kind of trading activity makes the market a little more fragile,

a little more vulnerable if those high beta, as I said, stocks, like you said, some of the IPOs and some of the other names that we had on the screen, they've gone up so sharply that if they have any sort of upset that the market's not gonna look that great. Possibly, I think the biggest risk in this market is such that, like a day like today, right? If is such that Like a day like today, right if you're looking at a day like today the top 30 names for today are have an average return of minus seven and a half percent year-to-date and the 30 worst names have an average return of

You know 25 percent this year. So you're having you're seeing the big rotation, right? That's been talked about a lot today, but I think that's actually the biggest risk for the market here is that everybody's piled in to some of the largest cap names that have done so well, and now it's time to start looking in other places that maybe are a little more cyclically biased. And that's, you know, in our portfolios, for example,

we started moving into mid caps a couple weeks ago, because we felt like they looked pretty cheap. And they have some of those sectors, for example, that Adam was talking about in the financial space. So I think that is a risk for the for for the market as a whole. But I do think our customers, they do tend to recognize when something has had a big run-up and tend to trim those positions. So I think they're used to volatility, and I think it's healthy to have higher volatility levels if I'm being honest. But I agree that in September we could see some pullback. I just think September ends up being the worst month, and if we're in a strong rally, it's just time to consolidate those moments usually. We'll get back to the conversation in a moment, but the president has made some comments to reporters on Air Force One moments ago.

Eamon Javers is tracking that for us. What do you say, Eamon? Scott, that's right. The president is on Air Force One. He's on his way back from Florida talking to reporters about Fed chair Jay Powell, who he called a moron, and said that he has two or three other candidates in mind to replace Powell's Fed chair but did not go so far as to say when he envisions naming that person. So the White House has been hinting now for several days that they're looking at other

candidates and there's been reporting that they might name somebody as early as this summer. No confirmation of that from the White House yesterday. No confirmation of that from the president today. Just venting frustration as he has continued to do with the fed chair. Also on trade, the president said he's not inclined to push back that July 9th trade deadline. Particularly frustrated here with the country of Japan saying he's going to send them an angry letter saying he might raise tariff rates on Japan if they can't get to a deal.

The president has long maintained, Scott, that if he doesn't get a deal with each individual country, he'll be the one to simply set the rates. That is because he'll snap back to those so-called Liberation Day tariff rates from back in April. So the president here continuing to ramp up the pressure on Japan to get a trade deal and on the Federal Reserve Chair to get rates down to a point where he's comfortable with them. Scott, back over to you. All right, Eamon.

Thank you very much for the latest. That's Eamon Javers down in our bureau in Washington, as you see. You care about any of this? I mean, I just, I aspire to be a moron. The guy went to Princeton and Georgetown Law School and worked at Carlisle and I don't know, is he a moron? If he's a moron, my goal is to someday aspirationally become a moron. The guy went to Princeton and Georgetown Law School and worked at Carlisle and I don't know, is he a moron? If he's a moron, my goal is to someday aspirationally become a moron.

I think what he's saying is he wants me to cut rates and I think the guy's been really consistent. There's a dual mandate, it's stable, pricing and full employment. We got a job spring coming. He's not gonna cut him until he gets dead. Do you worry at all about what some have suggested is the only thing really to worry about in in any of this

is undermining the credibility of the fed that if you appoint somebody early it's a little ideas jay pals ability to do his job at the market is going to see the appointment as obviously a dovish person and start to act accordingly whether Powell's ready to cut rates or not. I mean, we saw when there was a bit of this, well, it was one sided,

but there was some pretty harsh criticism a couple of months back. And then there was a comment from President Trump saying, you know what, it will stay independent. The market rallied like 2% on his comment that will stay independent. So clearly people don't want the specter of it will stay independent. The market rallied like 2% on its comment that will stay independent. So clearly, people don't want the specter of it not being independent. On the flip side, obviously, he's going to bring someone in who's going to be dovish.

And I think it could stoke a little of that inflation fear group. So I think what it does is maybe create a rotation underneath where maybe the value stuff actually can catch up a little bit. Maybe discretionary or even if the fundamentals are bad home builders or things that are considered the Fed playbook, you know, the front end playbook kind of rally. I don't know if it's good for the overall market as much as it maybe just causes some rotation underneath.

I thought it was interesting, Kevin, where Stephanie said that she expects September to be the worst month yet that's when most people expect the Fed to start cutting rates again. So are you going to be negative in the face of rate cuts? Well, I certainly wouldn't base a view just purely on anything seasonality related, but I also wouldn't base anything on just whether the Fed is cutting. If the Fed is cutting in September because we're facing a much more precarious labor market situation and you're starting to see the unemployment rate gain significant momentum. That's a very different scenario than the Fed

maybe cutting once or twice this year because inflation has come back closer to their target and the labor market is still on a solid spot. So you would have to tell me what the data look like. But isn't that closer to what your baseline view would be? That they're just cutting like they would he suggested they would already be cutting. Yeah, no, if not for the if not for the tariffs, the tariffs don't cause the kind of inflation

that people have expected. Yeah, at the headline level. I mean, if you if you break certain, you know, indexes, whether it's CPI or PCA down to core goods and services. On the good side, you do see the tariff impacts playing out. You have seen a reversal in the annual change for core goods, it's just not filtering up to the headline level because the power from disinflation and shelter and services

has been so strong that it's just not showing up at the headline level. So if it's strong enough where you get momentum to the upside for headline CPI or headline PCE, then yeah, that puts us in a different spot. But even as of now, the Fed is further away from its inflation target than it is its labor market target. So that's still what the focus has been on.

They haven't changed their message around that. So I could still see a case where even if tariffs are delayed after next week and you still get this massive blanket of uncertainty that's weighing on companies and they have to figure out at that point what to do with, you price hikes that have been imposed on them is at that point presumably you're up to an effective tariff rate that they're paying of closer to 15 percent as of may you still didn't reach double digits so if you get up to that point by late summer into the fall and the tariff bite starts happening in prices then you could see that so that's a plausible case why the

Fed would be on hold. I don't see why we just if you look at where we were on March 31st and we were on June 30th, the economy is better than people thought across the board pretty much and yet Fed Fund futures 12 months forward are actually for lower front-end. So like it's the expectation about the Fed has gotten more dovish as the economy is surprised to the upside. That doesn't seem congruous to me. I don't think the Fed's in July. Well what if they're just too restrictive of where they need to be? Why are we missing that part of the story? Because, well, listen, all seven years I worked

at Morgan Stanley, every time we put up some, like, the firm put up some R-star chart and some, you know, kind of like, you know, supply demand argument, they got rates wrong all seven years, okay? And so what I've learned is, like, will back up when the economy surprises the upside. What happened in Q2? Incredibly stable tenure yield. What happened in the stock market? It was like incredibly volatile. So like I think the bond market is probably telling you a story that like the Fed's not going to act. That's what I think. And I don't see why, you know, Powell is going to come in there with, I agree with what Kevin said, like there's incongruous data between the inflation numbers and the jobs numbers. So you need to see things deteriorate. Even if they lag, Powell's going to stick to the playbook. So unless we get a really bad employment

figure here in July, I can't see why he's going to. I think his playbook, I think he's played his hand on the table. I would have cut, I mean, he's not saying it that explicitly, but they would have started cutting rates if not for the tariffs being bigger than they thought. Irrespective of the fact that the economy's hung in there, they're not rushing to cut rates because the economy looks bad. They think they're north of neutral. They just want to get back to neutral. They just can't pull the trigger on that because they're afraid of some inflation that hasn't

shown up yet showing up. Yeah, I just think the history of that, the Fed being proactive on it is zero. So for them to do it now in the face of pressure from the president seems incredibly unlikely. All right, we're tracking big moves in retail as well. It is part of the story today. Stocks that have underperformed are outperforming as Courtney Reagan has been following throughout this day.

I mean, you look at Target, you could probably pick many others that you'll highlight for us here that are ripping today. How did you know I was going to pick that one, Scott? Well, the XRT retail ETF, it's up 3%. So it's well outperforming the flat S&P 500. The sector, largely getting positive vibes probably from this FT report that the Trump administration may be seeking phased trade deals and agreements in principle, at least

ahead of that previous July 9th deadline. But Target is up almost 6%, as you point out. administration may be seeking phased trade deals and agreements in principle, at least ahead of that previous July 9th deadline. But Target is up almost 6 percent, as you point out. It's had a tough 2025, though. It's down 23 percent. Kohl's, too, it's been beaten up this year. Its shares are getting a bid today up about 9 percent. Now, Contour Brands, that's also up almost 8 percent. But this one was added to Goldman Sachs' conviction list for healthy underlying trends and that Helly Hansen acquisition. Goldman Sachs also upgraded Hasbro, Argus Research upgrading Nike to buy, citing its own progress and its recovery, as well as its improved progress.

So a number of reasons why these stocks are moving. Back over to you. All right, Court, thank you. That's Courtney Reagan. And Coles, making you look bad today. Yeah, well, Cole's is something I think I said on the air was obviously worth zero a couple years ago. I think it's down 80% since then, so I'm OK.

I hear you, but what about the retail trade? What about laggards being winners? What about a big catch-up trade now? The Russell's up one, the S&P's down. You're getting a factor rotation today. It's hitting value. it's hitting retail. Is it just a day thing, or are you gonna have some sort of catch up now

from the other performers? You could, you could, and that's what I think the Fed's, any Fed action's more likely to cause a rotation, as I said. But look, these businesses are impaired. I mean, Target is, what's the in-store competence to your stack, down 10%.

I mean, the business is impaired. Of course you get dead cat bounces, but that's a poorly positioned company with you know no clue. So you want to buy that as a long-term investment? I don't think so. You're making friends all over the retail space. Don't go to the mall. It's a terrible big box. It's a terrible business. Yeah I think there's this thing called Amazon. I think that's a problem for them. Stephanie what about this catch-up trade? Does retail have it? I think there are a lot of opportunities in retail. I think you've seen over the problem for them. Stephanie, what about this catch-up trade? Does retail have it?

I think there are a lot of opportunities in retail. I think you've seen over the last couple of years a number of CEOs that changed hands because the companies themselves had lost their way relative to their older brand names. Target is one of them. Nike is one of them. Starbucks even. I think think those actually there could be opportunity as management is trying to change the way it works, right? Like Nike is trying to come back to running and in their last earnings report, the running category had actually started to show some growth and Starbucks, I just saw that the CEO is looking to hire, you know, all star baristas. So I do think there is a potential opportunity,

but you know, I think you want to be cautious in it because retail, you know, it depends a lot on what happens with the labor market and with the consumer. Can they continue to spend? We'll leave it there. Thank you, everybody. Adam, Kevin, Stephanie, we'll see all of you soon. Was that a W Hotel there? What was that? No, it's good. What room was she in? We're just getting started here. I did my ride in my house. Thank you. We are just getting started here. Up next, the double dose of tech stories.

We are keeping an eye on this hour. Tesla and Apple moving in opposite directions. Big stories on both. We'll discuss next. Welcome back to stories we're following this hour. Tesla shares down sharply as Elon Musk and President Trump renew their war of words today. And Apple shares are higher on a report that the company could be close to a major strategy shift on Siri and AI.

Deepwater asset management's Gene Munster is with us, along with big technologies Alex Kantrowitz and Alex is a CNBC contributor. It's good to have you both with us. Gene, you say there's an 80% chance this blows over and they call a truce. Maybe I would have thought that after the first round, but here we are again, what leads you to believe that? Well, I think they both have a lot to lose. Trump has, I think, probably the upper hand, but they both have something to lose here. So I think that the rational minds will ultimately

play out. But whether this kind of feud blows over or not, I think one thing that's critical for Tesla investors to remember is that what's going on with the business, with autonomy, the progress that they're making, albeit early, is much bigger than any feud that is going to happen week to week between the president and Elon. And so I'm surprised that I understand the reaction, but ultimately I think that cooler heads will prevail and if they don't Autonomy still coming one way or the other How do you see it? Okay? Well, you know logically they should have not fought ever right the whole idea We are exactly so when you're asking do I think there's gonna be a truce that's gonna hold I don't I don't know

I mean, there's no logical explanation for why they're fighting now. And so therefore, I wouldn't use logic into the future to say they're not going to fight in the future. And I think that if you look at Elon Musk, you have to be saying, what are you doing, man? You're jeopardizing not only Tesla, but probably from a larger extent, SpaceX. So it's incumbent upon him to stop antagonizing the president. He's talking about

how he's going to potentially form a new political party. I think every Tesla shareholder was relieved when he left the White House and said, I'm going to do something else. And they want him to be out of politics and be focused on his company. What about the Tesla customers or even the prospective ones that were mad at Musk for being close to Trump in the first place and are now don't want to see it end. They're like, more, go ahead, go after him some more. I don't think the guy who has the bumper sticker on the back of his Tesla that says I bought this before I knew Elon's policies is going to go out after this Twitter fight and then

take it off the car. I think it's going to take a long time to undo some of that damage with the more progressive and liberal buyers of Tesla that bought it for an ideology now that he has been so close to Trump. You know I think the only thing that happens as he stays in politics is potentially more damage on both sides. I almost hear Eugene saying that the demand issues that have hurt Tesla in some respects as a result of this relationship with those two men we just showed on the screen doesn't matter as much anymore because autonomy is where this company's growth is going

to come from in the future so if sales never recover so what well at some point they got to recover because you have to sell the vehicles to promote autonomy. But at the end of the day is that the brand will improve, assuming that he continues to step back from the political wrangle. And ultimately, again, I just come back to this. Just to get a snapshot, this is stuff that people like Alex and I, we obsess about every detail that's

going on with these companies and the progress that they're making around autonomy and who's doing what. But sometimes when you're that close to it, you just lose track of the bigger picture. And the bigger picture is something that's going on on autonomy. TUS is one of the two companies that's leading in that. And ultimately, this is going to be the most obvious example of physical AI, something that's important for the U.S. more broadly. The government, Trump doesn't want to see autonomous vehicles roaming China and Europe

and them being prohibited in the U.S. trucking all the benefits of autonomy. So Scott, that's exactly right. They've got to get eventually the units to improve. But ultimately, as Elon has said, this is all about autonomy. And I don't think the White House wants to stop autonomy. Let's switch to Apple because that stock has been a dramatic underperformer over the first half of the year. Hopes are high for a rebound.

The stock's up today. Why? Because of report that Apple's looking to a third party for AI related to Siri, what some have said, throwing in the towel and trying to do it themselves. Alex, how do you view this? Is this a good move? I love this. I mean, this is Apple saying we're going to stop holding to our, you know, try to ensure

principles and try something different. And the market is giving it permission to do that. We see the jump after Apple's going to say, you know, maybe we don't build it in house. Maybe we work with a third party. We use their model and we put our product on top of it. All the value, or most of the value in AI is not gonna come to these model builders. It will be coming to the people

who build the product on top. So Apple has been obsessed with building a model, it's built the inferior model, it hasn't integrated it well with Siri. Working with a company like Anthropic, which cares a lot about safety, has built this clawed chatbot that people in Silicon Valley love, could go a long way to fixing the problem of the assistant that

it has inside. Gene, you like this? Yeah, I think it's a really good move near term. I think the best move for them is to buy perplexity. And there's three things that perplexity gives Apple. Number one is that they essentially have tools that build on top of these other models. So it means that Apple is not going to be dependent to one LLM provider longer term if they do acquire perplexity. Perplexity is also working on a agentic bot that goes

within, it's called Comet, that goes within a browser. So that would really improve the value of Safari. And last is that of course perplexity has this search business and this is something that Apple has struggled with for a long time. So agree with where Alex is coming from. The market is giving them permission. That's a great way to say it. I think that the best option for them is perplexity. Spend 20, 30, 40 billion dollars.

You'll be more than rewarded when the stock goes up 10, 15% on that news. You preach to the choir. AK has been saying that, as you did when you were sitting next to me at WWDC. The more you guys talk about it, though, the bigger the price tag gets. Well, Apple has plenty of money, so they better get on it quickly or else it's going to go even higher. So if you're listening, Tim Cook, make that call. I know that they're talking about it internally.

Get on the phone with our Vincerni boss, the CEO of Perplexity, and get the deal done and do it sooner rather than later, sooner before their discussions with Samsung get even deeper and before that Google ruling goes through and you might not have the ability to make, take those payments from Google and then the price tag goes up. Further perplexity to Apple, it's the no-brainer. Maybe my Galaxy brain take was they're talking

about Anthropic to use it as leverage to drive that perplexity price tag down. Gene, last to you, better stock in the second half than the first, it's not gonna take that much. I think they're both in good shape. I put Apple in part because the iPhone numbers are so low. Remember, 2021, 39% iPhone growth. We talked about that super cycle, it hasn't showed up,

but the numbers for September, the streets had a flat iPhone number, they're gonna guide to a higher than flat. I think that's going to be positive for the stock. All right, guys, we'll leave it there. Gene and Alex, thanks so much for being here. Up next, JP Morgan, Private Banks. Abby Yoder is back with us. She'll tell us how she's positioned now for the second half of the year. Bell's coming back after this. Welcome back. Stocks begin the second half with a good amount of momentum. Can it last is the question.

Let's ask Abby Yoder. She's chief equity strategist at JP Morgan Private Bank. Nice to see you again. Nice to see you. You were pretty bullish, I think, the last time you were here, a handful of weeks ago. I think you still are, right? Yeah. Yeah.

I mean, I think, yeah, we were talking about this and I was mentioning our bull case, which has the S&P at around 7,000 in the middle of next year. And it seems like we have a lot to learn over the month of July, I would say, between earnings, between policy, like what's really going on in terms of the background tariffs, obviously. But that 7,000, that bull case seems like relatively plausible, right, if you get this and not just based on momentum, but by based on real fundamental strength, right? From a margin perspective, from an earnings perspective.

So yeah, we remain really optimistic at the moment. So the tax bill that we're watching, you think is better growth than people are even anticipating that earnings are gonna be much better than current estimates are forecasting that tariffs aren't going to ultimately be as bad and the bite of them is not gonna hurt the economy? Yeah, I mean, I think when we're thinking

about earnings expectations right now, so look, when companies were reporting last quarter, they were kind of operating under this worst case scenario in terms of tariffs, right? So when they gave guidance for 2Q, you saw estimates really meaningfully revised down, something like four and a half, five percent, when they're typically revised down

something like three, three and a half percent. Even if you could give guidance, right? Right, exactly, even if you could give guidance, but they tried, right, they really did. They tried to put a framework around it. And I think so when you think about, we think about the macroeconomic data that hasn't been showing the effects of tariffs,

it's probably likely that we also don't see that come through in company results, which means upside. So IPO markets picked up? Yeah. M&A is going to pick up? Are we going to be talking about animal spirits in a way we thought we would in January and we just couldn't because of the whole trade stuff? Well, that's what we were talking about when we were talking about this bullish scenario

last time. It really was like all of the focus was on the negative policies. It wasn't on those growth positive policies that were still in the pipeline. And we really have started to see that deregulatory agenda come through. We got the stress test last week. All of the focus was on the negative policies. It wasn't on those growth positive policies that were still in the pipeline. We really have started to see that deregulatory agenda come through. We got the stress test last week. We got some more bank reform at the margin. I think with markets back near all-time highs, you've also seen the IPO market pick up as

well. It's funny you say that. I'll come back to you in two seconds because we do have some breaking news regarding the IPO front. Leslie Picker following that money. What do we know? Hey, Scott, yeah, continuing to pick up here, we've got Figma revealing its S1 to go public. If you recall, this was the design software company that Adobe was looking to buy several years ago,

but that deal fell apart on regulatory concerns. That deal valued at $20 billion at the time. We don't have a valuation for the IPO. That's something we'll learn in the forthcoming weeks. However, in looking at the financial picture of this company, the S1 revealing $821 million in the last 12 month revenue, 46% year over year revenue growth here and 91% gross margins. Figma applying to list on the NYSC under the symbol FIG.

Morgan Stanley, Goldman Sachs, Allen & Company, and JP Morgan are managing this offering. I'll send it back to you. Okay, Leslie, thank you. That's Leslie Picker back with Abby Yoder. I mean, this says everything about market conditions getting better. Everything.

I mean, and also I think when you, not only are IPOs coming back, but you've seen really good follow through in terms of performance of those IPOs, which obviously begets better sentiment as well. I would say the other thing, and we talked about this last time, what was really predicating or underlying that bull case was around the adoption of AI. And we've really seen that across enterprises, right?

So last year at this time, around 5% of companies were using AI. Now that's almost doubled to 9%. And it's really seen an inflection higher in the first half of the year. So I think as they start to see, you know, revenue, like the case for revenue increases as well as cost cutting measures, I think that really bodes well for the market as well. You like the financials as a group, which have been at record highs, I mean whether it's your firm, JPM, or Goldman, all anticipating just better conditions, deal-making, deregulation, good economy, everything else. I mean, this is going to be the first time in, let's say, 15 years that we see regulation easing for this sector, right?

As opposed to incrementally getting worse, particularly relative to, you know, the past two years. And if you look back in the first Trump administration, you know, bank stocks outperformed for the first two years. It wasn't until 2018 when the actual legislation was enacted did they start to underperform. So it's really like one of those things that we can see continuing throughout the year. Good catching up with you again. Thanks for coming by. Yep, Abby Yoder here with us at Post9. Up next we track the biggest movers as we head into the close closing bell coming right back. Music Let's send it over to Contessa Brewer now for a look at the key stocks to watch. Hi, Contessa. Hi there, Scott.

Look, casino shares really hit the jackpot today, boosted by much better than expected June gambling revenue numbers in Macau, a 19% improvement year on year. The expectation was, at most and 19% improvement year on year. The expectation was at most 5% improvement. And look at Wynn, Las Vegas Sands, MGM Resorts, all pushing higher by almost 8%. Melco today up 12.5%. And then look at the hotel. Those shares are also on the move.

Hyatt got an upgrade to Strong Buy from Raymond James. Those shares are up 4%. Wyndham and Choice Hotelels also moving higher this hour as are Hilton as well and Marriott. Scott? All right, Contessa, thanks so much. Contessa Brewer still ahead. Solar stocks are surging. We'll tell you what's behind that. The bell comes right back. We're now in the closing bell market zone CNBC senior markets commentator Mike Santoli is here to break down these crucial

moments of the trading day plus a big rebound in solar stocks Pippa Stevens with the details there Brandon Gomez looking ahead to Constellation earnings which are out in OT Mike we'll see if this is more than a one day thing of losers becoming

winners and winners being losers. Yeah, it's almost at this point, it seems like kind of deferred maintenance, right? The end of the last quarter, things got a little bit divergent within the market in terms of winners racking up big leads against the laggards.

The bottom 15 year-to-date performers in the S&P 500 are up today an average of 2.5%. So it is pretty stark. You have the equal weighted S&P up more than a percent, NASDAQ 100 down. It doesn't seem to be coming from, at this point, a place of stress, where you had this crowding and people had to unwind these popular trades.

We'll see if it does spill into anything beyond this. I wouldn't be surprised, too, if Tesla's downside pressure and then the balance over two days in Apple, which has been a big laggard and most likely not a momentum weight, maybe give an extra little shove to this type of action. Okay, Pippa, tell us about solar stocks, which are rebounding today. That's right, Scott. So clean energy stocks are bouncing back after the Senate removed attacks on solar and wind from the reconciliation bill.

It would have added attacks to projects using components from China and took the industry by surprise when it was added to the text over the weekend. The TAN fund is rising 3% today. Shoals and Array Technologies, which make rackers for utility projects, are surging double digits with Sun Run rallying as residential leases will once again qualify for those tax credits. Developers Nexair and AES are also in the green. Now the updated bill does extend the deadline for projects that begin construction within the next year to qualify for the

tax credits. But overall, this bill is still very much a blow for renewable energy with industry group SIA saying it will lead to higher electric bills, factories will shut down, jobs will be lost, and the electric grid will be weaker. Scott? All right, Pippa. Thank you. That's Pippa Stevens.

Brandon Gomez looking ahead to Constellation. Those earnings in overtime, Brandon. Hey, Scott. Yeah, look, it was a sobering first half of the year for investors. Constellation brands down 25% year-to-date. Not alone. All except Bud Lightmaker, AB InBev down double digits as well. Nielsen data showing sales volumes for Modelo and Corona declining mid single digits compared to last year.

And that's ahead of the 4th of July weekend. Now in April, you'll remember Consolation cut its earnings and sales forecast, not just for the year, but all the way out to 2028. Some investors worrying consumers are losing interest in alcohol, prioritizing healthier lifestyles, as well as alternative products gaining favor. Still though, two thirds of analysts have a buy rating

according to FactSet one legendary investor. Unspooked, Warren Buffett, doubling his stake in Q1 of this year to 12 million shares. Berkshire now the third largest shareholder at 6.7%. Scott, I'll be listening for any comments on tariffs, pricing, Hispanic American consumer trends next this hour. All right, Brandon, thank you. We'll see what happens there.

Brandon Gomez, Mike, I'll send it back to you. We got a jobs report a day earlier this week because of the 4th of July holiday. Some jobs news today. Jolt's better than expected. We did. It was better than expected in terms of the job openings. So therefore job openings per unemployed person.

And you know, the two-year note yield is up, you know, seven basis points or thereabouts. So it's been sliding. You've been pricing in a likelihood of a Fed ease over the next few months not sure the jolts would really turn that picture over except i think people already were bracing for potential week number on Thursday a lot of the estimates have been coming down i think there's just a general sense out there that you're not too far from stall speed on job creation as labor supply and demand go down. So there's just a little bit of an interruption of

that process and now we have to just sort of be on alert in a two-way fashion. Alongside that, you know, I think you got a little bit of an upside surprise even on the ISM today. So it seems as if, you know, just as soon as people get it in their head that the economy's in this deceleration mode and the Fed's gonna have to maybe have a better case for cutting, it sort of muddles it a little bit, but not in a way that I think should concern anybody in a direct or immediate way.

Final piece of it, you know, talk about the momentum stuff. Palantir down a ton today, Uber is another downside leader, Netflix, Robinhood is down on more than a hundred million shares, which is a massive more than double average volume after being up on that volume yesterday. So just keep in mind, like the retail trader has been very active and has been redeemed in the buy the dip instinct. We'll see if it's sort of getting a little

bit tired or if this is just a one day refresh because it could be either one at this point. We said in many respects it's the reason why the market was able to be so resilient because retail hung in when others did not or got more cautious. And the pattern of the market being up after a down day this year so far has been one of the strongest on record. Alright, good stuff Mike, thanks. Good night to you, everybody else too.

So we'll go out with a nice day for the Dallas. Obviously reflecting this change in positioning at least on day one of the second half. That will do it for us. I'll see you in a little bit of a time before then.