Closing Bell - Stocks Keep Climbing Despite Rising Risk As Latest Inflation Read Comes in Light 8/13/26

Episode Date: August 13, 2026

Markets digest tame inflation data, falling oil prices and another round of tech earnings. Mike Pyle, Deputy Head of BlackRock’s Portfolio Management Group, assesses the broader market backdrop and what could drive the next move. Ray Wang, Chairman of Constellation Research, breaks down the tech trade and where the AI investment cycle goes from here as Applied Materials reports earnings. John Kolovos, Head of Technical Strategy at Macro Risk Advisors, analyzes the charts and identifies the signals that matter most for market momentum. Our Katie Tarasov takes an inside look at SK Hynix, its massive expansion in South Korea and its first U.S. factory. She examines whether soaring demand for high-bandwidth memory has permanently changed the economics of the industry or whether SK Hynix risks overbuilding if the AI boom slows. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

group bringing the bell. Welcome to closing the bell overtime. Long from Studio B at the NASI market site. I'm Melissa Lee along with Mike Santoli. Stocks modestly hired today with the S&P and Russell hitting all-time highs. S&P 500 crossing 7,800 for the first time. The Dow adding 69 points

at the whole session at the close. S&P 500. Are we going to... Just going to be about 0.8 points away from that close above 7,800. We'll see how it actually settles out here. The modest upside here across the board, in part because of lower yields.

Tech, real estate, and communication services are the winners, materials, and energy, blacked. Yes, semis and memory in particular outperforming today. The memory ETF gaining around 4%. That's its third straight winning day. Sandisk, Western Digital and Micron gain. Sandisk itself was up 13%. Two names sitting out the tech rally, Cisco and Cerebrus. Cisco falling as its gross margin out with overshadowed a solid quarter.

Cerebra's tumbling and second quarter revenue came in like you see it down almost 12%. In time workday, really the start today soaring this afternoon on reports that private equity firm Silver Lake is in talks to buy the company that move lifting the IGV into the close. Big movers also in the retail space with double digit percent losses for both tapestry and Yeti will have much more on that straight ahead. It was another one of those days where at the index level didn't seem like that much was going on. No. You look under the hood and you saw big gains in DRAM, for instance, IGB. surging. And I feel like if you saw what happened with Cospy overnight in terms of the rally there and it being in a technical bull market again, it really speaks volume as to the re-risking

that we're seeing in the market here. How quickly it has come back. Yeah, without a doubt, that the reflex is very strong. What was interesting is, in part because of that workday news, and you got that rally broadly in software. You had finally a day when software and semis were up together. It's kind of an asterisk next to it because of how it happened. But maybe that's a change in tone. And that's that 100 is still a little bit below its size, like 2%, call it. So that's where most of the catch-up could happen, and that's why the moves have been bigger in that direction. On the macro front, you know, yet yields were definitely down. To me, coming into this week with a 50% perceived chance of a September rate hike, that was not a major restraint on the market. However, the inflation numbers were good enough, and those odds have come down.

And I guess that's just enough to kind of clear the way for a little bit. more upside. Right. I mean, if you sort of price out a Fed hike in September, you get closer and closer to the midterms and the belief is they're going to be boxing, they can't really move. And so we are in this sort of stretch, this runway to go higher through. And the bull case is that maybe we won't need it if inflation remains tame, but that remains to be seen, of course. Speaking of which Treasury yields easing today on the back of weaker than expected wholesale inflation data in a 30-year auction, Rick, Santelli is watching that for us. Rick, and you gave that auction a C-minus. Yeah, the 30-year auction wasn't very good, and I'm sure that part of that, of course, is that, you know, it isn't the benchmark.

It basically is insurers and some of the big portfolio people like those 30-year bonds, but ultimately the highest yield on the treasury curve, I think, is coming down. And the notion of finding less buyers actually surprised me in a way, but it didn't surprise me because it's just not as liquid as the rest of the curve. I think there's still this overriding nervousness regarding how rates are going to behave in lieu of what's going on in the Mideast. Now, if you look at the final demand year over year, it was at 4.7 today. Now, granted, 4.7's too high. But as you can see on that chart, the pattern was broken at the end of February when the war began. That's when it started moving back up. The fact that it's turned down a couple of months is an optimistic sign.

I think it gives credibility to the notion that the Fed should wait and see how the rest of the Mideast turns out. I think that could have a big drop in energy prices and continue to affect those charts. Now, if you look at a 12-hour 2 and 10, it's clear that at 8.30 Eastern, boom, they dropped rather significantly. And even though oil is down, the lows in yield coordinate with the bounce that we had from the lowest levels on some of those futures markets in the crude space. If you look at a one-month chart of two-year, we're going to be on pace for the lowest yield closed basically in one month. And that really is something important to say. We're now 20 basis points below the high yield close in the two-year, which was 435 as we hover down six basis points below yesterday's settlement as we hover at 414 plus. And finally, you know, everybody's talking about what happened with the dollar yen at the end of July and early August with the interventions.

This chart goes back two weeks to the lowest level of the dollar after the interventions, which was around 156 and 155 in change. You see it on the far left there. Today, the dollar index closed at the highest level since the interventions. It's closing in on 160. And I think it's very important to watch this because, once again, traders are emboldened as we get close to 160. And we have to monitor if the bank in Japan's percentage of possibilities for tightening into the next meeting continue to move higher. Mike, Melissa, back to you. And there's some reports, Rick, that the Japanese government is behind a hike.

Oh, yeah, no, and I think that they ought to be. I really do think that there's no way around this. And if they don't hike, I think the interventions are going to continue. It's going to be throwing good money after bad, and I don't think it'll have any lasting implications without that rate hike. Yeah, I mean, it didn't really last that much this time around. Rick, thank you, Rick Santelli. Oil prices, meantime falling today, despite no evident progress in Iran.

Gasoline prices, however, are not coming down as quickly. Pippa Stevens is here with that for us. Hey, well, falling today, despite more attacks, including a reported one on a Saudi-Aramco refinery at the hand of the Houthis, but we really remain in this limbo state where Hormuz is neither open nor close, and it's very clear that some ships are getting out, but the estimates very widely on just how many there are. The administration has said it's 9 million barrels per day.

Some of the data-watching firms like Kepler and Vortexa have that at a lower level. But RBC's Halima Croft has been notably bullish on all the prices here, and she said that the market is sort of anticipating, this time machine of sorts. That we're going to go back to January. Hormuz will be exactly the same. It will be open. Middle East geopolitics will go back to what they were before. And she said, that's just a complete miscalculation here and that there's going to be significant overhangs. If President Donald Trump were to kind of make some concessions in order to get a deal, there are still going to be issues with infrastructure. I will say Eurasia group on the other side of that.

They say 65 to 80 is what we're looking at for the rest of the year on Brent. They say it doesn't matter if Hormuz is not open. If it's open 50 percent, that's enough. But then just finally, point on gas prices. We are at 407 here on the national average, and that is the highest August on record, according to AAA, not adjusted for inflation, but clearly we're still feeling it at the pump. And, you know, I can just look at Valero up another 15% this week. So the refiners are just kind of feasting on all this. They can't really make any more, which maybe explains a little bit of the weakness or relative weakness versus expectations of crude, but no relief at the pump. Yeah, that's what everyone is now focused on. It's the

tightness in the refined products, and that's really where we're feeling it. And the idea that if you have refining capacity offline, then they are buying fewer barrels of crude, so that does depress the crude price and then lift product prices. And I think, additionally, as we go into the fall, we've seen some of the maintenance season be delayed as refiners look to capture the huge crack spreads that we were seeing north of $70. And so to the extent that they have to then do more maintenance in the fall and, you know, their operations will go offline. Of course, summer driving demand will be behind us, but this is now going to see an increase in diesel demand because heating oil season will be upon us, especially in Europe. So they'll be looking for more imports

They should be hedging hurricane risk along the way, too, because, you know, that would throw things off. It's supposed to be tame, though, thankfully. El Niño is making it a little bit more. That's right, yeah. New sight. That's a bonus. Yep of Stevens. Like Rick mentioned, yields lower today after the latest read on inflation came in below

expectations. The chances of the Fed now holding rates steady at its next meeting sits at 65 percent, up from 45 percent just a week ago. At the same time, Cleveland Fed President Beth Hammock reiterating her call for the Fed to raise rates immediately to combat inflation. So what are investors supposed to make of these mixed signals? What does the path for rates look like from here? How could it impact stocks? Joining us now, Mike Pyle, he's deputy head of the portfolio management group. Mike, great to see you. Great to be here. Does it matter? Or is the earnings picture so good that it almost doesn't matter

for the Fed tweaks by 25 here or there? Listen, I think that, you know, stock prices are obviously both a function of earnings, which are historic, particularly some of the sectors that out perform today. But I think we are very focused still on the interest rate curve, particularly at the long end. We've seen, you know, I think part of the reason why stocks were so strongly performing today is precisely because we saw some of those interest rates come down. Easier financial conditions, future cash flows to discover back to the president of a lower rate. You know, the fundamentals are very much still matter, even as we kind of very squarely have our eyes on those earnings. I was mentioning earlier. I mean, as much as 465 on the 10-year feels because of

of where we've been in the last few years on the high end. I mean, how much lower would we expect yields to be given, you know, nominal GDP growth, 5, 6%, percent, and all of the demand on the capital markets for new borrowing? Well, I think you hit it right on the head there. I mean, I think one thing we are very closely monitoring is exactly that, the demands on capital markets. obviously historic Cappex demand around capital markets, just as obviously the scale of fiscal demands being placed on capital markets, not just from the United States, but really developed economy governments around the world, to say nothing of just the basic run-in-the-mill demands from investment grade issuers, from households, from the mortgage market, etc. All of that adds up to us to an

environment where the risks are tilted upward on interest rates precisely because the capacity of capital markets are kind of out the outer bounds. So then that goes back to my first question. I mean, in terms of interest rates, do you then dial back your expectations for stocks or do you see that stocks have some sort of a cap on them because interest rates are just, you know, we're in a higher for a longer kind of, you know, regime? Yeah, I mean, I think it's exactly as we were talking about. It's that race between earnings and interest rates. We do see pressure upward on interest rates, particularly at the longer end of the curve. but at the same time, we don't see any slowdown of this incredible CAPEX wave that looks to us as if

this is an environment that's still underbuilt, not overbuilt. We haven't seen in earnings this month anything by way of a deterioration of those CAPEX expectations of what's flowing through there. And so to our eyes, you know, the ingredients for ongoing earning strength remain. And the thing we're just going to be observing is that, again, that kind of race between earnings and rates. And it's understandable then that, you know, equity investors are so fixated on the areas where there's scarcity, where you have these bottlenecks, where there is pricing, where we have quarters worth of visibility on insatiable demand.

I guess the call has to be after that is that going to create a productivity payoff, or we go in and then get into a disinflationary spot. That's exactly right. I mean, the way we think about it is, again, to kind of put it in race terms, the race between scarcity and abundance. that, you know, right now, so many features of the economy are described by scarcity, whether it's energy markets, we're talking a moment ago, these bottlenecks around AI CAPX, capital markets. Ultimately, the payoff has to come from enhanced productivity and steps

into a world where those scarcity constraints relax and we see greater abundance. That's a world where I think you can get the type of picture of lowering interest rates, stronger earnings led by productivity and a very positive equity environment. But we've got, you know, some steps to get from here to there. And in the meantime, it's that kind of race dynamic as we were talking about. But that handoff period, if it takes longer than expected, then what? Investors will be patient. Yeah. And again, I think that the challenge is that, you know, the Cristobal is especially hazy, I think, with respect of the historic, you know, dimensions of what we're seeing go on. We have paid very close attention to the data month in, month out.

I think you can see fragments of evidence of productivity increasing of some of these types of technology advances that we're hoping to see feed through. But I think the evidence is just that fragmentary at this stage. And it's going to take more to get confidence that that's really coming through. Mike, thanks. Mike Pyle of BlackRock. Applied Materials earnings are out. The company beating on both the top and bottom lines of revenue coming in at $9.12 billion versus the estimate of $8.99. EPS coming in at $350 adjusted versus $3.50. 339 estimate. Adjusted gross margin also slightly above expectations, a company also giving better

than expected adjusted EPS and revenue guidance for the fourth quarter. Despite all the beats, we're seeing the shares down by about 2 and 3 quarters percent after hours. All right, let's turn to one of today's biggest tech movers, workday. The software company jumping following reports that private equity firm Silver Lake is in talks to acquire it, the move giving the sector ETF, the IGV, a bump. Let's see it up there about 3.1%. With us now is R. Ray Wong, CEO of Constellation Research, co-founder of AI Forum. Ray, it's good to have you on. I mean, look, the market was receptive to this report.

We don't have it confirmed that, in fact, you might have kind of a motivated buyer who thinks you can go into a SaaS company like Workday, maybe put some more debt on it, hold it, and have it live in the AI future. Are we going to take heart in that message? I definitely think so. And if you look at what's so related with Dell during the turnaround, We all thought Dell was not going to make it to the hardware revolution, and Dell came out perfectly on top. Workday is in the same situation.

We're in the SaaSpocalypse. Pricing is actually undervalued. The P.E ratios have come down so hard. But guess what? If you're in the SaaS business, you've got data, you've got distribution. You're still going to win. I mean, this is a company that's going 12 percent year over year. This is a company that's being operating in Rule 40, Rule 50.

These are companies that are durable. These are durable SaaS vendors and not fly by night. They're not point solutions. And it's an enterprise play. So there is an opportunity to go out and take workday and then bring him to the next level or even combine some players in this market, especially given the valuations are so low. Yeah, we do want to take a quick break here. Ray, just hang on. There you go.

Girl Scouts of America of Greater Chicago in northwest Indiana ringing the closing bell at the CBO in Chicago, ending the regular trading day for options. Love the thin mints, by the way. Of course. Yeah, I don't see any there. Ray, what companies are like Workday in terms of, you know, attract evaluation, the improvements that it can be done, how it can survive sort of this AI displacement fear? There are three more like Workday. Melissa, you're absolutely right.

There's displacement fear that's going on. I would say Salesforce is in that camp. Service Now is in that camp. And of course, Adobe's in that camp. And all three of them have shown that despite the terminal dates going from 30 years to 10, PE values crashing, these people are. companies are still growing. I mean, these are double-digit gains. Nowhere else can you do that. Software doesn't have massive Cappex expenditures. Software generates massive free cash flow.

These are things that investors should be looking at, especially as we're coming out of the next rotation out of hardware memory and, of course, AI chip stocks. Eric, you know, turn over in my mind exactly what the market is willing to bet on at a given time. So if we're going to say Open AI in Anthropic, their market valuations privately, who know, is approaching a trillion dollars. The whole AI hardware food chain has massively gone up in value. That only makes sense, perhaps, if they're going to kill some businesses along the way, or they're going to displace some revenue streams along the way. The market decided at one point, it was likely to be some of these software companies. If that's not the case,

is one of those price dynamics wrong about how we're valuing pure AI companies? I think the price dynamics are wrong on LLMs. There's this belief that LLM's. There's this belief that LMs are going to get you to, you know, AGI, which is general intelligence. And I think the challenge is that LMs aren't designed to do that. But the LMs will be displacing a lot of areas, but transactional software is a hard place for that to happen. I can imagine an open AIA and anthropic post IPO three years from now making an acquisition attempt at one of these enterprise software, cloud vendors, and SaaS players, just so that they can build that into the mix. But at this moment, it's more likely that a hyperskilier might want to get into this enterprise play, and you take a

Silver Lake who might take a Workday private to then actually get acquired by maybe an AWS or maybe by a Google. And those are all possibilities that are on the market. Of course, these are really big transactions. And for someone to pull that off, they would have to have some deep pockets. But a combination of Salesforce Workday Service now is an interesting proposition. I mean, Workday alone, it was $43 billion prior to the pop. And then you have to add the premium in. I mean, that would be a very, very big bet. I mean, do you think, you've been in this sector for a long time? In this day and, I mean, at this moment in time, when there is some uncertainty about the future path for this kind of software,

does that kind of big bet makes sense? It definitely does. It's just like when we looked at pharma in the pharma industry, you had companies that became biotech companies. Those co-opetech companies all ended up being acquired by pharma companies because pharma companies had distribution. and they had the capability to get to the sales enablement. That's the same thing with enterprise software. As we get bigger and bigger, if you've got data and distribution, you win the game. And so you could take SaaS companies and startups that go from zero to 100 million in product-led growth.

But once you get the sales-led growth, there's something special about enterprise. That's different. You saw that's why Open AI has swapped out some of its leadership team. Enterprise is different. It's not consumer. Knowing how to run Slack is not being able to do enterprise. The enterprise requires customer success management. it requires a product roadmap, enterprise architects that are operating at scale.

I mean, it's a very different type of enterprise motion, and companies are banking on those technologies to be able to succeed. It can't be fly by night. And this is a very important piece. And that's why the Open AI moves actually look really good for their purpose of getting to enterprise in the future. Right, great to speak with you. Thanks. Hey, thanks a lot. Ray Wong. Coming up, Netflix gets a boost as Bill Ackman's Pershing Square takes the sake. Again, plus investors are betting, coach won't be enough to keep tapestries momentum. And CNBC was the first media company to get an on-camera look at one of SK Hynix's new chip plants in South Korea.

That story is straight ahead. The stock up 8% today. You're watching Closing Bell overtime, live from the NASDAQ market site. It's a sequel. No one saw coming. Bill Ackman is betting on Netflix once again four years after exiting the stock. Pershing Square disclosing it bought 3 million shares of the company, making up nearly 5% of the portfolio. Pershing first bought Netflix shares back in 2022, then sold the stock three months later after the company reported its first subscriber drop in a decade. It took a $400 million loss at the time. Since then, the firm says Netflix has won the streaming wars, and its subscriber base exceeds

competitors, adding that they think the streamer can outspend rivals on content while spreading the cost across the industry's largest user base, improving both the value proposition for subscribers and profitability. for the company. Other names that Pershing disclosed new stakes include Visa, MasterCard, S&P, Global, Intercontinental Exchange, and Alcon, all of them closing hire, with the exception of Alcon. Sort of fascinating. Of course, in the interim, Netflix stopped reporting subscriber numbers every quarter, so they don't have that ride to do anymore. But I think that maybe there's a common theme with the Visa MasterCard and ICE as well as Netflix, because they all did really come under heavy pressure as,

people were looking at these businesses that were these kind of networks or fintech or financial data information as being AI victims. Right. They have come back a little bit, but it seems like an opportunistic play that these are still compounders that can work. But I see Netflix as being completely different from that. It's largely different, right? I mean, like, it's very different. And it's interesting because it still hasn't, it's nowhere near where it was prior to making that failed bid. That's right. And so you think, like, what is wrong with Netflix at this point. I mean, if all the things are true about, you know, Netflix in terms of its dominant position, ability to outspend rivals, then what is the deal here?

Yeah, I mean, I think, I mean, obviously it's different because it's pure consumer and, and, you know, but it's still kind of like network effects, low capex and all the rest of it. I do think it's a more mature company and it's got to get valued that way and it's probably going to be not as exciting. And so it's just kind of a plotter and not a fast grower. We got a couple of retail earnings this morning. I had a lot. of tomorrow's July retail sales report. Yeti falling 12% following results. Well, headline numbers came in above estimate.

Sales were slightly weaker. Expenses were up, which hurt operating margins. The company did raise its full year EPS guidance. Tapestry, meantime, closing on its worst day since 2013. As its outlook disappointed investors, the company saying it expects revenue will slow in the second half of the year. Its coach brand showed very strong growth, with sales up 15%, which helped offset a 7% decline in Kate Spade.

And on the flip side, Berkinsstock closed. higher after its third quarter results beat estimates. The company also laying out, it's full year of guidance which shows revenue and adjusted EBITA coming at the higher range of previous guidance. I mean, Perkins stock was crazy in every single region that it had double digit percent gains in revenue. It's wild.

Yeah. I mean, maybe there's some seasonality. I mean, Sam's, you know, in summertime, but still. Seasonality, the stock have been down for sure. I mean, also, they just keep expanding way beyond the core. I mean, they're now have these shoe models that you wouldn't look at them and say they're Birkenstock. sneakers and other ways.

Oh, it sounds like you really. I actually have noted it fairly recently, and I think that could be something to do with what's happening here, that they're kind of expanded beyond their niche. But, of course, none of these stocks are really sort of bellwethers from retail. And there's been a lot of chatter about Target and Walmart, which are reporting next week, I think 18th and 19th or something. And how more bullishness around Target, more bearishness around Walmart. Yeah. Morgan Stanley Economist had a piece today about how discretionary spend had really come. come back in the first half of this year. Maybe it skews higher end, but that would say target over

Walmart if you're going to be simplistic about that. Up next, why many younger Americans are feeling anxiety and distrust when it comes to the nation's AI buildout and how it could impact their careers and financial goals. Plus, we'll break down the charts to see why gold may be on the verge of a long-term breakout. Closing bell overtime. We'll be right back. Five below closing higher after Jeffries upgraded the stock to a buy, raise the price target to $3.50 from 210, calling it the next TJX of value. The company's recent comp strength has come from

the viral squish toys. But Jeffrey says this overlooks several improvements in the business. They cited transformation into a durable growth story with rising productivity, high single-digit percentage unit growth, structurally higher comps, and accelerating EPS growth. The squishes, those are, they're very cute. I've just

been introduced to them. They are, and I understand what's fascinating about five below, though, is they have this way of, they surf from one of these trends to the net. I know. It's amazing. Remember the fidget spinners and the stock went crazy on that? So it's kind of amazing that they managed to generate these every few months or so. A new exclusive Generation Lab, CNBC survey of young adults is pending a very pessimistic view of the nation's AI buildout. Pippa Stevens here with the details. Pippa. Hey, Michael, you can call it AI angst because young Americans have quite a few trepidations when

it comes to the promises of artificial intelligence, according to our exclusive survey with Generation Lab, and that includes what it will mean for jobs. 30% of the more than 1,000 respondents, aged 18 to 34, said it will help their career at least somewhat, but 45% said that they believe it will hurt their career. Now, they also want more oversight. Three-quarters said it should come from either the federal government or an independent expert body rather than the AI companies themselves. Now, 8% did say, though, that it's the Wild West and no regulation is needed. Now, there is also an overwhelming distrust when it comes to AI leaders. Across Tech Titans, Satya Nadella is seen as the most trustworthy in terms of having the best intentions for AI and to act responsibly. But it's only

at 35 percent, followed by Sam Altman and Elon Musk. Now, on the flip side, Palantiers, Alex Karp, Peter Thiel, and Dario Amadeh, were rated the least trustful in terms of AI responsibility. Now, finally, as data centers get more attention, the pushback is growing, and that's also reflected in our survey with a majority 60%, saying that construction should slow down about a quarter said it should stay the same. And 15% said full steam ahead and we should keep on building. Yeah, come on over, Pippa. I mean, I don't know. It was surprising to me, at least, Mike, I don't know if it's surprising to you, that this generation was so skeptical and want to pause. And so the measures by Governor Hockel here in New York and Governor Abbott

in Texas, they line up with what this generation actually wants. And I think it's an interesting contrast to look at the advent of the internet when it was very much seen as, you know, Democratic with a small D in bringing people together and idea sharing. And this, I think, the distrust about for the AI leaders, I think it gets to this point that Gen Z doesn't really know who's in control of this. And it's seen as this mysterious figure. And now I think the data centers themselves have become a physical representation of kind of this unknown and this idea that we don't know who is overseeing it and whether or not they have our best interests in mind. So it feels like a big contrast. I think it also feels,

as if it just gets layered on top of the existing anxieties of this generation, which are we don't really know what the clear career paths are, you know, what the formula is for kind of getting ahead. And then the affordability part of it, you could theoretically also say this is an exacerbating factor, at least in people's minds. Yeah, and it definitely dovetails with the rise in democratic socialism, which we saw in this idea that AI could take away from white-collar jobs traditionally seen as those that could lift you out, you know, into the middle class, into the upper-middle class. And so there's more anxiety amongst that group as well, in the sense that, you know, we can't start buying,

we can't buy houses now when our parents could, and, you know, those types of sense that we're being left behind, or they are being left behind, I should say, by the economic system. Right. That slide that you had about who do you trust. I think that the bottom line there is that they don't really trust anybody. I mean, you highlighted Satya and Dell as having the highest amount of trust, but more, a majority do not trust them either.

Exactly. They don't trust anyone in this sector, which is fascinating to me. Yeah, and I think it just is that sense of mystery and what's actually going on behind the scenes. and just having no sense, and is it kind of this machine computer that's now going to be controlling us? And it's just happening without their deciding it should. It's just like, you know, you're forced to kind of participate if you want to. AI's world.

This also, I think feeds into the whole, like there's this nostalgia for the pre-digital world. I have a parent of two Gen Zeres. So I kind of see this happening. Hardcover books are in. I mean, like actual physical looks. And physical media. And the flip phones and now rotary dial-ups. You can get those for your kids too.

Yeah. I'll see how long it lasts. Thanks, Biffa. Time now for a CNBC News Update with Brandon Gomez. Brandon. Hey there, Melissa. The Justice Department today allowed a federal court ruling easing restrictions on silencers and short-barreled guns to take effect. A judge had previously struck down the federal registration and approval requirements for the weapons and ruled that it would take effect today if the DOJ didn't request to stay. But the DOJ still has time to appeal and says it currently assessing the impact of the judge's order. The NTSB says a broken engine fan blade sent debris into a Ryan airport.

plane in Greece last month, shattering a passenger window. A 61-year-old man seated beside it was partially sucked out before other passengers pulled him to safety. Investigators found bird remains inside the engine, suggesting a possible bird strike. And six Arab Soccer Federation are backing FIFA President Gianni Infantino as pressure grows for him to step down. The support comes after Infantino abandoned a controversial plan to sell stakes in the World Cup to private equity investors. Several major soccer confederations have accused FIFA of deception and a breach of trust. Melissa, send it back to you. Thanks, Brandon. Up next is the recent move higher by stocks assigned this market is about to break out. And will momentum stocks lead the way? We'll break down the

charts from closing bell overtime returns. The S&P 500 is gaining momentum this month, up almost 5% so far, not even halfway through August, driven by strong second quarter earnings growth, surpassing 7,800 for the first time ever today. But is there more room to run or should investors be looking for signs of resistance coming in? Joining us now as macro risk advisors, head of technical strategy, John Kolovis. And John, look, last time we were talking about maybe there was a little bit of a dicey zone where the market might have a further pullback. You said if it vaults well above 7,500, you've got to give it credit for going higher. Yeah, that's absolutely right, Mike. So now we're back to threading the needle to 8,300, essentially. So what we had going into

into the June into the summer months was a corrective process. That was the call overall. But if you remember when I came in the day after the Fed meeting, I said, that was a kicksafe, because if we had failed to hold the June lows, we would have made an ABC decline down to around the 7,000 area. But instead, we broke out above 7525, and we did so creating a, I would call it, a coiled spring effect, which now projects the market up to the 8,300 area. And on intermediate term basis, I wouldn't be surprised to see the market stumble a little bit here around 7 to 800, but so long as we hold above the support level here, right, we should be in half decent shape to rally into the 80300 area until the end of the year.

We never got that index level sort of flush, John, that you were hoping for, but we did see momentum names really correct. Yep, that's absolutely right. While we didn't get the spike in the VIX, we did get like a bloodbath elsewhere in the market. So one indicator that I use to help me with my rotation calls is to apply an overbought, oversawled oscillator on the relationship between momentum winners and low beta. And that's what this essentially shows.

When this line is rising, momentum is outperforming low beta. When you apply an oscillator to it, what I noticed was is that we hit a two standard deviation oversawed condition on this relationship. And it's important for two reasons. One is that you can see historically in the past, when we got to these oversawled levels, momentum started to outperform beta. All right. So number one, we think momentum should start to outperform. And number two, these lows here on the oscillator actually lined up with lows with the market itself. And, John, over the course of all this, maybe not very well noticed, gold has woken up.

Absolutely. So as we look outside of the market, where are we seeing signs of potential bottoms and trend reversals, one of them is actually with gold right now. So if we take a step back, we got to remember that gold is in a secular bull market, meaning that gold is essentially working, way up to the 8,000 area. And how I'm viewing the decline this year is that of a cyclical bear market within a secular bull. And I've been eyeing this, you know, 4,000 to 3,700 area is where we should start to bottom. And what was interesting, though, last week is that we finally broke above the 50-day moving average right there after breaking out of a bit of a small base pattern. What that has me thinking now is that we're going to start at least a minimum, a counter-trend rally, you know, up into around the 4,600 area, if not maybe up to the 5,000. And then from there we'll take it, right?

How a pullback's going to be going to be benign and corrective and the subsequent rally would be impulsive, then we're going to thread the needle higher for gold. But I'm open mind that gold is starting the modeming process here. Sounds like you're making a call on China, John, that we may have seen a bottom. Yeah, I'm open-minded as well with what is going on with China. And again, too, take, it's always important to take a step back when you're looking at your chart. So China made, the HSI index, made a bottom back in 22. It was a generational low. And the way I'm viewing the decline this year is that of just a cyclical bear market within a ongoing bull market within China. And I'm also very bullish within emerging markets over time. But what I've noticed here is this is the rally that started here with the HSCI happened right off of well-defined support.

And also what you do to do, different measured move targets on this index, this is exactly where you should have bottomed. And then now you have an impulsive rally. So what I'm looking for here right now is a very benign pullback, hopefully not much lower than the 8,000 area. And then they'll start to rally here. you actually look and squint a little bit, what do we see happening here? A little bit of a head and shoulders bottom. The Kavari will be forming right now within Chinese equity. So here I'm also very open-minded that China is bottoming.

All right, John, come on over. You know, it's interesting you characterize maybe what we're in for is a threading of the needle up to 8300. I mean, what are the various dynamics that we're going to have to, I don't know, maybe kind of slalom our way through? Well, there's still a lot of these macro worries that are out there. We still have the election. We have to worry about. You know, what I worry about, and you hinted on this earlier today on one of your commentaries, which is like the market seems kind of just very complacent here.

VIX is super duper low. You know, it's trading at 15. Yeah, I think it should be at 20, given what's going on. It's what's very remarkable was going on. It's also there's a seasonal effect here with the VIX. It's very well pronounced. It should rise there. So I'm worried about that.

The macro is a bit of a concern. But, yeah, it is a threading of the needle. One thing that does bother me a little bit about this advance. If we want to just pick on things. is that we only have about 3 to 5% 52-week highs right now in the market. It should be about 10%. So it's a little bit uneven. It's not awful.

It's not going to derail things, but that does bother me a bit. In the past, when we've seen the VIX be so low, but individual stock volatility be so high, how does that usually resolve? How has that played out in the past? Well, yeah, that's what I was kind of banking on, you know, that we're going to get that swoosh lower. That usually gets resolved by correlations,

implied correlations to spike. But the market's done a remarkable job diversifying itself here. Even with you go within the tech sector, Apple's correlation versus its peers is very, very low. So the market's done a good job at doing that. I just worry, though, that, yeah, there is a bit of complacency out in the market might not be ready for that unknown, unknown. And particularly this time of year, come on, let's think about it. You've been in the business for a while. Somehow something weird always happens in August.

And that's kind of that worry. Yeah, that runs up against, I think a lot of people are saying, well, last two weeks of August is going to be dead. Right, we got past CPI, nothing else to worry about. Yeah, that's what I wrote about in my note today. I'm like, for this being the dog days of summer, there's a lot going on here in the market. I just want to take a break. Can't take a break. So, yeah, ultimately, I think the tape is in pretty decent shape.

It's just going to be rotational. I think that idea that it's going to keep rotating, that's the mantra until proven otherwise, to be quite frankly. Yeah, see if we get another test. John, good to see you. Good to see you. Thank you. All right, well, be sure to check out my new weekly market memo newsletter. It features analysis of key market themes, including insights and data.

from John Kolovis and exclusive commentary from top traders and investors. You can subscribe at CNBC.com slash market memo. Up next, an exclusive never-before-seeing look inside the massive factory of one of the world's hottest memory makers. Closing bell overtime. Be right back.

Welcome back. It's been a very volatile year for the South Korean stock market with the index seeing gains or losses of 8% or more on at least seven trading days in the past few months. Part of the move was driven by new individuals. investors flooding the market and the introduction of single-stock levered ETFs, in particular on SK Heinex and Samsung.

In an effort to calm some volatility, regulators have introduced new rules where investors must complete a week-long course before they can start trading in single-stock funds. So obviously, you know, innovation and speculation runs ahead of education, I suppose. I did like the contrast of the U.S. around the same period of time, loosening the frequent day trader rules. You don't have to keep as much margin. You know, anything goes. And we saw margin levels go up in the month afterwards. So it's great. Imagine if they impose those kinds of rules here in the United States. Yeah. There would just be a, I don't know, revolution. Yeah, you have to go back to driving school or something like that after an accident.

Yeah. Well, speaking of S.K. Heinex, the company's investing more than $700 billion to build what they are calling the largest network of memory factories in the world. CNBC's Katie Tarasov, gotten exclusive and never-before-seen look inside one of the massive chip factories. Katie joined us now with the highlights. It was an extraordinary tour you got, Katie. Yeah, it absolutely was, Melissa. I actually got to see three of S.K. Hynix's memory fabs in South Korea, and I had a rare chance to talk with the chairman of the parent company, SK Group.

Memory is typically this boom and bust industry, right, which creates a risk around such a massive spend, $720 billion. But he told me why the next. next technological leap is shifting the whole industry. This is what we call the HBM4E. And what's next after this? Well, next is HBM5. People just perceive that this memory chip is just commodity.

Wow, they don't really care which one, the Samsung brand or the SK brand and the micron brand. But now it's a custom product and, well, we have to actually designed for. or the specific customer and the specific performance. Yeah, Chairman Shea told me that customers like Nvidia and Google are lining up for this custom high band with memory, which is coming with the next generation, HBM 5. And it's what S.K. Hynix will start making here at the Yonge En cluster.

This is the biggest one that we got to see, and it's going to start putting those memory fabs, memory chips out in February. Back to you. Katie, can you put the spending that S.K. Hanix is doing into context in terms of how much Samsung is also building out its capacity. And then what is being done here in the United States, which seems like just a drop in the bucket compared to what S.K. Heinex is spending alone. Yeah, absolutely. So Samsung is also spending a lot of money in South Korea

to build out a huge cluster of fabs in this Pyong Tech area. Both Samsung and S.K. Heinex have other fabs that haven't really broken ground yet in the southwest of the country. South Korea is doing this huge push to try to ramp up capacity. and remain the memory leader. But the U.S. wants more memory here. Micron is the only company that is building front-end manufacturing fabs here in the U.S. in Boisey and Clay, New York.

You know, S.K. Hynix is also building in Indiana. I got to see that as well. Exclusive first look there, too. But it's a packaging fab, so this is back-end. This is how they wire and connect the memory chips together. But the, you know, the U.S. Commerce Secretary last month actually called on S.K. Hinex and Samsung to. push for a front-end fab here to build in the U.S. But no plans as of yet.

Katie, we often remind folks that SK Heinex and Samsung together comprise like almost half the market value of the South Korea-Kosby Index. It must also be a huge economic footprint in the country, all this spending and investment there. I mean, how is that, I guess, impacting things? And is it celebrated there? Yeah. If you go to South Korea, when I went to South Korea, when I went to South Korea just a couple weeks ago. It's so interesting. It's actually made, if you're an employee there, the value of your stocks, the bonuses are huge, and it's actually made you like a hot member of the competitive marriage market there. That's been reported out a bit. And there's, you

know, the hotels all around South Korea are analysts told me booked out with memory giants, memory executives from the U.S., who are coming to Korea for meetings. NVIDIA's Jensen Wong, AMD's Lisa Sue, they both took trips to Korea in recent months for memory meetings, actually. Amazing. Even impacting the supply and demand for mates, I guess. Katie, thank you very much. Really fascinating stuff. Thank you. Let's read the full story and watch Katie's exclusive documentary. Please head to cnbc.com. Up next, find out why World Cup ticket sales were not even close enough to help StubHub's

latest quarterly results, even as ticket prices sold for thousands of. of dollars apiece. Posing Bell overtime live from the NASAC market site. Be right back. Welcome back. World Cup fever. Apparently wasn't enough to prevent Stubhub from reporting another disappointing quarter. Julie Borson's got all the details. Julia. Well, Melissa, you'd think that the World Cup would be great for Stubhub, but it reported a quarter in which costs grew faster than revenue grew and earnings missed expectations. And despite raising its revenue forecast for the year, it did not raise its adjusted earnings forecast for the year, implying a slowdown in the second half. Analysts are flagging concerns. Bank of America downgraded Stebhub from neutral to underperform

and slash its price target to $7.50 from $11, I'm sorry, $7.50 from $11, saying with the World Cup catalyst in the rear view, it does see slower growth ahead. And a sign of another headwind for Stebhubhub, the company spent nearly $2.6 million in lobbying. in the second quarter in California to block a bill that would limit markups on ticket resale prices. That makes it the second largest lobbying spender in the state in the quarter. And, Melissa, with today's move, the stock is down nearly 70% in the past year. Wow. Julia, thank you. Julia Borson. Let's now get you set up with tomorrow's trade today. There are no earnings on the calendar,

but on the economic front, we'll get the July retail sales, which are seen rising zero. 0.1% excluding autos. Economist predict sales to increase by 0.2%. Also on tap, the preliminary August reading of consumer sentiment that has perked up, but it's still been the stubborn thing. The economy seems like it's plugging along. People don't seem to be cheery about it. But S&P 500 did print a new record today, at least marginally above where we were.

Eight days ago, we'll see if that helps at all. And we'll see if you have that magical close, right? Yes, the weekly close. Yeah, we'll see what happens. 7,800. All right, that does it for overtime. Fast money starts right after this quick break.