Closing Bell 8/5/26

[MUSIC] All right guys, thanks so much. Welcome to Closing Bell. Scott Walker, live for Post-Night here at the New York Stock Exchange. This make a break out begins with stocks trying to extend their record run. Maybe a little fatigue though following that first hire over the past few days. The scorecard with 60 to go and regulation looks like this. It's certainly a nice session for the Dow as results from Disney are helping that index. The big banks outperforming as well. So that's one story there. In Vity is a big winner today in the tech space today. As Elon Musk sings its praises during the SpaceX earnings call stocks up near 5%. AMD those been down all day after its own earnings report and it's down 6%. How about Lily? A beaten-raised quarter sending shares higher. We will have more on that coming up. It does take us to our talk to the tape. Whether stocks can continue to march higher. Let's ask our panel. JP Morgan's Abby Yoder, C.I.B.C. Chris Harvey, and CNBC contributor, Payne Capital's Courtney Garcia. Welcome everybody. Good to have you all here. Good to be here. What do you think? I mean, 8,000 seems to be now the end-of-the-envogue number. I know. Minimum. I mean, it's really remarkable. I was having a meeting last week talking about the nervousness of the market on July 30th. So before we got some of the reports that really bolstered this positive sentiment. And it's really just been, it just shows, and this has continued to happen over the last couple of years. When you have these sell-offs and the things like semiconductors and the infrastructure and even the hyperscalers to a certain extent, there's so much appetite to own these things that you get one incremental data point. And granted, the data points were good, right? They were very solid. They re-underwritten wrote that really positive view on AI. In terms of monetization, you just see money flood back into that space, right? So a lot of that was technically driven in terms of the sell-off as it relates to semiconductors. You get those good data points and you see money flood back. You have these major clearing events too, haven't you? You get past the tech earnings and parts of that point. Yeah. The hedge fund blow up. You got past that. And the market has kind of been up every day since then. You know, albeit today is not much. But nonetheless, it's not down. No, it's not down. So there's a lot to like, right? Chart looks good, earnings look good. You had a clearing event last week. You delivered fundamentals across the board. Not for every single stock, but very solid to strong, right? If you look at M&A, we're going to have an M&A cycle. DeRay, we're still seeing the effects of deregulation. The credit markets are wide open. You can issue cap, you can issue paper and do cap backs. You can do buy back, you can do risky endeavors. So our price target is 80/20. We think we get there. Oh, I mean, Edward Denny says 80/250 could look conservative because of what the earnings picture has looked like. And on that note, I want you to listen to Goldman's president, John Waldron. He's spoke to Andrew Rossworth in this morning. Listen to what he said about earnings and this market. I would say the most important factor right now is earnings. Earnings growth. You know, earnings growth continues to be really strong. We're going to have the second quarter with the seventh consecutive quarter and the S&P of double-digit earnings growth. So we've had very consistent and significant earnings growth, which is propelling markets. That's ultimately the most important fundamental driver. And I would say recently it's broadening. It's not that complicated beyond exactly that, right? I mean, that's the underlying story underpinning this whole thing, isn't it? Yeah, I mean, it's all going to come down to earnings. The more that we're seeing these potas of earnings, the some of which is actually justifying the questions about the cap backs spend right now, at least to a certain extent. That is going to continue to be the story. And what I like about days like today, where you're seeing the Nas Act is down because you have some of these headline companies like SpaceX or AMD is down, bringing down the waiting. You're seeing the underlying breadth in the markets right now, with the Dow being up. And that's what I like, is people are not selling equities. They are rotating out of them. And I think that is a very healthy sign for the stock market. And I think these earnings are going to continue to drive that higher. How much do you guys think the momentum trade matters? You know, we had this incredible run up. Then we had this incredible and fast reset. Yeah. And, you know, we're down a little bit. Obviously, now there are those who say if you look at what the market has done, what momentum has done, it's not really going to be a pretty picture from here. I mean, how much does momentum matter? Well, I think to like what you're getting at is like, how much do we need to pay attention to positioning, right? Like this really is. And in that also, like, how much do client portfolios have exposure to a certain factor, right? Like it's not necessarily like I was talking about semiconductors, which is a, you know, part of the momentum. Oh, and a big part, obviously. Right. But like it is very important to think about, okay, what do I have exposure to from a factor perspective? And then also thinking about like positioning to your point, like to Goldman's point, right, making the comment that like earnings are driving the market. That wasn't the case a week ago, right? If you looked at earnings revisions and what was working, it wasn't the sectors that were having positive earnings revisions like tech and calm services. That has only changed now. So, and I think that again just speaks to the style, the positioning, and paying attention particularly when you have as much leverage in the system as you did. Jonathan Krinski at BTIG has been talking a lot and writing a lot about momentum. How quickly things change, you said, "Oh, we could go semis, we're in around a 30% drawdown." We'd call time on the momentum unwind. Fast forward to today, we've seen the largest four-day rally for the SOC since COVID, okay? The S&P has surged 5% over the last four trading days. That speaks to these, you know, after the clearing event. Into a 52 week high, in the last 30 years, that's only happened three other times, including March of 2000, which was the highs of the dot-com bubble. What do you make of that? So, what I make of that is, momentum bent, it didn't break. A lot of it was because of the leverage, positioning, and almost every single portfolio was following the same thing. I buy things that go up and I sell things that go down. That was retail, that was hedge fund, that was institutional. We had a wash out of that, it's fine. The underlying fundamentals are good. We went back to 1998, long-term capital, this is not that. We went back to '07, this is not that as well. Credit spreads are still strong. You can still get liquid in this marketplace. Underlying fundamentals again are solid to very, very good. What do you make of the fact that, you know, Michael Burry says, "We're near a major top and possibly a 1987 type fall." So, what I worry about is the Fed shrinking the balance sheet, which is not going to happen until, I think, second half of '07. I mean, '27, excuse me. And the reason why I worry about the Fed shrinking the balance sheet is because of credit markets are so important at this point in time. They're funding that CapEx spent. And that CapEx money is going into the marketplace, and it has a multiplier effect. Once you start shrinking the balance sheet, that credit market all likelihood becomes more selective. Now, multiples begin to compress, and you can't do the CapEx that you could do over the last six months. And that's when we have to think about repricing. Repricing the market, repricing a lot of the tech space. How much of a wildcard, I mean, it obviously speaks to the Fed. I think the market is trying to understand on its own for the first time in a long time what the message from the Fed is. Correct. Even if the message from the Fed is more opaque than maybe it's been in the last, you know, a couple of decades at least. So, what do we do with that? Well, I think some of that is the story that's happening this week because there's also the geopolitical concerns, which are arguably lessening, which is that's going to improve the oil picture. So, you're seeing energy prices come down, you're seeing inflation expectations come down on that. But you also just got an ADV payroll number. And I think this will be interesting to watch how this plays out, because you're seeing that these numbers are softening. So, you're seeing a cooling of the labor market, but not a breaking of the labor market, which could mean that the Fed has more likelihood that they could stay on pause. There are still some wrinkles in that. Like, for example, you're looking at wage growth, and you're looking at the financial increase, that can increase wage inflation. So, I don't think it's not clear, but I do think you are seeing some signs here that maybe it won't be as bad as people had hoped when it comes to the Fed raising interest rates. John, well, I mean, I'll go back to earnings. Waldron, I think, makes the case that if you're getting this broadening of earnings growth, doesn't that point to a healthier, broader, better foundation under the market? Yeah, I think the argument is actually twofold, and I'm not being negative, I'll get into it, but essentially, you've seen the median company in the S&B 500 accelerate from 6% earnings growth in 2025 to 14% this quarter. That's really, really healthy, and the majority, a lot of that, are the banks. The large-cap banks have that up stellar quarter. Then the counter argument is, wait a minute, but all of these, you're seeing this broadening because you're seeing this mass adoption of AI, and so then you're seeing margins expand. And that's true, like, that's the goal, right? Spending trillions of dollars, don't you want this to be embedded throughout the economy and through all of these different sectors? That is the goal where it's going to become AI as synonymous with all of these different things. But at the moment, there is differentiation from a performance standpoint, right? You look at the sell-off in tech and semi-conductors in June and July, and financials were one of the best performing sectors, right? So I think the conversation with clients now is more around, because it was scary to go through that drawdown, that historic momentum drawdown, like, what can I own that's differentiated? Financials stands out, and dustreels are benefiting from that. They're a little bit more correlated, but getting differentiated exposure. >> Maybe we just made an overall reset kind of of everything. You step back, like, Scott Rubner yesterday of Citadel Securities was writing a note about, there's nothing fundamental that's changed, and you spoke about this already. We sort of shook out some of the excess and some of the leverage. The story didn't change, it just reset. >> That's right. I think expectations were too high. When we were coming into July, everyone's saying seasonality, seasonality, July is always good. July is a great month, and I said, "We're just going to flip a coin here, and I'm not feeling so good about things, and I'm feeling that expectations were too strong." At the beginning, we thought things needed to reset. They did reset if you look at what really popped, it wasn't because of earnings, it was because there was a massive degrocing, and that degrocing and created more degrocing, and then we had that liquidity event, right? And what we're right, what we have is just a very healthy, it wasn't a correction, but a very healthy repricing of risk and of the momentum trade. And now we move forward, because as we look at the earnings, we look at the fundamentals, we look at the commentary, or we're hearing as demand is good, but visibility is almost as good. The issue becomes supply chain and supply chain constraints. It's not the demand side. That's incredibly strong, and the visibility is there. >> Yeah. >> The broadening trade feels like it's got some legs to you. What do you think? >> Absolutely, I mean, I think, again, today is a good example of that, where you're seeing the Dow is outperforming, and I think that's gonna continue. And I think in as an investor, you do still wanna own the AI trade, I don't think that's over, but I think there's so many other areas of opportunity. I think like for example, Europe is a good place you can look at, which has kind of almost become the anti-AI trade. A lot of that is more driven by things like financials or energy, and it's really under owned. It's really undervalued. So I wanna make sure as an investor, we own all of those pieces, 'cause this year is a good example of how a diversified portfolio has really been working in your favor, and I think that's gonna continue when you look at later this year. >> I guess you gotta be careful, and maybe Chris, you alluded to this just now, that trying to use history as a guide for what certain months are going to be. August and September are typically not good for equal weight. Well maybe this is gonna be different this time. What does it matter, whatever history's been in the past, this time, it's kind of always different every time, isn't it? >> Yeah, and it's flashing back to the last couple of years where everyone was entering September, and they're like, oh man, this is gonna be really bad, what are we gonna do, and then it ends up being positive. So I do think there's an element of that, and it really matters to Chris's earlier point, what the Fed is doing, 'cause what's interesting is obviously the market, the rates market didn't take the meeting last week well in terms of the curve bear steepening. And so I think, but what's interesting though, if you look at overall financial conditions, because of what was happening in credit markets, particularly really did a software in the hyperscalers, you actually saw financial conditions ease, even though you saw the long end of the curve. >> Yeah, let's go to the 30 year guys, just throw that up there while Abby's talking. I wanna see that, 'cause that's where the real move happened. >> Right, and I-- >> Right, and you like, 520. >> And you would think, how can the equity mark go up when you have a move like that in the longer end of the curve? But it really is when you look at overall financial conditions, because you had this monetization from the hyperscalers, you saw their CDS spreads and their credit spreads come down, which is a net positive, I would say, full liquidity and for sentiment and for risk assets. >> Last point, are you surprised that the market has hung in there in the face of the long bond doing what the yield doing, what it's done? >> So we take a yes and no. What's really more important is credit spreads, right? If you look at credit spreads and credit spreads have been incredibly tight, that's more important to multiples and to earnings than anything else. The level of rates important, and if we get to a certain level, yeah, we're more concerned about it, it's really credit. And at the end of the day, what we've been talking about over the last couple of minutes is, we forgot the lesson about leverage and tal risk. We relearn that lesson last week or the last couple weeks, and now we move on. >> That's kind of Waldron's message today too, right? It's a good lesson for risk and worth heating, no matter what kind of investor you are. >> And you need to moderate that portfolio with a little bit of risk of urgent where there's quality with this low volume because you need to stay in the game. If you get shaken out, game over, that's the worst situation. >> All right, we'll leave it there. Guys, thanks so much for being here. Everybody, we'll see you again soon. All right, let's get to some of today's top stock stories. There are many alphabet falling around noon or so today during half time report on news of a shakeup in its AI unit, McKenzie-Sagallis, been following that all day. And what was a pretty dramatic stock move, Mac? >> Yeah, it really was. You've got alphabet chairs still under pressure after that major AI leadership change. Demis Tassabis is stepping back from day to day management of DeepMind. CTO Cry, Kavukoglu is taking over in long time chief scientist, Jeff Dean, is leaving with three other Google employees to launch an AI startup. Now, the timing is what investors don't like. It is another major organizational change. As the street is already questioning Google's position at the AI frontier. With this latest shakeup adding to concerns out here in Silicon Valley, that Google's exodus of top AI talent is gaining momentum. Now, we've just seen a string of prominent departures, including Nobel laureate John Jumper-Twinthropic and Gemini-Colean Nome Shazir to open AI in just two years after alphabet spent nearly $3 billion to bring him back. Now, the bull case is that alphabet is putting a stronger operator in charge. DeepMind was built as an elite research lab. Now, it also has to ship products faster more reliably and at lower cost, especially after alphabet forecast as much as $205 billion in CapEx and turned free cash flow negative for the first time on record. It's got. - Okay, Mac, thank you, Mackenzie Segal. So we are tracking some big moves in the chips again today. It all falls in with that momentum trade. We spent a lot of time talking about Christine Aparts and Neville spends a lot of time following it too. What can you see? - I'm gonna start off with AMD because that one is moving and selling off even after a record quarter revenue jumped 50% on data center business that now makes up nearly 60% of the company. But I bring all of that up because shares have more than doubled this year. So a beat just wasn't enough. And the reason you're seeing the sell off today is that the guy topped Wall Street, but not the whispers increasingly more important, capital spending came in nearly three times what analyst modeled. And there's also the price of winning those AI deals. AMD is handing key customers more than $15 billion in stock warrants for every roughly 15 to 20 billion in future revenue. And the biggest payoff, it's Helios AI racks, is really just a 2027 story. Then came Mr. Elon Musk. On his own investor call, he said his companies will build quote exclusively on Nvidia, calling Blackwell the best architecture, which was a reversal from May when he said he'd buy both and by Blackwell, I meant they're Ruben, sorry about that. And this is a big number for Nvidia by its own math. Every gigawatt of AI data center is worth roughly $35 billion in revenue. So that could potentially unlock billions of dollars in revenue for Nvidia. And it also deepens a circular tie in AI in video, put up at least $2 billion into XAI this year. And it's also his chip supplier, financing the very GPU see then buys. So today that loop came at some of AMD's expense. - Okay, all right, good stuff. Christina, thanks, Christina, parts of Neville, us Eli, Lily and Amgen are both rallying today following their strong quarterly results. Let's get to Annika Kim Constantino. She has those details for us. Hi. - Hey Scott, so we had a strong quarter for both of these names, but let's start out with Lily. The company smash estimates for the quarter and hiked its revenue outlook once again, sales jumped 48% this quarter, thanks to higher demand for Zepboun and Mnjaro, which help offset lower prices of those drugs in the US. And Mnjaro almost top 10 billion in sales for the first time. And we're seeing strong demand for that drug internationally. We saw Lily's new obesity pill found day or rake in 98 million in sales, which is generally in line with estimates. So that's a pretty solid start to that launch. Now let's turn to Amgen now, the company beat on the top and bottom line yesterday. It also hiked its full year outlook. We saw strength from Rupatha, a drug that lowers bad cholesterol, and its Boundensity Drug Evinity. And both those treatments beat estimates for the quarter. Amgen did announce yesterday that it would halt development of an early stage obesity treatment, but investors are much more focused on progress with the company's late stage weight loss injection called Maritide, back to you, Scott. All right, and a good thank you very much. But that look, how about travel stocks today? They're surging on the heels of booking holdings results and Kitesa Brewer has that for us. This is a nice move in that name. Love to travel and investors are loving this too. Really, it's the US driving the performance for booking holdings. It's up 6% today had great earnings report, optimistic expectations, but again, the US, it's fastest growing market in the quarter. Expedia is also up 2%, it reports after the bell today. Truist analysts think Expedia might have an even greater potential upside than booking because it doesn't have as much global exposure where we've seen macroeconomic pressure. Logging up as a group, you've got Mary-O, Hilton, Hyatt, Choice, Up between, looks like 3% and 4%, what's clear from the group is that Iran is having an impact. It's squeezing the global travel companies. Mary-O saw a 43% drop in revenue per available room in the Middle East reported that on Monday, higher fuel prices are having an impact. Booking said, not because really gas is expensive, but because the plane tickets are so expensive. Even European and Mediterranean travel has suffered declines. And then you've got those long haul flights to Asia that have had to adjust their routes around the conflict in the Middle East. All of those headwinds booking expects to persist through the third quarter, but you've got luxury remaining above the fray. We heard that from booking and that domestic travel demand is strong. So when I say domestic travel's got not just the US, but around the globe, people are clamoring for trips, even if it's just within their own borders. Yeah, we love the travel. There's no doubt about that this summer, of course. Contessa, thanks, Contessa Brewer, activist investor, starboard value revealing a stake today. And Shake Shack just hours after the company reported its earnings, the stock liked it a lot. Where's it trading now, Brandon Gomez? It did. Shares of St. Louis, Jeff Smith calling the stock too cheap, revealing a several hundred million dollar stake in the company in a year that shares have been falling roughly 20% before today's move. Now, while last quarter's print concerned investors, this morning's results showed a different story. Shack beat expectations. Same store sales rose 3. 0.5% as the company used targeted promotions and expanded its footprint. Now, I know Josh Brown joined you this afternoon in called Shake Shacks, quote, "prime locations," one of its greatest assets, but also said inflation remains a challenge here. And CEO Rob Lynch confirmed it, saying today that the company had expected relief by this point in the year for higher beef prices and labor costs, but that has, quote, "not been realized." And remember, this isn't Shake Shacks' first experience with an activist investor. In 2023, activist fund engaged capital took a stake in the company and pushed for changes, including improvements to operations and shareholder returns. Well, now investors are watching if Starboard pushes for operational changes to or broader strategy shifts like it has in the past with names like Darden and Papa John Scott. All right, good stuff, Brandon. Thank you, Brandon Gomez. Now you're up to date on all the big movers. We're just getting started. They'll coming up next. Soccer superstar Alex Morgan. She changed the game on the field now. She is making her next move off the pitch. She's teaming up with JP Morgan to help fellow athletes master their money. She'll join us next, where the stock exchange, the New York stock exchange, and you're watching closing Bell on CNBC. Back on the Bell Soccer superstar Alex Morgan, among several big name athletes joining JP Morgan and chief Jamie Diamond today on his annual bus tour. Alex joins our own Leslie Picker live from Los Angeles. Hey, Les. Hey, Scott. Thank you. And thank you, Alex, for joining us today. You're here with JP Morgan at the LA Coliseum. You sit on the firm's new athlete council. How did that partnership come about and how have you found it so far? You know, they wanted to increase their involvement in sports and in women's sports. And so I've really, I partner with them over a year ago and I've helped them see, you know, where there is great value in women's sports, which is only increasing in opportunities for female athletes, which is so great. And the athletes council is such a great opportunity as well, especially for female athletes when we look at financial education. And the salaries and opportunities that there are today in comparison to when I play it. Yeah, it seems like a big, a big market and it's definitely having a moment. I also want to get your reaction to the big news in the soccer world, in the, in the sporting world, the recent backlash to the FIFA president's attempt to sell 20% of a new commercial rights body to private investors. What do you make of everything that's going on there? Well, I'm not privy to any more information than anyone else has seen. Obviously, the World Cup was fantastic for the U.S. in looking at it on home soil and what FIFA was able to do here in the U.S. and I went to a lot of those games. You know, it's too bad seeing that negativity and all of the backlash around that over the recent days. And you know, it makes me want to go back to just a week or two ago to where there was all this positivity and everything positive coming out of the World Cup and looking forward to the women's World Cup next year. That's really what I'm focused on right now. There have been calls for Gianni Infantino to resign or step down. Do you think that's a necessary move and could you envision a woman stepping up as president of FIFA? At this point, you know, Gianni Infantino has been in place for quite some time. He's done great with the, you know, progression of women's football globally and the world and the women's world cup as well, the previous ones that I've been a part of. So moving forward, obviously, the women's world cup being in only a year's time. Of course, there's going to be a lot of different opinions coming out of these last couple of days with the potential investment or, you know, the scratching of what there was potential to be. But for me, looking forward to the women's world cup. My hope is that FIFA has a massive plan in place for Brazil and the value that they see in terms of the women's world cup and where the women's world cup is going and women's court. Oh my goodness. Women's courts in general. That is a very large time. Very large. Honestly, you kept your girl's heart. Seriously, but for now. Yes, we're outdoors here. I believe Scott in studio indoors has a question for you. Yeah. I'll try and save you guys for a moment. Alex, it's great to have you on the show. I want to continue on this FIFA issue for a moment in the context of the only two women on UEFA's executive committee were among the most outspoken critics of the whole plan to begin with. You guys, so I don't know. This is, please continue. Sorry. All right. I'll start over. I know it's distracting. Believe me, I think we've all been there too at times of doing live shots here and everywhere else. So you're being a good sport. I appreciate that. Let me restart that. The fact that you only have two women on UEFA's executive committee. Of course, UEFA was the first to come out, holy critical of that plan and they were among the most outspoken critics of it. I'm wondering if you could speak to that. The role that those two women played, the importance that their voices were heard as well, given the fact that obviously as you say that the women's world cup is next year and the calls by some that there just needs to be more female representation at the highest levels of soccer. I'm not sure if you realize this because I certainly didn't that less than 5% of registered soccer coaches globally and only 16% of FIFA council members are women. Yeah, I mean, you said it perfectly. That is something that I think we can both be doing from the top down from FIFA from the bottom up as well. There are a lack of female coaches. There are a lack of female executives from the top down. I think that it's important to recognize that and to increase that. That has been very slow over the 15 years that I have played on the international stage. It has been slower than we have wanted for sure. That's something that I focused on with my foundation as well, launching three years ago, is getting more female coaches in the game and advocating for more female representation. We've seen so much opportunity for female athletes now and opportunities in various leagues both in the US and globally. But for sure, there needs to be more female representation from the top down that starts with FIFA, but that's also holding accountable all of the federations and all of the governing bodies. The implication, of course, is that with a lack of representation, some of the critical decisions that are being made about almost everything important to athletes like you and the other ladies on our national team and playing in the professional league here in the US, is you just have less say regarding everything. Salaries, broadcasting, logistical decisions, decisions that are being made by people who have never experienced the game from a woman's perspective. Certainly not a woman's soccer player's perspective. I mean, you're preaching to the choir here. I totally agree. There's things in place that I'm looking to do now on the business side and the investments I've made in various sports assets, women's sports assets as well, together in my media company that we launched five years ago. But there's a lot more that can and should be done when it comes to the investment of women's sports from the top down and the women's representatives that are able to experience it firsthand and can rely on that experience. But it takes time. It's not going to happen overnight. You look at these men's leagues and these governing bodies that I've had or even the World Cup, the men's World Cup that started 100 years ago or 96 years ago, now the women's world cup only started in '91. We've only had seven World Cups on the women's side. So you look at that. There has to be a catch up moment. Is it going as fast as we want? No. But will it happen? Yes. Certainly seems like it's going in the right direction. Alex Morgan, thank you so much. We appreciate your time today. And about an hour's time we'll be sitting down with JP Morgan, CEO Jamie Dimon here from the LA Coliseum to talk about their partnership with the Olympics and Big Bet on Sports as well as a whole host of other topics. Make sure the beer, whatever that was, doesn't show up for that. Okay. Yeah, we definitely need some bug spray out here. We'll look forward to the interview. Thanks for this one. Leslie, thank you. Alex, of course, thanks to you as well. Up next, more on the momentum mayhem, top technician Jeff DeGraphy's from Renaissance Macro, standing by with where he sees that trade heading from here. Welcome back, momentum. Lower today, which is one of the reasons why the markets are taking a bit of a breather. The question is, where does that trade go from here? Let's ask Jeff DeGraphy's chairman and head of technical research for Renaissance Macro. Welcome back. Nice to see you. Good to see you, Scott. I'm going to point out today in a note after a momentum peak of this magnitude, the analog is an initial oversold rally. now that's what we've witnessed over the past few days, then drift with the typical trough not showing up until roughly six months later. What does that mean then for the time between now and let's say January? - Well, I think Leopold put a face on the crash, right? So I think that's important. It kind of gave people some recognition as to what was going on. And maybe make some feel a little bit better and more comfortable about going back into the water, if you will. I think it's important to realize that, you know, the conditions that drove it to the high, particularly in the parabolic phase are probably done. We're not gonna have the same amount of leverage, the same kind of urgency going forward. So I think we'll rally probably somewhere around 30%, 35% off the lows for a lot of these momentum names, really specifically for I think semiconductors. And then from that point, I think you end up with another correction and you'll end up either testing the lows or undercutting those lows and it'll all kind of sort itself out somewhere around January. That would be my guess. - Does that mean that we have a pretty good runway between now and then if we've gone through the kind of de-leveraging event that that blow up obviously showed and how the markets reacted since? - I would caution that. I think we'll probably poke our heads through the 50 day moving average again, something that's a 30% move. So depending on what stock that is, there's probably maybe halfway to go on a lot of those others, other names off those lows. And then you tend to drift and then you tend to roll over. And so from my standpoint, one of the things that we've been urging clients for the last three months is you don't sell on the way up, you sell on the way down, but really what you do is you shoot them in the back. In other words, once they crack and they start to run away from you and they rally, we wanna start letting go of those names that aren't acting right. And that's where we think we are in the phase of this correction here. So I think the one thing to keep in mind, it's easy to say, hey, are they upper, are they down? Not that it's easy to say if that's gonna be right or not. But the other scenario that I think gets lost is that a lot of times I can just drift. And I think that's what we're really staring at. If we look at the analogs historically is the drift. And certainly I think that the upside is from here, but I do think the drift is probably the more urgent message for clients between now and the end of the year. - Okay, so if that's true though, and now I wanna talk about everything else, I think that's what I was implying in looking past the momentum trade. So let's say the momentum trade just drifts. As John Waldron was saying this morning as we played on our show, it all comes down to earnings growth for this market. And earnings growth and the strength within it is broadening. You see that as a sign of the overall market, despite whatever momentum does, is primed to do pretty well? - Yeah, look, I really don't follow earnings, so I know that sounds antithetical, but that's not my game. But we follow the tape. And what the tape is saying is exactly that, which is there's a broadening. I mean, look, the Russell 3000 breath line hit a new high yesterday, that's good news. The one fly in the ointment that we saw yesterday was the 20 day highs did not really expand. They're really 19%. For a market that's making a new high, we'd like to see something at least in the 30s, if not 40% plus. So I don't get too worked up about that, that can catch up. But I think when you look at breadth and you look at the percentage of issues about the 200 day, et cetera, this is a market where whatever money was coming out of momentum stocks, it found its way into something else. And that is a healthy sign. What we worry about is when they say, hey, these yields at 5% plus percent look pretty interesting, let's shift the allocations. And that's not what we're seeing, which I think is good news for the market overall. - You say lean into energy and healthcare. I mean, that would suggest that you are a believer in this broadening aspect of this market. - 100%. Yeah. And what I would say is, and this is something that people have not paid enough attention to in our view, is we have seen tightening financial conditions. The latest episode of that is what's happened to the yen. Prior to that, we were seeing rising real rates. And when you see that, you see a shift historically from cyclicals, which a lot of the momentum names were towards more defensive names, which is what healthcare is, which is what reats our, energy is kind of a tweener there. Financials can fall into the more defensive bucket as well. So I would say that while we are seeing a broadening, we're also seeing at the margin, I'd call it 6040, a move more towards the defensive side of the ledger than the cyclical side of the ledger. - We'll see you soon. Thanks for coming here. - Thank you. All right, yeah, thank you Jeff to graph up next, the biggest movers, as we head into the clothes, we're back up to this. (upbeat music) All right, we're about 10 from the bill, back to Christine and now for the stock she's watching. What do you see? - Well, let's start with the bloodshed, because they are plunging 14% after the Fandual owner slash the full year US profit outlook. And then also said CEO Peter Jackson would leave his role in October and be replaced by the head of its international. They're also seeing lower bedding sales and customer turns to that weight on the stock shares, a fallen almost what, 60% this year and down, like I said, just 14% right now. Uber shares also in the red after it issued a soft outlook as it continues to wrap up investments in autonomous vehicles. The company said it expects to commit more than $10 billion in coming years to bring EVs to market at scale, shares down 5% right now. Last but not least, Shopify shares, surging on the back of a strong revenue outlook for the current quarter, it comes really as the company's AI effort strong more merchants to its services. And softens any fear about growing competition from AI in the lakes shares are up 18% as best day in a year, Scott. All right, Christina, thanks. Christina, part of the novel is coming up next. We get to set up for all the big earnings movers in overtime. We'll do that in the market zone, which is next. We're now in the closing belt market zone. The pressing grows and through try here to break down these crucial moments of the trading day. Plus, Oliver Renek standing by live from the Seavoke Global Markets in Chicago for a little options action. And two earnings movers, we are definitely keeping an eye on and overtime. Hit the Stevens looking at Occidental for scene of parts in Novelos is looking at Western digital Oliver to you first. Let's play some options action. What do you see? Scott, things are much quieter today after market makers yesterday sounded like even they were caught off guard by the rally. The question now is what new range the S&P might settle into. First, let's look below. There's open interest in options lingering in SPY at put strikes that are now well behind us. 755 and 765. That should be new support for stocks as those put steadily decay or bears cover. On the upside, SPY today was rejected above the very popular 775 strike that expires August 14th. But there's even more open interest in the 785s that expire August 21 and the 800s that expire in CEP. For now, the important thing for bulls is just holding. Yesterday's record number of call buyers faced leakage in those options today as VIX fell. But a day like yesterday, which was record setting for call buying and volumes at CBO almost by definition required this reset today, Scott. - Okay, good stuff, Oliver. Thank you as always, Oliver. Renek, Kippa, tell me more about Oxy. - Well, companies have been reaping their rewards of higher commodity prices. Their expectations are high ahead of Oxy's print though the company has lagged the broader energy sector over the last year. Still, Evercore, ISI saying now is the time to buy as the company has material, delivered its balance sheet and executed a structural step up in capital efficiency that reshapes the free cash flow profile and provides a path back to shareholder returns after the company pauses by-back program to pay down debt following acquisitions. Now, Oxy also benefiting here from relatively lower well costs as well as lower well decline rates, which does reduce that maintenance cost. Now, on the call, top of mind will be CapEx targets as well as production forecasts amid supportive oil prices, but relatively weak domestic natural gas. Scott? - Okay, good for Stevens. Thank you very much, Christina. How about Western Ditch? - Well, first, it makes the high capacity hard drives that store all the data piling up inside AI data centers. A lot of people get confused and it and C-Gator basically, the only two players left in that business and right now they can barely make these drives fast enough. The stock is one of the best performers in the entire S&P 500 this year, it's up over 200% year to date. C-Gator's competitor set a high bar just over a week ago, a beaten raise that sent its shares up double digits post earnings. So a lot of the good news, Scott, may already be baked into Western Digital because it also rows post those earnings. What investors really want to know is whether the hyper scalers are still buying everything Western Digital can produce on the storage front and how much more capacity can actually add. The company is already signing supply deals out into 2029, a sign that this AI storage boom could also run stronger for longer, much like memory. - All right, good stuff. Christina, thanks. Christina, parts of Nubilus. Andrew, a lot of 8,000 calls, some are even higher than that. What's your view on where this market can go? - We're still constructive. I think the last few days have proven that this momentum trade that was unwound for a short period of time there still has legs. But I think more importantly to us is this broadening theme. We're seeing an abundance of growth in this market which tells you you want to be in some of the other segments. It's not a scarcity of growth environment where you want to push into the names that are the ultra high growth things. It's the health care, it's the financials, it's those segments that might be a little bit sleepier where you're starting to see growth tick up again, broadening of earnings that also really underpins that next leg higher for the market. All about earnings, getting us there? >> Yeah, I mean, if you look at the surprise levels for earnings this quarter, 80% reported, let's call it on the S&P 500, we're at 30% plus on the surprise level growth, 50% plus on EPS basis, top line looks phenomenally constructive as well. You look at the GDP now that came out today for Q3, north of 5%. So we're looking at a nominal growth environment for the US economy that could be in the 8, 9% range. That's just fantastic environment for risk assets, generally speaking. So the question is, which segments have gotten too far ahead of themselves? Which segments still have the potential to re-rate? And that's where we think it's more about in that broadening theme, right? The equal weight type of S&P approach relative to the market cap-weighted environment. >> Lots of bullishness out there, obviously, but it sounds like you think it's justified. >> We do. >> Yeah, again, I think from an economic perspective, we are running it hot. It's hard to argue that financial conditions have tightened in any sort of meaningful way. Despite the fact we've seen yields take up modestly, certainly not a restrictive cost of capital environment. You're soon, again, seeing earnings prove out the fact that demand is still there across sectors in this case. Like I said, the sort of this broadening theme is playing itself out. And I think the other thing you would point to is globally. You look at Europe, look at Japan, look at even emerging markets. You're seeing a broadening of economic growth, export activity, manufacturing, PMIs. Everything is sort of re-accelerating and you're pointing to a higher direction, despite the geopolitical headwinds as well. So for us, that's all great underpinnings for risk assets over the balance of the year. >> Yeah, I mean, it's been an incredible really how resilient the market is and you even make note of the fact that, the Middle East is still not resolved, but it's been a source of volatility, not necessarily a threat to either the broader economy or to this market. And that's a statement in and of itself with stocks have gone. Andrew, thanks. >> So soon, that's Andrew Krius. >> He's good. >> From Crescent Grove advisors. We'll look at the market here as we head towards the close. It's going to be really close for the S&P if we can get to another record close. We might end up just shy of that. Had to be a little bit above 7730. We've faded a little bit there, but the Dow's going to get it. And it's not going to be close. >> This is going to be 85 with the fire record close for the Dow. So we are there. >> Let's go to the last spot. >> Thank you. [MUSIC]