Transcripts For CNBC Fast 20240702

Guests, and nice to see you. Thank you for joining us. Thank you. Lets check the markets now you know the story the nasdaq is where the bulk of the damage is. Down near 2 a loss of 236 points yields are very much the story today as well. Backing up yet again toward 5 there is 491 the tenyear note yield. However, i want to start with microsoft. That is the story today or certainly one of the stories at least the positive story today as your cloud Revenue Growth accelerating for the first time in a couple years because of ai, you own the stock. Give me your take. Its good we saw Cloud Services growth back up 28 which was the expectation i had on monday. That is where it needed to be. But overall the impact of what we expected from microsoft on the market, itself, its ability to stabilize the market, it obviously is not present and the reason its not present is these stocks are called the magnificent 7. Now were down to the magnificent 5. Weve lost tesla, lost alphabet. Well get into the reasons why in a few seconds but just overall for the ability of microsoft to stabilize the market and obviously the reason that its not, you needed all of the magnificent 7 to push up against a lot of very troubling signals within the market itself i think weve done at least myself ive looked toward this magnificent 7 and looked away from the troubles but what is going on this month in real estate what is going on with the banks . What is going on with the financials, the response, the reaction to earnings lets remember something the reaction to what is very good earnings so far has been horrific were seeing the Revenue Growth at 4 , Earnings Growth at 7 , but stocks are not reacting accordingly and that is why were in a very uncomfortable place right now. 4200 the Technical Levels holding us up but the rise in yields pushing down against that and were below the 200 Day Moving Average looks like well close below it for the second time in the last few days. Joe makes a lot of good points give us your view. We are barely above 4200, teetering a little bit there the tech trade i dont know if it looks tired to you but these stocks have done so well that these Earnings Reports are going to have to be knock it out of the park so to speak to keep up the momentum. It doesnt look like that is going to be the case. Yeah. So i dont think it is just tired, scott i think it is thoroughly exhausted. It is really interesting when i take google and microsoft versus my portfolio yesterday youve got, sorry, alphabet. Where they had amazing numbers right . They beat by a billion dollars on revenues. Earnings came in 10 cents ahead. Stocks down 9 microsoft plus 26 on earnings stocks meh i think that is because when theyre trading at 30 times and 27 times and theyre up as much as they are, they are thoroughly exhausted. Then i take that and i look at what happened in my Equity Income yesterday stunning yesterday verizon, 3m, next terra where i own convertible preferred and dow. Perfectly lovel earnings nothing spectacular. No up 26 but these guys are trading at 8 times earnings, 10 times earnings you have verizon where all they did was beat by 4 cents. Stock is up 9 yesterday crazy. When youre trading at 8 times earnings with an 8 dividend yield on it there is no exhaustion so i see what is going on in the last two days as meaningful. I think it is rotation out of those that are exactly as you said tired, exhausted, and into those who have been waiting on the sidelines. I think it was andrew yesterday morning who said Something Interesting when looking at verizon premarket. He said, i was driving and listening to the radio, oh, i didnt know the market allowed verizon to go up i think that felt true for a lot of these old line companies. All they need to do is give Solid Earnings and i think there is significant upside ahead. I see a rotation in leadership developing. All right so a perfect segue i think to you and using words like total exhaustion, right, you make your living looking at the chart. Certainly one point of what you do, your overweight tech, xlk. How do we view these as these reports start to trickle in . I disagree. I think it is pretty encouraging to see microsoft which is an absolute behem oth gap up on its chart, up through short term resistance and right around current levels so as long as it holds it will have a short term breakout and then the final resistance in reach for microsoft. Imagine a market in which the major indices are going down and microsoft is making new all time highs. That would be hard to imagine given it is the second largest component in the s p 500 i wouldnt minimize the price action in microsoft today. It shows reaction to oversold conditions we also have to keep in mind alphabet was the one that hadnt really corrected yet so i dont want to say it is a positive to see it gaap down. It was up 14 to 15 since its last Earnings Report or roughly thereabouts right over the last three months to your point it had really run up into the report it was more over bought you think about coming into a report over bought a harder sort of proof point for the market and of course microsoft was relatively over sold compared to alphabet so we are encouraged by the action i think tech has maintained the relative same on the large cap front. What we really need to see now is for that to expand to small and mid cap tech. Dont give up on megacap just yet in other words, steph. That is essentially katies message here is despite what youre looking at which looks ugly in the nasdaq today, microsoft is a pretty good tell. The momentum is still there. Stock could push to new highs in her estimation what do you think . Well, i think, you know, they are very over owned, right so i think you have to keep that in mind. But you are getting growth azure at microsoft grew 29 , accelerated from 26 even the pc business rose 4 , which no one was talking about, which by the way is positive for the stock i own which is cdw google, alphabet, same thing you are seeing substantial growth if you see some meta i think youll also see substantial growth same with amazon on a pullback i am looking to add to all of these. As you know, i am under weight tech but looking for opportunities because i think this is where the growth is going to be. As they pull back the valuations get a little easier to digest. They are not cheap by any means but are behemoth and have a lot of tail winds with them especially ai which we are in the first inning with. You know, you make a good point and you said it yesterday that the big question was if the stocks pull back, in your mind they would be bought that is in part what was going to hold them up in the face of some turbulence within the market and then today i see that you bought alphabet which was down, what is it down now, 9 now . The worst day in about a year. Yes. At least. So why does selftephanie link b alphabet today great growth, fabulous management team, great Balance Sheet. Lots of cash flow and the stock is on sale that is what i do. I like to buy the number one or Number Two Company in any given industry and when it pulls back for whatever reason if i think, my thesis on owning it, if it hasnt changed to me, they just reported 46 Earnings Growth. 11 Revenue Growth advertising, which is 80 of the company grew 9. 4 and accelerated for the last three quarters thats what i care about when i think about alphabet cloud i know is important. But it is 13 of the total revenue of the company and it still grew 23 i understand operating margins and why people are upset about it because they were a disappointment that is why the stock is down almost 10 im using that, taking advantage of that, and adding to it because i do think it is attractive for the long term i think they will be a very big winner in cloud. I think you have the big three theyre all going to win and any given quarter one takes a little bit of share the other takes a little bit of share. I think this is absolutely an opportunity. You know i always say earnings season is silly season we see over reactions all over the place. Well talk about another one i bought in the b bloc i want to use my cash to be adding to Good Companies but the third place player within cloud, i mean you can make an argument now especially where ai is going. The third place player cant afford to lose marketshare and it is already third. Right . In terms of the cloud. Here is a call today, as they down grade alphabet to neutral i want your reaction, steph. Well positioned to capitalize on the digital ad trend, participate in the clouds growth, innovate with ai, benefit from Digital Transformation and leverage a leaner cost structure. However, regulatory head winds persist, competition is dynamic, and we believe the darkest days of this downturn are ahead of us wow. Pretty bold i dont know how to address the regulation that is an overhang on just about all of these companies and so, you know, these guys have a lot of cash they can write a check so i dont want to dismiss it, scott, but i kind of discount it, and i do think the bulk of this company is still in massive growth mode. If you look at search up 11. 4 youtube up 11. 3 i mentioned that overall advertising accelerated. I think the fundamentals are going to win out eventually. They are going to have to spend a lot of money to gain more share in cloud but at the same time they have this engine at the company that is just doing very, very well. Any given quarter operating margins are either up, down, they disappoint, upside surprise i think they can rein it in if they really want to and i suspect they will after the reaction to this quarter today i go back to where some of the commentary has been about alphabet relative to microsoft when you have this conversation. Its bing vs. Bard a whole different argument no one cares today about ads on google no one cares about youtube today as it relates to google. People care about where the companies are going in terms of ai who has the leadership role. Who seeded it in part of where the narrative has gone you own alphabet as well i do. I like what steph is doing here recognizing the value in the pullback in the stock and taking advantage of that. I did think last night a little bit about what has been said about alphabet and what he did with his position. Im not necessarily sure, though, what we witnessed inside the earnings is representative of evidence that in fact, the things he was concerned about were actually validated in the earnings i think it is to stephs point specific to the cloud. I think there are other areas that are positive within the business and if you, like stephanie, have some cash, this is a Quality Company and youre getting it where the valuation is coming in toward you and you take advantage of that. I remember the conversation that i had with bill ackman last month at delivering alpha where he was essentially, you know, talking about the gershner perspective who was also there speaking about the trade that he made and versus his own perspective was like sold to me. You know, one of his biggest positions now. And on the prior weakness right after all of this ai frenzy started to happen after microsoft did open ai and announced chat gpt, you know, the stock sold off ackman used that to buy more i get there are two sides of it. It just comes at a time, you know, these reports, there is no room for error right . No margin for error with a lot of these stocks for the very reason that the games year to date on the gains year to date on all these stocks are enormous microsoft 42. 5 . Alphabet 43 amazon 48 meta and nvidia you need to talk about more than 150 gains it really rests on apple. The biggest constituent within the s p 500. Now i like stephanies willingness to revisit these stocks into weakness though because that is hard to do its when sentiment is somewhat bad and people are scrutinizing these Earnings Reports a good rule of thumb in terms of gaaps when you look at a gaap down if you see alphabet in particular rise into that within the next week or so, that tends to be a positive it suggests it is actually over done on the down side short term we like to use that metric in terms of revisiting these stocks. All right so meta, now the stage is set and maybe the pressure is on even more, right, for a stock that has done so incredibly well after what we just got and the reaction in the market and what we are witnessing in the nasdaq today tell me what you are thinking here for a stock you own. I think it is really challenging. Remember we owned meta this time last year when it was trading around 90 bucks a share. As it shot up weve trimmed it a couple times because that is prudent Portfolio Management now we sit here today with a stock over 300 and were balancing out what is out there. On one hand 19. 3 times multiple on it, 6 Free Cash Flow yield, earnings for 2024 going to grow by about 25 2025 should grow by 17 . From a math perspective you have a pretty reasonable valuation and really compelling Earnings Growth on top of that you have 42 state attorneys general suing saying, hey, this is predatory to children it is an interesting thing because they are saying the reason it is predatory is the software is addictive. The platform is addictive. A year ago somebody was saying nobody wants it or uses it now they are being sued because it is so well used it is considered addictive it is a really tough kind of balance right now to figure out what to do about meta going forward. I think were more likely to use it as a source of funds rather than add to it but were not selling it quite yet because that math is compelling. One other thing on the predatory and addictiveness. This is hard for me personally to deal with as a mom my kids have no instagram, no facebook, nothing. For me personally, i love it i think its great and a wonderful way to stay in touch with friends who i wouldnt otherwise. I really see both sides of this platform and that frankly goes back to the investment position which makes it hard. I think its just a challenging investment right now but the math is there. Okay. Steph, i know youve been trimming meta. Yes. Over the last six months at least. Now how are you feeling into this quarter as you remember, lets remind people, you had sold alphabet originally to buy meta we had a big debate on the program about that now youre back in alphabet. Yes. What is the state of your meta position here i still like it i think the advertising results at alphabet bode very well for meta they also have very easy comparisons, kind of a stable environment, like on the macro front a little more stability there. And i think reels is just getting going. I think the quarter is going to be fine. It all depends on their cost guidance, scott. 96 to 102 billion total expenses that is the bogey. If they do below that, and that is the guide for next year, thats good. If they actually go to the high end the stock is going to get clobbered. Just because it has done so well i still like it. I still think the valuation is reasonable for what you are getting so well have to see what it does but i sold a big chunk on the way up. Well see. If it pulls back i might add to it as well but i am going to continue to build out the alphabet position. You let us know what about you, joe . You have it as well in the joe t. Listen, im somewhat concerned with meta. I think it is kind of stretched. Im also concerned when we look into 2024 what the spending ultimately might be. I am not inclined to add here to meta and as i said at the top of the show i think we are down to the magnificent 5. That is troubling for me from a technical perspective. Did you have a question for katy quickly i do, scott great katie is on the show today. So many people are looking at the charts and realizing 4200 is a significant level in the s p 500. Back to june 1st that is exactly where this market broke out through the month of june, through the month of july. How should we think about the significance of closing below 4200 and in addition to that how do you think about a second consecutive close below the 200 Day Moving Average when does it become validated and relevant for technical purposes before you answer that we are literally right at 4200 as you give your answer to joe and our viewers. Ill just preface your answer with that. I would say we have to look a at these support levels as cushions not precise points. They are never precise and there are just too many Market Participants to allow them to be that our support zone is 4180 to 4195 so a bit lower than the 4200 threshold. For us a decisive breakdown would be a move below 4180 and there is also former resistance at 4195. I would be a little more generous it is a critical junction. The 200 day level hasnt been a support level but bolsters the zone potentially with over sell conditions on pace with the short term, intermediate charts and over sold readings in breadth and sentiment it is intriguing we have this kind of compelling risk reward ratio. We know our risk because well stop out below the 480. So we showed you 4200 on the s p key level. Lets just show you the ten year note yield again because it was moving back toward 5 which has really been a line in the sand in terms of the Comfort Level for some investors as to where they were thinking all of this was going to go. I bring it up to you as you see 491 here b of a says they think peak yield pretty close on the other side of that youve also got deutsche bank, in addition to that saying we recently closed our tactical under weight in equities and turned bullish again. Look, it is easy to run with a nervous crowd. They admit theyre contrarian but they find more evidence they say their thesis of Global Growth is more resilient than expected and that is going to rule the day you want to address that, joe, before i take a quick break . Listen, i agree with that scott, you know my bias. It is still i believe we are going to have a recovery we are going to have a price rebound in the fourth quarter. A lot of it comes after november first. When you hear from the treasury, you hear from the fed, and when you hear from apple. I also acknowledge and believe that there is a significant value opportunity that exists for the long term investors in the bond market. And that is without question competition for equities and i think that is indicative of what were seeing today in the tape all right watching the markets, the tape top to bottom today. Thank you so much for being here. Thank you coming up our chart of the day. A threeyear low for a semistock after earnings joe is in that one well get his take when we come back live from schwab impact in philly back in two minutes. Back live at schwab impact in philadelphia. I thought maybe you were ducking us after those alphabet results. But no you showed up. You are a good man alphabet and microsoft i would be remiss if i didnt get your take even though we discussed it in a block and well get to so much more coming up what do you think . Clearly a cloud miss for google that was the issue for the brand. Again, top beat on the top and bottom line. Google for me as we talk about the ai blip early on this year i think that was somewhat of a challenge but clearly obviously microsoft is in the lead microsoft has intensified growth of azure. Are you worried about your stock position in alphabet today . I am not because i like the average highs in revenue is obviously growing significantly. Youtube revenue is really strong for me i think they are moving into the cycle and starting to build their position in the ai space. I think this is a little blip in the road theyll catch up i hear on that. Our chart of the day, joe, Texas Instruments. Chips are a laggard today. Texas instruments hits a threeyear low on the earnings there. You own it personally. You own it in the t. You got a lot at stake on this one. There it is down 4 . Im not sure why this is chart of the day it should be something that looks really good. You have to turn the chart upside down for this to look good this is awful. Turn your Texas Instruments phone upside down. Yeah. So this is an analog semiconductor. Okay it ha underformed the entire industry year to date. There is a certain point at which you get frustrated, scott. Youve heard from myself and so many others what do you want to buy . Balance sheets return capital for Share Holders . You want to own quality . All right. A semiconductor . No more quality ate if semi than Texas Instruments. Revenue is down this year. Theyre doing awful in an environment where i am told the industrial sector is doing really well. And benefiting from infrastructure spend they are making chips and electronics for the industrial machinery industry how is your revenue down 10 i dont understand that. There something idiosyncratic about this company where theyve lost their way and it is a shame because this has been a signature name to own when looking at semiconductors. You know, im looking at some of these names today you got broad com. Certainly one of yours that stock is down a little more than 2 . Forgive me for looking away from the screen between broad com and search these chip stocks arent trading all that well today. Theyve had a really nice run and actually last week Lamb Research reported earnings and i added to it because i do think you are seeing a bottoming in the memory market. It is not happening as quickly as people expected or want and the stock was up 50 into the print but they did increase fab equipment spending targets for the second time this year and that is a leading indicator for the bottoming in memory. I think this company is Something Like 40 a share in earnings power making it 16 times forward estimates very attractive top of the Line Management good Balance Sheet by the way, structurally their margins are much higher than past cycles, which is very encouraging and good for operating leverage nvidia, jason along with qualcomm, now nvidia doesnt report or a couple weeks here. Right. What about the chips . Are they in trouble . I think for me qualcomm has obviously been a challenge all year i am excited about the new snap dragon chips that will support the ai space i think it could be a catalyst for the stock going forward. Nvidia, obviously the stall worth, up 180 year to date and theyll report in a couple weeks. Well have to see the cloud. The demand continues to resonate in the market place. I think theyll be strong. Sky works, intel, teradyne . This is when you want to buy when it makes you queasy and uncomfortable and most people feel frustrated. Now were at two years of depressed sales, destocking of inventories on pcs and phones. When you look at the earnings for next year the numbers are huge teradyne should be up 59 year over year, intel up 173, sky works up 7 . It is just earnings recovery right . Not like suddenly they have remarkable earnings. But when you want to buy them is in the year or year and a half before the cycle starts to turn. What we know is the cyclical terms are always very vicious. They get hit really hard on the down side and ricochet on the up side but wait a minute you say you paint a picture like of the stocks have gotten crushed so now is the time to buy. We just showed the semiconductor index. It tells a far different story it is up 38 year to date. So the stocks havent gotten crushed. Right . Right but what percent of that, scott i am not exactly sure about that. Here is the thing this is why all year ive been saying you cant buy the semiindex you need to parce through it what percent is nvidia when it is up 38 how much of that is nvidia responsible for versus skyworks, actually down you have to sort through and say whats down, what is trading cheaply. What has significant earnings, significant provable earnings recovery ahead buy those. Yeah i am not making a broad statement on the semiindex but a focused statement on what we own and why within that industry all right moving to industrials, boeing. You bought more of it. You bought more of it. Yep now we take a look at the stock today. Give our viewers a read. It has been a little disappointment of late why did you buy more the stock is down 24 from its highs and the headline was not great in terms of them missing earnings but when i dug deep into the results it was really more charges in the defense side of the business i dont really own it for the defense side of the business i own it for commercial aviation as you know. I also own ge for the same theme. So in addition to the headline not being so great, then the company cut the 737 deliveries that was as expected, to be honest they didnt change their long term guidance of 50 and didnt change their Free Cash Flow which is the most important piece of the story i just thought down 24 , you know, from highs and down initially this morning i just thought it was an opportunity to build up the position maybe thats all you need be Bertha Coombs has the headlines. At this hour california Governor Newsom met with chinese president xi jinping in china today to discuss Climate Change. Newsom on a week long trip to promote climate cooperation said the world will not be able to move the needle on Climate Change without u. S. And chinese collaboration. Xi said the cooperation could be a bright spot in the relationship between the two nations. Former treasury secretary and Obama White House chief of staff jack lew is one step closer to becoming the new u. S. Ambassador to israel the Senate Foreign Relations Committee advanced his nomination today in ta 129 vote a formal confirmation vote likely next week the ufc named bud light its official beer sponsor parting ways with modelo the new contract starts next year and is the latest effort by bud light to reclaim its spot as the countrys top selling beer following the controversy over its Marketing Partnership with transgender influencer Dylan Mulvaney last spring bud light previously sponsored ufc for about a decade until 2017 when modelo became the official beer. Scott, back over to you. Bertha coombs thanks up next mike santoli with his midday word along with kevin gordon here at iacmpt. Her inves in this market, youll find Fisher Investments is different than other money managers. other money manager different how . Arent we all just looking for the hottest stocks . Fisher Investments nope. We use diversified strategies to position our clients portfolios for their longterm goals. other money manager but you still sell investments that generate high commissions for you, right . Fisher Investments no, we dont sell commission products. Were a fiduciary, obligated to act in our clients best interest. other money manager so when do you make more money, only when your clients make more money . Fisher Investments yep. We do better when our clients do better. At Fisher Investments, were clearly different. What do you see on the horizon . Uncertainty . Or opportunity. Whatever you see, at pgim we can help you rise to the challenges of today, when active investing and disciplined Risk Management are needed most. Drawing on deep expertise across the worlds public and private markets in pursuit of longterm returns. Pgim. Our investments shape tomorrow today. At morgan stanley, old school hard work meets bold, new thinking, to help you see untapped possibilities and relentlessly work with you to make them real. This thing, its making me get an ice bath again. What do you mean . These straps are mindblowing they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. And you are . Im an investor. In invesco qqq, a fund that gives me access to. Nasdaq 100 innovations like. Wearable training optimization tech. Uh, how long are you. Im done. Im okay. Welcome back to schwab impact here in philadelphia our senior markets commentator mike santoli has joined us now for his midday word. Also kevin Gordon Charles schwabs Senior Investment strategist good to have you with us mike, ill begin with you. What the market could ill afford to have is tech go down hard and rates start to go back up. That is exactly what youre getting today. It has been a tough formula i would take some heart in the fact there is some differentiation in terms of reaction we are not all across the board selling everything but coming into this week i think the way i was presenting things was, look youre a little bit over sold in the market rates have had a little bit of a hard time getting through 5 on the ten year youre going to have the most Profitable Companies in history report earnings. How negative do you want to be into that strong seasonal period not really all played out. Maybe you dont want to be too negative but just this Testing Process that has not really let up 8 of the 17 trading sessions this month the s p had an intraday low within 25 points of 4200 they want to either soften it up to get through it or it is proving that people want to make a stand and say thats enough for now. What do you make of, look one of the key questions is if you did have a pullback in tech would it be bought stephanie link takes the opportunity, and maybe it represents a broader psyche of significant pullbacks within that space are going to be bought i think yes until proven otherwise because that is still the relative trend is in place there. How much of a pullback do you need before it registers or bring up a lot of demand a lot of air under a lot of those stocks that is what the market has to sort out i do think the earnings season is doing kind of what it is supposed to do which is the differentiation and we are trying to figure out to me if the next couple of quarters, earnings forecast are plausible. Perfect segue to the Senior Investment strategist for Charles Schwab who now advises people to do what . Well, i think to mikes point in terms of the near term there is a little more support from a sentiment perspective. Youve seen across the spectrum on the attitudinal, behavioral side not just what people are saying theyll do or how they feel but also what they are doing with their money and how they are positioning there has been more of a washout that was what was missing in august when you started to hit some bumps after july. Yes you get a place where it is a little more supportive of a rebound of a rally but you also need a catalyst. Maybe earnings season is the differentiator i wouldnt look to just earnings themselves you have to broaden the scope and look at revenue. For all of the cheering about the pick up and the beat rate on the earnings side we are around 80 right now. You are 60 on the sales beat rate that is a widening divergence that typically doesnt last in perpetuity and doesnt have to be that earnings has to catch down i think you can get more durable growth on the sales side but you have to be more, a little bit more nit picky on what youre looking for on a sector perspective. We show rates on the screen now right . 492. Back on the ten year what is your view of rates how should we be thinking of that in terms of Investment Strategy now i still think that rates and level terms, there is not just one magic rate mike mentioned this before which i think is good where you plug and chug and it is that rate for the entire market. For some companies and segments of the market rates dont even matter as much it is actually a good thing rates have shot up they are earning more in their cash versus what they owe in terms of debt. I think it does come back to the volatility of rates. One of our secular themes right now and what were starting to see and expecting to see is this turn back to what was the temperamental era from the 60s to 90s where you had more persistance in the negative correlation between bond yield and stock prices that seems to be the case now though the positive caveat is that it was not as severe as it was from the 30year period. Inflation was a much bigger problem. We dont see a repeat of the 70s or 80s the dynamics of the economy are just different i think in a better way i would be on watch for that and especially sectors that dont benefit from that environment. It is your traditional defenses like utilities that dont. Tech often gets a lot of flack for being so negatively correlated with yields but also areas like utilities and small caps. At some point you run out of time to start discussing whether there is going to be a year end rally or not you got two months left. Earnings season for megacap was viewed to be one of the catalysts. If youre going to have a broader upset like joe was talking about the magnificent 7 going to the magnificent 5 you cant have it go down to the magnificent 3. You absolutely cant. Maybe it could be that in order to really get a better flush out there you have to have that faith that these seven stocks can save us broken for a while who knows . That is one of those things where i can see it play either way. A lot of the seasonal lows and even longer term lows have happened in the final ten days of october yeah, to your point, running out of time for the classic period to unfold. The classic period is only like a 5 or 6 gain. It gets you back to where we were in july everyone would take it it doesnt mean it has to be some heroic move. Ill see you later on closing bell kevin gordon, always good to see you. Four stocks four bullish calls mmteaselownership on the coite wl. Our calls of the day next. The power goes out and we still have wifi to do our homework. And thats a good thing . Great in my book who are you . No power . No problem. Introducing stormready wifi. Now you can stay reliably connected through Power Outages with unlimited cellular data and up to 4 hours of battery backup to keep you online. Only from xfinity. Home of the xfinity 10g network. There is the level you need to watch 4200 we are sitting right there teetering back and forth above it, below it, and well follow that obviously until the end of this trading day and track that through closing bell the last hour of trade as well lets do some calls of the day i do want to do Palo Alto Networks initiated by needham 305 the price target. It transformed itself they say into a stalwart in Cyber Security you own it i agree 100 . Clearly palo alto has had a phenomenal year, year to date. Up 80 . Revenue growth last quarter 26 . They guided to 19 this stock has recently become profitable the last couple quarters but Cyber Security is a theme that keeps on giving and palo alto is positioned perfectly in the space. You own it as well. I note that it is down today it just gives me pause for a minute to just wonder if because jason mentioned 80 year to date investors will look at some of the huge gains on the year feeling uneasy about where we are and start to ring the register on some of these names. Right i love the way jason said it is the theme that keeps on giving that keeps us in you cant look at it on earnings and the reason has to do with their counting of revenues and the timing but you can look at it on free cash growth for our strategy this is in we want a 5 or better Free Cash Flow yield this is down to 3. 4. On every metric it is pretty expensive and we have trimmed over the years we are constantly tempted to trim or potentially sell it and then we go back and we reevaluate the growth and we know the Free Cash Flow will continue to grow in a way that i think in the whole Software Space is completely unique there is for better and worse endless, absolute demand for Network Security these guys are the best and have the most diversified platform, highest free cash yield within the peer group this is why we stick around. It is tough when it is kind of expensive as now. Would you make the argument, fortnet is yours right that is how you play cyber yes it trades at a discount to palo alto and has also lagged substantially. They had a disappointing quarter last quarter and the stock fell 20 on the day i added to it on the day it hasnt really recovered but i still like the story very much long term with bookings and billings growth in the 30 , margins expanding. I want to be part of and involved in Cyber Security i think i have a lot of confidence in that total Addressable Market and the theme for the long term so you have some bumps and bruises along the way. I just prefer the valuation discounts supporting that versus palo alto. Lets squeeze in joe. I know you have palo alto but i want to move off that and go to pack ar upgraded at deutsche best in class machinery they call it. 2024 consensus too low stock too cheap. Give me something on paccar. Should have been the chart of the day. Instead of Texas Instruments this company is growing at 20 plus over the last two years. A great looking chart wow. And that is a stock that trades at a valuation i know everyone would expect, low teens. It is a company hitting on all the fundamentals and is being rewarded shareholders are benefiting and we have people paying a premium for the stock price. We own it. All right well take a quick break and come back and set you up for earnings still ahead in the next 24 hours i got ibm, service now ive got honeywell ive got merck were back from philly at schwab impact next. With gold bond. You can age on your own terms. Retinol overnight means. The smoothing benefits of retinol. Are now for your whole body. Plus, fastworking crepe corrector diminishes wrinkled skin in just two days. Gold bond. Champion your skin. You know when you have those moments . That time to reflect. To be like wow. What did i do to get here . city ambient noise right. Work. You worked hard and its time for a bank thatll work hard for you. Everbank brings security and a guarantee. That youll earn a yield in the top 5 of competitive accounts. Going, got you where you want to be. Were the partners for your next move. Everbank. Advantage, you were just showing you the nasdaq that is not the picture that you were hoping for today, i know. Down 2 . And sliding a little bit as the show has gone on we have more earnings coming up in the next 24 hours all right, stef, overtime today, ibm, what do we think yeah, i think software is the story, thats 75 of the overall total revenues that will increase recurring revenues, drive Market Expansion and the guide at 10. 5 billion is key i think they will reiterate that jason, service now today and overtime as well yeah. The stock is doing really well yeartodate up 38 im focused on the Revenue Growth of 46 in the last quarter im sorry, revenue eps up 46 you want to take honeywell, too . Its before the bell tomorrow. Honeywell has been challenging, down 16 to date. I look at honeywell as a tech industrial, so they have a diversed product so hopefully well see some runway there joe, tomorrow, before the bell, personally and in the joe t. You have this, so whats your read absolutely, one of my favorite names its going to come down to etruda we need to see that blockbuster cancer drug revenue come in, well above 3. 6 billion. Were looking at 15. 3 billion for revenue. Analysts have been raising analysts on merck, so its easy to say buy the pullback. Theyre going to need a better than expected Earnings Report here i believe the stock will rebound. All right ll ke qck weta aui break final trades are next. sfx stone wheel crafting the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. It still does. What can you do with spy . Were back for closing bell today with our special guests kevin dryer is a cabelli funds cio. We have a lot to talk to him about. In the meantime, lets do final trades. Joe, ill go to you first. Amazons down 5 i dont think thats your final trade, but it is noteworthy. A down day for tech, to say the least. Yeah, keep your eye on that with amazon reporting tomorrow my final trade is visa from the long side. All right stephanie . Cummings. Pricing power, i like the acquisitions and the stock down 9 yeartodate. Trades at 11 times forward okay, Jenny Stanley black and decker. I bought this back may 4. 2 yield right here. Jason google. Price action is overdone well see how it shakes out the exchange is now. Thank you, scott welcome to the exchange. Im kelly evans. Heres whats ahead. Our market guest made a bold call three months ago that generated a lot of blowback. Its already proven right so far. He joins us for a victory lap and what else hes betting on right now. Theyre young, they like to travel and theyre buying into one travel trend to figure well talk to the ceo of the company thats been benefiting of it. Home builders have been buying dow