Transcripts For CNBC Closing 20240703

And were hanging out there now. Utilities, financials, they are among the standouts this week. Yields are up a bit too on some hawkish leaning fed speak, and were going to get to that in a minute as well it does take us to our talk of the tape the rally, how resilient this market can remain. Lets bring in kevin gordon, Charles Schwab good to see you. Its been a minute. Nice to see you this markets been incredible its been resilient in the face of so much theoretically its had this nice bounceback. What should we make from it . I think whats nice is through this mini pullback correction, whatever you want t call it, youve removed frothy sentiment as a pretty big risk that had been a risk from midnovember up until march where you had seen indicators on the behavioral and the attitudinal side that had gotten way into excessive optimism territory. As we know from history that can happen for a while until you get a negative catalyst to tip you over that negative catalyst probably ended up being inflation, this reacceleration that we saw in the First Quarter. Now that youve taken that back, earnings season for the most part has generally been pretty good maybe less good on the sales side, but overall, i think there have been enough catalysts to keep you in this uptrend and sort of that broader picture going back to late october and the late october low of 2023 keeps you in the sub the key catalyst if we want to call it that, everybody is sort of coalescing around the idea that the fed chair changed the game at the meeting. He was not nearly as hawkish as some had feared he would be, and thats really why we find ourselves now where we are i have a little bit of a different view only because if you look at the shift in Market Expectations that weve seen a lot. Theres been so much whiplash since the end of last year, when you really started to get favorable readings on inflation metrics. Everything was pointing in the direction of right at 2 , maybe sub 2 , but if you go back to some of the commentary from powell himself, december and january, you know, there was no major pivot. I know that in the sep there was an indication that on average fed officials were expecting three cuts this year even powell himself in january said were not going to declare victory, its premature. I say that to say and reaffirm the point that its not the fed that has changed its tune. Its just the market that has had to adjust. Lets discuss that. Weve had these hotter than expected inflation reads, and we many a bad gdp read, so you know, all of a sudden were sitting there, okay, now are we going to get any cuts at all is he going to come out at the News Conference and be really hawkish, and is that going to be a problem . We have to worry about stagflation. So he comes out, and he says hikes, more hikes unlikely uses that word, right . Highly unlikely. Right no stag, no flation yields come down yields are down considerably since that day stocks are up. Its directly correlated if you look from at the point that the market started to aggressively price in cuts up to 7, if you want to go from that period from sort of late fall into the end of the year and at sort of the max point was january of this year when you got to 7 at that point, yeah, that coincided with some weakness because under the the correction last year from late july to late october. Then of course with the turn of yields, that helped propel stocks in the opposite direction. But since then as weve gone from pricing in seven to maybe just one, now to maybe two, the market still rallied thats the disconnect there where i dont think that the market is purely just trading off what the fed is going to do this year. If he coulhad come out and s or even gave you the glimmer that another hike was on the table, we would not be where we are. They always entertained that as an option. Yeah, but the way that he came out and wasnt nearly as hawkish as some feared has to be a considerable part of the story, and so does the sector performance, lets just take this week. Utilities are leading the way at 4. 5 , financials, materials, industries, are you telling me those sectors would not be leading this market if rates were still 20 to 25 basis points higher where they were around fed day, and he was hawkish. Theres no way. But even if you look at the leadership profile since late march, i mean, you look at whats been leading and im sorry, excuse me, late february, early march, thats when you started to see a shift where technology kind of took a step back, hasnt really participated as much since then, but the three Top Performing sectors since that time, since the beginning of march have been utilities, energy, Communication Services so thats a traditional defensive area, thats a traditional sort of deep value area, and thats a growth area that are all leading im not really sure what the markets message is there. So its not a clear cyclical risk on tone, but its not a clear all in defensive tone either i think thats consistent with where we are in this part of the cycle where nobodys sure how much of a reacceleration is to be believed, whether we start to turn lower from here or that brings cuts back on the table for the fed. Now you reintroduce a little more on the labor weakness side and the consumer weakness side where i dont think were in dire straits right now because of one jobs report that got you down to 175 and payroll, the Unemployment Rate tikd cked up little bit you reintroduce some of that and it fits with at least how we think about the fed cutting potentially, which is inflation and disinflakes, ttion, the tres the stage for them to be able to cut. A lot more members have mentioned this is weakness in the labor market, if the Unemployment Rate was to gain more momentum to the upside. We had a special event really in the last hour, an exclusive with president schools by and kashkari up in minneapolis, steves with us now. Wanted to catch you before you got on your plane to come back i thought this was significant, steve, in that, you know, it almost feels like now the fed chair is on the island, and almost everyone whos coming out certainly today and there have been many who definitely have a more hawkish tone certainly kashkari e. Yeah, well, i think the way to think about, that scott, is you follow the data. I think what youre talking about to set the whole scene, you know the news like the back of your hand, in case people werent watching, logan came out, bowman came out, said she didnt think they should cut rates this year. Logan asking the question maybe the fed is not tight enough. Thats from dallas, and then we had kashkari on who says, you know what . Well, you know what, lets listen to what he had to say the good news here is hes not talking rate hikes, so lets hear what he is talking about. If we get concerning inflation data continued, were going to sit where we are for an extended period of time. I think thats the default if the labor market stays strong, we dont have to do anything we can stay here as long as needed now, i dont think austan goolsbees viewpoint is any different from that given the scenario, where austan may be a little different, is he seems to have more optimism that inflation is going to work itself out he will keep reminding you that we had an historic decline in the inflation rate last year obviously not the price level, but the rate of inflation came down very precipitously. Hes a little more optimistic. He does not accept the idea that were in this last tougher mile of inflation he seems to have expect that the inflation progress of last year can and should continue this year i also, to be honest, was struck by the issue of rents, right . The fed chair at the meeting had you believe and he said it numerous times that he believes its a lagging indicator, that rents are going to come down he sounded pretty confident in that if you listen to these two gentlemen with you today, man, they almost talked as if its a leading indicator to them still that the stickiness there or as i think mr. Kashkari pointed out, the tick up in new leases gets him a little bit worried, so i wonder if we have differing perspectives on that well, youre 100 right to point that out whether its leading or lagging, the fed cant get there from here if indeed housing inflation is not going to fall that is a prerequisite for the fed getting back to that 2 inflation level. Youve got to remain at 5, 6, 7 , its not going to happen on the 2 target, so therefore you get into this thing. Goolsbee calls it a puzzle, kashkaris a little bit more worried about it, and as you said, powell is kind of i dont want to say doubling down, but more confident in his forecast that the decline in housing rents has to show up in the cpi. It is a puzzle, scott. We dont know quite whats happening. We do know that marketbased rents and other data from that have shown a decline it hasnt shown up in the cpi. What we do know is that if youre going to get to 2 inflation, those housing numbers must come down. It was great stuff, and its rare to have two president s together live on television, safe travels back. I appreciate you spending some time with us steve liesman, our senior economics reporter kevin gordon, off the macro and back to the market, do you believe that the trades that have worked this week, the sectors that have outperformed as i said utilities, financials, materials, industrials are now the place to be, that the economy is going toe remain god enough, irrespective of what the fed does down the road the Market Dynamic has shifted enough yeah, we think it has i mean, if you look at even our sector model has a couple of those has outperformed, financials, materials and i would add energy the move in utilities, i think if you were to take it back to what we had seen back in october, specifically for the utilities sector, not only did you have it relative to the s p 500 fall to a new alltime low, but in absolute terms, the sector fell to a threeyear low. That sector had gotten so deeply oversold its not a surprise to me to see the run weve had since then that being said, our view that the fed is probably at this point not going to go into an aggressive cutting cycle, that theyre probably going to take it slow assuming the economy hangs in there, thats not consistent with utilities and traditional defenses continuing to outperform. I would say that the cyclical bias is there in terms of what we look for in terms of quality and everything, looks relatively strong even in a higher rate environment. Were wrapping up this week, and we got above 5,200 on the close. Were not going to do a new high on the s p today, it doesnt appear, barring something dramatic in the final 50 minutes or so that we have because we need a 1 move from here how should we come away from this week thinking about this market i think that the s p is going to be up about 2 this week. I think today you have a bit of profit taking going into next weeks cpi, but i think this conversation around industrials, utilities, and ai, i think you have to throw the old cyclical playbook out because theyre all related. So we have this big ai spend that we get reaffirmation or confirmation from meta, google, amazon, microsoft, et cetera, tesla about the massive spend that theyre going to continue to do, and where tdoes that play into actually . It plays into data centers, which plays into utilities, and so if you look at next day or nre, i think its up about 23 this year. Thats close to 15 of xlu, and then you think about industrials, were doing so much onshoring, if you look at whats happening with intel, the chips act, ira et cetera, thats also to Bring Technology back onshore. So i think you have these cross currents, so i think its really important for investors, that old playbook of when should you buy utilities. Rates could actually on the back end start going up thats not great for like dividend yield and utilities but you have this other aspect, i think, of energy spend around onshoring and data centers thats actually butting that and that is a much bigger move that could help utilities be strong for the rest of the year. Thats an interesting play, and a lot of people are talking about that, kevin, including carl quintanilla, my colleague posted on social media the conversation that he and cramer had this morning about utilities. That theyre no longer, at least now, a defensive play but rather a generational growth story as the power hungry data center drives upgrades to the grid. Is there something to sna. I was thinking back to when bryn was talking about that, when we wrote our outlook for 2024, we do have that view, not just this year but maybe youre at a secular turning point where the ai ben fisheficiaries and t adopters start to take more of a turn theres still enough from a fundamental perspective, especially where we are given rates to weigh down on utilities, not that they have to go down. I think in terms of relative performance, you look at the debt levels, the interest coverage ratio for that sector, its not very high its actually rolling over you look at the fact for the sector as a whole, the dividend yield relative to what you earn in the bond market, that spread has been slipping, and now youre kind of into a zone that is consistent with weaker returns, not outright negative, but just weaker relative to history. I do think that, yes, theres probably a secular story there, but im not sure given where we are in the fundamental aspect and what the markets been focusing on in terms of quality, im not sure that thats a longterm play right now. Financials, were showing them on the screen, its number two on the list. Theyve certainly done quite well, its 11 yeartodate. Its one of the Top Performing sectors in this market what should we think about right now . It feels like directly correlated to the fact that rates have come down theres a better feeling about how this whole thing is going to end. Ive been i think really consistent we are very underweight financials were trying to be away from financials i think theres better returns outside of a few individual names. I think that we could go into when we look back at the end of the year, the fed could actually lower rates on the short end bubu you actually have a version of the yield curve where the long end actually goes higher and so whereas the big banks can actually do some stuff with that, i still think with the long end commercial real estate, mortgages are priced more on the long end, not the short end, and with a trillion dollars of refinancing on commercial real estate, i still have this unease that we have these land mines in the commercial Real Estate Market and other areas that if you continue to get, once again, an uninversion, regardless of what the fed does, thats going to put some pressure on some sectors that were not ready within financials and i think that probably brings moefsst of them down with it if that occurs. You like financials, dont you . I agree with bryn, if you start to break it up with large cap versus small cap. Lets talk large cap. Goldman sachs has been hitting a new alltime high almost every day. Jpmorgan has been doing the same i definitely think we need to separate the kind of conversation we need to have were not talking regional banks out of the russell 2000. Were talking about Large Cap Money Center Banks or Capital Markets focused banks, things like that. When we look at the factors we use whether its quality, sentiment, growth value, that sector scores pretty well. For now its worked thankfully for us knock on whatever here, but i think that you still have strong trends in place. The underlying breadth and internals of that sector are really strong. Financials is one of the s p 500 financials is one of the sectors thats scoring the best in terms of participation among its members. Bryn, what about energy i think we have some differing views of late whats been a disappointing trade and fits and starts should we believers in that, asking had somebody whos sitting in the houston, texas, area, may be a little biased. Im factbased. Im boots on the ground. I think i have a really good lens. Thats fair i got you. Other people are biased and so i think that youre going to continue to have dispersion i still like the smaller names i mean, if you look at a diamondback, that stock, if you took the name off, you would think that would be a technology stock. I think that, you know, 80 is the new 60 i think these companies in general have good capital discipline the Free Cash Flow yield isnt as good as it was last year. I think its about 7 in ago gait aggregate. I like these names, like the diamondbacks, those kinds of names and ages were playing it generally, so i can get some smaller emp names and not just sit there with chevron and exxon. I think that this needs to be part of the portfolio. Also, energy does well in this kind of market when youre expecting rates to come down, energy is one of the top performers and i think energy is up about 11 , so its been a really strong performer. Yeah, over a month, its been the worst performer energy you like that too. Yeah, you keep i mean, you go through these fits and starts we take a longer term approach past four years, energy is still the dominant performer out of all sectors. When you look at fundamentals, talk about a sector that looks a little bit or a lot a bit different than Something Like utilities. The profit boom for this sector over the past couple of years is notwithstanding the weakness weve seen over the past year has been enough to really lift that interest coverage ratio, keep it elevated, which is one of the reasons that we think areas like this can still do well even with rates really elevated we have to keep in mind, its about risk appetite. Its not as much about the level of rates permanently affecting any given sector or any given company. If youre able to withstand it, which a lot of Energy Companies have been able to so far, then that ultimately is a good thing, especially in a higher pressure economy, which we still seem to be in right now. Lets finish by circling back to one of the areas of the market thats had it tough this week, and those are those high growth stocks, high beta stocks. Like roblox, for example got crushed the other day. We had you on halftime, in which you said you were going to buy more soon and that time has come today. Yeah, i mean, i added to palantir earlier this week, very overblown, and i added to roblox this morning i originally said yesterday i was going to wait until monday, but after the market it seemed really washed out, so i think that once again the stock will see 40 again. Its in a really strong channel. The market overreacted to this, and so i think this is a good opportunity. I can buy it around 30, probably take profits on this piece around 40. You know, in the next six months to a year, which would be a great total return yeah, a decent little move today, bryn, thank you, i appreciate it very much. Bryn talkington, kevin gordon. Lets send it to Kristina Partsinevelos for a look at the biggest names moving into this friday close, kristina. Move over tesla, chinese ev maker sizeker ipod in the u. S it offers several luxury ev models and opened at 26 bucks this morning the zeekr listing is the biggest by a chinese based firm in the United States b since didi in 2021 shares of the largest chip manufacturer in the world are also higher but up just over 4 after reporting a 21 sequential monthly increase in april sales. Thats 60 higher than last year at this time those big numbers driven by demand for ai products, standard server builds, stable demand from apple and were starting to see the seasonal improvements in hand set and pcs. Skcott thank you very much up next, growingpains, a number of high profile growth stocks, we just mentioned one like roblox getting hit this week eric jackson has been a big believer in that trade find out if hes bullish or if the recent turbulence has him changing his tune. Its friday, youre watching closing bell on cnbc announcer this cnbc program is sponsored by truist wealth, where meaningful relationships matter most. 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. Stock market heading for a positive week. A different story, though, for a handful of high profile growth names, roblox, spotify, uber down sharply since reporting earnings this week a little bit of a recovery after that its been a tough week, and our next guest says theres still more gas in the tank for that trade. Joining me now, emj capital president and portfolio manager, eric jackson good to see you. Welcome back its been a while. Hey, how are you . I think thats the theme of this week really is a lot of the blowups that we had, six, seven, eight names really got hammered after their earnings just didnt werent good enough. Thats true, i mean, this is a market where you come up short youre going to get punished but looking through those examples, i mean, i think there is some good news this week, scott. Ai, the big ai trade, you know, the names are much higher than they were a week ago, and kristina just mentioned it in the prior segment about the taiwan semi news overnight, their april orders being up 60 year on year so thats definitely helped those stocks the russell also is up just, you know, compared to a week ago, the vix is down, tenyear is sort of flat most of these most tech names, most growth tech names, if you go back and look at the charts, bottomed in the third week of april, and so despite the bumpiness and the individual names, i still think that growth is on its way up from here, not down why then did you exit out of microsoft, amazon, and google . We could start there because thats what i see as part of your notes you recently got out of those stocks yeah, after earnings, you know, i look at those are all great companies, and i think theres going to be opportunities to trade all the mag 7 names throughout this year, including apple and tesla. I just thought theyd had great pots there was good news, there was sort of pessimism going in i decided to take profits. My two favorite names in the mag 7 all year and continues to this day is meta and nvidia i think those are the two, you know, solid holds for all of this year. The others, you know, some of them have stretched valuations some of them the Growth Prospects arent as great. I think theres opportunities to look elsewhere in some of the smaller names, you know, wherever the valuations arent as stretched theres sort of a growth story emerging a lot of companies have cut head counts significantly, so theyre much more profitable than they used to be nvidia, i mean, their earnings are looming large now were going to have to wait 12 days or so before we get them how important a moment is that going to be for the whole market its the biggest name affecting the whole market i mean, theres no one else bigger if they tanked, if they stumbled, it would have profound impacts on other names and other sectors that are far away from ai s ai, so theres no question that they everyones looking to them the taiwan semi news, though, of today and just april sales being up sequentially 21 for them, and ai chips being a big reason why, i think, you know, it goes back to the story of nvidia as really the core way to play ai despite the fact that theyve had good quarters to this point i dont think its going to be a 3 4 and done story i think its a multiyear story, and nvidias going to continue to move up from here. So the top picks you have relative to axi, one of which to be quite honest, i dont know that ive heard anybody talk about. Maybe thats me, maybe i just missed it, is dell why so yeah, dells reporting after nvidia, should be later this month, scott i think theyve quickly emerged this year as sort of a stealth play in ai obviously super micro got all the headlines a few quarters ago for building out the data centers that are wrapping the nvidia chips but dell is, you know, arguably doing just as good, if not a better job than super micro. You know, we just heard all these the people like amazon and meta and google on their Earnings Call kind of spook the market because they talked about how they are not stepping back from ai spending, and thats good news for the dells of the world. Its good news for the super micros and others. And so i just think dell, you know, theres obviously a consumer story, but the data center story, the ai story is one thats picking up steam big time you like arm holdings, right . They had earnings this week, and the reaction wasnt great afterwards it wasnt they bounced back today. Theyre up even more than taiwan semi today, i think on taiwan semis news. I think the results were better than kind of the first reaction. Theyve already kind of taken some pain going into the earnings event so they are an ai story too. Obviously theyre more they make the cpus that power the ai data centers, but theyve ngot close relationship with Nvidia Nvidia obviously tried to buy them a couple of years ago, and theyve got a Great Management Team i do think that they will continue to emerge as a very strong story Going Forward in the rest of this year, and as they roll more and more chips, their royalty rates are a lot higher, so well see that play out in the story as well you like one of, gosh, whats been one of the most turbulent stocks, i think, in this entire market over the last few years thats carvana maybe the story has turned i dont know where the Short Interest is today relative to where it was before. My guess is its not nearly as high as it once was. Why do you continue to bereliev in that name its been a binary story for well over a yeear, scott. Most people thought this company was going out of business. They thought the debt was going to crush this company. Obviously the Management Team has done a great job of proving those skeptics wrong over the last year. So now as sort of the bankruptcy fears fade, you know, the question is really like how do i value this company is there historically its been a go go growth story. There have been no profits, no Free Cash Flow theyve changed their tune now as theyve gotten fit and much more focused over the last couple of years. Now the question is can they walk and chew gum at the same time can they be a growth story and a profitable story, which they showed just in their last Earnings Report that had jumped significantly, and if they can, you know, people really will have to say, you know, where does this deserve to trade from a multiple perspective assuming they can continue to march up, theyre not just a traditional car retailer, like a carmax theyve got this wellknown brand. Theyve got the ecommerce story. They didnt spend a lot on marketing in this past quarter, and yet sales jumped tremendously i still think there is gas in the tank for carvana. I appreciate it, enjoy the weekend. Coming up, return to the fed put. Ed yardeni is back, he says thats back, and he says theres rising risk of a market meltup as a result. Hes going to tell us the catalyst that could drive the rally. Cke s his case when we com ba 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. So this is pickleball . Its basically tennis for babies, but for adults. It should be called wiffle tennis. Pickle yeah, aw whoo these guys are intense. We got nothing to worry about. With e trade from Morgan Stanley, were ready for whatever gets served up. Dude, you gotta work on your trash talk. Id rather work on saving for retirement. Or college, since you like to get schooled. Thats a pretty good burn, right . Got him. Good game. Thanks for coming to our clinic, first ones free. When it comes to investing, we live in uncertain times. Some assets can evaporate at the click of a button. Others can deflate with a single policy change. Savvy investors know that gold has stood the test of time as a reliable real asset. So how do you invest in gold . Sandstorm gold royalties is a publicly traded Company Offering a diversified portfolio of mining royalties in one simple investment. Learn more about a brighter way to invest in gold at sandstormgold. Com. The s p in the green heading back towards record highs. Investors turning their attention to next weeks all important cpi and ppi data joining us now ed yardeni, the president of yardeni research. Good to see you. Thank you, scott. What a remarkable turn since we were down 5 or so on the s p, wondering if we were going to have a 10 correction from there, and here we are less than a percent away from a record high what should we make of this . Its clearly still very much a bull market. I thought we could have a 5 to 10 correction we had something a little bit over 5 . Looks like were not going to have anything like 10 the Economic Outlook remains really quite positive. I think inflation is going to continue to moderate i think the economy is going to continue to grow, and i think that means that earnings are going to continue to head up, probably not to a new high in the First Quarter when the numbers come out, but i think over the next couple of orders were going to make new record highs in earnings. I see the market moving higher. I mean, lets kick earnings around, if you would sure. Because i know where the outlook is, but if you look at what just happened in earnings season, and its for all intents and purposes over, the growth was all from the mega caps, right . I mean, what are we going to do, less than 5 total Earnings Growth, maybe around 5, but the majority of that came from a very, very select group of stocks why should we believe that thats going to turn im quite optimistic at overall corporate profits. Last year they came in at 222 per share for the s p 500. Were thinking 250 this year, 270 next year, and 300 in 2026, and the reason for that is i think Profit Margins are going to continue to expand to alltime record highs. We have seen Profit Margins going up, and youre absolutely right, some of that leadership and higher Profit Margins have clearly been from the mega cap names. It is what it is were talking about roughly 30 of the s p 500 market cap being dominated by eight names, and theyre not going away, and theyre going to continue to be an important part of the market. Weve got a forward p e of about 21 with them weve got a forward p e of 17 without them the market doesnt look cheap when you look at the overall market, but then youve got to consider what youre getting for your money, and youre getting some Pretty Amazing companies. What about the sector shakeup, if we want to call it that this week is good evidence of it, right . The sectors that have done really well this week, and technologys not going to be mentioned by me, other than telling you its not in there. What do you make of that do you believe in this broadening finally and for good . Because ive asked you and others at times when, you know, weve broadened out, and its fiz fizzled. Will it this time . Well, you know, and i think part of the broadening issue has been that the mega cap eight, as i like to call it, i watch a lot of movies, so im throwing netflix into the mega cap 7, and a lot of those stocks have really seen their price appreciation, stock price appreciation so great that by comparison, other stocks that are up, maybe a piddling 20 since the impbeginning of the b market dont look that exciting. A lot of the breadth issue has been a mega outperformance by the mega cap stocks. Im thinking utilities this week, financials have done incredibly well. When you look at utilities, most people look at utilities, they say, well, its a yield play, you know, thats where its defensive. Now i hear the overwhelming majority of people suggest now these are just more ai offense plays, and others would suggest, well, thats going to end in tears. Now weve taken utilities to the point of their ai plays too . Well, i think i mentioned to you before my thesis here is that all stocks are Technology Stocks you either make technology or you use technology if you dont do that, then youre out of business youre going to be competed out of business by companies that are using technology or making it, and so, yeah, i think the market is actually broadening out in a way that makes sense to me tremendous demand for power to power the data centers and naic all work. And the notion of, you know, what we heard today from the fed speakers who were out in force, which certainly tilt ed a littl more hawkish the fed chair obviously didnt or at least thats the read, assuming were reading that correctly. What do you make of that well, look, i dont think the economy needs any change in rates. It certainly doesnt need rates to go up, andi dont think it needs rates to go todown were back to where Interest Rates were before the great financial crisis, before the great abnormal between the great financial cricrisis im very comfortable with rates here the stock market seems to be very comfortable with it i am concerned that the fed might just take any bit of evidence that the economy is slowing and lower Interest Rates, and my concern would be that that would be too much of a good thing we could have a meltup situation in that scenario so im rooting for things to pretty much remain even keel here, and that i think will remain very positive for the market. Are we giving too much credence to the notion that the consumer is just going to hang in there forever because the data this week was squirrely on that front, and if you put starbucks, the recent Earnings Report into the mix and others, im not necessarily sure we come away from all of that feeling great. I think the consumer has got a lot of odifferent stories in the consumer its not just one story. Youve got a lot of baby boomers that are retiring. The baby boomers have 75 trillion in net worth. Its the richest cohort of demographically that weve ever had, and theyre spending money like crazy theyre going on tours theyre going to entertainment venues, theyre going to restaurants. Theyre traveling, and theyre going to the health care system, and thats creating a whole bunch of jobs that all those kind of services on the other hand, you do have people that are struggling with consumer credit, and a lot of them are actually younger folks, and i think what were missing here is theres a lot of intragenerational support going on where the baby boomers, i think, are paying some of the their credit card bills, and some of the mortgage down payments for the younger generations, so i know this from personal experience, scott, but i also know it for my friends. Well leave it there and see you soon. Thank you ed yaryardeni, were tracking the big movers ahead of the close. What do we see what do garlic, steak, and Healthy Greens have in common . Maybe your dinner or maybe a 30 stock surge. Ill explain next. Announcer the bond report is brought to you by pimco, a Global Leader in active, fixed income were less than 15 from the closing bell, back kristina for a look at the key stocks we need to watch. Its all about guidance this earnings season and thats why Akamai Technology shares are g getting punished they warned of weak june guidance the company is facing Slower Growth in media and thats why shares are down 11. 5 . Bring on the protein, maybe for scotts dinner, caramelized garlic steak coming to a sweet green menu near you. Shares are popping over 33 right now because the salad chain beat on earnings and also upped its fullyear revenue guidance scott, whats for dinner i feel like having carbs. Is that bad . Thats not that bad, right no, its not bad. Its friday. Its allowed. Thank you ill let you know what i had on monday. Still ahead, the big bio tech bounce, shares of vaccine maker novavax soaring today. Well drill down to whats driving that near iptrle digit surge, look at that, 96 back on the bell after this. At pgim, finding opportunity in fixed income today, helps secure tomorrow. Our timetested fixed income suite, backed by over 145 years of risk experience, helps investors meet their goals. Pgim investments. Shaping tomorrow today. Your shipping manager left to find themself. leaving you lost. You need to hire. I need indeed. Indeed you do. Indeed instant match instantly delivers quality candidates matching your job description. Visit indeed. Com hire with gold and copper prices pushing towards alltime highs, mu. S. Gold corp is advancingn. Its environmentally friendly gold and Copper Mining project and creating american jobs in mining friendly wyoming. 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And its customizable scans with social sentiment help you find and unlock opportunities in the market. E trade from Morgan Stanley with powerful, easytouse tools, power e trade makes complex trading easier. React to fastmoving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you wont miss an opportunity. E trade from Morgan Stanley were in the closing bell market zone, plus, Angelica Peebles on novavaxs huge rally, Pippa Stevens on why donalds is popping as well. Were not that far from a new record high either how are we thinking about next week, inflation, inflation, inflation . Market has really pretty much done what youd hope it to do off of that low three weeks ago, responds to the overflow conditions, makes the most of a decline in treasury yields weve talked about the financials and others that have done well. I do think it was interesting that the university of Michigan Consumer sentiment numbers today kind of stopped the levitation that was kind of underway in the morning, put the market a little bit back on its heels, got yields firmed up a little bit. Thats really a tertiary type indicator, that oneyear Inflation Expectations it says we have the sensitivity to those inflation numbers, so were not going to fully relax until we get through those and see if were still on track to have disinflation resume or have it be a good enough number that yields can stay calm. Angelica peoples, a nearly 100 oneday gain. Novavax is having its best day after after announcing a partnership to sell its covid vaccine. Novavax will get 500 million upfront and another 700 million if they meet certain milestones. The total could go higher over time if the combinations pan out. Jpmorgan is calling this deal transformational to novavaxs overall business this is a company that about a year ago warned they might not be able to keep the lights on. Shares are doubles to about 9, theyre still down from their intraday high of 332 in february of 2021, and novavax is still a favorite name to bet against with Short Interests representing almost 34 of the float as of the end of april per fact set data. Angelica, do you have a quick thought . Im really glad we shared the multiyear chart there. Its still down like 95 from the highs. It does show you it was onethird of the flow. It shows you sort of, you know, the postcovid playbook for some of these main names within that group, pfizer, were dealing with that, moderna they dont really know the way out of it. The fact set numbers for the First Quarter Earnings Growth would be much, much higher if not for big losses, its still kind of an overhang on the overall earnings picture. Mcdonalds making some moves here tell us. Mcdonalds is prepping a 5 value meal to bring customers back in this competitive environment. Two sources familiar told our kate rogers it could include a mcchicken or a mcdouble with four piece nugget fry and soft drink. Deal details are still being hammered out and an initial proposal by mcdonalds for the 5 value meal did not clear necessary hurdles. Additional details are now being discussed one source said cocacola added marketing funds to the equation to make the deal more appealing for owneroperators. Value remains key in this environment. Mcdonalds has leaned into core items that have done well with consumers, but this value meal would be substantially lower than ordering those items individually that stock shot up nearly 3 all right, Pippa Stevens, thank you so much. Weve got 90 seconds, mike, great week for financials. Yeah. Great week for utilities. And pretty spread out throughout, its been a nice broad week it has. I think one of the factors thats been driving a lot of whats gone on the last few weeks, we talked about this even going back to february was the extreme outperformance of high momentum products to this market, really look vulnerable for reversal the high momentum areas of the market have backed off, but what happens there is you get the low momentum washed out parts of the market benefitting because essentially the quantitative trades work in reverse i think thats a big part of whats going on with utilities, a little bit with staples that have acted a bit better too, and the glaring piece of this, which keeps me from saying, oh, were seeing a broadens of the market because we have a better macro picture is the consumer cyclicals. You still have a little bit of pressure on the whole story line about whether the consumer is going to be resilient for all the reasons weve been talking about so, you know, the market has kind of like gotten over to this neutral spot, almost back to the highs no longer overbought or over sold macros going to pick up next week. You have a great weekend. Thats mike santoli. Everybody at home please do the same, but not until overtime plays out. We go there now with morgan brennan. The dow closing higher for the eighth straight education, the nasdaq and s p 500 finishing out their Third Straight weeks of gains this is the fourth straight week of gains for the dow that is the score card on wall street, but the action is just getting started. Welcome to closing bell overtime im morgan brennan, jon fortt is off today. Evercore isi vice chairman krishna guha joins us ahead of a big week of potentially market moving data. And an analyst who calls himself, quote