Tweet us cnbc fast money. Lets start with a strong start to the week for the markets. In fact, recordbreaking close for the nasdaq tech leading the way it has done so often guy, your take on todays rally. If we snapshot today, guy, Half Way Point of the year, the dow is down 8 or so the nasdaq 100, up 21 , almost a 30 differential will that be repeated in the second half of the year . Well, first of all, its great to be with you you know, im a huge fan of yours. Ive mentioned that number of times. So. Thanks for hanging out with us this evening. Thanks for having me, guys. Im hard pressed to believe that you can come anywhere close to having that same kind of out performance in the second half but i have to say, i didnt think it would happen in the first half of the year so who am i to sort of speculate on that. What i will say in terms of the s p 500 with its move basically within a whisper of its alltime high if you assume 130 worth of earnings for the s p 500, which is a pipe dream, at 3200, youre talking about a market trading close to 25 times earnings thats rich by anybodys standards. The counter to that is it doesnt matter because Central Banks globally afford so much liquidity in the system. I think evaluations matter and i think were getting levels where the market might think that as well. Were getting close to earnings so they have to rethink evaluations. Dan, good to see you outside of the dmz for once and i know from those conversations that youre not particularly bullish but are you more bearish than the cyclical names or the tech heavy fan names . Its interesting. You know, ive spent a lot of time talking about some of the cyclicals that dont act particularly well are some of the areas like bank stocks in particular that act down right horrible or oil stocks that just dont really confirm what were seeing in mega cap tech. When you think about meg ka ca tech youre seeing buying. Its unnatural in a way and reminds me of the late 1999, early 2000 period for many of the same names but microsoft is up, you know, 33 on the year. Its up double that from it march lows and, you know, when you think about head winds to Enterprise Spending and how they are getting their lunch eaten with teams, whether its slack thats doing it or zoom versus skype, you say to yourself, what the heck is going on here because this company, you know, was obviously decently positioned prior to the pandemic but im not sure there are two positions where well discount any snags that they have in earnings for the next year or so to me, i just dont see some of this stuff thats going on here. I actually have seen it before i know it doesnt end particularly well if youre a Retail Investor panicking to buy stocks right here on july 6th with the runs they had, its quite dangerous to be honest. The nasdaq is a clear performance differential so far year to date and so is u. S. Versus the rest of the world unless you focus on two countries, china, thats had a great day today and put the shanghai index up 10 year to date and germany only down 3 or 4 year to date more similar to the s p 500. Do we conclude if youre really, really on top of controlling the virus that u yyou should perform well and if so, why has the u. S. Performed so well . Look, first of all, welcome great having you i think this rest of the world trade is something that actually weve seen start to move two to three weeks ago. If you look at the dax and you want to invest in the ewg and remember thats a local currency based etf. Effectively, youre going to out perform if the eros is out performing the dollar and the dax outperformed the market 12, 13 in the last six weeks. China last night had an extraordinary dynamic of where the securities journal and the state newspapers were essentially saying hey, get involved in the stock market wealth effect coming bull market possibly coming and stimulating the fact there will be exciting support for their markets, whether they should be doing that or not but, you know, thats their version of the fed getting out there saying well do whatever it takes so the under performance of china and emerging markets to this point but the last few days and even last week, the out performance of the fxi despite what is going on in hong kong is a trend that i think investors should continue to look at guy talked about earnings and valuation. Im not sure were really handicapping s p earnings until 2022 and thats the opportunity where i think people are looking for laggers and under fperformes while they bid up u. S. Stocks. Exciting day for Global Investors but its been a brutal, you know, six months even with this out performance over the last few weeks. And the one International Market of course that hasnt played catchup is the u. K. But we could have expected that, i guess. Guy, to tims point there about whether the market is reacting to earnings or reacting to momentum or liquidity, do you think earnings season coming up, banks kicking off a week from tomorrow will be a moment where the momentum could be taken out of the market and people focus back on the fund mentals again i think for a couple days at least it will because i dont think earnings will be particularly robust in my opinion. Banks have absolutely under performed. Well talk about that, im sure. You talk about a name like j. P. Morgan that made an alltime high of 141 in february. Flirted with 80 and sort of me aroundering in the mid90s these stocks are under performing for a reason and to answer your question, i think the market will take a pause yes, youll see one offs great earnings weve seen it and the stocks are rewarded but when you look across the specspectrum. Im hard pressed to believe they will stay that optimistic in my opinion. You know, it interesting we saw earnings over the last couple weeks and a great reaction out of fedex. Fedex is going down for two years and its earnings estimates had been ratcheted lower and lower and the stock bounced maybe 12, 13 after that report but we also saw nike get flushed and we saw other action here so, you know, its been kind of a oneway trade or 45 degree angle for the last couple months but as we head into the back half of the year, earnings will matter more when you think liquidity was one of the main things that got the stock market here, it distorting valuation a little bit but one of the things that guy when he was brought up in this market after the really the great crash, maybe close to a century ago, you know, you had to learn how to figure out, you know, price discovery and valuation scrutiny these were two very important things and they seem to be out the window again but once we get over this hurdle of the stimulus or the Financial Assistance that turned into stimulus, i dont think there will be a heck of a lot more in the second half of this year and thats when investors might start to scrutinize valuation a little bit, especially to what tim just said were not going to get back, i dont think, to peak earnings, the 2019 earnings for a couple years and i think you should probably start to put a discount on multiples if thats the case especially if visibility is that poor for that long. Lets bring in another market voice joining us now by phone. Lindsey bell, great to hear from you, as always starting off with the general market mood, it feels like it super positive another record close on the nasdaq but have we in fact, be range bound for a couple weeks when you look more at the s p 500 and will it take a lot to break us out of that range in either direction yeah, i mean, we definitely have been ranged for the last couple weeks of course you get a monday like this where were hitting new highs in the nasdaq and some of the big tough names. Sure, that feels exciting. But underneath, i think the reality is coronavirus cases are increasing here in the u. S. While the Economic Data up until this point has been surprising to the upside. The question mark remains how is that going to develop over the next couple months are we going to see a plateauing in Economic Data there is still a lot of questions out there. With policies, policy has been a great support to the system for the majority of the last several months, this month in particular several of the fiscal policies are going to run out and by the way, taxes are due july 15th so that could put a damper on sentiment, too i think there is a lot of question marks out there even if it feels a day like today feels really good and as we get into the second half of the year, i do believe like your guest was saying earlier that fundamentals are going to matter a lot more when that policy jolt starts to fade. Are we more likely, lindsey to break meaningfully higher or lower . To me, i think that as we go through Third Quarter earnings season, you know the summer is a slower, weaker period during the year i think that were going to get some digestion and consolation because it will be a huge mixed bag. Either sh earth shattering but the game changer is election in november and that will determine where we go to upside or downside from here. Same quick question to each out traders one by one meaningful to break higher or lower . I have to be steadfast. I think the break will be meaningfully lower. Tim how are we defining meaningfully the lid quiquidity of the fed, s good news for the correlation trade. I do think there is more room to the upside, not meaningful and i think the markets are at some point off sides. Dan yeah, i think you have a one up, two down scenario to answer your question. I think that maybe you see the s p 500 back near 33 3 under some of the best Case Scenarios but on the downside, possibly down to 2750 thats how i get to one up, two down. Lindsey, 21 bear to bull, is that the same kind of answers you get when you speak to your clients . Yeah, i mean, i think that thats where the institutional mind set is at and i think on the retail mind set, which is where im at on the invest side is much different. There is more enthusiasm and excitement within the market and the potential for it going into the end of the year especially as like you said people continue to work from home. They have time to dabble in the market and learn and there is definitely a strong interest for that. Hey, lindsey, its tim. Is there some interest in starting to rotate we had an ism Services Number this morning, which was very bullish. The payroll number is die jegesd but pmis around the world. There are sectors that have badly under performed so i think were all saying chasing five or six stocks at the top of the nasdaq leader board is concerning but is there anything you can own . Yeah, no, i think its a great question and, you know, ive been eyeing financials for the last couple months now because i agree with you that the one sector that has been beaten down significantly and the economy is starting to improve and even if we do hit a little bit of a plateauing here, i do think that the worst is behind us and these stocks have been beaten down to 2009 levels so there is opportunity with Interest Rates remaining low. That said, lindsey, you mentioned the election briefly and earlier on do you think the financials will be at risk if there is a democratic sweep of the election there was a note from j. P. Morgan that suggested the broader markets were not too much at risk from the election but perhaps financials would be a sector that could be it will definitely be a focus if there is a democratic president and democratic sweep for sure but again, i do think this is a sector thats been beaten down so significantly that once we get past the election, there is, you know, there is the ability to for the uncertainty to be lifted because were going for the next four years and while the financial, the red tape cut by the Trump Administration on the Financial Sector regulations that have been removed, that will likely, you know, potentially come back on i think these stocks are so beaten up, something thats worth at least vrg sohaving som exposure in the portfolio. Dan, is the election a risk in the market . Not really oh, sorry. Dan, go ahead. Sorry. Yeah, no, i actually dont. I mean, i think that under post circumstances, i think a lot of investors have already priced in probably higher Corporate Tax rates so i dont see that as a big thing and listen, if you look back to the last financial crisis, you know, obviously deregulation in the lead up to that, the 07, 08 doit p08 pera little aggressive. The bank was the source of the crisis let me tell you something, i think were probably also pretty decently happy with those regulations being in place we might have really added fuel to the fire whatever the next fire was going to be so at the end of the day, i think the regulation worked out okay the dereg is fine but also putting some shackles on this bank stock right here. They would like to see Interest Rates rise i think under a new administration you may start to see that with less geopolitical volatility. The bank seeing a lot of stock differentiation. Down 5 year to date and wells fargo down 50 year to date. They begin earnings reporting next tuesday lindsey bell, thank you for joining us. Thank you. The chart master is taking a look at the concentration of stocks that are leading the charge carter worth is here to break it down over to you. Sure, thanks, wolf. This is a class sick instance of a market with every major top that occurred had that circumstance in 2000, financials and other things were turning down before the market peaked in march in 07, same thing, Consumer Discretionary names turned down before it peaked in october of 07. The same circumstance before we came apart in february let look at a few tables and charts the first is to the issue of concentration of capital the top three stocks are the same as essentially the bottom 300. You see it there there are actually more. Its 4. 6 trillion in value 16. 6 of the s p versus the bottom 300, 4. 2 or 15. 2 so top three more than the bottom 300 take a look at the second table, the top five 6. 3 trillion versus the bottom 350 at 5. 27. So now youre talking about top five at almost 23 versus the bottom 350 at 21 now, take a look at the top 15 and this is just reached the level that it was in the. Com era. The top 15 stocks at 9. 5 trillion are essentially 34 of the market thats the same as the bottom 420. Top 15 and the bottom 420 stocks there is no s p index anymore. It just a few names. So take a look at the next this is a chart that depicts the top five and 22. 6. Com peak 92 . Its a defensive thing, and people want to hide because theyre worried. It good technique until it too crowded. In any event, final slide, the summery of it all and this really gets to the heart of matter the top five stocks again, 22. 6 of the market cap of the s p and yet, their earnings of course, the top five only 12. 5 . These are the darlings but the top 15 are more than the bottom 420. Were so dependent on a few names. We certainly are, carter. If youre comparing it to the. Com bubble, would that percentage of earnings albeit today is lower than the percentage of market cap, would it have been a lot lower earnings relative to market cap back in yes for sure a lot lower. Thats important this is a much different era Interest Rates are different, of course and we dont have the valuation issue that we had with the. Com. Again, if you think about the peak in march of 2000, the peak in october of 07 and every other peak for the most part, even frankly in february before the pandemic hit, yo u have tu i bifercation. Do i stay and choice those that are crowded or does one frankly take the risk . There are value traps and were seeing that in energy and banks and industrials. Carter worth, thank you for joining us guy, we go to you. I guess you eluded to the argument at the start of the show you could have made the points carter just made at any point in the last five years and you would have missed out on tremendous performance. No, absolutely very true without question but his point is well taken and i know youre a footballer, a fan of football. Let me put it in terms youall will understand. If you recall in the 990s, eric was the star of the team and carried them for a period of time until he couldnt at that time what is going on in the market you cant have a few names carrying an entire market. It works until it doesnt and i think were closer to eric on 97 than we are to eric canton in 92 if you get my drift. Not a perfect analogy because he retired before the most successful period in Manchester United history it would be like arguing amazon found a new business to go into to carry them to greater heights. I get the point youre trying to make and really appreciate the way youre trying to make it, including calling it football. Not sure the audience does. I think i went down a rabbit hole tim, what is your take and if you could use a football analogy, id welcome it . Wed lose another half of the audience and speaking of rabbits, by the way, i saw three or four rabbits in that painting right next to carter we should bring that back because there is a lot of hidden gems in there. We have a case where we had moments where the breath and the nasdaq has been a harbor and we see the breath and rotation. This is extreme and reminds me where we were two mondays ago into the middle part of the week before we had a nice pull back tell me how long the fed will be in the market and ill tell you how long liquidity will drive up five or six stocks higher. Thats the dynamic where liquidity goes. Perhaps we dont discuss this enough last year we said that the tools left in the feds tool box are diminished from a year earlier or ten years earlier and today, this year, weve seemed to forget that argument they are all in but is their ability to be all in or does all in mean less than it once did . I just think we have the evidence of 2018 not only the fed but Central Banks trying to take liquidity and 2019 and test cases. You tell me what global Central Banks are doing, ill tell you the direction the market will go you said yes, the feds Balance Sheet has fallen in the last few weeks. They are buying about 5 billion. Thats down. They havent reversed and not going to reverse thats a dynamic that i think is all Equity Investors need to know its not that simple except for the fact that Central Banks have been your friend and until liquid