On nvidias numbers . Lets welcome Jordan Jackson is Global Market strategist for jpmorgan Asset Management and stephanie link, hightowers chief strategist and Portfolio Manager and cnbc contributor, both here at post 9. Great to have you. Jordan, a momentous week obviously, and i think the question on everybodys mind is now what . What do you think is next . I think weve got some further upside from here and i think we could see another 5 to 10 upside from here. The reason being you have three put, the fed put, you have the earnings put and the consumer put, right . The fed seems bias to begin cutting rates at some stage, its not a matter of if, its a matter of when. Earnings are coming in, First Quarter earnings came in better than expected. Doubledigit growth being expected for next year, as well. Most of the performance in the market this year has been driven by earnings. The wild card, its consumers. If they start to be more tapped out which is certainly some early signs of that, that could to could become a challenge. Is that what sort of is as con confounded the bears. Earnings have mattered more than anything else, and in my conversation yesterday here with rick reader, when i asked what happens next, i want to you hear what he told me, and you can react on the other side. The earnings are actually pretty good. Theres stickiness in the margins. Earnings are still pretty good. I know weve talked about a bunch of things. P people underestimate it. Could you get another 10 , not much of a stretch. More than that, yeah, i think you could. Pretty surprised by that pretty bullish view, right . Somebody often called one of the bond kings talking about, look, hes the head of global allocations, so he has hats in many rings, but what do you think . Hes brilliant, right, so i dont know if we get that much higher in the markets by what hes talking about. Were already up 11 , scott, year to date. And the longterm total return average for the s p 500 is 7. 7 for fixed income, its three. So great hes excited about equity, he should be. I think not enough emphasis this week is on the economy, though. Because we wouldnt have good earnings if you didnt have a good economy, so you had to get both of those things right. Weve been talking about the above average growth rate for the economy. Were running at about a 3. 6 gdp number, and we got good cpi ppi, kind of a wash this week. Retail sales was a disappointment, but look at the sixmonth moving average at 3. 1 in retail. So you got to smooth it out. Its too volatile each month so the economy is growing because the consumer remains strong. Manufacturing weve talked about. Housing is actually stabilizing, and, quite frankly, that is leading to better than expected earnings ifyou add on the margin story which was what rick rieder was talking about. Everyone warrants to call the demise in emergenciens but companies, especially u. S. Companies are so good at restructuring, reorganizing, in Pricing Power and in adjusting and i think thats what weve been seeing this year. Well continue to see it. So, are we up another 11 between now and the end of the year . I dont know. We will be higher, i believe, because earnings will continue. Higher than where we are now. I do think so, scott. Is it 5 . Is it 10 . Id be surprised if it was 10 because weve had a nice year and a half. You know, if you look at what were calling the everything rally, because over the last six months, it kind of has been, its not just the dow and the s p and the russell, its metals, you know, gold and other thing, bitcoin is up a ton in the last six months. Are you surprised, jordan, that we were able to raleigh back as strong as we did from the april lows . Im a little bit surprised, because the markets been able to rally off two very different narratives, right . Last year the market rallied because the fed was going to cult rates. This year the markets rallying because earnings are good and continue to see a lot of durability in the equity market, momentum tends to beget momentum and the market spent more time rising than it does falling even though the average yearly correction is 14 . The markets higher 75 of the time, so this is a market where as was highlighted, companies are adept at managing margins, consumers are going to continue to power top line Revenue Growth and so you put all this together and the fed is willing to cut rates. Step in and cut rates so i think this is a market that continues to grind higher. What is going to lead us . Steph, i know youre beyond tech. You own some tech obviously, and youve been buying things like apple. I think its now your largest position. But whenever i talk to you, i feel like its the cyclical, its the industrials and the free ports and well talk go that later. Are we still going to be okay thinking that this broadening move is going to carry the next leg, or do i need to lean in large as i look ahead to things like nvidia next week. I think nvidia will be great. When you have 177 billion of capex from the hyper scalers this year, thats a huge number and that is going to benefit nvidia but its going to benefit many Semiconductor Companies and companies in general. Its so powerful because it extends to so many different sectors. We talk go industrials, which are cyclical for sure, however, they are benefiting from the Energy Transition into green, into clean, into grid, into power, into data center and, again, a. I. , and those that sector has done quite nicely. By the way, just as well as Technology Year to date. Energy, thats also done better. Its taken a pause over the last month and a half but i do think that sector is still ripe for higher action, because those stocks are cheap and also because theyre minting money, the Free Cash Flow stories are so powerful so i also think discretionary which is debatable right now. Lets debate it. Thats why i brought it up. Thats controversy. Just think of what weve heard recently from the consumer. Why would i buy discretionary stock. When i listened to walmart i was very encouraged. Theyre saying they are seeing a constructive consumer focused on value. By the way, who is not looking for value all the time . Im looking for value. Im sure you are as well so thats a consumer thats very i think that sounds solid. Private label, theres opportunities there. You think the consumer is solid . Oh, i do. Yes, i do, but wait a second. General merchandise, for the first time in two years at walmart was up low single digits. We havent talked about goods in a long time and that was really encouraging to me. Yes, i do think the consumer is strong because we have the job market that remains very strong, wages, we have higher home prices, we have higher equity prices, we have 6 trillion on the sidelines in cash, yeah, its getting 5 , thats great but the fear of missing out if you talk to schwab youre starting to see money pour back into the market because the markets up 11 . Part of rick rieders thesis to stephs point, you have this divergence between the consumers, its at the lower end and the younger consumer is hurting. Higher end, older consumers, baby boomers are going to fuel the next leg of the kind of market that he thinks you can still have because of all the spending and investing power they have and that more than offsets the fears we have for the lowerend consumers being hit harder than most on the higher for longer and why inflation remained elevated for so long. Thats spot on. Remember, 60 of consumption in the economy is driven by the top 40 ofearners, right, so as long as the affluent and upper folks income earners are still in good positions then the economy can continue to grow, right . These are folks, you got income growth. They can grow their consumption and thats how you grow the economy. Now, certainly when we look across our chase universe and chase data, we can look at sort of income cohorts and how checking and savings account balances have changed since the Fourth Quarter of 2019. The bottom quartile, checking and savings accounts balances are down 20 . Look, lower income consumers are certainly feeling it but the folks that are going to drive consumption growth are doing okay. Scott you need to be selective, dont you . To suggest that walmarts commentary means that the consumer is just great and strong, im not sure. I think the consumer is good. I dont know if i would say great. I think theyre good but they are still spending on services. We are seeing it across the spectrum. Well, you have to spend on services, dont you, to exist. Well, of course, but we root for that because thats 75 of consumption so we want goods to do better. I was just mentioning that we havent seen goods have any life in the last two years and now were starting to see it. I think the job market is critical. If i worry about one thing, its that deteriorating but were not seeing that yet and let me just give you a data point on bank of america does master trust data each month and net chargeoffs are up 2. 94 and delinquencies are 1. 3 . Thats hardly horrible, right . Thats actually historically low, and, yes, we are seeing an increase but its so gradual. You earned 9 , 10 in 2008 in these figures, so i just think that the consumer has a long way to go, its all not perfect but definitely theres places to make money. So, lets bring in cnbc contributor malcolm etheridge of cic that joins the conversation once again. Nice to see you. So youve heard the commentary and more bullish calls and wonder whether it hitting 40k is a sign to get in or be more cautious. Yeah, i think investors probably see the dow hitting 40,000 to be their signal to say let the good times roll and to stephanies point, move some of that cash into the markets. Im feeling my fellow skeptics have warmed to the idea this soft landing has already happened and we can declare Mission Accomplished but i am still concerned what powell is trying to accomplish getting cpi down to 2 is in direct conflict with the biden agenda, right . So, this is not a political statement. This is a statement of just common sense, i think that as we get closer to november, we are still in danger of seeing something in the system break, because biden is going to be doing what he can to get cash into the hands of consumers, consumption will continue to go, and i think thats also i mean, i dont know. There is a thing called the congress. I mean, trying to get, you know, more what do you think, more stimulus will come into the system . Were already worried about how high the deficit is now. Hear me out. We just got earlier in the week the report from the Financial Times that it looks like its at least possible that the proposal from freddie mac to go into the secondary market now, its ten helocs to homeown is who have 37 trillion of assumed equity trapped inside homes and the estimate is within the next six months that would unlock about a travel dollars of additional equity out of homes. Where are those dollars going to go if not into the same consumption patterns, those services you just got done talking about . Especially at the top end of the market, where are the consumers who are home owners have the equity built into those homes, so those kind of measures is what im concerned about in direct conflict withus ever getting to that 2 number and getting that interest that first Interest Rate cut we all covet. I mean, inflation is coming down. We know it. The fed is the fed is going to cut before they tell you that, okay, it hit 2 . We know that also. One positive report, one positive data point doesnt make a trend, though, scott, so we cant necessarily say inflation is coming done and it is on its way to that 2 target any time soon simply because we saw one good report. Steph, malcolm makes the case that, you know, rate cuts still matter. You make the case that they dont matter at all, and you dont think were getting any. No, i dont think were getting any. I think its because we have elevated inflation but im taking it from the point of view we have elevated inflation because we are growing above trend. I mentioned 3. 6 growth here. Whether its actually that number or not doesnt matter. Is it 2 1 2 , 3 . Thats above trend. That plus the Global Growth, right. We talked about China Growing 5. 5 in their latest gdp. They Just Announced stimulus overnight. Its not big by any means but it just shows you theyre willing to do something and more likely. We have the oecd raised Global Growth to 3. 1 . We had imt raised growth to 3. 2 so inflation is staying high because were seeing better growth and that to me, id rather take better growth and a little more inflation because that will lead to better earnings. Its not going to get you multiple expansion but better Earnings Growth, Something Like 8 to 10 . What do you think . Hold on, malcolm. Ill come to you in a sec. I promise. Do we need cuts. If youre business, inflation is your friend. The fact that were in this sweet spot where it is a little elevated but not eroding consumption, its not putting the fed in a situation that you have to come back to hike rates. Since 1980 the fed has never gone on a hiking session and paused then come back to it. The bar is high for them to want to hike rates. Powell told you as much. Most recently. We wouldnt even have this conversation if powell didnt do what he did a few weeks ago where he wasnt as hawkish as some people feared and said hikes are unlikely. The data favors highly unlikely, whatever the exact wording he used. The data favors the bulls. Malcolm . Yeah, scott, i agree with what stephanie just said about the unlikeliness that we will get a cut this year, but i disagree with the fact that they dont matter. I think that what does matter, we just got done talking about how strong the consumer is and the tailwind behind that consumer at the top end of the Income Distribution is going to be the 5 plus that theyre receiving on their deposit, on their cds, money markets, those kind of things theyre spending those dollars on Services Today and that is what is also helping to dive consumption so as long as Interest Rates stay elevated, yes, they do hurt businesses ability to consume but they also improve individuals ability to go and consume, which is a catch22. Its 6 in one hand and half a dozen in the other. Steph, can we talk about nvidia and what is really riding on this report next wednesday for the overall market, for the a. I. Trade . What do you think. Its going to be great. I have no doubt about it. I just mentioned the capex were seeing in cloud and gen a. I. At the four hyperscalers. Of 177 billion this year alone its tremendous. A lot of that is going to nvidia. The problem is nvidia is up 210 in the past year, so the expectations are high. I think if you do get some weakness, though, i think youll see buyers come in, because if you believe were in the second or third inning in a. I. , which i do, then they are going to benefit. But there are other ways to play it within technology as well, so i kind of have my Shopping List ready, so if we do see a pullback in any of the stocks, broadcom, you know the one and lam the other one i own i would be a buyer but i mean i think its super important. Its 5 of the s p 500 in terms of the weighting, as well. This may be the one conversation that involves Portfolio Managers on this network, all of whom do not own nvidia. I dont expect you to because its not your job to run a portfolio obviously but steph doesnt own it. Malcolm, you dont even own it which is kind of a shock to me because you own the other many of the other mag seven stocks but aisle sure you have an opinion on what that report means for this overall market and perhaps the stocks that you do hold. Yeah, i have said it on the network before, and i think it bears repeating that our love affair with a. I. Is nowhere near over, in fact, were probably still in that early infatuation stage where were just in love with all of the possibilities of what could even be and so i think that nvidia will definitely come out and dazzle us no matter what. Theyll tell us about elevated demand levels, and as long as their receivables remain at the level they are in comparison to their inventory, i think its a 21 ratio, Something Like 10 billion in receivables versus 5 billion in inventories, as long as those numbers hold, nothing else really matters when we talk about nvidia and as long as that trend continues, the a. I. Wave can keep on rolling for multiple quarters before it finally gets interrupted. Okay. You still like megacap tech . We do. I certainly say we dont view the max seven as one monolith. Theyre proven to not be. That dispersion in performance itself is pretty significant but one of the things i think investors can play on in this love affair with a. I. Is actually sort of a Second Derivative in electricity. Electricity providers, power grid infrastructure players, you know, you look at some of those companies underneath the hood, theyre up double digits so far this year and if were going to batteries, electric vehicles, chip, if were going to be using more and more electricity in the years to come, i think those utilities are a great place to play. All right, everybody. Well leave it there. Good weekend. Malcolm, see you soon, steph, youre coming back in a little bit and need to talk about metals on the move, jordan, well see you soon too. Lets send it to Kristina Partsinevelos for a look at the biggest names moving into the close. What do you see . We have another restaurant warning about consumer spending, shares of cracker barrel, theyre down about 13 after the restaurant chain lowered guidance because fewer are going out to eat and saw similar comments from jack in the box and applebees management. When you zoom out over the last 12 months or so crackers stock is suffering a much steeper drop when compared to Olive GardensParent Company darden and you can see that on your screen right there. Just eat up 59 . A drastic difference between all of these names. Doximity, and shares moving the opposite directi