>> and so let's see. like that would be a pretty good takeaway. >> scottie scheffler, all the money is flowing that way. >> he's been the best for several years. >> the number one golfer in the world far reason. >> dom, thank you. >> thank you for watching power lunch. >> imagine caitlin clark. all right, closing bell starts right now. welcome to closing bell, i'm scott wapner, live from post nine. this make or break hour will begin with a big sigh of relief for the bulls. stocksrebounding. this one softer than expected. we'll ask our experts over the final stretch what all of that means including former dallas president, robert kaplan. he's coming up in a little bit. in the meantime take a look at your scorecard with 60 minutes to go in regulation. got a very interesting final stretch underway because the cooler than expected ppi is stabilizing interest rates. that's good enough to get stocks a bit of a lift today. nasdaq outperforming as you see

there. several mega stocks are catching a bit this hour. amazon among them. that's going for a new record closing high. you bet we're going to track that throughout this final stretch. a nice move as well for nvidia, recovering from its correction territory move. apple, it's also rallying back above $170 a share. there it is, pushing towards $170 for us. a nice gain of 3.5%. we've got news coming up on apple too. you don't want to miss that. it takes us to the talk of the tape. great expectations. whether they need to be reset for the fed and for the markets. let's ask cameron dawson, chief investment officer for new wealth. and also a cnb contributor. they are, as you see, here at post nine. i'll begin with you. did we unravel anything big yesterday? if we did, did we fix it today? >> i suppose it is in so far as the inflation and yield story doesn't question the growth story underlining the market and the risk on valley can continue. as long as we continue to see

earnings estimates strip somewhat higher, have an optimism about the underlining growth of the economy, then risk continues. the bigger issue would be if you start questioning risk because yields are so high or because the feds stay hawkish. >> i said joe, we would stabilize the yields today and that will help the story as i look over the shoulders here, retaking back that level. it sure looked a little dicey yesterday. nerves were definitely tested. i'm not saying we're out of the woods here today, but it's a different story because of the inflation read was a different story. >> well, it looked dicey at 9:15 in the morning. once the market opened, it stabilized because nvidia and the mag seven showed up once again. that's an intriguing dynamic over the last 24 hours. i'll touch on that in one second. but as it relates to yesterday and the federal reserve. now look, i've said this all along. number one, we know they are not adversary corral. full stop. but secondarily, they want a reason, they want the reason to

cut rates. they didn't get that reason to cut rates. what dropped late in the day yesterday in the business media? the news surrounding the balance sheet and the possibility that they will be pairing back the balance sheet runoff? that is dubbish in its nature as they will follow it this morning and say that you would get potentially a june rate cut. now in the last 24 hours, scott, you've got the mag seven coming back that's intriguing to me. a little bit concerning to me because of the strategy that i would run. but it's certainly relevant and it will speak towards the market is focused in prioritized on earnings because that's where the spectacular earnings will come from. >> all right, we will start tomorrow with earnings, but still fixated, cameron, on when we will get these rate cuts. voting members like john williams, no need to do anything, "in a very near term." but he does expect the pce to get to a level that is good, right? i'm paraphrasing that.

it's 2.25% this year before moving closer to 2% next year. and that is not where we want to be, but we are heading in the right direction. collins, expect it will be appropriate to begin cutting later this year. more times are needed now. >> similar story, right? the bottom line is that they are still talking about cuts. just not yet. >> yeah, they really want to cut, which is why they would ignore the inflation data from january. they did it in february. now it sounds like they're going to do it for the march data as well to look through it to see it as a bump and not a reverse trend in direction. so it means that as we get closer to the meeting that we would get the april data if that continues to move in the opposite direction of what they want. they will really challenge them to keep this narrative. we think that the three cuts that they have put down in that plot is way too high. given the fact that the financial conditions are easy. there is no urgency for them to move. at the end of the day, it is going to be less than three cuts and likely back and loaded to the back half of the year.

>> is the market going to be cool with that? patient enough to wait? >> and they are cool again back to growth estimates. as long as they are holding up. as long as we are seeing the estimates hold in okay. that means that the market, they can forgive a lot. we also have to remember that there is a liquidity dynamic that's happening here. it is a little nebulous, but we know liquidity has supported this market. so you add growth, liquidity that you can shake off the fed, and apparently as of today, you can shake off higher yields. >> yeah, yeah you can. but joe, at some point, i go back to tony pascarella, when do higher yields begin to bite? all roads lead to that question. yesterday we were unnerved because we felt like they were going to start biting sooner than we thought. maybe we reset our expectations there as well? >> i think it will begin to be problematic for the market when earnings do not deliver. i solely focus on what happened in q3 of '23.

you really didn't have the significant growth in earnings that we're witnessing just yet. it was kind of isolated at that point. here we are now moving into an earnings season. if we can get 3.5% growth on revenue or the 5% growth on earnings, that's going to be okay. if it doesn't deliver in earnings, then to your point, it's going to be troubling to look at treasury yields at those elevated levels. >> well then you question the multiple, right? cameron, you've had multiple expansions, right? that's how we've gotten here. you're supported by something like earnings. >> and you could probably make the argument that at the end of march at 21.2 times forward, maybe that was the peak multiple given this yield backdrop. the thing about earnings to watch really closely is that they become more back-end loaded. if you look at it, you kept the earnings estimate for 2024 the same, but it's all put into the third and fourth quarter. fourth quarter growth is expected to be 11%. so we're listening closely from guidance from the companies as we go into earnings season to see if that kind of growth in

the back half of the year is possible. >> worst sector this week, joe? >> financials. why is that concerning? well they kicked off earning seasons in the morning. are they going to deliver something uplifting or are we going to be writing off a group that's done reasonably well as of late? year-to-date it's up 9%, but that reflects the pullback more recently that this space has had? >> i don't believe we'll be writing off the sectors because the sectors you pointed out, the performance has been strong year to date. i do think elevated yields reintroduced as a little bit of a problematic scenario for the regional banks. i look, i'm personally along jpmorgan, and i'll stay long even on the decline and probably buy more because that stock moves significantly higher. but there is enough within the financials when you are looking at consumer finance, capital markets, asset managers, private equity, and then insurance companies.

and insurance companies, whether it is auto or property and casualty, you're going to see significant revenue growth there. >> so cameron, i mean investors in some respect can have it both ways. you can't say well lower yields and expectation cuts are good for all these broadening sectors that are, you know, sensitive to the economy. and then now if we are talking about higher rates for longer than we thought, say well yeah, those sectors could still do good because everything is just perfect. do i need to rethink where the broadening trade has gone and where it may go from here? we just showed a board of where the bond yields are. what did i see, on the tenure? okay. we were worried that it was going to get over 4.5. well, here we are. there it is. >> there are two camps of the broadening trade. one that's hurt by the broadening yields and one that could do okay if they are higher. the one that does okay is your sensitive sector and the industrials and the materials

and the energy, benefiting from the higher commodity prices in the recovery and manufacturing. the stuff that will get hurt from those higher yields is your small caps and your lower quality parts of the market. those with bad balance sheets that will have to refinance their debt that higher for longer means that they are going to get pinched as they would go through the cycle. >> yes, that means they got crushed yesterday. they were down pink if i recall it correctly like 2.5% on the spike in yields after the hotter than expected cei. but what do i do with the broadening trade? >> yeah. so let's tackle that. let's put small caps off to the side for a second and touch upon first of all in q4 if you look at revenue growth in the mag seven, 15% for the other 3%. 600 basis points, margin expansion verses only 60 for the other 493. elevated yields, what do investors see? they are looking towards earnings saying okay, where do i get the sustainable reliable earnings? i get them from the mag seven, so i'll tell you sitting here, running an equal strategy. i am looking at the rice

action in the last 24 hours. i'm saying to myself, uh-oh. here we go again. don't do this to me again. come on. because we had it going in the right direction. we would have the broadening out trade. s&p equal weight is trading awful. we are seeing some areas of the market like industrials and financials. where you had strong momentum, they are falling down. let's not forget in technology, you are going to have this divergence. semi conductor commitment, software, those earnings will be okay. when you're looking at hardware, communications equipment, electronic equipment, that is not going to look so good. >> you know, if you're going to have a little more of a defensive tilt within your bigger picture offensive stance, you're going to go right back to the mega caps. you're going to go to nvidia at $900 now. microsoft is up 1.5%, or amazon trying to hit the new record high as we suggested today. or alphabet, which is up 2%. and then there is apple, which

is one of the best performers on the day today as well. >> it is not a today event by the way. this started yesterday, right out of the gates when the yields rallied. >> we are keeping an eye on shares because they are trading near the highs of the session today. on reports the company is gearing up for its first big ai product push. steve kovach following that story for us, and he joins us now. steve? >> reporter: hey there, scott. yes, this is based on a bloomberg report earlier this afternoon saying apple is getting ready to put out its new crop of mac chips. we're currently on the m3 line of chips. these will be the m4 and start launching reportedly at the end of this year probably for the holiday buying cycle. and then into next year, most importantly, this report says apple is going to be marketing these or pitching these as ai chips for ai capabilities. i will also note though the m3 chip, the current chip that came out last october, and it is also in the new macbooks

that were announced last month, it is already being marketed as an ai thing. so the macbook air came out, calling it the best pc you can buy. so we are already seeing apple start to label some of its machines and technology as artificial intelligence. of course, scott, nothing i just said is going to matter until june 10 when we see apple finally unveil the user facing artificial intelligence features that they have been teasing. >> and do you think, steve, based on your own coverage experience the most pressure packed moment that you're going to have witnessed for apple in that second week of june? >> 100%. only because i have been covering this company for over a decade, scott. i have never seen apple tease a product like this. never say hey, we are going to announce something related to ai or they would not admit they have a new iphone coming in september if you were to ask tim cook today. the fact they are teasing it

right now, saying it will be an artificial intelligence announcement will say a lot about the pressure that we're under as we would see the stock underperforming. it's because of ai. and so again, i'll go back to what their words have been that they are going to break new ground in artificial intelligence. that means something new that we have not seen before, which will put enormous pressure on themselves to actually deliver a really killer announcement related to artificial intelligence. that will run on these chips. but again, it's the user facing stuff that really gets people excited. >> all right, the high of the day for shares of apple. steve, thank you, that's steve kovach. joe, it feels like a good minute since apple was at $105 a share. it's been stuck at $168, $169. look like it was about to have a more significant move lower and here we are. and might these shares be at your own? >> exactly. i'm just hoping that apple will rally another 7% to 8% before april 30 when we do the

quarterly rebalance. the momentum on apple will look awful and negative right now. but the fundamental story is intact. i think this is evidence that they are going to deliver an incorporating ai into their products for their consumers. they benefited clearly in from covid with the computer sales where they needed a catalyst coming off of that after experiencing the weak sales in the early part of 2023. i think here it is. refreshing the entire line of max and imax inclusive of ai and that is going to incentivize me to buy a few. >> but do you think this announcement that we expected in the beginning part of the summer, joe, will be enough to get that mojo back? >> i do. i really do. i think that they will deliver on it. i think they are and i think it will be the iphone 16, they could potentially be as relevant and as impactful to them as iphone 6 was. >> you're watching shares of

am, right? for the overall market picture, it hasn't as of late had an impact, i suppose, that it once did in terms of, you know, as goes apple, so goes the market. we haven't talked like that in a long time. >> certainly i think that the challenge for apple going into this year was a part of the mag seven, but didn't have the mag seven quality earnings growth. its earnings are expected to grow just 7% this year verses triple digits for a name like nvidia. so the question will be, is this enough to move the needle for earnings growth? apple is 7% this year, 8% next year, trading at 25 . do we see that moving? it's 100-day moving average. overhead existence could rally over that. if they roll over, then it's in trouble. maybe this is a new day. >> the bulls will be extraordinarily happy if you're talking about 184. >> it sure would. >> the last time they would have a significant move lower, they would recover quickly.

>> it did. >> now where she the ai announcement to look forward to. we will have earnings well before that i think around the first week of may-ish. they will need to deliver something decent there as well. give us something on the revenue growth side, right? because we're begging for that again. >> i think that they are going to give us something there where we will need to see the improvement. we are forgetting about that and that it is important. are we beginning to see a little bit of a lift in the business there? >> the mega caps in general. how do you view this space? we wanted to write them off and figuring that it was time to go broader. are we back as we have discussed, you know, with joe already. are we back focusing on those areas if the market is going to get a little choppy? and if volatility is going to pick up a bit as we sort of debate when the feds are going to move and by how much? we are going to go right back to the stocks? >> i think that they will remain incredibly important that we can't have the mag seven break down and have the

overall market do well, simply because there is such a large weight in the index. so we have to root for the mag seven. as to whether or not they will be leadership, we do know that they still have powerful earnings growth this year, which means that they can still outperform and lead those with the best earnings growth. the question is this starts to decelerate a lot in the fourth quarter and into 2025. that's when we probably start talking about these fading in some of their glories simply because the earnings growth will not compare to the other parts of the market. >> what if they get off to a rocky start tomorrow? does it matter? do we care? does anything matter? >> and that is the moment of confirmation of whatever the general trend is going to be in the early part of the earnings season. the jury is going to remain out until we hear from the technology companies for sure. even if the early part of the earnings season is not as strong as we would like it to be with the financials. >> the problem is that you pick

jpmorgan out earlier. they are one of the number of stocks and a number of sectors. the large cap stocks that have done really well and still even with recent pullbacks are trading at near new high levels. that to me raises the bar on almost every sector because of the broadening. if you didn't have that broadening story, you would say it matters when they report. now a lot have done quite well since march 1. doesn't that raise the bar on everything? >> i think it does. if you look, there is quite a few sectors that are trading near your 20-year highs, industrials, materials, the healthcare, financials. which means the bar is high for upside surprise. you have to deliver on the earnings. if you don't, then it's likely that you'll see some choppiness. we have notably seen some momentum start to fade over the last couple of weeks, which says we shouldn't be all too

surprised if some choppiness ensues, mostly a little weaker data. >> i will get you the last point, joe. the big takeaway. >> our big takeaway from this week so far is the 2024 that has been a year in which the market, the bull market will continue to get stress test. i think that we would have another example of that this week. with this latest stress test, we are not all rooting for the mag seven to outperform. let's be clear on that. but with the stress test of this week, it was the mag seven, the definition of quality like you said that has returned once again to lead the market off of what would appear to be the deeper correction. >> it's been a resilience market and in many respects this year it seems as though just when they thought they were going to get the upperhand, it didn't materialize. this market is proven to be a lot more resilient than people thought. mostly because i think the economy is good and expected rate cuts, who cares if they are further down the road than we thought and the earnings

story and the economy are just remaining good enough. i appreciate your time. i like the conversation, cameron dawson, thank you. over to you. the look at the biggest stocks moving into the day, seema? >> reporter: take a look at shares of nike moving higher after calling bank of america upgrading the footwear to buy from neutral basically on valuation. the bank says investors should look to buy the dip as estimates and valuation look more compelling. tune in to hear from nike's ceo, john donahue tomorrow in the 10:00 a.m. hour. let's switch focus to carmax. shares are tumbling after a weaker than expected earnings report. the used car retailer also warned of a slower recovery for the used car market. that it may fall short of sales targets as high monthly payments continue to hurt customers. scott? >> all right, we'll see you in a little bit. up next, not for the faint

of chart, get it? the top technician will break down the health of this rally including the key rally for stocks that investors need to watch. we're live from the new york stock exchange. you're watching closing bell on cnbc. ♪ upbeat music

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welcome back. the s&p 500 and nasdaq making a bit of a comeback today with some of this year's top performers leading the charge. our next guest sees reasons to be cautious, at least in the near term. christopher verrone is here at post nine. it's good to see you. >> it's great to be here. >> let's be clear on what you think. you're not talking about a change in your overall view, which has been positive. it's just we could be a little bit volatile in the next days, weeks? >> yes. that's right. everything we do sat least incremental. you think about the last couple of weeks, you have a move in yields, you have gold unbotherred by it. you have hot oil, you have dollar up.

maybe doesn't make sense. and maybe a 20% move in five months, absolutely. as we were saying earlier, i don't want to lose the plot of the movie here. the plot of the movie here is this is an ongoing bull market. bull markets are paused from time to time. what we want to be mindful of are maybe some flashes of leadership change under the surface. i have been finding it curious that stuff like utilities have quietly perked up here a little bit. an unusual mix given the moving rates. it is more about rotational impulse than it is some outright distribution or something. >> hasn't there been though a twist in the plot, right? the plot of the bull market was economy is good, fed cuts are coming and the fed cuts are coming soon. rates are going to move lower. well, we've had a plot twist because now rates are coming later with some suggesting they might not come at all. and we are hoping that the economy can withstand the feds staying higher for longer. how do we square that? >> the key to macro is

distinguishing e between what should happen and what could happen. what should happen, the feds probably shouldn't cut rates here given the persistence, and what the inflation has done. and that doesn't mean they won't cut rates. if you look at the message of gold here. gold is behaving as if the feds are going to do exactly as they have said and cut. so i'm hesitant to get too negative or too cautious in that environment. >> you think that backdrop is what has been driving this incredible record run for gold? >> i think gold is becoming the valve of what could be used to cutting a strong economy. the narrative or the consensus out there is the economy is strong. that's the camp i'm in. but we also have to poke holes in that. what i will be mindful of is if the status quo is going to persist, we need stuff to keep outperforming. we need financials to stay a part of the game.

you know, there is maybe some modest pause or correction in those groups. how they respond out of this i think will be essential as to whether or not the status quo could persist. >> are you worried about this breakdown in the financials? i mean i think i said earlier was below their 50 day for the first time in november. >> maybe after the best three to four-month move. >> no question about that. but you used the words needs to continue? >> sure. you know, if you look at the soft landing episodes historically. so non-recessionary rate cuts. what do they have in common? financials were absolutely above and beyond the best sector. if we're going to maintain this, you want them to participate. the good news is that a weak removed from 52-week highs and jpmorgan will make the 52-week high today. i don't want to get too carried away with oh, they are breaking down or not working. do we need to put it on the list of things to watch? absolutely. >> talk to me about 5,200. we have retaken it on the s&p as we -- in the final stretch here.

how important is it that we hold it? >> i don't think that it is that crucial. i mean there is really good long-term strategic support in the 49 to 5,000 rate. and so if you got a deeper pullback or a correction over the coming weeks. there is a lot of support underneath this. the moving average is roughly 5,100. that might not be enough to contain that weakness. but a look at how the stocks today would hit those big levels and came right back off of those. look at the tech names. so you will have to tip your hat to the market and say it is another sign of bull market acting as bull markets tend to. >> do you want to weigh in on bitcoin and what is driving the breakout or if it can continue, if there is durability for it? >> whether you are there or not, you must be aware of its diagnostic value. we look at bitcoin as the purest form of a liquidity barometer that we have. and gold historically has been both a risk on and a risk off

indicator. bitcoin has been the risk on indicator. so if this liquidity impulse that has driven equities higher, if that is to persist, you need bitcoin to be a part of that. $64,000 is a real key level. under $64,000, you begin to question, wait a second, maybe the liquidity condition is starting to evaporate or deteriorate here. >> are you watching technical levels of any of the key mega caps in particular? apple is obviously at the charts, which is what you watched has looked terrible. today notwithstanding. i mean the stock is up more than 4%. how do you view that one? we just talked about it on the anticipation of what they will do. >> when you look at this magnificent seven if we're still going to use that name. what the mag seven is not, it is not the center. i know apple is bouncing here. let's focus on the leaders. the leaders in the mag seven are google, i mean break it out of a huge base to a new high. amazon, breaking out of a huge base and a new high. i want to own the best stocks

in the leading groups. that's google, that's amazon. it is not apple here. i think apple is a bounce in a down trend. >> interesting. i appreciate your time. >> always. >> chris verrone joining us. all right, he is back with us. how he is now sizing up this week's conflicting inflation reports and whether he thinks the feds should push back their rate cut timeline. that's after this quick break.

welcome back. this week's inflation report only adds to the debate of when the federal reserve might be cutting interest rates this year. robert kaplan joins us now with his own view. also the former vice president of goldman sachs. mr. kaplan, welcome back. it's good to see you. >> good to see you, scott. >> how complicated did things get this week for the fed? >> uh -- i think the narrative continues, that goods are disinflating, not perfect, but disinflating. services is sticky, and the cpi and the ppi, i think were somewhat conflicting, but confirm that. and i think the other narrative here is you've got very restricted monetary policy is offset by an underestimated impact of very stimulative fiscal policy. so the net of it all is you're

seeing some confusion, and i think it will likely cause the fed to be very careful about moving in june. but i think they should keep their options open and let the situation continue to clarify. >> so you don't think the door is fully closed on june, it sounds like? >> it's -- i think from a risk management point of view, i'd say the waying, if i were there, i think the bar has gone up for me to want to cut in june, but i would keep an open mind. i would be careful about making prognostications, and i would wait right up to the june meeting to make a decision. but i think the markets should be prepared that they won't cut in june. i'd keep my options open if i were the fed. >> how lively do you think the debate is now going to be in the room itself? and what do you think is the impact from that kind of a debate? remember, we move from what has

been in terms of there haven't been any descent. are we seeing a change? >> yeah, you may have heard me say before, i think the fed is at its best when there is debate and disagreement. i like that there's disagreement. here is why there ought to be disagreement. again what's the impact of fiscal policy? we have this issue of labor supply looks like it's going up due to immigration. is that sustainable? we don't know. is productivity growth improving? is that sustainable? we don't know. you also have this preverse affect that higher rates may actually be making rents higher because multi-family owners have to charge higher rent to cover the debt service. i think all those things mean this is kind of homework time for me if i'm at the fed. keep an open mind, do your analysis, talk to contacts, and

listen to counterarguments. i think debate is healthy right here in disagreement, and i'd be learning from my colleagues. but i pride myself the risk of how to act in june, that's for sure. and i will take it meeting by meeting. >> so williams of new york who is a voting member, of course, says today, there is no need to adjust policy quote in the very near term. can you decode that for me? >> yeah. he is saying we would like to cut rates at some point. it will help the banks. it might help small business lending with the other positive affects. but we are at full employment. because we're at full employment, we have the luxury of patience, let's take advantage of that fact that we are at full employment and take advantage of the fact that we could afford to be patient. >> of course, they can be patient for all the reasons that they say the economy is strong. but at some point, the longer that you would wait, the more

perhaps the risks of a mistake will go up. how much do you think that's being discussed? >> it is being discussed, but i've got to tell you, again, we were in 15% of the gdp deficit in 2020, but we know why, covid. we ran another 15% in 2021. a lot of that money was still being spent. we ran the fraction last year, on our way to seven, i'm afraid this year unless tax revenues bump. you've got very strong fiscal policy. and we've got programs that are going on that you would normally do after a recession. we are doing them prerecession. and so it would give me some confidence that we've got a bit of a tail wind, and i want to make sure to wrestle this inflation to the ground. i don't want to declare victory prematurely. >> i mean we're looking at the meeting schedule. for argument sake, let's take june off the table. we've got july, we've got september.

we have a decision that will come down two days after the presidential election. and then we have december, of course. so let's assume they first go in july. would they go in september? is that too close to the election? >> i mean my own view is i would do everything in my power to screen out political considerations. so i would want to do what i felt was appropriate. i think the one decision they will make in may, by the way, is on the balance sheet. i think they will telegraph in may, a plan to slow the unrunoff on the balance sheet. >> that's a significant development for where the yields will go and how the stock market might take all of that, which will lead to me the question about the stock market itself. and if, you know, this record setting rally in stocks has played a role as well or at least given that additional policy to the fed of feeling comfortable enough that they don't have to do anything now.

>> yes. the increase in wealth and also i would say still relatively tight credit spreads. i would keep my eye on the credit spreads. as long as they stay tight, that is more important to me than the stock market. but both will give a tail wind to the economy. the fact of the matter is though that they will have a luxury of patience. and let me let you ask the other question. >> no, that was my final question. >> okay. >> and let me also say there is so much focus on monetary policy because it's easy to understand, and we can understand two to three rate increases, and everybody can play. i think the fed will do their job this year. i'm not sure what they will do, but i'm confident that they will do their job. two years ago i thought they were out of the position. they are in that position.

i think more attention should be spent on the fiscal situation, which worries me much more. and the debt to gdp is well over 100%. the interest expense is moving towards a trillion dollars next year, squeezing out the other items. this money, they will eventually run out. i think that. so strength of the economy is inorganic, artificial, being based on the government spending. i think more time will need to be spent on that. >> yeah, but i mean i guess i'm going to ask you another question given your answer there. you are insinuating, i suppose, that somehow the government is going to continue together and do something, the political parties are, about the deficit. when people say that, eyes roll when they say yeah, all right. you know exactly what i mean. >> i am not saying what they will do and listen, it's the order of what they should do. >> you're suggesting what they should do when people would say there is no way in heck that it

will happen. >> and so if you are a business person, which is my background that you first diagnosed the situation. then you figure out what to do and how to do it. i'm still saying in our diagnosis of what is going on, that we would be well served to highlight a part of what we are seeing is very strong government spending. i don't think that is being properly recognized right now. >> fair enough. we'll talk to you soon. i appreciate your time very much. thank you. >> thanks, scott. up next, we are tracking the biggest movers. seema mody standing by with that. seema? >> and scott, production is starting to catch up with key stocks in the sector. is this a warning sign ahead of earnings? we're going to discuss that after this short break.

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we're less than 15 from the bell. let's get back to seema mody for a look at stocks to watch. seema? >> reporter: scott, let's talk about on pace for its worst day since february of 2022, fastenal. due to sluggish demand for industrial parts. now fastenal specializes in key components used in machinery and construction. it's the potential warning sign for some of the bigger industrials that will get set to report earnings in the next two weeks. stock is down about 6.5%. but take a look at global life. shares are tanking on an unverified short seller report that alleges fraudulent practices. wells fargo analyst defending the stock reiterating their overrate rating, not stopping

them from performing the worst performer of the insurance company on the s&p 500. remember global life has seen scrutiny in the past as a subject of a business insider investigative series in february of 2023. scott down about 53% right now. >> all right, seema, i appreciate that update. seema mody, still ahead. we are on record flows watch for amazon after those shares hit a new day high for the first time in nearly three years. we're going to track the mood in the final mines otrutf ade. we're back on the bell after this.

coming up next, morgan stanley shares under pressure here. that after a new report that the bank's wealth management division is being probed by 'rgog guto. wee into bring you the latest inside the market zone next.

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we are now at the closing bell market zone. cnbc senior commentator michael santoli here to break down the crucial breaking day. kate rooney is with us. and why morgan stanley shares are selling off late day into the closing today. michael santoli, we do begin with you. what a difference a day makes. and sentiments certainly is not what it was a day ago? >> it has firmed up. i mean a lot of things have to go wrong to really buckle the market that behaves this way. mentioned yesterday the lows got down in the market on the cpi number. the lows were just holding at

last thursday's low. so we held in the reins. it's very tough when the problems or the stress points on the market are yields going up, and we have to question about the fed policy and make we are going to have to wonder if the economy can handle it. that the biggest stocks in the market are the ones that get bought in those scenarios. they are not yield sensitive. >> let's play defense when we have to. >> everybody recognizes that we are getting into the earning season. the other characteristics of this market for a long time is once the known catalysts are passed, even if they didn't go right, you know, cpi, ppi, and then the treasury auctions. it is like okay. we got through it. no more volatility storms that we could be aware of. so we would hold them here. i'm not saying that means this little choppy episode is over. what it means s that we have been going sideways for four, five weeks now. that's a good thing. you have the momentum trade cooloff. we still don't have great breath today, but that is where they tend to bite. >> the higher prices are in the

mega caps as they were talking about. i'm looking right at amazon. this will be a new closing high? >> yes, scott. amazon is hitting close to an all-time high in terms of the close going back to the ipo. 1997 is one of the dow leaders. today that record coming on the same day as ceo andy jassy's annual shareholder letter. jassy talking about balancing some of the cost disciplines with spending and artificial intelligence. a lot of focus on amazon's profit margins and so-called cost to serve. on its prime video business, jassy says, "we have increasing conviction that it can be a large and profitable business on its own." that was new, but does not plan to spin it off. according to the interview with andrew this morning, meanwhile reaffirming amazon as its top pick today. mentions ai, saying a lot of the workloads, they could drive some more demand. and also expects north american retail segments to hit record margins and sees the record free cash flow into the

quarter. evaluation is reasonably disallocated verses the historic average evaluations and sees it as one of the very large few caps with material. multiple rerating potentials this year, scott. >> kate rooney, they look your report on the new york stock exchange as they get ready to ring in a new record closing high for amazon. thank you for that. let's go to leslie picker who is following the financials, most specifically morgan stanley. those shares are down and pretty significantly late day? >> reporter: yeah, you are not used to seeing a move like this in morgan stanley. more than 5% right now after the wall street journal published a story about a wider regulatory probe into the firm's wealth management division. how it is vetting clients at risk of money laundering. at issue, according to the journal's sources unnamed in the piece, is whether morgan stanley has been "investigating the identities of perspective clients and where their wealth comes from," as well as how they monitor their client's financial activities. some of the probes are focused

on the bank's international clients. the journal reported the fed had been looking into similar issues, but today's story says there is also involvement by other regulators as well including the securities and exchange commission, the sec, and the office of the comptroller of the currency among other treasury department offices, the journal source is saying in today's piece. morgan stanley declining to comment. morgan stanley reports earnings next tuesday, scott? >> all right, leslie picker, thank you very much. joe turnovo was nging around. we want you to weigh in. what do you think? >> i think on tuesday, we're going to learn how they handle the adversity, how he is able to speak to the analyst community and to the shareholder community. they've got to clean this up. this is something that's lingering from 2023, the federal receive in november. obviously was unhappy with some of the measures that morgan stanley has taken. there is a lot of scrutiny right now in washington, d.c. on these firms.

and we will find out on tuesday if, in fact, he's able to handle it. >> not necessarily going to call this a crisis sort to speak. >> but the wealth management division, it's the engine. >> that's their engine. >> and this is his first test of sorts. >> first dealing with the adversity that's affecting the shareholder base. that's significant. you'll have to address that. mike? >> yeah. i mean first of all, it will have to be one of these ongoing things that every constitution will get scrutinized. it is such a core thing for the compliance that you know it is an ongoing back and forth and now maybe it's been elevated or maybe they feel as though they need to push for more substantive change. so i don't know, you know, we don't know the details, we don't know if this is material to earnings as much as it is about the franchise. it is significant enough, again, that you would release the reporting. [ cheering ] [ inaudible ]

>> all right, a pretty good recovery today. joe, thanks for your interaction. all right, we'll try to get there. they're fired up. fired up. and the breaking news is a record high for amazon. that helping tech stocks recover from their recent funk. and there is your scorecard on wall street. kind of looks like one of those cookies. green on one half, red on the other. the action though just getting started. hi, everybody, welcome to closing bell. i'm brian. once again, john is off. morgan will join us shortly from colorado. the market and you finally getting a little good news on inflation with the march producer price index rising, but rising less than expected coming up. ro