it's been catalyzing everything. how about commodities? gold, copper, metals, everything is rising in tandem. >> you don't usually see copper and gold going up at the same time because one is a fair trade and the other is an economic expansion. >> central bank buying. >> got to leave it there. thank you for watching power lunch. >> closing bell starts right now. all right, cal, thank you so much. welcome to closing bell, i'm scott wapner live here at the new york stock exchange. this make-or-break hour begins on nvidia. on a terror lately, a big reason why the nasdaq has surged to new record highs. the big event of the week, nvidia reporting earnings tomorrow in overtime. so much at stake for the tech trade, perhaps the markets overall. we'll ask our experts about the final stretch including liz sanders who will join memo men tearily. 60 minutes to go in regulation looks just like that. we are green across the board, but there is a wait and see for

the majors today ahead of those key earnings tomorrow. yields, they're lower across the curve today. we will continue to watch that. and which takes us to the talk of the tape. with stocks trading around record highs, is it time to lean into this bull market or step a bit back? let's ask liz ann sanders. she's schwab chief investment analyst, joining us live. nice to see you again. welcome back. >> thank you very much. happy tuesday, scott. >> you as well. what do you think of that question? time to lean in or maybe take a few toes out of the market? >> well, we have $9 trillion of client assets. i would ask who is the client, what the structure of the portfolio, whether they are on some sort of rebalancing schedule. i think periodically rebalancing is just a beautiful exercise especially if you make a portfolio base as opposed to structuring it around the calendar, which a lot of investors do. it will force us to do a version of what we know we were suppose to, which is add low

and trim high. so i think that is always an important part of the discipline of investing is that rebalancing as opposed to trying to time the market in the short term. >> sure, you know where i'm getting at though? we've had a great rebound from the april lows. does it feel like there's more to go to this bull market? >> yeah, but i think that there has been a lot more churn under the surface that i think helps maybe tell a more accurate story of all the uncertainties, which we are very familiar with, whether it is fed policy, inflation, the backdrop of the economy, some signs of weakening and economic data. you talked in the leading about the nasdaq. nasdaq is up 10% in the past month. hasn't had more than 7% to 8% draw down, maximum draw down year to date. but the average member within the nasdaq has had a 35% draw down. so there is a lot of rotation and churn going on under the

surface. you just have these indexes significantly buy some of the mega cap names. not just the magnificent seven anymore that's keeping the index afloat. but there's a lot more churn under the surface. it is interesting that you're starting to see small caps try to, you know, claw their way back into some short-term leadership position. so i think the market has the potential to broaden out a bit here, but we do need earnings to continue to come in well. last year was all about multiple expansion without any benefit from earnings. i think earnings do need to continue to catch up to where multiples are. >> you have given me a perfect segway to nvidia. i know you don't talk about individual stocks, but everybody is thinking about it. with the implications are of this earnings report tomorrow. what do you think is really riding on it? >> i'm not going to talk about whether they beat or not, but clearly the whisper numbers continue to edge higher. it is important to remember the

overall tech sector has a blended earnings growth rate, meaning all the companies that have already reported their actual results blended with the companies that have yet to report. but i think it is 23, 24% for the sector, but that drops down to 11% if you just exclude nvidia. that's a numerical way to see how much is riding on this. they continue to beat every single quarter, but you know, i guess we have to be careful about extrapolating as far into the future as far as years from now. could it represent a risk at some point from an expectation perspective? yeah. but whether that is tomorrow, i have no idea. i'm not an analyst. >> would you think earnings can be good enough to get a lot more out of the bull market? i mean rick reader was on with me on blackrock the other day and suggested they are good enough and could still be good enough, that you might be able to get 10% to 15% more out of

equities in 2024. now many would sit back and say wow, that sounds like a massive amount of turn to produce? >> no, it doesn't. but i think the background conditions need to be supportive too. so multiples should never be used as any kind of market tool. market could get more expensive, stay more expensive, and it doesn't represent some in or out call on the market associated with evaluations. however, where there is a very close relationship to evaluations historically whether they are on the higher end of the historical range or lower end is the inflation backdrop. maybe, not coincidentally, the sweet spot for inflation is right around the feds target in terms of historically, that has been the inflation backdrop that has been supportive of higher than average valuations, and it gets worse when you go into deflation zones that will obviously get very worse when you go into the hyperinflation zones. so both yields and inflation

need to also cooperate alongside a strong earnings growth. it's also important to remember their revenue data is nowhere near as strong as the earnings status, so this has been a profit margin story. you've had better than expected beat rates, where they have beaten on the bottom line. but you have lower than average beat rates in which companies have beaten on the revenue line. revenues are only growing at the pace of inflation, so that is something to be mindful of, that they feed to persist as we would go into the rest of this year. >> you mentioned things like the russell rallying up 8% in the last month. so we are really talking about the line in the sand. what do you make of the so- called everything rally, small caps, tech, gold, copper, bitcoin, you know, bonds. i mean the 10-year yield is down 30 in that period of time too, since kind of powell talked us off the ledge, the fed chair. what do you think of that?

>> i think it tells you there is still a lot of liquidity in terms of a backdrop. it also suggests financial conditions are relatively easy. that's in contrast to some of the commentary we hear from the fed. certainly powell has been getting a lot of questions about policy being restrictive, yet you don't see it in the data in traditional financial conditions, indexes that we all track. and i think that is part of the reason why you have this rally in areas aside from just the equity market. >> when you take a look at some of the sectors that have done pretty well. like when you see utilities, for example, 11% up in a month. now i know everybody is talking about them as, you know, the next ai derivative, right? and i don't know if you agree with that or not, maybe you do. >> i forgot who said it recently, but ai is everywhere

except in the numbers. and you're not really definitively seeing it, but everybody is trying to figure out what are the longer-term plays aside from the direct infrastructure plays associated with ai. and then you add to it the necessity of boosting the power grid globally, not just for ai reasons, but the lack of investment, and also move towards green tech and ev. so i think they are there in terms of the long-term fundamental support. but you have to worry at some point about evaluations in a segment of the market that is extensively valued. this is one of those potential issues where utilities don't generally find themselves living in the growth indexes, so therefore they're in the value indexes. but that doesn't necessarily mean there's true value there from a multiple standpoint. so i think there could be some sentiment risk at some point. we have the utilities and the

market perform. another word for neutral, so we don't have it as an under performer. >> sure, it's been a broad based recovery from those low. i'm looking at staples that we don't necessarily talk about in an offensive way either. they're up almost 5%. discretionary, we have serious questions about the health of the consumer up almost 5%. healthcare, not doing all that much. up almost 5%. >> you know on a year-to-date basis, most sectors, 10 out of 11 sectors, are in positive territory with the exception. but you still see these leaderships occur over shorter- term periods of time. but there are generally that reciprocal bias, even in the case of utilities, which we think is classically defensive. there is that perceived or actual growth play that's part of, i think, why utilities have done well. i don't think they're doing

well nor consumer staples for that typical sort of defensive play. in addition, momentum is a factor, which is more of a concept, that continues to do really well. which sitly means stocks that have been doing well continue to do well. you do get some performance chasing that happens in an environment where momentum as a factor is doing well. >> liz ann, i appreciate it as always. it's nice to see you. liz ann sonders, schwab joining us. all eyes on nvidia ahead of tomorrow's earnings report. kristina partsinevelos is here with more. it's good to see you. you look at the results via expectations. i mean revenues are posted more than triple a year ago. earnings five times greater than a year ago. the thing that popped out the most to me today, which is why i wanted to talk to you is the headline about ft. amazon pausing their orders while they wait for these upgraded or next generation gpus. then i'm like well, how big of

a deal is this? it's the first i've heard of it. what can you tell us? >> yeah, this is a big debate on wall street and whether nvidia will suffer a demand low or what they call an air pocket, caused by customers waiting for the next generation gpu chips, which are slated for later this year as opposed to buying chips already on the market. and these next generation black well chips, which is what they will be called, should be four times faster than the previous generation. so it's enough of an incentive for customers to want to wait, right? wait for something that's better than what's on the market right now. the ft reporting aws is doing just that. taking their planned orders for already available nvidia chips, and pivoting them to the new black well chip. a move that runs counter to the recent theories that there are no air pockets or demand lows. that's when you saw the stock fall 1% on the news today. it's regained some of that. but another positive way and you've seen it from a few

others. i would say aws is still buying chips, so that revenue stream is still coming in for nvidia. doesn't mean they're canceling. there is so much demand from corporations beyond hyperscalers that would maintain that demand level, you know, remove any type of air pocket. it's no wonder why you have 88% covered analysts that think this company is a buy with an average price target of $1,039 heading into this earnings report. but i would say that's a point that a lot of people are debating about, scott. >> i wonder what we will hear about it tomorrow and certainly on the call about the alleged air pocket. kristina, thank you for setting that up for us. kristina partsinevelos, we'll see you later on closing bell. let's bring in lauren and eric. lauren, let's turn your attention to a moment on nvidia as well. what do you feel is at stake tomorrow, not only for the overall tech trade, but the market at large given the magnitude of the rally led by tech? >> everything is at stake is the answer. i mean not just on the upside

in the sense this earnings environment has been really constructive. it's an important part of the rally so far. but also on the potential downside. if you look back to the 2000s, it didn't take a big downward turn in earnings to pop the bubble. it took cisco reporting closer to 50% growth instead of 60% growth to do it. so these numbers matter a lot. if we can pretend that, you know, we don't have to care about nvidia, which isn't the case, the environment for the rally to continue that is quite strong. we've had a good earnings season. we have a fed that is hell bent, and we have an employment environment that is still very strong. any any of those factors reverse, which i don't see a reason for that to be the case in the next couple of months. this is a technical all systems to go for the bull market. >> wow, all systems a go. so eric, the everything rally as we are calling it continues? >> yeah, listen, forward

earnings are definitely supporting stocks. as liz ann mentioned, rising profit markets in the s&p 500. broadening out with the equal weight index is just starting. small caps are still under pressure from the higher rates. but we see no reason with the tight labor market, rising real incomes, and just more spending that corporate profits have to fall any time soon. >> interesting, so it's going to be an earnings driven story. you guys are looking -- you know you tend to look out further than most and put out lofty targets, i think is fair to say including one you put out, you guys put out something big earlier in the week. remind me what that was? >> yeah, so we are targeting -- >> the dow, 60,000 or something like that? >> yeah, listen, for the next few years we have 5,400 for the s&p 500 this year. and the number at 6,000 for next then, then finishing up 2026 at 6,500. that's earnings driven. this whole roaring 2020 scenario right now is our

highest probability outcome. we attribute about 60% likelihood of that. there are some other risks, you know, we have a 20% scenario of a melt up. if the fed preliminarily make cuts, meltups are fine. you just have to know when to get out. and then the 20% scenario where there is another revival in inflation. but for now we see productivity growth really being a strong driver of real incomes and for the next several years, driving the market higher. >> you don't think what we're currently experiencing is a "melt up? >> it is supported by earnings and real incomes. valuations could be frothy at 20. but especially what the mega cap eight have done including nvidia. >> i mean it may not be expensive for the mega caps, but 20.5 as a multiple to some seems a little expensive? >> liz ann was right. valuations aren't a great market tool, but one of the

things we've noticed recently, the past couple of weeks the equity risk premium has moved negative. it doesn't tell you anything for the next couple of months as i mentioned. we do think the case for equity is strong at the moment. but what it does tell you really consistently over a longer term basis, think even ten years out, that the trade- off between equity and bonds doesn't quite make sense anymore. so that supports one of our highest conviction views, which you and i have talked about a lot, which is taking some of the gains we've seen in equity, activating it in high yield, where you still get the benefit of the bull market we're seeing, but higher income streams in the meantime. >> what about taking the cash and use your word, activating it into equities? i mean that's what some are banking on to get you to the next leg. >> we are actually moving cash into short duration fixed income for a couple of reasons. one is you still have, we think, an interesting risk reward profile similar to the benefit you would see, just putting money to work in equity or other asset classes. but the real reason is regardless of the path or the

exact timeline that the fed is trying to take is a cut. and the benefits of the higher rates in cash over the last couple of years aren't going to benefit from those same rates moving forward. so you look at the maturity well that's coming in the next couple of years. a two to three-year short duration fixed income play is a real nice way to lock in that higher income stream for the next couple of years. >> eric, do you think we get cuts this year? from talking with ed, you know, over there on a regular basis. it doesn't even feel like you guys care if we get them or not. you're still positive on the market nonetheless? >> yeah. we think the economy can handle higher rates. it's definitely demonstrated that. we don't think the feds should cut. if they do cut one or two times this year, it will be to maintain that kind of real restrictive rate where inflation falls, unless we need to cut on a nominal basis to keep where rates are. that will up the chances of a melt up in the stock market. so we don't think there is any

reason to cut. but if they do, we will be revising our expectations for the next few years. >> how are you guys thinking about whether the consumer needs to be worried about, lauren, or not? we've got matthew from jpmorgan coming up. he's a top retail analyst. target earnings are tomorrow. there's a lot of things going on within that space. the sector, year to date is up 2%. does it get better? >> look, i think the reality for the consumer is the story is bifurcated. this is something we're seeing from companies as well. lower income consumers are starting to struggle. middle to upper income consumers aren't. that's a challenge for the fed because it means inflationary pressures are still a part of the problem. even some of the evidence that we have from price cuts and certain companies really aren't hitting the mark when it comes to being able to cut rates. and that is one of the things that we have heard a lot from. the endless slew that we've got a couple of months and better data before we could think about it. >> sorry to interrupt. that's what they were telling

steve today too. like i need several months before we are willing to entertain the cuts. it's been good talking to you. that's lauren goodwin. eric, i'll talk to you soon as well. >> thanks, scott. up next, microsoft's conference underway. we'll take you there live. plus instant analysis from deepwater's gene munster. what he will be watching from nvidia's results tomorrow. and dow is good for about 54, trying to get back to 40,000. we'll be back in two minutes. ♪(voya)♪ there are some things that work better together. like your workplace benefits and retirement savings. voya provides tools that help you make the right investment and benefit choices. so you can reach today's financial goals and look forward to a more confident future. voya, well planned, well invested, well protected.

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welcome back. shares of microsoft hitting an all-time high and heading towards a record close today. the company kicking off their

conference. just wrapping up the keynote speech as well. steve kovach is there and joins us live with what happened today and what mr. nadella has said. >> reporter: yeah, scott. it's our artificial intelligence, of course, and just a slew of announcements coming out. most of them are wonky and focus on the developers that are here. about 4,000 of them i'm told. high level here, just some consumer facing stuff, co- pilot, which is, of course, the most important ai software product that they are actually selling. that's getting an update. they are calling it kind of a project manager version. it's called team co-pilot, meaning whereas before co-pilot worked on an individual basis, now it can manage groups or manage even your entire organization. but a lot of today focused on openai and that latest gpt 4.0 version that openai just shared last week. that's the one where you could have a sort of natural language conversation, it's multi-modal, meaning it could interpret images, text, and voice. but of course, there was that

controversy, the scarlett johansson thing, where they had to take down the voice that sounded like her. scarlett johansson saying they didn't use my permission for this and they tried to use me. you know the controversy there. but sam altman did make a surprise announcement at the very tail end of that keynote talking to microsoft's cto, kevin scott, a little bit about how those two companies will work together. sort of hinting at the future of what's coming next. altman not really giving too much away, but saying only that chatgpt is going to get a lot smarter very soon here, scott. >> steve, stay with us. joining us now to discuss all of this, how he's playing the ai trades, gene munster, deepwater management. good to see you. >> good to see you. >> i look at the notes here. you don't earn microsoft. and i get the feeling that you're not as all in on this name as some other investors that we speak with. why not? >> there's two reasons.

first is as part of our flagship product, we just want to have concentration, and we don't want to hug a benchmark, so we don't own all the mag sevens, for example. we had to make some decisions there. microsoft is in a good place relative to the opportunity in ai. that's one piece to it. the second piece is if you just take a big step back and look at what's happening today, today is underwhelming for microsoft. it had that feel to it because really what we saw a week ago from openai laid the ground work for what we saw today. it reminds me that microsoft's future is in the hands of openai. they have 51% ownership. it's more than 51% ownership. but the bottom line is this relationship is incredibly strong. there's no reason to think it will get fractured. but that is the dynamic. the companies that do own

google and meta related to he ai opportunities are the only ones that are in total control of their ai destiny. that's why we have the portfolio that is positioned that way. >> you portray it as if microsoft, while great now is in more of a position of so- called weakness rather than strength because of the dynamic and the relationship with openai. >> i don't know how else to think about it. the reality is there are two different companies. the reality is really what openai, what microsoft brought originally was a lot of money and separately the distribution. i think as openai continues to explore their options, you know, they're on the table with apple doing something, getting access to those active devices. google pays $15 billion a year for that in search. so i think that is just an important piece. ai is the brains of the future of all these companies. and it is a little bit

concerning to us that microsoft really isn't in control of that destiny at the end of the day. >> steve kovach, how would you assess what gene munster just said? he used the word underwhelming to describe what you have seen today, but also these risks that maybe investors haven't considered quite to the degree that he has? >> reporter: yeah, i totally agree. i don't know about the underwhelming part, but i definitely agree on how late these two companies are. we can't underscore enough how much what openai does impacts the road map for microsoft and its artificial intelligence future. you might remember last fall with that ouster of sam altman, ceo of microsoft. he spent the entire weekend trying to repair that situation in order to calm investors nerves. at the end of the day, they super rely on this technology. then over the past week or so, we just had a number of dramatic events happen at openai. a lot of stuff, you know, questions over whether or not

altman was open and basically truthful about that whole scarlett johansson thing and how they were training models. also the cto has made comments in the past about how their new video products kind of said -- not really admitting whether or not they used youtube videos to train it. since then we've heard from the google side saying openai did use youtube to train it is not very good. a violation of their terms. microsoft kind of put themselves in that position where yes, they are wowed by the technology and everything that's going on there. but at the same time, microsoft just kind of forced to own a lot of the drama and everything that's going on at this hugely important company for them going forward, scott. >> they do, gene, have the first mover advantage sort to speak, right? there's going to be growing pains, drama in a new relationship. but look at where they've gotten to thus far in what is still a very infancy of this

relationship as brent jeffries put it earlier today, and i know you know him, research analyst. microsoft is so far ahead is the point he made. the amount of earnings power they could drive from that is so substantial that that is why they're in the leadership seat. >> they're in the leadership seat because of what's going on with openai. openai by my estimation is probably six months to a year or so ahead of where google is at. they're doing live multi-modal demos last week. google recorded demos with a light year gap between those two. and brent is spot on. the earnings powers with microsoft are just concerned. it comes down to the control. i mean the soul of microsoft is openai. and they don't have control of that. so i don't want to take anything away from their earnings. i want to be very clear. the substance of ai is going to outpace the hype. this is as big as it gets. i'm 53 years old, i'm thrilled to be alive today just to see

this breathtaking transition that we'll see over the next decade. microsoft is going to have the place for it. i think there's better companies. >> people who watch this network associate you so well with apple too, gene. and i'm wondering how you think about that stock here, you know, they've obviously had their issues fundamentally with revenue growth or lack thereof. when is the next cycle of the iphones going to come. both of you together know more about that company than most. so gene, how are you thinking about their own ambition and do you own that stock? >> i do own apple personally. as i mentioned our fund because it's con sen is traited. we've selected meta and google as kind of our large cap investment. we have tsm, they get exposure to chips, but i do own apple personally. apple is one of them. the reason is i think they're going to have participate in this ai piece. and they are going to be

licensing the core model from openai i or gemini to initially get that party started probably for the next few years. eventually they'll get things going there. but i'm optimistic about apple. i think this company can be much higher. specifically we're getting back to growth after two years of no growth, we're going to get 2%, 4%, 6% growth over the next quarter. and inject some ai mojo into that and customers will respond, and investors alike. >> it's been a great rebound for those shares as we said in the top of the program. thanks. steve kovach, thank you so much. i appreciate it very much. all right, we are getting news from mcdonald's, kate rogers has that story. >> some franchisees say a 30% discount for a $5 value meal needs a company investment to be sustainable for the long run. cnbc obtained a copy of the memo to the national owners association, an independent advocate for mcdonald's franchisees, weighing in on the new four for $5 value meal.

in it the board writes the fact remains in order to provide the consumer with more affordable options, they must be affordable for owner-operators. mcdonald's vast resources and financial investments are essential to any affordable strategy. bring back the snack packs and drumming up interest for customers with bringing popular drinks from cosmics to franchise stores. it also says, "there is simply not enough profit to discount 30% for this model to be sustainable." mcdonald's declined to comment on the memo. but in the past they said u.s. cash flows are up nearly 50% on average since 2018. last year it was one of the highest franchisee cash flow years in mcdonald's history even when taking inflation into account. a reminder here for viewers. the month long promotion of this value meal beginning the end of june has marketing support from coca-cola, so this is getting at how to keep it on the menu past that time frame, running again for roughly a month, scott? back to you. >> kate rogers, thank you. up next your retail

rundown. shares of macy's are popping up. we hear from the number one retail analyst on the street, matthew boss, the hall of famer, gives us his first take on the quarter. rngsean.e avigating th eain sso that's just after the break. ty competent. i'm just here for the internets. at&t it's super-fast. reliable. you locked us out?! arrggghh! ahhhh! solution-oriented. [jenna screams] and most importantly... is the internet out? don't worry, we have at&t internet back-up. the next level network. i sold a pillow!

welcome back. the beaten macy's quarter helps them out. and more earnings over the next two weeks. joining us now, the hall of

fame retail analyst, matthew boss with jpmorgan. welcome back. it's nice to see you. >> good to be back, scott. >> do we feel better about the consumer environment after what macy's did? >> look, we've been more constructive on the consumer. when we put march and april spending together using some of the chase credit card data. march and april was about similar from a spending perspective as the fourth quarter and holiday that outperformed expectations across the board. so macy's this morning, i think it shows you the resilient consumer, but also the selective consumer. the consumer at the high end that's being more choiceful. the low end i do think is a melting ice cube. i've been on the show before and we've talked through this. what i'm calling it now is a selective recession. again, that's $40 trillion of net worth that's been created since 2019 at the high end, but it's a low income consumer that by our survey works 70% of low income consumers. right now they're saying they are struggling to make ends meet and really cover with

savings their cost of living. >> you still like ross, tjx, and burlington? >> that's your sweet spot. what that tells you on the selective recession or that choiceful consumer in my opinion, the consumer wants value, but they also are striving to own the brand. so if you sell brands for value, that's off price. that's tjx, ross stores in burlington. in my opinion, that's your sweet spot for this value and convenient. and as good, if not, better than where you were pre- pandemic because you've expanded the demographic reach as to who is shopping your box. >> but you think overall some of the concerns about the consumer fading are overblown? >> no. you know, i hink it depends on where you're looking. so if you're focused on that low to middle income consumer, they're under pressure. and the pressure is really the inflation is just continuing to last. so each month that we move forward, it doesn't matter that the inflation is not worsening. it's just an incremental toll

on that savings that they built. that's why i said the low end right now is that melting ice cube. but low income consumer, very different than low income retail. that consumer gravitates to the lower income retail. but what happens is you get the trade down effect. that's where i think you're seeing with the discounters with wal-mart, where you are seeing the off pricers, where you're seeing the dollar stores. so low income retail can benefit when low income consumer is under pressure. it's the middle that ends up getting squeezed. i think that's where you're not the best at what you do and you do not have differentuated innovation. that you're falling in the middle. that's where you're going to come up short and the companies that you're going to hear complaining about the macro backdrop. >> do you think we're set up for the good beaten rays from birkenstock? >> i do. they fit into the best in class brand. what i was saying before, if

you have differuated technology and scarcity of brands is what birkenstock has. the capacity has right now, so this brand can service asia. there is a material shelf space on birkenstock. we think for the next two years, i think that brand is white hot. it's a brand right now where demand exceeds supply by 30%. so we like birkenstock for the print and multi-year story. i like pvh, calvin klein, tommy hill hilfiguer. there is a tremendous amount of self-help still on the marvin side. >> are you too optimistic about lulu? you have overweight and you have a $500 price target on it. i mean that stock has not done well at all. you use the word when you talk about why you like birkenstock

so much. it is not that much different anymore. with brands, you know, all these other companies that are now selling stuff that kind of look the same, but cost half as much. this is a real problem. how do you see it? >> i'm glad you brought it up, scott. look, what lulu finds themselves in right now, it's a moderating growth story or perceived as a moderating growth story. the truth is on a multi-year basis, i think lulu can drive the double digit top line growth, which would equate to a mid to high team bottom line grower. you have international that is still in early earnings. less than 10% exposure to the international markets. you have men's that can still double from here. accessories is still an opportunity. and the total addressable market for casual, i mean there is no question it's larger on the other side of the pandemic. so yes, there is viore that is a very strong brand. on the fashion side, it's showing nice strides within

that space as well. but i don't think anybody mapped this space out as potential use case seven days a week. not just the weekend in the active and casual, but the work environment as well. i think with a larger total addressable market, it's on lulu to continue to show the innovation in that difference. right now you're caught between the catalyst of holiday, where i do think lulu potentially overearned with that younger customer that came out strong. and now you have the out of stocks on the size zero, two, four within the box. from an execution perspective, they probably could have done better in this first quarter, but it's a low. we will see when they come back and the colors come back. i don't think competitively this is something lulu can't come out on the other side. >> but you're comfortable with the multiple and the premium multiple that you're paying for what you describe yourself as, "moderating growth? >> look, i think it deserves a

premium. what i'm saying is you're caught right now in a moderating growth runway whereas 20% plus operating margin with a double digit top line profile. there's no question if that is the other side of this maybe one to two quarter moderation in growth, then i think you'll see lulu back on the other side of the premium. >> interesting. i appreciate the conversation, matt. thank you so much. great to be back. great to have you. all right, up next, we're tracking the biggest movers into the post. what do you say? >> we are seeing two wins for the major pharmaceutical stock pushing into the all-time highs and a surprise comeback for the semi conductor company. details are next.

we are less than 15 from the bell. let's get back to kristina for the stock she's watching. tell us. >> let's start with semi conductor equipment, lam. the first split in 24 years. and also a $10 billion share buyback. this is a part of lam's commitment to return cash flow back to investors. the promise they made. the stock split wouldn't do anything in terms of math involved, but would invite more investors to participate. shares up 2%. a big day for pharma giant, eli lilly, positive test results for a phase three crohns disease trial. separately eli lilly's diabetes drug received approval from

chinese regulators. both of those, reasons why we're seeing e eli lilly up eli lilly up 3%. ether, what it might mean for the rest of the crypto space as well.

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i'd rather work on saving for retirement. or college, since you like to get schooled. that's a pretty good burn, right? got him. good game. thanks for coming to our clinic, first one's free. we're now on the closing bell market zone. cnbc commentator michael santoli here to break down the crucial moments of the trading day. plus kate rooney on the surge of ether prices. and diana olick looking ahead to toll brothers as they report earnings in overtime today. mike, we've got the great weight ahead of nvidia tomorrow. what stands out to you today? >> market is not really wasting any energy on the preliminaries. you have this kind of comfortable zone of where the economy and credit and bond yields are. it is actually kind of interesting. the treasury market tried to

react to some of what governor waller headlined this morning. up pretty significantly higher, and unwound the whole thing because it's pretty much the same story. and fed people now essentially treating these softening of the consumer side in the economy as a net positive the way the market has been thinking about it. for now it helps the soft landing. in general it's forced to kind of make a claim. it seems like the market is waiting for nvidia's permission to try another upside view. >> we'll see. 24 hours from now, it will be interesting. kate rooney, ether's run-in is not a surprise because bitcoin is too. maybe this is from some of the same reasons that got bitcoin off the canvas sort to speak initially? >> yes, scott. there's definitely a correlation. we talk a lot less about ether. this is the second largest cryptocurrency. but the entire asset really getting a boost from some new optimism that u.s. regulators are going to green light an etf for ether. so as i said, second largest

cryptocurrency comes after a wave of bitcoin etfs were approved earlier this year back in january. that helped usher in more institutional prices and led prices to an all-time high. a lot of excitement behind that. the rally started yesterday amid reports that the sec is asking for an updates around those potential etf sponsors. the final decisions on the applications are due at the end of the week. some investors are also cheering the resignation of the fdic chair amid allegations of misconduct. martin greenburg was seen as hostile towards the asset class based open the folks i talked to, letting banks accept crypto, for example. and then bitcoin's rally started last week after that april cpi number that hit 70,000 for the first time in about a month, scott. >> all right, kate rooney, thank you so much. to diana olick now as we await toll brothers. what should we look out for? >> well scott, toll is a luxury builder, so buyers aren't dependent on mortgage rates. but there's a distinct rate in the last quarter. that's what we'll be watching, the affects on q2.

it is q1, beating expectations for all metrics. take a look at the way rates were from november to january. they fell sharply from the mid 7% range to the mid 6%. interestingly in the conference call, they said while mortgage rates buy downs are heavily marketed and they offer nationwide, very few of our buyers will use the incentive dollars to buy down their rates. they prefer to use any incentive offered on the design studio upgrades, or reduce their clothing cost. in fact they said 25% of his buyers were all cash. in q2, rates did the opposite, climbing from the mid 6s to the mid-7s. >> thank you so much. we'll look for you in overtime. mike, it's back up to you. we're headed for another closing high for the nasdaq today. thank you, apple, thank you, nvidia, microsoft, and some others. >> they tend to persist. you know, there's more stocks down than up today. that's the market for you. things are cooling off after a 7% run. in both cases, it's no secret at this case. it doesn't always have to be, you know, kind of big contrary call to say why things are

positive. it is worth asking how much dry powder there is in the very short term, nvidia will see if it lights any of it. but at this point, i feel it's about people expecting a generally positive summer tone in an election year and you have this fed fitting well with an idea of the economy that is still chugging along, but maybe slowing down in certain ways. so kind of, it is goldilocks until further notice, i guess is the way you put it. >> i wonder how much powder is out there from, i don't know, shorter term cds, money markets that are maturing and that, you know, money, they might not necessarily roll in to cash still, but they need to come in somewhere else? >> in theory it is there and in general the supply, demand equation is favorable as many pointed out that you'll have more money in corporate buybacks than you would have in equity issuance. so it is just this general, this inherent data in the market is there. i don't think that you would have to say that they will

sweep all their cash into the market by just saying, you know, essentially the volatility is low. all the rich models will say that the big institutions can own more. >> all right, that's michael santoli. we will see you omorrow. that bell marking yet another closing high for the nasdaq. all eyes on nvidia tomorrow. i can't wait to take you up on that. and we will have more with morgan and john. well record closes for the s&p 500 and the nasdaq with nvidia up more than the averages ahead of tomorrow's earnings results. that's the score card on wall street. but we're going to stay late, welcome to closing bell overtime, i'm jon fortt with morgan brennan. >> welcoming up, the ai story of the day, scale ai. and we're going to talk to scale's billionaire, ceo, alexander wang, exclusively about the news. and more earnings are rolling in this