basketball analyst and for his colorful personality he talked philosophy, literature 71 years old came on "closing bell," tyler, back in the day. i told him my uncle was a fan, and he signed a book when i mentioned my uncle was an english teacher he wrote a page and a half about how john wooden was a teacher. >> he was an amazing character thanks for watching "power lunch." >> "closing bell" starts right now. >> thanks. welcome to "closing bell." i'm scott wapner live from 900 this make or break hour with the nvidia surge continues yet again today. we'll ask our experts how much further the stocks can run and what it means for the markets overall. near 7% in the meantime, the scorecard with 60 minutes to go in regulation more red than green on the board dow is negative as the s&p, dow

going backward dragged by health care and some of the standout names there. mostly weaker session as you can see. yields creeping higher 2-year near 5% again consumer confidence it was less bad than feared. some of the data of late has been pretty good yields backing up as a result. you saw with the 10-year doing there too. yields are green shares of texas instruments today. elliott taking a stake, a story reported by david faber. stock not doing too much that's interesting we'll ask stacy rascon about that the star chip analyst will be here at post nine. we can't wait for that biotech, insmed soaring on positive drug data takes us to our talk of the tape the road ahead for the markets with tech once again apparently in the driver's seat bring in sophie's head of investment strategy liz young here at post nine. sdploo >> good to see you to me the big story remains nvidia. >> yeah. >> because it continues to keep

this market levitating and keeps investors positive and specifically in the area of tech even apple was higher today, we'll cover that in a little bit, but nvidia unbelievable. >> well we've got the situation, too, where you've got econ data warming up again some of the stuff we thought was softening problem areas like consumer confidence, consumer sentiment, pmi last week came in stronger than expected so we've got this heating back up and the narrative around a recovery, another recovery in some of that softer data. so there's nothing right now to look at as an investor and say, something is wrong even when you look at the market and what people have bought we're not in overbought conditions nothing screaming overbought, not the s&p or treasuries or bitcoin. >> not the nasdaq? >> well, i think there are pockets. >> 17,000 today, right, for the first time ever. now it's come back a little bit,

but you get my point the money continues to flow into tech. >> but even if you are in the camp that i'm in where i think we're in this elongated late cycle you want to own large caps and in this particular environment with yields where they are and hopefully they will come down eventually as the year goes on, large cap tech and profitable large cap tech is the place to be. >> that's what goldman's tony pasquariello, i mentioned this on halftime, those of you who didn't hear it there, the reporting period justified the earnings season just ended, justify a claim the mag seven remains the most durable and certain turns the most convex set of stocks in the market. said another way this cohort displays elements of the sword and shield to your point offense, they work, defense they work. >> i think what used to be the case and what is different this time, even though saying that phrase makes me shutter, what used to be the case if we rewind to the early was2000 and we lood

at tech stocks we had valuations way higher, not a lot of support behind it. we're in a situation where these stocks have worked for investors, so not anymore are they these high beta, high tech stocks, people look at them saz w as somewhat of protection and diversification away from old economy in their portfolios. i would be remiss if i didn't mention some of what's going on today and the risks are that still are out there for some of the stocks because of yields, so yields are up today, not just because of strong economic data but because we had a couple weak treasury auctions. >> one this afternoon, right the 2-year approaching 5%. >> yep. >> as we said. >> weed a a weak two and five-year auction. independent of inflation, independent of economic data and independent of what the fed is going to do, we've got pressure higher on yields which brings

that tightening back into the conversation and lower appetite for treasuries which is not good for our burgeoning debt problem and what the treasury and the government needs to do to finance continued spend smoog what do you make of the fact that investors continue to buy in i thought there was an interesting story in the journal, u.s. based mutual and exchange traded funds have drawn $172 billion of inflows so far this year and that's a turnaround from assets flowing out of those areas over the past couple of years. so they're not, you know -- investors aren't as risk averse, right. there's the money that had flowed through the money market system is now finding its way into the markets. >> yeah. >> and that's fueling some of what you're seeing, nvidia included you have to imagine i'm sure investors have been sitting in cash at 5% and say, gosh, i don't know nvidia 900, is it too late nvidia 950, too late

maybe not. nvidia 1,000, 1050. >> yeah. >> you have to be an auctioneer. >> right and you're not getting hands up in the air at that point. >> the point is you are. that's the crazy thing you are. >> so i think what will start to happen if you look at what happened even broadly in the market we had that pull back in april and we're back up to slightly above where we were, but we've been kind of sideways since we recovered from that pullback now i think investors will start searching for other places, rather than the ones that have been popular if you look at tech, i think what could happen, this happened earlier this year, some of the old tech caught a bid. some of the stuff that wasn't semis because it was like i want to be invested in tech but this doesn't look like a good entry point anymore, i'm not going to buy that, i will buy something else adjacent or like copper flying because we've got data centers and demand for copper into the future. utes flying because of the themes i think some of these adjacent stories will catch a bid as long

as the market continues to stay - >> what i feel like falls in that category even within the mag 7 apple. stock falls out of favor, nobody likes it and all of a sudden okay, you're going to put some money now into apple and that's led a large part of the comeback it was briefly positive on the year earlier today, now it was green and now pulled back red. that's benefitted too from this laggard within the leaders and now it's joined the party. >> yeah. and the original question that you asked was about money markets and if people are still sitting in money markets i think a lot of people are because it's rational to get paid 5% to wait around, but if you're taking your money out trying to put it to work, those are the places that you're looking for. if i didn't have nvidia this entire time and missed it, then where do i want to go to a place that maybe is going to be next on that leg or is going to join into the ai party and the other thing is, you don't have to be the first mover to still benefit from a theme

i think people are going to start to catch on to that. >> we're talking about apple getting briefly positive on the year because iphone sales jumping in china last month. steve kovach joins us now to break down those numbers that's what report was today and that was enough at least initially to push these shares higher yet again. >> yeah. it was up as much as 2% premarket. we thought it was going to close the day in the positive, but look, apple's fortunes might -- in china might be turning around here because the shares pulled back a little bit after rising earlier today after data came out from the chinese government overnight showing iphone sales jumped 52% in april from a year ago. apple's been, of course, struggling in china ever since the pandemic hit, whether from covid related production suts downs or the recent competition coming back from chinese brands like huawei. last earnings report for the march quarter shows china may not be as apocalyptic as counter point had implied this year. going to be pressure on the iphone business through the end

of the year, especially for the new model we're expecting this fall which is going to need some impressive ai features to convince people to upgrade and, of course, scott, we're expecting to get our first taste of the ai plans on june 10th at the annual developers conference and bloomberg over the weekend reporting details of what we're expecting to see on the ai front like automatic photo editing and ai generated emojis. is that going to be enough to spur a new upgrade cycle. >> that's the beginning, middle and end of this story. apple needs it to be, right. >> yeah. >> maybe that's part of what's in the stock the expectation that lateron this year, you're going to get that. >> yeah. and going into, i don't know, the last couple months into wwdc you have to wonder if this is one of the buy the rumor moments for apple, we've seen a surge and then see it selloff after wwdc again it's more anticipation for the iphone because the features they announce in june are lilkey stuff everyone gets not

necessarily drive hardware purchases what they need so the iphone, the in exinext iphone nd something to convince people to say i need to upgrade earlier than i was anticipating and need that super cycle to come back, not to mention bring back that growth in china. >> yeah. i mean, a big buyback is only going to get you so far. >> exactly steve kovach let's bring inshannon and victoria good to see you. talk to me about this market and how do you see things from here? >> yeah. i mean, look, scott we've, obviously, had a good up leg from the pullback in april and there's reason, right. there is the seasonality typically supportive through the end of july so you've got that we've had a good earnings season, although you could say take out the mag 7 and it's not near as strong as what people anticipated. but because there is the belief

that the consumption is still there, because there's the belief that gdp is going to be pretty high, i mean, you look at atlanta gdp now is 3.5%, and the belief that the fed is going to start to lower rates this year, i'm not saying i agree with all those assumptions, but i think the market is making those assumption, you have a tendency for the market to move higher. i don't think you want to miss out on that, so i think you want to be fully invested we are for our clients but based on some of the things that you and liz have been talking about, i also don't think you can completely ignore some of the flags out there when you look at consumption. we're seeing weakness in different areas, consumption is one, real retail sales have actually been flat for the past four - >> even the consumer months -- >> the philly fed and empire and manufacturing numbers are a little weaker as well.

and -- >> we're going to work on victoria's shot. we're having an issue with your shot shannon, want to weigh in on this market? >> scott, i think we're, you know, entering into what could be an honestly a little bit of a choppier few weeks as you and liz talked earlier about treasury options we have pce coming up. we've got a ton of fed speak and the challenge here is that the fed is really a taker on policy right now. if you think about what's happened from a fiscal perspective, if you think about the better than expected growth, the stronger and more resilient consumer of last year, it's really put the fed into a bit of a bind in terms of moving from data point to data point and that type of volatility is not going to necessarily show up immediately in the equity market, but it's going to show up in the bond market and yields as you were talking about earlier. i think in the absence of, you know, micro are result, we're entering a macro vacuum and, frankly, unless pce comes in

lighter than anticipated, which it could, based on asset management fees being a little bit lighter after april's market activity, i think we're entering into a period of some difficulty now, the good thing is, there are places to go you know, we've seen strength in financials we, as you know, have been very optimistic on utilities even before everybody started buying them for ai, and i think that the broadening out of industrials and materials, cyclical sectors give you an opportunity to potentially add positions here if we get weakness coming into the next earnings season, but i think right now it's going to be tough because there's just not a lot of micro to go out there with. >> jpmorgan says favor a barbel of defensives and commodities. while wolf says you're going to have a choppy summer ahead, go mag seven in the secular growers, likely to outperform. >> the commodity play, i've been talking about metals most of the year. >> wasn't that your contrarian

play >> it was my pick in late january, copper has worked out not for the reasons i thought it would, we add on this ai theme and the data center play, but the metals play continues to run and i do think that exposure to commodities at a time when we don't have hard data yet that says the economy is faltering, you're going to see investors continue to at least hang out around the cyclical trades, and commodities is one of those that's been benefitting. we're in a period of the market and this is to shannon's point n a period where you almost need confirmation now we've made the new all-time highs and need confirmation from other areas to say that this deserves another leg up. we haven't gotten it yet we're not getting it from small caps or not getting it from the gdp data yet we're getting sort of whispers of it. not really anything concrete this is when we need that confirmation we don't have an earnings season for a while still, so we are - >> you need inflation data, right? >> inflation data. >> the next thing we look to starting at the end of the week. >> we got some of it in cpi.

people were happy about that we have not slayed the dragon yet and that's what we get caught up in is that we hear this hawkish commentary from the fed so then any little hint of cooler data people celebrate, but we're not done yet even what we heard today from kashkari, maybe there are more hikes to be talked about, unlikely, i agree. >> you saw the face i made, is that why you reacted. >> i don't think the viewers saw the face. >> i saw the face. >> thank you for not taking a two face, fate was made and the reaction you said that the data, the stronger data, puts the fed quote in a bind. doesn't it give the fed cover and you also said that the market is making assumptions of what the fed is going to do. i don't think the market is making any assumptions anymore the market is assuming the fed will not do anything any time soon and the data good enough it gives the fed to cover and the market is content enough with

that that will take stronger growth over more cuts, so, therefore, where are where where are. >> i think there are pockets of the market that are giving the fed cover and i also think there's pockets of the market if you think about the fed's mandate which is price stability, price stability is not being relayed in the data that we're seeing right now and most importantly, if you -- we talk about the fed being apolitical and talk about going into an election season. i don't think that that's going to color their expectations -- their move if you will, but i do think what's happening in the lower income cohorts of the u.s. economy and what we're seeing in terms of credit card delinquencies, balances, percentage to max, all of that is weighing on the fed in terms of how they witness to deal with inflation. so yes, when inflation is, you know, sort of starting to trend lower and we're getting the trend that we want to see on inflation, the fed has plenty of cover. unfortunately, when they stated they were looking for greate

confirmation, now everybody is high high, high poth sizing what does that mean, that confirmation they're looking for. we look at the first ourth quar and expect earnings and revenue to be higher than they were in the first quarter, you have to earn that. if we're not going to get rate cuts and not see additional accommodations >> victoria, ubs says we're going to 5600 on the s&p it's a 5.5% move from here maybe a little more with the midday pull back we've seen. what do you think of that number >> yeah. i would say it's a little bit high just based on what we're seeing but that could change if we see investment start to go higher. consumption leads investment and investment is really the trigger for a pullback in the market when investment goes lower or for a recession. with consumption being weaker, i think we have to be concerned of having another 5, 10% move higher before we get a greater pullback closer probably to

around the 200-day moving average. >> i mean, you mean consumption by consumers >> yes so you have to have that consumption in order for corporations to have the investment when you look at the capex coming out of the earnings season, about 75% of the gain in capex was strictly from alphabet and microsoft. so we've got to see a broadening out of that and it's not going to happen unless consumer consumption continues to do well. >> well, we'll see if the confidence number today was less bad than feared, so maybe the demise of the consumer remains greatly exaggerated. we'll find out. >> it might be. >> i appreciate it very much thank you. shannon as well. liz to you to. send it to kristina partsinevelos now for a look at the biggest names moving into the close. >> thank you, scott. zscaler shares are falling right now on a downgrade to equal weight from wells fargo analyst. they're worried about increased competition for the cyber security firm and number of executives that have left the company jumping ship and you

have competitor palo alto that is also lower in sympathy down about 4%, zscaler down 4.5 vote of confidence from victor capital management, the investment firm acquired over 3400 shares of hims & hers according to the firm's recent 13 f filing. victor capital not the only buying in, bell point, emc capital, horton capital, a few of the firms that added positions in the last quarter. recall just last week, hims & hers announced a weight loss shop and injectable cheaper than wegovy and ozempic and the stock has climbed and up over 11% right now. >> thank you. we're getting started. up next, nvidia shares are rallying yet again and this latest bounce thanks to elon musk's push to build a super computer using vinvidia chips stacy ras gone is here and going to be here at post nine to tell us what it means for you and the rest of the semi sector. live at the new york stock exchange at post nine

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endless possibilities for people to thrive. visit feedingamerica.org/actnow all right. welcome back nvidia driving the nasdaq to all-time highs earlier today that stock also at records as investors bet elon musk's ai start-up will deliver another windfall for that chipmaker. maybe the whole space overall. joining me at post nine, bernstein's analyst stacy rascon good to see you in person. >> thanks for having me. >> when you see nvidia do what it is doing, what is your reaction >> i think you have to be there, right. i'm not surprised it is doing what it is doing, right. we have the numbers a week or two ago whenever it was the demand for their products is off the charts you have a product cycle on it ways they took the air pocket transition risk out. what is not to love?

>> at some point when i talk to you, the day of earnings, prenumber, we were i think at 950. >> that's right. i think i told everybody to sort of relax. >> you did. >> the phrase. >> you said it was going to be mundane. >> yeah. >> i mean, it certainly wasn't shocking >> to be fair -- >> maybe it was. >> the numbers were -- they were a good beat probably in line with sort of the whisper numbers, but they said two things that were helpful one is they took the air pocket transition risk as you go from hopper to blackwell off the table, and then number two, i think the commentary on the pace and timing of the blackwell ramp the next generation product was supportive people thinking it was coming next year, and he was clear, said we'll see a lot of blackwell revenue this year the quote. >> did you expect that >> i expected it next year earlier than we thought. >> is that one of the reasons you raise your price target? >> our numbers went up materially it was both of those reasons, but yeah. >> what do you do when the stock

continues to out run you you know what i mean. >> it's not out running us yet. >> i mean it's on the verge of outrunning everybody and everybody's price target. >> yeah. >> how do you handle that? >> we've had this conversation don't get hung up on the price targets -- i know. >> the price targets matter. people look and are like okay, now what. >> people don't update their target prices every day. for now let it run the story is really good the numbers are going higher the stock remember it's not like it's expensive, like if the numbers come in anywhere close to where where i think they can come in the stock is inexpensive given the growth trajectory. >> what is the risk at this point? >> yeah. >> the stock at the highs of the day, up 7.2%. >> okay. >> we're having this another $76 deers today. >> yeah. i think in the near term there's not a lot of negative catalysts on the way again, we know the numbers are fine in the near term, the product cycles are come. i don't know if they'll talk about data center, it would be

weird for that, but they're going to be it. >> jensen will speak there. >> you know, it looks pretty good for now. >> you're telling me there's no risk i mean - >> look there's always - >> i know, there's always risk we walk outside the bus comes. is there legit risk? they pulled forward the blackwell production expectation. >> versus -- i don't know versus their expectation but versus ours the risk are a few, right. there's always that cyclical risk you know, that seems to be off the table in the near term we can talk about longer term. in the near term fine. longer term the worry would be a lot of investment happening and eventually there has to be a real return on those assets driving revenue or efficiencies or i deli for their customers and if it were to turn out over time, then the whole thing would come crumbling down for nvidia and others i don't think that is the case and it's not a risk now, but over time certainly you want to see business models start to get

built on this, sure. >> what about interest rates, do they matter? >> they're high. they haven't mattered at this point. >> if they keep going higher, doesn't matter >> i don't know. i'm not a macro economist. >> you don't look at that sort of thing and say it could be a risk in the near term. >> interest rates go high drive multiples lower, it has not happened in the semi space, right. certainly -- but again that's not nvidia specific right. those are broad risks. interest rates going higher and impacting things would impact lots of things >> why is amd up 3.5%. a halo on this >> probably. you mentioned the xai musk story. >> broadcom is down. not like everything is up. amd is up. >> i think the players that are viewed as maybe more like direct beneficiaries may be up. broadcom is a directive beneficiary of ai as well. >> a lot of people make that argument as a cheaper way of playing nvidia at this point it's not that much

cheaper. >> it's quite a bit cheaper and still inexpensive. broadcom is a different ai you asked about risks to nvidia one is competition hyper scalers are doing their own. broadcom is doing the work for the hyper scalers. there's only two companies that have material ai stories right now videnvidia and broadc and that's it. >> do we know whether xai will spend all this money with nvidia >> i don't know that we know anything for sure but seems -- does seem they just raised money, does seem they're going to be spending money likely with nvidia if they want to build a super computer over the timeframe they're talking about they don't have any choice. there's one option it's nvidia. >> that's why the stock continues to go up last question, texas instruments, so elliott takes a stake. >> yeah. >> and the stock doesn't do anything. >> yeah. >> are you surprised >> not really, no. look, ti, it's an interesting activist play. ti knows what they're doing. they understand the impact for

those -- your listeners that don't know, ti is spending a lot of capital expenditure to expand capacity it's unclear where they will get the revenue to fill it they understand what they are doing. it is a 15-year investment horizon they are on. i don't know that elliott taking a stake is going to make them take a pause in what they're doing. they understand the results, the impact it's having on the numbers, the margins i don't think they care. they're in this for the long term. >> they're going to spend what they're going to spend regardless of elliott telling them to cut back >> over the next several years i suspect they will. >> what gets you off your under perform? >> so i think revenues are too high going forward i think gross margins are too high and the capex is high if we have a massive amount of revenue rebound or they start to take materially amounts of share that they can fill the capacity they're talking about, again it's unclear how they will do that, but that would be a positive. >> we covered a lot. good to see you. >> happy to be here.

>> stacy rascon at post nine. investors awaiting critical inflation data this week for clues about what the fed's next move could be. former federal reserve vice chair richard clarida will join us after this break. "closing bell" is coming right back

. we are back. investors turning their attention to key inflation data as an indication of when or if

we're going to see rate cuts this year. minneapolis fed president neel kashkari sitting down with cnbc international saying he thinks the fed should take its time when it comes to cuts. let's listen. >> remain remarkably resilient gdp growth has been stronger than forecast. most people thought we would be in a recession toward the end of last year that didn't happen and very strong growth u.s. consumers have remained resilient. the housing market has remained resilient. i'm not seeing the need to hurry and do rate cuts i think we should take our time and get it right. >> joining me now to discuss is pimco's rich clarida, the former vice chair of the federal reserve. mr. clarida welcome back nice to see you again? >> you bet. >> let's cut through some of what mr. kashkari said we should take our time and do it right what does that mean? >> well, i'm glad to hear that from my good friend neel kashkari i think it means data dependence the data has been disappointing

year to date and so fed rhetoric has moved away from highlighting a cut to we'll let you know when we're going to do that, and i think there's a real case that we may not get any rate cuts this year, although i think on balance i probably lean in the direction of that. i think it's closely balanced call right now because of the inflation data. >> you told me last time you thought we would get one cut are you rethinking that? >> i think it's a closer call. i think when i did the show last time it's going to depend on the inflation data the calculation, scott, is basically for the rest of the year, inflation needs to come in at around 0.2 for the rest of the year to keep it under 3% that may happen, but we haven't seen it. it's a close call, but i lean in the direction that we probably do get one cut. >> you do think, though, that the outlook that we get at the next meeting could be rather interesting in terms of what it shows the so-called dot plot

which gives us at least an idea of what they're thinking in the room about the number of cuts we may get. >> exactly at the march meeting, which seems like a long time ago, the dot plot showed three cuts this year i don't think it's going to show three cuts this year i think it's probably a close call between one or two cuts i think my prediction is that the june dots will show one cut and that actually may be a close call as well. >> when people suggest that, you know, good news on the economy is so-called bad news for the stock market or it has the connotation of being bad news because it's going to, you know, make maybe the prospects of inflation staying too strong for too long rates elevated for too long, how do you and those in the room look at that? do you sit back and say, well, the economy is too resilient

>> no. >> the data is too good? can you give us clarity on that? >> i can again, it's a different committee than the one i served on i gave several speeches as vice chair saying the fed likes it when people get a job. the fed is not targeting any particular rate of unemployment. it really does come down to the inflation data last year the economy grew well above trend and inflation came down because of the improvements in the supply side so no, the fed is -- bad news -- good news for the economy can be good news for the fed so long as consistent with inflation returning to target. the problem this year is not the real economic data, it's been that the inflation data has been stubborn. >> if you listen, though, to, you know, members of the committee like mr. kashkari, leads you to believe that well, the economy is almost too strong or it's certainly stronger than we thought it was going to be, so, you know, that raises the issue of inflation remaining

stronger for longer than we expected it to be as well. however, if the, a, the inflation is not necessarily being caused from traditional forces like too much demand, and b, if you look at the stickiest part of inflation or at least one part of it, which has been rents, and that's a tremendously lagging indicator, the fed looking at the right thing and thinking about the right moves >> i think they are, but your question suggests that it is important to look into the -- if we calculated inflation, in the eurozone, it would be running at 2% right now over there they don't even try to do this under equivalent rent calculation. so, yeah, i think the fed is focused on the inflation data, it's focused on the labor market, i think the progress has been remarkable. two years ago inflation was 7% it's now in the 2s it's moving in the drright direction and appropriate to be

in the data dependent. i don't have complaint with where they are right now. >> you raise an interesting issue and make the comparison between the eurozone some would look at the situation and say they should cut right now here, that they're going to risk this whole thing by waiting too long, then they're going to be reactive after it's too late >> and i think that's a legitimate risk. in monetary policy there's always an element of risk management and what i would say is, i think here, there is the path dependence and history dependence is important. the fact is that inflation in the u.s., my last year as vice chair and for two years since, well above the 2% goal, and i think given that history it's important for the fed to do what it needs to do to get inflation down to target even if that means running an elevated risk of perhaps they keep rates higher for too long. right now that is a call that they should be making and i think that's the one that they're going to be focused on. >> how closely to the election

do you think chair powell is willing to walk up to? >> well, you know, i think the powell fed is going to do what it thinks it needs to do this year i think their decision would have been easier had the data cooperated and had they been able to get a rate cut in at the june or july meeting it looks like now if they do cut it's going to be in the fall and you know the calendar as well as i do, i think they probably want to avoid moving at the november meeting the day after the election, so right now, it's looking like perhaps september or december if they want to get that rate cut n. >> see how it all transpires rich, appreciate your time very much thank you, once again. >> you bet. >> richard clarida live on "closing bell. up next, we're tracking the biggest move nears the close kristina is back with that. >> we have a biopharma stock downgraded amid weaker growth expectations that name and much more after this short break .

15 from the bell back to kristina partsinevelos for the stock she is watching. >> that name was sarepta after a downgrade to sector perform from outperform at rbc capital. the stock is up 17.5% year to date, but down 8% right now because rbc thinks that setup looks less compelling amid growing expectations for the fda's label expansion of a gene therapy. in other words, they're saying we need to temper expectations for this expansion of this gene. norwegian cruise line shares jumping on an upgrade to buy from neutral the stock up 3%. the bank raised the price target to $24 and said cost cuts should boost the operator after two

years of under performance. >> thank you as always kristina partsinevelos still ahead, draftkings and fanduel parent flutter are falling on a new sports betting tax hike in one state. the details and what could happen if more states follow suit there the bell coming right back ♪ ♪ welcome to the roots of our legacy. where excellence, comfort, and electricity... are forever in bloom. welcome to beyond. the mercedes-maybach eqs suv.

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sports betting stocks. a little bit to do with taxes which we'll talk about in a minute mike santoli, it's nvidia's world and we're just living in it. >> yeah. without nvidia's move today, the s&p would be down more than half a percent and more in tune with the other indexes. it's not fully masking the fact that it is a little bit messy under the surface. you got two stocks down for every one that's up and the dow, the dow is a good 3.5% below its high when it hit 40,000. equal weighted s&p the same. what that means to me is, you've had this kind of stealth digestion kind of churn going on in this market after we had that four-week rebound up 7%, and it's kind of held the s&p 500 and the nasdaq harmless along the way. that's a good way to play defense, i guess, if it can last the other piece i would take hard in today is that the traditional defensive groups are actually getting blasted so consumer staples and pharma are the weaker performers today. >> health care the worst sector to your point. >> not as if the market in

general is saying okay, hunker down and get ready for something tough. now we, obviously, are responding to this move higher in yields, there's sensitivity in that, that's when market breadth suffers when yields go up aside from that, it does seem as if nvidia benefits from it being feasibly the highest conviction source of fresh funds for anybody out there among mega caps. >> two year goes to five because we're at 497 is that a line in the sand we need to really keep a close eye on for this market. >> we traded above it without terrible impact. just think ate it in two years, we're talking about maybe one rate cut between here and then it's not literally what's means but the fed funds rate above 5.25 right now. i do think if the 10-year starts to migrate back up to 5 that's more of the gut check for the broader tape we can make progress with yields sticky because the first time we hit 4.5 on the way up on the

10-year, was september 26th of last year. the s&p was under 4300 we're up 1,000 points in the s&p. yields are the same. that shows you when earnings are growing, and people at least have a licne of sight to a rate cut, knowingly you can handle that. >> because the economy is stronger today than many thought would be and earnings are better -- >> rising. >> and not willing to give up the ship entirely. >> he correctly reads weight of the fed's intentions still lies in that we're looking for an opportunity to ease. their bias institutionally is in that direction, their framework points that way. he did imply it's a high hurdle for inflation coming in softer on average to get there. >> contessa, tell us about draftkings. >> well, it's -- i mean it's down today if you take a look at the shares down almost 11%, fanduel, the

nation's market leader saw its parent company losing some share price as well down 8% on the day because illinois, the fourth largest state for sports betting proposed legislation that would hike the tax rate from 15% for sports operators to as high as 40%. it's a progressive tax, so if it makes it into the final budget fanduel and draftkings would take the biggest hit analysts argue these two operators also have efficiencies of scale that could make them more immune. it would benefit them if other states follow suit in hiking taxes. the industry points out, though, who really benefits when you hike those taxes is the illegal offshore sports books which already capture the lion's share of sports betting dollars. those sports books don't pay taxes at all, and so what might happen is, say fanduel and draftkings pay more in taxes they shift their marketing and their promotional spend and

perhaps there are fewer pots of dollars to tax draftkings jason robins said in his earnings call the burden goes to the consumers as they would look to recoup the costs it's an interesting take on this on the other hand, the industry and i've heard this at many conferences, is hopeful that as states look for new tax revenue, they'll consider legalized online casino games or igaming which is far more profitable than sports betting and one that fanduel and draftkings have now overtaken the number one and number two lead spots in terms of market share. >> contessa, appreciate that contessa brewer. mike, i'm also thinking about it's not like earnings season is fully over crm, salesforce, going to be important, especially at a time where, you know, software stocks haven't done that well. >> all chips and the mega caps. >> it's definitely been a little bit sidelined by the fact that

all anybody really cares about is,the hardware investment cycle at this point. i mean, salesforce has had a decent story to tell about implementing ai. it almost fits perfectly in with what they've always tried to do. now they call most of what they've been doing all along ai and some version that being said the bookings rate and everything that reflects what companies are spending on incrementally is going to come to bear on crm it matters, but it doesn't feel like it's where everyone is right now. what i did find interesting today, industrials giving back 1% as well it's a little bit of a willowing of the leadership of the market. software not playing along microsoft actually is just kind of been capped at the old highs as well for a little while here, from back in march you do want to make sure it doesn't become, you know, so narrowed down into one theme that the market becomes unstable. >> costco, you look at it, it's

reporting. you look at that as a good read as well on where the consumer is they have the annuity business, the membership fees, but otherwise, it's pretty decent still. >> as a macro tell what's great when they seem to be gaining market share when their comps are better than the industry as they typically tended to be, they are a force of disinflation in the world because what they do as a matter, of course, forever they cap their profit margins they will not accept the higher than, you know, target profit margin they make the money on the membership fees which means they're kind of giving back pricing to consumers over time i think it's almost a net positive when costco is doing well when all we care about from a macro perspective is inflation coming to heel. >> speaking of, pce, later this week. >> yeah. >> i feel like over the next couple days we could be one of those the wait and see. >> exactly. >> we had our activity today. >> i feel like it is a wait and see and the question is what the treasury yields get to right

ahead of that number, which direction they're going to be leaning. >> see if they front run it higher or sniff something out. >> set up a relief trade. >> good stuff as always. that's mike santoli. to o.t. with morgan and jon. [ applause ] the nasdaq closing at a record lie to start this shortened week driven by another surge for nvidia in what was otherwise a mixed day of trading. that is the scorecard on wall street the action just getting started. welcome i'm morgan brennan with jon fortt. >> coming up on today's show, reads on software spending and the consumer when box and cava report results cava more than doubled so far this year up nearly 4 x since its ipo last summer. >> and fundstrat's tom lee will join us with his