what they're saying is obviously, they see this as an effort by the biden administration and by extension, the biden campaign, to generate goodwill and increase some voters population. >> all right. eamon javers, thank you very much. and thank you, everybody, for watching "power lunch." great to be you, mel. >> i'll see you tonight at 5:00 on "fast." "closing bell" starts right now. >> all right, guys, thanks so much. welcome to "closing bell." i'm scott wapner live from post nine at the new york stock exchange. this make or break hours begins with the rally and why wall street getting more bullish on stocks. the big question, should you do the same? we will ask that question to super investor keith mymeister. in the meantime, your scorecard with 60 minutes to go in regulation, looks like this. a disappointing retail number today sending yields lower and capping some of the activities in the major averages, as you see. there's the move in yields, but we're not doing too much. sectors pretty split as well. tech is leading once again. that's thanks to gains in n

nvidia, which passes microsoft to become the most valuable company in the market bhap a stunning run. you can see the chart, lower left, upper right. pretty much tells the story. goldman sachs, too, having a pretty good day. that's from the banking sector. it does take us to our talk of the tape. the road ahead for stocks as price targets keep increasing and the bulls seem to be getting more kbemboldened. let's welcome in keith mister. >> great to be back with you today. >> we have lots tube, and let's begin with your view on the markets. we've been around record highs. where do we go from here, do you think? >> so the s&p 500 has been a phenomenal index. the returns have been driven by a handful of companies that have been able to leverage growth at scale like we've never seen before. and for a minute, let's celebrate america. these are all american companies, leveraging the american capital markets and it's a wonderful thing. but you know, the performance --

if we -- if i came on your show in the beginning of 2023, and if you told me that that stheexz would have performed the way they had, i would have been skeptical, like most have been. so can it continue? i don't know. it's a very powerful trend. i think lthere's a difference between what's happening with a handful of companies that make up a big portion of the s&p 500, and what's happening with the other 490-odd businesses. and with the powerful ai trend, it will work until it doesn't work. there's been a lot of positive circularity when the hyperscalers say they're investing more money in ai and their stocks work, it's more money that can go to nvidia and drive this amazing trend. it will last longer than we think it will. and i'm not going to make a call on that. where we're going to spend our time focussed is on the other 490 stocks and trying to find high-quality businesses going through change, trading at reasonable values. >> you still, are, though investing in those big names?

you hold many of them, correct? you posted your stake in alphabet recently? >> so our view is we should run a balanced portfolio. there's no way we're going to have 20 ideas that are better than all of the large-cap names. and flsthere's an opportunity t own the best businesses at a reasonable value, we should do that. a year ago, i would have had 25% of my portfolio in names like microsoft, google, amazon uber, salesforce. today i probably have 12.5% of my portfolio in those names. we're always as value-driven investors going to sell a little bit early. but i think it's a very hard thing for an investor to have a whole portfolio with no bets on these amazing large companies that are allocating capital in such attractive ways, spending on r&d, and spending technology. >> are you surprised at all that the s&p is at these lofty levels, record highs, given what the backdrop has been, or does it make sense to you? >> if we started the year, people thought the fed was going to cut interest rates six or

seven times. now consensus thinks they're going to do it one or two times. so if you had said to people that that was going to be what was going to happen, everyone would have thought that equities would have faced a real headwind. the offset's been that fiscal policy has been so substantial that despite the fed's desires to try and be restrictive with monetary policy, we have a really good, healthy economy. we're at full employment, the consumer is still relatively strong. so you combine that with a huge product cycle, there's lots of elements of today that feel a little bit like the boom of the late '90s, early tw2000s. and if you told me that these five or ten companies would act the way it would, it would be completely reasonable that the index is where it is. so said differently, any look at the average company in the s&p 500, my sense is they trade at an appropriate valuation. it's not a screaming buy or a screaming sell. >> does the overall valuation,

if you take it as a whole, does it make sense to you, relative to where rates are, where the economy is? i've had some question where we are now, and they make the comparison to '99. say, this is the most expensive market since then. we all know how that ended. is that a fair comparison or no? >> i don't think it's fair comparison. unprofitable tech is not soaring. so if you look and say, if you back out these ai winners and look at the average business, they trade at relatively reasonable valuations. there's winners and losers. my guess is it's a stock picker's market, that's trying to find the right story, but we look at our portfolio, and there's lots of good businesses that trade at reasonable valuations. inflation expectations have been anchored. i think the fed's done a really good job. the ten-year sits at 4.25. so the concept to have buying the average good business at 14

or 15 times earnings, who can leverage, you know, r&d, ai, cheap access to capital, despite the fed raising rates, the private credit markets have been alive and robust, the fed's balance sheet has expanded from $800 billion to almost $9 trillion. there's a massive amount of liquidity in the system. we're running a 6% deficit with full employment. during that environment, it doesn't surprise me that it's a decent time to run or buy an average equity. >> when someone says we need rate cuts, does the market need rate cuts? >> i think rate cuts will be a negative for the market? >> you do? >> sure. why would we be cutting rates? we would be cutting rates because things are rolling over. if we can stay with short-term rates at 5.25, 5.5, longer term rates at 4.25 and full employment, i think that's a healthy backdrop. and by the way, in that

environment, you still have a lot of monetary policy -- sorry, fiscal policy. so there still is the chips act, the ira, all of these projects are still coming. so there's been these cross-currents. the fed has tried to be restrictive. yet despite the fed being restrictive, you have, you know, so many positive tail winds that you can have a good economy, full employment. so if you're jay powell, i think you're sitting there saying, you've done the right things, people criticized you at the end of the year for not lowering rates, you were patient. it proved right. my guess is, if he chooses to lower rates between now and the election, he's doing it because employment is rolling over, if the economy is a little weaker, and i don't know how good that is for equities. >> not pause inflation has come down enough, they're confident, they always use this word "confidence," obviously, that it's moving back towards trend and they talk about the two-sided risks as well, as doing too early, but staying too long. >> so i don't think, with an s&p

making a new high every single day, with risk assets, and financial -- soaring, financial conditions easing, and employment near full employment, he needs to rush to lower interest rates. so if you're him, the worse thing that happens for your legacy is you lowered rates too early. so be patient, and you know, what is the cost of waiting? sure, there's a handful of levered asset classes that may have challenges, but every single day, nvidia makes a new high. every single day, bitcoin is trading at 65,000. he doesn't need to lower interest rates right now. i think he's in a good place, and he's going to be as patient as he can be. >> you think there's too much speculation. if you mention nvidia and bitcoin at 65. rae really representative of feelings toward risk assets. probably those two asset classes, or the asset of nvidia and the asset class of bitcoin, what they've been doing. does that represent something dangerous to you? >> i think if you were the fed chair and you were thinking

about the pluses and minuses for cutting interest rates, one of the things you would worry about is inducing an asset bubble and the consequences of that. and if you think about a world where we've celebrated the haves from the have-nots, if we're inflight assets, it benefits when people own assets, and you're trying to fight inflation and protect those at the lowest end of the wage spectrum, you would be worried about creating asset bubls. >> you own nvidia? >> i do not. >> did you? >> it's not a name i've invested in. >> when you look at a stock like that, do what it's been doing, do you sit back and say, this is incredible? >> so, let me -- my take on nvidia is, you know, people come on and talk about the p multiple, and i think that's the wrong thing to focus on. the question is, are they over-earning or not. if they're not over-earning, they deserve a really high multiple and it's an amazing

business. what i don't have an expertise in understanding is how strong is their ote. they have a product everyone needs to buy. they can charge a lot for that, can they do that for five years, ten years? will they empower another competitor. will they create their own alternative. it's not in anyone's interest to have one. i'm not an expert in understanding how long that runway is, so we're watching, we're not long, we're not short. but i think the ultimate question is, is how durable are the earnings for nvidia at $3 trillion and there's other people who can answer that question better than me. >> but you raise an interesting point, though. you analyze the businesses that you look to invest in anyway. first mover advantage versus true moat. you own alphabet, right? people say, okay, alphabet, meta, they each have their sort of moats around their respective businesses. do you find that an interesting way to analyze these kinds of companies? first mover advantage, nvidia?

of course, they're running the race faster than everybody else. right now, they have the product that everybody needs and wants. but to your point, there are others who are producing these chips, too, and who will -- it's not going to be a one-horse race. >> sure. so when you look at a stock, there's -- you know, what we do as investors is, we're not great momentum investors. we're not buying stocks, because we think they're going to beat next quarter and we know they're going to go up. we're buying stocks, we need to you not markets and markets matter. we're buying stocks, we like the market dynamics, but we think the net present values of the future cloash flows will be hir. we have to buy stocks. it's okay to pass on a lot. my answer on nvidia, is i know it's not going to be good. my answer is i'm not the right person to tell you, but clearly it's an amazing business that sits at a truly, truly, truly unique junction. and you know, today is the day it became the largest market cap

company in the world, and let's just pause again. we have a presidential election coming up in 140 days. and everyone is going to be negative about so much stuff. and pause and say, nvidia is an american company. apple is an american company. google's an american company. microsoft's an american company. meta is an american company. these multi-trillion-dollar companies that are spending tens of billions of dollars on r&d and capex are doing this in america, because we have the world's greatest capital markets. and we're the envy of the world. imagine if all of these companies were listed in europe. think about how different that world would be, or in asia. so there are a lot of great things to celebrate in this country. >> the regulatory aspects alone would perhaps make you shudder. obviously, there are, you know, headwinds here, at least, you know, verbally, and we'll see what happens from a regulatory standpoint. but your point is well taken. i notice, and it's always hard to judge holdings by virtue of 13fs, because they're outdated.

small caps. do you like small caps here, when you talk about looking for value in the market. we have debates on the network all the time. are skmmall caps a good investment, are mid-caps a good investment without the rate cuts that are going to come anyway? >> we've been a big believer in large cap over small cap. the russell 2000 has been a hedge for us for the last several years. i believe in most industries, we live in a winner-take-most world. scale really matters. i've been on the board of 15 s&p 500-type companies. when a bad thing happens to a business and you need to deal with it, having a scale is a huge competitive advantage. so there's a reason why companies that are small, in many instances are small, and big companies are big. we would prefer to invest in companies with strong macro tail winds, and let the macro inform the micro, so i'm generally a believer in medium to large-cap businesses over small cap businesses anywhere in the

cycle. >> themes that you like, energy transition. when you look at utilities, for example, ai, we're talking about, there's not enough power to produce enough energy to make a lot of chips, to make this whole thing work, are you playing that theme, if not, is there another part of energy transformation that you're hot on? >> so we've owned utilities, with a view that we're buying good businesses at decent valuations, so we've been buying utilities at 1 to 1.1 rate base, 12 times earnings, good, regulated businesses, historically from 2013 to 2023, electricity load in this country was essentially flat. now, whether it's because of the i.r.a. or whether it's because of ai or evs, it's projected to grow at 3%. we've created a regulatory compact where we've incentivized great capital markets in this

country, incentivized utilities with the lowest cost to capital and guaranteed regulatory returns of 9 to 10% to invest that capital. we think utilities are a good investment for in general in the cycle. how do we make them a great investment? utility investors like simple. ten years into an economic cycle, 15 years into an economic cycle, many utilities cyies con rotized. and focus on what you do and get a lower cost of capital and a higher value. we invest in exelon, the big utility in the midwest. they owned a hidden asset called constellation energy, the largest fleet of nuclear power plants. we had no idea the, a i boom was coming. we felt like nuclear was going to go from being part of the problem to part of the solution. we didn't know the ira was coming. it all happened when we invest in exelon, it was a $40 billion company. today the business that was spun off is a $70 billion zpasset.

and we did it with a company called mj resources, the regulated utility in north dakota and montana and eight other state in the northwest. we invested in an ldc in the southwest called southwest gas. both of these companies had core utilities and other businesses. both of these companies realized that they wanted to simplify and our core competency is not running a utility, but we could act like an owner. the great thing inside both of those situations is they're spinning off businesses that are services businesses, that do the capex for utilities. so if you think about where a great place to be in the cycle right now is, if utility capex is going to grow because of the ai boom, because of evs, because of -- so we're going to grow rate base utilities at 6 to 8%, they're going to spend that capital at our companies that are being spun out. look at quanta services.

it's a $40 billion company that was a $6 billion company five years ago. inside of mdu, there's a business, everest. inside of southwest, they ipoed a business century. so we think just like exelon spinning off constellation, there's great businesses that can be separate. and what we're right to do is find hidden assets and value in an otherwise reasonably placed market, but look at utilities, because they have a secular tailwind behind them. >> interesting. alumna is a relative new investment for you. we haven't talked about nit in while, broadly speaking, ever since icahn was in it and had the whole grail transaction that is obviously not happening. why do you like that name? >> it's a great business, trading at a reasonable business. that volatility was driven by them in the middle of covid, buying a diagnostics company called grail. and they have alumna's core business is enabling technology for genomics.

they do the sequencing of dna. oh, by the way, in an ai-driven world, what are we going to need more data from health care, that's going to come from sequencing the dna. the core business is a gentlemen. but they bought a business that was losing $600 million a year. they went through a huge journey with that, that i don't need to go back on, but came to the decision that they were going to separate that business. on june 24th, i think monday, that business will be a freely traded separate public company. and when we look at alumna again, it won't have those $600 million of losses, but it will have the core business. along the way, they have a new chairman, a new ceo, a new cfo, we believe this team will help the company transition. just like when i came on the show in early 2023, i was talking about salesforce. in both cases, great self-help efficiency stories. we think there's an easy play book for alumna to copy. and when it does and margins go from 20% up twards 30% over time, and it's an enabling

technology, it won't be worth the $15 billion it's worth today, nor the $70 billion it was worth in 2019, but a lot closer to the 70 than the 15 billion. we think it's a great opportunity to buy a high-quality business going through change that's getting simpler. >> lastly, before we wrap it up, and time flies. i don't know where it goes, activism. do you still consider yourself to be an activist investor? how have you seen the evolution of that craft. >> we consider ourselves high-quality businesses going through change. we want to sit around the table and say, how can we help this company. alumna is a great example. we want to be a business owner and help them, but we're betting on the ceo, the chairman. we would not have bought the stock if we didn't believe in them. somehow along the way, activism got defined of good guys versus bad guys. i would say, it's not what activism is. it's an ecosystem that tried to

define it that way. it creates pr jobs and defense work and banker work. the lens through which i look at it today is acting like a as business owner. and in a world in which so much money is driven by that, there are so few owners that can take duration. when we find opportunities that we can buy stock and act like owners, it adds huge value and it happens really well in a world of high-quality businesses going through change. we have no idea how to runthe company. if anyone let us run a company, it would with a huge mistake. but we're really good, two decades of doing this plus in the applicators, of helping public companies be better public companies, how to leverage one step back to take two steps forward and be a partner with public companies. we can do it by joining the board, by recommending board members, or by talking to management on a regular basis behind the scenes. we have no one recipe fits all. each situation requires something different. and our strategy is to make good

risk-adjusted return for our investors and a tool we use is acting like a business owner. >> it's good to catch up with you. it's been a year, believe it or not, since we had a conversation. to kristina partsinevelos now for a look at the biggest names moving into the close. kristina? >> thank you, scott. occidental petroleum moving higher after files revealed berkshire hathaway has skoopd up more shares over each of the last nine trading sessions. but he's not interested in taking full control of the oil and gas producer. shares of chewy are jumping, though there is no particular news catalyst for this bounce, but keep in mind, management changes are in store at the company ahead of its annual stockholder's meeting in july. could be some meme trading, too. chewy has soared nearly 60% in the past month or so. shares up 13, almost 14%. >> kristina, thank you.

back to you in just a little bit. we're just getting started on "closing bell." the s&p 500 and nasdaq trying for yet another record close. pi pimco's erin browne and kevin simpson are breaking out their own playbooks. how they're navigating the rally. it's just after the break. we're live at the new york stock exchange. you're watching "closing bell" on cnbc. since my citi custom cash® card automatically adjusts to earn me more cash back in my top eligible category... suddenly life's feeling a little more automatic. like doors opening wherever i go... [sound of airplane overhead] even the ground is moving for me! y'all seeing this? wild! and i don't even have to activate anything. oooooohhh... automatic sashimi! earn cash back that automatically adjusts to how you spend with the citi custom cash® card. [mind blown explosion noise]

breaking news out of the boeing hearing on capitol hill. now back to phil with that. >> this is a rough hearing for steve calhoun. most of the questions that centered around the fact that he keeps saying, dave calhoun keeps saying, we are making changes. we are going to hold ourselves accountable. and senators are continually coming back and saying, you keep talking about this, but what are you really doing? and then there was this exchange

between missouri senator josh hawley and dave calhoun, take a listen. >> but meanwhile, you're getting paid a heck of a lot of money. it's unbelievable. if anybody is coming out of this deal good, it's you. why haven't you resigned? >> senator, i'm sticking this through. i'm proud of having taken the job. i'm proud of our -- >> proud of this record? >> i'm proud of our safety record? >> you're proud of this safety record? >> i am proud of every action we have taken. >> every action you've taken. >> yes, sir. >> wow. wow. there's some news for you. >> that's just a taste of what dave calhoun has faced this afternoon over last hour and a half. we think this goes for about another 45 minutes. back to you. >> appreciate that update. phil lebeau down in d.c. on the hill for us. s&p and nasdaq both trying for record-breaking highs. joining me now is capital wealth planning's kevin simple skpon p son and pimco's erin brown.

keith meister sounded pretty constructive on the markets here. what's your view? >> i'm constructive, as well. we're in an environment right now, where growth is still good. we have inflation coming down. that should be supportive of corporate profit margins. and when we look into the second half of this year, we're expecting to see a little bit of an earnings pickup. to date, this has very much been led by the ai sector and by tech specifically, but i do expect as we move into the second half of this year, we would see a gradual broadening out. that said, i still want to stay long ai and the tech sector. and incrementally start adding additional sectors as well, maybe some more cyclical exposure, given the underperformance of late. >> i thought keith's point of view on rate cuts was interesting. the idea, if they do cut, it's going to be bad. it's not going to be for the right reasons, because inflation is coming down. it's going to be for the wrong whe

reason. right now, they dmeentd to do anyt anything. the economy is in good standing. >> as the investment community, we would like to see them. i agree with keith's point. and the question we should be asking is isn't when we cut rates, it's why they cut rates. that's problematic. they can throw as many rate cuts at us as they swant. it's not going to save anything. i think they'll cut rates one time at the end of this year, but longer term, november, december, february, it doesn't really matter. it's affecting short-term trading. >> it matters, though win suspect, in the kinds of stocks that you want to position yourself within, right? he talks about the megacap names, for obvious reasons, because they've done so much better than everybody else, even at a time when you have an investor like that, that is looking far underneath the surface, looking for value, but it's no accident why the biggest stocks have done the best. is that just the way it's going

to be, until we get even more clarity on the idea and timing of the first cut? >> in the short-term, absolutely. and to erin's point, we're looking for breadth in this market. we've been looking for it for two years, especially when you run a diversified portfolio like we do, the rest of the market hasn't been participating in any way, shape, or form. and that's two years running now. if we look at rate cuts in 2024, markets will be positive. but if you had the ability to stay in these big names, i would do it. >> erin, you suggest it's time to begin moving into quality cyclicals. what does that mean? >> i think we're starting to see a little bit of nascent signs of a recovery in the manufacturing sector. you saw that earlier today. and you've seen that really on a global basis as well, where you're starting to see manufacturing activity, pmis globally start to pick up. this, i think, is a healthy sign of a cyclical recovery.

we're in early stages, so i think you want to be incremental in this approach, but start stepping into global cyclicals. start stepping into some industrial sectors. the metals and mining sector has got hurt pretty badly over the last month. i think that there's some value there. similarly in global industrials, as well. i think that these sectors are going to start to benefit, as we see the rest of the world start to close or narrow the gap with respect to the u.s. the u.s. is still going to be the top of the leaderboard, where you are going to gradually see a narrowing, and that's time to start to step into those industrial sectors or those more metals and mining oriented sectors that have underperformed. >> do you not think that we're late cycle, erin? >> it's really interesting, because when you look at pimco's models with respect to where we are in the cycle, we've been in a late cycle environment over the last 18 months. but what's interesting is that you're starting to see signs and indicators pick up that we're

moving back into a mid-cycle environment, so instead of moving into a recession, which is what you traditionally see in an economic cycle, we're now moving back closer to a mid-cycle environment. so right now, i think, you know, we're certainly running with high inflation. that's a sign of a late-cycle environment. you certainly are in an environment where you're seeing this blow off the top in certain sectors. again, a late-cycle environment. but economic indicators are actually moving backwards, not forwards. >> that's why i ask you, i asked you that question specifically because of the idea that you want to move into some cyclical names like industrials and materials at a time when some suggest that we are late cycle. >> right now, our recession indicators are quite low. they're sort of at average levels versus what you would expect over a normal business cycle. so it's not like we're seeing recession indicators really now

percolate and move higher. if anything, they're actually moving lower over the last 6 to 12 months. all of that is suggestive of an environment that is maybe less late cycle than many in the market anticipated. that does support broadening out into more cyclical exposure. >> i always say, kevin, you're one of the most active traders who comes on. you sold covered calls on jbm, on tjx, and freeport. >> i think we're in a period post-earnings where we'll be in a lull. it will be hard to see the markets go up another 20% from here in the short-term, unless it's nvidia. then we look at the market and say, there's probably not going to be a recession, swoe won't see a 20% correction. if you're expecting market s to trade within 10 to 20% up and down, it's a great way to get through the summer. i would like volatility a little bit higher -- >> you think you'll get that? >> i think when we zboo the presidential cycle, we see a lot

of volatility. >> you have to wait until you get closer to the election to get that volatility? >> we'll have a debate this month. for those of us old enough to remember 2020 and 2016, there were plenty of volatility in those two elections. i expect something similar this year. >> we'll talk to you soon. kevin simpson. up next, treasury partners rich saperstein is with us. he'll tell us the sectors he is banking on, the names he is adding to, and how he is playing the ai arms race, just after the break. "closing bell" is coming right back. that's right james, it isn't. car, where are we going? we're here. (♪♪) surprise!!! the future isn't scary. not investing in it is. car, were you in on this? nothing gets by you james. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses

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we're back. the s&p 500 hitting a new intraday high fueled by shares in nvidia shares. surpassing microsoft's market cap to become the most valuable u.s. public company. joining us now the rich saperstein, microsoft and apple are two of his largest tech holdings. he's ranked number four on behrens list of the top 100 financial advisers of 2024. made the top four, congrats. >> thank you, scott. >> appreciate you being here. >> it's my pleasure. for somebody who's been reasonably cautious on the market for many of the conversations that we've had, had record highs yet again now. where are you now? >> we're fully invested, as we have been for quite a while, with an overweight in large cap tech in oil. i think the economy is doing well, apart from retail sales, you know, weaker earnings in

mcdonald's or starbucks or target. but generally speaking, we have low unemployment, record-high household net worth, record high cash balances, and a fed that's really poised to be accommodative. >> so does that mean you're more positive on the -- i get that you're fully invested, but you sound more positive on the market. >> i'm always cautious. i'm paid to be cautious. >> of course, you are. that's why you're must remember four. you're keeping your clients' money. >> i want to keep wealthy people to stay wealthy, that's the main thing. >> see, that's -- i'm glad you make that point. i razz you a lot about sort of your view on the market and how you're sort of activating your perspective. your job, by and large, as the kind of wealth manager you are, is to preserve the capital of the wealthy clients you have, not go so far out on the risk curve, because you're trying to generate these huge returns. is that fair? >> very accurate. >> how does that then dictate the kind of things you're willing to invest in?

megacap tech, for example, screams to me, perfect example. >> it's about taking a longer term perspective. so if you look at the cues versus spy over the last three, five, and ten years, over ten years, the qs have doubled the return of the spy. we're overweight, microsoft, google, apple, and we've had these names for years. if you think about what's going on now with capex and reinvestment, amazon, google, and microsoft, they're investing $160 billion in capex this year, which is really astonishing, the amount of money. google is increasing their capex by 50% from 32 to $48 billion. so the question really becomes, you know, what's going to be the outcome with all of that reinvestment? our view that it will be productive, it will lead to more cash flow, and these stocks, even though they're expensive now, you've really got to own them for long-term. >> they've driven the market

multiple higher, in some cases, to some people, to uncomfortable levels. do you think the market's too expensive at 21 times or no? >> yes, it's zpdefinitely expensive. >> is it too expensive? >> it's not cheap, but i think investors really should try to have a strategy of, i'm going to own large cap tech, i'm going to own companies that have a change agent, i'm going to own cash flow companies, i'm going to own some defensive companies. so there's a wide range of names that could be held in this market, and even though the overall market's expensive, you still have representation in large cap tech. >> i wonder, you know, we had rick reader from black rock on the show yesterday, who i guess you could say defended the multiple of the market, and he's liked stocks for quite some time. let's listen to what he said yesterday and i'll get your reaction on the other side. ric reader. >> i still like the equity market. it's a heck of a move today and it's been a pretty profound

move. i still think, when you boil it down. and all of this discussion about the multiple, you're still seeing an historic dynamic around the growth of roe, the return on equity companies are creating and the buyback relative to the calendar. when you marry the fundamentals and the technicals, they're pretty powerful. >> yeah, it ties into a lot of the names we hold. so if you look at buybacks, one of our names is fidelfidelity, . talking about a company buying back 10% of their stock. all of our companies have buybacks in place. in terms of earnings growth, all of our companies are showing year over year earnings growth. so the market's expensive. so you can say, look, large cap tech is 37% of the market, yet generating only 31% of the earnings. so there is an overvaluation there, a large presence. but i think you've got to own it. we're fully invested, and we're concerned about how expensive

the market is, but where else are you going to be right now? >> you -- did i see a utility on your list of recent buys? >> two of them. >> you heard the conversation i had a short time ago with keith meister, who's playing energy transition as a big percentage of his portfolio. you're a big believer in that area of the market, too? >> we own two names and vst, which we started buying in january of '21, and it all of a sudden, this utility became an rks i darling. even though we bought a utility with a 30% operating cash flow. today it's got a 14% operating cash flow. they're buying back 5% of the stock each year. and nextera also is a beneficiary of the ai, you know, transition. >> when you were talking about buybacks before you said fidel ty, i thought you remember going to say apple because of the size of the buyback, obviously, that they had. you own the shares. >> i own it. >> what do you make of this run

of the -- i don't know, it's reemerged, right? now it's trading at or near all-time highs now. >> there's the obvious reason oempb everyone owns apple. you have the transition to the iphone 6, as long as siri is going to get smarter. we have the services, the repeat revenue. there's one primary reason why we have owned apple for over a decade. there's an install base of $1 billion wealthy people around the world. that's $1 billion people that are going to upgrade, that are going to keep adding to that ecosystem that they have. so, you think it's a very key name to own. and if you marry it off with, let's say, a google, which is doing search, microsoft, which is software, you have three names that should be the core of every portfolio. granted, multiples are evaluated right now, but if i was an

investor and didn't own them, i would have a position in them right now. >> so you believe in the upgrade cycle that is going to take effect in part because of what was announced at wwdc? >> yeah, i think it could occur. >> we'll see. all right, mr. number four, richard saperstein, it's good seeing you. >> thank you, scott. >> take care, we'll see you soon. up next, we're tracking the biggest movers as we head into the close. kristina partsinevelos is standing by with that. >> a popular tech etf hitting an all-time high once again. can you guess the ticker? and a gat ea abrchnd hurting shares of one chipmaker. i'll explain after this short break. t—mobile's 5g network connects a hundred thousand delta employees so they can make every customer feel like they've arrived before they've left the ground. this is how business goes further with t—mobile for business.

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we're less than 15 from the bell. back to kristina for the stocks that she is watching. what do you see?

>> i have to talk about the smh. i don't know if our audience guessed it, that is the ef barometer for the chips base hitting an all-time high today, but if you consider its relative strength index, it does remain in overbought territory. nvidia is playing a big role, since it became the most valuable company in the world in terms of market cap, but micron and super micro also driving the action, specifically with micron, earnings are out next week. higher memory prices are expected to climb and help micron. gross margins, amd, an outlier, lower on a report that hackers stole employee and product information and are selling it for crypto online. an amd spokesperson tells me that they are aware of a group claiming to have stolen data and that the company is working with officials to investigate this claim. you can see shares down 2.5%, scott. >> appreciate that, kristina partsinevelos. still ahead, the s&p and nasdaq pushing for yet another record close. we break down those moves right up to the shares. and lennar shares are slipping.

"closing bell" is coming right back.

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we're now in the cloegs bell market zone. mike santoli here to break down the crucial moments of this trading day. diana olick with a look at kb home ahead of earnings in overtime. michael, i thought it was interesting, our conversation with keith meister at the top of the hour. be careful what you wish for, because maybe it's not such a good thing. i want you to listen to meister and we can chat on the other side. >> i think rate cuts will actually be a negative for the market. like, why would we be cutting rates? we would be cutting rates because things are rolling over. so if we can stay with short-term rates at 5.25, 5.5, longer term rates at 4.25 and full employment, i think that's a healthy backdrop.

>> what do you make of that? >> i agree that status quo has been fine and probably would be fine if conditions warranted to keep rates wherever we are. we know the ten-year at this level hasn't really completely undercut the economy. i think you have to take the fed at its word in terms of what it would be reacting to if it cut rates. the bull case is not quick and many rate cuts. it is optional, orderly, slow, deliberate cuts, just to take some of the pressure off the restrictive policy. all they are saying is, they need flix inflation to be bette a couple more months. the first rate cut was not a negative for the markets in 2019 or in '95, even though it has been at other times. i think you have to understand what they would likely be reacting to with the first rate cut. you don't want to be wishing for a really aggressive easing cycle. >> maybe kb home and the builders are hoping for an aggressive easing cycle. you tell me. >> well, they absolutely are. kb is expected to report smaller

gains than a year ago in earnings and revenue, but like lennar yesterday, it's going to be less about the last quarter, and more about the second half. lennar reported weaker than expected guidance and talked about increased incentives. builders have been offering extras and buying down mortgage rates, with rates now higher than they were at the start of this year, those incentives are driving sales, but do cut into the bottom line. beth lennar and kb skew more towards the entry-level buyer, which is much more sensitive to small moves in interest rates, and if we continue to see what is slower than seasonal activity, which we're seeing now, it will be harder for the builders to deliver the results that they're expecting or guiding for, scott? >> diana olick, thanks so much. see you in ot. the beat goes on. we'll get closing highs it looks like on the s&p and the nasdaq. you have those price targets yesterday from a few shops go higher. you had today's fund manager sur ray of bank of america, the highest in three years, at least. the bulls have had a lot to be happy about. >> without a doubt.

and most of the things are lining up in the right direction. the big question is, are we in overshoot mode on the themes that everybody understands and celebrating? the concentration of momentum story has become so saturated, everybody fixated on that. nvidia itself is accounting for 15 points of the 14 points of s&p upside right now. it shows you what can happen. nvidia is up 45% in four weeks since it reported earnings. >> that's incredible. >> we're kind of getting to the point where you're at least extrapolating in a hurry some of these great trends. that being said, breadth is better today and yesterday. the market can just cool off and maybe redistribute some of the buying in other areas, or we could pull back a little bit, and not have too much of a problem. i think we dealt with a soft retail sales number okay today. yields are more cooperative going down today. and you know, off bit in things like the banks. so it's encouraging. i wouldn't want to sort of draw this line extending it too far out, in terms of the angle of

dissent on things like the nasdaq 100. >> just when you think, thinking of naz 100, that nvidia gets a run-up into the stock split, you get a split surge. >> always have been wrong to the bet that it's done. >> the s&p and the nas, send it into "o.t." with morgan and john. >> stocks just keep marching higher with the s&p 500 and nasdaq closing at record highs and the dow in the green for a second straight day. and we also have a new most valuable company on wall street, with nvidia passing microsoft in market cap. that's the score card on wall street. welcome to "closing bell" overtime. i'm jon fortt with morgan brennan. >> tech and industrials, the big winners today. communication services, consumer discretionary, underperforming, but coming up, the biggest b