taylor swift element was a positive one. there's been a lot of chatter about expanding the regular season to 18 games which would involve moving the super bowl to president's day weekend. the commissioner noting it's a decision that would need to be made alongside the players association. >> julia, beautiful out there. thank you for watching "power lunch." >> i'll see you at 4:00 p.m. on "closing bell: overtime." welcome to "closing bell: overtime." i'm scott walk at the new york stock exchange. we begin with a market meltup. ed yardeni will be here to discuss. we start with the russell today which is ripping to say the least. this could be the best day of the year for small caps today after that softer than expected

cpi report. look at bioteches and regional banks as well. it's all part of the yield story, the value trade story. it's a down day for big tech. apple, seven-day streak running out of gas today. tesla was down earlier on a report about a delay in its robo plans. delta taking a big hit after its guidance came in lighter than street expectations. takes us to the talk of the tape. higher stocks. ed yardeni joins me now. welcome back. >> thank you. >> cpi better than expected. yields fall. parts of the market going up sharply today. what do you make of it? >> the bull market is broadening. there were concerns it was narrowing to the magnificent seven. today's an important day.

this is the day where investors are starting to rotate out of the magnificent seven into the rest of the market. i don't think this is going to pull the s&p 500 down. i think there's enough money to keep the leading stocks that have done so well fairly elevated, but i think we'll see more gains in the s&p 493 as well in the mid caps, the small and middle mid cap stocks. >> this is the start of something. that's been the great debate, when this broadening would happen. there has been teases before. you think this is legit? >> i think it's legit partially because the fed has changed my mind in terms of where interest rates are going. we still think that the economy is is doing well enough with inflation moderating that there's no reason for the fed to lower interest rates.

jay powell made it clear they really do want to lower interest rates. now the market is absolutely right and anticipating a 25 basis point cut in september. i don't think it's going to happen in july. now we'll see interest rates come down. at the beginning of the year the market was expecting six or seven cuts. that never happened. this time i think the rate cut is coming. >> that was the takeaway over the last couple days. "the wall street journal" writing that powell, quote, made the beginning of a pivot on interest rates that might prove more durable than what that sparked a market rally last year. that's what you're talking about? >> absolutely. the key is the fed is balanced in its assessment of the dual mandate. unemployment is just as important as inflation. before inflation was the key.

they were totally focussed on convincing us that inflation had to come down before they started lowering interest rates. now they're signaling we are getting close. excluding shelter the api was only up 8.8%. shelter inflation is coming down. i hope they don't utter the words mission accomplished, but i think they're getting close. as a result, they don't want to get a recession, which, again, i think has been an exaggerated risk for over two years now. >> yeah, but i mean, the unemployment rate did tick over 4% for the first time in some years. that obviously put this whole thing on the clock. you could sense from the commentary from the fed chair that was a moment to pay attention to and they don't want to let that go any further or any higher and ruin a good story that they think they're going to be able to tell. >> that's a reasonable position. i think the risk that they're

taking is, if they do move in september and the market continues to expect that, this will turn out to be a 1990s style meltup and there will be another problem with the economy and the financial markets. financial conditions are awfully easy for a fed that maintains that they're being very restrictive. i don't think they need to ease. doesn't matter what i think. they're going to do it and that will keep the bull market going and help the economy somewhat. all in all, the labor market indicators add up to a labor market that's doing just fine. we saw initial claims coming down today. all in all, i think the economy is doing fine without the fed messing around with the rate. like i said, my opinion is irrelevant here. what matters is what they'll do. they made it clear that they're going to lower interest rates. >> i mean, you raised your

year-end target for the s&p to 5,800 to 54 as a result of what you heard over the past couple days from the chair. why did you stop at 5,800? we're at 56 today. let's say we're near that level, right? why 5,800? >> maybe it's wishful thinking. i don't want to see a meltup market here. valuations are already stretched. if we see this market go into 6,000, 6,500, that -- those are my targets for the end of next year and the year after that. this market's -- as you know, scott, we've been bullish. this market, not bullish enough. 5,800 feels like the right number to me. we're getting closer and closer to presidential election day and i am concerned about a lot of

partisanship, shall we say, as we get into that entire mess. that may weigh on the market. >> you think that that uneasiness that you feel towards what could transpire around that time of the election is coloring your view a little bit or tempering your enthusiasm as a bull? >> yeah. i'm trying to curb my enthusiasm, correct. the reality is i have to be realistic about what the market's doing and there's $6 trillion in money market mutual funds if the fed starts lowering interest rates or when the fed starts lowering interest rates, that's a tremendous amount of fire power that could drive the market higher. i'm counting on the market rally broadening out. i wouldn't mind if the magnificent seven do nothing for the rest of the year and we see money going to the rest of the

market which has been left for dead for a while. >> that would be something. let's bring in joe terranova. good to have you with us. christina, sounds like ed is singing the tune you've been telling us, that's the idea that value stocks and the russell 2000, small caps, you should have started buying them already. they're outperforming in a dramatic way today. do you agree? >> absolutely. they look very attract ive toda. they're assuming the fed will act quickly enough that we can avoid a recession. i do think the situation is more pressing. we could easily end up in recession if the fed doesn't cut soon. cracks have appeared in the

economy. >> soon, you mean this month? >> i would love to see a cut this month. i think that would be wishful thinking. starting to cut this year. >> that's not disagreeing with ed. he thinks it's going to happen too. >> he's not saying it's necessary. i think it's necessary for us to get started on the rate cut path for us to avoid a recession. >> necessary or not, he said it's going to happen whether he likes it or not. that was the point made a couple times. >> the difference is that could be the difference between a sustainable rally for small caps and cyclicals or it fizzling out. >> you've made the case that you're not a believer in the broadening story as much as you are in the mega cap story. you suggested on numerous occasions that you need to see the rate cuts first before that trade starts to work. have i said that correctly? >> yes. >> the market activity today

would suggest that's not the case. now is the time to get in because the market believes cuts are coming and you want to anticipate it rather than be rea reactive. >> today what is going on has nothing to do with investors pivoting toward small caps. what is going on is systemic trading is rotating towards small caps and away from large and mega cap stocks. q4, the s&p 500 was up 4.9%. the weighted s&p was down 2 .9%. that's the largest differential on record. what is going on today is nothing more than a rotation within the market. if we want pure broadening, what we would be encouraged by is the fact that technology is rising modestly along with the cyclical

areas of the market. >> give it a chance, man. it's one day. >> no. i don't want to see nvidia down 5%. i don't want to see apple down 3%. i don't want to see microsoft down 3%. all that is is a rotation. i agree with your point on, if you're going to believe in the broadening out, the cyclical story, you have to know that the economy is going to remain resilient. there's a chance, a small chance as it might be -- i agree with ed the economy is strong. there's a small chance the federal reserve might be late here. the damage has been done and a trend of economic weakness is building and it's only going to accelerate. >> ed, how would you respond to that? the data suggests that joe's correct. the economy is softening. what about this idea -- the fed -- you said it yourself over

the last many conversations we've had. they were late to start hiking. what if they're too late to start cutting and they lose control of a story that they had pretty well written? >> you're right, they were late to start hiking, but not too late. they caught up pretty quickly in terms of raising interest rates from 0 to 5.25% within two years. >> the market got crushed because of that though. >> it did, but as you might recall back in 2022 and 2023, when a lot of people were talking about recession, our position was we're in a recession, but it just happens to be a rolling recession with different industries being hit at different times. i think we're in a soft patch. historically recessions are caused by the fed tightening monetary policy. check that. that's certainly been the case. then that in turn causes a financial crisis. we had one in march of last year. then that financial crisis turned into a credit crunch and

it's the credit crunch that caused recession in the past . we're not seeing that now. another way we get recession is a major spike in oil prices. that's not happening. the global economy is muddling along while the u.s. economy is doing quite well. all in all, i don't know when we'll be rid of the concerns of recession. it's still out there. there's still people convinced the economy is weak and vulnerable. >> which is why joe has his -- to guy the stock. i've read in some places if you have a softening environment, why would you believe in the value trade right now? >> because you anticipate the economy is going to re-accelerate when the fed starts cutting rates. there are other reasons.

one is, as inflation comes down, real wages are going up. that will also be a powerful driver. of course a lot of this is predicated on unemployment staying relatively low. i'm not thrilled to see unemployment climb from 3.7% in january to 4.1%. it's fine for right now, but we have to worry about what has already happened, what more damage has occurred to the economy we haven't seen yet because of the aggressive tightening and the fed holding rates at this level. >> it was the pepsico ceo who was making some cautious comments today about the consumer which goes to the point that some have made on this program. the economy is weaker than you think and the fed should go in july. >> if that's the case -- by the way, i want to be clear. i run an equally weighted strategy. if i look at the tape, i'm happy

with the performance, but i don't trust it. the reason i don't trust it is if the economy -- i don't think we should be using the word recession. i think that's not something we're putting on the table. if we're seeing softening, then you have to call into question the ability to have the type of earnings growth that's needed for these cyclical stocks to have expansion. i know where i can get the earnings growth. i'm going to get the earnings growth surrounding the a.i. story. certainly taiwan semi told me that the other day. i'm calling into question the cyclical earnings growth if we see the soften economy. >> i'll bring up a stock example. i was going to do it in the next block, but let's do it here. delta airline is the perfect example of everything that we're talking about, if not some are worrying about. okay. it's hard. it's hard to pick winning stocks that are so tied to the economy. air travel has never been

busier. three times in the last two weeks we've had the busiest day at airports in the nation's history. yet, delta's guidance -- they tell you business is great and their guidance doesn't live up and the stock goes down. airfares are coming down. they have a lot of capacity. their costs are up. isn't that the point? you stay with what is tried and true in this market. there's one cohort of stocks that's been tried and true and that's big cap tech. >> or you could go with diversification, which means you have some of the tried and true and you also have the cyclicals and smaller caps because it's uncertain where we're going. my best case scenario is we'll see an economy that re-accelerates. you want to be well diversified because you don't know. >> ed, how would you address that issue of whether you just

stay with what's worked? you're going to have days like today. it's rotation. whether it's a lasting rotation remains to be seen. you'll have days where the mega cap stocks pull back. the longer term trend people believe in heavily. maybe that will be backed up when they report earnings in a few weeks. >> you raised the issue of delta. i would counter that with some of the cruise line stocks that have done extremely well. consumers are spending money. maybe delta is having problems with labor costs and maybe some competition. as you point out, i mean, you can look at the statistics or go to the airport and you see that everybody -- the airports are absolutely full. >> sure. those long lines haven't translated into higher stocks, which is my point. it's hard to look at that and -- you would say, well, if the airports are busy than they've ever been, obviously the airline

stocks with going to work. the commentary from whoever in the airline dynamic says demand is off the charts. the stocks haven't responded. >> look, i have no problems with staying with the magnificent seven, but they're not cheap. they've discounted a great deal. here's what i'm expecting for second quarter earnings announcements. i think almost every management is going to have to talk about a.i. and how it's impacting their companies. investors are going to be asking those kind of questions. analysts will be asking those questions. i think we'll be surprised how many companies start to talk about how they're implementing a.i. and how it's cutting costs and increasing their productivity. not having a major impact immediately on earnings, but they see it as being a game changer.

i think in that sense the broadening of the market is simply the broadening of the understanding that technology overall lends itself to increasing productivity and cutting costs, not just in a handful of stocks, but a broad range. >> if the result of today -- if the result of the expectation that the federal reserve is going to cut in september -- we'll know by jackson hole if not at jackson hole. >> let me tell you something. i feel like he told us. >> i agree. >> he didn't explicitly say it, but -- >> i agree with you. i said it yesterday. if the result is we lose technology or the mega caps, we could have a broadening effect on the market. that's not good for the market overall. that means the s&p is going down. the best case scenario is technology hangs in there.

maybe you get outperformance from the cyclicals. let's not lose technology. on a day like today we see is russell up 3.4% or the nasdaq down 2%. i'm more concerned about the nasdaq being down. >> i'm not saying -- he didn't say, hey, everybody, we're cutting in july or september. his bias was clearly now. the federal reserve's bias seems to have pivoted to they're going to cut barring data that changes their minds. right? >> yeah. they developed the confidence and i would argue that that's okay. that's going to be the boost for the cyclicals and the smaller caps. what can keep technology at relatively high levels is all that cash sitting on the deadlines. the there's so much of it. you don't have to take from

peter to pay paul. take that cash and move it into areas like the cyclicals and small caps. >> the other point to be made -- i've heard this from some. okay. if i think those areas of the market maybe can go up 5% between now and the end of the year, well, i'm getting the 5% risk freeb by staying in cash. i have the election to worry about and i don't know what's going to happen with fed policy. maybe the money some have speculated -- well, it's not worth the risk. >> then where's your entry point? for most investors they have a long-time horizon. it's far more important to get in and be well diversified and ride this through even though we could see short-term volatility along the way. >> ed, i'll let you wrap it up.

>> again, i think we're in a bull market. that's the bottom line. right now earnings have been very strong for companies that have gone up. it's basically the tech companies. i think the second quarter learning season will be surprisingly strong. that could broaden the market. >> all right. that's a good last word. we'll see what happens starting tomorrow. ed, appreciate it. christina, thank you. joe terranova is sticking around. let's go to seema mody now. >> reporter: shares of quantum scape soaring after they announce an agreement thomas to mass produce the battery for the vehicle maker. up 28%. roblox sliding on valuation

concerns. analysts believe roblox will return to expectations, but the company's execution has been, quote, oncerning. shares down 2.3%. scott? >> seema mody, thanks. up next, tesla's pain is uber's gain as a new report drives those shares in opposite directions today. uber shareholder joe terranova standing by. we're live at the new york stock exchange and you're watching "closing bell" on cnbc. [♪♪] your skin is ever-changing, take care of it with gold bond's healing formulations of 7 moisturizers and 3 vitamins. for all your skins, gold bond.

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taxi roll out. uber and lyft moving on that report. joe terranova back to tell us how he's playing uber stock here. he's long. >> long, yes. >> what do you make of this? >> personally in the long this is a critical juncture for the stock. >> for uber? >> yes, it is. it's right back at a critical price point. since the last three months it's been unable to get past $74. it's been consolidating from the correction it had in the low 60s area. it gets the news today on the robo taxi delay that's benefitting the stock itself. what you want to see here is you want to see the stock break at about74, get into earnings which are august 1st i believe. in that earnings report we need to see the return to profitability. we don't want multiple quarters where uber is telling us we're back to being unprofitable. that's why investors like myself bought the stock. remember, momentum.

>> they had a surprise. that's why the stock sold. >> absolutely. momentum, but quality. i want quality, profitability. they have to return to profitability quick here. i believe they will. >> you had tesla before, didn't you? >> yeah, tessly has been in and out in the joe t. several times. it's been unsuccessful. tesla's a very difficult stock to trade because its momentum becomes very intense very quickly and then you tend to lose it. it evaporates. >> it's funny because you're -- in many respects you're a prisoner to your rules and strategy. >> correct. >> you don't buy it until you also have this momentum in place. >> correct. >> you're suggesting by the time you buy it the momentum tends to run out. >> right. you're trying to catch the wave as the wave is building and ride the wave. what happens with tesla over the last several years we've noticed

this. the wave builds and then the crave dissipates. it's been challenging to try and trade tesla surrounding momentum. >> let's talk delta. i mentioned it in the "a" block. if you're buying stocks based on economic metrics, in some cases it doesn't work. you have this stock, delta? >> purely on momentum. it's in the etf. >> is it losing the momentum? >> of course it is. you know this. >> just because of one day? >> not just because of one day. let's pull the chart up. look at the momentum. since may it's -- we're working on three months where the momentum is sliding. they had a mild correction under way. this airline has been resilient relative to its peers in the airline industry. it's the one airline that we've owned in etf.

airlines are difficult. they're very difficult. i think stephanie said today on halftime, they're a trade. she's so right about that. it's nothing more than a trade. i have to tell you something -- >> why did you ever add any of them in the etf? >> they're tin the universe. you can't break the rules. then you get into the discretionary element. the rules take out of the -- >> you don't have the discretion to say, you know what, i don't care if that stock hits the rules and the buzzer -- >> i have to file with the ftc for that. >> glad you gave me insight in that. would you be hesitant to buy another airline stock? >> when these airlines went into the etf, i wasn't excited about that. >> you don't own it personally >> no. i don't think i owned an airline

personally in my lifetime. i don't think airlines are a good representation of the state of consumers. >> all right. i might sneeze in a second. i think i can wait until the break. joe, thank you. felt it coming. 3 fourteen warren pies is back. we're going to get his thoughts on these big market ves moand where he sees stocks heading, after this. ♪ ♪ ♪ ♪

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s&p and nasdaq pulling back from record highs as investors rotate out of the big tech winners. signaling rate cuts could be on the horizon. joining me now to discuss warren pies of 3fourteen. what do you make of this market action today? >> it's definitely a strange market today. i don't think you can expect this kind of a day, this intense of a rotation going for ward. it's a taste of what's going to happen the second half of the year. you have to go back to the beginning of the year. even the biggest bulls on the street were saying it was going to be a weak first half. then you get a strong first half. you have consensus for a strong first half and that leads to a powerful second half usually. we've had 23 years where the first half of the year was up double digits and 19 of those

years you end up with more gains in the second half. that's what we're looking for and how are those gains going to manifest. we think there's going to be a broadening of the rally. the s&p had a new high on may 15th. we wanted to see that new high confirmed within 90 days. that's mid august. days like today bring us closer to that. >> you're tempted to want to believe in this? >> yeah, i am. there's parts -- you need to be nuanced about how you believe in this. the shall caps are the obvious big winners today. it's been an area we've been recommending clients avoid all year. i don't think you're in the right part of the cycle to chase small caps. for us to play the broadening we want to go outside of that mega cap tech. you want to go to still high

quality. i think this is a tricky part of the cycle. it could be late cycle. you don't want to play it like it's an early cycle environment and go into high bid small cap type stuff. you want the quality group below mag seven that hasn't kept up with the market. that's how we're positioned ourselves. >> what do you think the story's going to be after this earnings season wraps up or the bulk of it? is it going to be the same story or are we going to be starting to look beyond these mega cap tech stocks because their growth rates are simply -- it's impossible they could keep up what they've already done? >> yeah, so in my view the narrative that's going to take shape is that it's going to be -- number one, i think earnings will come through. we have a big earnings lift from the home market. especially when you look at q4

this year, i think we'll hit those earnings numbers. that's number one. i think the narrative that's going to take shape in driving the next leg of the bull market is this credit expansion. if you go back, yeah, we've had a strong economy in a lot of ways over the last few years. there are pockets that are restrained by fed interest rate policies. as we get new cuts, i think the first cut comes in september at the latest, and you'll start seeing a story open up where things that have been dormant like existing home sales which are back at 2009 levels and new auto sales which are below 2018 levels. those reawaken and the consumer borrowing takes the baton from this fiscal deficit led expansion. there are a lot of things that can go wrong with that as you play it forward, but that's the narrative we believe the market

grabs ahold of in the second half. >> warren, appreciate your time very much. warren pies joining us. up next, an interview you do not want to miss. nba legend charles barkley joins us live from the american century golf tournament. he always has a lot on his mind. we have a lot on ours about what we want to talk about. we do it next.

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good to have you on. >> it was good to see cyou unti i saw the stocks go by. nothing more stressful than seeing your money drift away. >> you must be big in nvidia and apple. >> i think i got a lot of apple. i wish i had got in nvidia way, way, way back. >> some people don't think it's too late. talk to your financial adviser and figure it out. let's talk nba. okay. you probably saw, just like we saw yesterday, that the nba had finalized its deals for the media rights with espn, nbc and our parent, and amazon, but tnt

could still match. you announced a month ago that you were going to retire after next season no matter what happened. was that firm? were you joking? what's the real status of you in terms of broadcasting going forward? >> well, i really feel bad for everybody at tnt, all the people i've been working with for the last 24 years. they're like family to me. i really hope we match. i honestly in my heart think we have lost it. that's my honest opinion. i really hope we get a last-minute reprieve for the people at turner. the main reason i was talking about next year being my last year, i wouldn't feel comfortable going to work for another network. it would be 25 years that i've been working with turner. i love everybody at turner. at this age to go start over, i don't know if i want to do that.

>> is there a certain -- we're not going to have a negotiation on television. you know how these things work. it's no different than in any other business. people say they don't want to do something and then they get a nice financial offer and change their mind. is it in part -- could financial reasons change your might not? >> hey, if i don't have enough money by now, i'm the biggest idiot fool in the world. seriously, if i don't have enough money by now -- i've been so lucky and blessed. i played in the nba for 15 years. i've been on television for 24 years. if i don't have enough money by now, i'm the biggest loser in the world. >> i hear what you're saying, but i think you know how popular your program "inside the nba" remains with fans. i don't think people want to see you go. let me ask you another question

before dom jumps in. related to nba basketball, but as it relates to the olympics. at nbc we're extremely excited about what's about to happen in paris. you've seen the highlights of the workouts. the team is stacked. is it a no brainer to think they'll win the gold medal? >> i hope it's a no brainer. any time you get in the shoot-out round -- they have to get to the knock-out round. in one-game scenario anything can happen. i think they'll win the gold medal. i'll be shocked and mad and disappointed if they don't win the gold medal. you know, there's two things that go against them. they've lost the intimidation factor. when i played in the first olympics in '92, those guys were so intimidated. they lost the intimidation factor. the big advantage we had was depth. i watched them play last night against canada. canada had five nba players in

their starting lineup. the big advantage the united states had, when the others team go to the bench they're not bringing in five other nba players. some of those other countries, they're going to have ten good players, nba players. listen, i think they're going to win the gold medal. i'll be totally mad and disappoi disappointment if they don't. >> charles, it's interesting, the sports side of things has evolved to a point where streaming is now the norm. that's the reason why some of these package develop the way they are. do you feel the world is evolving enough in sports to accommodate streaming or do you think streaming has outpaced what sports can offer right now? >> well, i think you have greedy players and greedy owners. they don't care about anything except how to make the most money possible. we should never put money above the regular fans.

everybody can't afford streaming. when you go to the highest bidder and you're not on regular television, you do a disservice to the fans. in fairness, the players want to make as much money as possible. the owners want to make as much money as possible. the fans are the most important thing. no matter how much money you make, if people aren't watching, it's a lose/lose proposition. >> one of the last times we spoke, you talked about the cultural situations developing in america, wealth and equality. it was a tense political situation back then. i wonder if you might weigh in how you feel the culture politically is developing in ame america. >> i feel sad. you have the greatest country in the world. i have nothing but admiration and respect for president biden. it's time for him to pass the torch to a younger generation. he's been a great person. he's been a great man. this ain't something i'm saying now.

i said it a year ago. it's time for him to pass the torch. i don't want to hear the convention is coming up soon. he's had a great life. he's one of the greatest people i've been fortunate to be around. it's time to pass the torch. listen, president trump, i would never vote for somebody who had that mentality. you should always have respect for the office of the presidency. i get mad at these sports teams. some of these bozos won't visit the white house because of a democrat or republican in there. it's the president of the united states. we should always respect that office no matter who is in there. >> charles, i want to ask you one more question. back to the olympics. there seems to be controversy that jaylen brown is not on the team, even though kawhi leonard was taken off the team. what's your opinion on that? i'm sure you have one.

>> jaylen brown is on fire right now. getting the mvp in the playoffs and the finals. he's an amazing player. listen, i don't know how they came to that conclusion. derek white is a terrific player also. i don't know if it's controversial. listen, they could get this guy right here to take kawhi's place and if they don't win the gold medal, it's going to be bad. doesn't matter who the number 12 player is. we could put this guy in -- >> what are you saying, chuck? >> he would never get in the game, but if he was on the team they should still win the gold medal. >> i've never seen dom chu shoot a basket. i've seen him on the golf course and he's pretty good. i'm just going to say that. just going to say that. you guys have fun. charles, hit them straight. >> thank you. >> dom, good stuff. still ahead bracing for the

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bang earnings. we'll begin with bob. you're a senior market correspondent. >> i am indeed. as a stocks guy this is the most interesting day of the year. >> really? >> yes. i'm going to call this the revenge of diversification. everybody will look at this and say what the heck? the nasdaq is down big. amazon is down two. apple's down two. this is not a negative on technology stocks. it's a positive on diversification. the russell 2000 up 3.6% with the s&p down. do you know the last time that happened? october 2008. that's how rare that is to have the russell 2000 up 3% or more and the s&p 500 down. >> this is the biggest one-day gain of the year for the russell. >> for sure. here's why -- again, this is not negative on tech. this is positive on diversification.

that's the way to look at this. >> you framed that owell. >> 6 to 1 with the s&p down. here's what everybody is asking me today. great, bob. is this a one-hit wonder? how does this continue? what do we need to get this to ten? obviously lower rates is the key here. small caps are very interest rate sensitive. that seems to be happening in very real way. you see what's happening with expectations for rate cuts from the fed in september. secondly, we have to have some confidence the economy's going to be stable to good. there seems to be confidence in that as well. i'll tell you the final thing is the earnings situation. the root source of all this rally, of the tech outperforming everything is the expectation of superior growth. nothing comes close. how much upside is left in tech and is there anything more on the value side of things on the small cap side that will enable

people to be comfort saying we can rotate out? i can't answer that. we may have an earning situation where growth comes back again. i don't know. we have the seeds of a potential little rotation. that makes me excited. >> you know when we'll get more answers? tomorrow morning. we'll get banks reporting. leslie picker, what should we be on the lookout for here? >> you are, right, scott. morgan stanley up over 40% over the last year. going into earnings there's a big question about whether the big bank bias continues into the second half of the year or whether we see rotation into those regionals. the debate stems largely from uncertainty around net interest income, the profitability metric for loan making. it has been held down by higher paying costs and then loan growth has been muted, meaning

they're earningles less in interest. some think it will drop. others think it's a 2025 event. now the larger banks have been supporting by improving capital markets and investment banking revenue as well as the potential for proposed capital rules to be watered down. scott? >> leslie, thank you. leslie picker. bob, back to you. we had the animation for two minutes. yesterday was interesting. we had the powerful move post powell into the close. the vix was up as well. i wonder if there's a new dynamic that we're going to be preparing for where volatility may pick up, the vix could be more elevated. stocks can do fine in that environment.

what's your thought? >> the short answer is yes. i'll tell you why. it's a seasonal thing. if you look at the vix performance on a seasonal basis, volatility in the vix goes up notably between the middle of july all the way into the early part of october. it's very striking. i don't have the chart with me. everybody who follows us knows this. the volatility goes up. this is part of that whole thing about the worst three months performance going into october. i would expect the vix to be higher a month from now, even two months from now if it follows historic pattern. remember, we're going into an election. the vix futures are higher already. look at the vix futures for september, october, november and they're higher than they are right now. i'm more interested in whether or not we can continue to have the strong earnings in technology and whether that will keep people in tech or whether they'll see some real rotation. today was tremendously healthy

for the stock market. anybody who's worried about nvidia being down or apple being down, is not sufficiently diversified. >> bob, appreciate it. bell's ringing. dow up, s&p down, the nasdaq down, but the russell, oh my goodness. that's the end of regulation. fm investments ringing the closing bell at the new york stock exchange. black rock doing the honors at the nasdaq. a big rotation day for the market. the nasdaq snaps a seven-day win streak. small caps surging more than 3%. the action is just getting started. welcome to "closing bell: overtime." i >> tesla sinking after reports said the robo taxi