have skipped it that way. could there be something on the payroll front to skip that, too, to try and incentive advise that. >> yeah. what kind of hole does it blow in the payroll tax? what kind of hole does it blow into the budget? >> a lot of workers where there's tipping, restaurants make so little annual income that they wouldn't qualify. >> got to leave it there. thanks for watching ""power lunch."" >> welcome to "closing bell." i'm scott wapner. this make or break hour begins with the rebound in stocks which have gotten all of last monday's losses back and then some. it's been a remarkable turn around led by tech which has some wondering whether that trade is back now as well, along with the markets at large. we're going to ask our experts over the final stretch. let's check out the scorecard with 60 minutes in regulation. it's a strong day today. the nasdaq leading by 2 1/3%. s&p good for 1.5%.

there's the dow pushing back to 40k. a ppi held the gains, even added to them. by now you know about the big story of the day. starbucks ceo out, chipotle's ceo now former because brian nichols is going to take that job. chipotle, the worst in years it is coming off the worst levels. it takes us to the talk of the tape. finding opportunity in this market. our headliner was doing just that a week ago. he called in to "closing bell" last month. blackrock's rick rieder is with us now. he's the head of the global allocation team. it's good to have you back. >> thanks for having me. >> you sat down and you said, we've been selling. i'm a seller j. >> yeah. >> i was very surprised to hear that based on what we talked about a week ago. >> so i would say pruning, trimming. listen, when you take -- i mean, today the market rally on a softer ppi, if you look at the

report, it was mixed but we're moving in the right direction on inflation. when you take a step back and think about it, you've got an economy that's slowing. you're now pricing -- i think we were -- s&p was 5180. we're bumping up against 5500 earnings. take the pe and the equity, it's 23 1/2. tech about 34 and even if you take off of forwards you're pricing a lot. you've got mid east. you've got a cpi report tomorrow. people say -- and you've got a slowing economy. people say, well, we've got the fed that's going to cut rates. we're pricing in the fed. i mean, you're pricing in 4 and change cuts. you're pricing down 3% funds cut rate next year. the only point being, is it time to trim a bit. equities going on equities. equities are going to be higher over a year from now. that being said, i think these valuations have gotten caught up with -- and there's -- think about where volatility is down

to versus where we were on the phone. vix was at 63. we're at 20. you can sell the up structures where you can buy some up side because volatility is down again, protect some down side. i don't know. it's a pretty big move in a short period of time. >> yeah. >> it's worth taking some chips off the table. >> are you shocked by the rebound? you sound like you are. >> particularly given the fact that, you know, i was looking at was it bostic or some of the fed statements, we still have to see, i think you're going to see a decent cpi report tomorrow. i would say the convexivity if you have a softer ppi and you're pricing in so much for the fed. listen, if it weren't a good number, that wouldn't be a great thing in terms of the perspective where the fed is. the i am surprised we've moved as much as we have. whether it's selling or buying some convexivity today, it feels like a gift. i went to sleep last night and thinking a lot about the

geopolitical thing, gosh, what's going to happen? now you come in today, s&p is up 80. 80 something points. >> i think it shocks most people relative to where we were when we had this conversation a week ago and how quickly we've come back. almost like nothing ever happened. this was this massive panic attack over a growth slowdown and the unwind of the carry trade. is there more to come as it relates to that? are you fearful of that? >> i would say a couple of things that make me feel better about it. part of why the equity market is doing what it's doing, you cleared out a lot of the gearing, a lot of leverage positions to a couple of trades, japan being a big part of it. walking in on -- trade before i walk in. you look at where the nikkei was coming in monday morning, that's where developed market equity, market will do what it's doing. you think of what sort of stimulated it. you had a weaker payroll report.

by the way, geopolitical was there. you think where we are today versus that point. maybe the news is a little better in some form. we know inflation is am coming down. gosh, i read a load of earnings reports and if you -- earnings were pretty good because margins continue to be reasonably high. you go through this period what companies do, you're able to keep margins up. the top line revenue, particularly when you think about consumer data, top line revenue was uninspiring. i think the economy is fine. is it softening? it's softening. the delta of where we are today versus where we were last monday and it's almost extraordinary. >> isn't the multiple argument skewed by the fact that as we have tech leading us back we're once again to the top heavy market? and if you actually are going to get rate cuts and earnings are going to hold up because the economy is slowing but not stalling -- >> yeah. >> -- or shrinking -- >> yeah. >> -- then it's not as clean a

picture as some would have us believe. what's the equal weight, for example, multiple relative to what the s&p is when you put in all these tech stocks? >> so i saw this a couple of points. one, if you take out the tech stocks, multiple is not that aggressive. then i read a load of earnings reports from those outside of the tech companies. i didn't get really inspired by, gosh, i'm going to miss the run up on top line revenue growth. then i was like, by the way, i still like equities, i just think we've come a long way pretty quickly. i was looking at equity risk premium today. i was looking at free cash flow yield and then i was comparing it to where we could do like in fixed income today, we have the ctf. we're clipping 6 1/2 to 7 in fixed income. gosh, i've got to pay a 23 multiple off the last 12 month earnings. i'm hoping we don't see what we saw last week. i have to hope that revenues accelerate and that earnings and margins keep up where they are

or i can clip 6 1/2 to 7. my only point is i think the needle can shift a bit from, you know, it's been equities, cash. equities, cash. seven equities. i think now you can evolve the portfolio a bit and a bit less equities. >> can we talk about the 60-40 again? that's what i hear. >> yeah. >> you look at flows from competitive shops of yours. you see where the flows are going. there's a lot of money going into fixed income funds. >> yeah. so i don't think the traditional 60-40 got you an index with a long -- with a lot of exposure to the back end of the yield curve. given how flat the curve is, given how much debt the treasury is going to issue, when i flow into get me a traditional index, i wouldn't do that, but you can buy three to five-year parts of the yield curve where you've seen it play out today, that is the leverage in terms of where the forwards can move if the fed moves, you can get a lot of yield without going out the yield curve.

double b high yield in europe. single b high yield in the u.s. securitization yield. not stretch credit quality wise. i'm definitely not in the mode of the standard 60-40, rotate more into the traditional 40, but build income. income can be really good, particularly second half of the year where volatility tends to be higher. would i earn income, more income than i have? i would. >> you mentioned boss stick who was -- bostic wants a little more data on the economy before cutting rates. just to be absolutely sure he says it would be really bad if we started cutting rates and we had to turn around and raise them again. i'm willing to wait, but it's coming. you think they go in september? >> i do. >> the market's already got that all in. >> the markets have us pricing in almost 50 in september, 2/3 of the way to 50 in september. the markets are pricing four cuts for the balance of the

year. listen, i think there are members of the fed who do want be to see more data, do want to build more confidence. one man's opinion, you invest relative to what you think the fed will do. they'll do two more successive 25s. i think it's priced wrong. at 5 3/8 you have inflation, three-month moving average, six-month moving average, core pce, core pci. service level, strip out shelter, even shelter is coming. running low 2s inflation and you're building real slack in labor. obviously we talk a lot about the unemployment rate, too much time on the unemployment rate given the amount of people entering the workforce. jolts, hires being down. you look at, you snow, some of the cyclical areas hiring that are coming off, travel, leisure that have been a big boon to this economy in terms of people. listen, you're building real slack. i've said it before, it really hurts. look at the consumer data. low income, small business

having a really hard time. local banks having a hard time. see that in auto delinquencies. i would get the rate down faster. i would do 50s sooner. i would have gone in july, but i don't think they're there. >> what if they surprise us, surprise you and they do that? remember, the whole reason i reached out to you last week in the throws of all of this was because i saw social media post of yours saying what you just did, suggesting that they're already -- they're way too high. >> yeah. >> and that they need to get it down quickly. >> yeah. >> if they do get it down quickly, does that change your perspective on equities in the nearer term? >> if they do get it down quickly, all you're doing is verifying where the pricing is in the market because we're pricing so much. i think and i do think, as you said, with regard to bostic, i do think there are members of that committee that don't want to be wrong and don't want to create a reacceleration. by the way, i don't think they will. i think there is a view you can

create a reacceleration. i think that's flawed thinking. i think they'll move deliberately. you could do 50s. if they did 50 in september and went another 50, i think the terminal funds rate -- chair powell said it at the press conference, he said it at humphrey hawkins, the terminal rate is not going to be 2 again. you're pricing next year close to 3. like you can do 50s and say, listen, we're not necessarily going to go much further than 4 and then you don't create a financial easing dynamic, you don't create a potential acceleration. i just think you've got to get to 4. 5 3/8 relative to where it is and by slack by any measure is the wrong price. >> you have your eye on jackson hole? >> i do. that certainly is a point where you could describe the transition. you can describe the metrics that you're utilizing to think about how fast you would move. when you move are you data dependent or is it a process?

is it a process where when we start moving we're going to do consistent moves or is it we're moving once be? i think that's where you would articulate that. i think there are interesting things around the unemployment rate. i think there is way too much focus. you're bringing a lot of people in the labor force. how do you define what are the metrics you're thinking about? jackson hole is going to be a big part of that. >> no doubt about that. let's go back to where we were when you sat down and we started talking about trimming some positions. where? where would you do that? >> so i think tech's at a good go. today's had a really impressive go. i like tech longer term. by the way, i'm still in tech. i still believe you're supposed to be in it. i do think free cash flow generation is terrific. pricing some pretty good multiples into particularly in semis. you're pricing in some pretty aggressive multiples. you have to get the capacity, energy to get the ai demand that you're pricing into semis today.

so cutting a little bit of that. the and then general technology growth oriented equities, we're pulling back a little bit. again, i don't want to overstate it. i do think equities will win, but i think in the near term i'm pretty impressed how much we've moved. converting some of your organic equity exposure to call spreads, not to get too complex. if you sell down side now to buy some up side, you know, you can create some really neat convexity in the equity market as opposed to sitting in a delta one or equity position. >> it sounds to me if you are suggesting that cash could come off of -- or come out of money markets as rates don't look as attractive as they did -- >>yeah. >> -- 18 months to 24 months ago, you would almost suggest that it goes into some degree of fixed income -- >> yeah. >> -- here rather than equities. is that correct? >> 100%.

i mean, the needle has to shift. you can create 6 1/2 to 7 yield, aaa c loads. etf will run. it's a high bbb. we're creating literally 690. if you said, gosh, i can own some of that, 690. what is the run rate return on equity of the equity market? let's say you get 10. you can compound at 10. if i'm getting close to 7 p and your free cash flow yield given where valuations are are down, i would definitely move the needle. you're seeing, as you said, not just our sales, a number of others seeing flows into fixed income. >> yeah. >> the needle definitely -- second half of the year, the seasonals aren't great. you have an election, let alone the mid east dynamic. yeah, i like derisking of it at this point in time. >> you're going to mark the one year anniversary of the big, as you said flexible income etf,

blackrock flexible etf. you're going to ring the closing bell. >> yes, sir. >> has it been a year you've expected in terms of what that fund was going to deliver for investors? >> i think we're one year, 12% return for fixed income. pretty good. not taking a long end interest rate risk. high yield has done extremely well. we're super happy with performance. obviously flows are beyond what we thought they would be at this point. i think where people are viewing it, we're at a pretty unique point in time in history. think about inflation running at 202s. you can clip -- still clip without going into like aggressive emerging markets, aggressive high yield, aggressive ccc high yield. your real rate of return, i've been doing this, i won't say how long, for a really long time. if you think about the years with 0 interest rates, 2% funds rate, that's a pretty neat point in time. i think it makes sense people move in that direction. by the way, not necessarily this

fund but a bunch of ways to get yield in a portfolio today. >> go get them up there on the podium. >> thank you. thanks for having me. >> that's rick rieder joining us from blackrock. let's bring in christina hooper at invesco. welcome backs. nice to see you as well. rick's point today is i think this market's full, right? the multiples expanded. the market's come back a tremendous amount since last monday. agree or disagree? >> certainly it's come back a lot. i think it speaks to the resilience of the environment, but i do agree that there could very well be significant volatility ahead. we could see some pull backs. i just don't think that's a reason to take profits off the table given how much cash is sitting on the sidelines for investors. >> sure. but that's not the reason that he necessarily suggested you should. it was more towards the valuation of this market is now stretched. like all of the good news is in.

how do you respond to that? >> i don't think all of the good news is in. when we look at the forecast of earnings growth for the coming year, it's pretty good, and you have to factor in that there are more names in the s&p 500 that are potentially contributing to that growth, at least that's the expectation. so it's not just a few names, it's more of the s&p 500. i think that matters. i do agree that it's very important to be well diversified, and this is an attractive environment for fixed income, no doubt. i would wantadequate exposure there. to me, it's all about diversification. i think it's important to maintain significant exposure to equities. >> over the long term he said it himself, did ridck rieder, that doesn't mean there's going to be choppy waters ahead. do you think that earnings justify where the multiple of this market currently is? because i think he would cast some doubt on that based on the

commentary and the forward guidance from several companies. >> if we get rate cuts and they start soon and they're significant, i do believe that that would be the case. >> okay. if you were going to -- do you take issue with the idea that you should trim some megacap tech stocks right now given the fact that they've snapped back so sharply? >> well, what i think the market is telling us right know is there's a higher probability of recession, which means you want to be in some defensive names. arguably those megacap tech names with the significant free cash flow generation are checking that box. so i wouldn't abandon them. i might trim them a little bit, but for the most part i think it's time to just take some cash from the sidelines, add to fixed income exposure, add to alternative exposure so there's more diversification and a more

smoothing of volatility because there are likely to be some ups and downs going forward. >> what about small caps, which still seem to get a lot of conversation about whether it's time to do that because the fed's going to cut rates and they're finally going to get, many of these companies are, the benefit of lower borrowing costs. what do you say? >> i think small cap companies have potential. a lot of it depends on what happens to the ucht s. economy. of koirts, there are increased risks of the recession. it remains this restrictive, but if the fed starts to cut and cut significantly, we are likely to see a reacceleration in economic growth and that should benefit small caps, cyclicals. we're likely to see markets discount that in advance, and so i think there's potential there. that's the beauty of diversification is you can hedge

your bets and have some exposure there. >> christine yeah. we'll see you soon. joining us on closing bell. >> thank you. shares of starbucks and chipotle moving in opposite directions. that is following news starbucks is replacing its ceo with chipotle's ceo brian nichol. what it could mean for both of those stocks. what a day. >> reporter: what a day. major news with brian nichol heading to starbucks, next month, september 9th after some years with the company. scott boatwright, interim ceo at chipotle. nichol is respected as a visionary leader. he joined in 2019 as they were struggling with food safety issues and under his tenure it was a blip with few subsequent issues and he grew into a real force and introduced new successful menu items. prior to chipotle he was taco bell's ceo helping to create

viral moments and catering to a younger audience, a legacy that remains today. the challenge is that starbucks will be different. first, the footprint much larger and more global with more than 39,000 locations around the world. company owned and licensed. the china and u.s. businesses are under immense pressures with higher prices and quality issues. back over to you. >> kate, appreciate that. that's kate rogers with our reporting. how about this juicy little tidbit i learned earlier today from sources telling me that nelson peltz's trian built a substantial stake in starbucks over the past few months and then had conversations with mellody hobson. trian is happy with today's outcome so much that they sold the stake on the big pop. the best day ever for starbucks. we'll continue to follow that story. we're just getting started on "closing bell." has the ppi solidified the case

for rate cuts? stocks seem to think so? so does allianz's mohamed el erian. what happens tomorrow ahead of tomorrow's cpi print? he'll tell us. - i got the cabin for three days. it's gonna be sweet! what? i'm 12 hours short. - have a fun weekend. - ♪ unnecessary action hero! unnecessary. ♪ - was that necessary? - no. neither is a blown weekend. with paycom, employees do their own payroll so you can fix problems before they become problems. - hmm!

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we are rallying after the softer than expected ppi. the nasdaq back towards record levels. investors turning their attention to tomorrow's cpi print. what that could mean for next month's critical fed meeting. joining me now mohamed el erian. good to see you. >> thank you, scott. >> are you surprised how quickly the market has bounced back from last monday's selloff? >> i am. i'm like rick.

there's reason to bounce back, but the speed and the extent to which we bounced back surprised me. we still have a 35% probability to recession and we had another corporate earnings report today from home depot reminding us of the weakness of the consumer. policy i think the market is expecting too much from the fed. finally, the technicals are still vulnerable. there is still some out there. i'm not surprised we've bounced back, i'm surprised by how much and how fast. >> the fed is going to go in september, yes? >> yes, absolutely. >> by home how much? >> it will go by 25. >> what raises it to 50 do you think? because, i mean, you've made the argument that they're already too late, that they should have started cutting already, so i'm sure in your mind you'd like to see them go more than 25, wouldn't you? >> i would, but i don't think they will. there's a journey and

destination. i would rather they started the journey earlier and they should have cut in july, but there's also the question of the destination. where do they end up? they've been ambiguous about that. i think the market is expecting 200 basis points in the next 12 plus months. that will be too much. the market should be more looking for 150 basis points. >> do you think they've done a good job? >> i think they did a terrible job in 2021. >> i know. this is 2024. >> yeah, they've gotten a lot better. their communication is still all over the place. they've got to be more consistent. chair powell is going to have a golden opportunity in ten days' time in jackson hole to do three things. one is be clear on what the neutral rate is. that's really important. two, tell us what sort of journey would he like to get there, how he would like to get there. and then, three, be clearer on what he expects with the economy. if he does that, they can regain

control of the policy narrative and that will help enormously in terms of the next phase. >> do you think we'll get all of that? >> i don't. i think this is a very cautious fed. it's a fed ex sescessively caut. i think they're going to be a risk-adverse fed. because of that, we're going to continue having volatility. >> do you think there's any risk of cutting too soon or by too much at this point and reaccelerating inflation? rick rieder, i'm he not sure if you heard his commentary or not -- >> i did. >> -- thinks that's a false premise. >> yeah. i think that the inflation risk is much lower than the unemployment risk so to the extent they make a mistake, i hope they don't, i'd rather they make a mistake by cutting too much than by cutting too little.

if you look at what's happened to this economy, we have lost most of our buffers. we no longer have high pandemic savings. credit cards have been maxed out for lower income segments. the last thing you need is the labor market to come under pressure because that's the soul thing keeping consumption going. >> which is why the fed chair continues to talk about it in the manner that he does, right? i mean, are you -- do you take any comfort in the fact that if you listen to anything he said of late, the focus obviously appears to be more on the labor market than it does the inflation picture because they feel, certainly seems he does, that inflation's on its way back to target. >> yeah. if you listen to him carefully, there's more focus on the employment part of the mandate, but he says they are balanced now. the inflation part and the employment part are balanced. i don't think they are. i think theemployment part is

more important right now than the inflation part, that's why, as you noted, i argued that they should have cut last july. they viewed them as balanced. i don't think they are balanced. i think the employment part is very vulnerable right now. >> that's why you think the soft landing probability is only 50%? >> yeah. i think there's a 50% soft landing probability. 35 that we fall into it. bigger but not hotter. the notion that we can have a series of positive supply shocks that allow us to maintain growth wut overheating this economy. so if you look at the combined probability, and you know i often tell people, don't just look at one scenario, trace out your whole distribution of outcomes and look at that combined probability, it looks like treasuries are pretty fairly valued over the longer maturities. on the front end, we should have started cutting earlier and credit, certainly high yield

credit looks expensive at this point. >> we'll leave it there, mohamed. good to talk to you as always. be well. >> thank you, scott. >> mohamed el erian joining us. google holding its annual pixel event. we'll share the reactions as well. we'll do it right after the break. "closing bell" is coming right back.

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welcome back to bell. google holding its pixel event. hey, d. >> reporter: hey, scott. it was more than about hardware. gaggle going to be the first to market there. apple is available sometime between october and next spring. i just asked google's head of android why they were able to bring on device ai to users and he said, listen. we've been working on ai for more than a decade, and that's why. the unlike the google io demo,

they were live, glitchy, in one case they had to be done on a different device. they showed a personal assistant capable of many tasks. in that sense google is trying to say it's show time for generative ai. it needs to be usable, practical and it needs to make money. investors are looking for return on investment. >> d, thank you. deidre bosa. let's bring in alphabet shareholder, the chief strategist. it's good to have you back. are you wowed by what you have seen today as a shareholder? >> hi, scott. you know, i think it's the best event alphabet has had for a long time. in the prior events, you know, bigger screens, bigger cameras, they're great. prior events they were lacking. this time around it showed that the company's truly committed to

the integrational software and hardware, which is what apple does well. this bodes well for the pixel phones. >> how are you thinking in general about, and d referenced this in her report here, spend versus return and time of return. what do you need to see as a shareholder? >> as a shareholder, this is our research and development, if you would. with this investment our expectation is you're going to have multiples on roi. there's always this sort of initial investment that ticks cash flows and everything else. we think it's a worthy spent. just from the results we've seen in terms of the digital assistant, gen ai live. you can have real conversations with digital assistant that i think users can not just save minutes by setting a timer but they can save hours by writing emails and doing research and

due diligence. >> you heard rick rieder, i hope, at the top of our program sit down and say this market's full. we're selling or trimming some stocks. when i asked him where, first thing he said was megacap tech has come a long way. it's up 3.6% this week. what are you thinking about when you hear that? >> well, we're not there yet. in fact, we would say the approach that we're taking is it's more of a barbell approach. we've recently added to our apple position. the barbell approach means we're still overweight tech, still overweight growth. we recognize we're not going to see the same returns we have seen in the megacap stocks. other sectors will start to participate, but we still want to be overweight tech and growth because that's where the earnings growth is. >> i hear you. i don't think that he would argue with that in any way to begin with. there is the valuation question, right? to what point are you willing to be overweight i think is the

more valid question as the valuations look rich to some. do they not to you? >> you know, valuations, the most recent pull back in tech stocks, i will say the valuations look a lot more reasonable. even looking specifically on alphabet, for example, we're actually trading below 5 and be 10-year averages in its multiples. on an absolute level having 20 times, 24 times earnings seems high but historically alphabet has traded higher than those levels. with the earnings growth we're expecting, 30%, in the mid teens, following years, i think it justifies the higher valuations. >> see you soon. >> thanks. that's king lip. up next, we track the biggest movers into the close. >> a top nike rival is making gains in the athletic footwear market. we'll reveal which name after this short break.

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go before the closing bell. back to seema modi. >> on holding, record-breaking earnings with a year-over-year jump with sales over 28%. the stock is having its best day since may. stiefel reporting it's up. tencent music tanking 10%. seema mody. thank you. we're going to drill down what's behind the slide. back on the "bell" after this break.

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that's a pretty good burn, right? got him. good game. thanks for coming to our clinic, first one's free. time for the "closing bell" market zone. cnbc's senior markets commentator, mike santoli. pippa stevens why the energy sector is sitting out and contessa brewer looks at flutter reporting earnings. mike, to you first. a strong day. we are add bing to it as we spe. rick rieder sat where you're sitting at the top of our program today and said he's trimming stocks. i want you to listen to why. >> equities are going to be higher over a year from now. that being said, i think these

valuations have gotten -- have caught up. >> all right. so his point was, look, valuations are full and rate cuts are -- everything's priced in because the market snapped back so much from the depths of last monday. >> right. we are still a few percent below the record highs in the s&p 500, in the nasdaq, but i think you have to remember, trying to -- been pointing to this, that at that moment, at the highs, you have just complete agreement on how ideal the setup was. in terms of probabilities of soft landing. the very small probability of hard landing. the fact we even thought we had a fix on the election and we hadn't yet had that kind of stutter step rethink about ai investing and the big tech pullback. so i think it's fair to say if that's your ideal spot right now, 4, 5% from here, it feels fully valued. now the market behavior itself has been very encouraging. every day without a surprise has meant the market makes a little

more progress back towards where it was trading before. we haven't yet had a broken, this little mini down trend we've been in for a few weeks. we're close to it right now, but i was saying earlier, we're in the zone right where we finished july more or less and right before we got the bad jobs number. so, you know, i think it makes sense that we're kind of tacking back and forth. the fact that we're also returning to megacaps being kind of defensive and kind of this collective agreement that they're somewhat safer at a 10 or 15% down from their highs shows you that the muscle memory's there. >> the vix is under 19. >> yeah. and that's part of it, right? everyone wanted to celebrate a broader market when you had crazy wild russell 2000 stocks leading the way. that's not a formula for a stable kind of comfortable rally and the more the megacaps could be an anchor, volatility can come down. it's not renormalized to where

we were below 15, but it's definitely more secure footing. it shows you we're not talking about macro stress here, we're talking about when the fed does what it does and what the economy is going to look like when we get there. >> got one sector today, pippa, that's red. it's energy. i know we're obviously concerned about what's happening potentially in the middle east, but at least for today oil is not delivering and, thus, those stocks are down. >> that's right, scott. it seems to be the demand concerns of what's hitting oil today with middle east tensions taking the back seat. the market has priced in it a retaliatory attack on israel which hasn't happened. we're seeing an unwind of the geopolitical risk premium. at the same time in closely watched monthly reports, opec trimming forecast in part because of tepid consumption. there's a $90 million call on brent taking into consideration whether demand is really as weak as the market is pricing.

oil's downturn is hitting energy stocks which are the only s&p group in the red. the upstream drillers are leading the declines. nat gas down more than 3% with obviousy, diamondback and coterra down 2%. >> thank you very much. to contessa brewer with what to expect from flutter. >> flutter's putting a lot of eggs in its u.s. basket. it moved the primary listing from london to the new york stock exchange. since then the stock is up about 3%. fan duel is the clear market leader in the u.s. fueling most of flutter's growth. now the street is expecting revenue of $3.4 billion with the u.s. contributing 1.43 billion of that. there are real potential challenges. growing concerns about a regulatory crackdown. big worries about states hiking taxes on gambling revenue. we saw that in illinois. draft kings announced it's going

to start tacking on a surcharge on winning bets in some high tax states defraying the cost of that. the investors will watch and see if fan duel follows suit thereby eliminating any competitive risk perceived in the fees. igame, it has the potential vastly to overshadow sports betting in terms of profitability. with flutter and -- well, fan duel and draft kings running neck and neck here and bet mgm working to recapture the lead a bit, flutter insists it has the edge and will maintain it. we see the stock up on the day about 2%. >> see what earnings deliver. contessa, thank you. contessa brewer. we're approaching the close here, mike. we've got a dow that's good for almost 400 points. as you said, 5400, we've eclipsed that. >> yeah. >> now on the s&p, we've passed the ppi test. now we need to pass the cpi one in the morning. >> we do. even as much of as i thought

that the inflation numbers, as long as they were mostly in line and stayed out of the way, we'd be fine. we probably got our hopes up after ppi that you're going to see further encouragement. not saying you're going to get that. i feel like the bond market is already there. i'm he not sure. once you are pretty sure the fed's going to cut, you're mostly rooting for the economy to hang in there, not for inflation to plunge. it doesn't hurt. i also probably would have said that about weekly jobless claims and that ended up being a bullish catalyst. what's interesting, when earnings season started. let's call it the friday when banks start reporting, july 12th. we're 5600 on the s&p 500. you've kind of softened up a little bit. you've given a few percent back. even though earnings in aggregate have come in a couple of percent than anticipated at the time but not at that same margin of victory that we got used to. we got used to 5 percentage points of advantage. so you could say that the fundamental support is there, it's just that the rate of

change is not as exciting. you're starting to see a little bit of wear and tear on the guidance. >> rick rieder tiers up what is in the market, what isn't in the market. do you sell the first cut because of what stocks have done going into it? >> sure. >> that's going to be the fascinating conversation over the next months really. >> without a doubt. but every sell the first cut winning trade, in other words, every time that was smart to do, it's been because recession was there. you're kind of using the sort of secondary indicator of what happened in the market instead of just sake, look, if they're cutting into a resilient economy that's not going to fall into recession, then you're talking about 1995, 1998, 2019 not like 2007, 2000. >> you don't want to take defeat from the jaws of victory. >> that's right. >> if they're going to hold off. >> >> that's going to be the debate for the next five weeks.

we'll be talking about what do we expect in terms of magnitude of easing. >> mike santoli, thank you. see all of you tomorrow as well. the fed is at 400 on the dow. we said the s&p bounce back 5400. tech is leading the way. almost 2 1/2%. >> that's the end of regulation. blackrock ringing the closing bell. u.s.a. volleyball doing the honors at the nasdaq. softer inflation prints and the yield's lower. stock's higher. with the nasdaq leading the gains up around 2.5%. closed at session highs. that's the scorecard on wall street as you can see right there on your screen. market rally. we're just getting started here. welcome to "closing bell overtime." i'm morgan brennan. jon fortt is off. dan niles joins us with his take on the nasdaq's rally. plus the two mag 7 stocks he likes right now and wh