the company doesn't comment on that specifically. they say it's in the works, they're figuring it out. >> kate rooney, thank you very much crypto night in america tonight at 6:00 p.m. will have a whole lot more on this eamon, we'll see you at 7:00. >> yeah, i'll be hosting the news with shepard smith tonight. >> thanks for joining us the last few days. >> thanks for watching "power lunch. everybody. >> "closing bell" starts right now. stocks kick off the second half the same way they ended the first with more volatility the dow trading at a 500-point range. at the high end of that ragenges we head to do close. i'm melissa lee in for sara eisen. right now we're pretty close to session highs in the s&p 500 3812, up by 0.7 of a percent the way we are moving, though, is a defensive tilt to the market we've got consumer stapling as well as utilities leading the way. check out the 10-year yield. same theme there a pullback in yields today, another sharp one, falling well

below 3%, to its lowest level since may. for the week yields have gone down 23.6 basis points, a stunning move. we'll be all over the market action and talk to former ford ceo mark fields about today's auto sales numbers and how car buyers are affected nationwide. warning signs on wall street micron shares plunging after raising the alarm about slowing demand it is the latest company to warn on earnings. nike, gh and more. meta platform ceo mark zuckerberg plans to cut hiring engineers by 30% this year as he cautioned employees about an economic downturn. he said in a q & a session, if i had to bet, i'd say that this might be one of the worst downturns that we've seen in recent history joining us now is paul hickey and mike santoli good to see you both

paul, i'll kick it off with you. we're on the precipice of earnings season and right now estimates are pretty much higher or the same level as they are at the beginning of the year. so there's a lot of wood to chop here going forward we're just getting a taste of it right now with the companies that i just mentioned. >> yeah. so i mean the last two weeks investors have been looking forward to this coming earnings season they're just waiting to watch the disaster waiting to happen it seems you know, the overall top line numbers haven't been lowered that much. but we have seen more companies get their numbers cut by analysts over the last month heading into earnings season than we have seen numbers raised it's in the highest rate of downward revisions the month of june is a small sample size but we've had 21 companies report earnings. over 80% have beat eps forecasts and 80% have beat revenue fo

forecasts. guidance has been weak like you were talking about in the intro. but we've seen four companies or five companies after micron that have lowered guidance and two that have raised guidance. but we've actually seen ten companies reiterate their guidance so it's not all that bad i don't know what the rest of the companies are going to report this coming earnings season, but we were just down 15% last quarter and that market declined partially because of the fed becoming more aggressive but it wasn't because of nothing. investors have seen a slower economy. two weeks ago the fed said that activity appeared to be picking up versus the first quarter. ever since then all we've seen are weaker than expected economic reports so zuckerberg talking about the worst downturns in recent history. the atlanta fed gdp report 2.1% decline in the second quarter. that doesn't look like picking up i think people have adjusted to

diminished expectations in the last two weeks, i think. >> i think, mike, that's scary or what feels different about this in the warnings we've gotten recently is how close they have come after the companies either addressed investors and/or gave them guidance for instance, micron they came out yesterday, adjusted their guidance. they just talked to investors at the beginning of june. 27 days later they cut their guidance microsoft it was a few weeks later. target it was a few weeks later. is it seems like it's on repeat. >> it does part of that is a relatively sudden stall in consumer demand, obviously reacting to shifting their spending priorities around with inflation try to rationalize the whipsaw in inventories that we've seen so i do think that the interesting issue is how the market has reckoned with some of that already

so if you look at micron, it was an awful revenue warning, and it's down 3% and the stock was down 40% before coming in so if that gets repeated in some fashion across the board, it means, well, all the bad stuff wasn't priced in but a lot of it was. i think that's what the market is struggling with we've been leaning in this direction, feeling as if things were at stall speed and we're just not sure if it's going to tip over into outright recession and even what kind of recession it might be. >> and to mike's point about the inventory issue companies are working through, paul, maybe the hope is it's going to be more like gm where they cut their revenue and profit guidance for the current quarter but for the back half they're maintaining it for the second half of the year because they think all those cars sitting there waiting for chips to be installed so they can get off the lot, that those will clear by the end of the year maybe there's that hope that that work-through can in fact happen in the back half. >> yeah. so companies are dealing with a

picture that they have never had to experience and no one frankly has experienced. the situation is just so changing by the day as far as inventory numbers, what supplies are coming in, what's not, what orders are getting changed i think this coming earnings season, again, we're looking forward to it a lot and very nervously, but all it's going to take is some maybe recognition by the fed that maybe they are seeing inflation expectations and some signs of inflation in the pipeline lessening and it may not even matter what these companies report as long as we -- because right now investors are so concerned that the fed is just pedal to the metal, even as the economy is slowing down and there's a big -- you know, when you have the fed coming one way and the economy pointing the other, that's not a very good recipe for things but if they start to recognize that more, i think we'll have a

better, more relaxed outlook >> right at the same time we have the overlay of rates subsiding, yields subsiding and that has helped us stabilize at least 3.8? who would have not. >> 2.8. >> absolutely. it was 3.5 and now we're at 2.8 or so. a month or two ago if you would have said all we need is for oil to stop making new highs and we see yields back up and we'd be fine that has come along with or because of some of the slowdown fears. so it's not as if there's an easy off-ramp to these concerns. but to paul's point, most of the financial condition tightening has happened because of what the fed has said it's going to do. i don't think there will be an

overt signal soon but it could be the market struggling in that direction and trying to overanticipate it a little bit i think there's a chance of that if it's going to be needed. >> paul, which sectors need to see the most estimates cut, do you think? >> well, as far as numbers getting cut, i think you have some of these high growth stocks that are going to have to see their numbers come in a little bit. retail is an interesting issue because the inventory overhangs don't appear to be getting much better, which is what we heard from kohl's earlier. analysts -- but they have been lowering forecasts in these sectors as well. i think it's more about the expectations game and heading into earnings season you still have very high expectations for the energy sector analysts have been tripping over themselves to raise forecasts in that sector, so i think that's something to look for as these companies report going forward but looking at the economy again, the fed came much more

aggressive because of the report that was revised away and now the atlanta fed gdp model from their own atlanta fed district is anticipating 2.1% decline in growth in q2 that's an acceleration of contraction versus q1, not an acceleration of growth so i think it should start recognizing that pretty soon, i would hope. >> the piece of it with mark zuckerberg talking about a downturn, that's the piece of it that's hard to model out based on the economic data because meta is a company that can afford to carry as many employees as they want if they decide the tide has turned and we have to rationalize the workforce, let's get this thing in the correct cost structure to what we are expecting going forward and talk the opportunity to kind of winnow the workforce down and be a little more conservative, that's the part of it that you don't really know. that's kind of vibes and this

collective herd mentality of getting away from labor scarcity toward austerity or something close to it. >> which netflix has done. they have done it already. paul hickey, mike santoli, thank you both. >> happy fourth. >> happy fourth. coming up, rising rates and high gas prices putting the brakes on auto sales former ford ceo mark fields right after this break you're watching "closing bell" on cnbc.

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stealth mover, duck creek technologies it was downgraded from neutral to buy slashing the price target to 16 from 39 following disappointing fourth quarter and full year guidance that stock is down 3.25% today. gm reporting a 15% drop in sales from a year ago. the company also warning investors supply chain would impact its second quarter earnings but is maintaining its previous guidance for full year 2022 for more on auto sales and the state of the auto industry, let's bring in mark fields, former ford ceo. great to have you with us. >> hi, melissa. >> hi. i'm hoping you can help me understand what gm is saying i know you come from ford but i'm sure the dynamics of the industry are similar they're waiting on chips because of the supply chain issues they can't get chips to install in these cars and move them off the lot. are these cars all spoken for? are they paid for? are they guaranteed sales? >> yeah, i think for the most part you're seeing a very high percentage of sales from dealers now that are presold

all you have to do is talk to any amount of dealers, as soon as they show up on the car transports, they're gone i also think gm is saying, listen, it's not only a microchip shortage there are a whole host of components gummed up in the supply chain, whether it's because of the covid shutdowns in shanghai or the strikes that are happening at ports in europe this is dgoing to be a continua problem and it's not just microchips but my interpretation of what they're saying is they're maintaining their profit forecast because of the tight inventory, average selling prices are extremely high because of the pent-up demand and very low amount of incentives, historically amount of incentives that they're spending. >> right i want to get your take on where you think we are in the u.s. economy as relates to automakers right now there are great fears about recession. we're seeing it play out in the market and the treasury market at this point. there is a thought that by the

time the automakers can get their supply chain issues straightened out that the demand won't be there anymore what do you think about the timing of things when it comes to this economic cycle when you juxtapose that with where the supply chain issues are right now? >> i think we're in an unprecedented time in the auto industry usually when you're going into recession, and whether we're in one or not it doesn't matter i think psychologically people think we are right now despite what the numbers say nonetheless, it's unprecedented where you have very strong demand going into a recession for auto and the reason for that is because of the last two years of supply chain issues, an average recession in the industry drops about 20% in volume. guess what, over the last two years because of the supply chain, the industry volume has dropped around 20% so you've already seen inventory come down or volume come down. inventories are very low even if we start to see some demand erosion because of the high gas prices or the higher

interest rates or the lower consumer confidence, the car industry still needs to restock from this last two years so any degree of recession would be more muted than it has been in the past for the industry once we get through the recession, you're going to have probably three to four million units of pent-up demand out there. so following the recession, however light or severe it will be, will be a very good time for the auto industry. >> i want to ask you about valuations in the sector i mean the valuations just bombed out to put it bluntly the five-year average is 38. what do you think these stocks are pricing in at these valuations, mark >> i think the valuations are unduly depressed right now because i think a lot of investors are keeping in mind how auto -- how the auto industry has performed in previous economic slowdowns.

i think we're in an unprecedented slowdown with very positive implications for the auto industry. i also think the second thing is they're looking at the industry's transformation in introducing electric vehicles, andthey're looking at the very strong increases in the elements, lithium, cobalt, all the input costs for those vehicles so the question is right now you have in the ev market, supply is now a greater constraint than demand the question is once they're able to get supply up, what does it mean for margins? in the auto industry, they're great at working scale economies. guess what, for elements, they don't respond to scale economies. lithium, cobalt are going to be what the market says so they'll have to look at other ways in their operations to improve the overall margins in the evs, but that's what the market is looking at. >> this is supposed to be the growth engine. this is why ford, specifically

kb gm, more broadly the auto industry got rerated higher. but right now those profit margins look in danger lithium is up 500%, nick 'em is up over 30%. the ford f-150 lightning, the margin is razor thin, mark where can the efficiencies be gotten, and how long will that take will that only happen with scale and so, therefore, it will only happen with time >> well, i think it will happen a couple of ways first, as you're seeing with automakers, they're pulling the pricing lever because they can you've seen multiple price increases from tesla, from ford, from gm with the exception of their bolt because they want to show some traction with their evs. they're under pressure for that. but i think first and foremost they'll continue to pull the pricing lever until they see demand evening out secondly to your point, they're going to have to look at all the elements that they usually do to drive cost efficiencies in the

auto industry. in the case of electric vehicles, it's working on the battery packs, inverters and motors and using scale economies to drive down those costs. the one that's not going to move is the elements, as we were talking about earlier, because that is going to be what the market is going to be. those don't reduce in cost sale economies or respond to scale economies in the auto industry so they'll have to continue to look at ways of the battery chemistry to try to reduce those elements just like they did with catalytic converters so i think you'll see progress but it's going to take time. >> mark, great to have you thank you. >> thanks, melissa. >> mark fields let's check on the markets right now. higher on this first trading session of the second half of the year let's get that straight. s&p 500 just a points off the session highs. a pulse check on the consumer,

we'll break down staples and new details on sam bankman-fried's latest acquisition in the crypto space. check out some of the top search tickers. the 10-year yield getting the most interest followed by apple, wel rndohs.la a kl' 'lbeight back.

sam bankman-fried's ftx is making a big acquisition in the crypto space s. >> ftx has the option to acquire blockfi at a maximum price of $240 million that's based on certain performance targets. no word on a minimum price it also includes an increase in the lending facility ftx had loeaned blockfi $250 million. that's pumping up to $450 saying it hasn't drawn on that yet.

this deal is going to be signed by the end of the week the price tag could have been as high -- not a great outcome for equity investors even if the deal were to get done at the high end it's a fraction of what the company was worth at its last private funding run. i'm also told venture capital investors are taking pretty big losses here and they're writing down the value of that investment we also got some news last hour that one of blockfi's major competitors, voyager, is temporarily suspending trading, deposits, withdrawals and loyalty rewards as well effective as of 2:00 p.m. eastern today. more issues here in the crypto space. back to you. >> kate, thank you kate rooney. let's get today's market dashboard. mike santoli is back taking a look at consumer stocks, mike. >> yeah, a big change over the last two years

this is consumer discretionary relative to consumer staples this is an equal weighted version of either of those sectors. if you look at it, consumer staples is 40% p & g, coke and pepsi. remember two years ago that was the early stages of the first reopening kpieltment that we got after the pandemic so you did see discretionary really surge depressed earnings now it's been a complete round trip they have converged and consumer staples living up to the reputation for stability and boredom and that's actually done okay in the last couple of years. take a look at the valuations of the same two baskets, forward price earnings multiple for each one has been an inversion. we've gone from close to 28 times earnings, this goes back to the end of 2020 so this is only like 15 months ago or so, down to under 14. now, the consumer discretionary sector has not spent an awful lot of time below 14 under the

last six or eight years. it just shows to the point we were making earlier that essentially the market has been leaning in this direction for a while saying, look, the earnings are probably in question for a lot of cyclical groups obviously we don't know if the market has fully accounted for all of that. >> mike, thanks. mike santoli. up next, wells fargo's scott wren don't miss the outlook for cryptocurrencies in the second half of the year during a special report, "crypto night in america" coming up at 6:00 p.m. right after "fast money.

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energy by far the top performing sector in the first half our next guest still likes it for the rest of the year joining us now is senior global market strategist scott wren scott, great to speak with you. >> hi, melissa. >> hi there. so energy, we've seen a pullback more recently just because of the trajectory at which energy stocks rose was extremely sharp. you, though, think that energy ultimately will still be a winner. >> it was an extremely sharp increase, melissa, but we do think that the energy sector still has some legs. we think oil prices are still going to stay high we've got a $100 target for the

end of this year, $110 the end of next year so basically we don't think there's a lot of downside in the oil market the demand is there. the earnings and cash flow of these companies are good so we continue to like energy. >> i want to ask you about the recent decline that we've seen in the 10-year yield and what you think is behind it we've seen a decline in a single week of almost 24 basis points which is a very sharp move in one week i'm wondering if that changes the backdrop for equities in any way? >> well, i think that equities are more worried about how aggressive the fed is going to be let's face it, the bond market has been pretty wild here, whether it's on the way up or down i think the bond market anyway, at least when i look at it, is saying inflation is not going to be a longer term problem there's some flight to safety there because there's a lot of

people on the recession train now and the growth is going to slow so i think there's some hbuyers in there at yields we haven't seen for a while i will say our fixed income group when the yield was closer to 3.20, they brought up to neutral a very long-term position we'd been carrying so there's been a lot of interest at the yields we've seen recently but certainly there's safe haven buying going on here and just looking for some slower growth. >> right in addition to energy, like health care and information technology with a focus on big caps, so the market cap of these stocks and equality. what source of information technology are you looking for we got a negative point from micron and then for a lot of the online sort of commerce names and online ad names, those are very highly correlated, the revenues are, to gdp. >> yeah.

i think that search certainly ts been hit harder than the s&p 500 overall. you have to ask yourself is this an opportunity or is there something there. we do think it's an opportunity. if you have a 12, 24, 36 plus month kind of time frame horizon, we think you need to be in here buying these names, these quality names. quality is the word people use all the time but for us it means good balance sheets, good cash flow, easy access to credit, buying back shares, lots of products, all those kinds of things so that's what it means for us we think the earnings growth rates are still going to be good they tend to be less cyclical. we don't have a lot of interest in companies that aren't making money and don't have cash flow if you look at technology, things that deal with automation, things that deal with efficiencies, you know, companies know that these labor shortages that are out there are not going away any time soon and are looking for ways to make up

for that to some extent. so those automation and efficiency areas in technology, those are good ones to take a look at. >> scott, great to see you, thank you. scott wren, wells fargo a good weekend. >> you too let's take a look at where we stand in the markets we're close to session highs in the s&p 500. we're up almost a full percentage point the dow is up more than 300 points. kohl's calling off sales talks with franchise group and the stock is getting hit hard. the details on what is next for kohl's when "closing bell" returns. ♪ ♪ well would you look at that? ♪ ♪ jerry, you've got to see this. seen it. trust me, after 15 walks it gets a little old. i really should be retired by now. wish i'd invested when i had the chance... to the moon! [golf ball bounces off rover] unbelievable.

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kohl's shares getting crushed after announcing it has ended sales talk with franchise group. the retailer's chairman explained why they abandoned those talks. >> we both felt that the price offered was too low and that we also believed to not have conviction that that transaction could actually close the complexity of the financing involved, the lack of commitment papers that we received frankly with that transaction led us to believe certainly in this environment that we were actually trying to catch a snowball going down a hill >> cnbc.com's lauren thomas broke the news of the deal falling apart and joins us now what's next, lauren? >> yeah. that's a great question. i think that's a question that a lot of people are wondering as we kind of have this culmination of what's been a months-long back and forth between kohl's and potential bidders. of course ultimately franchise group rose as the top bidder and now we're learning that that has

fallen through you know, kohl's has said that for the most part its long-term strategy, including sephora, and this partnership with amazon, all of that will remain intact of course this company still has to navigate a lot of uncertainty in the near term, particularly as we roll through the back-to-school season and upcoming holiday season and these larger inventory issues that retailers are facing. you know, kohl's is not immune to any of that so i think that the pressure will certainly be on michelle goss after the company has gone through this process and has a bit more to prove for itself one thing that will be most interesting to watch and we have a separate story up on cnbc right now about the fact that the retailer says that a real estate sale is potentially on the table and the board is actively re-evaluating kohl's had said that it was

opposed to selling a lot of its real estate and leasing it back but we have seen activists really put on the pressure in recent months for kohl's to do such a deal. that was going to be part of this franchise group agreement franchise group wanted to come in and sell a lot of real estate, so i think it's likely that the company ultimately maybe was able to learn the value of what it could get for some of its stores and distribution centers so that's something to watch i think that could come more imminently and over the long term we'll have to see how kohl's performs from here. >> lauren, thanks. lauren thomas. micron drakgging down the chips. an analyst who just downgraded micron to neutral. plus the outlook for finteches and banks in the second half when we keta you inside the market zone

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we are now in the "closing bell"stephanie link is here plus vivek and kate rooney on fintechs markets are fairly range bound in the first trading day of the second half of the year and before a long holiday weekend. steph, we had a big decline in the 10-year yield. we're session highs in the s&p what are you watching here >> well, the good news is that the first half of the year is over the bad news is that we still don't have a lot of visibility in terms of the things that got us down 20% for the first half of the year. it's inflation, it's the fed, it's -- i don't know, is it recession, is it a slowdown, is

it stagflation all of these things are still top of mind and i don't think they're going away any time soon melissa, i was disappointed in the economic data yesterday and today. the core pce number at 4.8% -- sorry, 4.7%, even though it was down from the prior reading, it's still a ways to go from the fed's goal of 2% and the ism number, the new order number fell into contraction. new orders we know are leading indicators for earnings and capex. this is not stuff we're really surprised about, but it is certainly something to watch so now the fed has to tighten into a slowing economy and then we have to get through the non-farm payroll numbers next week and then earnings, which i think is going to be a very wild ride i don't think you're going to see big disappointments in demand, maybe certain sectors like we saw in semi conductors, but i think we'll have to get through this cost inflation and supply chain issues. let's get to micron shares, they are slumping on the back of their forecast

the company issuing weak q4 guidance with the ceo saying smartphone and pc sales will decline meaningfully this year joining us for more is vi vivek aria vivek, great to have you with us. >> thank you, melissa. how are you? >> good. do you think this reset is big enough for micron? what i thought was interesting about this is we just heard from the company at an investor conference at the beginning of the month and here at the end of the month we're seeing the guidance being cut, citing deteriorating conditions effectively. >> yeah, melissa so the message here is that the semiconductor industry is finally feeling the heat of the cycle. the downturn started on the consumer side partly because of the tougher comparison when everyone bought a lot of pcs during the lockdown. then the smartphone market started to slow down partly

because of the turmoil we have in europe, partly because of the pressure the consumer is under and the lockdowns in china some of that consumer weakness is starting to now spill over into parts of the enterprise data center and eventually some of the auto and industrial markets. so as we are starting to see the rollover in these different markets, you are seeing different companies start to express that caution as micron has done the silver lining, we are starting to get to a point where consensus expectations for next year will start to overreflect the downturn and that is usually the point at which the stocks are at the bottom. so we are cautious on demand but we are a little more positive on some of the semiconductor stocks as this process works its way through the system. >> steph, the read-through is not good for intel the read-through is not good for amd and not good for chip

equipment stocks where do you stand on the sector >> nor is it good for lam research or applied materials. it's the whole food chain within semis. i don't own any semis. i sold all of my semi names about two months ago because i was afraid of the potential to see double and triple ordering and i think that's what you're seeing today not only is it micron but it's tsmc saying that orders are slowing and that has big implications as well so for now i think we just stay away, get through earnings i do agree that maybe we're getting closer to the bottom because it's already down 30, 40, 50%. but i would pick my spots carefully. broadcom is a name i have my eye on but there are names that are starting to get on the valuation side more interesting. we've just got to get through the e part of the earnings and evaluation story. >> vivek, how can we think about the double ordering issue that so many investors are concerned

about and maybe when that's all through on the other side of it demand is even weaker than what we're seeing right now >> sure. so i think there are pockets of semiconductors where there could be double ordering risks you know, these tend to be exposed more on the commodity side so, for example, memory there are greater double ordering risks because you can exchange products from different suppliers. but there are other parts of the semiconductor market such as in cloud and parts of enterprise, such as in semi cap equipment where it is hard to double order. but still the demand outlook from a number of those customers was based upon the consumption of a certain macroeconomic outlook. the semiconductor industry doesn't operate in a vacuum. it is exposed to a separate economic environment and that is being influenced by the decisions of the fed, what's happening in europe and what happened in china. so they are trying to adjust to what that new outlook is and i

think that's really what's showing up in the estimate reductions with these companies. but i agree with what stephanie also mentioned in some cases, the estimate reduction and especially the pe multiples are now getting to a point where they have corrected more than what we have seen in prior downturns. so it's a matter of waiting for the catalysts when these macro forces start to at least stabilize or abate i think that's the point where the semiconductor stocks will be a lot more attractive going into next year. >> vivek, thank you. don't miss sanjay tuesday on "squawk on the street. the bank says honeywell and uber will be resilient. top ideas include kroger, meta and pfizer steph, you own a couple of them,

american express and meta. it is a market underperformer today. we got some warning from mark zuckerberg about some fierce headwinds. >> yeah, it's been a really hard stock to own it's a humbling business and you've got to call a spade a spade. the stock is down 53% year to date and trades at 9 times earnings clearly they'll cut head count but there's other things they can do as well at last quarter they did lower their op ex guidance in the meantime you've got two to three billion monthly average users. size, skill, 10 million advertisers. even if that slows, it's better than traditional advertising there's a boatload of cash buying back stock.

i'm sticking with it i think the risk/reward from here is too compelling >> exp, being so exposed to travel and that bouncing back, is that still the driver >> they have done a really good job in terms of card growth and new customer acquisitions. genxs and genzs are signing up faster than expected net charge-offs fell in may year over year. delinquencies were flat year over year in may that might change. it's probably going to change for all of the financials but they're so well capitalized at this point in time and the stock trades at 14 times earnings i still like this one. i would be a buyer on weakness but waiting for the earnings if you get a drop on earnings,

that's when i buy more. >> let's get to fintech here the wall street journal is saying klarna is buying a company. it shows just how rough the environment has been for fintech stocks kate rooney joins us kate, buy now, pay later seems to be one of the worst performing groups right now. what are some of the things in fintech analysts may be a little more optimistic about. >> lending has been the toughest sector dan dolev told me he sees valuations pricing in what he called an apocalypse in consumer credit so anything other than this in the second half could result in upside the other thing people are focused on, profit paypal would be a name in that category and block as well,

formerly square. but that name has gotten beat up a bit more than others $6.5 billion in cash robinhood as well a name people are focused on i'm told there may be an artificial floor on some of these fintech names because they may seem m & a targets the risk/reward looking slightly better for a lot of these fintechs as multiples come down. melissa. >> i don't know. a thesis of it might be bought doesn't seem like a good one steph, do you like any of these fintech names? >> oh, no, definitely not. not when i have something like bank of america when they spent $30 million over the last decade so i'd rather own the financials

that have earnings, that have cheap valuations, good capital ratios and positioning >> thanks a lot, kate rooney. closely watched ban ank list mike mayo out with a big call on the banks. lowering price targets across the entire sector citing tough year-on-year comps and the marks to book value but mayo does say regional banks should fare better than wall street banks while keeping bank of america as a top pick what's your top pick, steph, in the banking sector >> well, after the capital tests, the stress tests, i think morgan stanley as the winner hands down in terms of them turning around and increasing their buy back and a dividend. the only company to do both, by the way, so they look like a shiepi shining star i like what they have done in terms of the m & a and diversifying away from the yield cou curve. you're going to see synergies there and they just continue to

have excellent, flawless execution. and the stock trades at 11 times earnings and will yield 4% i like the turn-around in wells fargo and also i mentioned bank of america is the hidden fintech play. >> are there any banks that we're talking about right now, steph? institutional banks that could add a fintech company? we were just talking about fintech. is there sort of a, i don't know, a matchup that you see in the cards possibly >> i mean it's possible. but i still look at these valuations, melissa, and they're still pretty high and what do you get for them, right? you've got a declining subbase, if you will. so i think that these companies have all been investing in technology i think, again, bank of america is the standout. and so they can make a tuck-in but they have such size and scale now they can just groew de novo what they ave

they have been making so many small acquisitions and some really good growth initiatives on this front. >> you mentioned morgan stanley in the context of diversifying away from the yield curve and that does look like where the strength in the banking sector right now is the companies that are not dependent on loans they're not dependent on deposits they can sort of trade they can do other things away from that all. i'm wondering if there is another bank that might fit that in your view >> well, and that's why morgan stanley has an rotce of 20% and their target is low 20s for the next couple of years look, i think everyone seems to be kind of piling on goldman goldman is much cheaper than morgan stanley and they too have kind of been diversifying. the market is still so small for them but perhaps maybe they do something there or continue to build it out but these two companies i think are going to do better than the traditional banks. that being said, the 10-year started the year at 151. even though it's at 288, that's

still a big move so net interest income numbers will be the bright spot for those traditional banks. for example, wells fargo net interest income, for every 50-point basis point move in the fed funds, that's 16% to earnings and 7% to net interest income so that's a big beneficiary and they have done a good job in terms of cost cutting on the side we don't want to be too negative on the banks especially when stocks are trading at one times books or less. >> i'm going to say good-bye to you and have a good weekend, steph. before you go, what's your best pick going into the second half? just one ticker. >> let's get -- let's go with meta, why not. it's down so much. i think the sector -- the sector is energy, the stock is meta, how's that >> excellent steph, have a great weekend, thank you. >> you too >> all right we're close to the close here on the first trading session of the second half of the year. we're close to session highs right now. leadership coming from consumer discretionary right now, up by almost 2% as well as utilities up 2.5%.

again, the move on the 10-year yield for the week has been stunning down about 24 basis points in a single week. as we close this session out, the s&p 500 closing out a 1% gain on this friday. i'll see you tonight on "fast money" at 5:00 meantime, let's send it to "overtime" with mike santoli and welcome to "overtime." i'm mike santoli in for scott wapner you just heard the bells and saw the fireworks. we're just getting started in just a few minutes we'll speak with crypto bull tom lee his reaction to that dramatic fire sale in the crypto world. plus late-breaking developments as another crypto lendser freezes customer assets. but we begin with our talk of the tape. is it time to double down on defensive posture as we kick off the second half of the year? another dose of weak economic data adding new fears of