>> it's eating me alive. >> thanks for watching "power lunch. >> we'll see you tomorrow. tech shares driving the nasdaq higher today but the dow is in and out of the red as we head to the close. the most important hour of trading starts now welcome to "closing bell." take a look at where we stand in the market building on strong gains, the s&p up half a percent. you have consumer discretionary energy and financials. those are all the groups in the green. what's lagging today utility, health care and consumer staples it's flat now. check out the top performers which once again is driving the gains and that is despite higher treasury yields and a stronger dollar today

look at netflix driving the whole movie theater and media groups higher at the top of the market software names are doing well. the high flyers which have gotten absolutely slammed in the bear market is up 5% thanks to coin base, unity and shopify all up double digits right now coming up on the show two key players in the battle over funding for semiconductors, we will speak exclusively to micron ceo who has been in washington this week as we speak meeting with lawmakers about the needs for chips act funding in order to compete in the global market. commercial secretary gina raimondo with the latest on where things stand in the bill's passage. mixed action the major averages still on pace for a strong week.

can we trust this rally? i think we're going to have two people on different sides. tom, you are bullish you see it as sustainable? >> i think the second half of this year has a lot of tail winds building a lot of the inflationary pressures that made investors think it was quite sticky are rolling over, some of the foods and even some of the things pointing to housing. that means inflation risk is declining and that allows not only the fed to be less aggressive but p/e to he can panned and earnings haven't been as terrible as expected. investors are bearishly positioned and a lot of negative sentiment.

that will be something we have to respect >> why are you more cautious >> look, the -- i do believe we at ubs do believe the 9.1 june inflation is likely to prove at peak in which case there is a chance however, the constant dialogue and back and forth in the market has been about the recession versus inflation and so maybe we have started on a path to deacceleration which would be wonderful and would start to provide some stability and get institutions back buying and taking on risk but then the r word, recession although it is true earnings have not been horrible the case for that is to say earnings are backwards looking.

companies and consumers have been resilient and started to figure out a way to maintain pricing power for now but we're 24 companies in and each of those 24 companies have guided down and that still has to hit the markets. >> tom, it is a good point even if we've seen peak inflation, we may not have seen peak damage and the fed is not signaling yet it's ready for any pivot what about that recession question and whether there's more pain to come? >> i think these are fair points foremost we have to keep in mind markets are forward looking. i think the central case for investors seems to be that a recession is sort of in the back or it's a done deal or it's not -- it's unavoidable but i think what may be strengthening in terms of incoming data is a

soft landing what that means for earnings is just not entirely clear to me. i think a lot of companies, especially cyclicals will get really hit with that bullet effect so a lot of e-damage with cyclical stocks investors tend to buy high p/e because they look through that valley. i do think you want to be overweight quality large cap tech and growth and then some defensives that's a lot of ballast, talking 70% of the s&p is viable and earnings risk. in 1982 the stock market was almost three months ahead of the fed before volcker declared an end to anti-inflation measures

even if we see that last month, june was the high water mark, it's unlikely we'll get a fed pivot anytime soon and they've signaled they're willing to let the economy fall into recession as we deal with it it doesn't mean it will come down to 2% anytime soon. fed hiking is not as problematic as the fed having upside risk, hawkish risk we see much more measured and, look, if fed funds get to neutral and the fed wants to push above it, that's most of the market is stock market history.

equally important we have to keep in mind that it's only been achieved 30% of the time it just needs us to get away from these are pretty ugly numbers, these are terrible. the fed doesn't have to change to raise forward expectations. still 2.8% it's not like the fed has to crush the economy. it has to manage expectations. >> well, we have that qt wild card they're going to start tightening and that's another, i think, headwind. alli, the final word on the strategy if you are feeling more cautious than, say, tom's view on the market, where should you be right now >> my job is to protect capital

and as much as i hope that tom is right, you have to plan for the best that is what i am doing. we are in a huge transition period globally synchronized in that transition period i expect volatility to persist there is absolutely a world in which we saw peak inflation behind us and market history informs what happens over the next 6 to 18 months which is largely above average returns even if we go into recession there is also the possibility there's another shoe to fall and we've had a lot of good information hit the markets recently that have helped what may prove to be a bear market bounce i think all of the strategies, going for quality, having enough cash on the sidelines and, you

know, really understanding your time heorizon, but we can keep our fingers crossed for sure >> tom, look at coin base. it's still down 70% for the year would you be going back into bitcoin with the bullish view overall? >> bitcoin and china equities, i guess, are both the highest beta expression of tech i think bitcoin's recovery is pretty miraculous, right, almost 50%, a huge deleveraging event, maybe some fraud and yet bitcoin has bounced close to 25,000. we need to respect that price move >> coin base says it has no exposure to the collapsed hedge fund, three arrows, celsius and voyager. alli and tom, great debate thank you for joining me

and the dow is back in positive territory up 52 joining the s&p and the nasdaq rallying more than 1.5%. after the break our exclusive interview with the ceo of micron as chip makers anxiously await funding from the chips act why he says the government needs to act soon or risk falling behind you're watching "closing bell.

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check out today's stealth mover. it's silvergate capital, another crypto play. wells fargo raising its price target on the platform from 115 to 100 reiterating its overweight rating citing valuation. the analyst there believes his bear case is priced in at this point into the stock after a more than 30% decline just in the last three months. everything crypto is rallying nicely today the chips act clearing its first hurdle in the senate and the semis are certainly getting a boost on the news. the vaneck semi is up. meeting with members of congress joins us now for an exclusive interview, sanjay, great to have you. what are you hearing is this going to get done? >> first of all, sara, great to be on your show. yes, as you noted yesterday's motion to proceed and a positive vote, large bipartisan support in the senate is very positive

momentum we are hugely encouraged by this of course we have to get to the finish line in the senate and then we move next to the house hopefully over the course of the next few days the chips act will pass sara, you know this is really important to secure economic stability and economic prosperity here in the u.s. as well as, of course, national security and the chips act is all about having america lead on manufacturing front and reverse the trend of the last 20 years, incentives provided in nations overseas, manufacturing has shifted to only 12% of the manufacturing here in the u.s. and of course the chips act will work on bringing that back micron is absolutely going to do its act in terms of investment with the federal support as well

as state support >> that's what i wanted to ask you about, sanjay. there are reports, i don't believe you've confirmed them yet, you are looking at building a fabrication plant in boise, idaho, which i know your headquarters is there. is that true what are your plans? >> we have not confirmed the site yet first things first, we need to get chips passed and, of course, we will be then making our decision around the site of course micron is headquartered out of boise, idaho. 7,000 team members who i know want to see, and micron wants to see, but our team members also in idaho want to see chips act supported and we are a global company. we have a strong presence here in manassas, virginia, as well but, sara, no decision is made yet.

however the matter is of great importance urgency because we will be looking at making our decision in the next few months. it's important to get chips across the finish line before the august break in congress >> keep us posted on that. sanjay, you mentioned you are already doing it and other companies are building plans in the u.s. you should be building factories in the u.s. to protect your supply chain so this shortage doesn't happen you have plenty of money >> recognize two things, one only 2% of the global memory production takes place here in the u.s., only 2% and if that 2% will be even smaller and, of course, how can you have your national security address

through manufacturing overseas this is why we need to have chips act. how can we have economic prosperity when we see industries across-the-board were affected by supply chain shortages, semiconductor shortages. in order to provide the relief to that and not to have a repeat, support incentives are needed from the government in order to bring manufacturing here to have a secure domestic semiconductor supply chain in the u.s. as well as to have a pipeline of chips manufactured for mission critical military infrastructure as well companies like micron, the semiconductor industry invests a tremendous amount of capital that goes into these manufacturing plants of course we have to be competitive, sara, with overseas locations where the governments have provided for a considerable period of time over the last 20 years and there is a 35 to 45%

cost difference in production overseas and here. of course companies like micron will invest the vast majority of the capital for this but the incentives from federal and state level are needed just to level the playing field. those that have recognized the importance of semiconductors over multiple years -- >> i get it that you're in china giving subsidies and it's a competitive issue. my point is just tsmc is building a plant, i think, in arizona, and samsung looking to build a plant in texas at some point it does make economic sense, doesn't it, for you as a corporation to do this anyway, subsidies or not >> i want to be very clear that for memory if there is no chips act micron will not be able to invest because we have to be

competitive in other global companies that are in the same space. this is about not having these jobs in manufacturing go to overseas countries if chips is not done, we'll be ceding the future supply to overseas countries and this is what you don't want. for national security reason and, of course -- >> understood. >> tens of thousands, many tens of thousands, hundreds of thousands of jobs here in the u.s. that the semiconductor industry will support with chips getting across the finish line >> sanjay, didn't you just warn a few weeks ago the demand environment currently is changing and is weakening from what we've seen? so i do wonder about the timing here are we on the brink of seeing potentially that shortage go away and in a few years if the money goes to the chip makers and we see a real building glut, an overcapacity problem given what's happening on the demand

side >> i think, sara, what you have to recognize is semiconductors demand is continuing to grow it's all the applications from ai to connectivity such as 5g, electric vehicles, so from the cloud to your smartphone, data centers in automobiles, memory and storage and semiconductors are needed you have to look at the long view the investments the chips act would allow are really about addressing the demand for the later part of this decade. sara, the semiconductor industry is going to double from its current levels and become a trillion dollar industry memory and storage is growing faster than the average of the semiconductor industry this is not about any near term. you have to really look at the long term and to invest for the long term incentives from federal such as the chips act

that are absolutely needed otherwise, again, this manufacturing will be overseas and in that process america will lose in the long term. so this is not about any near term adjustments businesses make from time to time managing their capex, given the near term environment, long-term trends are secular in nature in terms of more need for semiconductors, more need for memory and storage. memory and storage which micron is the only company that supplies that here in the u.s. will grow from $160 billion to $320 billion industry in 2030 time frame this is what is at stake here in terms of bringing manufacturing to address growth here in the u.s. >> sanjay mehrotra, we got a good taste of what you're talking to those lawmakers about. thank you very much for joining us today >> thank you, sara >> the ceo of micron in d.c. today. we'll talk more about the chips act and how quickly it can

get through congress when we are joined by commerce secretary gina raimondo. plus the nasdaq 100 has been on a hot streak up more than 12% from its lows of the year. a closer look at the names that are driving this rally and the stocks that are sitting it out check out some of today's top searched tickers netflix today takes the -- unseats the ten year yield amazing. i don't think we've seen that in months netflix rallying 6.4% off less worse subscriber numbers than reported but the ten year is number two and we are above 3% we're seeing another sell-off with yields pushing higher tesla ahead of earnings is rallying a little, 1.3%. that's coming after the bell apple and the s&p 500, which is now up three quarters of a percent, building on the gains in this final hour of trade.

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time for today's market dashboard. mike santoli with a closer look at the recent rally in tech. i was wondering if you would use

the word junk. >> the lower quality stocks, beta is running hard however, if you look at it longer term, you do have the quality mega cap tech. also maybe getting some adherence here because this rally has slightly broken above this downturn. the nasdaq 100, everyone has been watching this that approximates the average we built upon the rally from thursday morning's low it's about 9% or so in the nasdaq 100 so relatively significant but it hasn't just been all inclusive especially over the last couple of years interesting to see apple has really continued to stand out as the destination of sort of safety seeking money this is apple against paypal, shopify, docusign from two years ago to labor day of last year they were in the same spot and then in succession they fell away docusign, this reopening trade the pandemic favors. paypal had a stumble

fintech got overheated and shopify a similar story where e-commerce seemed to fall away the question is are we going to continue to see this divergence. they are up today but not making too much of a dent there is selectivity in the market and i guess we'll have to see if it will be a catch-up move or something in between >> internet retail zooming etsy is at the top or bought am it's up 6% near the tomorrow but still down >> it's a supercharged kind of consumer cyclical plus the digital economy play >> mike, thank you we'll see you in the market zone you heard from micron ceo sanjay mehrotra on the chips bill which passed forward in the senate let's bring in commerce secretary gina ray raimondo it's great to have you back on the show welcome. >> nice to see you >> what is the time line from here for passage >> so last night was a big vote,

big bipartisan vote in the senate, as you said. the senate will take another vote later this week on to the house next week and then the president's desk. it's a train coming down the track now with great momentum. we just have to make sure it gets to the president's desk in the next week and a half to two weeks. >> it's a lot of money, $52.5 billion for grants and then the 25% tax credit for semiconductor fabrication estimated to cost around $24 billion so $76 billion for one industry. how does this get disbursed and when >> it's an excellent question. the money will come to the commerce department and we will have to set up a transparent process that's a competitive process for firms to apply the purpose of all of these moneys is to have more chips made in america.

very importantly there are a lot of strings attached here none of the money can be used to build facilities overseas. and if it is, then we can claw the money back it's really intended to have companies build large facilities in america making chips including the most sophisticated chips which are not now made anywhere in the united states. >> critics would say that you're picking a winner here. $74 billion is a lot of money for one industry, and i understand the arguments that it's important for national security it's important for our economic security with the shortages, but so are a lot of other industries, aren't they, madam secretary? biotech, ai, where china also has a competitive advantage there. why so much to one industry? >> you can't have a biotech industry or artificial intelligence or quantum computing without semiconductors

semiconductors are a cornerstone technology necessary to underpin every other innovation-based industry but also right now the united states does not produce any leading edge chips in our country. we purchase 90% of these chips from taiwan. and those are the chips necessary for biotechnology, artificial intelligence, military equipment so the national security vulnerability here i would say is nearly unique in the fact we are so dependent on taiwan and this is a product so necessary for innovation and military equipment. >> but we design a lot of the semiconductors here, don't we? the r&d is done here, which i would think for national security, is more important.

>> i would not agree with that yes, we do design here, let me say. the software companies, the tooling companies, the design companies, america has some of the best of them but i would suggest that if you allow yourself to think about a scenario where the united states no longer had access to the chips currently being made in taiwan, you would -- it's a scary scenario, right. it's a deep and immediate recession. it's an inability to protect ourselves by making military equipment. we need to make this in america. we need a manufacturing base that produces these chips, at least enough of these chips here on our shores because otherwise we'll just be too dependent on other countries. >> so you mentioned there are limitations or rules so are you saying there will be strings attached with this money where companies like intel

cannot invest or expand manufacturing for advanced semiconductors in china? are those guardrails in place in this legislation >> yes, they are the exact legislation is being written as we speak, so i have to be a little bit careful because they're finalizing the text, but, yes, absolutely there are strict restrictions with respect to prohibiting companies from using the money to build facilities any place other than the united states and, also, as you just said, prohibiting companies from building leading edge chips in china and other countries of interest >> and how do you get around the fact that critics and including from the semi industry, a former semiconductor executive wrote a while ago an op-ed in "the journal" when government funds a project like this it's an inefficient use of spending and

capital and ultimately whether the purpose or not unintentionally rewards payouts of executives and all sorts of other problems that come with government projects like this. why not just let the industry do it itself? >> so there's no question these companies are going to expand, right? semiconductor demand is up almost 20% in the past few years and will increase another 20% the next few years for intel, to fill customer demand, they are going to expand will they expand here in the up st united states of america or go to france, germany, spain, italy where they're receiving incentives and i want them here in america. i want to protect the people of america, to be able to build the military equipment necessary to protect ourselves, and i want to

create the hundreds of thousands of manufacturing jobs here in the united states of america and so that's why this is twort doing and necessary to do. >> secretary raimondo, thank you very much for joining us the ball moves forward, it is moving the semiconductor stocks higher today. up next, mattel to the moon. shares moving skyward after inking a new deal to produce space toys we'll bring you the details next

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check out mattel getting a pop after announcing a multiyear deal with spacex to produce toys and collectibles the toys will hit the shelves next year. the vice president saying we look forward to working with mattel for space explorers and enthusiasts. another company now in the musk orbit. mattel, of course, makes barbies, hot wheels and more a news alert on crypto working on a new bipartisan bill to address stable coins, according to a source familiar i'm told this bill would lay out stringent requirements for the types of assets that can back

stable coins and would impose standards on issuers and prohibit commercial companies from becoming issuers themselves that's a provision that would be aimed squarely at meta i am told lawmakers are hoping to have a markup on this bill a week from today. that's when they would debate and potentially vote the bill out of committee this bill is significant because the house financial services committee is the one with jurisdiction over this issue and if both the republican and democratic leadership support it has a good chance of moving forward. sara >> i guess better late than never, right this has always been a target of legislation. now we've had a stable coin blowup they're looking at it seriously. >> congress tends to lag rather than lead the industry on these issues, sara certainly this is something the treasury department has said is critical to provide clarity to the industry some issuers themselves have been calling on congress to weigh in maybe we will get clarity.

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matching your job description. visit indeed.com/hire what is wall street buzzing about? how the record heat could cool the global economy we are feeling record high temperatures across the u.s. today. it's part of a blistering heat wave this week and it's not just here it's sweltering in europe, too the uk saw its hottest day ever,

104.5 degrees fahrenheit breaking a recordset just thre years ago. president biden talking about climate change earlier this hour calling it an emergency saying his administration will announce executive actions in the coming days hsbc out with a note today tallying some of the economic impact of climate change the firm highlighting several factors that could impact activity like rising temperatures, rising sea levels, extreme weather events and food security these factors could have an effect on productivity, agriculture and infrastructure bottom line, hsbc says global gdp could be roughly two percentage points lower by 2050 as a result of climate change. so while washington grapples with how to tackle this problem, economic warnings could make some investors sweat up next, a post earnings bounce for netflix and a countdown to tesla's results when we take you inside the market zone. u'e dow is now up about 75 pots yove got salesforce, disney and home depot leading

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consider adding this. call unitedhealthcare today about an aarp medicare supplement plan. we are now in the closing bell market zone commentator mike santoli here to break down the crucial moments of the trading day mike, the broader market, the nasdaq outperformer going for its fourth up session in the last five and we're heading for a pretty positive week here. nasdaq 100 up almost 4% on the week what are you watching as this rally looks more durable >> a couple of opportunities today for it to really back off, maybe digest some of the gains that we've got the index has seemed pretty intent on rushing to the next test to the upside for the s&p that's very close by it's just over 4,000 it seems we have this breakout off that two out of three day

rally we have friday into yesterday and now people are chasing it just a little bit, again, you keep everything on a short leash, you understand it's been a longer term downturn. this might be probably, i would say, the second best rally we've had since the peak in january. still more to prove but you do have credit markets really helping out the story the last couple of days by strengthening. >> look at netflix, it's near the top of the market. after yesterday's less bad results than wall street had feared, still, it is the first time they suffered two straight quarters of subscriber losses. but saying on the analyst call the future for streaming and netflix is still bright. here is what he said >> we're talking about losing 1 million instead of 2 million our excitement is tempered by the less bad results look being forward streaming is working everywhere the end of linear tv the next

five, ten years. very bullish on streaming. >> so what do you do with the stock, mike? it's up today on relief and the setup was just poor, the stock had been down almost 70% this year, but does it mark a turn, do you think what do the analysts say in streaming and netflix's business >> i think it's a little bit premature to say it's the turn in the sense of some kind of turn to anything like the stock prices that you had in the last couple of years at the highs it's definitely still in the penalty box. you can totally grant the idea netflix is going to remain at the core of whatever the multibundle streaming world we will be seeing but the growth looks saturated. what's the cash flow number look like at some point when cable penetration peaked out it was a great business for a long time but there was pricing. there was really attention to

harvesting >> netflix is driving the communication services sector. a lot of other stocks are rallying off of it disney is at a six-week high up 4% it's had a nice run here, a mini run. paramount is doing well. newscorp, all these names are rallying on the back of netflix. it's happening in banks as well. we've heard from a number of top executives off earnings talking about the economy and the consumer here is goldman sachs ceo on "squawk on the street. >> our economists have put out they think there's a 30% chance of a recession in the next 12 months and 50% over the course of the next 24 months. that's a high probability. i'm not a good speculator on odds but as we want our business and are giving advice to clients everywhere we're suggesting that the chance of a recession is

higher now that it's been in quite some time and everybody needs to be a little bit cautious about that. >> other bank executives on this show a little more optimistic than that. one saying the consumer is outpacing last year so far in july listen >> consumers are continuing to be out there spending. we're seeing good activity across both the consumer and commercial portfolios. i think that bodes well for the environment. >> they have spent 11% more money than last year and transactions are up. transactions wouldn't goup unless people were out on vacations and other things they weren't doing last year at this time >> it's remarkable really. if you look at any metric, the criticizing commercial loans in the corporate side, those trends are favorable. if you look at delinquencies on the consumer side, no alarming

trends in fact, very, very stable so feeling really good right now about the credit outlook through the rest of the year >> that was my biggest takeaway from bank earnings and speaking with these executives that if the economy is turning they're either not really seeing it yet and they're not forecasting anything dire as far as a recession and if you look at the bank stocks they're up 3% over the last week or so the market is telling you, too, it wasn't doom and gloom if we heard any kind of recessionary warnings we wouldn't have seen that kind of action >> right it's certainly not -- if there is a recession on the horizon, if that's the risk that we're going to tip into it, it really isn't being driven by consumer household finance stress incomes are high enough to easily cover the debts the market-based indicators of recession risk are all about how much tightening that's already been in the system from the fed and from the markets themselves.

the downturn in housing activity, the retrenchment in manufacturing, maybe some layoff waves running through corporate america. it isn't so much about consumers are in bad shape and that's why we expect a recession. it's much more about consumers might, if anything, hold up better than the economy even if technically we do dip into a contraction. >> amazon, by the way, up 4% having the most positive impact on the nasdaq 100. apple, nvidia, meta, microsoft doing well and tesla is rallying, too. joining us now for a preview is senior analyst garrett nelson. we know the delivery, they came in line. what do you expect to seep from the margins that could drive the stock? >> we're a little bit more concerned about tesla's quarterly results this time. they have a good track record, beat 10 of the last 11 quarters but q2 presented unique

challenges that will weigh on their bottom line. we're at $1.48 for the quarter the consensus is $1.80 the impact of covid on their shanghai factory as well as startup costs related to the two new factories, one in austin and the other in berlin, we think will weigh on their bottom line. their outlook for the year they ended on a strong note, it was the strongest in company history. we think investors will be looking for more signs that momentum will carry over to the second half of the year. >> but do you expect that to happen because, if so, would you be a buyer on the stock even if you do expect bad news today because some of that news is from the shanghai factory. >> we are buyers and we think if

there's a weak headline number, a pullback after hours the stock is already down about 30% year to date we put out a report locking at the long-term opportunity. however the stock reacts to it we think investors will do very well looking ahead a year, three years, five years down the road by buying tesla around these levels >> there's also the macro environment which i'm sure will come up on the call and whether so far tesla has seen more demand than supply but whether that demand picture is changing. garrett, i just wanted to run by you a headline, cutting 8,000 jobs as it tries to build its push into the ev market. that's a bloomberg report citing people familiar. does that come as a surprise are we going to see more layoffs in the auto industry >> we do see more layoffs

coming that's about 4% of ford's global workforce. you've seen elon musk already come out and announce some job cuts but you're going to see more of that from traditional auto manufacturers as they pivot more jobs to their ev businesses. and they certainly want to get ahead of the competition as far as cutting jobs if we do have a recession:u.s. auto sales were down in the second quarter all signs show demand has certainly pulled back. >> got it, garrett thank you very much for helping us get ready for tesla after the bell garrett nelson, two minutes to go mike, what do you see in the internals? >> a little more mixed than yesterday, sarah, which was better than the morning. it's not quite 2 to 1 advancing to declining volumes pretty broad endorsement of the lift we've gotten today. take a look at the higher beta stocks against the low

volatility stocks. these two etfs are coming together you see that catch-up move by higher beta, the faster moving stocks on year to date basis it is down more but there has been this neater version in the risker parts. the volatility index nudged below 24 this is kind of a low since about april just about so it's relaxing just a little bit here as we have a relatively stable day in the overall index. >> stable and higher, up half a percent. a little more than that on the s&p 500. on the nasdaq 1.5% on the dow right now up about 40 points not the highs of the day we've been up and down all day it looks like we're holding the gains into the close what's working and driving this rally is tech and it's cyclical. consumer discretionary is the best performing group in the market thank you royal caribbean, etsy. a lot of the travel stocks are

rallying technology is doing well thanks to the semis thanks to netflix and all the media companies. energy is having a strong day. the defensives are lagging staples and real estate. there goes the bell. s&p up 0.6% taking the week to date gains that's it for me now to "overtime" with scott wapner sara, thank you very much. welcome, everybody, to "overtime. i'm scott wapner we're just getting started at post 9 at the new york stock exchange another big earnings evening with tesla, united airlines and las vegas sands all reporting. we do expect those results any moment now we will have the stock moves, the analysis and of course everything you need to know up to the minute, josh brown will join me with a big portfolio move of his. you do not want to miss that one.