the tgl. no one knows how this will affect it, tyler what an incredibly busy week for golf. >> team golf feels like it has something coming >> team golf. >> folks, thanks for watching "power lunch" on a smoggy, foggy friday >> "closing bell" starts right now. thanks so much i'm scott wapner this makes or break hour begins with another run at 4300 at the s&p and whether the bulls are now fully in control of this market we'll ask noted bear that question in the meantime, here's your scorecard with 60 minutes to go in regulation. the dow nicely higher today. you can see the stocks, health care one of the better sectors overall today. pretty good bounce back for tech after the nasdaq suffers one of its worst days

there's your nasdaq. leads us to our talk of the tape whether the bears are suddenly sweating as stocks stays resi resilient. are you sweating you are a bear this market's been getting away from you, hasn't it? >> it has, scott but i am sweating no more than i was sweating in august of 2022 and it seems a lot like august of 2022. much i count the ways? >> well, i mean, you don't have to go through all of them, but surely you had to have looked through this market and wondered do the bulles have control >> we ask ourselves that question every day, scott. the question is whether the market's going towards my prediction or not. but i think it is important to count the ways so i'm going to do that. just like in august, we have

kind of this erroneous policy expectation that we've had to fight. then it was talk of a pivot. now it was the market looking for interest rate cuts in the back half which for six months i have been incredulous about. not seen that as a possibility we fought the notion that the market was cheap back in august, that it was 17 times and just as then, the estimates are wrong. no, the market's not trading at 17 times the market's likely trading at 20 times forward then as now, we're all built this way, human beings, we all want the market to go up, but when these things are powered by emotion and not the substantive data we're receiving, it's hard to see this as not having any legs it's being powered not by emotion, where the market has been going you've been negative the market has been going in the

opposite direction. >> right. >> the economy has been, i think it's fair to say, more resilient than most expected it to be. earnings more resilient than most have expected it toblg. a.i. is a bigger earnings drawer than anyone expected it to be because we weren't even having this conversation back in august of 2022. >> and i can see everything you're saying, scott the problem is in the first two things you said. the economy has proven to be more resilient than we thought it would be. admittedly we had a stronger than expected first quarter. we're likely to have a stronger than consensus second quarter. we have to examine where we are. part is the fed spending down untaxed, unborrowed money which is a shot of adrenaline. that's not what plays into our forecast what happens is consensus took the opportunity on an unexpectedly strong first

quarter to raise estimates when likely what we should be doing is look at the third quarter, 2% growth, 9% in the fourth quarter and starting to decrease those estimates. i do believe we'll see significant downward earnings revisions. the fed has to do one of two things, they have to raise rates. there is no third possibility and you can't -- >> yes, there is yes, there is. they don't raise in june, which seems like that's the likely scenario, and they don't have to raise nearly as high as you still think they'll go because inflation is coming down faster than you want be to admit or are willing to say i want to read you something that behrens said today. investors are positioned for the worst. the only problem, they may be positioned for a bear market that already occurred. the higher the s&p goes, the

more likely barron's is thinking are you one of snem. >> i am not. had fund managers at near peak 6% accredited investors are sitting around 35% cash or cash equivalent i get how that could be construed as the powder for a continued bull market but i think it's going to be more of a trend, scott just to dispel some myths here. >> i am exactly one point above where we are i said 6.25. i'm not nearly as draconian as -- >> another full point. >> just to get will. >> i don't know why -- i don't know why the fed -- maybe they

will be forced to. nobody has a crystal ball. i can't say that they're not going to do that. >> right right. >> i would say it seems more unlikely than not just given where we currently are, that they're going to have to being that high on the terminal rate. >> i re'll take the other side f that, scott. the 339,000 jobs we had had something to do with it. we're sitting at historically low unemployment and that is not good sign for us coming closer to the fed's 2% target look, you win and all those things will be true. if the fed says 2% is no longer important but we're simply not going to get there with the wage inflation and the jobs creation we see going on now. that's going to continue to power inflation. >> i'm looking a the the major averages right now you'll forgive me for looking away from you. dow jones industrial average, highs of the day, up 182 and climbing as we speak

the s&p 500 may have it. we have 54 minutes to go you are unmoved by the resiliency of this market, by the technical hurdles this market has gotten over to the point you still think we're going back to the october lows because the further you get away from that, the less likely it is we're going back to that. >> that's what the math says to me, scott. i do want to differentiate between what we see. >> i want the market to go up. >> everybody wants to be right in their calls, greg. >> i've been right i don't expect to be right all the time my view isn't powered by that if the fed comes out and said 2% isn't going to happen. as long as we see unemployment where it is and wage growth where it is, then i have to stick to this reality.

>> let's broaden the conversation out let's bring in emily roland. joe teaaranova. emily, you get the first go. do you agree or disagree with mr. branch >> look, markets are fighting the fed right now and they are winning. i think there's a few things going on that's the mantra or bumper sticker of 2023 when you look at the earnings data, economic data we're seeing the city economic surprise here, seeing a bounce the other element is there were headlines that came across at the end of last week that china may be stimulating and that has caused a huge risk on balance across markets the final thing we see is there's almost a pivot party happening going on where markets are celebrating this idea that the fed is getting towards the end of their hiking cycle and it doesn't matter where you see it.

it's all across risk assets. japanese equities. small cap stocks seeing a huge run over the last few weeks. it's of course the a.i. names catching a bid here. there's definitely been a swift, sharp, almost violent rotation across different parts of the risk assets. this is a period where it gets pretty easy to get whip sawed and pretty easy to make mistakes here >> are we fighting the fed or understanding the fed? are we understanding the fact that they're probably not going to hike next week or the week after and even if they do hike again, they're much closer to the end than the beginning are you in agreement with gregor not? >> greg mentioned august let's remember what happened in august chairman powell smacked the market there was the jackson hole speech on friday, august 26th. >> 8 minutes i remember 8 minutes. >> and he told us what

he said there would be pain for households and businesses. that's why the market fell the vix at that time was somewhere around 19. the vix today is at its lowest level since before covid so, if in fact greg is correct, not with what he wants, what he sees, the insurance that you could buy to defend against a significant downfall in the market is -- the question, who's in control of this market now? the bears were undeniably in control for the better part of the last, geez, i don't know, 17, 16 months. are the bulls now in control have they taken the reins of this market? >> i think -- i think the bulls are in control if you rely on a quantitative approach.

if you rely on technicals, that's where the bulls are actually in control. you can't make a fundamental assertion beyond technology that looks overwhelmingly bullish what is bullish is the technical formation of the market. >> emily, i mean, the market's trying to broaden out a bit. >> yeah. >> bears like greg would say it's the magnificent seven have carried the entire market higher that's a valid point but it does feel like it might be on the verge of broadening out a bit. what do you make of that do you think it's legit? if that does happen, is that another bullish signal in your mind >> yeah. the broadening out is definitely a positive development we still like megacap tech you know through our conversations we've been there technology stocks are the poster child for quality. quality is company, great return on equity, great balance sheets, tons of carbon their balance sheet. if you are a company, you don't want to tap the capital markets

in order to grow as the cost of capital has risen so extensively. we think diversifying away from that makes sense we talked before about this pivot party. it's being celebrated across risk assets. if i'm somebody attending the pivot party, i want to go to it. i want to be there the late cycle can have incredible bounces maybe sipping a light beer instead of reaching for the tequila right now. you might have fewer regrets. >> greg branch, you're an astute investor you're looking for where this market is going. at what point do you say, i think it's going to turn now because the market starts to anticipate things six to nine months in advance, at least historically that's how it works. it's not an exact science but that's how it works. i'm gathering you must be a similar type of investor you're trying to look ahead to where the puck is going rather than to where it is today.

>> right right. at what point do you say, you know what, i am wrong -- >> yes >> -- the market is in a new trend and i better embrace it or i'm going to get run over and this thing is going to run away from me further than it has? >> right whether i'm right, whether i am wrong, i have a target to become more bullish when that is, that's when the expectations of what's happened. up until the last week, interest rates in the back half that's been ludicrludicrous. typically we bottom in a recession. we're not in one now many people think we will be in one back half of this year if i look at consensus for 2024 and it's not at 245 anymore, it's at 220, now i can start to talk about valuation and a

logical and reliable way that presents an opportunity to me but let me also answer another question you asked i do think that the bulls are in control right now. i will concede that. this is broadening in june the 600 has outperformed the 500. >> i knew you'd come around. only took you 14 minutes that's why i like having you on. on your recession call, feels like you're moving away from rather than into you don't feel that at all. >> no. >> certainly helps to explain why the consumer has remained as ro robust. >> that is true. the consumer balance sheet has not deteriorated for as much as we've seen let's look at the data we have we've put in historically low savings rates.

we have historically high credit card debt at historically high aprs as you look at the banks, they are starting to whisper about this we've seen credit card delinquencies tick up pretty significantly. we're starting to see a losses in auto and mortgage i do believe that we are facing some negative macro trends in cre. watch these banks. i think we're going to see a lot of provisioning in these next couple of quarters and i think most would agree we're starting to see that balance sheet will deteriorate pretty quickly. >> emily and joe, you get some signs. the lagging economic data catch up the lagging data looks awesome services, employment, the consumer tends to spend. the leading indicators are telling us that a recession

happens. pivot, get ready for a period the fed is going to win in this fight. >> i think there's a distinction between stocks and fixed income. if you are bearish, you want to affix that and up can't affect that even more in equities. >> i appreciate it. >> greg, appreciate it. >> always do. >> let's get to our twitter question of the day. who do you think is in control of this market now, the bulls or the bears? you can go to cnbc closing bell on twitter let's get a check on top stocks. christina partsinevelos joins. adobe shares after they announced the artificial intelligence tool firefly will be available you can instantly generate images or copy from text-based descriptions which can be used

in marketing campaigns firefly can be integrated with satisfied brands, matches, seas. shares of wayfair are up almost 9% on a city analyst upgrade or price target upgrade or to $65 from $57 they see the home goods industry may be working through inventory but the inventory is there up next, emj's been a big believer in tesla. now he's flagging two key reasons why he's making his spot you're watching "closing bell" on cnbc.

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tesla on track to finish higher with shares gaining 25% over that period my next guest is a tesla shareholder. he's cal called himself a big investor eric jackson, what's behind this move, do you think ten straight days is something to pay attention to. what's driving that? >> i think there's two things, scott. the fact we've gotten away from all of the worries, angst about

that and that's in the disstand memory people are looking into that in the fact they've gotten into record deliveries. and the biggest move is the a.i. story in relation to tesla they have a huge gop of data and there are interesting ways to leverage that. >> at what point do you sit back yourself and say, well, you know, tesla's apparently getting an ai bone xyz company is everybody thinks they're going to get an ai bump. what's justified and what's not? >> listen, scott i believe in ai. i'm eating the dog food mp i've

spent the last two years building it and just on june 1st we went live we've earned the votes the results have gotten so much better that i was convinced and i thought my investors are going to be better served by trusting the machine rather than eric jackson's views on tesla's deliveries so far it's going well we're only one week in we have to crawl, walk, run but it's already paying dividends big time, not just with tesla this month but also carvana. >> you have to explain to me more how this works. you'll forgive my skepticism, but i don't know i don't know how to respond to that you are now taking yourself out

of this entire stock picking model and relying on machine learning to do it? >> wleleslie picker was on the network talking about how a lot of them were up in may because they were basing it on ai stocks i think ai is going to disrupt the whole financial industry, including the hedge fund industry i think the traditional 20 something mbas who crank out spreadsheets are going to, you know, see their jobs in peril because of ai simply because machines can keep more fact offers going quickly

we flipped over on june 1st. i guarantee you if i had a team of 20 something mbas working for me, none of them would have come up in the meeting to go long carvana. carvana was down 98% last year. >> it was a disaster. >> it was their own career suicide in making a case for it. i trust the machine. the machine doesn't get embarrassed. it gives me facts. i would rather trying to go with that. >> you've owned car slab na for a while, haven't you >> absolutely -- if it was down. you had been runover if you stuck to your guns as a fundamental manager. even if you were right, the market wasn't agreeing with you. >> what did the machine possibly tell you to do

i don't get it. >> the machine tells me there are three stocks globally that are tech stocks. every one of those stocks, the factors that goes into what drives the stock up, what drives the stock down is unique so the machine learning program that we've built over the last couple of years identifies the optimal strategy for each one. if i only traded that, it would have been up 4%. on may 7th when it was 1185, i took it very seriously this is a volatile stock, it is up 67%, it could be up another 85% tomorrow i would rather place my trust in the machine, you know, giving me my instructions on when to get

out rather than the hedge fund bro 20 something. >> what could the model possibly know about tesla deliveries? the things that you rely on to make decisions as to whether the stock is going to be higher from here, whether it's justified to be up the ten days in a row we said it was? what could it possibly know at this point, especially about a stock like that? >> well, it's -- it's only right over the last 6 1/2 years 52% of the time it's going to get a lot of trades wrong when it gets it right, on days like tonight, and if you're compounding at a 52% hit rate with big wins when you do win, you can make big money with that the in terms of the secret sauce, that's where --

>> i'm not going to ask you to reveal whatever secret sauce you might have, although heinz was talking about ketchup getting a booths boost from ai. >> your buys, draft kings, roku and ai. >> all of them, scott. on june 1st it was a burn the boats. when the machine says to get out of them, we'll get out of them that's tough to do for a manager who's used to having their strong opinions. if i go to my investors and i say, these are the back tests, this is how well this thing has worked, i really believe in it, i couldn't take their money, start launching with the model, no, actually, eric jackson knows

best all those picks you mentioned came from the model and we're going to sfik with and see how it goes. >> you will no longer make any investment decisions based on your fundamental analysis and the analysts you employ? i don't know how many you have if any is that what you're saying >> i see my job, scott, i oversee the notal. i oversee the team and so my job is to kind of check and double check. make sure this works as well as we hope it works but that's the job i think the new model for all hedge funds going forward is teams of software engineers that know ai, deep learning the 20 something mbas, brokers

>> we'll leave it there. eric jackson, thank you for joining us once again. up next, bracing for a breakdown or breakdown we'll ask jpmorgan's top level what it plus be like, your intraday charge. the. for the month of june, pride, here is house global head of partnerships, bryan lip. >> the emotional baggage comes with hiding yourself at work, it's intense for the first ten years it took me so quickly. go out and see folks in the l g

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the major averages rallying. trading back towards 4300 on the doorstep having the third positive week in four. the next guest believes stocks could be approaching stall speed and setting up to give back some of those recent gains. joining us now jason hunter. welcome back good to see you. i started this program with somebody who suggested we're going back to the october lows do you see that? >> that's been our base case, scott, the last few times i've been on the show that 3500 would be retested and set the cycle low but all the while what we did say is the s&p

sustains below 4200 and it comes to the forefront, that would cause us to back off at least from the technical side. the support for that view, that macro fundamental view starts to wane and really what we've had since late last week starting on friday as the s&p pushed above 4200, you saw small cap and cyclicals catch a bid. it's unclear whether after two weeks of better than expected economic database sickically going straight up. it's unclear whether this is a recession themed position squeeze that could potentially whip saw much like august of 2022 when you saw that last push higher in the s&p towards 4300 or if this is something sustainable. we feel like we're at a bifurcation point. this is not what we wanted to see given our view that said, we wouldn't stop long it's a bearish exposure when the pieces fill in to support that

bearish feel on a technical side. >> when do you, use your words, back off your more bearish view and think we're going back maybe to 3500? >> the reality is you're above 4200 you see that pushing cyclical leadership there is the ambiguity if you look yesterday, you saunas dak come off basically the winner's funding the rotation back to small cap and really a down in quality trade so oddly enough you had the s&p down but if you look at the breath metrics, 76% of the s&p 500 is up on the day there is this ambiguity right now. we'd like to give the market some time to trade here. if the s&p is able to stay above 4200, you see cyclicals start to build support and rally, not at the expense of the recent winners. if they're both able to go up together, that would be a clear signal to reduce that exposure we're willing to give the view the benefit of the doubt

reality is when we have a macro level on the technical signaling, that doesn't look good i can't explain why the market's been so sticky and why it's rallying, when you look at things like the yield curve, the economic data, all of those things don't point to a rosie period in the months ahead. >> how many days do you need you technicians are pretty specific you look at things i think in rather absolute terms. how many days of this broadening out of the rally would be enough to say, okay, that's confirmation for me and now i am backing off my earlier projections. >> i always like to use a broader brush. we happen to look across all four of the major asset classes and have a benefit if if we look at the commodity market, copper has rebounded sharply. that's back into the 200 day moving average the march, april day lows. if you see the energy sector, financial sector firmly move out

of the march/may moving pattern along with that, it's an accumulation of things definitely not a set number of days definitely not a level on the s&p. it's an array of things that we like to look at. it's much more analog than digital rather than saying here's a specific level. >> all right we'll talk to you soon maybe we'll be there or not. always appreciate it jason hunter. >> up next beings tracking the biggest movers for the chris back with kristina partsinevelos. we discuss that next

we're less than 20 away from the closing bell let's get back to kristina partsinevelos. >> competition is revving up in the er market. that doesn't make it easy for fisker they only delivered to their first customer and recently lowered the results. in other words, they delivered to a saturated market. shares of affirm still soaring after announcing a deal with amazon pay. they can allow customers to pay their bills over time. you see the stock is up 16%. here's a sneak peek of a new

cnbc interview with max lefchin and his new thoughts on consumer credit quality. >> we saw a bit of weakness and adjusted our credit underwriting standards around that time and have been managing credit very, very carefully that said, we have seen no real deterioration in our user base over the last six months or so >> the full interview will be on "overtime. scott? >> last chance to weigh in on our twitter question we asked who's in charge of this market right now, the bulls or the bears. you can head to @cnbcclosingbell on twitter the results are right after this break.

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the results of our twitter question, we asked who's in control, the bulls or the bears. the majority of you, overwhelmingly so, 75% say the bulls. up next, alternative ai plays. big tech pushes into the space as you know, we're highlighting another sector that's all in on ai we'll find out how it's impacting that group of stocks just ahead that and much more when we take you inside the market zone [office sounds] ♪upbeat music♪ ♪♪ ♪when the day that lies ahead of me♪

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here we go we're in the closing bell market zone cnbc's mike santoli is here to break down the trading day pippa stevens on crude for us today. seema mody on the industrial companies benefiting from the ai gold rush. steve kovach looking to docusign's earnings. 75% say the bulls are in charge as we try to push past 4,300 for the first time since last august. >> there's a phenomenon where belief has started to encroach on skepticism. until two months ago we were weighted down about this market. people bought a lot of short-dated recession options. a lot of those expired, worthless for the time being the market just wouldn't quit. therefore, the resilience of the market itself i think has dragged people's attitudes into,

hey, maybe this is the real thing, maybe the landing can be soft and the fed is our friend and not our enemy. all that makes sense i think we've lost a little bit of the tail winds of having that skepticism, that reservoir of doubt that sometimes can make prices go higher which means something else would have to take over. i think a further embrace of risk in the credit markets, in small caps, in cyclicals, it can reenforce where we are in the market i am encouraged by the manner in which we've gotten to 4,300 relative to august in august it took three weeks to get from 4,000 to 4,300. it was a squeeze zi, emotional, hey, we got this type move the markets had been oversold at the beginning of that. here it's been two months plus to get from 4,000 to 4,300 it's been a grind. again, kind of arc companied by a lot of yeah-buts

the market is not cheap. it's hard toe see us escaping this late cycle of psychology of, yeah, but unemployment is going to tick up, but earnings maybe can only be flat i think that's good. the wall of worry remains in place, but at a short earned level. >> you heard that fon our show today. there are plenty of people skeptical of this move moving them is going to take a lot of work. >> a lot of people focused on the retail investors survey that had the biggest jump in bulls since november of 2020 what was november of 2020? it was eight months after a major market low and finally got us this burst of belief that maybe we're not gong to go back to the lows. the market did fine for a while after that keep it simple is, the s&p is where it was two years ago nominal gdp is 15% higher than two years ago. it's not insane that we're here.

>> pippa stevens, to you on this wild trading day for cruel oil pushback about these talks between the united states and iran. >> let's take a little closer look at the movement in oil today. this morning prices did start trending lower right around noon, middle e east -- prices fell almost 5% with wti dropping below 70 and getting down to $69. then prices started drifting higher as traders were sceptical about whether or not this deal would come to fruition right around 1:45 we learned that the white house called those reports false and wti ultimately finished the day about 1.75% lower. what i think is more interesting, when you look at a one-week chart, you can see how bearish the sentiment in oil is.

today's drop to the downside was more extreme than the move to the upside earlier this week when saudi arabia announced that 1 million barrel per day production cut it does speak to how bearish sentiment is >> pippa stevens, quite a day for crude oil. mike santoli, energy is one of the negative spots on the day. it's been one of the big disappointments on the year. >> really a payback phase. the sector was down 60% in a down market. i think people have been encouraged to some degree from a macro perspective that crude has not broken down below these levels has not been able to get out of its own way. in theory, energy stocks, if oil stabilizes, should be able to perform okay if we get excited about cyclicality. >> big tech, seema mody to

ketchup companies to hedge fund managers, everybody is in on ai including industrials. what are you seeing? >> scott, nvidia may be the favorite way to play ai, but it surged they're playing a critical role in building out the ai infrastructure. names like very that, eaton, schneider in the electric equipment space. analysts also pointing the the hvac companies like train and johnson controls as beneficiaries as ai data centers consume far more power and run far hotter than traditional centers. that's where their technology can play a key role. just taking a step back, scott, industrials falling a dismal may has had a pretty strong start to the month of june. look at the widely-held names like john deere and cat perpillr already up double digits in

june >> seema, thank you for that steve kovach on docusign moments away in ot. >> one of our favorite pandemic darlgs hasn't seen a big rally like other tech names. shares only up less than 6% on the year and still off 35% from the 52-week highs. here is what the street is expecting, eps of 56 cents up 38 cents. revenue expected at $641.8 up from $589 million a year ago we're expecting to get these results five minutes after the bem. i'll be back with the results in overtime. >> steve kovach, we'll be looking out for that a take on stocks like this, docusigns of the world, zoom, the rest. >> affirm. it's interesting that we're back to focusing on them. it seems likes there's another theme we want to use as a prism to look at their performance

-mile-per-hour rule on all these stocks is use the two-year chart, maybe even the three-year chart. this kind of stock peaked in the first quarter of 2021. there you see that, and that can make it seem like, well, things are ugly, this is still a down-and-out stock they've been sort of finding the level. so many charts look like that. i think that's something that, it will be a part of the market that money gets around to picking up if, in fact, we're in this mode of this is a sustainable theme in terms of ai or these companies have grown into reduced valuations. i don't think it's necessarily the kind of thing where we're going back for the fun times in exactly the same way but it's certainly worth keeping in mind. you have had a bit of a darwinian process along the way to figure out who is for real. >> you knew there would be resistance as you approach 4,300. maybe that's the line in the

bull-bear sand where, if you get over that and can sustain it for any period of time, more bears turn in to bulls because they feel like they have no choice. >> at least on a short-term basis. people saying 4,325 was the intraday high. there's these other technical barriers up in that zone which are basically the 61.8%, all that kind of stuff people are finding excuses to say this is where it should end. i'm not as concerned at going much higher quickly or necessarily having an up-side target as you build yourself a cushion, go down 3% or 4% from here it's absolutely no problem the healthiest thing would be the big caps taking a rest and settling back and everything else kind of firping up a little bit. we'll see if we get something like that. you've seen it on a day-to-day basis. today is a mixed day you have had yields lower after that unemployment claims increase and that is mekly

gotten the growth stocks moving to the upside. >> doesn't look like we'll do 4,300 today barring a burst in the last 15 seconds. for now i'll send it into ot and jon fortt. the nasdaq leading, that's the score card welcome "closing bell overtime." morgan brennan is off today. affirm ceo max levchin will join us, sending affirm shares slightly higher. we are also awaiting earnings this hour from