february, and we shall see what happens there. another big pocketed sort of government-supported investor will get a big franchise. >> and congratulations to the denver nuggets and to stan kroenke. the avalanche won the stanley cups, the ams, the super bowl, and he owns, you know, the nuggets. >> good for him. >> congrats to them and jokic. >> all righty. we'll see you tomorrow from washington with the fed decision see you then all right. welcome to "closing bell." i'm scott wapner live from post nine here at the stock exchange. this make or break hour begins with what else the rally. inflation drops to its lowest level in two years now all eyes now turn to washington where the fed will announce its next move on interest rates in less than 24 hours there is the countdown clock, and here is your scorecard with 60 minutes to go in regulation the dow on track for its best month since november industrials, materials, financials, energy all posting strong gains today new 52-week highs for the nasdaq

and the s&p 500 as well. even as tech takes a little bit of a breather, it leads us to our talk of the tape the bullish breakout and whether it can be trusted or not let's ask anastasia amaroso at post nine. it's good to see you. >> good to see you >> do you trust this move? >> i do trust it look, scott. you know, there's three reasons why the markets have been rallying this year which is inflation has been slowing and we saw that in the cpi report. there's a lot of good news that i think the fed will take from the month to month rate of change is just barely there. the fact this core measure dropped to 6% versus the 5% it was before, and inflation is slowing and that means in turn that the fed should be close to pausing and that's also great news for stocks, and then the third point is i love the cyclicals rally because guess what this economy has been surprising to the upside. earnings revisions have been actually going up, and that's why. this breadth of the market has

been broadening out. >> so you feel like the bulls, you know, have absolute control at this point of this market >> i do. look, i do want to say that near term we might be approaching some sort of stretch levels. what's been happening over the last few weeks now has been this ka pitulation into risk, and the commodity trading advisers that have pield in, and hedge funds thachb chasing technology and now they're chasing the cyclicals. now you have mutual funds that are starting to get back in there, and the peak at buybacks open window, and at the same time, the s&p relative strength indicator is actually above 70 so i do feel like, you know, the bulk of this risk may have happened, but you look at how much cash has gone into bonds. how much cash has gone into cash, you know, i think that longer term rally does have legs. >> what if we're getting too excited about this print that we got on the cpi today

wolf research for example says, quote. we continue to believe this rip higher has been a classic bear market rally the fed will be higher for longer and a recession will hit later this year. isn't that better odds than not of what's going to happen? >> well, people have been calling for a recession for a long time now, but i think the fed pause may actually be real, and the fed may ultimately pause at 5.5%. the reason i say that, kscott, i because if you look at this important relationship between the fed funds rate, there's a gap that finally opens up that's positive for a long time, the fed has been chase ing their tail, but f the fed can stay packed, the inflation has slowed down already, and it's on track to get to 3.6%. >> you think the fed is done >> i think the fed is really close to done. >> close to done and done are two different things. >> i think we're talking about 25 basis points, you know, i think they're close to done in july there's a 60% probability that

they go another time in july, but it's that delta that matters, you know? if they just follow the consensus forecast, then the core pc goes from 4.6 to 3.6, and is there a credit cycle tightening that's playing out? maybe they don't have to do much more than be close to done. >> what do you make of what happened with nasdaq that's, like, 30% on the year. there are a lot of nonbelievers, you know, still. maybe that's just because the last 18 months have been so turbulent for the market and given the 500 basis points that the fed's already hiked and the fact that the economy is weakening off of where it was. some are not willing to sound the all clear. he says we feel like a bit like a broken record. ndx has all the hallmarks of a par p parabolic blowoff top. it's gotten more broad, but how about that point >> i'm a believer in the nasdaq,

and for a very simple reason is stocks that typically deliver above average earnings growth rate, they typically outperform over a longer period of time, and if you look at a lot of companies in the nasdaq, they are growing their earnings double the s&p 500 now having said that, you know, if you look at the valuations of technology for example, relative to its ten-year average, it's a bit extended if you look at communication services also extended relative to the ten-year average. so i do think we have a rotation trade in the making. as i mentioned, all the hedge funds have chased, and they have been selling them for the last week or so, and they have been buying back into the financials. so it's all about the perspective, but if i get a pullback in the nasdaq which i honestly hope we do off these high levels, i want to step back in given that's where the earnings growth rate is. >> i want you to hold your thought for just a moment because we have been watching these events down in miami we have breaking news on the arraignment of former president donald trump

eamo eamonjavers has that >> donald trump has pled not guilty on 37 counts. that arraignment going on right now as we speak. live pictures from outside the courthouse in miami where quite a crowd has gathered to witness the history of the first former president of the united states to face federal charges in court. the former president, we are now learning has pled not guilty on all of those counts, the 37 counts involving -- some involving the espionage act and others involving mishandling classified documents of the highest national security order, scott. so we'll wait to see the former president emerge from the courtroom and his motorcade make his way out of that area what we're expecting is that he'll now head to new jersey this afternoon and he might speak before supporters in new jersey this evening. we'll wait to see a public comment from former president donald trump, but we know he has pled not guilty, scott back over to you. >> do we know when we will actually get a trial date?

and then we can start thinking about the -- what i would think is an extraordinarily difficult process of seating an impartial jury of mr. trump's peers. >> we don't know when we're going to get that. what we might get from the magistrate judge today in the process that's going to on behind closed doors right now is some indication of when the next appearance is going to be, when some of the preliminary activities will be, and that will give you a sense of the pacing at least at the magistrate setting up. as to when this trial might actually happen, that's anybody's guess at this point. it could be a long time, and then to your point, the question of seating a jury will be difficult. add on top of that, the publicity of having a current presidential candidate and the front-runner for the republican nomination being the one who is facing these charges that adds an element of complexity to it, and also the fact that what you have got at core here are classified documents of a high degree of secrecy that the united states government is not going to want to release under the open court record

so you have to have a trial about documents where you can't even necessarily reveal those documents to the public because of the nature of the secrecy of them some of them involve, allegedly u.s. nuclear weaponry secrets. the challenges here are unprecedented, scott >> former president, very popular in that state. winning in 2020, as you know by a wider margin than he did in 2016 >> yep, and this election of south florida, something seen to the credit of the trump defense team they'll be able to use that to their advantage because you do imagine there are more supporters in the jury pool generally than there would be in the district of columbia where i'm sitting which is a very blue city, and would have fewer just by the nature of the jury pool, fewer trump supporters who would show up on that jury the jury selection as each side gets to question and knock out potential jurors, you can only imagine what that process would be like in this case, and how they would sort through all

those issues it's just enormously complicated, scott >> thank you let's bring in ed gardeni as we expand our research on the market you put yourself out there ahead of most in suggesting that maybe this was going to have a happy ending after all and be, you know, not the economic disaster that some had been calling for you think the bulls are now in charge, ed >> yeah, i think so. i thought at the end of october that we made a bear market on october 12th there was a tremendous amount of pessimism, and there was a lot of talk about a recession as you know, and there's still a lot of talk about a recession i think the pessimists are now saying that once the consumer runs of the of excess sasaving, that's when we'll fall to recession. you're talking about 2024, and that's when we get the recession. i just don't agree i think there's a tremendous amount of forward momentum in

the economy, and particularly in the baby boom generation they're retiring, and they got $73 trillion of net worth which i think they're going to start spending as they do retire >> you don't think it's too soon to sound the all clear though? we just simply don't know what the impacts are likely to perhaps still be >> yeah. >> from that 500 basis points that the fed's already done, ed. >> right i think that's been the main point of the bears is that we have had an unprecedented increase in the fed funds rate of 5 00 basis points in the las few decades. the last time that happened was when we tried to bring inflation down, and could only do it by pushing interest rates up to levels that caused the rec recession. i don't think history necessarily repeats itself it does rhyme, but i think in this case, we have been in a recession as we have been discussing in the past, scott pst, it's a rolling recession, and i think it's affecting

different industries at different times and i think what the pessimists have been missing is a tremendous amount of fiscal stimulus in the economy. the tremendous trend towards onshoring, and consumers having the wherewithal to continue to move the economy forward i wouldn't say and never called the all clear signal there's always something to worry about, but at this point, i think that the market is making a pretty good account of itself >> do you need the fed to be completely done for your forecast to come to fruition >> it would help it would certainly help, but i think the market is thinking along those lines. i think the fed is done. i think they have been promoting the idea that they want to get the fed's funds rates up to restrictive level and keep it there. they don't want to push the funds rate up too high, get a recession, and then have to force it back down without completely dg being sure they

brought inflation down they have been picturing the store line which is working out pretty well, that they get too restrictive, and it's enough as of evidence by the banking crisis i think they just leave it there through the end of the year. the market has been wrong about the notion that the fed's going to lower interest rates. i think they keep them at 5.25% through the end of the year and maybe next year they start to consider lowering it >> i wonder if you think the next move from the fed might be a cut. i'm not saying it's going to be, you know, tomorrow, next month or three months after that, but that the fed may, in fact, be able to be done because of the inflation trajectory, and that the next move whenever it is may be a cut >> well, maybe the next move after july will eventually be a cut, but i agree with ed that i think the objective of the fed right now is to get to 5.25%, 5.5%, and keep it there, and let the inflation convincingly go down for the fed to cut, they really have to see a recession, and,

you know, that has been pointing out -- i don't think recession is in the cards for this year. i mean, this consumer -- we talked about savings this consumer still has excess savings. they have a job and wage growth that's rising year over year, and by the way, the nasdaq is up 35%. we certainly hold a lot of people have participated the s&p is up close to 15% once again, you know, so the household net worth has actually increased this year. so that makes the consumer that much more resilient and pushes off the recession. >> speaking of the nasdaq, do you have a problem with the fact that the market's been very top-heavy? >> not really, especially now that it seems to be broadening out. again, the bearish scenario has been that it's top-heavy, and therefore it's vulnerable to decline. i think we have been looking at a structurally higher forward pe in the market because you've got eight strongs ocks for 25% of t 500, and it looks like they will

continue to go for a large share of the market cap of the s&p 500, and i think it also looks like they will be highly prized, meaning that back in january when they were about a 22 forward pe, they were actually bargains and now they're more like 30. i think the market is broadening as anastasia pointed out and there's a lot of energy and material financials. that's all good. >> today there is. i'll certainly dgive you that. >> today there is. >> are you a big believer in a cyclical catchup trade >> well, absolutely. look the market was broadening out from october 12th to basically march 8th, 9th, 10th, when the bar banking crisis hit everybody jumped back in, and i like to -- i like to -- i like the action i'm seeing here where we are broadening up -- broadening out into other sectors of the market, and i think it is sustainable. >> anastasia >> it is really nice to see the broadening out of the market and

the catchup in the cyclicals trade and, you know, partially it's because of the u.s. economic resilience, but i also think china and the stimulus talk that's really heating up in china is a really, really big deal because all of a sudden if china does manage to stimulate domestic consumption, that spills into scommodities and industrials and that can help the s&p as well. i want to pick up on the valuation point. if you look at the s&p 500 valuation and you take out information technology and communication services, the pe on the s&p is about 17 times versus this 17.6 which is a ten-year average so it's actually not that stretch if you don't count the technology names which i think structurally deserve a higher valuation. then the last thing that really makes me encouraged, if you look at even some of the frothier components of the market at least that they were in 2022, if you look at the ipo -- recently ipo companies that ipo, well, their valuations have gone from

24 times to about 5.2 today, and they've sort of been staying there, which it tells me the valuations are stabilizing, and that's good news for markets. >> last point to you what about the idea of competition, and wondering whether you can take significant steps forward in the stock market as long as the bond market presents opportunities to go elsewhere and until that dynamic changes, you're not pgoing to be able to take big leaps and bounds forward. >> so much liquidity still in the system as anastasia pointed out. there's probably about a half a trillion dollars in excess savings, and we look at demand deposits are actually up $3 trillion above their pre-pandemic trend line. so in other words i'm not going back before the pandemic i'm just extrapolating the tren line, and the liquidity has never been so liquid if you know what i mean. demand deposits has been a fraction of them too

there's a tremendous amount of liqu liquidity, and they can go to both asset classes. >> we'll talk to you soon. thank you very much. anastasia, thank you for being here at post nine. let's get to our twitter question of the day. will the fed raise interest rates again this year? you can head to @cnbcclosing squn bell on twitter to vote we'll share the results with you later in the hour. do not miss double lines jeffr jef jeffrey gundlach can't wait for that. let's get pippa stevens. >> urban outfitters is higher today as morgan stanley upgrades the stock from overweight to equal weight the stocks valuation is relatively low, and see a number of factors that could fuel a turnaround including the back to school season. that stock hitting its highest level since november, 2021. elsewhere in retail, ulta is also in the green. loop capital upgrading that stock from hold to buy saying

it's a luxury brand expansions could fuel the growth. up a third today scott? >> thank you, pippa. we're just getting started up next, amd holding a big event today. the stock is falling the ceo wrapping up her keynote speech we're going to talk about how investors should trade that event. we're live from the new york stock exchange you're watching "closing bell" on cnbc. back after this. our heritage is ingrained in our skin. and even when we metamorphosize into our new evolved form,

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shares of amd falling this hour. there you go down 2 2/3%. updating the road map in san francisco. the company giving a sneak peek at rivaling nvidia joining us to break it all down is stacy rascon. welcome back. >> good to be here. >> why is the stock down >> just high expectations and seldom news. you have to remember the stock was up 30% and almost 100% year to date. i think it's just that we didn't do anything bad, like, it sounds fine my biggest takeaway probably would be that they're very early on this journey. i think maybe that's more of it. they didn't really talk about the ai road map until the very end. they talked about some new products that are coming the products that are specifically for ai, it's called the mi-300-x, and it's not

sampling until q3, and by then, nvidia would have been shipping for a year they've got a ways to go. >> they're playing catchup, even t though they're trying to position themselves as the closest competitor the nvidia. lisa suh, the total adjustable market numbers she threw from $30 billion to $150 billion in just four years? >> to be fair if that's true, it's probably pretty bullish for nvidia that $30 billion this year, that's effectively nvidia's data center revenues this year. so that's going to grow to $150 billion, like, who knows right? it's going to grow, and i think their hope is, you know, to catch it by the coattails and ride along with it, right? i don't think anybody would argue that even over that period that they would gain a leadership position over nvidia. i don't think so i don't think it will be a repetition on the cpu side my hope is that the market can

be big enough that even if they're relegated to a smaller piece of that, that smaller piece can be meaningful for them. >> if i look at your coverage list, stacy, obviously nvidia, outperform, broadcom, outperform and i'm thinking of the pure player ai companies and then if you look at amd, if you want to lump those three in together, you only have a perform on that. i'm curious as to why. >> think about it, right nvidia, if we're arguing ai plays, nvidia, 70% of the revenue this year will be data center and it's all ai effectively. ai and accelerated computing broadcom, 15% of their semiconductor revenue this year is ai and that's some design services for custom chips for ai as well as networking, and they said next year that's going to be 25% which by the way for broadcom would suggest their non-ai semi business could be down and they could grow it if it didn't grow that much

amd is effectively going to be zero or pretty close to zero relative to ai and then next year they'll get some. it's probably single digits, like, it's actually not that big as of yet. >> stocks near double though year to date it's pretty remarkable >> yeah. sure like, they've done -- i'm not going to knock them. they've done very, very well and, you know, they have been killing it on the cp side and everything that's all fine. certainly the shares have caught quite a bid over the last, you know, month or two or three on the back on the ai play. everybody is looking for alternatives, other ways to play the obvious which is nvidia and ai, doing the next in line at least they have a road map with products on it that seem reasonably credible, but it is going to take time, and there's a lot that is now getting built into the stock as people have been getting excited about it. >> in your universe, does this end up being a halves versus hav nots as it relates to ai >> it kind of already is my own personal feeling,

frankly, and we can debate it, f but if you are really going to be benefits from ai, i don't se it in my coverage of stocks, it's nvidia and broadcom, and not really very many others. you know, some of the others that have talked about it obviously are names like nvidia and marvell, and others that you can try to size. it's really nvidia and then maybe everybody else like quite a bit below. nvidia really is the purest way to do this though. >> i'm not going to debate you on it. you're the top chip analyst. i'm not that stupid. intel, what's your thought here? >> they have a little bit of arm. i wouldn't read too much into it it's not like, you know, they'll buy a few hundred billion dollars worth of stock, and the foundry business they've got a partnership with arm on the foundry side anyways. maybe it's in their best interest i don't know if i would read too much into it i saw the news today.

>> stocks hitting a nice bump. we'll talk to you soon thank you as always. >> you bet by the way, lisa su, the amd ceo, dr. lisa su will be on "overtime" today that's 4:00 eastern right here on cnbc. you don't want to miss that. up next, spicing up the ipo market, restaurant chain cava is expected to go public this week. does that mean a thaw in the ipo market is in the works we will discuss. and throughout the month of june, cnbc is celebrating pride, sharing stories of corporate leaders with you here's barry's boot camp founder and ceo joey gonzalez. >> i grew up gay and latino in a very homogenous part of the united states. what that did morfor me was inspired me to want to grow up

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we're back on "closing bell." the ipo market might finally be showing some signs of thawing. with restaurant change cava on deck to make its public debut this week, and that company raising its valuation target to $2.23 billion. my next guest says the move could be a good sign that risk capital is, quote, putting its toes back into the market. let's welcome an nyu professor it's taken awhile to get a toe back in the water, right >> it's a long run, which is a great one. one of the best runs of all-time so it was coming back from an all-time high in 2021.

so i think that being on the sidelines was warranted, and i think it's taken about 12, 16, 18 months for it to come back, but this is just a very small experiment at $2.3 billion ipo i will be watching to see what's happening the next few months to see if it's really back. >> we have this debate every day whether this is a legitimate bull market, whether the bulls are really back in charge. when you look at the valuation of this market relative to where the economy is, and interest rates, what do you come to the conclusion of? do you think the market's fairly priced is it too expensive or not >> at the start of this year when i looked at the s&p 500, i put it in the range of about 4,300 to 4,400 if the economy did not go into recession. inflation was benign, and in many ways the market seems to be pricing in that scenario the problem with pricing in that sn scenario is you have plenty of room for the downside, and could get an unexpected surprise on

either one i think the market has some weak spots but by itself, i can live with the 4,300 s&p 500 given where we are today with the economy and inflation. >> yeah. you couldn't live though with nvidia where the valuation had gotten stretched to the point where you sold it. you said at the time, quote, it was pushing the absolute limit of what sustainable value is that's an interesting quote to make about a stock that has always traded at an extremely lofty valuation, no? >> that's absolutely true. the same thing can be saidfor tesla which is these are stocks that have always been priced, not valued that doesn't mean somebody cares about value cannot hold them i've held nvidia for five years and i'm happy that i did, but at $400 per share, i backed out what you would need to justify that price, and nvidia basically would have to decimate or dominate the entire ai market for it to be justifying this price, and i'm not willing to take that bet. i mean, that's -- there's too

little upside left when you price that in. >> i mean, the stock though was cheaper the day after earnings than it was before because of that unbelievable revenue projection that the company came out with >> ai has been this buzzword that pushes every company forward. the two companies that have something material to show for it are microsoft and nvidia both benefitted, nvidia in particular the story makes sense, and the pricing doesn't. >> i'm wondering how you're thinking about just ai stocks in general. as the, you know, we call you the dean of valuation, and people look to you as, you know, the ash orbitor of what a fair valuation at times is. i'm wondering if you are thinking about valuation as a whole differently and you're forcing yourself to be more open to thinking about higher valuations than you otherwise would because how do you value

the impossible to know in a sense, that's what ai is. >> the minute you pay a price, you are valuing. the question whether you want to value explicitly or implicitly when somebody says, i'm not willing to value ai, but i'm going to buy nvidia, whether you like it or not, you're buying into the nvidia valuation. i would weatherather be hopelesy wrong than not make valuations at all like the cloud or metaverse, i couldn't see the magnitude of the business that came out of both words, but with ai, you can see changes that could be pretty dramatic to the way we live and work those changes always have valuation consequences >> i mean, nvidia reminded us of just how difficult this is going to be to value, right? the aronalysts had no idea. the people who comb over these

estimates better than everybody else were as blown away as the layperson was by what they delivered in terms of their guidance so if they don't know, who does? >> with companies with this much here, the answer will never be looking at past financial statements it isn't the story in assessing, whether the story you're telling about the company is possible, plausible, and probable. i call it the three-p test, and with nvidia, the possibilities have expanded obviously with ai. the plausible scenarios are much more upbeat, and the question is what can you bring into the probable that would justify paying $400 per share? it's on that last leg i basically gave in on nvidia because i could see the possible and the plausible, but i can't see this as a probable where you can justify the $400 stock price. >> we will revisit i'm sure. thank you. appreciate it very much. >> thank you

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will the fed raise rates again this year? the majority of you said yes two-thirds of you, in fact, 61%. up next, the crucial cpi numbers sending stocks higher. what that might mean for the fed decision tomorrow when we take you inside the market zone, and by the way, do not miss double lines. jeffrey gundlach, his reaction to that decision that's tomorrow on "closing bell." we're right back es need to navie the changing landscape to stay ahead. when you partner with barclays, every change leads to a bold possibility.

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we're now in the "closing bell" market zone. mike santoli here to break down the crucial moments of the trading day. plus, wells fargo scott wren shares whether he's a believer in this breakout our steve kovach on why turning lukewarm on apple after its run. it's been a broadbased one at that. >> it continues to answer the gripes we're at a level given what the s&p 500 has done to where the trend starts to become your friend in the sense that when the market has been up 20% after a bear market, up 90% of the time, 12 months forward. when the markets hit a new

52-week high, 12 months forward. doesn't say a lot about what happens between now and 6 to 12 months out, but it shows you where the bias lies. now within that, you could say the parts of the market that have been leading this year are piping hot going into a fed meeting. it seems like they need to kind of take a break and we'll see how the overall market might respond if we do get that. i'm on the lookout for a couple of things. one is this general sensibility of victory laps, and shaming of the bears. that kind of sentiment that feels like we got this already that might be coinciding with some sort of a short-term breather in the market the other piece of it is i guess you would have to say the going into the fed meeting, it could be this kind of culmination moment, and we're watching yields the five-year yield, that's had a pretty good move up today. we're absorbing a lot of supply. we're trying to assimilate this down on the headline cpi what does this mean from here to there? >> are you being shamed by any

bulls? >> well, i tell you, scott we think 4,700 is where the market is going to be at the end of 2024, but as mike said between here and there, we think we're going to have a bumpy ride here so we're expecting a recession we're not expecting the fed to cut rates. we think earnings estimates are too high so for us, we want to fade this rally and look to pick up some stocks at lower levels. >> those who have been, you know, urging to stay defensive by large part are the ones who have missed this rally. >> that's right. it's helped us we have been overweight until as a matter of fact today, we have been overweight in technology which, you know, 28% of the market cap, that will cover up a few mistakes on some other sectors. so we just cut that position today, but -- and it has been tough in some of these other sectors, but we have been defensive. that's how we stand right now. we hold a little bit of cash, and we hold more fixed income than we normally would, but still -- we did not want to chase this rally, scott. >> you're not banking on a soft landing? >> we're not banking on a soft

landing. we have pencilled in the second half of the year recession, and really the first quarter we're expecting the fed to make a mistake, and the mfed mistake means a recession, a moderate one. >> you're not on this? >> i understand why. there have been enough of the prerequisites of a recession and they have been flaring up. i think the market loses patience with assuming it's a matter of time and it's hispanic be -- going to be soon i'm not saying we have anything of the atmospherics of the ultimate soft landing, but there were similar aspects of it when something structurally was different about the labor market than we thought. we thought unemployment couldn't go low as it did without sparking more inflation. we have had much more right now to deal with, but there seems to be something structural with the labor market that's keeping it from weakening too quickly, and then i don't know what to make of the apparent resilient

profitability at least at the index level because that's another thing that's gone on for a few months now the forward estimates have been climbing so you hear them say the market looks expensive at 20 times earnings, 20 times trailing earnings, but that's when they trail off earnings that's how it is in every cycle. i know that's a lot to kind of take for granted, but i think it's -- the market's kind of suggesting that it's willing to migrate over to that being a higher probability outcome than we thought before. >> hey, scott. how about that what about the prospects of a different labor market, and then the power of ai which none of us really thought about in terms of the potential of being an earnings driver until six months ago? >> well, that's the thing that's really kept us out of a recession is the labor market and consumer spending, but if you look at really you go back 40 or 50 years, and you look at what happened before recessions, unemployment's always pretty low, and one of the things that usually goes along with that is

that inflation is high and the fed gets nervous so, you know, for us, that was a great cpi number, a little bit below expectations at 4% for the year of year, but let's face it. the fed is not going to be satisfied with that. we think inflation will be below 3% by the end of the year, but we need -- >> i think we lost scott's mic as you heard there, and again, i raise this issue earlier one hurdle for the bulls to get over is to convince people that fixed income and cash isn't a better place to be >> sure. >> there's no doubt about that, and it's a perfectly reasonable and plausible alternative for somebody to say, it's too uncertain for me to take the equity risk at this level after this move. i'm happy with what i get here, 4% to 5% history will show that if the market continues to barrel higher, people will simply not be satisfied with 4% to 5%, but if you are satisfied with that as balanced in your portfolio,

and you allow yourself to shoulder the equities elsewhere. that's all fine. i think that's more of a normalized environment that we can welcome, and not say that the sky's the limit on valuations and we have this huge momentum move and a handful of stocks and we'll see how we deal with any reset that come from that. >> steve, looking at that apple downgrade today, they cite softer iphone and services growth you could have cited that at any point over the last many months. it's interesting that they choose today to do the downgrade which they cite persistent i'm quoting from their note here, persistent softness in developed markets and data that indicates growth is likely to remain under pressure. what do you make of this >> it's an interesting call for one not just the downgrade, but also raising the price target from 180 to 190, but it's more specific thank -- look we heard this in the last two earnings calls, but what

specifically is in this note is it's the most profitable markets for amle that are seeing the u.s. and europe and countries like japan where they sell those most expensive iphones and that's where they have great market share where they're taking market share away from android. that's not happening in a significant way anymore. on top of that, kelly evans and i, we talked to the person behind thisduring the exchange and he was telling us all that commentary we hear from apple about emerging markets, that's india and countries like that, that they say they're seeing growth in. well, that looks like when they're going to miss this year from those bigger markets. that's really what the crux of his thesis i guess is on top of that, just services just the knock on effect of that with fewer iphones, fewer apple installed devices and fewer opportunities to sell services to customers so that's why he's flagging that

morning on services as well, scott. >> i wonder if we're appreciating enough this uncertainty that's coming out of the chinese market for companies whether it is at apple or a nike or a starbucks and these businesses that rely on a fairly healthy percentage of their hrevenues. >> for sure, and obviously the whole market has had to kind of take down its anticipation of a growth for a lot of this chinese domestic dmaemand, and for appl you can have cogent, careful kind of alternative data-driven arguments about the stock, positive or negative and look at the way that has moved since march, since svb that has, like, the tightest trend channel, and it's the market of the collective wisdom deciding where earnings are going in the next 18 months. it's the best balance sheet we know of. we've got this beeline for a $3 trillion market cap

you give it that market cap because assume they're able to navigate the next turn in technology my point is i agree, it's expe expensive. at some point, people willing to play the trend, but i'm not sure anybody has found that gotcha data point, either bullish or bearish that says this changes the story on apple. >> also, you know, steve, i remember when we were together at wwdc, and the deliberate nature in which tim cook is approaching ai he's not just suggestive that it's going to be the be all end all and trying to take advantage of this, you know, hype, this narrative that's around all these kpaebs and it still remains to be seen i bring it up because the stock is up 40%-something-odd. >> at some point they're going to have to deliver on whatever investor expectations are. >> yeah, and tim cook actually gave some comments after wwdc about that, scott, saying he's

looking at chatgpt and products like that and experimenting with it he he has he uses it, but we know apple likes to get right, and siri, they don't want to be embarrassed by siri turning into chatgpt and getting things wrong. they're going to be very, very slow compared to what we see out of microsoft and google on that front. they use ai in everything. i keep saying this ai is behind all of their products it's not necessarily consumer-facing. >> appreciate that thank you. we got less than a minute to go, and here we go you know, we think the fed's not going to do anything tomorrow, and we'll pay close attention to what jay powell says that's for sure. >> we will, and there's no answer as to whether they're done or not tomorrow the answer doesn't exist within the fed's decision-making so you can't guess what it's going to be, but we're close enough to where you can take the fed policy piece and set it aside and say, we think they're about where they need to go. the question is, what then are we going to be worried more

about? are they worried about inflation staying high, or the risk to growth it'll be worth listening to, but i think the market is correct. >> there's the bell. emeril lagasse is up there i don't know if he'll yell bam, but i'll send it into ot with morguen and jon. -- morgan and jon. your scorecard on wall street, but winners stay late. welcome to "closing bell overtime." i'm jon fortt on the other coast in san francisco >> and i'm morgan brennan at cnbc headquarters in new jersey. >> coming up on today's show, a can't-miss interview with the ceo of amd, lisa su, fresh off today's ai event her company's stock has doubled so far this year we'll talk about of course, the latest efforts in ai, data centers, much more. >> plus, we'll be joined by the ceo of crowdstrike as that company makes inroads into the world of artificial