about 0.03 of 1% banks getting a little relief on this abbreviated trading day >> we will switch over to closing "closing bell. thank you very much. welcome to "closing bell." i am scott wapner. this make or break hour begins with the question of the moment. can stock keep up their momentum and extend the rally into the second half. tom lee will be here in just a second, and your scorecard with 60 minutes to go on the fourth of july eve. and then tesla, one of the big

and best performers yesterday after the record delivery numbers over the weekend, and those shares the highest they have been since back in september. and apple down slightly, but still holding above the $3 trillion in market cap can the bulls keep charging ahead? tom lee, head of research and is with me as you can see welcome to see you again >> good to see you >> you just raised your s&p target to 4825, so you were a little too bullish last year and you think you are not bullish enough for this year >> yeah, we are at the midpoint of the year. we took a look at what could happen in the next six months, and i think there are positive catalysts coming up including inflation next month the cpi could fall to 3% got the generative a.i. story that i think is gaining

traction, and i know there's a lot of skepticism of the market, but it hit an all-time high last week, and i think we can build upon those gains >> are you sympathetic to the skepticism you say still exists? why do you think people are skeptical of a rally you think could keep going quite substantially? >> well, i understand why people are skeptical, but our view has been that this is an inflation war, and the fed is not trying to kill the economy, it's trying to kill inflation and i think they are winning i think it's going to be a battle the first gain was a couple inches, and i think it's still a street fight and the bulls are getting the upper hand >> did you think the fed thinks you can do one without the other in terms of killing inflation without killing the economy?

because anytime you hear jay powell or anybody with the fed talk, they say the market is still too strong, and the consumer is still too strong, maybe for their liking the economy is hanging in there better than they expected it would. >> yeah, i think the fed has an optics issue 4% inflation doesn't look good for them but the internals of inflation are encouraging. goldman had a nice piece today looking at that. first of all, used car prices which have been pushing inflation are set to rollover, and that has nothing to do with the stock market housing is finally starting to catchup and will start to reflect market prices. the labor market cooled off a lot. we will get the jolts report this week. and that's where the fed would like it, and that has nothing to do with the stock market >> i understand.

the idea that services inflation is still too sticky for the fed's liking has nothing to do with any of the things you just mentioned that have come down a lot. that seems to be the problem that the fed has and why they are so apparently resolute in the way they talk about what they are still going to do >> that's right. seven items make up services and that's running at a decent rate right now, like in the high twos financial services is being inflated because of higher interest rates travel could have a seasonal problem that is being fixed in the next two months, because when you look at things like airline demand, prices are cooling even though it looks like they are inflating. and restaurants are tough, and i don't know if the fed needs to kill the economy to get the restaurant prices down >> they need to kill demand, at least to some degree, and that's what they would suggest. that's what pouwell refers to

when he makes comments about what is ahead? there could be another thahike i year >> yeah, i think they will have an easier pr story after the june cpi comes out next week now people can believe there's progress because you have gone from nine to three on inflation. and they can argue 500 base points of hikes are still going to kick in i don't know if there's a urgency to keep hitting with a 25 base point hikes. >> we talked about why people are not fully willing to get to the train, so to speak, because they think that things are still going to come, that earnings are not going to live up to the hype, and multiple expansion that took you to where you are now can only go so far, and that's going to be set by

earnings and they are eventually going to have a v-shaped recovery >> fair points but with the 10-year at 8, the pe should be closer to 18 or 19. and earnings is coming out for q2 in a couple weeks, and we already had a bottom earnings in the fourth quarter and now it's turning up advanced declines at an all-time high i think investors are starting to buy individual names again. >> is there a level of interest rates that make you co uncomfortable? do you think about the prospects of rates going back up and what that could mean in your projection >> yes, if inflationary measures resurface, that means we are in

the 70s again, not winning inflation but still fighting it. and then i think the other risk is if expectations get too high, scott, our team talks to dozens, maybe hundreds of institutional investors every week and there's a lot of skepticism out there. i don't think people are thinking much in the second half and that's why we can be more bullish. >> let's bring in somebody that cannot expect much good, good to see you again. i like when we do these conversations and debates between you and tom, because we are hard pressed to find two guys on the same thing you heard what tom said, and what is your problem with it >> the headline may very welcome in at 3% next month and the question becomes are we going to

look at the window dressing or behind the window dressing ultimately it will be because energy declined significantly and it's not pointing to a favorable second half globally also, it could be because of the base effect. it's up 9% from last year. and they are going to look at core, and i think core, like it has ever month since october had growth i don't think there's an immaculate -- unemployment needs to be significantly higher than where it is now. lastly, i say, all of the forward indicators that i am looking at -- no means am i tied

to q2 -- >> you seem it you have been tied to it for a long period of time now and you don't want to seem to untie yourself in any way, shape or form >> well, i will untie myself when we get an ism that is not indicating a significant contraction of going forward i will untie myself when the purchasing barometer and new order barometers are not at recession airy levels. so with a deteriorating consumer balance sheet and estimates far too high, i think the s&p is trading at more like 18 times and not 16, which is an inappropriate multiple for a slowing environment. >> i want to have tom respond to all of that. what do you say? >> it's a lot of things.

i start with ism it was a bad reading but it tells you a lot about positioning when you have a bad ism and the market is up today it shows you people have been betting on bad news and positioned to be more on the short side and instead of getting this response of negative price reaction we are getting rallies. on inflation, i find that there's a lot of conviction inflation sticky, and headlines are at three, and most people did not say it would be three by mid year and core is probably going to be two, not .4, it's really decelerating if we see it as inflation where the fed is getting ahead of this ultimately the stock market is broadening, and there's less skepticism and there are more companies speaking about better visibility >> uh-huh. >> those are things that normally cause fundamental

investors to buy stocks. >> how about that, greg, that it was an easy market to pick at and say, you know, this is a magnificent seven market, and the s&p and 493 are doing nothing, and that has changed a bit over the last month, hasn't it i wonder why that did not move you, and that's a positive sign for by bulls feel the way they do >> yeah, if the duration was a little longer, i would agree that it's a positive sign. i don't know if any of those basis are based on investment cases on four weeks of data, and if we are talking about broadening, certainly that would get me to reconsider some things point of fact, and i just want to clarify this. you can't say core is decelerating, and you can say you think it might the fact is it has risen 30 to 40 basis points -- that's a

deceleration >> i feel like you are in the same boat as saying well, because the fed has done this, this should happen, and because earnings are too high in your mind, this should happen, and a lot of what you said should happen hasn't happened so at what point do you say, you know, what i thought was going happen doesn't happen? >> let me distinguish the difference so i am pointing at eight months of data and the distinction i am making if we have eight months subsequent to the conversation of the rally broadening, of course i would have to change my view the distinction i am making is observing this over eight months, and so all of the forward-ka forward-indicating things,

including the level of mortgage rates and including what is happening in the housing market that will make this fight very, very difficult for the fed all of those things are not pointing me in a direction where i believe we are going to have a 245 number next year on the s&p, or i can believe we are going to have 8 or 9% growth in the fourth quarter >> i think both sides are in a sense so dismissive of the other person's case, and not you and greg specifically, but generally speaking whereas the bulls like you say, well, things are getting better, and inflation is coming down, and bears like greg say, no, the leading economic indicators point to an economy that is going to weaken further, and the yield curve remains inverted and you don't way attention to that because you focus on other positive things you look at. how can you both look at two

markets, two economies and come to two different conclusions >> well, we are in a gray market where it's not decisive. greg was saying the core of 4.44, and last month, the may number, used cars are about to rollover and housing is going to rollover this is the internals that we look at. those are, to us, leading. you are right, i think the ah-ha moment is when the fed can point to progress that we can no longer dismiss if inflation is at 3, and it's going to be high 3s for a couple months, the bond market can't say inflation is a problem that's going to change how people view the inflation war. >> greg, do you feel like fomo

will get the best of bears, too. you think a large people will miss this move because they were not positioned for it, and they missed it so in some respect they are going to chase it and the longer people are willing to chase it and realize there could be fear of missing out, that will take the train down the tracks and you are still going to be standing in the station tri trying to hail the train, and you feel things should be working in your favor and they are not. >> it's a fair point, and my thesis coming to fruition is not working in my favor because it's hurting all of us. i think june was a fomo month, and i think the fomo will be over much like it was in august

when powell had to come out and recertify and rearticulate his intentions one area where i disagree with taupl tom is i don't think housing is rolling over we have new builds accounting for two to three times their average is purchases, and that's because we have a base level of homes that are not heeding the supply side, and demand has not been destroyed in the way we have liked >> well, that's -- again, people would look at that and say that's a positive sign, and that shows me the economy can withstand what the fed has done and it doesn't have to bring the entire economy to its knees, and i see tom shaking his head in agreement. i will let you take it over.

>> in a way the fed is creating the housing tightening and it's making it difficult for builders to build and construction to take place, and so in a strange way, we need easing conditions your point of fomo scott, i think it's powerful, and the market is up 10% in the first half, and then a median gain of 12 there's real performance issues. people have negative returns year to date, and cyclicals are up almost on average by double digits, and there's a huge repositioning that has to take place. >> we will leave it there. you guys could easily both be grilling and chilling already, but i am glad you took the time to have these conversations. i think it was good. >> happy holiday

>> you as well tech, health care, energy or industrials, which will have the best second half head to twitter to vote. in the meantime, let's get a check on top stocks to watch as we head closer to the end. >> overstock.com will soon be a thing of the past after buying bed, bath & beyond today we are seeing the stock down almost 2%, and could be profit taking and the shares are lower. the name change is already live in canada and will launch in the u.s. later this summer several chinese tech names are trending higher afterward of yellen would make her first trip to china in a bid to ease tensions between the world's two

biggest economies. so jd and p d1 of the two best on the nasdaq 100 right now. >> thank you very much we're just getting started up next, your second half set up for tech can the sectors' run continue? we're live from the new york stock exchange today you're watching "closing bell" on cnbc.

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about 40 minutes to go in the holiday shortened trading

day. nasdaq coming off its best half in over 40 years let's get over to steve. >> look at the runs so far apple up 49% so far this year, and nvidia up an eye-popping 189% some catalyst look through the end of the year for each of the names, and apple facing a fall in demand for its products and over to microsoft, investors, of course they are largely focussed on a.i. so expect to see more product announcements they could make money off of for the rest of the year alphabet, looking to monetize a.i., and they are still behind microsoft on that front. meta, it's the year of efficiency, of course, and over to nvidia, analyst still bullish on the chip darling, and we are

waiting to hear from the commerce department about more restricttions on a.i. chip exports to china and amazon prime day coming up soon, and that will be a good test of demand ahead of the holidays >> you know, steve, i'm thinking can you think of a tech earnings season with more on the line, perhaps, than this one will be >> just given the fact that the gains you showed on the wall we made are so extraordinary, not to mention the tech outsized the leadership in getting to the first half, and that puts the bar high in my mind. >> yeah, not only that, these stocks have to try to justify the inflated valuations on top of all that. i know we talked about this last

week, but apple will have a down year as far as revenue goes, and it's hitting all-time highs with the trillion-dollar market cap >> good stuff. let's bring in the chief strategist at baker avenue >> good to be here >> how high is the bar now >> the bar is high the tech sector led the first half, and i think you hit the nail on the head there, and the exs expectations are high. this earnings season is pretty important for tech if they are able to meet the high expectations, i think the rally can continue if they miss, even if, let's say, small miss, i think the shares of tech stocks could be severely punished potentially. >> you think they will live up to the hype? >> i think it will be name by

name a company like nvidia selling at the multiples it is now, it needs to be a beat and a raise for the shares to continue at its current rate it's hard for us to annualize the current numbers and extrapolate that into the remainder of the year, because the hurdle is too high >> how could they beat and raise after they have already raised to such an enormous degree how could we have expectations of even more than that >> it's tough for us to forecast that as well, and not just for nvidia but i would argue for a lot of other tech names as well. not to say we don't like these names long-term but in the short-term these shares have ran so much, we need earnings and valuations to catch up >> what do you think about valuations do you think they have gotten ahead of themselves? when you look at apple, 31

times, is it justified in being there, and is microsoft justified at 32, where it sets today? >> yeah, like i said, these are high earnings, and as a company, like apple, $3 trillion in market cap to roughly 11% of the u.s. gdp, and 6% of world gdp, and apple should probably be selling at a million dollars we need to see earnings growth this year it's modest in terms of earnings growth and a lot of investors are looking into 2024, where we expect to see a little rebounding >> what do you think of a more broad catchup trade? do you think that's in the cards where these sectors are finally

showing signs of life? >> i think it has to for the s&p to do well in the second half of the year, i think you have to have the other sectors perform better one of our favorites right now, and likely in the industrial sector where it's going to see earnings growth like tech and communications, and it's selling at far lower valuations than tech and communications. you really can see broader participation, and otherwise it would not be a healthy market if only tech is leading this year >> what about financials >> we like financials from the perspective of valuations. i think today, the second of the start half, if you would, apple is down, ands on other hand financials and value is up, so

there could be a hand off of the baton to the lower valuation and sectors in names that could catch up in the second haftlf o the year >> thank you up next, courtney garcia is back with what is on hooer radar as we kick off athnoer trading month. we're green across the boards with about 30 minutes to go. did i say chicken wrong? tired of people not listening to what you want? it's truffle season! ah that's okay... never enough truffles. how much are they? it's a lot. oh okay - i'm good, that - it's like a priceless piece of art. enjoy. or when they sell you what they want? yeah. the more we understand you, the better we can help you. that's what u.s. bank is for. huge relief. yeah... ♪

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we're back and stocks are near session highs as we wrap up the first trading day of the second half. what is in store for the rest of 2023 let's bring in courtney garcia i have had an unwavering bear and an unwavering bull to start

the hour >> i think what you are seeing is the economy continues to be in a better place than people expect, and the consumer is still spending, and earnings are not falling off a cliff like people expected and you are seeing the broadening out of the rally and that's a lot more indicative that there's room to run in the stock markets rather than just the sit-in that has been holding it up this way. >> what makes you believe the projections are right? >> well, i think ultimately it comes down to is the consumer still spending i don't see that falling off a cliff anytime soon, which is what will affect the company wages are stable and will keep people spending, and peoples' savings are not coming down as expected, and people have money,

cash on hand, and cash paying interest and it's going to keep the consumer going >> you don't think the market is too expensive at the multiple it's trading at now? >> yeah, parts are mega cap techs -- >> you think they are too expe expensive. >> >> i do. >> what will happen in the second half? >> i am not adding to the categories, and we want to own them but there are plenty other areas in the market, industrials and materials and other sections will benefit from the whole idea that the u.s. is onshoring and there's a lot of infrastructure that will continue to happen >> you think that the catchup trade is going to be legit, and these areas that have under performed and have started breathing heavier over the last few weeks, there's life there? >> absolutely, yes >> you don't think that mega cap

tech is going to fall back at all? >> that's a big question some of these companies have gotten overly expensive and i don't think i can justify it at a point in time to continue spending money there as an investor, you want to own those things, but if the s&p is trading and less the seven companies are doing well, why pay that kind of multiple when areas in other markets -- >> well, they would give you a list i am paying for safety and where the growth is, and balance sheets, and a.i. growth -- and we are trying to figure out how enormous that will be. that doesn't resonate? >> that could be the excitement is artificial intelligence and that's why everybody is rushing to the mega cap, and people tend to overestimate what is happening

in the short-term and underestimate what is happening in the long-term a.i. will be a huge benefit for tech companies, and short-term, it's priced in >> when you said everything about the strength of the economy makes sense, and you are right because it has a much stronger economic picture than a lot of people thought it would be to this moment, but just wait because it's only a matter of time because inflation is going to be sticky enough where the fed is going to follow-through on what it says and there will be that. >> well, eventually a recession will happen and it's a normal part to the markets, and the fed may increase interest rates this month and that's what people are expecting them to do and ultimately they will happen what is happening with inflation, which is continuing to come down the feds said two years ago we are not thinking about raising

interest rates and now they are not going to stop, and the markets are not believing that, and they have to at some point listen to the data >> the market is getting its arms around the idea that the fed is not going to come to the rescue, but it seems to be all right with that? >> that's what we have been saying all year. we don't see cuts happening, but at some point they will stop raising, and the environment, yeah, i think at some point in time they will have to stop raising. >> have a good holiday thanks for being here. >> you, too. up next, we are tracking the biggest movers, and kristina partsinevelos is back with us. >> one social media app attracting millions of subscribers and their stocks are moving, and i will have the details, next.

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less than 20 to go before the closing bell, and kristina partsinevelos is back with a look at the stocks to watch. >> let's talk about shares of snap they are up less than 1%, and if this stock closes in positive territory it would be its longest winning streak since june of 2020 when we will still dealing with covid

and snap plus subscriber services already included over 4 million subscribers after launching only a year ago. shares of astrazeneca are lower after posting disappointing cancer results it showed it was able to slow down the progression of the cancer but lacked details about how much longer patients lived over all >> tough day thank you. enjoy the holiday. see you on the other side of that last chance to weigh in on our twitter question we asked which sector would have the best second half of the year tech had the best first, and will it carry over or will be it health care or industrials the results are right after this break.

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saying, we all cannot wait to meet baby lila have a great holiday and then tesla topped expectations in a big way, and we talk about what this could mean for its stock as we head ato the second half thatnd more as we take you into a holiday shortened edition of the market zone and save on every perk. sadie is moving to the big city and making moves on her plan, too. apple one, on. now she's got plenty of entertainment for the whole ride. finally there! hot spot, on. and she's fully connected before her internet is even installed. (sadie) hi, mom! (mom) how's the apartment? (vo) introducing myplan. get exactly what you want, only pay for what you need. act now and get it for $25 when you bring your phones. it's your verizon.

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shortened one and brian dietrich on why history points to a strong second half and phil lebeau on tesla's big delivery feat and a big stock reaction at that i'll begin with mike santoli we're in green across the board. twitter poll says it's going to stay the same. green, and it's going to be tech driven >> we do know trends tend to persist. strength begets strength in the market typically, although you have to keep that in mind as you also recognize that there's ebbs and flows. i do think the market has proven a fair bit and broadening out somewhat you also have these sort of very modest pullbacks it shows you the supply and demand really kicking in that said, i do think it seems like more of an even trade to bet on everyone now is embracing soft landing you -- everybody, but greg branch >> well, true. >> everyone is seemingly viewing the market through the lens of, well, that makes sense because

even if what's only a period of time we have this wind owe when soft landing seems plausible the market will price that in. so again, i think that the market's won some points and you maybe should expect in the second half of the year at some point from some level a bit of a hiccup >> you need some healthy skepticism still, and you've been pointing to the fact that sort of, have we reached the point where it's getting a little bit out of hand in terms of the euphoria around this move that we have >> i would say there's room from where we are to get to outright, pure, everything is going right greed and over optimism. so i think that there's a sense of, nobody's fighting it as hard as they were a few months ago and we've chewed through a bunch of big picture worries and maybe there isn't a big one hanging in front of us, but i do think there's room for the fomo trade. >> ryan dietrich, it's certainly one of the biggest bulls that we've spoken with joining us

right now. you've seen big things happen in the second half of the year. >> we do, scott, and we've been bullish all year long and seeing the potential for new high and people thought we were crazy and let's look real short term july, the s&p 500 has been higher nine out of the ten julys and the qqq has been higher every july since 2008 and there's lots of things to pullback here and some of the other guests and the broadening out we've been seeing, right we've got consumer names breaking out relative to staples and all-time highs and there's a lot more participation than we've seen in a long time and i hope you can put it up and what happens when you're up at least 10% for the year the rest of the year on the medium return's up about 10%, double the average, but here's what's really interesting. i call this a sweet spot, scott. when the s&p is up 12% and 17% so not way up and not in the sweet spot and the rest is higher on medium returns

lots of factors, yes we've been bullish and we still think there's a rally and maybe we're due for a pullback in august, september, october and perfectly normal and we'd be a buyer of any weakness. >> you mentioned these are resident stock traders' almanac and history doesn't always hold true to how it may seem and this time is a little bit different on a number of accounts. >> without a doubt, and by the way, ryan has his own scroll there that he shares with everybody, and he's got a real good handle on the tendencies of things >> i think what's interesting now is some of these very reliable patterns, one or more have to probably be wrong in some respect when you're talking about whether it's when the yield curve inverts and what does it mean for markets. >> right >> what does the fed do and how do markets react to it we've kind of gotten through a lot of that and i'm willing for it to allow with some play in those relationships here and in

part because the yield curve got inverted in a hurry because you have the most transparent and aggressive fed at the same time and we got there early and it's really telling you that inflation will be moderating more than anything else. so i'm with you. i think that the election year pattern has worked to an absolute tee mid-term election and you bought it at that moment ask it's huge and that sort of takes you into around now through july is when that pattern tends to work out, in terms of the interplay with the business cycle is a big question and profits have been more resilient than we might have expected and the nominal growth is still sustaining equity prices at these levels, but valuations don't look great, but that's never a time and mechanism. >> anything, ryan, concern you you can't just be overwhelming and there has to be something on your mind and maybe this can upset my view. >> sure. the fed, they don't need to hike anymore and the fed seems like they want to keep hiking and

valuations are a stretch, but one thing i want to point out here and just today, the manufacturing data wasn't very good look at last week, though, the hard data last week and we've seen capex start to bottom and go higher and we'll continue to follow the hard data and not so much those surveys which people are bearish for whatever reason and don't be so bearish and look for higher prices. >> wish you the best, ryan dietrich, phil lebeau, better than 6% off those record numbers over the weekend we're making a run at a trillion dollar market cap again. >> and i wouldn't be surprised if they get there, scott look, if you are a tesla bull. there's a lot to like in this delivery, well above expectations, 466,000 vehicles delivered in the second quarter. the estimate was 445, excuse me. they have delivered 889,000 in the first half this year and they're half way towards their guidance of 1.8 million vehicles

being delivered this year and by the way, the expectation is for deliveries and production increase in the second half. one reason why adam jones at morgan stanley upgraded his expectation to 1.9 million deliveries we will find out what happened with margins as they had to cut prices and stoke demand in the second quarter we get those results july 19th after the bell and that's when tesla reports its q2 results and i also want to take a look at shares of rivian getting a nice pop today. if you look at rivian it's up more than 60% and q2 deliveries up relative to q1 and they reiterated their guidance that they expect to produce at least 50,000 vehicles this year. so rivian continues to move higher, as well. scott, back to you >> i like mike's opinion of this, which i had already heard earlier, incredulous where the delivery number comes in when it does and we're so surprised that the stock's up 6%.

>> it's certainly an outright beat in numbers and it does keep you on track for the annual run rate that we were expecting. adam jonas last october, i believe, took his 2023 volume estimate from 2 million down to 1.8 1.8 the stock is lower than it is right now and now the stock's higher and he takes it from 1.8 to 1.9 and to me it's either a car company that is outperforming expectations in the near-term and playing some market share games and winning on that score and margins be damned for the moment or it's just kind of a vehicle for everybody's hopes for the technological future and musk is a genius and they're figuring it out over time and it's a 10 those or a $15,000 car beat and you know, we've added almost their 500 billion in market cap from the lows, you know. the math doesn't always work out in terms of what's already built in

>> that's the base that will continue in the second half for sure. >> again, there's no right or wrong price with this, it traded at a 1.2 trillion valuation once >> our thanks to phil lebeau and wish you the best fourth of july holiday, as well >> here we go. we'll make the turn and we've made it into the second half, but volume is light. the real question. are we going to have a substantial catch-up trade and that is going to in large degree determine where this market really, really goes. >> yeah. first of all, banks are up a couple of a percent today and that would be an element to any catch-up raid and the fact that we were up 15%, 16% with banks down 20% was itself remarkable and probably not sustainable i don't know that a broadening out always equates with absolute higher prices in the s&p 500 and the big stuff has to hold together, as well, but there is a chance of that and more stocks participating, 40% of the s&p is up more than 10% this year so it's want as if it's only been a

handful of stocks, but you definitely want to see some followthrough and demand hit corners of the market and keep going. >> you come back green across the board as we end this holiday-shortened session and it's trying to hang on there although it's trying to settle and i'll send it into overtime right now. ♪ ♪ well, maybe trying to close even that's the scorecard on wall street as we kick off the second half happy independence day, win or stay late. welcome to a special edition of overtime i'm jon ffortt with morgan brennan. russia and saudi arabia, will that help put a floor under prices and we'll ask alina kroft as opec gets set this week >> tesla is jumping after deliveries surged 83% year over year in the second quarter and we'll talk to an