proper office behavior to address these concerns, more than 60% of companies are giving or plan to give their employees etiquette classes by next year let's hope it's not those online things where you have to watch a video. >> who's actually going to pay attention? if you really need etiquette classes, we need you to pay attention. >> that's going to do it for "power lunch." "closing bell" starts right now. >> i'm mike santoli in for scott wapner this make or break hour begins with the summer rally showing some fatigue as investors take profits on strong early earnings reports and as bond yields bounce just a bit. sebasien page calls himself a reluctant bear we'll begin with our talk of the tape has the market's recent run fully priced in the now popular soft landing story let's ask cameron dawson of new

edge wealth. coming into this year, the idea that we were going to have this perfect, benign soft landing, growth stays okay, the fed's not too scary, it was a long shot. not that many were willing to bet on it. at this point, with the market up where it is, it seems as if after this week's cpi report, it almost seems like consensus. where does that take us in terms of what the market is already priced in? >> and i think one of the interesting things is that if we look into '23, the rest of the year, and '24, what you already are pricing into earnings is that soft landing. you have a growth of about 11% of earnings in 2024. is there any further upside to those earnings that's where we look at markets trading at these very high valuations, and now we see positioning, which did start the year incredibly short, incredibly light and underweight. has now moved about 75% of the way back to kind of an overweight position. so, that's what we'll watch to see what's the next, like, hire for this market, how much more do you get people drawn in

>> no doubt about that we've seen an ongoing kind of short squeeze running through parts of this market the heavily shorted stocks have been soaring and yes, the positioning numbers, the sentiment data, probably less of a tailwind than it was i just wonder if we can exist in that comfortable place for a while. the market, when it's in an uptrend, when it seems like the economy is in a decent spot, it doesn't always punish optimism right away >> exactly what you see is that valuations can go high and stay high. sentiment can go extended and stay extended. i think the real measure is going to be, do earnings continue to supply on the upside and deliver on that optimism for the second quarter, we think that earnings estimates are too low. if you look at the revenue line, the forecast is for revenues to be down about 0.5% but you compare is that to nominal gdp, and remember, revenues are a nominal number, we're tracking closer to 6%, so that's a pretty big gap on the estimates for even just the topline, which is why we think

you could see more beats this quarter. >> so, we have the formal consensus estimates, as you cite you have what the market has already kind of priced to some degree in advance, and you have the actual investor expectations for how much companies are going to beat by we look for clues and earnings reactions, right what do you see? it's early we've only got a few of the banks and a handful of other companies, but so far, you've seen some selling into the good news >> it is disappointing with the banks, given this set-up, because we know that so many of them are reatrading at depressed valuation. positioning was light. expectations were low. they come out, they beat, they raise, they talk about some cautious optimism, there's some mixed signals, and yet they give up all of that strength. it's not to say that they can't find their footing, but if this is an economy that's much better than expected, growth holding up better than expected, we really would like the banks to participate in that as a sign of health for the underlying market >> right you like to see it as a market

signal but also the valuations don't make a tremendous amount of sense for banks if the rest of the market is somewhat correct about the economy. >> exactly if we look at broader sectors, other sectors should be showing more positivity if this is a stronger economy think of things like energy, which has been in the doldrums because oil prices have been weak, somewhat pricing in the risk of recession. if you look at materials, that has been weak because of weak manufacturing. if you start seeing those things start to turn around, you should see that broader participation kind of in what you would call the cyclical value parts of the market >> so, we have seen, in general, more stocks participate, right so, since memorial day, let's say, s&p is up like 8% the average stock or the equal-weighted of the version of the s&p has outperformed over that span. so, essentially, june and month to date, it's been better. the big stuff has still worked that's the other interesting part it hasn't been a zero sum game but has it been enough to really

get traction in terms of the strength of the tape and proof that demand is going to be strong for stocks in an ongoing basis? >> it is an important point that strength in other places has not yet come at the expense of the prior leadership now, we have seen this big divergence in flows. does that start to close because you're at those positioning extremes then, it's a question of, can the cheaper valuation in the equal weight index or the value index be enough for those parts of the market to work better the trends in those areas, from a technical perspective, still remain somewhat weak, but if we look out over the next two years, we'd rather buy things trading kind of below their long run average valuations instead of things like growth and tech names which are now all the way back up to the prior peaks of valuations >> right yeah as the nasdaq 100 is 5% or 6%, even in price below its peak

if the market at some point, you know, needs a breather and goes in search of something to worry about, which sometimes does happen at these stages, what do you think is more likely to be that gut check is it going to be faltering growth and we have another recession scare? is it going to be, you know, yields have upside because inflation is sticky and we have to reprice the fed again >> i think both of those are wi wild cards, and when we think about the inflation side of things, we see it continuing to moderate but this will be a market that will remain hypersensitive to incoming inflation data just because of the past experience that we have had, and that the fed is going to be hypersensitive to it so, if you have a couple months of a re-acceleration of inflation, that could be enough to shake the market, just given the fact that you are trading at such high valuations doesn't necessarily have to completely throw the rally off its pause. >> there's no all-clears

let's bring in malcolm ethridge. weigh in here in terms of where you think the market has gotten to at this point, how does it change the risk-reward if it does at all for you? >> i think cameron was making an interesting point about the banks and the fact that even though the earnings season was not set up for them to do particularly well, and for them to give us positive guidance going forward, they still did. they outperformed, yet their shares don't necessarily reflect that, at least so far, the earnings that we've gotten from banks, and i'm curious if that's going to be indicative of the rest of q2 earnings season where there's a number of companies who beat because earnings estimates had been guided down, right? we had all started to believe that things should be cooling off a little bit, and then they give us good guidance, yet the market doesn't care, because sentiment has shifted so much and because everyone is so focused on the additional rate hikes and the impending recession, it feels like, is on the back half force.

i'm wondering if we're not going to see these companies giving us really good earnings and guidance and the markets still say, so what i think in aggregate, we're about to get our last upbeat earnings for this year there will certainly be some outliers there's no telling how much longer the magnificent seven will be able to ride the a.i. wave into the stratosphere, but at the margins, i expect companies to struggle to pass on cost to consumers the way they've been allowed to the last couple of years, and i'm wondering if that doesn't show up in sentiment that goes against the earnings numbers that we're getting from some of the companies that still have something good to say about q2 and their guidance for q3. >> i can see that kind of mixed reception, maybe a bit of sell on the news, makes sense as a concern on a tactical basis, but bigger picture, couldn't you have the case made that earnings are troughing in terms of year over year percent change that's what the consensus says, this is going to be the worst of it, it should pick up from here

based on the forecast. that, alongside the idea that had fed's inflation fight seems like it's kind of tapering off who knows where it goes from here but at least right now, the market's comfortable with the direction it's heading and economic surprises keep working to the upside. >> i think that's fair the thing that continues to bother me, though, when i think about the macro picture and the market trends right now is the yield curve. we've now been inverted for 12 consecutive months now, and the note that i saw a little bit ago pointing out that a similar thing happened in 1979 and 2007, you know, those two periods saw the largest s&p rallies that also coincided with an inverted yield curve, so i think sentiment is starting to go in the direction of, yeah, but, right? we've seen earnings start to look good. we've seen all the different peak to trough markers that we need to see. the signal to us that we've hit the bottom we're on our way out of it recession may not have to

happen we can actually hit the soft landing. we got a positive inflation number, even though core didn't come in where we wanted it and i think the markets could well respond with "yeah, but" and that's the parting i want to make sure we're at least considering when we're talking about positive earnings trends and the fact that this could be the last good earnings season for 2023 in total even though, again, we'll see outliers in industries that we don't necessarily expect from right here >> for sure. i guess, cameron, the other thing that we haven't really addressed is aside from the aggregate earnings picture and how it relates to where the economy is, just the rush of enthusiasm around a.i. and whether that's directly getting into the consensus estimates for certain companies or whether it's just this halo effect or just an excuse, frankly, to pay up for the same, most popular big stocks out there is there a way to handicap it in your view? >> well, the first answer to that has to be an acknowledgement that the street is always lagging when it comes

to pricing things in, and usually things that are a big step change function higher or different. just look at nvidia, which had its estimates for 2024 raised by 50% in response to the last earnings but we looked at microsoft, and it's interesting because you could think that microsoft is the one company where you could most accurately estimate in the near term the impact from a.i. those estimates for '23, '24, and '25 have each only gone up by about 3%. so, we know that there will likely be more we can't handicap it quite yet, but that still seems like a very low number >> that's interesting, in the sense that the sell-side isn't comfortable putting a number on it or an aggressive number on it on the other hand, you could say, look, it's $2.5 trillion market cap 30-ish times earnings. maybe the market in general is saying, we don't know how much it's going to be, but we still think it's already kind of paying up for whatever they're going to print here. >> and there is that dynamic of price it into the multiple and

then see how it works through the earnings we've seen that multiple times, even with something like tax reform, when we got the big tax cuts in 2018, everybody priced it into the multiple, because you weren't quite sure how it would impact the earnings yet. of course, this is perpetual, it would be a stream of growth that we would get but i think that's why you've seen this rerating in names and not a big upside to those earnings numbers >> malcolm, if you feel as if maybe we're going to have a tougher road in terms of the earnings path and valuations make things more challenging, are there neglected parts of the market that you feel as if, you know, you're being invited to look at right now, or is it about rotating out of equities in general >> well, interestingly enough, back to the part -- point yo guys were just making, i think the one place that i see could be a catalyst -- there could be a catalyst, if you will, is tech, and interestingly, because we've been talking so much about how tech has been overbought

possibly and we're seeing a lot of money flowing into tech that doesn't necessarily make sense because the a.i. story has already been told and should have been priced in already, the thing i'm thinking about, though, with tech is the number of institutional managers who are underweight tech coming into 2023 they sold off a lot of what they held in 2022, trying to rotate into whatever they thought was going to be the next sector to take us higher and higher, and they missed the first half of this year. and so, i think where we could potentially see a selloff coming out of q2 earnings season, that means the tech has to get whacked as part of it because it's been the leader in both directions so far. i think what we'll see is a lot of institutional managers trying to make up for lost time, buying up any potential weakness in tech near term, and that could be something that, you know, serves as a shorter term catalyst that helps to flatten the markets a little bit and make us not necessarily see there is, in fact, a selloff happening until later on into the year where those dollars

were kind of buoying what ultimately became a softer market >> it's interesting, i know over the years, stan druckenmiller and others have talked about this you can be focused on the risks, feeling like there's systemic issues to worry about, the average stock doesn't look interesting, valuations aren't compelling, but disruptive tech, there's always something happening, so you kind of, in the old days, own amazon against being short the world. it was actually a barbell trade in a way >> and i think when you add on top of that malcolm's dynamic about being short tech to begin the year, is that valuations don't really matter when everybody is underweight when everybody is underweight, you have this rush and chase to get in, and you're not necessarily caring what price that you're paying it's really at the point when people have gotten very extended in positioning and they're having to make that decision, do i add more or not? to go much more overweight, that's when valuations start to matter >> yeah, and it's true that very few active managers, malcolm, would own a 7.5% position in

apple, which is what it would be to match up with the s&p 500 or own 27% of the portfolio in six or seven stocks, which is what the s&p is right now so, definitely worth keeping in mind as we look at the mechanical impact here thanks to you both appreciate it, malcolm and cameron. let's now get to our twitter question of the day. has the market peaked for the summer just need a yes or no answer on that one head to @cnbcclosingbell on twitter to vote. let's get a check on some top stocks to watch. kristina partsinevelos here with those. >> well, at&t is under scrutiny after jpmorgan downgraded the stock to neutral, slashing its price target by five bucks to $17 a share. there's two reasons. increased competition from verizon and t-mobile, and the second reason, toxic lead. a "wall street journal" investigation revealed that u.s. phone companies, including at&t, have left behind more than 2,000 old unsafe lead phone cables found under poles, waterways,

and in the soil, which will be very costly to remove. other telecom names like verizon, frontier, lumen, down almost 10% frontie frontier communications down over 11% on this news. western digital shares popped mid afternoon on news that it plans to complete its merger with japan's kioxia by next month, the weak memory chip market putting pressure on these names to join forces but now you can see it's pretty much flat. mike >> all right talk to you in a bit banks, a big underperformer today despite better than expected results from jpmorgan, citi, and wells fargo. up next, we'll discuss what that could mean for next week's barrage of bank results. you're watching "closing bell" on cnbc. this is american infrastructure. megawatts of power,

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it's happening. get started wih fast spees and advanced security for $49.99a month for 12 monts plus ask how to get up to a $750 prepaid card with qualifying internet. bank stocks pulling back from morning highs following strong second quarter earnings results from jpmorgan, wells fargo, and citi. my next guest says she's keeping her on eye on next week's results from community and regional banks let's talk about this. it's great to have you have you gotten any clues from the reports we've gotten so far about the sensitivity of large banks at this point to higher yields, pressure on deposit costs or any other big-picture themes that you think are worth watching >> thank you for shaving me. first and foremost, what we learned today is that the large banks remain strong from a

capital liquidity perspective. there is a big story depending on which banks we're going to talk about jpmorgan certainly being the leader it outperformed, and it's the only one from the three that reported today that's trading up, consequently today, and there's a reason for it. jpmorgan closed its -- basically bought a bank that was in distress and is benefitting already from that. its deposits were up, only bank had deposits up relative to the other large peers that reported today. and even that without the first republic acquisition so, jpmorgan outperformed across all businesses when we take now to wells, little different, doing well, but regulatory costs still remain elevated, and there's a commercial real estate story that's developing and keep developing for wells with better exposure particularly in office

compared to the other large banks. and citi, happy to talk more about it, but underperform relative to particularly these two banks. high regulatory cost, different business mix, does not have the strong retail business as well as jpmorgan, so definitely disappointed investors >> and the market has been essentially telling a similar story, of course, if you look at the way citi is valued versus jpmorgan and the others. seems like a familiar theme. i do wonder, though, if things like slightly higher credit reserves and things like, is there anything that you would, i guess, be alarmed about, or is this just kind of where we are in the cycle >> couple of things we're watching number one, just to retrade the commercial real estate exposures. we've been writing a lot about this topic half of the exposure in the u.s. is on u.s. banks' balance sheets, and roughly quarter, basically, of all the loans in u.s. banks are commercial real estate loans, so of course, we

have to be concerned about where this asset class is trending, particularly from an office perspective. but we have to kind of think about what does it mean? small banks versus large banks the bulk of this exposure is actually banks that are sub-$250 billion we wrote research that for banks that are sub-$250 billion in size, commercial real estate is greater than two times their capital versus for the large banks. bigger than 250 $250 billion it only 50% it's not necessarily a story for these banks. wells fargo did provide significantly more exposure, particularly relative to regional exposures and increased its provision again. so, the theory is starting to show cracks, particularly in office, and this is going to be much more of a theme for smaller

banks that are starting to report next week >> as we look toward those reports next week, just to hop in here on some of the smaller banks, how are we thinking about what the, perhaps, additional regulatory burden is going to be what is it going to mean for those franchises it seems as if there's been some relief that we didn't see further stress after svb and now the question is, can we really relax? >> look, we have a negative outlook on the u.s. banking sector and it's primarily related to this bifurcation of regulation i talked about this to you in an interview a few months ago, that the large banks had a much more stringent regulatory standards than the smaller banks so, what vice chairman bard this week announced is what is called wholistic review of capital. he's used that capital goes up in the system. there's speculation of how much that may be. we have to see the final rules but it's really going to affect banks that are greater than a hundred billion dollars in size.

there's a lot on the table maybe i can kind of see a couple things here. first and foremost, the trouble that banks like silicon valley got in, that now -- it wasn't reflected in capital what chairman barr is proposing that that will be something that will be corrected and thbanks wl have the same rules as those above $750 billion additional item that's obviously very important on the back of the banking crisis in march is -- are how these banks will be resolved. currently, only the global systemic banks are subject to a loss-absorbing capital that every bank has to have to be used for resolution to effect more and cheaper resolution for the fdic, so now chairman barr proposing these banks will be subject to that. there's more discuss around

standardized approach of modeling the risks and really, with that, closing some potential gaps all of this will be high regulatory cost, and the large banks will handle it i mean, there will be tweaks in their business models, of course, and they will pass to the customer, but for the smaller banks, this is definitely higher expense. >> yeah. a lot still to sort out. that is clear. ana, i'm sure we'll talk to you about it more. thank you very much. >> thank you >> ana arsov of moody's. the s&p 500 is now up more than 17% so far this year, but sebastian page remains a reluctant bear up next, why he says now is not the time to be a hero.

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we stop breaches. we stop a lot of bad things from happening. crowdstrike. protection that powers you. welcome back to "closing bell." the s&p 500 is trying to close out its best week since march, following two better than expected inflation reports, but my next guest is reluctantly staying in the bearish camp and says cash remains a viable

alternative to stocks. joining me now, sebastien page of t. rowe price what's keeping you from gaining more comfort in what other investors seem to be embracing about this macro outlook >> well, you know, mike, i think you ought to be invested in this market it's just that it's not the time to be a hero and overweight stocks by a large amount so, that's why i talk about being cautious and having a cash buffer in the context of a diversified investment portfolio. so, what's keeping me cautious at least three big factors the macro, the, you know, the macro, you see the leading indicators have dropped by 8%. we've never had that outside of a recession. sentiment is actually running really high right now. the vix, if you call it the fear index, is at the bottom of its range. the surveys of retail investors have spiked to the very, very

bullish top of the range, and that's usually a contrarian indicator, so sentiment is there. and then, you know, lastly, you have to be aware of valuations the equity risk premium is the most compressed it's been over the last ten years look, the earnings yield on the s&p 500 is about 5% right now. forward pe of 19 that's what you get on cash. like the spread is almost zero on those two yields, and historically, it was about 4%. so, if you think about it, you line up the macro, you line up the sentiment, you line up the valuations, you got to be cautious but you got to be invested too, because there's a lot of cash in the system, and you know, we're normalizing from very high levels of growth so, there's nuance in asset allocation positioning right now. >> for sure. you know, i know that it does look as if there's not much of a valuation cushion, if any, between equities and fixed income and cash, although if you look back to before the year

2000, it was pretty routine for things to trade this way so, i guess it's, to some degree, a call on what kind of regime we might be in, although within equities, you say there's things to do or maybe to position toward and away from, what would those be that you would favor? >> yeah, look, first, it's interesting, mentioned the tech bubble, because that was the last time we had this compressed equity risk premium, and it was around the top of the tech bubble, so that might be a reason for reassurance that it's happened before, but i would say it's a reason to worry because it's happened at the time where, indeed, stocks were quite highly valued i think you got to be careful making this analogy. we're not in the tech bubble, just to be clear what do we like in stocks? there are relative valuation opportunities, even risk on opportunities, mike, like small caps small caps are trading at 14 times price earnings ratio this is like where they were trading in 2008. so, if you just look at quality small caps, excludes the

nonearners, look at s&p 600, look to get exposure through skilled active management, you know, you're looking at, really, an asset class that's pricing in a very, very, very hardened laing. s landing. so if you get anything other than that, you're in a good position we look 12 months ahead. we also like high yield. spreads are fairly compressed but it's now a higher quality asset class than it's been historically it's got 9% yield. go back to my comment earlier, 5% yield on stocks, 9% yield on equities, you know, just thinking valuation, it looks pretty attractive. our analysts, they look at the default rates across the index they're forecasting about 3% default rates for the next three months that's passively for the index you can do better actively so, that's a good risk return tradeoff to add a little bit of risk so, mike, this is how we're positioned we're leaning back we're invested we're leaning back on equities a little bit we keep a cash buffer, but then under the hood, we take

advantage of some relative valuation opportunities that could play out in our favor over the next 12 months >> yeah, i mean, that high-yield story is interesting 8%, 9% yield and yet if it's going to work and the defaults are going to stay as low as your analyst thinks, it's hard to see the overall economy having a super tough time in that scenario, correct? >> no, i think that's correct. and you know, those defaults forecasted at 3%, it's actually slightly higher than where we're running right now, but it's not a deep recession i don't think we're getting a deep recession we have, still, $500 billion in excess household savings, and this is after adjusting for the additional debt that households have taken, and it's after adjusting for inflation. so, the consumer remains strong, and mike, there's some trends that are turning here. construction, nonresidential construction is actually pretty good right now, and it's turning. the housing market, somewhat

unexpectedly, look at the schiller index, positive the last couple months so, i don't think we're heading into a very hard landing it's just this environment where, look, we had 10% nominal growth in 2021 9% nominal growth in 2022. and we're sort of normalizing that so, i think the -- look, neutral is not a bad place to be right now. >> no. no, possibly not seems like there's plenty else to do outside of stocks. sebastien, thank you very much good to speak with you up next, we're tracking the biggest movers as we head into the close, kristina is standing by with those. >> another obesity drug worth roughly $2 billion could be in the pipeline for treatment and it's sending shares of one name higher can you guess which one?

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almost $2 billion. it marks an attempt to capitalize on the weight loss industry gold rush stock rose roughly 3.5% following the announcement sticking with bio and health care, moderna shares down about 4% after hbc cut its price target for the company, citing longer term risks for its mrna vaccine technology and questioned moderna's profitability since it's been spending so much money on r&d in the near term. happy friday, mike >> oh, you as well, kristina, have a good weekend. speaking of some big pops, cathie wood's ark innovation fund having its best week in january. >> after those big losses in 2021 and 2022, that flagship, ark etf, it's rebounding this year inflation readings are cooling the two top holdings have had

major runs this year, tesla and coinbase both of those have doubled this year at the same time, though, she missed nvidia, selling her position in the flagship fund earlier this year, but this is interesting. despite the rebound, ark has seen outflows this year and it would be the first ever yearly outflow going back to its inception back in 2014 so, we will ask her about that and lots more when she comes on cnbc to chat with me tonight at 6:00 p.m. eastern, 3:00 p.m. pacific for our "tech check" special. lots to get to there >> absolutely. and so much work to do really to pull apart what's going on in the market when her funds do very well or not very well recently looked at the ark innovation fund, year to date, looks exactly like the meme stock etf. you mentioned unprofitable tech, heavily shorted stocks, kind of these busted names from the 2020, 2021 boom time have now settled out, so be interested to hear if she's rethought the process, if it's the same types

of company she still finds attractive >> absolutely. we look at year-to-date and the numbers are impressive but if you go back five years, it's sort of that classic pandemic mountain, still hasn't come close to those points, but those unprofitable names, they have really rebounded hard. even a 2% pop for coinbase doesn't bring it close to those peak levels so it's interesting to know if she's going to stick with them or this is a recovery. we'll see. >> yeah, absolutely. be watching. deirdre, thank you so much last chance to weigh in on our twitter question has the market peaked for the summer head to @cnbcclosingbell on twitter. we'll bring you the results. ber. but the same ai-powered security that protects all of google also defends these services for everyone who lives here. ♪

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let's get the results of our twitter question we asked, has the market peaked for the summer decent majority saying, no, that there should be further upside, i guess, going through labor day. up next, jessica inskip on whether earnings season will shift the recent market rally into high gear plus healthy returns for united health when we take you inside the market zone invest in them. at t. rowe price our strategic investing approach can help you build the future you imagine. t. rowe price, invest with confidence. this is american infrastructure, a prime target for cyberattacks. but the same ai-powered security

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here to break down these crucial moments of the trading day plus courtney reagan looks at a big week for online retail, and malcolm ethridge is back to react to united health's big earnings beat. market sort of running hot coming into earnings season. sometimes, earnings season is a boost. sometimes it muddies the waters a bit. what does your work tell you to expect here? >> if we take a look at the beginning of every earnings season as we'd entered it for the last four quarters, you'll notice that that has been the fuel for bear market rallies, and then we only meet resistance when we have a more restrictive fed. going back to q1, once we were met with better than anticipated earnings, that natrrative that w are consistently hearing that but coupling that with a dovish fed, the light at the end of the tunnel, that's what put us into the bull market so powell took

his foot off the gas, turned on cruise control, but i want to exercise caution and know there could be turbulence ahead because data in a restrictive fed is what really, really tests that momentum. and additionally, i've got another chart for you from a technical view averages represent one, two, three, and four quarters worth of data, so we want to see that line to continuously slope upwards as well as the major indexes above that that tells me that prices are increasing on a quarterly basis, and that hasn't happened since, really, the downturn, so that's a positive sign of good base, but we're on cruise control. turbulence is important to be aware of >> yeah, the chart there marking the start of earnings season does show what is sort of familiar if you followed along, which is the catalyst you might get to the upside from the start of earnings often is kind of

retraced, right? so, you have a kind of almost two phases to an earnings season where people get their expectations leaning one way and then the market kind of moves and it unwinds a little bit after the fact >> yeah. absolutely completely agree and i think it's important to look at the headwinds that are there as well. we're entering an efficiency era. it's driven by tech but also being recognized by all. we heard that from pepsi earnings they're driving automation, and i want to hear that continuously i want to see profit margins expanding due to efficiencies, because that headwind and turbulence is absolutely a tight labor market, which could lead to a more restrictive fed, which will give us those downturns and may be the turbulence that we need to overcome to keep this momentum >> yeah, no doubt, ton of focus on margins will be there just to be clear, as we wrap up, so, you're still considering this kind of a bear market and whatever upside we've seen is a bear market rally, or have we broken above it? >> broken above it, technically.

we're in bull market this is a bull market, yes, that's right >> got you but we did get the bear market railz rallies in earnings season jessica, thank you so much let's get to courtney on online retail's big week so far, courtney, what's been moving >> mike, a lot going on. of course, it was amazon's prime day event, but really, that wasn't all that was happening. the higher income shopper is buying burberry but overseas because they're comparable sales in total grew 14% in the quarter, but china's sales up 46%, and tourists were spending in europe. but sales here in the americas, falling 8% for the quarter meantime, the i buy etf is made up of global companies with at least 70% of revenues coming from e-commerce. it's having its best week since january. compared to the broader etf, that's up 2.5% for the week. only three names in the i buy etf are negative for the week and all of them are

international online players this week's top performers in that ibuy etf, carvana, affirm, short interest, of course, very high for carvana that's probably playing a big part there buy now, pay later player affirm up 22% on the week it is a payment option on amazon, and adobe says that overall, buy now pay later usage during the 48 hours of prime day grew 20% across u.s. online retail compared to last year so, possibly a reason that affirm is getting a boost, i guess we could attribute some of that to amazon prime, but so much more going on in the world of retail than just that this week >> for sure, and there's definitely important to point out that these were, you know, stocks that had a hard run the last couple of years, had been heavily shorted, and so maybe they were sort of spring loaded here as the market as a whole reached for some of the riskier stuff. i know you say, and certainly it looks like it's well beyond amazon prime i think there's always a little bit of a debate that goes on in terms of just how much the retail side of amazon is driving

the stock and driving the story at this point. can we say one way or the other after this prime day >> that's such an interesting point. i will say, we sort of crunched the data to see what happens with the stock move for amazon during this prime day event, which of course has sort of changed in its duration over the years, but if you take it all together, during amazon prime day sales event, the stock is up only an average of 0.4%. this week, much stronger, but generally, you're right. it's the aws part of the business that people really care about when you're looking at amazon as an investable asset. of course, that is where all the profit is coming from. >> all of this, courtney, happening in the context of probably what i would call mixed signals about the overall, i guess, run rate of retail spending, of consumer spending people pointing to a weak redbook report, which you can take or leave that, but also, the bank of america credit card numbers, they're kind of steady, but they're not showing,

necessarily, an aggressive spending pattern so far this month. >> yeah, i think consumers are kind of doing what a lot of investors are. it's things are okay right now, but there is worry about what's to come. we just never know what's to come, but of course, right now, there's all this confluence of factors that are possibly sort of impeding on individual personal finances and spending goals, and so i think there's a lot of mixed messaging that consumers are trying to figure out here, and so i think it's sort of steady as she goes, but with the warning message, sort of a flashing yellow light going into the very important back half of the year for consumer spending >> yeah, and i know you were focused on back-to-school as well that's around the corner courtney, thank you so much. talk to you soon malcolm, unh, a stock you own, up 7.5% or so on pretty well received earnings report this season. it had been a weak performer what are you seeing in the numbers? >> yeah, mike, i initially bought shares of unh last month as a trade on that pullback

where investors got skittish over united cfo's comments about rising costs and its medicare advantage business and i thought those fears were likely overblown and i thought that given their scale and diversified services portfolio, unh would figure out how to pass those increased costs on to their insurers rather than absorbing the majority of the costs themselves and based on what they reported this morning, i would say that expectation was correct. as a matter of fact, they reported a 6.2% operating margin for the last quarter, which is the exact same as it was a year ago. so, i think this is definitely a name that's turning the corner they're at least getting past those fears that spooked the entire health insurer market as a whole, so we can probably expect that the majority, if not all of those health insurers who all sold off in aggregate along with unh are probably on the mend and going to see a backrebound going into next week

>> cigna is up 4.5% on this number you say you think about holding unh a little bit longer. does that mean it doesn't qualify as a longer term holding? >> i don't necessarily want to own health care long-term. i think that they'll definitely continue to pass along increased costs, like i said, to their consumers, in the form of higher premiums, but i do think that it will catch up with them eventually i think that, you know, they reported weakness in that medical loss ratio, which was up 2% year over year. that's the number that really matters for them and i assume that's what caused them to become a little bit cautious in the first place. i think that's going to be overshadowed the remainder of this year by share repurchases which will give them some time to get it sorted, so even though i expect it to sell today, following positive numbers for q2, i'll end up sticking with this name a little longer and hang on to it. i like the increased guidance for the remainder of 2023, them lefting expectations by 20 cents, but i'm not necessarily so sure that i'm keen on health care, you know, over the next two years-plus as -- and this

being a name that i want to hold on to all the way through that period i'm not as confident in this as i am, maybe, in tech >> just real quick, is there anything in particular keeping you wary on health care as a whole? >> well, as i continue to read more and more of what came out from united health, they started talking about places where they see those increased costs coming that they didn't necessarily anticipate so the increased cost from seniors having more elective surgeries was obvious, but the increased costs related to things like mental health care, number of folks seeking out additional mental health services was something they didn't see until recently and i think that can be negative for earnings >> malcolm, thank you so much. have a great weekend as we head into the close, worth mentioning, united health, its gain is good for 200 upside points in the dow because it is a price weighted index so, without unh's gain today, the dow would have been down about 100. you see the s&p 500 sitting on a slim decline of 0.2% on the day.

still up more than 2% for the week, sitting on that 4,500 level. russell 2000 and the nasdaq, both strong for the week the russell, downside leader today as we go out to the weekend with the vix below 14. that's going to do it for "closing bell. well, lost a lot on the s&p and nasdaq, that's the scorecard on wall street, but winners stay all afternoon. welcome to "closing bell: overtime," i'm jon fortt morgan brennan has the day off we're going to talk to the ceo of sunnova, whose stock has climbed 20% just this week, far outpacing its solar rivals plus intuit's ceo is going to join us to talk about his read on small business and consumer spending, plus how his company is continuing to use a.i. to help its customers and on the topic of a.i., we will have a first on cnbc interv