jpmorgan's ceo jamie dimon. >> we will discuss the state of the economy, america's banks and much more. i think it comes from bowsman, montana. nice place to do an interview. >> gorgeous. >> thank you for watching "power lunch." >> "closing bell" starts right now. welcome to "closing bell." i'm mike santoli here at the new york stock exchange. this make-or-break hour, stocks are taking a well earned breather as treasury yields rise toward their highest for the year and investors see confirmation of the economic soft landing story still intact. we ask, what scenario has the near 20% gain in the broad market so far this year priced in, and is that is plausible scenario here to discuss that is adam

parker adam, its one of these times where if you look at the message of the market and try to figure out how it's behaving, you give a lot of credit to saying that we have a pretty bright outlook, right, in terms of the broadening out of the market, the fact that we haven't went down in a while. it feels like we're scaling the wall of worry. volatility has dropped if you try to figure out the fundamental inputs that substantiate the behavior, maybe it's tougher in terms of valuation. so where does that bring you >> i mean, i think what's in my mind the rally earlier this year, i thought part of the reason we're up is the bear case doesn't seem as likely, consumer real income is doing okay, you can get a job if you need one. so that explains to me some of the market rally, just a lack of the bear case. but i think in the last five or six weeks the lack of the bear case isn't the only explanation. now it's a more plausible 2024 or 2025 bull case, which comes down to, you know, fiscal

stimulus for decarbonization and deindustrialization of america and maybe election year and china. there's an emerging number of possibilities that seems to make people think, maybe 2024 earnings could represent a new multi-year trend, so that, i think, is gaining steam among investors i talk to. all the while, i talked about the bear and the bull case i didn't mention the base case, which is kind of the same for me as it was on january 1st, i think earnings are eroding but not imploding and that's what you're seeing. so it's a kind of kind of bear/bull change but not a base change. >> so, yeah, in sort of hedge fund speak you've kind of chopped off one of the tails to some degree. >> yeah, asymmetry, yeah. >> to your point about maybe not that much has changed in terms of the earnings picture, if you go back several months to the beginning of this year, just

looking at 12 month forward s&p 500 earnings, 230 bucks and change, still 230 and change we went like this. a dip and a comeback so the point being, people seem to be more certain or confident that we can get there on a 12 month forward basis. then to your point, 2024 is when you start to resume growth but do you think it's all of those individual threads that you mentioned in terms of these themes of in the economy, long-term investment type activity, or is it just we're back-fitting the story to say, you know, maybe we have a bull market that's acting like one and we've got to figure out why? >> look, people always feel excited after a rally. if you're honest with yourself, you've liked stocks, i've liked stocks at higher prices than i used to hate them at it just happens because the market leads the economy, not the other way around what the market is telling you is that the earnings outlook is going to be better than people think or it's the beginning of a

multi-year run if one or both turn out to be true, we're going to get a big correction in the market i think right now it's definitely some human behavior and psychology, it's definitely part of it to answer your question part of it is how plausible is the fact we're going to have a beginning of multi-year run earnings i think it's got some teeth to it the other thing that's important, if you look at the year ahead outlook from all the major firms and the economists and strategists into this year, zero of the major documents mentioned a.i. so while we know a.i. is probably a little frothy in terms of what people expect and the actual -- the truth is there are some companies benefiting now and that was an upside surprise versus, say, last november so there's some reasons that the market should be up, the emergence of a.i., and i think some are sfpeculative

i think people struggle with the valuation of the equity market versus bonds people say it looks more attractive to buy two years. that works in years three through ten. it has never been a good predictor in a shorter horizon everyone is trying to figure out is this the last wave of optimism or not. my suspicion is maybe it isn't, because i think you can still believe the dream that we're at the bottom for a little while longer. >> yeah, i mean, i do think we need to scrutinize that relationship a bit because if you look at the history of when the stock market has traded at, let's say, near 20 times earnings and say what were bond yields, it's not consistent we were at 6, we were at 2 so it's an interesting one to figure out >> usually when yields are extreme the world is a risky place and you should pay a lower multiple the other pushback you'll get from people more bullish is this s&p multiple thing is not what's happening for the average stock,

the median stock, which is at 15, 16 times forward earnings. i think you're at the biggest gap on cap versus equal weighted valuation. so the case for the broadening is margins expand for more companies. that's a good-looking chart. nice. >> we got the source. >> so people are saying margins are going to expand because commodity headwinds turn into tailwinds, labor is going up at a less rapid rate. so all of a sudden there's some hi hi higher plauzibility and stocks go up when gross margins going up that's basically the number one thing you've got to look at. >> let's broaden the conversation and bring in cameron dawson of new edge wealth and marcy mcgregor of bank of america. how does this sound? we're trying to parse out whether, in fact, the market has

overshot what we can expect from the economy. you've pointed out the equal weight s&p is not necessarily parallel to the market cap in terms of valuation and performance. >> yeah, i think one of the other things to add to the conversation is about positioning, because that does explain a fair amount of the move that we've had and that positioning tends to be the bigger driver in the short term. and to adam's point, valuations don't really kick as a headwind if they're head, really until you look out two plus years. they're not good timing tools. so when we look at the positioning standpoint, what we can see is that positioning has gone from being deeply underweight to being closer to overweight but not to the extreme like we saw at the beginning of 2022, because history suggests that the point that valuations matter is when you are at very long positioning, meaning that that's when people start choosing between bonds and stocks that's where you start having that question about the incremental buyer. so there's still likely room for people to get drawn into this market, which means that

valuations could get more stretched. but that's where we have to start thinking about two years plus and wanting to be disciplined. >> that makes sense. marcy, what about the risk/reward to you it seems like you're not in the mood to chase things how would you with fresh money treat this market? >> we're staying really disciplined. we've had a slight overweight to large cap equities all year so we've been pretty happy about that position. but this has been the story of the first half, this was a really narrow market but it's been quietly expanding over the last month or so and that tells me we're in for a rotation so it's not just about tech, it isn't just a nasdaq rally. i think you're going to see some other sectors really start to participate here, so that's an area that the market i think is most positive. >> some of us are trying to be less quiet about the broadening out and the idea that it was a several week or couple of months of the year when it really was

extremely narrow i guess the question is, what is defense to you or what is now ripe for some kind of catchup if you do think that meaner version is going to take place >> well, energy has been the best performing sector over the last four or six weeks, and of course it has a nice seasonal tailwind in the near term i still think it's the cheapest sector but if i look bigger picture, i would balance that out a little bit with an area like health care, like sciences, i like some biopharma names. and then position for the world we're in, talk about defense, defense spending we're in a world where we are restocking munitions, there's a catchup with nato, and talk about a sector that still has pricing power and can pass through higher prices, especially when globally defense spending is rising so i like an area like defense and then finally infrastructure. you know, it was mentioned

earlier around clean energy there's going to be a tremendous investment and this isn't just a near-term story, around the infrastructure for a greener, cleaner world. that's where i see opportunity right now. >> the other thing i wanted to throw in is i don't think the mega cap companies have given us a lot of reason during this earnings season to think that their trade is over. i think it could broaden and they could still go up i think that's another reason the market has done okay microsoft basically told you, hey, if 20% of the people click on this a.i. button they could earn 20 bucks in two years people are saying maybe it's a $600 stock nvidia, we'll see what they report but i think people expect the current trends are strong. google's numbers came up 5%, meta's numbers came up 12% so so far you haven't gotten an excuse to sell the big ones. >> on the other hand, the general reaction of stocks to

even upside surprises for earnings, cameron, has been not strong so we were set up for good stuff. microsoft is trading below where it was a couple years ago, again. uber today, big upside surprise, first-ever profit on the bottom line and the stock is down. >> it is interesting if you look across the sectors, the only sector that has had a positive one-day reaction to earnings beats, which all sectors have had broad earnings, has been materials, which just means that was one of those left-behind sectors. so if we think across the board, maybe there is still some room for expectations to rise for cyclical companies one of the things is that we still have, to adam's point, very strong fiscal spending. the deficit is at 8.5% to gdp, that compares to 10% during the great financial crisis so some of these cyclical names should see earnings start to move higher, mostly as we move into 2024. so the odd part is that earnings estimates are still getting cut

for the back half of the year, which is where we're seeing '23 numbers drift down >> for earnings, energy and related? >> it's interesting, the trucking stocks also kind of missed bad and the stocks went up we think the market cap is not big but maybe an indicator for stuff getting moved around i think the street was saying maybe this was the end of the bad news i think it's about expectations. some of these that were low, i thought jbch, the stocks are higher and the earnings came down a lot. >> the extreme example would be the banks where you did get a big relief trade i guess just in the category of things that might be lurking ahead of us, some will point out -- you mentioned the fiscal deficit is quite high and explains a lot perhaps of gdp growth this year, but likely to narrow next year maybe a little bit. oil moving back up again it's going to have upward pressure on inflation measures

yields, the ten-year above 4%. the question is, is that happening for positive reasons or is it about, you know, we just kind of enjoyed the sweet spot for a while and now it's closing? >> well, the sweet spot has been moderating inflation but resilient growth and i think the trillion dollar between is that if you start to see this re-acceleration in growth as we're seeing in some of the manufacturing indicators, does that come with higher inflation, do we see a re-acceleration in inflation? certainly from energy you can see that on a headline basis we know the fed is watching core it's early, but does that mean that the fed has to do more? all year long the fed has not mattered to markets. the market has started to price in the fed doing more, equity markets haven't cared. will we get to the point where if they start ratcheting up hawkishness, will they care, it remains to be seen. >> marcy, ten-year treasurys at

4% or so is that just sort of rebuilding value in longer-term bonds or a little more of a warning sign? >> i do think now that we're trying to pick the rate, i think lower from here. to add on to something that cameron said, it's well known that we're at least near the end of the fed hiking cycle. when the fed paused, we talked about the removal of a hard landing scenario and i think that's going to be a good support. the thing we haven't talked about is capex that's been the biggest takeaway from this not so bad earning season, we've had nine straight quarters of capex gain, guidance in our work is turning positive. that tells me that you could get a productivity boost in the medium term future if this takes hold and that could be a real

positive for the economy, it could be a positive for corporate earnings we've seen so much multiple expansion in the first half of the year, we need earnings to do the heavy lifting next year. that's the story that actually gives me hope here. >> i guess the capex point is an opportunity to mention that caterpillar is up 8.5% on its results today. clearly that was a positive response to a good number. >> i'm always torn on capex, having been a semiconductor analyst in the past, because there's three things that matter to gross margins on the cost side there's labor and materials, which we talked about a little bit and depreciation so i think if the capex is going to be in utility plants, that's probably a positive for economic growth but what i worry about is little bit is when depreciation goes up and revenue slows and fixed costs are a problem. anyone that's been a semiconductor analyst has seen that come out poorly

>> capex is great in aggregate, as long as you're not the one spending your own capital on those expenditures, maybe. >> it's good for you, but you don't want your capex -- >> over-investment in semiconductors over the decades has worked wonders for the world at large. >> exactly that's always a tricky one but i agree with the tenor of the point. >> we're finding reasons to fill in the thesis. thank you so much. >> good to see you. let's get to our question of the day. we want to know where you think the s&p 500 will end the year. below 4600, do you think it will be between 4600 and 4800 or above 4800 that would be a new all-time high head to at cnbc closing bell on x, formerly twitter. let's get a check on top stocks to watch.

kristina partsinevelos has those. >> we've got two s&p constituents moving in opposite directions let's start with arista networks it's on pace for its best day since november 2021 after posting strong guidance and a strong earnings report that's easing concerns from last week that bigger clients are slowing down spending. shares are up nm 19% today on the other end of the spectrum, zebra technologies, which makes bar codes, scanners, printers and products, that stock is on pace for its worst day since 2015 after warning that sales are expected to fall due to softening demand. shares down 18%. >> from a to z thank you. >> that was good >> i thought you were going to go there up next, we're setting you up for amd's results that company reporting in overtime we've got top chip analyst with

us what it could mean for the rest of the chips space we're live from the new york stock exchange from big cities, to small towns, and on main streets across the us, you'll find pnc bank. helping businesses both large and small, communities and the people who live and work there grow and thrive. go there they're where we put down roots, and where together, we work to help move everyone's financial goals forward. pnc bank.

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amd shares climbing as the company gears up to report its second quarter earnings after the bell my next guest says while he recently increased his estimates for amd, investors should still tread lightly when it comes to the stock. let's bring in star chip analyst of bernstein research. good to catch up with you here ahead of these numbers what's your main concern in

terms of how the stock is set up for the results? >> yeah, so the near term i think may be a little challenging. we are below for q3, i think expectations maybe in recent days have been coming down, although today it is running a little more. people are worried about traditional cpu data center spending in the wake of artificial intelligence and gpus taking some share and intel pointed to some of this. intel's own guidance was not spectacular. you have to remember amd has a big lift in their model in the back half. i think they got revenues guided 50% half over half in the second half of this year. i think the data center trajectory bears a little watching i also think gross margins exiting the year are slightly high, their higher margin businesses are likely to get a little weaker and their margins within the business have been low on competition and some other things and they're looking for significant improvement in the back half to get gross

margins up i still worry about gross margins into the end of the year all of that being said, what investors are going to care about is the a.i. story, which is next year's story there's not a lot of revenue this year, so if they can give an attractive narrative, they'll probably say 300 two times on the call, if they can get confidence, people may look through near-term weakness >> do you think that the a.i. piece of the story is real or maybe it's just not going to be material by next year? >> i think it just takes some time they are going to have a slug of what they call the selling in q4 and that's more high performance computers. the a.i., it's called the mi 300 x, they're not even sampling it until this quarter they said production in q4, there will be revenue but my guess is it's not going to be in

real volume until the second half of next year. so i think it's going to take time to get to the levels and we don't know what the normalized volume level actually is, relative to what nvidia and their competitors are going to be shipping. i think expectations for what they can do have been accelerating rapidly over the last couple of months. >> i'm looking at the consensus earnings for 2024 and it hasn't seemed to get into the formal numbers. you're suggesting that investors in general are building up expectations for it? >> i think numbers next year are high i don't know exactly what's baked into the consensus in terms of buildup we're under 4 bucks next year. my next is the buy side is over 5 at some point. >> yeah, and so where does that net you out in terms of, you know, the stock and how it's valued and risk/reward

>> so we're below, our target prices are below where it's trading. i would be afraid to short it right now. like i said, we don't know what the a.i. story is going to look like even if it's not, there's a narrative that can carry them potentially for several quarters before they have to put up or shut up. so as long as they can keep the dream alive that may help the stock. i would tread a little lightly if it is strong, especially if it's strong on weak earnings, maybe you look to trim it. if the earnings are still strong, good for them. i don't want to be too negative. i don't want to take away from they've done over the years. they've done some phenomenal things if the stock was 90 or 100 bucks, i think it's fine at $120, bumping up there this morning or this afternoon. it feels a little stretched. i think it takes a little time for the a.i. story to play out.

>> just more broadly in the group, is nvidia the one legitimate a.i. play and you've got to pay up or are there other places to look >> in my coverage and i cover ten stocks, there are only two stocks that are actually showing actual revenue dollars and it's nvidia and broadcom. for everyone else, right now it is a narrative there's no actual dollars that are hitting the income statements yet for most other companies out there, at least in semis. we can dream, like maybe it comes next year. there's a hope that the opportunity is so big they get the dregs and that's the case. broadcom is the other one, they do custom chips for the hyper scalers doing their own and then they do stuff on the networking side that's benefiting. >> we'll see how the dream evolves from here once we have the numbers, stacey. thanks a lot >> my pleasure. up next, we're charting the rally. one top market strategist is

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welcome back to "closing bell." the s&p 500 is on pace to finish the first trading day of august slightly in the red. our next guest believes some summer seasonality could lead to some declines. joining us is ryan dietrich, carson group chief market strategist good to see you. >> thank you for having me and happy august we made it. >> exactly, seven-twelveths of the way through the year you've been leaning bullish for many onths so clearly the market has gone in your direction and it's obeyed a lot of the perhaps, i guess, patterns that you might have expected in terms of seasonal strength, in terms of

what's happened after midterm election year. you've got the october low where does that leave us right now in your view >> you're right, mike. i was with you in october of last year talking about bear market, and then we rallied the last three quarters, some of the strongest quarters in a four-year presidential cycle a lot of people ignored those things now here we are august, september, two of the worst months and we are overweight equities, the carson investor research team. but maybe it's time for a pullback august is not a good month when you have a good year going into august, up over 17.5%, i found 11 times that's happened august has only been higher three of them. so are we calling for the end of the world? i want to be clear, no but a 4% to 6% correction sometime over the next two months makes sense we're still bullish. just be open to some volatility here. >> sure. are there other things that are in the air that maybe support the idea that we could be in for some kind of a little bit of a

break here in the rally? in other words, semi getting overheated, do things look vulnerable, or is it just we've had some gains, history says we should expect a little bit of backfill >> i wouldn't blindly follow history because what have we seen the last couple of weeks? some of the well known bears have said we're sorry about that yes, some of the polls are a little frothy. i do a lot of client events. clients are not optimistic still. but, hey, we're awfully stretched, all these different things, it kind of makes sense, i think, to be open to the idea that we could have a pullback. one more thing, five months in a row, what does that mean for the s&p? one year later, okay, stocks are higher 26 out of 28 times, with an average return of 12.5% what i'm getting at, any pullback would be an opportunity

for the overall bull market to continue >> and so one of the definitions of a bull market, i guess, is that the overshoots tend to happen on the upside, the pullbacks tend not to be all that deep or long lasting. we'll see if that does hold up in terms of within the market, we've all been kind of applauding the fact that it's been a broader rally in the last several weeks, if not more than that if you expect any kind of leadership shifts or rotations that are playable? >> i know you've had some great guests talking about some of these themes we've been optimistic on small caps and mid caps and the cyclical names look at copper copper is breaking out as of last week. there's some things taking place, the shift from technology communications, which we're overweight industrials and small cap, mid caps. we like energy energy has gone nowhere for 15 years. a long-term chart, they had a big rally. as the market broadens out, those are areas we like.

>> what do you say to those who will argue that what we're really witnessing here is just a longer than typical lag effect of the tightening the fed has done and the economy is late cycle, no matter what the market is conveying, and how do we int g integrate with what the market has been doing >> we've talked about the yield curve forever being inverted we came into this year saying no recession, and was the consumer still strong now with inflation coming back, wages are growing faster than inflation, compensation growing faster than inflation, it is what it is the consumer is still strong then you look at housing and manufacturing, both of those things are starting to bottom. housing has detracted from gdp nine quarters in a row we're likely going to start to see housing be in addition to gdp, along with manufacturing, so it's not perfect. don't get me wrong last point, gdp the last year

has grown to 2.6%. we grew at 3.2% the three years before the pandemic. the economy is growing better now than it did three years before the pandemic. we think it's still pretty solid. >> it's a very good point and it's a good reminder that it takes multiple things going wrong at once for a recession to happen and we haven't quite had that be the case ryan, thanks very much good to catch up. >> thank you. up next, we're tracking the biggest movers as we head into the close. kristina partsinevelos is standing by with those. >> air travel, this is what i'm going to talk about, flurishing for international flights. one software firm is warning about budgets. all the details after this short break.

we've got breaking news out of the fed steve liesman has that for us. >> hey, mike atlanta fed president bostic meeting and talking with reporters over zoom saying the data he's seen so far is consistent with an orderly slowdown he calls that quite promising. recent economic reports, he says, argue for the fed being cautious, cautious in not raising too much, but resolute in bringing down inflation to the 2% target.

he adds there's some risk, he says, of the fed overtightening, though he does say inflation is still too high and must be brought down so his baseline right now is no hike in september, though he could support a hike if data goes the other way that is not, however, his baseline he does not see cuts until the second half of the year. i'll add that's similar to the austin president who talked earlier today and he said any cuts would be far off in the future he called himself a closet inflation optimist >> well, i guess he just came out of the closet in calling himself that that's good to hear, september 19th, 20th, is the next meeting. thank you very much. let's get back to a look at the key stocks to watch. >> let's start with manchester united because shares are dropping sharply to session lows, down over 7.5% in the last few minutes at british newspaper reports that the club sales process is effectively paused.

the stock has been on a roller coaster ride throughout the sale process this year, but clearly ticking lower on this reported development right now. switching gears, software from zoom info missed on revenue, cut its full year guidance and got a downgrade from deutsche bank zoom info was vague in its report but said companies are cutting back on i.t. budgets shares are down over 26%, which is an all-time low last but not least, jet blue on pace for its biggest drop in more than a year with shares down almost 8% the airline cut its outlook because passengers are opting to book international flights another challenge for jet blue, the end of its partnership with american airlines after a judge ruled it anticompetitive the two airlines stopped selling seats on each others' flights late last month. >> thank you very much. it's the last chance to weigh in on our twitter question we ask where you think the s&p

500 will end the year. below 4600, between 4600 and 4800, or above 4800. head to closing bell on x. we'll bring you the results after this break we planned well for retirement, but i wish we had more cash. you think those two have any idea? that they can sell their life insurance policy for cash? so they're basically sitting on a goldmine? i don't think they have a clue. that's crazy! well, not everyone knows coventry's helped thousands of people sell their policies for cash. even term policies. i can't believe they're just sitting up there! sitting on all this cash. if you own a life insurance policy of $100,000 or more, you can sell all or part of it to coventry. even a term policy. for cash, or a combination of cash and coverage, with no future premiums. someone needs to tell them, that they're sitting on a goldmine, and you have no idea! hey, guys!

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the results of our twitter question of the day, we asked where do you think the s&p 500 will end the year. a plurality saying we're going to go to record highs, above 4800 48.2% of you said that that beats out flat or down from here. up next, your earnings

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market, very benign decline in the s&p. it seems like we're at a now-what moment, people have embraced the soft landing scenario pretty wholeheartedly at this point. it's time to ask, have people gotten overoptimistic? what does your work tell you >> thanks for having me on, as always i think if you looked at the results of the poll you highlighted earlier, it does point to a lot of enthusiasm in the market i agree with your earlier guests who said with the clients everyone is cranky and not feeling all that great when we look at the aaia data, which is more of the retail side, it looks like sentiment is getting extended it's not at the hold your nose and sell, but it's getting close to it. my work says there's a little more room, my valuation model tells us the bull case on the market is 4700 to 4800, but that is really at cross purposes with what we're seeing from the

sentiment side so i think it's a very tricky market look, i agree with your now-what comment. i've been reading through earnings call transcripts and all the old narratives are fading away and nothing all that interesting is jumping up to take its place it's been a frustrating reporting season for me from that perspective. >> what has that done for your outlook to, let's say, 2024 earnings is it too early to make the call as to whether there's further downside or whether they're reliable at this point >> so we're pretty far below the consensus. i tell people not to get too alarmed, 227 is my early cut of 2024 the consensus is still around $243 numbers are usually way too high at this point, so i tell people to calm down about my forecast that being said, one of the things we've got baked in is the consensus view that inflation will return to kind of the low 2% range next year and that does depress revenues

one of the things i have noticed, some of the interesting parts of this reporting season have been companies are softening, everything is great with pricing but the commentary is softening and we've had a number of companies say that's because cost pressures and inflation is moderating so that's going to bring the pricing strength down. that is consistent with what we're coming up with in earnings models you're starting to get events of the headwind to earnings for moderating inflation next year >> where does that leave new terms of groups that you would emphasize or themes or factors that look ripe for investing >> i think it's really tricky from a sector perspective. we still want to have value exposure we've had sort of a nice reaction for energy and materials companies to earnings beats. i think there's a little catchup in the short term that some of these value and cyclical sectors need to have that being said, i'm really hesitant to abandon my growth exposure and we're hanging onto an overweight with tech.

but we do like it longer term because we do think you're going to be heading into a recovery that's subpar economically and growth stocks typically do well in that environment. i've been joking with people, i don't love all the commentary i'm reading. i understand why a lot of investors are annoyed and rolling their eyes i do think there is something there and i think a lot of the secular long-term efficiency tailwinds from tech and software companies generally are still around i want to hang onto those stocks but i understand the frustration some clients are feeling. >> it's a pretty nuanced take, lori thank you very much. talk to you again soon jason, i would love your take on the reaction of the stock in uber. do you think it's anything that investors are particularly seizing on in the results or is it a matter of how far the stuck has run? >> how far the stock has run, it was up 6% from friday.

just gave it back. i think you have some investors who wanted more, we'll call it momentum you do have a slowdown basically in the bookings and given where they are, they're probably not going to hit now that $170 target, bookings target for next year but a lot of that has to do with freight, which isn't a particularly valuable part of the business i think they're prioritizing gap earnings to get their s&p inclusion and that's probably hurting some of the gross bookings as far as leaning into growth and some of the short-term investors are unhappy and selling the stock. ultimately it sets up for long-term investors to ultimately participate. >> it's a fascinating dynamic and it has been commented on that uber is seeking the inclusion in the s&p 500, which does require profitability over a period of time but is that any kind of magic for the stock? dr. pepper went into the s&p 500

not that long ago and people didn't get that excited. >> our work with investors suggests that a lot of mutual funds have not been focused on this look, i think more maybe in the last six months. but if this is a stock you were talking to clients about nine months ago, you definitely had much lower interest from longer-only investors who tend to focus on index components so this is a big company this is basically almost $100 billion company, and really it's a disproportionately owned by hedge funds and shorter-term money and i think the s&p inclusion is definitely important. plus, the ability to begin buying back stock, which they're also talking about potentially in the fourth quarter. >> no, it's not a non factor and it's a good point that it does bring it into a different investor pool. and blackstone, of course, is the other one vying for

inclusion into the s&p just quickly, your target remains $65? >> $65, 20 times 2025 cash flow. >> thank you so much julia, what are we expecting from pinterest >> the big question is how much new shopping tools for brands and consumers are driving ad dollars, as well as the question of how the overall ad market is carrying this quarter in particular investors are looking for an update on a big partnership pinterest made with amazon to bring third-party ads to the platform they just announced it at the end of april loop capital writing, quote, we think the amazon collaboration is critical to demonstrating the bull case that pinterest can turn its high-intent traffic into action and become a valuable shopping utility. pinterest is expected to grow earnings by 5.9% and revenue by about 4.5% we'll have to see whether it

follows meta, which exceeded expectations, or alphabet, whose ads also beat expectations, or whether it's more like snap that missed on revenue and guidance back to you. >> you'll ya, where it sits in terms of the ad food chain is a crucial one. right now what is the sense of what analysts are expecting in terms of the ad trajectory for pinterest? >> i think the interesting thing about pinterest, it has particular strength in the retail market. so maybe less exposure to travel, which is seeing such a boom in terms of consumer spending and advertising spending it's more ex sposed to retail. the read will give us insight into where consumers are putting their money right now. pinterest is unique and the reinvention is going through with the ceo who just took the reins of the company a year ago, and focusing on driving shopping the idea that people come to pinterest looking for things to

buy. they want to make it easier to buy things and closing the loop could make ads on pinterest so incredibly valuable. so i think pinterest is unique from some of the other social players for that reason and they have, perhaps, different challenges but also more opportunities than maybe snap right now. >> that has been the promise we'll see how it comes through thanks. kate rodgers, what is starbucks about to offer >> mike, analysts are expecting an eps of 95 cents on revenues of $9.29 billion same sales stores in the u.s. and china will be key for investors to watch in north america, same-store sales expected to increase 8.4%. the china number will be key and starbucks will break that out. last quarter starbucks saw same-store sales increase since the third quarter of 2021. in this quarter firms have said china's recovery may be uneven and smaller competitors are crowding the landscape here and abroad

they reduced international projections last month on a potentially weaker china the u.s. is going to be all about the strength of the consumer if starbucks is able to hand on to share in the face of stubborn inflation. stock is slightly lower, up just over 1% on the year. >> it has been a little bit of a sleepy name. thank you very much. as we head into the close, the s&p 500 is sitting on a modest decline of about a quarter of 1%. it was about a half percent lower in the middle of the session. the nasdaq down 0.4, russell has been the outperformer. you do have some negative breadth as well. you have about 70% of all new york stock exchange volume to the downside treasury yields definitely a story. ten-year treasury has popped back above 4%. that's on some firm u.s. economic data, as well as some global yield moves as the bank of japan alters its longer-term yield suppression policies the volatility index not much to

say here still under 14, as the actual realized volatility of the s&p 500 remains at multi-year lows a very calm uptrend with rotation within the index as opposed to a broad pullback just yet on the first day of august that does it for "closing bell." let's tend it to "overtime" with morgan brennan and jon fortt. the dow hitting the highest level in 18 months as the s&p and nasdaq finish lower. that is the scorecard. the action is just getting started. i'm morgan brennan with jon fortt. get ready for one of the busiest hours of earnings season we'll get numbers in the next few minutes from amd, ea, starbucks, virgin galactic, pinterest and so many more. >> we're going to look for opportunities in the credit market we're joined in a rare interview by brian higgins, a founder of king