they'll delay retirement in order to save more >> you see this more and more, people want to stay in the workforce longer, both for financial reasons and also personal reasons thank you for watching "power lunch." we appreciate your being with us today. >> dow is just off session highs but it's the outperformer today. "closing bell" starts right now. welcome to "closing bell," i'm mike santoli in for scott wapner here at post nine at the new york stock exchange. we begin with a reversal of the reversal the broad indexes recapturing the ground loss in friday's sharp afternoon selloff even as the retreat in apple shares continues to another session the s&p 500 again pushing above that 4,500 level as another rush of earnings and a key inflation report await in coming days, which brings us to the talk of the tape, where we ask the a stealthpullback can be enough to refresh the summer rally or if a tougher and broader gut check is due as august unfolds

here to discuss all that is adam parker, research founder and ceo, and a cnbc contributor. adam, there were all kinds of reasons it made sense to anticipate a little bit of chop coming into august seasonals, sentiment, technicals, valuation, arguably, yields are doing what they're doing, but corporate america has kind of shown its hand on earnings for the most part this earnings season. better than anticipated. the consensus is holding up on a forward basis. where does that leave you in terms of whether, in fact, you know, the market can skate without much more of a correction >> i mean, if you're reacting week over week or, say, over the last month, i don't think the data make you more negative. >> no. >> i think if you were starting july 1, saying, i'm 50%, we're up ten, down ten, i'm like 60/40 up now because i think the big companies delivered pretty solid earnings reports their earnings are up pretty much for all of them, google,

amazon, meta nvidia's numbers are up. they didn't even report yet. so, i don't think, in that broadening debate that i get in every meeting, i don't think you have data that supports selling the big one yet. so, i think the low-end consumer is holding in. i think the dream that '24 could be good is starting to grow. on the margin, i think the data are slightly more optimistic >> i mean, apple, that's a little bit of a breakdown that would get your attention if you were just staring at the chart and said, oh, we raised above $3 trillion market cap and then you get a mostly as expected earnings report and you're down 10%. microsoft trading pretty heavy since its result i guess the question isn't, can these big companies deliver on their promise of being resilient and having good profit margins that are defensible, but is the market kind of saying, you know, we've been here for a while, and we priced it in. >> i think the market was anticipatory, but in order for the rally to broaden, you either have to believe that the other companies are going to have better relative earnings revisions, upside to their margins and earnings at a better

trajectory, or that their multiple is going to expand relative it is true that cap-weighted universe is expensive versus equal weight about the highest since the unwind of the tech bubble 20 years ago, so you have valuation support for the broadening, but usually, you need the catalyst of the relative margins and earnings to be better. i didn't get that in this earnings season yet. we'll see if that's what's coming if you do get lower commodities, you get less wage pressure, then that would be the bull case for margin expansion and the broadening >> it seems like you now have most people content in saying that recession watch has been called off for now beyond that, i wonder what people are expecting in terms of whether we're going to be in this late cycle, muddle-through environment. stocks are expensive, but the fed's almost done, and there's always kind of an offsetting factors that seem like you could argue either side. >> you get more, you know, equity investors get increasingly anticipatory. i remember, you know, a hundred

years ago, when i covered intel, they raised capex. the stock went up because people thought, oh, demand must be good, they're building a facility then the next cycle, they raised capex, stock gets creamed because everybody saw what happened this cycle, everyone's been increasingly anticipatory. the fed is not dovish, but everyone knows we're toward the end of the cycle, one more, two more, so you've seen the relationship between fed fund futures or the perception about rates and multiples priced to earnings, and nobody cares the multiple has gone up in both cases. there's no doubt people are anticipating the end of the cycle, so i think to me, what's interesting is to get the 5,000, so let's call it 10%, a little bit more upside, and now it's required to say, i'm going to walk in and be bullish on equities, incrementally. you got to pay over 20 times the consensus 2024 earnings for the s&p. the market doesn't usually stay at levels that high. so, the only way that's right is either there's upside to earnings next year, or hey, it

is the beginning of a new cycle, and earnings are going to grow, let's say, five more years in a row. or as far as the eye can see again. sort of like 2012 to '19 if that's the case, equities are going to look forward. >> it overshoots and then backs off. >> right or we get a pullback when i talk to investors, i think the bull case probability is growing in their minds. you dress the market up, usually, in an election year i think people think there could be incremental stimulus from china. there's a lot of incentive to -- you know, on decarbonization, on industrialization, on automation the low-end consumers come off and are hanging in there this could be a thing that the higher -- it's a more plausible left unicorns and lollipops thing than it was. >> let's bring in kristen bitterly into the conversation so, kristen, you can definitely build the rationale for why the market is here

now that the market is up close to 20%, s&p 500, up 30% off the low, which after a nonrecession bear market is about what you get in the first year. so, do you think that rationale has substance to it, or are we just kind of telling ourselves that this makes sense? >> i think once you break down what's actually been happening with earnings over the past couple of quarters, it tells a very different story, and this is something that's becoming more frequently discussed. the concept of a rolling recession. so, not an economics recession, but process recession, and so if we look back to q4 of last year, we had 7 out of 11 sectors already in a process recession same thing with q1, and now q2, you're looking at about 6 out of 11 sectors in process recession, so when we're trying to explain the overall index level and trying to explain the appreciation in the s&p 500, and that concentration, it starts to make sense, right? a lot of the activity is driven by the profitable positive free cash flow generating companies, and so the question really becomes, does that have breadth to it, and is it going to

expand given the outlook for rates and the economic data. >> and i mean, the market itself has, without a doubt, broadened out. i mean, by the time the complaint about it's only seven stocks going up got into its fourth week, i think that whole theme maxed out, and then we have been broadening ever since. i think the question is, earnings trough, maybe, you can check off that box second quarter looks like the worst, perhaps >> it does look like the end of 2023, for sure >> mathematical certainty. >> yeah. >> disinflation has been pretty persistent since october i guess the question now, this week, with cpi coming, are we going to have a rethink on that? is that what the bond market has been hinting at, that, in fact, inflation expectations are going to be a little more stubborn >> i think at the end of the day you almost have to say how should an investor be positioned in coming into all of this one of the biggest mistakes that you could have made at the beginning of the year is making that decision between being either all in or all out, and even if you were someone hiding

out on the sidelines in cash, your year-to-date performance is probably just slightly north of 2%, whereas if you had stuck with a diversified portfolio, 60/40, that had one of the worst performances last year in history, now it's up around doubledigits year-to-date. and so, i think it's really boils down to, from an investor positioning standpoint, this idea of diversification, that there are really attractive opportunities in terms of not only kind of the short end of the curve from a fixed income standpoint, but also extending duration and locking in some of these yields, and then from equities, stay diversified so, i know that sounds really simple, but as you look at the different things that could play out going into year-end, actually be balance and had diversified, and you'll benefit from some of these things. >> the idea of going longer term in fixed income and locking in positive real yields at these levels, i think that's maybe you're finding this with clients, that you have a little bit of a job to do, persuading people of that, just because the cosmetic nominal yields at the

short end look too interesting at this point. >> equity guys always hate that too. it's long enough, we dream things will get better, and then we can beat the guaranteed deal. >> i think you have to look at the collective yield of your portfolio, though, so it's undeniable that on the short end of the curve, whether it's three months, six months, those are really attractive yields, but you have now, all of a sudden, with some of the dialogue, you have real reinvestment risk, so if that is -- if that's your cash holding, that's fine. but if this is part of a diversified income strategy or fixed income strategy, that's where you can see locking in even five-year yields at these levels is compelling or doing a barbell approach and adding diversification and high-quality fixed income assets. >> adam, when you say that the very largest high-quality stock haven't given you a reason to step back from them, does that mean you would want to overemphasize them or is there stuff happening elsewhere in the index that's interest something. >> definitely interesting elsewhere. i view the biggest names as risk

management stocks anyway if you're trying to beat the s&p 500, i'm talking about just on the equity part, you know, you really don't know anything about those companies that's not in the price. there's 60 sell-side analysts and, let's say, 4 million buyside analysts covering those names. how could you possibly know? hug that 30% bench width of those big guys are and try to get your performance elsewhere i think in reality, almost everyone i know that's an active manager was underweight that big group, because it's hard to charge 1.5 in '17 and then just own microsoft. so, you got to go down and what's happened is you're going down in an area where returns have been worse and it's harder to make up the excess returns, so i think people want the broadening to happen, but most people i know were not overweight that group. to me, it's risk management, not alpha. the other 77% of the market, there's a lot of things going on i think my highest conviction view in any six 12-month view is

to own energy. i think you're starting to see that market act better the stocks are cheap i would want people to be as overweight as they could be energy in their portfolio. i think my second highest conviction thing is underweight retail i think any physical box that sells items has so many headwinds. i think you saw some of the transcript work we did where whether it's stealing, which they call shrinking but i prefer to call stealing, or growth in the stores or their financing arms, there's a lot of negative trends there so, i like sort of long energy, short retail as -- between now and year-end >> kristen, you talk about the rolling recession concept or earnings downturns that are kind of not necessarily all lined up at once. which makes sense. it's the way the economy, i guess, behaves most of the time is that things wax and wane. but it's a reminder, maybe, that o o outright recessions tend to come when there's multiple things at

once do we have the preconditions for that lining up i know that that jobs number on friday seemed kind of picture perfect in terms of goldilocks and, you know, right in the middle of what people might be worried about, but you hear the persistent recession callers saying, yeah, it always looks that way six months before jobs go to zero on a monthly basis. >> i think you have to look at some of the risks to that, which would obviously be massive deterioration in the employment backdrop would also be just inflation being stickier and maybe this print that we get this week is a little bit of a head fake in terms of some of the base effect that we're anticipating and some of the things we already know. and i think, like, the thing that, at least for us at citi, that makes the most sense is this concept of it's a flowing growth environment and so, it's not necessarily that -- because you have to remember, companies and consumers came into this year very, very well positioned from a balance sheet standpoint, and what would ultimately derail that, and it goes back to those risks that i mentioned, so the slowing growth, and you can see it even in q2 earnings, when you look at the earnings beats that you could argue are off a

relatively low threshold, when you actually look at that from a topline revenue, it's very different, that story. so, a lot of the profitability beats are based on inflation coming down or based on cost discipline and expense t discipline that topline revenue is starting to get shaky in some areas >> there's always a tension between the economy and stocks and i always -- the economists sometimes to me are looking at a different planet to me, stocks go up when margins go up. and so that's been a playbook for 20 years with semiconductors i think that's a huge point. if the input costs come down and companies can have higher margins than 24 and 23, you don't want to be that on equities i think it's that simple >> the other poisont, if you lo at the credit markets, it seems as if financial conditions are loose enough to allow things to

continue in this way on the other hand, are credit markets giving us a useful signal of forward-looking strength >> i've been confused about how financial conditions are looser now than they were at the beginning of the year when we had silicon valley bank in between. if you talk to folks that are trying to get nonconstruction loan from a regional bank, they can't get one. commercial real estate -- i think boots on the ground, it's a little bit more difficult than the, you know, actual stated data look. so, i'm not sure the -- i'm not sure i could say, oh, i think loan growth will be better going forward than it was pre -- it's a little bit of a tension between how that data's measured and the reality. >> the s&p going to 20 times earnings and the vicks going to 12, loosening financial conditions >> those are part of the calculation of financial conditions for the two major, you know, financial condition index that people look at. >> right >> is the market itself and the vicks. but the reality of, like, getting a loan, i think, is more challenging. >> and i think that's something when we're talking about the

health of the consumer and where we would see cracks in that, the first market to widen out is going to be credit spreads and right now, you see really tight spreads, except for some minor exceptions which are all in areas that we know very well, whether that's commercial real estate, office space, some of the areas we know are going to be stressed going forward, so i think that's one of the metrics to watch very very closely if there are any cracks when it comes to the health of the consumer >> the monthly data the banks put out is useful. 90-day credit card delinquencies, they ticked up a tiny bit, but they're still super low. the low-end consumer can get a job and feels pretty good. gas is down at the pump. their real income is up and they're still able to do okay. i think you need the employment market to get way worse or inflation to pick back up again and they're worried about the week-to-week bills short of that, i think the long consumer's okay. >> when the big macro worries are wage growth is above 4%, and almost everybody with a mortgage has the rate below 4% and that's

why the regional banks are in trouble -- >> gas is down a dollar at the pump that's what people kind of do week-to-week >> on the way back up. >> but year over year. >> kristen, in terms of the whole staying diversified story, does it encompass globally >> one of the things we've been doing over the past couple of weeks is adding international exposure and small and mid cap exposure when you look at the average investor, there's very minimal exposure, period, within those two areas so i think the small and mid cap argument, a lot of people are aware of that in terms of trading at about 30% discount and then when you look at international, international trading at about a 40% discount to u.s. equities, or another way to look at is u.s. equities currently comprise act 60% of market capitalization but only 50% of profitability i'll add two more arguments, though, for international. one, the currency one. if you're a u.s.-based investor,

you have the equity appreciation as well as the dollar play there, and then the second part is when we think of -- this is something that's a lot easier for investors to do in this type of market. when you think of long-term trends t ones that dominated the past ten years, smartphones,social media, are not the same ones that are going to dominate going forward, and that's much more of an international play in longevity, the rise of the middle class and broader asia, and having some of that international exposure, you can clearly benefit. >> i think if we sat here long you enough, we would agree on 80%. i spent most of my career not liking international and you know, i've always thought, europe's -- >> the valuation thing is always there. >> the valuation thing is always there. every cool thing that happens, like a.i., is the u.s. you know they're always cheaper for a reason i'm torn on that i think sentiment, when i'm out there talking, is the most for japan or you like energy, adam,

the european ones are cheaper. i've wanted that true-up between gdp and capital markets and that true-up between valuations and rates to happen, and it's lured me in the past, but i've been burned by waiting for that >> i know what you mean. it hasn't felt like you've been penalized. you haven't been penalized for being parochial. >> when you look at expansion into a region like asia, china was the biggest topic, and really dominated a lot of the investing conversations. obviously, japan now, much more front and center, given what's happened there but i also think markets like indonesia, india, you see some of the wealth creation and some of the innovation that's now happening, it creates a compelling argument for the broader asian economy and markets. >> we got to leave it there, but we're going to -- we're going to, you know, we'll forge world peace another time we appreciate it great stuff. adam, kristen, good to see you

let's now get to our question of the day. we want to know, what's the likeliest economic outcome by mid-2024 soft landing, hard landing, or a re-acceleration of growth? head to @cnbcclosingbell on x, what used to be twitter, to vote we'll share the results later in the hour let's get a check on the top stocks to watch. seema mody is here with those. >> 41 minutes left in the hour, mike, and shares of biontech are firmly in negative territory today after the company reported a sharp drop in revenue due to declining demand for the covid-19 vaccine as a result, the biotech firm says it will trim its research budget to cut costs. the news is also weighing on other big covid players, including novavax and moderna, which are down about 5 to 6% elsewhere, tyson stock, under pressure after missing estimates on earnings and revenue. the company is seeing a number of headwinds from falling chicken prices and pork prices along with slowing demand for

beef as well you'll see shares are down nearly 5% today. mike >> seema, thank you. we are just getting started. up next, trouble in the technicals btig's jonathan krinsky is back. he's flagging the one sector that could see some serious downside and the one he's betting on instead we are live from the new york stock exchange you're watching "closing bell" on cnbc. the dow up i remember when i first started flying, and we would experience turbulence. i would watch the flight attendants. if they're not nervous, then i'm not going to be nervous. financially, i'm the flight attendant in that situation. the relief that comes over people once they know they've got a guide to help them through, i definitely feel privileged to be in that position. ♪♪

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welcome back to "closing bell."

the nasdaq 100 rebounding today. our next guest still sees technical trouble ahead and more upside in one of this year's lagging sectors. joining us now is btig's jonathan krinsky jonathan, good to see you. we started this hour by essentially asking, you know, can a localized pullback in just the big nasdaq stocks be enough to refresh this market what do you see in terms of the nasdaq, which is now down -- nasdaq 100, 3.5% off a tie >> i mean, i think it's not a coincidence that we got the nasdaq and many components of the biggest components within the nasdaq back into the area of the late 2021 early 2022 highs they started to stall out and now we're seeing early evidence of maybe some waning momentum and downside momentum in some of those key names. obviously, apple, front and center selling off pretty definitively breaking us here today, trying to post the earnings

but there's a big, big important support there on 176, 178, right where we're trying to bottom today. so, i think this week will be telling. if apple can hold this zone and resume back up, then no damage done to the bigger structure, but a failure at this -- what is major support would be a pretty good indication that things are pretty tired in those mega cap tech names >> recently, obviously, it's been more a matter of the market being able to rotate away from danger where it popped up and keeps -- keep itself supported on the s&p level what are you seeing in that regard, whether, in fact, there's enough kind of diversified strength in the tape to keep us here? >> yeah, i mean, i think rotation is happening. the issue is, given the size and weighting of tech, where tech goes kind of drives the s&p, but i think if you're not beholden to the s&p, there's some opportunity. we've been highlighting energy over the last couple weeks,

starting to show some renewed strength if you think about last year, it was kind of the opposite tech did awful, and energy was the only sector doing well this year, energy's about flat, year to date even with the recent rally while tech is up 40%. we think some rotation back into energy is making sense obviously, you have krcrude breaking over $80. if you get through that, we think it opens the door into the high 80s for crude and today you're seeing a potential breakout in natural gas as well. you got a lot of things working for energy, whether it's the xle or the down cap some of the e&p names are starting to work we think there's opportunity there below the surface. i just don't know if that's enough to support the s&p, given the weightings there >> mathematically, it's an uphill battle if the biggest group does not participate or pulls back i wonder if it, beyond energy, if things like -- i was looking at the regional banks doing reasonably well in the past month, even as yields have

risen. in other words, bonds have been selling off and that was the main problem back in the spring. the losses they were going to have to take on their fixed income do banks or broader financials qualify as an area that you think has the potential to catch up >> i mean, look, banks certainly got the oversold rally they were beaten up the most, obviously, into march there could be a little bit more upside in banks broadly, but they don't really screen that well for us technically here what we do find interesting are the reits, which are still the worst-performing sector over the last 12 and 18 months, so really a contrarian view there, but over the last several weeks, we're starting to see upside momentum some of the office reits like fl green, breaking above they 200-day moving averages, so i think from a contrarian standpoint, you're getting some of those names starting to work and especially as you get later in the year, and investors kind of look for the catch-up-type

trades, we think reits offer some insulation there. again, historically, they tend to be more defensive, obviously, given the structural issues with office reits, they're not defensive, but we think there's opportunity there as well. >> very interesting, especially that you're focused on some of the really extremely beat-up office names because the reit indexes are dominated by things like the cell tower and datacenter stocks, so the office guys are really coming out of the trench jonathan, we got to leave it there. appreciate it. >> thanks, mike. >> talk to you soon. up next, countdown to the crucial cpi number jpmorgan asset management's gabriela santos says the fed's next move hinges on this data in a big way. "closing bell" will be right back good luck. td ameritrade, this is anna. hi anna, this position is all over the place, help! hey professor, subscriptions are down but that's only an estimated 15% of their valuation.

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stocks in the green across the board to start off the week of trading as investors await thursday's critical july cpi print. my next guest says she expects to see more disinflation, which

could mean the end of the fed hiking cycle joining me now is gabriela santos of jpmorgan good to see you. >> good to see you >> certainly, the market is poised, i think, to expect more disinflation had that story unhold a little bit farther now. how low we get in terms of inflation rates, who's to say? what do you attribute the yield move higher to if it's not necessarily about thursday's cpi? >> so, i do think the -- we do think soft landing hopes have really been justified. the probabilities have moved higher the real economy side is looking good demand is normalizing, not collapsing, at the same time that you have this disinflation process. we do think it will continue without the fed needing to tighten policy further so, really, it hinges on that disinflation continuing and lessening any kind of policy-induced recession odds. but i do think it's been interesting to see long-end

yield move higher. really, since early may, they've moved higher by 70 basis points and it's not really about shifting fed expectation, because the two-year has gone nowhere during that moment it seems to be about 20 basis points higher inflation break-even, maybe related to commodity prices moving higher at the time. real rates, it might be a combination of technicals in in the bond market and a lot more surprise we heard last week. >> and if that's the case, you do have the opportunity to capture real rates and longer term bonds right now i guess the question is, does it create a real restraint on the economy beyond just the nice soft landing, and can the stock market digest it okay? >> so, i think it's been happening for over three months, and the stock market just did not care >> sure. >> it was happening in the background and i think it was just the suddenness of the move last week where at one point, ten-year yields had moved up nearly 30 basis points in just one week

and had reached that near 15-year high level >> just above four, yeah >> exactly so, i think it was that suddenness of the move from here on out, i think it depends how long we stay at these levels we don't think for very long, which is why you want to take advantage of it by leaning into duration and i think it's why it's happening. and critically will be to watch those inflation break-evens. do they keep widening? all of a sudden, we throw into question the disinflation narrative, the fed narrative, the soft landing, or is it just about bond market technicals, in which case, stocks can go back to ignoring that move. >> if you think the fed won't have to tighten further from here, let's say that's the case, you'll have some folks come and say, well, you know, it's about six months after the last fed rate hike that you have, on average, a recession scare, if not worse, or, you know, stocks tend not to bottom, so to speak, until after that can we really put a lot of

credence in those things i just wonder because it seems like this whole cycle has been kind of scrambled in terms of the cadence of how markets have behaved with regard to the fed >> i think you're totally right. it's not a normal business cycle in the sense that it was really driven by the pandemic, and we have all kinds of distortions happening. which is why we came into this year expecting a hard landing, expecting a recession, and we have had to revise that now given the data i do think the soft landing can get extended into next year because we've gotten two really interesting pieces of information over the last, let's call it, 24 business hours first is better improvement on the supply side of the economy we got that on friday with productivity moving higher so, that means that unit labor costs are moving lower, and you can continue to see disinflation and the second one is the interview with the new york fed president, john williams, with the "new york times," suggesting that the fed can lower rates next year because they're

focused on the real rate and it doesn't -- you don't need a hard landing to have rate cuts so, the fed can help land the plane together with the improvements on the supply side. >> that was -- it's absolutely kind of kickstarted that storyline again, and of course, the market has been projecting the potential for rate cuts, but maybe that was just seen as an insurance policy against the downturn in the economy as opposed to the fed saying, we don't have to keep them up here that long. aside from maybe thinking about longer term bonds, you know, to add right here, what on the equity side makes sense to you have we priced in a lot of this soft landing expectation >> so, we would say the number one thing is to take advantage of the bond sale, extend duration that also allows you to take more risk on other parts of the portfolio. and we do think the change in the macro landscape does warrant higher allocation to equities. the trick is it took a lot of guts to be in the equity market in the first half of the year

given all the uncertainty. from here on out, it's going to take a little bit more heavy lifting. meaning, we need to be a bit more selective and think more about the alpha, not just the beta we're excited by two stories, for example, beyond the mega cap tech the first one is industrials you have the huge rise in industrial policy around the world. a lot of capex that's been a very positive surprise so far this year. and the second one is non-u.s. you still have large discounts that aren't warranted by a change in the macro and the governance figures especially around europe, japan, and parts of emerging asia >> all right you broke the tie. earlier, we had a debate as to whether non-u.s. or u.s. was the place to go. gabriela, good to see you. thank you. up next, we're tracking the biggest movers as we head into the close, and later, paypal popping, the fintech company making a big push into the crypto space looks like investors are

cheering the news. all the details right ahead. "closing bell" will be right back

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coming up in 18 minutes until the closing bell, the s&p holding on to a gain let's get back to seema mody for a look at key stocks to watch. >> we'll start with an industrial player. united rentals stock is up about

4.3% following multiple wall street analysts, including barclay's and keybanc, raising their respective price targets on the stock this morning. keybanc to $5.25 a share analysts there say an improvement in the nonresidential market will increase demand for united rentals equipment. let's turn to -- it does follow a nice rebound in the broader industrial sector, which has been a bright spot for the overall market as we've been discussing today let's turn to travel now booking holdings, record rally continues with the stock up another 5% today, and now up 13% since reporting earnings last thursday j&p securities raising its price target on the stock to, get this, $3,600 a share analysts there calling it the stock to own in the travel space, pointing to strong pricing trends in the second half of this year. mike >> all right, seema, thank you so much. industrials and travel right on it. last chance to weigh in on our question of the day. we asked, "what's the likeliest

economic outcome by 2024 soft landing, hard landing or a re-acceleration in growth? head to "cnbcclosingbell on x, formerly known as twitter, and we'll bring you the results. i did have hearing aids from another company...

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let's get the results of our question of the day. we asked, what's the likeliest economic outcome by mid-2024 soft landing is the winner pretty clear winner.

41.5% of the vote. hard landing comes in at 30% after this break, your earnings set-up, lucid and paramount, both out in overtime we'll bring you a rundown of what to watch in both reports. atndth a much more when we take you inside the market zone l buse back. from august 7th to the 13th. get a free tech check and special offers. like a free 5g phone. plus, switch, keep your number, and get up to $300 off. with verizon business. it's your business. it's your verizon.

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that fits your lifestyle and budget at one of our over fifteen hundred locations. call miracle ear at 1-800-miracle and schedule your free, no obligation hearing evaluation today. we are now in the "closing bell" market zone. jessica is here to break down crucial moments of the trading day, plus kate rooney's on paypal's move in the crypto space. and we're monitoring two earnings releases after the bell phil lebeau is watching lucid, and julia boorstin on what to expect from paramount. the s&p 500 has gone nowhere in

about three or four weeks. it did bump its head against the 4,600 level. you hear a lot of talk about seasonal weakness in august and sentiment got overheated where do you think that leaves us in terms of whether we're in store for a deeper pullback or maybe just a breather? >> i think we're definitely in the terms of breather territory. i agree with you we're seasonality, we're in a couple of challenging months as we get into september. however, i think it's important to take note of the levels that i see on the s&p 500 equal weight we are looking to overcome the first low or high of the downturn, and we need to overcome that level before we can have a new higher high i need to see the equal weight index be above consistently on a weekly basis i need consistent weekly closes. and i see we've failed to make that higher high as we came up to that level, but what i do see is even though we're failing to make higher highs, we're still

making higher lows, so sideway is a direction that is the best case scenario for a sideways direction we still have the lows ticking up higher, so eventually, we have that broader participation. that's needed. see those consistent closes above 1621 and that would support a new bull-based case for 4,600, but i need to see that broader participation first, but a lot of the other fundamental and macro factors are pointing in that direction >> we were just showing the equal weight s&p holding up this month compared to apple. there was a time, and a lot of folks will still say, as goes apple, so goes the rest of the market apple is down 10% from its high. do you think the rest of the market can shrug off further weakness there >> i certainly do. i think a lot of that came with what we saw in earnings. consumer discretionary was leading the way with beats, and that's amazing and that suggests that demand shift from services to goods, but i think from this

earnings season so far is where we can find those details of broader participation. there's still year over year increase of about 9% in capex spending, that fiscal spending, reshoring, emerging a.i., which is needed for the job issues and labor market headwinds we've discussed consistently so, i think there is broader participation that we see with the equal weight that will certainly help with that base case, regardless if apple's not there. we know where he need that broader participation to overcome those levels. >> for sure. that market is kind of answered that criticism in the recent months to some degree, that it was too narrow jessica, thank you so much talk to you again soon kate, fill us in on this paypal move in crypto >> yeah, mike, so, this is the first move by a major financial services to launch what's known as a stablecoin, and it could help what's been otherwise a pretty slow adoption of cryptocurrencies for real-world payment, so it's through a partnership, paypal is partnering with another company called paxos

they're issuing something called the paypal usd coin as it's being called it's going to be redeemable one for one with u.s. dollars. it's backed by dollar deposits and cash equivalents p paypal plans to issue monthly reports. they have not said yet what it means for the bottom line, but there's a chance that paypal will eventually earn interest on some of these coins. paypal is playing catch-up there are plenty of other stablecoins out there. tether is by the far the biggest. circle, usdc, about $25 billion. these are mostly used to make it easier to trade cryptocurrencies it's easier to get in and out of a trade. on the payment side, they don't have the price volatility you see with bitcoin, which makes it a lot more attractive for buying things like a cup of coffee, for example. >> and i wonder, is there any other type of transaction flow that paypal would hope this gives them more access to? or is it just about facilitating

dealing in crypto coins themselves >> so, that's the way it's been used now so, people really use it on exchanges. if you want to get out of a bitcoin trade, instead of cashing out into the banking system, you can just keep it on the exchange that's really where these have gotten a lot of uptick for paypal, though, you can see a world where they start using this on venmo. they'll start rolling this out in their internal systems. it will make it potentially faster and cheaper to operate within that paypal ecosystem, and then they could start potentially offering it outside and trying to get more pickup there, increase the market cap, and therefore increase their bottom line if they're earning interest on this they're holding things like treasurys, they're earning interest, the customer's not, by the way. if you're just parking money in paypal, that's one of the downsides of these as a consumer >> sure, although that's how brokered firms kind of make their money in large part to a degree as well kate, thank you so much. phil, set us up for the

lucid report after the close >> mike, the question is, how stable is lucid right now? it's had a rough six months in terms of not meeting expectations with either production or delivery, so three things we're going to be looking for once the report comes out in the next 10, 15 minutes. first of all, what's the production guidance? do they keep it around $10,000 little over 10,000 or do they lower it even further? is demand slowing? the reason this question comes up is because many believe the inventory has been growing, why? because of what they did today they announced a price cut of on their models we're talking about the base model. a drop of $5,000 brings you down to $82,400, so it's still a very expensive electric vehicle, and then grand touring at the top end still goes for over $125,000 take a look at shares of lucid stock was under pressure when people heard about the price

cuts we'll see what the numbers are in the next ten minutes, earnings call at 5:30. >> still got a close to $12 billion market cap, phil what do the analysts think ultimately lucid can get to and, you know, in the next couple of years in terms of volume >> i think that the estimates have been brought down so far that it's hard to find an analyst who says, i believe these guys are going to get to 20,000 in production things have come down that much in the last year that everybody's hedging their guesses at this point. do they make it to the production of gravity, the suv they plan to bring out next? clearly they've got the saudi investment fund as a major backer, so this is not a company that's going to go bankrupt, but you have had some rough reports over the last six months, which really raises the question about the stability there. >> all right, phil, talk to you again soon once those numbers are out. julia, probably a lot of moving parts when it comes to paramount in terms of strikes and potential asset sales.

>> that's right. paramount's results are likely to reflect some of the broader media challenges, including cord-cutting and ad contraction and, yes, also, those strikes. analysts do expect paramount's revenue to decline 4.5%. the company is expected to report zero earnings per share, down from 64 cents per share in the year earlier quarter investors will be focused on growth of the company's direct-to-consumer streaming business, the integration of the showtime app into the parent app. they're also looking for an update on when the streaming business will turn profitable. this year was supposed to be the peak losses for that business. we're looking for any commentary on the impact of the writers and actors' strikes, which are ongoing. another thing we're waiting for news on is simon and schuster. paramount is reportedly close to selling its publishing assets to kkr for as much as 1 $1.6 billin

>> and that's a material number for paramount, which has under $11 billion market cap at this point. they've been trying to sell that for a while. julia, thank you talk to you once that report is out as well. as we head into the close, you have the dow up about 411 points it is the outperformer today names like amgen, united health and boeing are leading the way the s&p 500 pushing toward a 1% gain on the day. now up 0.9%. recapturing most of friday's selloff, although small caps are underperforming. they are about flat on the day kind of a split market the breadth is negative on the nasdaq it is still positive on the new york stock exchange with about 60% of all volumeon the nyse t the upside you have the volatility index getting some relief in terms of coming down, relaxing a little bit, under 16 right now. that was above 17 at the highs last week as the s&p 500, again,

looks like it's sticky around the 4,500 level as it was multiple times last week bond yields have come down after the big increases in long-term yields last week that took the ten-year above 4%. that's going to do it for "closing bell. we'll send it into "overtime" with morgan brennan. we'll see you in just a moment, mike meantime, a solid rally on wall street to start the week, even as market heavyweights apple and tesla pull back. that is the scorecard on wall street, but the action is just getting started. welcome to "closing bell: overtime," i'm morgan brennan. jon fortt is off today the earnings parade rolls on this hour with more key names gearing up to report results, including palantir, paramount, lucid motors, skyward and chegg. we'll talk to an early palantir employee