to the theater the first is strays, live action comedy with the dogs, voiced by jamie foxx, another canine, and will ferrell among others. it is distributed by universal pictures that's going to do it for this part and universal pictures -- that's going to do it for "power lunch. "closing bell" starts right now. all right. thanks so much welcome to "closing bell." i'm scott wapner live from post nine the make or break hour begins with the hunt for momentum whether the market can wrestle it back from the bears, stocks are rallying as the final stretch to august gets going there's your scorecard dow looking for rare back-to-back gains, so far so good 3m the big winner along with a nice bounce for goldman and nike, which recently ended its historic losing streak a drop in yields helping stocks broadly today. the industrials, tech, and com

services nasdaq strong with apple, microsoft and nvidia see gains there's microsoft just negative. the other two are still green. we'll keep our eye there it does take us to our talk of the tape what a saggy september might hold for your money. ask liz young, sofi's head of investment strategy live at post nine. >> good to be here. >> august has been rocky it hasn't been horrible. but what does it mean as we close this month and the next couple days and we move on >> well, i mean, we talked about this ahead of the show, really low volume this is pretty normal this time of year, kind of boring. the one thing that low volume does present the opportunity for, though, is that if there's a surprise or a bad data point or shock, it's that things move much more quicker in either direction, particularly on the downside there is data coming in, gdp, pce and jobs there's a lot going on despite the fact that we're closing out

summer, getting into what usually is a pretty trepidacious period for the market in september and october. >> as bespoke points out, not so much it's sort of overhyped how bad the fall can be. they say it's not typically a weak month when the s&p is already up double digit percentage points year to date through the end of august. so maybe if things fall in the right way and you hit on one thing the data, right, the data has to cooperate, yields have to cooperate, the data has to be good, but not too good on the economy, right, earnings estimates can't get revised lower, i'm going down the checklist i made for what has to happen for september not to be bad. you need tech to perform, don't you? >> you do. but i think what's happened since july, i mean july was such a strong month coming into august i think most people expected that there would be some

giveback, even the bulls and tech bulls expected there would be some giveback a lot of this decline we've seen since the end of july has been pretty orderly that's not a bad thing i think it's healthy for the market i don't know that there's going to be a lot of earnings revisions or things that go on in that camp through the end of the year into 2024 this week i would expect earnings revisions to come in september maybe if they're going to come at all. >> that's what i'm thinking in september. for september to go right, you can't have earnings revisions lower. you can't have yields continue to go up. >> that's right. >> you can't have inflation data come in on the wrong side of what the narrative has been. maybe some would say you can't have good economic data, because that is now bad. good is bad again? or not >> i think good is bad from the fed's perspective, but now we've all sort of accepted the idea and jerome powell reiterated this in jackson hole last week, accepted the idea that rates were going to be higher for longer, they are not done fighting this. the pce data is going to be

point because he reiterated that as well. we talk about cpi. we're going to get pce data. a couple months does not a victory make they're going to continue on this path. 65% chance of a hike in november we might see another pause through september, then you got a built-in pause in october. in november if they hike again, i don't think they need to, but if they hike again, that could be a part where you get -- the market gets to the point where it says now we really cannot sustain these valuations anymore and one or two of those lines has to move to get back into jive with what it's supposed to do from a relationship it standpoint. >> you gave a list of things to our producers and said none suggests there's any positive signals about the near to medium term do you feel that way >> we're down. what's the s&p down. >> 3 or 4%. >> maybe the nasdaq down 5 tech stocks have had a bit more of a rough month here's your major averages

through august dow down not even 3% s&p 3.5% you really feel like there's no positive signals about the near to medium term >> i think a lot of the signals that we rest on right now that are positive are still backward looking. i acknowledge that the momentum in inflation has been cooling. that is positive the fact that consumer confidence is rising, also positive. >> that's not backward looking. >> but it's very coincident, right? consumers answer that survey on the idea the market is up, inflation down, i still have a job. i don't think that it's really that much of a surprise that confidence in sentiment has risen after a really strong july, after we passed the peak in inflation year over year and had some of the lower readings and engineering 3%, 2%, hoping for a 2 handle all of that is good. those are good signs the parts that from a market perspective, still bother me and still worry me as far as signals go, i talk about the yield curve so often.

i'm sick of talking about the yield curve. the fact that this inversion continues to be here and has gotten deeper again, at some point it does have to right it will and usually is a problem. >> you can't get positive on the equity market until the yield curve is no longer inverted? is that what you're saying >> somewhat, yes because as the yield curve resteepens, we have to even out borrowing koshgsz even out the constriction of capital that's happened in the economy. the resteepening that happened recently wasactually a bearish resteepening that doesn't make me positive on eblgtss. if a resteepening happens because the short end of the curve comes down it's likely because the fed says finally we're done with hikes and probably have to cut sooner rather than later. hopefully that happens not for a bad reason, hopefully it happens because they can normalize rates. >> sure. >> i'm not optimistic they will be able to wait that long to just normalize everything without something breaking in the meantime. >> we know they're getting towards the end. >> true. >> does it make a difference if there's one or two more hikes?

>> i don't think so. i don't think it makes a difference it's about messaging right now, and if jerome powell feels like he needs to continue to send the message they might hike again in order to not let financial conditions loosen too much he will keep sending that message i don't think it makes much of a difference whatsoever. i think the damage or at least the hiking that's been done, is really it, right we went as far as we could as fast as we could the idea is to constrict capital and demand it hasn't happened in its entirety yet and i think there's more to come. >> let's bring in brin talkington you heard the case liz made. do you agree or disagree >> well, you made a few cases. let's start with the recession -- >> she's cautious, no question about that. >> let's start with the yield curve inversion. that was the last comment. as an asset allocator if you look back through time, when the yield curve invertsz, you look at the 10 and i3-year the averae

recession starts 589 days later. you've had 1,000 days on the long end, 300 on the short end i think that looking at the yield curve ultimately the data tells you we'll get a recession, but to me, as an asset allocator, i can't allocate around that because if it takes a year and a half, what are you sitting in, cash, what assets? i also, though, all year like liz have been defensive and as an asset allocation, we felt going into january of 2023, we are late stage economic cycle. i think jay powell thought that as well, right when he says as is often the case we are navigating by the stars under cloudy skies, i just had to laugh because that's like the opposite of greenspan's speak, which you couldn't understand any word he was saying he was so human about it like this is so hard and we are in such unchartered waters so i agree with liz about being defensive. the way we're playing it is, you know, we're long equities, we do like energy, which is not

defensive, by the way, that's very, very cyclical, but we also own a lot of covered calls which in the first half of the year when you have the nasdaq and s&p going straight up you're getting consistently called out of those names and not the full upside. as i heard jay powell last week, i still am staunchly like i do think we're late cycle at the end of the day the question i ask myself, do rates matter do rates matter? and that there's no way in my mind you can have 13 years of 0 rates, we're a creditor economy whether it's at fiscal level or consumer level, you can go from 0 to 5.25 and then higher and no impact, no problem i just don't buy that. that ultimately we're going to reaccelerate and have this like new burst of growth, just because i do think there's going to ultimately need to be a re-setting of rates because most people still in general have very, very low yields on their credit, whether it's the consumer or at the corporate level. >> what if we're not as late cycle as brin and others think

we are, if inflation continues to come down, growth is still pretty reasonable, i mean you look at the atlanta fed, gdp now, i -- granted that's not a definitive read of anything, but it sure as heck is better than a terrible read, and it at least suggests the economy is growing better than most expected it would? what if the call we're that late cycle is wrong >> it could be or this part of the late cycle is lasting a long time. >> we'll be here for two years almost. >> it can last 18 months it could be that this is taking longer and there's a whole laundry list of reasons why that is, stimulus and all the things we talk about ad nauseam i find it hard to believe, even if this is, let's say, late mid cycle or the early part of the late cycle, who knows where exactly, at some point we do have to transition back to early cycle and you're not hearing really a lot of people -- looking at economic data, even market data, aside from what happened in july, market data isn't telling you that we're

early cycle. i don't see how we can transition from late back to early without a bump, which is usually a recession. it doesn't have to be armageddon, but there needs to be a repre-setting. >> what's the most important thing whether september is a historically bad month or not as bad as some people expect it snob does it boil down to simply what yields do first and foremost >> i think it's the long end because when the -- just like, you know, basic yield formula in the long end going higher the economy is improving that's the typical base case the economy is improving i don't know about that atlanta gdp number everyone is scratching their head on that so i think that if yields, the 2-year and 10-year continue to go higher that's what everything is priced off of, you will challenge i think tech specifically, like smaller mid-cap tech specifically will be challenged and i think going into especially september no one

is talking about the budget impasse that i promise we will be talking about in the next few weeks. september and october, as they have been historically, will be the bulls in hibernation over the next couple months because not only seasonality but the budget there's really not i think great news happening with the fed not cutting rates unless something happens. that's not good news either. >> what if the better economy than expected is in rates and why rates have gone up 60 or 50 basis points since the beginning of earnings season why should we assume if the fed is closer to the end, which i think we believe it is, rates are going to continue to go up from here? >> they may not. so technically, the 2 and 10-year, the 5 and 4.25, are strong ceilings and bouncing around it, and i think you would have to have an economic fundamental thrush to get them to move over that and become support. i'm not in the camp that they will move above it but what's the most important thing, i

think yields come up there because we don't have any like macro data to me the jolts is -- i know what jolts is going to say we have jobs are plentiful but less plentiful i don't think there are going to be big surprises and going back to the yields and we're going to have to muddle through the next couple months still seasonally november and december is when that positive return gets steam again. >> can we discuss tech and the importance that it has after, you know, i said nasdaq is down 5% or whatever the exact number is at this point we can show the performance again just to make sure that i'm accurate on that we know that it's, obviously, stumbled a bit nvidia was the last out. there's your performance, mega cap, the august losses apple the one to watch biggest stock in the market. looked edgy. the others have done all right the importance then of apple to what happens in september and then perhaps beyond and to

another month is what? >> well, i think some of the stuff particularly for apple is probably more china related and everything that's going on in china maybe the expectation that we're going to have issues there. tech is clearly very important to this market i think it's even more important to investors' sentiment and investors' psyche and things that happened with nvidia after they really delivered on results and the stock couldn't hold on to those gains has been a sentiment shift if for nothing else than the fact that multiple expansion has been so strong and feverish we can't possibly continue at that clip forever in this environment. >> that's good >> it's good. >> this conversation on "halftime. everybody is looking for the massive bump from nvidia on these blowout earnings again not taking enough consideration the stock had gone up 350% in three months. >> yeah. >> if it would have powered forward you would have heard many, many calls, oh, my gosh, i can't believe it's up 200% and now it goes here, that's a sign

of froth in the market maybe the rest was well needed, especially for, you know, a market that at least in that part of it with that cohort, looking like it was overstretched. >> right and single stock analysis is different than broad market analysis, but coming into that earnings report, nvidia was 70% above its 200 day moving average, something like that if the s&p was 70% above its 200-day moving average people would be screaming it's way over valued you have to think about that just from what are you willing to pay for something i think the pause is probably warranted in big tech, but i also think there's a pullback warranted to get valuations back to a reasonable level, especially in the stocks driven by this big a.i. craze i think i've said this before on this program, we're not going to get gratification that a.i. has changed the world in the next 6 to 12 months, so those valuations that are placed on -- >> nvidia might by the virtue of, you know, the kind of business and the guidance that

they've given. they may realize it a lot earlier than we thought. >> well, but then they would have to come out as the definitive winner in that space, and i don't think that we're going to be there yet. we're not sure how thifrz going to play out. >> one of the definitive winners we can say that. >> yes. >> may not be the. they'll be it at the top of the list. >> maybe maybe. look back to the dotcom bubble, right, the ones we thought were winners, two or three years later, maybe they weren't. if it's a winner today, perhaps. i don't think we're going to have a definitive answer of this is the one, this is the company that did it rightand pulled ahead. >> i saw brin shaking her head i want to hear from you before we go. >> so, listen, there's an a.i. craze. nvidia is the definitive winner. let's be clear there okay their year over year revenues are up 101%. their expenses only up 10% what does that tell you? they can charge whatever they want the use case for all of the

h-100 devices they're selling, is the big question. how these other companies will be able to monetize that is the big question mark. as this craze is happening definitively, nvidia will monetize it until we all find out. i just think by the time we find out, the amds and other companies, i think they're too far behind all of this forward buying, that everyone around the world is doing. >> look at the forward p/e of nvidia, which is below 36 now. >> right. >> so people have looked at that, they've looked at the decline in the stock and it's always, oh, it's so expensive. the p/e has been coming down. >> right. >> over the last two quarters worth of earnings, and after they gave the incredible guidance they did, the p/e came down. >> right. >> didn't go up. >> jensen said on the call, he said we have, quote, incredible visibility into 2024 he's not just like, that's just real those are orders that are coming i think that nvidia continues to

be for investors wanting to play the a.i. space, that is like the known place to go. the other companies, outside of microsoft charging $30, you know, a head for their, i don't know that that's going to move the needle, to me nvidia is still like the best way to play what i agree with liz is an unknown application of those h-100 chips in the future. >> by the way, all of those p/es have come in since apple was 33 now you see where it is now, under 29 you have had a bit of a re-set, not a full re-set, obviously, relative to the multiple expansion you got in those names to get you where you were, but it's a little bit of a different story today than it was, you know, i don't know, three months ago and we'll see. see you later, brin. >> liz, great seeing you. >> thank you. >> our question of the day will the s s&p rise or fall in september? @cnbcclosingbell on x. a check on top stocks to watch as we head into the close.

kristina partsinevelos is here with that. >> let's start with shares of horizon therapeutics they're jumping about 5% right now after the federal trade commission said it would pause its challenge to amgen's $27.8 billion purchase of horizon. recall that ftc filed this lawsuit against amgen's takeover in may arguing anti-competitive practices within its treatments for thyroid eye disease and chronic gouts, the ftc's change of heart occurred over the weekend as it considers a settlement to allow the deal to close with conditions. shares of boston scientific are 5% higher and one of the best performerson the s&p 500 after positive results from a trial from its system to treat atrial fibrillation, it occurs in the upper chambers of irregular heartbeats and that treatment [ inaudible ] shares almost 6% higher. >> kristina partsinevelos. we're just getting start heard. coming up, breaking down the charts top technician, jeff degraaf

flagging the one sector he thinks could be on the verge of a breakout as we head into the end of the year. he makes the case next we're live from the new york stock exchange and you're watching "closing bell" on cnbc. flu shots at cvs are pretty... flex. schedule one for you... or the whole crew. plus, they're free. really? healthier is getting a flu shot on your schedule. cvs. healthier happens together.

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macro research welcome back. >> thanks, scott. >> i mean, this space barely is going to eek out a gain, and it is barely a pulse i would suggest. but why do you see that this is about to take a turn >> well, i think a couple things really jump out to us. one, the group was definitive leadership in the first half of the year the sentiment got a little aggressive and frothy and then transitioned to tech tech now shares that frothy sentiment, and i think needs to cool off a little bit, which we're seeing frankly i think the overall trends in the group are still positive valuation, when we look at valuation from a sector specific basis, is still the most favorable for energy of any sector so i think this was a big pause over the last six months, consolidating, buying some time and turning. i think one of the areas of this may be an improvement that we're seeing out of china. i know the data and news flow is bad, but if you look at the chart of the chinese market,

certainly looks a lot better to us than what the news reflects it's not a bottom yet. it's not leadership. it is bobbing along. there might be upside surprises as we go forward. >> i mean, let's tackle that because the economy is different than the market. >> sure. >> number two the market may be anticipating a more stimulus and easing from the chinese. that's number two. i think it's hard pressed to make an argument there's, quote, unquote, the word you used improvement in china i don't think many see any. >> in the data, right. and so the question is, are the markets anticipating that to your point i think what's interesting, we go through and look at the data that we use to get an idea to where we are in the snooil china, we're actually in a pretty good spot it's not the best spot, but some incremental improvement in growth goes a long way there theyville tackled inflation. inflation tends to be one of the biggest drivers of the equity markets there and inflation is in a good spot for the chinese in terms of the equity performance.

i think there's something to that, and we'll continue to watch it i think it is early, but i don't think it's early by a year and i don't think it's early by six months it might be early by a month or three, but i think it's in a pretty interesting zone right here. >> do you think there's more consolidation to come in the fall in technology >> i do. i think, you know, nvidia trades heavy. microsoft trades heavy the response to good news, some of the data that we look at, the commitment of traders data on the ndx in particular shows that large speculators are pretty aggressively positioned in the ndx. they're not usually rewarded right away they have to go through this cleansing period i think we're going to have more of that. again, i don't think they're tops, i don't think they're excessively dangerous. i just think that you're going to have more shakeout and really just kind of create this apathy in the group that frustrates the bulls. then i think it's set up all right for the fourth quarter, but i think we'll have more of this pain and indecision over the next several weeks here. >> nvidia is only $35 off its

recent high. that's not that heavy. you can make the argument after, you know, an initial bit of upset on the backside of the earnings report it's actually stabilized fairly well >> yeah. in the near term absolutely. if you look at the positioning, skews, put call data, there's a lot of interest in the upside and usually that upside gets frustrated if it's that excessive. i think, again, 400 is really good support on nvidia i think we can trait trade down to that level and we would be buyers at that level i think there is a process that we have to go through to digest these earnings nothing unusual, nothing bearish or dramatic, but just the time a lot of times overbought conditions will correct themselves through time, not price. those end up being bullish in the long run, but they are frustrating in the near term. >> 400 would get our attention that's for certain see you soon. >> thanks, scott. >> jeff degraaf joining juice chinese ev companies popping in today's session and break down

what's driving those moves tesla on the receiving end of positive analyst commentary. we'll discuss all that and more with a tesla shareholder after this break crowdstrike shares are sinking. what's sending the software name lower it today ahead of earnings too. see if it could igweh on the rest of the cyber security space. "closing bell" right back.

we are back. didi and x moving higher both stocks up 3.5%. phil lebeau with what it might mean for tesla phil >> i'm not sure how much this is going to mean for tesla because that's basically a deal structured for the chinese market, but when you talk about tesla the shares were moving earlier in the day, scott, in part because of a note from canicord looking at full self-driving technology and how far along tesla is and optimism that, well, look, as they continue to develop this, especially as they focus on a.i.

neuromets, the potential is going to be substantial. there is a buy rating by canicord on shares of tesla. earlier in the session the stock moved higher today in the last hour they've given a little bit of that back. not a whole lot of movement in shares of tesla. whether it was the x paying dues or you look at other news out of china, the fact that we'll get the neo quarterly results tomorrow morning, a number of the foreign ev stocks were moving higher today as you take a look at chairs we're going to show you rivian and fisker vinfast has a very thin float. this is a vol it tile stock. we saw it drop by double digits after its spac ipad lipo last wn now it's up by 19% do not count on that one continuing either higher or lower. it is all over the place it's a very, very thin float on that stock. >> sure, but i think the implication from the way we came

into you in this story is that, you know, tesla has made no secret that they want a greater share of the chinese market, too, and that's why they've been cutting prices there like everywhere else. >> yes but so has xpeng and nio and the chinese automakers - >> you have a price war it >> absolutely. that does not seem to be ending. despite earlier in the year, tesla and the other automakers signing an agreement there would not be major moves in pricing. look, the market is what the market is, and as long as the pricing continues to be challenged by others in that market, and there are scores of them, we're not talking about smaller ev makers in that market, as long as that happens, tesla and xpeng and nio and others will have to respond. >> good stuff. appreciate it very much. requisites, brin is back with us because she owns tesla

it is the most competitive ev market in the world. musk, he doesn't care about profitability so much as he does growth. >> well, first of all, the didi story should be a cautionary tale to steer clear of the chinese stocks because in 2021 didi was at 18 it's at 3. it's a terrible investment number one number two is that i think that you were very right, this is a price war. but why this war i think we'll have multiple winners. just to give perspective n 2022, globally ev sales were around 9 million. it's expected for 2023, china will sell 9 million evs. the u.s. market, we all talk about ford, gm, an tesla, you really have to put your footprint and sell volume in china. >> what china's share of the ev market is. >> 60%. >> you know what the u.s. is >> 9. >> right that's what i'm saying

you have to be in the ev market, and to phil's point, there's so many other competitors so tesla wants to focus on volume, not margins at this point. ultimately, though, and elon has been clear, that for tesla as a company, to succeed, they have to be able to monetize full self-driving they have to do more in solar. right. we saw some green chutes, we'll say, that were having adoption in the u.s. of the super charger, ultimately, though, that full self-driving, i think is much further away, tesla is doing a lot with their dojo system, their own a.i. network that will imbed itself in a sophisticated way, but the proof will be in the pudding, is that we saw in san francisco with cruise, i think cruise, correct me if i'm wrong, had got into some wrecks or maybe waymo and the firefighters, these autonomous cars are hitting firefighters i think it's a long road out for

all of this. >> what about the stock? it's not had a great month. >> right. >> now if tech overall, nasdaq comes in more, this is right in the middle of that, right? >> it's right in the middle of it i think also goldman's recent report, i think it's the number one shorted hedge fund. >> one of. >> i think it's the top in goldman's list this company is in the s&p, the number 6 holding of the s&p, everybody owns it, by the way, in the u.s. within u.s. companies we want companies that have profit margins and growth i think ultimately investors love elon, love the story, net net, but at the end of the day, you have to have margins and growth and full self-driving can't be ten years out it's got to be in the next few years. to me that's the risk in the name this keeps getting pushed out and investors gets exacerbated with the story. >> good to have you back we'll see you soon jup next, fixed income expert dave albright is back

the biggest buying opportunity in bonds since 2009. why? he'll tell you after this break. "closing bell" right back. ( ♪♪ ) ( sfx: people cheering ) ( sfx: stock exchange bell ringing ) ( ♪♪ ) ( ♪♪ ) ( sfx: people celebrating )

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short-term treasury yields on the rise with the one-year hitting a 23 year high and our

next guest says the returns hasn't been better since the financial crisis of '09. welcome back good to see you. >> thanks. >> why is this the best time for those returns since '09? >> because we're seeing discount prices we haven't seen before going back to the global financial crisis 88 on ig corporate, 88 on high yield bonds. we're getting yields going back to the global financial crisis and it's a great time if not in fixed income to be dollar cost averaging, in fixed income stay, think about your reinvestment risk and timing the six in money market or cds. it was the right move to get out of your deposit account, but if the fed can orchestrate a softer landing or mild recession and looked at maybe some rate cuts in the next 12 months.

>> the bottom line you're looking for yields to go lower. >> absolutely. absolutely i think we've hit peak yields. the fed near the end of the tightening cycle tee faults are starting from the low point. if they can orchestrate and thread the needle and orchestrate a soft landing, ig corporate is giving you around 6%, bank loans over 10, high yield corporates 870 and structured product anywhere from 6 to 8% with investment grade ratings. >> do you think the fed is done? >> i would say you have to take a hard look at going forward, take a look at the numbers, made it clear at jackson hole looks like the market is saying 50-50 for one more rate increase, it's a wild card if inflation picks up and they have to do more than that our bet is that you get a rate increase, they're in pause later in the year, november, december, and then they take a hard look and really have enough time to absorb the data. there's typically a lag effect with the slowdown as we know

525 basis points, 11 rate increases is a lot we have to see if we get that slow down. opportunities are abundant, scott? you mentioned high yield are you surprised there's little to no stress at all in that part of the market? >> we see defaults in the high yield market on an issue basis of 1.53, long-term average 4.1, so stress is definitely down, but it comes to the highest credit quality in that market we've seen in history. more importantly, the access to liquidity, scott, not only markets wide open, but now you have another 1.5 trillion of private credit we like it it's a good way to get duration. we like name like hilton hotels giving you a solid double b credit, yielding a little over 7% we think that makes sense. a life point yielding 7 to 8%. solid credit fundamentals. so there's value there maybe spreads are maybe fair value, but that's why we like quality. >> we'll see you soon. appreciate your insights very

much last chance to weigh in on our question of the day. we asked, will the s&p 500 rise or fall in september you can head to @cnbcclosingbel on x the results are next

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the results of our question of the day we asked will the s&p 500 rise or fall in september the vote is split. well that's interesting. near identical wow. near break even. we'll give rise the win. we will. up next speaking of rising, 3m shares soaring all the details about the potential settlement ndg attoseinth sck higher coming up when we take you inside the market zone. of what america is. ( ♪♪ ) this is our task. this is our mission. we have a clear focus, and we have the ability to be agile and innovate. it takes years of dedication to get us to this milestone. it is all because of you. never doubt that a small group of thoughtful, committed citizens can change the world. it is the only thing that ever has. ( ♪♪ ) to be a woman leader, it's not so easy. but it's easy if the passion

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i go through a lot of pants. before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com. somebody would ask her something and she would just walk right past them. she didn't know they were talking to her. i just could not hear. i was hesitant to get the hearing aids because of my short hair. but nobody even sees them. our nearly invisible hearing aids are just one reason we've been the brand leader for over 75 years. when i finally could hear for the first time, i started crying. i could hear everything. call 1-800-miracle and schedule your free hearing evaluation today. this is the "closing bell" market zone. cnbc market commentator mike santoli here to break down the trading day and seema moody on 3m's potential multibillion dollar settlement, that stock surging, kristina partsinevelos

here on what's behind the sell-off in crowdstrike ahead of its earnings this week we turn to you, mike up 200 now on the dow, and just because september is historically bad, doesn't mean it has to be >> it doesn't. i was looking back to see how bad september has tended to be, if august was also down. don't have the full numbers, but there's been plenty of instances where they both were down. i think we're giving almost outsized attention to the seasonal patterns this year and part of it because they held so well almost all year they've been pretty much on point. >> because we're a little jittery where we are oh, boy. this is what's happened in august and now that's looming. >> exactly and, you know, i think there's been a lot of squinting it at the rally every step of the way because it was somehow imperfect. it somehow wasn't living up to our ideals of what it ought to be because it was too narrow or because it was going up when yields were also rising and maybe that wasn't supposed to be the case right now, i mean, the market

hasn't, with -- call it a two-day bounce, hasn't really proven a whole lot, but definitely showed you once we got past the big known catalysts of nvidia, it tech did not rally on good news but doesn't mean the news wasn't good i think you still have the earnings base is pretty good, and the fact that we're trying to make our peace with a 4.2% 10-year yield, you had a 2-year note auction today, didn't really disturb the stock market. breadth has been good today. the 1 or 2% in the s&p from here in the short-term, to say that this downtrend since the beginning of august is broken. >> the craziest stat, the s&p not having back-to-back gains all month. incredible stat. >> it is and, you know, it's three quarters of the way through with the month. it shows you that it has been a very much mean reverts market, and that's part of that notion that goldman was putting out it

there, that it wasn't a very strong buy the dips reflex right now. it shows you that it's much more about we think the market is capped right here no reason to chase it on the other hand, you know, as you've been saying, 5% high to low, is sort of a pullback in name only really. >> yeah. the narrative makes it sound like it was a much worse month than in the reality. >> look, you did have the majority of stocks go down below the moving average and breakage under the surface but not terrible >> yeah. good stock today, seema moody, 3m, leading the dow up better than 5%. what's going on? >> well, scott it's no doubt scene as a positive development, this potential settlement as jpmorgan analyst wrote in his note to clients, the lawsuit involving roughly 300,000 veterans has weighed on the stock, down 13%, underperforming its peer in the industrial space. this potential settlement is

giving investors a sense that end is near. i'm hearing that 3m's board is meeting today to discuss or finalize a settlement. however, this is just one of the legal overhangs that 3m is facing it's still awaawaiting a finally approval of the forever chemicals lawsuit. that has turned to how 3m is going to pay for this. they did add the high dividend payout is a risk the stock yielding around a 6.1% dividend and other analysts said 3m may have to the cut its dividend after the company spins off its health care business. >> thank you seema moody. now to crowdstrike kristina partsinevelos, this company reports earnings this week and a downgrade ahead of that >> exactly and the reason we're seeing that downgrade is it's all about cuts to spending. more specifically, i.t. spending morgan stanley downgrading crowdstrike to equal weight with a lower price target of $167, like you said, ahead of earnings out on wednesday the analysts are worried that

larger customers like home depot, target are spending more cautiously, spreading out the costs over time with smaller deal sizes and anticipate a cut to net new annual recurring revenue estimates a key metric for the software space it's not just about crowdstrike. morgan stanley says that the cut to cyber security spending in general could continue next year with the recovery only in 2025 negative for a lot of the names that you're seeing on your screen but i would like to point out, we're talking to morgan stanley. the stock is down because of this downgrade but it runs counter to a lot of other brokers i was reading reports from rbc, ubs, wells fargo, all of them increased their price target ahead of crowdstrike's earnings separately, scott, bloomberg reported last friday that cloud cyber security start-up whiz is considering buying sentinel one, a competitor to crude strike even though it's early days this would be a larger platform and that would intensify competition

and why you see the divergence in stock prices ever since friday. >> yeah. i think they should report on labor day friday why not? why not? why wednesday? >> why friday? when i have -- is this like punishment for me to stay late >> well, i'm alluding back to palo alto. >> i know. i know i know that's what you're doing. it worked out for them because we spoke about it so many times they didn't blow the earnings or anything like that if anything the stock bump was up because so many people were paying attention. >> yeah. thank you, kristina partsinevelos. >> thanks. >> mike -- >> i don't understand the whole punishment to stay late. it's an opportunity to stay late and cover something exciting i do think it was interesting -- >> says the guy who is done taking stock - >> exactly that was entirely my choice. look, what really is interesting about the downgrade, too, just this window on the entire cloud services food chain and the attention on the fact it's often

a layer of service on top of an aws contract you have the client still in this mode of trying to restrict spend org trying to meter the spending more carefully and what does that mean flowing through i don't think this is part of that story of if everybody is spending hand over fist on a.i. capabilities, what's getting left behind or what's, you know, being foregone it's still in that idea that we still have a disciplined i.t. buyer right now. stockhad, you know -- has held up better than many software stocks not a big deal it's backing off a little bit. >> we're going to turn the calendar in a couple days. we talk about what's going to make the most difference yields are down today. that's, obviously, stoxx getting a boost, that will remain key. earnings revisions >> you can't - >> we're not going to be able to handle all of a sudden these earnings revisions coming in lower as september hits. >> i don't think there's a really strong reason to expect there to be a big wave of downward revisions

if you think about the way that gdp is tracking right now, you know, the credit side of things has been okay. yeah, there's been some kind of, i guess, hot and cold when it comes to the consumer this quarter. my point being it doesn't feel as if there's necessarily a lot of shock value to what might happen in september. >> i agree. >> the difference is, and this strangely enough, this is one of those story lines as to why sometimes you get downward revisions in september as everyone is away in august and you come back and analysts have to update their models and you have the regular preannouncements and the regular kind of nip and tuck of what we expect in the consensus and that sometimes does hit i totally agree. if the market pullback was just about, you know, moderating sentiment and valuation and positioning, it's done a lot of that, but the valuation side has only been helped out if the consensus forward earnings don't fall hard. >> still the heart of the bear argument, right? >> yes. >> the same bears making the same arguments, earnings are too

high. >> absolutely. they're saying 2024 is too high. >> we will go out to match it in the green. dow will go out better than 300 points s&p 500 looks about a half a percent gain i'll see you tomorrow and send it to "overtime" with morgan and jon. s. well, stockshigher ending higher, extending friday's rally to start the final trading week of a rocky august. that is the scorecard on wall street the action just getting started. i'm morgan brennanen with jon fortt. coming up this hour, zillow co-founder spencer rascoff talks housing as tight supply and sky high mortgage rates put pressure on the real estate market. >> the impact of an auto strike. the united auto workers union granting its leadership the authority to call strikes as it negotiates with gm, forward and