decline in august? >> part of it is people are traveling to europe, so the u.s. travel market has been treasured by that. seema, good to have you. >> great to be here, tyler. >> have a good long weekend, everybody. whatever you're doing, do it safely. we'll see you next week. thanks for watching "power lunch." >> and "closing bell" begins right now. welcome to "closing bell." i'm mike santoli in for scott wapner here at post 9 at the new york stock exchange. this make or break hour begins with the stock market unable to make too much of some made to order economic data on jobs and wage inflation, leaving the major indexes somewhat indecisive to start september. bond yields perking up. some big tech leaders under pressure today. those small caps and banks getting a nice lift. r rye detrick is back with us. why he thinks september could be better than many are predicting. our talk of the tape is a loosening job market is and an

ongoing retreat in inflation. are the economy and market headed for harder times? to debate this, we'll bring in tom lee, fund strat global adviser cofounder and a cnbc contributor here at post 9 as well as warren pies, cofounder of 314 research. great to see you both want. appreciate you joining in the home stretch of the week toward the weekend. tom, i think i frame it as a debate because the numbers are definitely encouraging in that goldilocks manner, not too hot, not too cold. you are seeing inflation move the right way. you are seeing the labor market soften up but not fall apart. on the other hand, none of it's inconsistent with either sticky enf inflation or we're headed towards some kind of downturn. where does that leave the market? >> i think you've definitely described why investors are bifurcated. there's folks who see hawkish things and bearish things and stay bearish into september, and

on the other hand i do think there's a lot of evidence of the soft landing and that inflation's on a glide path much lower, and given how hesitant people have been and how much cash is on the sidelines, i think that resolves positively. the reason i would sort of emphasize that view is i think companies have been really managing this exceptionally well. i mean, x energy second quarter earnings were up yellar-over-ye. >> we've seen an swupturn in th forward estimates for the s&p 500 earnings. part of the august story, when we got this 5 or 6% fullback, you definitely saw sentiment cool off. part of it was a rate scare in the sense of long-term bond yields going up to levels which at least recently have been uncomfortable. are we out of the woods on that front? how do you interpret the way the stock market has tried to digest that? >> it's -- i think it's two ways. and again, this is where it's

indecisive because what we're seeing is a bear steepener, which it's actually generally good for stocks because it's refl refl reflationary like today yields popped. we know that hurts tech stocks, so i think markets are ref reflexively still reacting to higher rates, and rates are you been predictable. so i would have liked to have p seen rates fall, long-term rates but they're up today. >> sure. and warren, in terms of not really just the rate story but even the internals of the jobs report, the general run of economic data, which has somewhat cooled off, what does that tell you in terms of where we might be going, what the market has seemed to price in from here? >> yeah, i mean, i think that at this point it's clear to everybody that we're getting to be late cycle, so even just a few months ago there was kind of an open debate, where are we in the cycle, and at this point in time, we're starting to decelerate, and that's pretty clear.

obviously we're creating fewer jobs. the revisions are getting worse. that's something you see around recessions or into slowdowns where you get negative revisions month over month. we've had that through the beginning part of this year, something we look at as residential construction, payrolls, those continue to dec decline, and you're getting negative revisions there too. so all these things point to a late cycle type of environment, and then as tom's alluding to, you kind of have to ask yourself are we going to end up with a soft landing or a hard landing and that's a tough question to answer. i think at this stage of the cycle, both of those outcomes feel the same. you start decelerating on the data. you start having a softening of the labor market, the very first signs of softening, and it can go either way. the odds historically are that we're going to end up in a hard landing. soft landings are really rare. the bear steepener, when you get a bear steepener out of an inverted yield curve, that's usually before you enter a

recession, and the most important thing here is not predicting the right outcome, it's understanding what's priced in to various markets. and i would argue that you're not being paid to bet on a soft landing anymore, that right now markets in general are already pricing that in. so if we get that outcome, you're going to have to look ahead and say, okay, what's next. i think that under hardly is actually kind of underpriced at this point in time. that's the -- i think we all agree kind of on the lay of the land and the weakening of the data, it's a matter of what's priced in markets here. >> it is an eye of the beholder situation because you can't fully extrapolate from here how the numbers are going to go. and interestingly, though, i've been with you on this idea. it's hard to argue you're not late cycle when the unemployment rate's already 3.5%, and the fed has had this tightening campaign, just about the end of it. that kind of defines a later part of the cycle. on the other hand, you saw the

ism manufacturing pick up. housing got blasted but then maybe is showing maybe some signs of life. who knows, and then the corporate earnings cycle maybe also had a little bit of a dip and a comeback. how does that play into this idea of how exactly to price this moment in the cycle. >> it's a weird cycle. i mean, everyone has to have -- there's a large forecast on certainty at this point in time. i think that housing just to take one point you brought up, housing, it's showing resilience, but i would argue it's not reaccelerating. and so there's been a bit of confusion that the housing market's just kind of taking off from here. we're actually seeing starts continue to trend lower. i mean, single familystarts went from over 100,000 a month down to 70,000 a month, and they're still kind of seeing job losses in that segment of the economy as well. so you know, to me, this is resilience. it's not reacceleration, and that's the key is that we are in this cycle where fiscal spending has supported the cycle for a long time, it may continue to do that for a while.

this long cycle is drawn out. reaccelerations, i think the pmi data has gotten screwed up. i'm putting that in the penalty box. as far as earnings go, you know, it's priced in. at this point in time you have double-digit earnings growth for '24. double-digit earnings growth for '25, margin expansion for both years. that's optimistic. what happens if we under shoot that. it's the hard landing scenario starts to get repriced. you usually go to bonds for this scenario. that's been a big problem for stocks. bonds are trading basically right in line for the fed funds rate. at this point in time, you're seeing the ten-year is right now 125 basis points breelow the fe funds rate. bonds are already priced for the cut cycle. across the asset spectrum, everything's priced for this soft landing. >> what would you say to that, tom, you do have an s&p 500, the

idea that this is a little bit of a disjointed cycle. >> yeah, i heard all of warren's points. typically, though, a recession is a sudden change in business conditions because of leverage or commodity shock. we've had those shocks already. we had two quarters of negative gdp last year, businesses aren't over levered and households are not over levered. next year if the fed pauses, mortgage rates could drop, which is a huge easing of household financial conditions, so -- and when it comes to valuations, you know, the faangs, the market's really at 16 times, which is not demanding and typically early in a cycle you get huge multiple expansion. we haven't had that yet, so i would say it's undecided but i think a soft landing stocks have 20% upside still sort of valid view. >> i did mention that even today of course you see outperformance by small caps, cyclicals, some

bank stocks. on a given day you do start to see traction. the cyclicals did not give parkway even in the august downturn on a relative basis. do you think the fed is done, tom? is this it? >> that's one of the things we're watching for this month. when we get august cpi, i think the fed probabilities for both a september and november hike dropped to zero. it's 7% and 35%. there's still a huge way to go, and i think that's going to change positioning in fixed income and it's going to boost equities as well. >> what about the idea that historically the first rate cut isn't necessarily a bullish sign. i know there's exceptions to that. >> as we all know, this hasn't even been typical cycle. normally stocks rise into the first few hikes and they fell 27%. >> even before the first one, yeah, exactly. >> warren, you mentioned that it's tricky to maybe head for bonds in this scenario, even if you think the economy has some risk to it, but you do prefer commodities. what's the rationale there?

>> well, this is the late cycle play book. you know, and as tom talked about at the end of these cycles, you usually end up with some kind of commodity stock, and that's specific to oil. that's the largest weight with a commodity intdex, right now we have the saudis basically driving prices higher with a massive unilateral cut. n demand has not fallen off a cliff. there's strong underlying demand. china's on its countercyclical path to the united states, they're digging out of zero covid still. i think the backdrop is positive for oil prices and commodities here for a little longer. that's our favorite spot. i would agree with tom on one other thing is that i think the fed is done here, and i think that the first few weeks of september could be a little bit of this relief rally. i look for the red to raise that terminal rate, and that to me is the last lever that they pull in the cycle as they start trying

to boost terminal rates, that's where the fed funds rate ends up at the end of the cycle. the last time they did that was 2018. it was a lot of indigestion for asset markets, bonds, and stocks. that's something i'm watching s. >> i guess that is the question. there has been this case, well, the stock market's banking on rate cuts. they were priced in the forward curve. we keep pushing that out when the rate cuts are priced in. is a bullish case contingent on relief on the fed funds rate within sight? >> i think it's going to be important, michael, because, next year let's say inflaktion, the run rate is down three and the fed funds is 5.5, that's a massive real tightening of financial conditions. so that could -- as warren says that could tip us easily into a recession. i think if the fed is trying to avoid huge job losses and not so worried about what equity prices are doing, i think they'd be cutting next year. >> yeah, that is the question.

i mean, careerllearly that's wh inflation numbers need to move in their direction to have flexibility on that front. final point, you mentioned that it is the faang complex magnifying the valuation of the overall index. does that mean avoid that area, or are they operating on a different energy source at this point? >> it's a great question. you know, i used to do wireless, so i was a tech analyst for 15 years. you should never sell a tech stock on valuation. so for the faangs as long as they have visibility and positive revisions, their multiples can go up far more than most people would like to see. so it could get very uncomfortable. >> yeah, it's true if it does continue like this. all right, tom warren, appreciate it, great conversation, thanks very much. we'll see you again soon. let's now get to our question of the day. we want to know, are you more bullish or bearish after this morning's jobs report. head to @cnbcclosing bell on x.

let's get a check on some top stocks to watch. kristina partsinevelos here with those. >> shares of mongodb are higher after more than doubling earnings estimates on revenue that also blew past expectations. the database software giant also issued strong third quarter earnings as well as revenue guidance, and the company tied to various investments in, what else, ai, though it also warned that growth in its atlas service would be impacted by the, quote, difficult macro environment throughout the fiscal year. and you can see shares are up almost 4% right now. broadcom is lower despite a beat on the top and bottom line. the chip giant's guidance was in line and gross margins were a r little bit of a miss. the ceo says ethernet and custom ai chips are a driving force for future ai revenue, which they believe will contribute over 25% of total revenues in fiscal 2024. the stock is down today, about 5% lower. keep in mind, a closer to 52

week high yesterday. mike. >> absolutely. this just takes it back, i think a few days in terms of price after that run up into the numbers. >> exactly. >> kristina, thank you very much. we've got a news alert now on disney, julia boorstin here with that. hi, julia. >> mike, disney responding to charter as its networks remain in the dark on charter's service. so those charter subscribers are still not getting access to abc, espn, and more. disney disputing claims saying they have offered charter the most favorable terms on rates, distribution, packaging, advertising and more. disney also saying they have proposed creative ways to make their d to c services available to charter spectrum subscribers including new and flexible prices. they say that spectrum is demanding those services for free, something which they do not think is fair. they also do say that they value the relationship with charter, and they say, quote, we are ready to get back to the negotiating table. disney shares are down about 2% on this. a lot hangs in the balance in

terps terms of the future tv ecosystem. we'll see how quickly this can get resolved. >> plenty of contentious negotiations on all sides. we are just getting started, up next, new statistics on retail investors is shedding some light on the one sector they're betting on and the space they're ditching in a major way. we'll dig in on that data after this break. tech investor king lip is back. he's weighing in on the sector's rally and where he sees the megacaps from here. we're live from the new york stock exchange. you're watching "closing bell" on cnbc. we earn your trust. maintain our financial strength and stability. and deliver solutions that meet complex needs. massmutual. partnering with financial professionals,

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welcome back. we're getting some fresh figures on where retail investors are putting their money. kate rooney is here with that. hello, kate. >> hey, mike. so individual traders pivoted a bit in august after a record amount in buying and fixed income, it started ditching treasuries and bond etfs in favor of big tech names. last week marked the first week of net selling in u.s. bonds. likely has to do with some of the uncertainty around yields, the fed's path forward as well, economic data we've gotten this week and then some of the volatility we've seen in bond markets. a pretty sharp decline in buying for bond etfs leading up to the days before jackson hole, traders were de-risking ahead of that meeting, and it wasn't just those bond etfs, etf inflows

across the board have slowed town significantly. that was one of the big reasons for an overall slowdown in retail trading for the month. etf activity fell drastically, more so than single stock purchases as you can see there. august does tend to be seasonally slower for trading activity on the retail side. one area that is not slowing down by any means, big tech, and especially chip names. it was the only sector with an uptick in interest this month, other sectors saw outflows m mean meanwhile. that's according to vanda. the most bought stock of that name, no longer apple. nvidia topping the chart of the most bought stocks, followed by tesla, amd and apple coming in at number four. >> nvidia has absolutely taken over, i know in options taken over from tesla. let's bring in baker avenue wealth chief strategist to talk more about this group. pretty nice move this week, a rebound broadly speaking this tech. you have nvidia backing off

today, but still mostly holding all of that gain that led up to its numbers. where does that leave you in terms of feeling like whether tech has already figured out the big ai opportunity or has more to go? >> hi, make, you know, we think the tech trade is still alive and well, you know, august we just heard that there are money flows into the tech sector. i think that was a smart move because the tech sector did give back some gains in august because of higher interest rates and some seasonality. but, you know, in q2 we saw an 8% earnings surprise for the tech sector. for q3 estimates are going up by nearly 4%, so we're still quite bullish on the tech sector, and we think there's still a long runway for the ai driven growth. >> now, we do, of course, always talk about the tech sector or the magnificent 7 or the big tech as a category, but there is a lot of movement, diversity within the group.

we have amd, for example has struggled as nvidia has done well. we where within the sector do you feel as if there's still that long runway? >> well, i think from dell's news today, it looks like some of the downstream effects from ai is starting to pop up in other companies. so for dell's example, i think the momentum can continue there. they had a wonderful earnings report. the company has somewhere between a 15 to 20% server market share. estimates for mid single digits, i think that's going to be ramped up. a lot of companies don't want to be left behind in the ai race. so they're going to want to upgrade their servers for servers that are more optimal for running ai chips. ink th i think there's a lot of opportunities in some of these downstream plays. >> it is remarkable getting it toward a $50 billion market cap. it was keend ind of left as a n

growth story. i think there's been some scrutiny on the guts of its report. excessive reliance on a couple of big customers, and then just this radical upward pricing in its key ai-related processing products. mainly feeding this idea that maybe it's a relatively short lived binge of a ramp-up in this investment cycle, and it's going to peter out from there. how would you deal with that? >> well, we wouldn't agree with that. i think, you know, from a -- just an overall market opportunity for ai, we see multiple, you know, perhaps multiple decades in terms of ai growth. i do believe that from a lot of this ai executives saying that this is the sort of new beginnings of very similar to the internet berth in the 1980s to 1990s, this is similar in our view. so multiple decade growth

opportunity. perhaps there's things in the ai, nvidia's reports that perhaps bearish investors or speculators if -- there were a lot of things i thought were very, very strong. we're still scratching our heads a little bit about the $25 billion buyback, but nevertheless, as investors we still like that. >> yeah, seems like a little bit of a rounding error for the market cap, but it's still real money relative to the size of the revenues. it is sort of interesting they're going with that. when it comes to apple, you know, this is a company that hasn't really shown its hand, if it has one, specifically on ai, but we do have this product rollout come ago week from tuesday i guess it is. what does that mean for the stock? it has bounced here, but still below the highs. >> yeah, apple this year, we didn't honestly expect a lot from the stock, so we're -- it's great to see the stock has done very well. earnings growth is to be pretty

mo modest honestly. the apple event on september 12th we're going to be monitoring. we're not expecting a lot of surprises there to be honest. what we typically see is the stock would have a run up for any sort of perhaps some surprises if you would, and perhaps a -- sort of a sell the ru rumor, buy the news type of mentality. we have seen earnings estimates start to tick up on apple. so from that perspective, we're still quite bullish on the stock as well. >> got you. king, thanks for the time today. appreciate it. >> thank you. all right, up next, are stocks set to sink in september? well, in some cases history would say yes, but top technician ryan detrick is seeing some bright spots in the charts that signal otherwise. he'll make his case after this break. plus, what's next for walgreen's. chose shares slumping following ceo raz's brewer's exit.

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welcome back to "closing bell," stocks slightly mixed to kick off a weak stretch for the market. our next guest says history suggests the current setup bodes well for a return to all-time highs by year's end. let's bring in chief market strategist ryan detrick. good to catch up with you, we were here the first of august, so a month ago. you had been bullish. you mentioned that maybe august is going to be a little bumpy. what is the tendency and the market behavior telling you about what we might expect in november. >> it was august 1st, we talked about then the idea of 17.5% for the year. historically august had been down the last four times, so maybe it was time for some bumpiness. this was fifth time, here's the kicker, mike, when you're up

17.5%, again, the first seven movant months of the year, september, this terrible month we've been hearing about was higher the last four times with really good returns. one more on this when you're up 10% for the year and down in august like we are right now. the s&p has been higher eight out of ten times with some really strong returns, we're not ignoring the seasonal weakness. we are saying, you know what, there's a setup. maybe we could have a surprise september rally when no one expects it. >> it definitely seems as if a strong start to the year does change the equation on what might be to come. that being said, aside from the seasonal patterns, what are you seeing in the market setup right now that makes you lean one way or another about how the year might finish? >> yeah, well, obviously we've been overweight equities all year. people didn't like that call at the beginning of the year, they've come on a little bit. what i like is looking like the internals, right? advance the climb line on the s&p 500. it's really strong, it's not

that far away from an all time high. you hear about the magnificent 7. there are a lot of stocks participating. the other thing, kind of the second part to this, i love to look at the credit markets. look at high yield trasdrastica outperforming treasury. if there's a monster under the bed, we will see more stress. we said the whole time it probably wouldn't be much more than that because the credit markets and the internals were strong. it's a little seasonal weakness, perfectly normal. now we think the upward bias is back. >> it is true. credit markets never really sownsown sounded any alarms. it seems like it has aktcted as little bit of a restraint on stocks. i'm of the view the market can make its peace with different higher levels of yields if it's for the right reasons. how has it played for you? >> our opinion the yields wentz higher the last month, the economic data continues to get

better. everybody kind of got a one side, now you've got the economic data, the softening, we're seeing some softening. yields, i don't know if yields have peaked for the year, that can kind of give the market its peace and let it continue to rally. let's not forget, september, october can be a little rough. later in a preelection year, november, december are really strong. new highs are quite likely when all is said and done s. >> what parts of the market seem like they're standing out to you? >> we've like cyclical value a lot. energy, no one's really talking about -- i think i talked with you a month ago, energy is where it was like in 2008, mike, okay? but yet energy all of a sudden is outperforming. there's a lot of potential upside to energy here. we also like small caps, i know they haven't done as well last month. look at how they're doing today. if there's no recession, we think small caps and those cyclicals energies, industrials, materials maybe a bit of financials will probably be the

area to lead we'll say the rest of this year. >> all right, ryan, appreciate it. we'll hold you to it, catch up with you again soon. >> thank you. up next, we are tracking the biggest movers as we head into the close. christina standing by with that. >> we talk about a slowing chinese economy, but one retailer saw a 60% boost in sales from china. those shares are jumping. a retail roundup is next. >> announcer: the bond report is brought to you by pimco, a global leader in active fixed income. however you see fit. rosie used part of her refund to build an outdoor patio. clink! dr. marshall used part of his refund to give his practice a facelift.

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shares of walgreen's down nearly 7% on the back of news ros brewer has stepped down after more than two years in the role. here to discuss what it means for the company is john ransom of raymond james. appreciate you calling in. obviously this stock had a very rough go before this move. it is deepening its decline here. what does it tell you about where walgreen's is strategically in terms of the earnings power. they did effectively kind of guide to the lower end of their expected earnings range as well. >> hey, good afternoon, so a couple of things. number one, i mean, i think everyone would agree the company -- took it away from u.s. drug retail. for context that division did -- we're modeling that to be 3.3 billion in 2025. that's where all the covid snoiz

and other things are out of it. what the company's done, they've spent $13 billion pivoting to u.s. health care. the problem with u.s. health care is it's racked up almost a billion dollars of operating losses. they've missed numbers every quarter, and so the company every october, they give their forward looking guidance. they do a two-hour call. now we have the cfo having stepped down and the ceo having stepped down. we're kind of left hanging with what the company's going to say to dig themselves out of this hole. and you know, a couple of years ago, they should have been earning north of $6 a share. if they hit their plan. if you look at our furthest out estimates, we're modeling $3.85 a share. that's even with a pretty big expected improvement in u.s. health care where the losses keep getting worse every quarter. >> so this shift in emphasis towards health care in the u.s., you felt like it was kind of necessary or defensible, maybe the right thing to do. was it just the way it was executed? what's the strategic move from here, do you think? >> it's a good question.

they bought four businesses that don't really fit together, two of the four, one of which loses money like crazy. this is the village md that they've opened 190 clinics. they didn't seem to have a plan to attract patients when they opened these clinics. the losses, they're a year behind filling these clinics. the last deal, they paid $9 billion, the last filing i mean, that thing's supposed to be doing about 400 million of ebitda. it was doing 70 million of ebitda in a september of '22 filing, and then they buried it. it's not health care is the wrong move. it's just the last couple of deals have been very expensive and the numbers are way behind. >> yeah. you mentioned $3.85 a share is where you see ultimately earnings coming through. i mean, obviously that's a big decline versus historical levels where you thought they should be. but it also means it's eight times maybe what could be trough earnings. at some point is the franchise

worth something here? >> i think the problem with the last two years is the earnings have some -- we had $1.30 of covid in one of our years, and they've been front loading some unsustainable real estate gains. the real earnings probably are in the low 3s once you strip out all the nonsense. at some point there would be value if earnings stabilized at some number. i think, though, in the front view mirror you've not the seller dividend that they're not covering from cash flow, and so you've got the dividend, you know, you saw it happen to at&t when they cut their dividend. there are people hanging on for that 8% yield, and then, you know, the credit, are they going to get a downgrade to one of the big credit agencies. they filed $10 billion of either severance cost or opioid litigation over the past couple of years. the financial position's deteriorated. you've got some more shoes to drop potentially, but yeah, i mean, the business might be worth something at some point, but we're still a ways from

stabilizing. >> it's pretty messy i guess along the way there. contrast it, if you could, quickly to cvs. they clearly also made a different kind of foray closer into health services. >> yeah, so the pbm at cvs makes money, double-digits this year. aetna makes money. they bought businesses that, a, are profitable and have a more logical fit. cvs has spent $20 billion on a couple of acquisitions that they just closed and probably the jury is out. so yeah, cvs is a better house but it's been a tough neighborhood. >> for sure it's a tough space. john, really appreciate the time today for you running through all that with us. john ransom of raymond james. >> okay, thank you. let's get back to kristina for a look at the key stocks to watch. hi, kristina. >> hi, mike. well, dollar general is falling again today after at least six firms downgraded the stock in

the wake of its disappointing earnings that came out yesterday morning. luke capital is among the names cutting from buy told. they say they're particularly concerned about the drop in same-store sales, especially when rival family dollar posted same-store sales gains during the exact same quarter. the stock is heading for its worst week in three months. shares are down over 5% at the moment. lululemon shares are moving in the opposite direction up about 6% after raising its full-year guidance and reporting an 18% jump in sales and profit for the second quarter. sales were fueled by strong growth internationally, including a 61% boost in china. the stock is now trading at its highest level since april 2022. mike. happy friday. >> kristina, thank you. have a good weekend. last chance to weigh in on our question of the day. we asked are you more bullish or more bearish after this morning's jobs report.

head to @cnbcclosingbell, we will bring you results after this break. (vo) explore the world the viking way

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let's get the results of our question of the day. we asked are you more bullish or bearish after this morning's jobs reports? 61% more bullish, 187,000 net new jobs seemed just right to the majority there. up next, media stocks slammed. what's sending that group lower, and what is at stakeorhe acrit ahead? that and much more when we take you inside the market zone. dow up 100.

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or reverse orders so you won't miss an opportunity. e*trade from morgan stanley we are now in the closing bell market zone, sand hill global advisers, brenda van jell-o is here to break down the crucial moments of the trading day and shares three tech stocks. and phil lebeau on why tech shares are under pressure and julia boorstin on the selloff of media stocks. we have a little bit of a muted response today to a pretty i would say comfortable set of data from the employment report. we did have this shakeout in august where, you know, up 3 or 4% in the nasdaq this week. where does this leave us? do we have unfinished business in terms of a pullback or was that it? >> you know, i think when we

look, it's hard to argue that the fundamental picture is looking pretty good. you know, we've had this string of economic data recently that suggests that things may be softening around the edges. that's really what we need to see in order to suggest that the fed is probably done or is going to pause in september. so i think that's some good news. i don't expect to sea more of a pronounced market pullback. i do think we could see some stocks take a break, some that have tremendous moves this year. not all have. there certainly are plenty of opportunities and even within the tech group that we think still have legs from here. >> yeah, i was going to say a lot of the biggest companies in growth, in nasdaq, in tech in general have shown a lot of earnings resilience and even just other kind of growth drivers. where within the sector would you look right now in terms of,dowof, you know, fresh opportunities? >> our view is really sticking

with companies that have valuation that's reasonable relative to themselves, have a good margin improvement story and still have a great growth opportunity. so in our view, we're looking at salesforce, at google and amazon as being those three companies right here and now within that large tech group that we still think have some upside from here. >> yeah, salesforce, of course, is definitely winning a lot of adherence on the margin story, and perhaps as they layer in ai. google's been a great outperformer, the earnings estimates have tilted higher. i am interested in your view on amazon right here because there's a lot of questions in terms of which parts of the business you're buying it for, and they're a massive spender right now in aws on ai capacity. how is that going to pay off for the company? >> sure. well, i think when we look at the company, you have the aws business where last quarter we did see stabilization and growth there, which i think is a positive, and really heard from management seeing that, you know, more customers are really

looking out to the future and thinking bigger picture rather than being more cautious. we have the advertising business that i think is, you know, really well-positioned within amazon's retail business to continue growing and that's another source of very profitable growth, and then we have amazon's core retail business, which globally, you know, they have a very small share of total retail sales. so we continue to think there is a growth opportunity there, although, certainly they will be -- if we to see a little bit of a slowdown on the consumer side, you know, that business could be at risk, but we to think that they've managed to, you know, really infiltrate such a large percentage of the population, especially in the u.s., and there is more opportunity globally for them to win customers that really become, you know, very comfortable with their business model and the ease of which they can just order product and have it delivered to their door. we think there are drivers and really like the margin improvement we saw last quarter, quite encouraging especially from a company that has sent

significantly over the years as a public company and to start to see some margin improvement is really refreshing in our view. >> long awaited, absolutely. we'll talk to you again in a second. thoughts on this pressure we're seeing in tesla. >> part of it is, mike, if you go back to the 15th, basically two weeks ago, look at the move in tesla shares, going from 215 up to 255. it was due for a bit of a pullback. here's the catalyst for the pullback today. it is announced by tesla overnight in china that they are going to be -- they've done a refresh essentially on their model 3. it's got a sharper, sleeker design, not a huge major overhaul but a refresh here. this is only for china, asia, and europe markets. it will have longer range. this is the key point, 12% higher price. they're not cutting prices, they are raising the price on the model 3, which has some people saying are you going to be able to make this stick in china,

which is in the midst of a brutal price war when it comes to electric vehicles. tesla is number one worldwide when it comes to ev sales, largely because of its success in china, but look who's number two byd, and byd is coming on strong. then you have vw and general motors and again, mike, if you take a look at shares of tesla, i'm not surprised that it pulled back more than 5% today, it had a nice move over to the last two weeks, and people are looking for any kind of a reason to take a little bit of profit here. >> still, it is still a double this year, so it has some to give, phil, thanks very much. brenda, there also was some reporting on price cuts not in china but domestically here. that's been a theme for a while. i guess that's a matter of whether you think that's a good strategic volume move or a sign of weakness. >> well, i think the price cut to the model 3 in my mind makes a lot of sense. in order to clear inventory and make way for the newly designed model 3, even though it hasn't been announced in the u.s., i think it was coming to the u.s. at some point.

i think that that makes a lot of sense in my mind. but of course, i mean, this is a company that has incredible transparency with pricing the vehicles, which isstandpoint, b from a wall street standpoint it creates volatility when they make these different moves on the pricing side. but i do think in my view, this longer term makes sense. i think it is due for a refresh in order to compete globally with some of the other players out there in the lower price luxury category, and at the end of the day, when we think about tesla too, they do have an opportunity with their newly opened factories to continue driving margins, profit margins higher. some of that might be taken away with some of the price adjustments more recently on the model 3. when we look out bigger picture, we still see continued opportunity for growth and market share gains from tesla. >> and unlike some of the competitors not facing a strike in the next little while either we'll see if that plays into it.

thank you very much. appreciate the time. julia, media stocks, a tough day here, we have continued questions around the various business models. >> tough day indeed. media stocks tumbling pretty much across the board on the standoff between charter and disney, which charter has said will impact its financials. now, charter, which has nearly 15 million subscribers having a chilling effect on other media companies with its threat to potentially permanently drop disney's channels, including abc and espn. disney shares are down about 2% today. the rest of the media giant's falling as well on concerns about whether distributors will perhaps drop other networks. take a look at these stocks here. warner brothers discovery shares down 12%, paramount global down over 9%. fox down over 6%, and then comcast, which is of course cnbc's parent company, that stock is more diversified with its own cable and broadband business down just about 2%.

rich greenfield calling charter's threat to potentially permanently drop abc and espn a watershed moment for linear tv. >> mike. >> julia, it's worth getting into exactly how that might be, is the idea here that the cable operators are just now willing with the decline in viewership to essentially try and rewrite the entire economic relationship here? in other words this, you know, declining but steady cash flow coming from the cable bundle is now going to go down more quickly potentially? >> yeah, well, what these cable operators are saying or at least what charter is saying is charter is saying, if only a certain percentage of our subscribers are actually really engaging with disney content, why to we have to make all of our subscribers pay for it if you are offering it a la carte. they're basically arguing that the fact that disney's now bringing content to consumers a la carte with hulu and disney plus is undermining the

long-standing relationship that they've had, and it's un undermining their own business model. that's why charter is asking to have more of a partnership with disney and to get to offer effectively for free, those ad-supported streaming apps as part of their tv bundle, disney is saying why should we give you something for free. you're undervaluing our content. right now they're going back and fort forth, he said, she said. we'll see how this all plays out. >> the logic has been for years even if overall viewership is going down, sports is that one thing that does collect a decent size audience of scale. has that changed? or we feel as if we have to test that? >> i say it all the time, i feel like a broken record. everyone says sports is the glue holding the bundle together, and espn has been this essential piece of the live television bundle. now that disney has said it is

planning to take espn direct to consumer, they will also offer as part of the bundle once they start taking direct to the consumer, the recules of the ro may change. >> thank you so much. as we head into the close, the s&p 500 heading for a very slight gain on the day, up about 2.5% on the week. it's also going to lead just about 2% from that record high from the very end of july. that's going to do it for "closing bell." we'll send it into "overtime" with morgan and john. stocks eking out gains this jobs friday, at least the s&p and the dow. the nasdaq basically flat. the major averages logging their best week since july. the action is just getting started. welcome to "closing bell" overtime, i'm morgan brennan with jon fortt. coming up on today's show, ginkgo bioworks is up more than 30% after striking a deal with google to work on, you guessed it, ai. we're going to talk to