of china's movie goers. >> very interesting. what did you learn while you were off? what did you learn? >> i still didn't get everything done. >> there's never enough time in the day. >> no, there's not. you know, back to school is -- i didn't have any supplies this morning, and then the bus didn't show up, you know, it's good to be back. >> it's good to have you here. thank you all for watching. >> "closing bell" starts right now. thank you very much. welcome to "closing bell," i'm scott wapner live from post 9 here at the new york stock exchange. this make or break hour begins with a debate on the state of stocks, whether they're poised to buck a historical trend or succumb to september's seasonally sad story. one of the biggest bulls and biggest bears square off on that critical question. first, your score card with 60 minutes to go. interest rates rising, that put a lid on a lot of today's action, rising oil prices weighing on sentiment too even as energy stocks see another

strong session. that sector going for its seventh straight day of gains. the only other areas with some green on the board kind of feels a little suspect as this last hour begins, we'll keep our eyes focused there as well. it takes us to our talk of the tape. is the market's uncanny resiliency throughout much of 2023 a sign of what's to come in the months ahead or just too much to maintain. let's ask eric johnston, he's made his case on this show that stocks are due for a big drop, and on the other side, nfj's john mowry who argued investors have been too negative. both joining me live. it's good to have you both. eric, you're here next to me. i'll come to you first. why do you remain negative on this market as we make the turn into the fall? >> yeah, so there remain significant headwinds that are in front of us, and i think looking forward. so i think if we look at a few different things, number one, this is a late cycle economy. we've looked back and i would

define the cycle by unemployment rate and how much you've grown since the last recession, what the historic low unemployment rate and nominal growth has already risen 40% since the recession of 2020. number two is people talk about the delayed impact from rate hikes as being kind of not a big deal. we think it's pretty significant because it really has effects on the consumer, on businesses, on commercial real estate where all of therir paper gets rolled on rolling basis every few years, and right now over the next two years, you're going to be rolling a lot of 0% paper into today's interest rate, and it's not only the consumer and businesses, but it's also the federal government, right, who has an exploding deficit, which is going to significantly increase the amount of treasuries they're going to have to issue, and that's part of the reason why we're seeing the higher interest rates, and that capital has to come from somewhere in order to absorb that supply, and i think equities will be one of those places. >> the crux of the argument is

you ain't seen nothing yet. whatever you think about the economy being allegedly stronger than expected, it's all going to normalize or worsen or weaken, once all of the things you think are going to happen actually happen. >> yes, exactly. like we've been talking about, the excess savings declining, san francisco feds hit zero by noon this year. we've talked about the student loan moratorium ending. that's ending right now, and the first payments come in october. we've talked about these payments having the interest rates rolling on commercial real estate. there's about a trillion coming due in the next two years. we talk about tightening lending standards. that's not something that hits the economy right away. that takes time, that takes -- that's a lag and so whether this pushes us into a very strong vicious recession or it is a slowdown from here, we think categorically there's going to be a minimum of slowdown in

economic growth and earnings estimates are not pricing that in. >> so john, the bottom line here is that eric thinks stocks are too expensive where they are even now based on what's still to come. what's your response? >> so good to see you, scott . definitely some stocks are expensive. the nasdaq's up close to 40% year-to-date. that was the most beat up index. so no doubt we have seen a big retracement. there are pockets that are expensive, but i do think there are areas that have gotten cheap, maybe where i differ with eric a little bit, i think some of the areas that have gotten the most interesting are the areas that are being most impacted by the higher rates. for example, you're seeing many of the reits trade at some of the steepest discount to their history and peers going back over the last five and ten years. i think that you're getting that priced relative to where they've traded historically and if you

think about those valuation in tandem and relative to the tech valuationings, investors have gotten sanguine about the multiples. interest rates have not come down, if anything they've gone up, and this was the very reason people sold technology. so now you have a situation where technology is rerated. it looks very pricey in certain pockets and the more interest rate sensitive areas look quite cheap. i think you're getting much of that priced even though we could be linked cycle. if we are linked cycle i would expect some of the reits, utilities, to do better given where interest rates are today. >> the stocks are just too expensive now and once, you know, the real effects of what the fed's already done start to take hold once the consumer weakens, once the economy starts to weaken further, that there's no justification u toto keep st at this level, no less expect they're going to go up from here. >> well, i wouldn't totally

disagree with that. you're paying 18.5 times the s&p, that's a very tech-heavy index. if i look at the russell 2000 value which has a greater financial dominance in reits, those indexes are trading at ten times earnings. that is material. so i'm going to repeat that. 8.5 turn discounts with yield premiums with growing dividends, and i think these areas are set to outperform, and what's so interesting is over the last three months, the russell 2000 value and the russell mid cap value have both been up about the same as the s&p, they've been performing in line, but you're getting a steep discount in valuations. i always think that valuations should shape investor expectations, and it's no different today, many of the tech names and within the s&p look pricey. you can look orever the value arena, and there's lots of opportunities that have discounted the slowdown, discounted the recession, and i think that is where investors are going to make their money in the back half of the year. >> how do you account for the fact that the market's been so -- as i wrote at the top --

uncanny in how resilient it's been. in the face of not d-- i mean, wha what you said is not outlandish. it keeps getting pushed further and further off. maybe the most dire projections about the consumer and the economy never materialize. >> i think it's a great question. you know, the money flows that have come from the federal government have been a massive tailwind. inflation has had mixed impact on the consumer and on the market, so, for example, social security payments got rerated 8% higher, you know, this year. that's putting money in people's pocket. and we have full employment due to some of the labor dynamics that are, you know, very kind of new and secular today versus what they have been pre-pandemic. so i think those combination of the federal, you know, stimulus

and deficit, some of the labor dynamics that are currently there that have not been there before, i think are absolutely helping the market and making it much more resilient. i mean, as long as people are employed, they're going to put money into equities and consumer spending is going to hold up. >> what happens if all of that keeps the economic motor running enough, enough, it doesn't stop when we don't have to pull over the side of the road and have a problem, we don't have to get towed. it keeps the economy motoring on just enough, long enough that inflation continues to come down. the fed actually starts cutting rates. is that the nightmare scenario to a bear? >> so i think the idea of the economy continuing to grow and for the cycle being extended i think is real. i think it can happen. i think in that scenario, though, returns are going to be very muted because i don't think in that scenario the fed is going to be able to cut rates.

>> even if they fully stop raising rates. i mean, muted returns aren't taking us down to what you suggest we could do at 3690 on the s&p 500. we're at, you know, 4,500 today. that's a considerable decline you're looking for. >> yes, i mean, i think that if you -- even if returns are 0 minus 5% and minus 10%, those would be very poor returns relative to your alternative right now, which is very real. you have alternative investments. you have money market funds. you have market neutral hedge funds. there's plenty of absolute return strategies out there that are returning that have had very good returns and i think will going forward. >> when you say muted returns, and i sort of came back, muted doesn't mean minus 10% in my book, right? muted means reduce your expectations on where the gains in the equity market are going to be, not batten down the hachs

a hatches. >> the best case scenario is muted returns. my case scenario about what i think is going to happen is we're going to have a decline of 10% or more, kbyou know, in the coming months. >> how do you counter that? >> i mean, the market's done a lot. the market's been carried in many respects by mega cap. there still is a lag effect that, you know, almost all of the fed, you know, members who speak talk about. the consumer may be, you know, on the tail end of this run. what happens if what eric says actually comes to fruition? >> well, these are all really good points. i mean, what i would say about the muted returns and the absolute returns of any of these stocks, we have significant dislocations. the reits are down in many cases 25 or 30% year-to-date. if you look at that relative to the s&p, you've got many reits such as within the tower space that are down 50% relative. if you look over at the multifamily reits, those are underperforming homebuilders by

over 100% year-to-date. >> but john, you could look at any area of the market. you can't tell me your whole bullish thesis on the market is hanging on reits. >> no. >> anybody can look at any one o'area of the market and say, well, it's undervalued. it's trading at a valuation less than this, that, and the other thing. you've got to tell me there's more to your story than, hey, look at reits. >> definitely, that's why i would point to the russell 2000 value. if you look at those indexes, 25% is in financials, another thousand basis points. now you're up to 35%. you got another thousand basis points in reits and utilities are another roughly 5 or 10%. over half the index is in a very different group that has not performed well. you've got a significant portion of the opportunity set that is massively underperforming the market, has priced in a recession, and has also been punished because of higher interest rates. when i look at some of the tech areas as some of those indexes that are very heavy there, those

to me look much pricier. those are of much greater concern. with regard to the slowing consumer, again, i would point to the fact that there has been a difference this cycle. people have been more willing to spend, and i think that that has elongated this particular cycle. but nonetheless, i would completely agree that the lag effects of tightening credit have not fully been felt. i think the real key here is the cpi, which is one-third shelter, and i know we've talked about this, but if that comes down and the st. louis fed has already said if you back that out, cpi is at 1%. if that comes down, there will be enormous pressure on powell to lower rates. the real rate will be too high, and there will be enormous pressure from politicians to do so. i think you can have a very real scenario where rates have to fall in the back half of the year or excuse me, in the second half of next year. the two-year bond sniffed out that powell's late starting out rate increases. ink the yield curve will begin to

steepen, and that will be a boom for many of these areas in these value indexes. >> it's like a race against time in some respects, epidemic. you -- eric. bulls need inflation to come down to the degree that the fed can really be done at the same time the economy has to keep the analogy going, keep motoring long enough that it can keep moving forward enough that it gives us teime. it's a race against time. >> yes, you have a situation where inflation's coming -- is coming down. >> which is it. which it definitely is. and the economy is going through what i think is going to be a, you know, sort of transition, you know, to the downside. >> which it hasn't. >> which it hasn't. >> yep. but that's to come, and do think that that's going to be sort of the correction. >> which it might. >> but the fed is really done with their tightening, you know, process, but remember that quantitative tightening, right, is going to remain, they're

probably going to run off another trillion over the next year, and even if they keep rates where they are, which i think they will for a fairly long time until we start to see what i'm predicting for the economy, that is going to be a situation where the fed is keeping policy tight, and the further inflation comes down and the wider that spread is versus the fed funds rate, the more restrictive it is even though they're not actually raising rates. even though the fed is done, the rate policy is going to remain a headwind, and it's going to have still incremental effects from here. >> so there have been moments in time where we've had these conversations where you've made, tactical changes, and maybe in the recent history, it's only been one where you got -- you tried to get bullish and it didn't last very long, and you've been pretty consistently negative now. so what is it then that gets you to change your view to more constructive on the market? do you throw in the towel on the

idea that we're going to slow, that the economy's going to run out of gas, that the lag effects are going to have such a dramatic impact that haven't been felt yet? >> yeah, i mean, it's difficult because it's very hard to justify buying equities at these prices. it just -- you know, valuation could change, right, that would have an impact on what we're saying. we could see the economic -- the economy roll over, right, where we get a little bit of a reset. that's kind of one of the things that we are looking for. outside of that, it's very hard outside of price and getting that recess in the economy that would make us turnbullish. our opinion has been the same for this year but we're always evaluating the market and will make it change if we deem it so. it's very hard to see that happening based on the current

dynamics in the market. we call them like we see them. this is the way we do our analysis. we have our view, it's what we believe in, and you know woe're going to stick with it until we don't believe it anymore. >> john, do you think earnings are going to hold up? ultimately everything's going to come down to that, and you know, the trajectory for earnings this quarter is where you get back to earnings growth, where you end the three straight quarters of negative earnings growth. this is supposed to be the change. you need that to happen. >> yes, and specifically on a stock by stock basis, what we're looking for companies that have had a dislocation in the valuation, and not in the earnings. some are more cyclical than others such as energy, but again, to pivot back to some of the real estate and utilities that are now getting cheaper and cheaper, zero dislocation in the fundamentals, zero dislocation in the ffo in many of these, the only difference is that people think that because of the ten-year, you should not pay that same price, that same multiple for many of these reits because they are substitutes for those bond proxies, so i think

there are pockets, scott where you have not seen significant dislocations. in many cases you're seeing forecasts that are higher and earnings growth in many of these areas. financials are the one tricky ones. you have seen earnings revisions downward. when that happens, you've got to pay close attention to price-to-book. if i could make one color comment around history, in 2007 banks were expensive, and i don't hear a lot of people say this. they always say it was a great financial crisis. we had a reskcession and invert yield conservative. they were expensive coming off the tech bubble and off that big bottom in march of 2000. if you look at 2000, if you use that as kind of your pinpoint, valuations are steeply discounted, and sometimes the most since that period, you have an inverted yield curve similar to that, and you have tech valuations that in many cases look egregious. nvidia's trading at 38 times sales. that is a lot to pay. i know the earnings look very

good. but it's a lot to pay. >> yeah, but i mean it's a hard one to pick out of the hat and say, you know, tech's too expensive because nvidia has always traded at elevated valuation. it's trading today at roughly its ten-year historical average in terms of forward p/e. >> it's true, and that's why nvidia's tricky. i would rather see multiple confirmations across valuation measures. i always get a little nervous when only one or two multiples look cheap and the others look egre egregious. price to sales looks egregious. p/e looks pretty good. you've got to make a choice what variables weigh in heavier. i think nvidia really needs to surprise to the upside on those earnings to maintain that elevated valuation on some of the other metrics outside of p/e. >> i'm sorry, john, eric before i let you go, do you want to leave us with something on mega cap tech, just sort of how surprising in some respects it's been to you that it's done what

it has this year and where you think it goes? >> i think mega cap tech, if you didn't know the valuation, i would say that's where you want to be going forward heading into an economic downturn because they are certainly more stable businesses for sure. the problem is that within megacap, there are some valuations that we've talked about apple on this program before, which i think is purely too rich. on the other hand i would say something like an nvidia which, you know, i would own here. and so there are mix within megafmega cap, although valuations are smaller, i think it's going to be a tough group heading into an economic downturn. >> some people were like literally spitting out their afternoon espresso hearing you justify nvidia's multiple but not apple's. you want to expand on that? i had to go, but i want to hear your answer. >> sure, apple has currently zero growth and it actually has negative revenue growth, and i

think their growth going forward will be fairly muted, and yet it's trading at 30 times earnings. nvidia is, as we know, is in this sweet spot for the buildout of the ai infrastructure, and i think they're going to have -- although there's tons of pull forward going on, you have a line of sight for the next two to three quarters at minimum that their fundamentals are going to be there, and that's the big -- that's the big diff differential. >> we'll leave it there. guys, thank you. we'll talk to you again soon, eric. that brings us to our question of the day, we want to know are you more bullish or bearish heading into year end. you can head to @cnbc closing bell on x. united airlines has resumed its flights after briefly requesting a nationwide halt for about 40 34minutes or so. the federal aviation administration said the airline carrier experienced computer

issues which halted flights at their origin of departure. those flights were able to continue to their destination. shares right now of united are about 3% lower. data storage provider seagate is seeing its shares almost 3% lower after its cfo issued a warning at a goldman sachs tech conference. management believes q3 revenue will be towards the low end of the guidance range. western digital shares are also lower in sympathy. scott. >> see you in a bit, we're just getting started. up next, and the winner is icapital's anastasia amoroso is standing by with who she thinks came out on top in the big debate. plus she's breaking town the three themes she is watching. what tgdit could mean for your money. you're watching "closing bell" on cnbc. if (vo) you were diagnosed with thyroid eye disease a long time ago.

and year after year, you weathered the storm and just lived with the damage that was left behind. but even after all this time your thyroid eye disease could still change. restoration is still possible. learn how you could give your eyes a fresh start at tedhelp.com. businesses need 5g solutions today. that's why they choose t-mobile for business. mlb partners with t-mobile to

not only enhance the fan experience, but to advance how the game is played. aaa relies on t-mobile's network to stay connected nationwide, so they can help get their members back on the road. and we're helping pano ai innovate, to stop the spread of wildfires. now's the time to see what america's largest 5g network can do for your business. ever since she was a little ki, all maría wanted to do was bak. now's the time to see what america's largest 5g network i'm maría alvarez, owner of maría's cakes. and i'm axel, proud to be her state farm agent. her baking superpowers have brought sweetness to our community. i make delicious cakes to make special occasions even better. maría doesn't just bake; she also creates opportunities. small businesses like maría's, open doors for communities to thrive. support your community. support small business.

the power goes out and we still have wifi to do our homework. and that's a good thing? great in my book! who are you? no power? no problem. introducing storm-ready wifi. now you can stay reliably connected through power outages with unlimited cellular data and up to 4 hours of battery back-up to keep you online. only from xfinity. home of the xfinity 10g network.

you just heard the market debate between our resident bull john mowrey. he says inflation is moving in the right direction, he sees big opportunities in banks and reits. johnston sees economic headwinds and quote, meaningful downside risk to the markets. let's bring in icapital's anastasia amoroso to help settle this debate. which side are you on? >> i'm on the bullish side. i think a 10% pullback if we get that gets bought just like that. if you think about the market in august, you know, we corrected 4 or 5%, and you fast forward if you were on vacation, you blinked and missed it. the stocks are almost back to their highs from earlier this summer. i'm not in the bearish camp,

look, this economy i don't think is headed into a recession. you've got the third quarter gdp that's on track for 5.6%. you've got consumer spending that's very resilient, and the biggest thing that makes me think i don't think we're headed for a recession is the fed is just getting maybe too restrictive. yes, rates are 5.5%. if you account for what the neutral rate is, what inflation is we might just be slightly restrictive. that may not be a 2024 event. >> and you think that that can last, the economy can keep coming along, the consumer can say stay strong enough and inflation comes down enough? it's all going to really hinge on that. >> yeah, i think it can. and first of all, you know, it's all about employment, and the consumer's gainfully employed, is fully employed, and yes, the unemployment rate is 3.8%. the only reason for that, the more reason for that is because we had more people enter the labor force. you've got wage growth that is strong, and i think probably the biggest reason why the consumer has been so resilient, everybody

worries about these lagged effects. most consumers are paying mortgage rates in the 3s and the 2s, most consumers not seeing this big reset higher in debt expenses, so why should a consumer that's gainfully employed all of a sudden tighten the belts all that much. >> that's all good. how do you under that optimistic scenario justify current valuations given where rates are and where the economy is still tracking. how do you do that? >> i think valuations are full and they're fair. i think they're fair for the current level of rates. they're fair for the current level of growth, and i think they're fair for what the forward looking earnings expectations may be. obviously there's distinctions within the sector. if i look at tech, we all worry about tech valuations. if i have a company that is growing their earnings at 10, 12, 20%, you know, versus the s&p 500 that is maybe growing the earnings at, you know, 5 to 10%, of course i'm going to pay higher multiple for the higher growth company. >> you're not worried about the

fact that that earnings growth and the very companies you're talking about has been coming in not going up. >> that was the case earlier this year, that was the case in 2022, but when i look at earnings revisions now, they're actually trending up versus down, that's true for technology. that's true for cyclicals, and what happened is if you look at consensus gdp forecast for this quarter, it was virtually, you know, 0.5%, 1%, it's moved higher to 2%, but it's still -- there's still this delta between the now -- at 5.6%. the reason i bring that up is because as analysts have been behind the kcurve, they're now having to revise the equity analysts are having to revive their earnings estimates higher. >> you think the makeup of the market even as you remain bullish is going to change that -- going to be talking about more than just technology. look, energy was at one point today the only positive sector. last month wit was the only

positive sector. how should we think about the makeup of this market? >> i think it's important to have the b approach. i am a believer in tech, partially because of the secular growth and, you know, the artificial intelligence. i want to have that in my portfolio. probably can't be the only thing. there is a risk that for example headline inflation start to creep back higher. the culprit of that is going to be energy. so i do want to have some energy in the portfolio, and i think saudi arabia, russia pac today shows you that that alliance wants to keep oil prices elevated. higher oil prices is good for energy equities, so i want to have that barbell in the portfolio. i also previously talked about financials, and they've done okay, not great recently, but i do think that if capital markets do reinvigorate themselves in the back half of the year, you know, if some of the ipo activity picks up, if the economy doesn't fall apart, that's good news for financials as well. i do think a barbell of tech and

cyclicals make sense. >> you don't look at any since you mentioned oil's impact on the consumer. you don't look at any of that recent retail, whether it's earnings or other information that leads you to believe that, you know, once the spending on all of that summer travel subsides and the spending on the experiences and all the concerts, et cetera, subsides, that the economy and the consumer are, in fact, going to start to slow and oil going up consistently like it's been for the last seven or eight days is just the thing that we don't need at this particular moment? >> well, i think consumer spending is going to slow, and scott, one of the numbers that we get on friday, we get first of all consumer credit and then we also get household net worth. i think household net worth is likely to go higher. consumer credit is probably going to also tick higher because people probably financed a lot of that concert spending and whatever else spending with consumer credit. i think it would be a perfectly normal thing for that consumer spending number to come down in the fourth quarter, but guess

what, if we come from 5.6% gdp growth to 2 or maybe 1.5, that's still not bad news for the economy because, again, most economists have been modeling growth for this year very, very conservatively. >> wea'll leave it there. up next, trading the apple rally, that stock seeing serious gains here to date. its highly anticipated product event is just one week away, so how could the new iphone impact the stock performance. we'll hear from a shareholder with what he is expecting. and do not forget to register for cnbc's delivering alpha conference. i'll be there with some can't miss interviews including a sit-down with brad gerstner. september 28th, new york cy,it scan the qr code to get your tickets. "closing bell" right back.

♪ "the pursuit of gold" by alex ball ♪ ( ♪♪ ) ( ♪♪ ) ( ♪♪ ) ( ♪♪ ) ( ♪♪ ) ( ♪♪ ) the l'or barista coffee and espresso system. a masterpiece in taste.

you can't buy great conversations or moments that matter, but you can invest in them. at t. rowe price our strategic investing approach can help you build the future you imagine. t. rowe price, invest with confidence. we're back on "closing bell," one week away now from apple's latest product event where the company is expected to

announce its newest iphone. will this be enough to keep the recent momentum going. as you know, shares are coming off their best week of the year. in fact, they are just shy of $190. now let's ask cnbc contributor and apple shareholder jason snipe of odyssey capital advisers. nice to see you, 52-week high on this stock, just under 200 bucks, 198. is this phone going to push us there? >> i'm not sure about that, scott. i think a lot of the -- you know, the return that we saw last week was indicative of some of the softness we saw in economic data where a lot of the mega cap tech names caught a little bit of a bid last week. so for me as it relates to this event, i think, you know, as i look at the 5g cycle, the 5g has been around for several years now, and if i'm looking at the carriers as an example, i don't see a lot of the incentives being put out there for, you know, companies for the consumer really to plug in and be able to

take advantage of, you know, these incentives that are not really there. so for me, i think this is another event, we'll look through the rest of the year. the stock is -- to some of the commentate we saw earlier, the stock is trading at 21 times forward. i think, you know, the multiple is definitely in view right now, and i think that's what the concern in the market is looking at going forward. >> are you suggesting that you also think apple's too expensive? >> i do. i think it's pricey. it's hard to justify a 9% growth rate, especially revenue deceleration that we've seen over the last couple of quarters at 31 times forward. but i think, you know, apple has been a safety trade, you know, tech has obviously run a ton this year, and apple clearly has benefitted from it. listen, the consumer is still relatively strong, and i think apple is always a bellwether stock for the consumer, and i think when the consumer's healthy, apple is healthy, and apple is strong, although i do

think the multiple is a little bit rich at this time. also considering it's above its three-year average as well. >> you sound, frankly, like somebody who's trying to justify taking profits in the stock, not someone who's bullish and continuing to hold at these levels. >> well, i mean, for us it's something that we continue to review, clearly the stock has done very well. it's up 44% this year, it's approaching 3 trillion in market cap, but for us, again, as we look at a lot of the macro data and the consumer willingness to lean into some of these prices, iphone sales have been somewhat muted, and i think that that's three a concern for us, but services has been very strong, and even in the last print, i mean, apple printed, you know, just about a month ago at this point. china has grown a little bit. now there's been concerns all year with china. so for us, i think it's something that we continue to evaluate, but it still remains a core position for us as we move forward. >> do you see other mega cap

valuations as extended as well? >> you know what, i think a lot of them, obviously. this year has been about multipleexpansions, so a lot of them have been stretched. to your point in the earlier segment, names like nvidia who have actually gotten cheaper buzz the earnings has been there, so i do think a lot of these tech stocks have moved a lot, and that's obviously the reason for the multiple expansion. i think there's areas of the market that i think are prime for some new leadership and new growth and energy being one of the examples for us as we start to look to allocate funds in other places of the market. >> well, because i mean, you've got, you know, alphabet, amazon, microsoft, nvidia itself. you're all over this area. is there another stock that sticks out like a sore thumb to you within mega cap that looks like it might be a little stretch. i'm looking at microsoft, for example, i got a p/e of 34, north of that. >> right. >> right. >> so it's funny that you mention microsoft. microsoft is actually the one

that i would say is a little bit stretched. they took advantage of kind of this ai themed bull that has taken place throughout the beginning of this year and year-to-date. so i would say microsoft actually is the one that's a little bit rich on evaluation -- on valuation. amazon as well, but we continue to like the cloud business in amazon and some of the other things that they're doing, margin expansion there. so i think for us, yes, i think it would be microsoft, but we continue to hold all these names. i think you have to have a barbell approach, you know, with the mega cap tech and some of the more cyclical oriented areas. because i don't believe this -- >> he froze. well, that was jason snipe, as you heard, as you see, and we'll see him again soon. up next, we're tracking the biggest movers as we head into the close. ch kristina partsinevelos is standing by. >> now you can be late to those zoom meetings, and a bot can

recap what you miss, more on zoom's latest ai offerings. the stock's moving. that's next. >> announcer: the bond report is brought to you by pimco, the global leader in active income. your record label is taking off. but so is your sound engineer.

you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire since the citi custom cash® card automatically adjusts to earn me more cash back in my top eligible category... suddenly, life's feeling a little more automatic... oooooohhh... automatic sashimi! earn cash back that automatically adjusts to how you spend with the citi custom cash® card.

almost 15 to go before the "closing bell," and we're back with kristina partsinevelos for a look at the stocks she's watching. zoom is the latest company to offer an ai assistant that

can summarize your video meetings, even if you're late to the meeting and compose chat messages for you as well. the perress release says the ai companion will be at no additional cost but you have to be a paying zoom user to get it. shares are up almost 2.5% right now, but it's up about 9% year-to-date. shares of airbnb are popping, about 8% on friday's s&p announcement that airbnb will join the s&p 500 on september 18th, the stock is one of the top nasdaq 100 performers today. the continued demand for travel has helped airbnb jump about 67% and overshadows the local news that's happening in new york city that new york city is going to be cracking down on airbnb and short-term rentals, going forward airbnb rentals will have to register with the mayor's office before being rented out. shares are almost 8% higher. >> kristina, thank you again. last chance to weigh in on our

question of the day, are you more bullish or bearish heading into year end? the results just after this break. let innovation refunds help with your erc tax refund so you can improve your business 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. emily used part of her refund to buy... i run a wax museum. let innovation refunds help you get started on your erc tax refund.

stop waiting. go to innovationrefunds.com you really got the brows. at pnc bank, you can find us in big cities and small towns across the us, where our focus is to always support the people who live and work there. because you call these communities home, and we do too. pnc bank.

the results of our question of the day, we asked are you more bullish or bearish heading into year end, the majority of you said bullish. up next, oil and gas stocks jumping in today's session. we'll drill down on those moves after this break. zscaler reporting in just a few

minutes. we'll have rundown of what to watch enwh those numbers hit. that and much more when we take you inside the market zone. (sirens) [due at target in 5!] copy that. make a hard left down the alley. network's got you covered. [please confirm requesting back-up.] -changing route. -go. roadblock ahead. ...back up, back up... reverse! reverse! next level moments, we're 30 seconds out. need the next level network. [north corridor, hurry!] -coming through! -or 3, let's go. the network more businesses choose. transplant received. at&t business.

wow, you get to watch all your favorite stuff. trit's to die for.d. and it's all right here. streaming was never this easy, you know. this is the way. you really went all out didn't you? um, it's called commitment. could you turn down the volume? here, you can try. get way more into what your into when you stream on the xfinity 10g network.

♪ opportunity is using data to create a competitive advantage. ♪ it's raising capital to help companies change the world. ♪ opportunity is making the dream of home ownership a reality. ♪ ...and driving the world forward to a greener energy future. [applause] sometimes the only thing standing between you and opportunity is someone who can make the connection. at ice, we connect people to opportunity. power e*trade's easy-to-use tools, like dynamic charting and risk-reward analysis help make trading feel effortless. and its customizable scans with social sentiment help you find and unlock opportunities in the market. e*trade from morgan stanley.

with powerful, easy-to-use tools, power e*trade makes complex trading easier. react to fast-moving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity. e*trade from morgan stanley >> announcer: the market zone is sponsored by e-trade for morgan stanley. we're in the "closing bell" market zone, cnbc senior markets commentator mike santoli here to break down the crucial moments of this trading day, plus pippa stevens on the rally in energy stocks. and seema mody looking ahead to fiber security company zscaler, those earnings in "overtime" today. >> bespoke, a horrible day, 114

s&p 500 stocks up versus 389 down. faang plus up 1%, but the small cap russell 2000 down more than 2%. >> yep, it's very up balanced, and it really is -- some of the cyclical parts of the market, not on the nasdaq, really more new york stock exchange that are showing some wear and tear. it feels like there's a sensitivity to this moving yields, 4.25 on the ten-year, which is i think just adding to this sense out there that, yes, this was a pretty down the middle reassuring jobs report on friday, but still leaves us open to this idea that we're going to have some more rate sensitivity in the economy. i don't think it's -- you know, it's not game changing. it's just around the edges. those were the outperforming areas of the market, consumer cyclicals. homebuilders getting smoked today. it's hard not to feel as if there's been a little bit of crowding in some of those areas, industrials are a pretty consensus favorite as well as homebuilders. we'll see if it's just a brief shakeout of the first part of a new month or something more. >> well, speaking of game

changing, pippa stevens, we're going to find out whether a continued rise in oil prices will be game changing for either the consumer, the economy, and perhaps what it means for energy stocks, which, as you know and are watching today, continue to rally. >> a big day for oil with brent topping 90 days per barrel for the first time since last november after saudi arabia said we'll extend that barrel production cut through the end of the year, with russia also extending their levels. mat millenoting that 93 to $94 e key level to watch here as the sector looks to retest its highs from earlier this year, and last year as well. however, he said the sector is looking a little bit over bought here. we might see a breather before any type of retesting of those levels. while energy is the top group there is some divergence, we are seeing weakness from the nat gas players, after weakness from nat

gas prices today. the oil field services players are doing very well. with wti approaching $90, we could see an uptick in spending from the independent emps, those private companies which are about half of the rig count. they could look to bring production back online, and so that could be very supportive for the services names looking forward. >> all right, pippa stevens, thank you very much. mike santoli, 90 bucks. is that the line in the sand of worry? >> it's getting closer. i wouldn't say worry. it's three the top end of the range. every little bit is going to be just slight restraint on what the consumer can do coming at a time when especially outside the u.s. you're starting to see growth sputter at best. so it's, you know, another thing to layer on top of the market, kind of creates a higher burden of proof for the idea that we can maintain above trend gdp growth. i don't think the market relies on us having above trend gdp growth. we are seeing earnings estimates tilt higher. we have this ongoing choppy period in the market, nobody

said it was over in the late part of august. the weight of the evidence still says trend is higher for the market, usually stocks find their way, if earnings can keep going up, but you know, i don't think the market owes us anything. >> seema mody, earnings, zscaler in overtime, cyber security a hot topic of late. this stock is really ramped into the number. i don't know if that's on the back of crowd strike and palo alto, you put some of those concerns about fort net in the rearview mirror, but this stock is up in a week almost 13%. >> yeah, and that's why, scott, expectations are certainly high. the cyber security cloud provider has posted profit growth of 100% or more for three consecutive quarters, and right now analysts are estimating a 97% jump in the fourth quarter print. the question is will that be enough to appease wall street. shares have gained about 10% in the last month, outperforming the global security etf, btig upgrading zscaler to 185 a share

ahead of earnings. wall street will want more color on microsoft's expanded security offerings, and if that poses a threat to the company and other cyber security names, we have seen some volatility in those security stocks, especially with palo alto as of late, but a lot of these names have also bounced off of those lows, scott. >> we'll see what happens in overtime, so don't miss that. it's been a hot space, and, you know, there's been a lot of chatter about it. as i mentioned, fort net kind of raised some questions, but the others seemed to close the door on those questions. >> yeah, i mean, it's one of those deals where i think stabilization has been this buzz word for this quarter just general i.t. budgets. it goes name by name as to whether, in fact, they had what was in demand in that given quarter. i don't think it's that easy to generalize about the group, except there is this broader sense out there that, well, you're always going to have to pay up, you know, even if you don't want to for this tiype of thing. we're still on the lookout for

things that might be victims in the short-term of the kind of completely singular focus on ai-related capabilitcapabilitie. we'll see if that's part of the story here or not, but you know, it's the tech side of the market that's been holding things together today, a little bit, you know, despite the yields going higher, big corporate bond issuance window opening up with september starting. that sometimes puts some pressure on yields as well. i think it's a little bit of a tough take to decipher in the short-term today just because you do have the back to school new month, see if it's giving back more of the rally in late august than we thought. >> talking and watching a lot about apple over the next weeweek, banging up against 190. and it's not that far away from its 52-week high. >> it's not. and it's a little wbit of a puzzle in the sense of what moves the stock and what doesn't, nobody really has an

edge, i don't think, fundamentally about units sold, and if you knew what the number was going to be in terms of iphone demand, i'm not sure you could translate it into how the stocks should trade-off of it. it has been a combination, flight to safety beneficiary, you know, mega cap source of stability and predictability. the other small piece of it is, there's this idea that corporate america is so much less rate sensitive than it used to be. you have an apple earning more on its cash on hand thatn it's paying out. it's like this weird buffer for the current environment we're in where even's worried about are rates going to hurt. also, upward revisions to earnings estimates for the nasdaq 100 type names, but not really for apple. it's not really an earnings momentum story at this point. we'll see if it can make in add addition. >> as big tech goes, so goes the market for now? >> i mean, always for now in

terms of the s&p 500, but i do think you could see, you know, pockets of varyuaiation away fr that. >> we're going to close on the lows. dow's down 200, s&p down 19. the nasdaq, even though we're talking about tech, nasdaq's going to go red too. to ot with jon fortt. well here's the score card on wall street, lots of red. i'm jon fortt, morgan brennan is off today. ahead on today's show a quarter trillion dollars worth of advice. we will talk to the ceo of investment firm janus henderson about the outlook for the u.s. and global markets as we head into the fall. plus we're awaiting earnings this hour from three names in the enterprise software space, asa na, git lab and zscaler.