anyhow, it has been a very interesting week and a very interesting day. right now the dow as we hand it off to scott is higher by 406 points and that, after a beginning of a week that was anything but positive. thanks for watching "power lunch." have a great weekend, everybody. "closing bell" starts right now. what a reversal. welcome to closing bell. i'm scott wapner. it is a reversal of fortune for stocks after the hotter-than-expected jobs report sends the s&p sliding only to stage a comeback as interest rates hop off the hot burner. here's your score card, with 60 minutes to go now in regulation. well, there is your intra-day s&p 500, the entire story is right on your screen right there. that's where the mid-day turn-around happened. just as the 10-year note yield retreats from its new cycle high. not hard to see what's happening. rates down. stobs up. every sector green. except for consumer staples. they have had a miserable week.

names like coca-cola, pepsi, hit especially hard. we will focus on all of the green because that's really the story today. nasdaq, another spot to take note of today. the outperformer as well this week. even apple up nicely despite the midweek downgrade a strong week for alphabet and nvidia as well. take a look at those three, having pretty good gains. leads us to our talk of the tape. whether the storm clouds for stocks are about to pass, as earnings season kicks off in earnest next week. let's ask tom lee. fund co-founder and head of research. welcome back. good to see you. it's been a while. >> great to see you, scott. >> i will start calling you prescient tom. i hope you don't mind. because this morning, at 10:23 in the morning, you said possibly this is the flush, bottom line, possibility equities reverse into the close, well, it looks like you called it, tom. what do you think about this reversal and what it means? >> well, i think if we think about the data for the past

week, the stagflation story that gained a lot of prominence in the last ten weeks, i think it has diminished a lot. because the jobs report showed good jobs, but soft on wages. we're making progress on the uaw strike, and of course, as you know, oil's come off that boil, and these are all pointing to an expansion that's not suffering from an acceleration of inflation. so i think it really helps that -- as you said, maybe the flush happened, and we can be strong into year end. >> do you think that this is that moment, that that turn is going to begin to happen, tom? >> part of the technical view comes from our view, but i think what is going to be, it was going to be either today or early next week, because we had that intra-day reading of the put/call reach 1.97, only 20 times the last 30 years, it is so rare, but it is almost always signaled an imminent bottom, and then today, as you point out, we had a really hot jobs number, a

pretty big sell-off that is reversing in the face of people still saying nothing's gotten better. so i do think that the sellers are exhausted. and there's a lot of fire power in the sidelines. and if a few things go right, i think we get a big rally. >> the one thing that is not really getting better and i don't want to ignore it, rates are still high, right? >> yes. >> so we're at 488 earlier today on the 10-year, so we're at 477, so we've come off, as you said, the boil, but we've still got a pot that is really simmering rapidly. >> that's right. these are very tight financial conditions. it's probably not a long-term killer if we were at five for years because we know 5% is the average for the 10-year for the last 90 years. but at the moment, that change has been very restrictive, and if i was to be half full on this, we know this also means that the fed has less work to do, which means fewer hikes.

so in some ways, as long as the market can absorb this change, and it's very restrictive, i mean it's uncomfortable, i think that's positive. more importantly, as we found out, there is a parabolic raise in rates, it is not going to take the escalator back down, if it does peak, it will be a sharp reversal and of course that is supportive for stocks. >> do you think the fed is done? do you think mary daily was a pretty big tell yesterday, the san francisco fed president, of course, thinking that the move that we've seen in interest rates has caused financial conditions to tighten substantially, in her mind, equal to at least one hike in rates, and that now, that is the prevailing thought within the room, that credit conditions have tightened enough, or restrictive, as you said, we're done? >> yes, i think the fed feels that since september 20th, i think it was clear that the market kind of got this new message, higher for longer, the markets price that in, i don't know if the fed has to keep

jawbone it and even threaten further hikes if it's gotten to the place it wants to be, and as you're saying, when you have a fed member saying it's a hike, another hike on top of that means that we are extra worried. >> how about valuations? you are comfortable where they are? and where, you know, simply relative to rates being high, and, you know, you still believe the economy,to some degree, is going to slow, it's just hanging in, so incredibly resilient, it's stunning, i don't know what else to say. >> yes, i mean i know investors think p/e has to come down because interest rates have gone ut but history shows when the 10 year is between 3 1/2 and a 1/2% the p/e has averaged close to 0 times, part of it is something that sheila baird has written about, it produces capital discipline and that allows

companies to have durable earnings which means p/e should be higher, but also we're in an experiment where nominal growth is higher, which means i also think we're in an eps surprise event environment, that's why p/e should go up, it is actually really 16 times, actually less than that, ex-faang, i think if it goes up four turns, that is a huge upside in equities. >> okay. i'm glad you went to earnings because i wanted to get there anyway. so you don't think that estimates that have crept up incrementally positive this quarter, a little more next, and more substantially as we get into 2024, you don't think those are over their skis a little bit? >> on earnings, earnings always have some risk, because of optimism of analysts. so 70% of the times, earnings revisions are down. but the revisions to q3 earnings are more consistent with a turn in the cycle, and we have to remember the headline earnings are still down year over year, because of energy and basic materials, without those, it is close to 7% earnings growth in

the third quarter. i mean that's a really nice, you know -- companies are doing well, i think the inflation will hurt and of course volatility with the strike but the oil picture, demand is holding up and now wage costs are slowing, that should help be supportive of earnings, actually. >> yeah, i mean you said ex hong faang, so let's drill down on that a little bit more, what are we talking? 15 times for ex-faang? basically the 490-whatever stocks within the s&p 500, versus the mega caps. so if you think we're going to hang in there, and from an economic standpoint, and you think the fed is done, and you think rates are not going to really, you know, go much higher from here, do i want to start looking at ex-faang? or do i want to just dance with the stocks that got me here to begin with? >> scott, i don't want to sound like i'm saying both, but when i think about how we risk, like

when institutions want to add risk in the fourth quarter, they're going to buy what's liquid, and what's worked so, i think that's why faang should lead, but the reason why the rest, the rest of the s&p is attractive is because you have a level set of 7% earnings yield, or maybe 6, but with earnings growth double digits, the total return profile of equities here trounces what you can earn on a 10-year. i don't think investors are convinced of that today. but a year from now, they will be. and that's why the s&p could, you know, have more than double digit gains in the next 12 months. >> i know, but you make a good argument though, even as you argued for stocks relative to bonds, others would say, look how cheap bonds have gotten as rates have gone up. so there's still considerable competition in a really uncertain environment, whether it's, you know, cash equivalents or treasuries themselves, that still offer a safer, let's just use that word, safer alternative. >> yes, i mean i think it's

correct for people to have that view. how many additional make that decision in the next 12 months i think is what matters. we've already seen trillions flee out of risk assets. the stock market has been starved of retail and institutional equity flows. the movements have all been prime brokerage leverage. buybacks will continue. i think on the margin, if inflation is diminishing next year, and people think the fed is done, or might cut, that's good, because bonds could rally, but as we know, i mean if that happens we know p/e will go up a lot, so stocks will rally even more. >> let's bring in cnbc contributor brinna to join the conversation. i believe you heard everything that tom had to say. do you agree? >> well, i think going back to the technicals, let's go back there, i think that we started the week with only about 15 stocks above their 50-day moving average. when it gets below 20%, that's

really bullish from the short-term bottom. that was right on top of the s&p, almost getting to 4200. so i think we're in this really oversold condition. and i think, you know, great job on tom calling for a mid-day rally, and so i think we can definitely rally from here. don't forget, monday, the bond market's closed so this party can continue, because there's nothing to stop, it because really this has been a rate-driven market, so i think that's going to help. i do think, though, over the next few months, outside of seasonality, which is a real thing, right, i would never discount it, i think over the next six months though, we are going to be much more range-bound between this, let's say 4200 to like 45, 4600, so i still think there are so many cross-currents, i think on the earnings front, though, if you look at goldman sachs, i think there is good research, technology is where you will get all of the earnings growth next year, so they're looking for 10% earnings growth, you know, year over year from 23 to 24, and so

we're going to have to get that, because those stocks are more rich, and so i'm not in a consensus that i think we're going to have this 12% earnings growth, and so when i break down the names, i do think you still want to own technology, but within technology, i think you have to be, you know, somewhat judicious, because while, you know, if you look right now, scott, microsoft and apple's charts look terrible, their revenue and earnings growth haven't been as good as say google and microsoft. i mean google and meta. whose charts look really strong and continue to gain momentum. so it will be interesting to see if we start to get some dispersion of the mega cap names especially as earnings come out next quarter, we'll see, but i think that's a pretty decent probability, some dispersion of the mega caps starts to play out. >> i feel like tom, that's a long way of saying, that, you know, i'm not -- brin, i'm not necessarily as optimistic as you

are, tom, that earnings are going to reach the level that some like goldman and others suggest that they might. now they might in mega caps. that jury is still out. but certainly not elsewhere. so tom, how do you respond to that? >> well, i mean i think there is a pretty long list of worries out there, because, you know, if i wanted to add to brin's concerns, i would add china and europe, and the war and the escalation of the ukraine war, but in this environment, which has been incredibly challenging for companies, they're able to produce 7% earnings growth now, in the face of the fed relentlessly raising rates. but in the next 12 months, they're taking their foot off that. oil, i think, might have made a local top. wage pressures went from, you know, nearly 6% on their way to 3 1/2. and the 10-year environment like this, with nominal gdp, does point to very good earnings growth historically, and that

pmis have convincingly bottomed. stuck below 46 now, back to 49. and to me it is pointing to an economic momentum that is materially improving. so i think that rate of change is what is going to compel stocks to get p/e expansion. >> tom, what do you make of weakness we've seen in utilities and staples and transports, and things like that. are they any bit attractive? i know that all of these other sectors, you know, the lights on the marquis, they're the ones that are there, i get it, but sometimes you see the best opportunities where the greatest carnage lies in the market, staples, utilities. are they attractive or not? >> utilities, for someone who is really great for timing, the utilities risk adjusted are probably huge opportunities. i bet it is going to follow tlt, right? tlt at some point is going to make a pretty tremendous upside

movement, with the 10-year, it goes back toward 4% next year. and on transports, it's tricky because you've got to pay attention to what is happening there. but there are a lot of intra-play dynamics that are idiosyncratic and not necessarily simple macro. but, and then staples, it's tough because that is a green inflation sector and now on the margin, strange stories about calorie consumption could be declining, i mean it's tough. i think i would rather own technology stocks over staples because at least technology stocks you don't have to worry about calories. >> i mean i don't know that you would find too many people fighting you on the idea of owning technology stocks over staples. so i don't know if that is necessarily a fair fight. but brin, how would you address those two sectors, or just simply other areas of the market that might work outside of big tech? >> so i think going back to utilities and staples, we are

looking, if you look at the net debt to equity of every sector in the s&p, which three sectors have the highest debt to equity ratios? utilities, real estate and staples. so i think that those three areas, and so we're talking about two of them, are just much more susceptible to the d of the d and the e of rate rises. so i think this is a unique time. typically later stage in the economic cycle. those would be doing well. we have a whole new play book. i think that people can count on large cap technology to know what you're going to get. you might not get great revenue growth, but you're going to get good earnings because they're all buying back their shares. i think from an allocation perspective, what my concerns are is that i agree with tom that the economy is probably going to stay really strong, but for the wrong reasons. because it's government-led. but don't forget, we have the, you know, 1.9 trillion american rescue act. and then three other ones underneath them.

those dollars need to be spent. there are billions and billions of dollars that need to be spent by 2025. and so you're going to continue to see municipalities doing very, very large infrastructure plans. and so bottom line, what does that mean? that's good for the economy. but what else is that? it's inflationary. and so i just think we're in times where the government is spending like they're trying to get out of a recession, and they're doing this pre-recession, and to me, that ends up causing just a higher probability that recession stays stickier, because of government-induced programs into the u.s. and so to me, that puts somewhat of a ceiling on rates, as well as markets, because we're going to continue to be having this inflationary conversation, and we're not getting to 2% any time soon. >> well, we seem to be on the march there. tom, i think you would probably disagree. >> yes, i mean to the extent that i don't think it's a fait accompli that inflation will be accelerating or sticking, i mean as we know, the only sticky

point of core inflation right now is shelter, and housing is going to get walloped as mortgage rates stay here at 8, so to an extent, this rising rates is accomplishing what the fed wants to do, which is kind of put a ceiling on home prices for now. and that's going to really restrict cpi. i mean 40% of core cpi basically housing related anyways. auto is close to 57%. so as long as cars and housing are not accelerating, inflation is on a glide path lower. >> tom, what's your target for the end of the year for the s&p? you still have one, correct? >> yes, scott, i think we're going to rally double digits, so i think we're going to get over 4800 by year-end. i mean a lot has to go right and i will tell you there is a lot of damage the last few weeks, so you know, it may not get to 48, but i think directionally, it is th correct, because i think we have a very strong inflection recovery because interest rates

are nearing the end of a parabolic rise. >> well, we'll see for sure and we will talk to you plenty of times about it. bryn, talk to you soon. and tom lee, thank you. the question of the day. we want to know, do you believe in the soft landing scenario for the economy? just like tom lee does. you can head to@cnbc closing bell to vote. and mapping out the market, tr rowe price sebastian page is reluctantly bearish. will he ever change? we'll ask him next.

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a check on some of the top stocks to watch as we head into the close on this friday. courtney reagan is here with that. >> the automakers firmly am positive territory in the last hour of trading as the uaw signals talks. given the progress, including an agreement from gm to cover battery cell workers. and in energy, pioneer natural resources is higher as exxonmobil nears a deal to acquire the company. according to cnbc sources. dow jones reports the deal could be worth about 60 billion dollars. shares of pioneer up 10%. >> thank you. stocks with a big reversal following today's hot jobs report. here to discuss, t row price

sebastien page, a long-time reluctant bear,self described i might add. he might be getting closer to neutral however. welcome back. good to see you. one of these times you're going to show up and say you know what, scott, i'm a reluctant bull now. why are we at that moment, why aren't we at that moment yet? >> scott, i think we're getting closer. we would probably consider closing or underweight which is about a percent now, so close to new ral, around 4100, with a higher mix in negative sentiment, that might be enough to get us back in. i'm still worried about three big macro risks. rising rates. obviously. and inflation. i think it has risks to the upside. and valuations. just a compressed equity premium. but no, scott, we're not panicking, but these are serious macro risks to worry about. >> i know, but those macro risks, sebastien, have existed since the beginning of the year,

arguably, and we're later along in the fed cycle and we're stronger along in the economy than many thought we would be. so, you know, i guess i would say, i've heard this, i've seen this movie before, and yet, the market's up quite nicely this year, the s&p is, i don't care whether it's been driven by a handful and a half or stocks or not, it is what it is and it is where it is, so how do we deal with all of that? >> look, i think the rising rates risk is heats up as we speak. the 10-year sis up 150 basis points in six months. with that velocity in rate hikes and in rate spikes, especially in the long end, and the dis-inversion, things can break, so that remains a risk. and the passage of time, we still have yet to see a lot of the lagged effects of the fed hikes. but scott, you're right, that growth has surprised on the

upside. if you look at gdp growth expectations, starting q3 this quarter, we are at 0.3, and we're now at 3%. so this is just annualized for this quarter, and it tells you how quickly gdp growth expectations have come up. and the other thing we talked about, scott, and the reason why things aren't cracking yet, is this massive amount of money in the system. and we talk about excess savings running out. excess savings is a bit of a wonky definition. if you look at money market funds and checking accounts, the amount of money that is in the system, a lot of it is at the top, and the bottom quinn tile of earners are tapped out and loading up on debt. but the total aggregate amount of money, i call it the blob of money, it eats all of the negative headlines, scott. so those explain what happened this year and with growth surprising on the upside, and you know, ultimately, and the

reason why we're close to neutral is there is oxygen for markets above 5%, just look at the 60 year before the great financial crisis. the average 10-year was 5.8%. so we have to deal with the acceleration in the hikes in the rates. >> i feel like you're almost rebutting yourself, by suggesting yeah, i know that rates are 5%, but we're just normalizing, and it's like, yeah, i know the economy is strong, but that's just because of all of the stimulus that's in the system, and i'm thinking like, yeah, and maybe that's enough of a reason that we're not going to have the gloom and doom lag effects that we otherwise would have, without all of the stimulus in the system, and that's been the most difficult thing to calculate, and to quantify, is because all the stimulus that nobody could really understand what it was truly meaning for the consumer and the economy that has gotten us to this point, maybe it was

just enough to stave off any really bad scenario from the economy, in fact, maybe the fed is going to pull this off. >> i think that's right, scott, and where we stand now, we're just waiting for a pullback, and a spike in the vix, a real deterioration in sentiment. i think we're guesting closer. and in the meantime, where we've been adding to stocks this year has been in parts of the markets that haven't participated in the rally. we like real asset stocks, for example. stocks of energy companies, utilities, stocks of real estate companies, and with a lot of active management and stock picking in it, but also metals and mining stocks, so these real estate equities have been an area where we've been incrementally adding to stocks they haven't participated in. and we think there is upside risk to inflation. the labor market remains incredibly strong, and that explains the strength of the consumer, but also it poses

upside risk to inflation. i think the prints today aren't that encouraging, if you put them in the context of all of the other numbers that we're getting on the labor marks, they are strong. >> but if there is -- i got to clean my ears out when you said utilities that are attractive to you. if you're looking for upside risk to inflation, therefore, you know, high rates, why are you utilities going to work in an environment where obviously they're moving in the opposite direction to where rates are going? >> right, it is part of a diversified portfolio that has some measures of protection for the ability to raise cash flows with regulation, and with inflation over time. now we like to protect against inflation across different types of stocks, and different types of inflation, so when regulators allow price hikes for the utilities, that helps you over time protect against inflation. meanwhile, you get pops in

energy stocks, and metals and mining. so it is all part of a diversified portfolio that we call real estate stocks. >> but tech's not at the top of your list? >> sorry? >> tech is not at the top of your "like" list. >> look, we're neutral between value and growth. there are reasons to like growth stocks, just the valuation is really high. you know, at the end of the day, when i talk about my three big risks, i talk about rising interest rates, i think about inflation, i think about valuation, really the one that bugs me a little is the valuation and the compressed equity risk premium. so we're neutral. we think ai is real. we think it's going to help growth stocks. i think my colleague was on your show talking about this. >> he likes them all. >> it is real. valuation is expensive. valuation has inflation capabilities but it is also cyclical. >> he loves them all.

i have conversations about him, and not to talk about somebody who can't come and defend themselves on their own but when i asked him about some of the valuation of the very technology stocks that he loves, he loves them. valuation at this point be darned. >> look, we don't have a house view, but in the asset allocation committee when we look at the asset class overall, growth stocks overall, we end up neutral. but if i look at our research platform, where it sits right now, it's quite favorable on ai. and i got to say, in past technology innovations, we've been technology investors for decades, we have not necessarily made the same staples, so yes, i stand by his statement that ai is real, but as asset allocators, you know, don selects securities, as asset allocator, we've got to look at growth stocks overrule and

that's how we come up with neutral. >> nasdaq anything but neutral today. a big burst for the nasdaq. appreciate it as always. see you soon. >> thank you. up next, class is in session. even on this friday. the dean of valuation, aswath damodaran of nyu, he will talk about the swings and the one coming ipo that looks promising. that's after the break. and cnbc celebrates hispanic heritage we are sharing influential hispanic business leaders you with. since i was a little girl, i have been surrounded by beauty in our latina culture, watching my mom take care of her skin, put on makeup, my aunt, beauty is such an inherent part of who we are as latinas, and so i took that passion that i had for beauty growing up as a latina, and then i turned it into a career. and i don't work a day in my life because i'm having so much fun.

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we're back, big tech rebounding. all surging. to put the nasdaq 100 on track for the best day since the end of august. so is this the resumption of the tech-led bull run? or just a relief rally? the dean of valuation, aswath damodaran, from the nyu stern school of business is here to break it all down. professor, welcome back. it is good to see you. >> thank you for having me. >> i'm glad we led into this segment the way we did, talking about technology. i'm not sure if you heard the conversation that i just had with sebastien page of t. rowe who says tech valuations are just too rich. how would you address that? >> you know, one of the terms to describe what is happening in the market today, it is one of my favorite movies ground hog day, i wager that if you took the show on january 3rd of this year, you blanked out the screen behind you, you would be having exactly the same conversation

you had just a few minutes ago. it is almost like it is a rehash of the same argument over and over and over again. and at some point, you got to ask, is there something original that we can add to the discussion? the truth is, at the start of the year, it was about inflation and the economy. the truth is, right now, it's about the inflation and the economy. at the start of the year, tech had had a bad year. and then it rebounded. and through the course of the year, it's carried the market upwards. so i think that while it's easy to look at the pricing and say this is the peak, i'm not getting in, i mean i own five of those seven winning stocks that have carried the market, and i thank the stocks that i have in my portfolio. i just got lucky. i can't imagine being an active investor without any of those stocks trying to beat this market right now. it is almost impossible to do. >> but in a sense, professor, it is different. at least as it relates to tech. and let's really drill down here. because at the beginning of the year, we weren't coming off a

miserable year for technology stocks, we were coming off a miserable year for technology stocks, many on the street were mispositioned, right, for the run that we were about to have which was fueled almost entirely about the hype over ai, where as now we have travelled a good road, from much lower valuations, now, we're a little bit off the peak of where we were six to eight weeks ago, but we're still higher substantially than where we were. and in many cases, we're higher almost across the board, for 10-year historical averages for those same stocks that i'm talking about. so that is different. that's why it begs the question now, about that space in particular, which has carries us to even have this positive market conversation. >> i'd push back on the ai story. i know microsoft and nvidia, ai has been a big part of what caused the price to go up but the other five companies in this group though, the reason i think pricing is up is because they have shown incredible pricing power and one of the big questions coming into inflation is are these tech companies

going to be able to deal with inflation and pass it through, and the resounding answer we've got over the last eight months is they have more pricing power than the consumer company, the brand name companies and part of what you see in this run-up is the recognition that these companies are much better at handling both inflation and economic potential shocks than we thought coming into this. and i'm not saying it explains away everything that we've seen here, but it explains, i think, a significant component of the rise in pricing we've seen in these companies. >> so let's talk about apple specifically. because it was, you know, certainly one of the stocks of the week, and i think it is fair to say you don't see a downgrade of it very often and we did get one this week, and one of the, you know, premises was, we're at peak multiples for apple. now again, that's one of those stocks that was, i think it was like 31, 32 times so it is backed off that a bit, but it is still well ahead of 109-year historical average. so how would -- the 10-year

historical average. how would you address that? do you agree with the downgrade? certainly based on other fundamental aspects as well. >> i would be worried if there were seven upgrades in the past week than downgrades and historically, the best contra-indicator for a sock is what analysts think about it. so if you get these upgrades coming out, you almost have to stop and ask, what am i missing, what is the down side i'm missing that is causing analysts to kind of jump 0en to the bandwagon. so maybe it is a good thing that you're getting some downgrades, some realism in expectations because i think the company's fundamentals are driven, it is an excellent company, you can dress this up as much as you want, it has a business, this is a smart phone company. my thought is you live from up grade to up grade, iphone 5 to -- 15 to the 16 to the 17 and that is the biggest risk to the company, the next upgrade will not catch on and i see the

company not giving up a chunk of the earnings, even in a down economy, inflation goes up so from that perspective with all of the ups and downs i think there are more ups than downs throughout the course of the year and if you have it in your portfolio, hold on it. and if you don't have it, wait for a correction somewhere along the way and try to bite bye. it because i think it's the company equivalent of what warren buffett called a company for all seasons. it is essentially being able to deliver to us no matter what. >> that's why it's the largest berkshire position by a mile. i think at this point, professor. we'll see you soon. i appreciate the time as always. >> thank you. >> aswath damodaran, joining us, there the dean of valuation. up next, we're tracking the biggest movers as we head into the close. courtney reagan is standing by with that. >> hi, scott. how much do you want to bet me has to do with cybersecurity? you'll see what i mean coming up after the break.

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15 minutes before the close on this friday. courtney reagan has a look at the stocks she is watching for us. courtney? >> mgm is higher after saying it expects its recent cyber attack to have a negative impact of about $100 million on its third quarter results but it doesn't anticipate an impact on the full year financials. the casino operator believes the insurance will be enough to cover the impact. mgm shares up around 5% but still down 15% over the past

month. speaking of cybersecurity, many of those stocks are among the top performers today. that clause crowdstrike, z kale scaler, palomar and fortinet and one of the tickers that tracks, cibr, is looking at a weekly gain, 3.5% off the august high. back to you. >> thank you. courtney reagan. last chance to weigh in on our question of the day. we asked, do you believe in a soft landing scenario for the economy? the results after this break. (♪♪) in this clinic, we pride ourselves on putting others first. it's on us to help care for our clients' well-being; to help them adapt. it's inspiring to work at a place where our patients succeed. and we as therapists do, too. with great benefits from principal, we feel appreciated for the work we do. (♪♪)

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the results of our question of the day. do you believe, in miracles? just kids. do you believe in a soft landing for the economy? some say that would be a miracle. it is neck and neck. no is winning barely. we will see what happens after the break. up next, big tech's big pop. some of the top names in that sector making serious gains today. we will tell you what's behind that bounce just ahead. that and much more, when we take you inside the market zone. if you want to lower stroke risk from afib not caused by a heart valve problem, there's a better treatment than warfarin. eliquis. eliquis reduces stroke risk and has less major bleeding. don't stop taking eliquis without talking to your doctor as this may increase your risk of stroke. eliquis can cause serious and in rare cases fatal bleeding. don't take eliquis if you have an artificial heart valve

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santoli and julie boorstin, and mike, you first. what arebound. >> yes. >> many times, this is one of those times, to set up matters, the set upmatters a lot. and the setup was we were kind inform a defensive crouch, for both stocks and bonds, selling off, going into this number and i think it would have been easy to say, going into it, michael hart disnet of bank of america said we get over 5,000 new jobs, s&p is going down to 2950. it made sense. too hot would get the bond market inflamed even further and stocks couldn't handle it. in reality all we did is test the recent highs on yields. it told us this inflation is still happening in wages, while we got resilient labor market, all good for now, but i think most of all, it just kind of opened up that window for an oversold market, to have this nice snapback and definitely a chase for the biggest index names to get exposure. that's another future of the rally. >> now, it doesn't guarantee anything about a soft landing

but you can't have a soft landing without a good economy. that's the whole premise. >> exactly. >> and at that point, you have to either embrace it, or say it's just not going to happen. but the leading indicators at this point suggest it is a real possibility. >> it remains a possibility. and i mean you absolutely have some sensitivity about, in the next three to six months, the levels, work their way through and you've seen some on the consumer in pockets, are we going to able to weather it? no doubt about it. but when you have unemployment at 38 and you have wage growth still at a decent clip, it is not falling apart all at once. maybe there is going to be some corporate credit stress that pops up, it hasn't been that conspicuous, so for now, nobody is able to disprove a soft landing but i also understand why there's residual skepticism about it. >> well, sure. >> is not a high probability scenario. >> let me be clear. i don't mean so literally like the leading indicators. i know the leading indicators, i

want to make sure everybody knows, too, the leading economic indicators have been squirrelly especially in manufacturing for many, many months, so the jury is still out. however, you can't have a soft landing without what we got kind of today. >> and what is weird is the leading economic indicators have now gone longer in forecasting a recession than any time prior. so it's sort of like, was it too early? is there something wrong with the signals? based on today's economy? did we invert the yield curve way earlier than we otherwise would have because the fed was so aggressive in coming from zero? these are questions that we will only know the answers to in retrospect. >> not many people are giving disney stock a lot of love these days. it did get some today. >> that's right. disney shares gaining nearly 3% after this week, the stock hit the lowest level since 2014. bernstein coming out with an outperform, 103 dollars price target on the stock. calling disney the only credible challenger to netflix. forecasting direct to consumer

revenue will surpass linear revenue in 2024. saying that disney has more to gain from buying out the remainder of hulu, also saying that they believe that the park's long term growth spokes is still intact. meanwhile, a buy rating with a $93 price target saying, quote, take advantage of the maximum pessimism. as a way to benefit from two leadership areas in sports, espn and experiences, parks, resorts, cruise lines. with the stock sell-off, the futures are down about 17%, in the past 12 months, 73% of analysts have a buy rating on the stock, and 21% have a hold. so i guess they see some opportunity there. >> julia, thank you. good weekend to you. steve, you know the seeing. if you mess with the bulls, you get the horns. well, you downgrade apple a few days ago, and you are getting the horns. because the stock is up 3 and 2/3% on the week and up for the third straight day. >> that's right, scott. and 72 hours ago, in fact, i was

sitting right in this chair and the nasdaq and the mega cap tech names were selling off dramatically and look at the screen a bounceback. nasdaq is up better than 1.5%. let's dig into the mega cap names. apple up 1.5%. like you said, the keybany downgrade, it was shrugged off by investors. let's move over to microsoft. up more than 2.5%. meta 3%. alphabet up 2%. nvidia up 2%. and amazon, up better than 1.5%. so look, the question, scott, is did we hit the bottom for tech and now we're seeing it come back up? analysts had a good note out this morning, highlighting the quote, meaningful pullback from all of those names i just went over, over the last few months, and actually they don't see a recession coming for tech earnings. but are expecting a slowdown in earnings performance going into 2024, and look, we're just a few weeks away for most of those

names reporting, netflix is up first and in less than two weeks, scott. >> thank you very much. turn back to mark santoli as we approach two minutes left. that's the premise of tom lee getting to 4800 on the s&p with the market still getting there, because you're going have a pile-in to mega cap between now and the end of the year. >> it's always plausible, and in this case, too, that is where the earnings growth is coming from. if you looked at the one-year path of earnings con sez, mega cap tech is like a hockey stick higher over the last six or eight months. where as everything else is, you know, up just slightly, off the lows, and so ma makes sense. what we've had is a big pullback in the big index gains because the index itself was under a lot of pressure. obviously more expensive than the market, and the market periodically rethinks that. and then sort of circles back around and says the fundamental story hasn't quite changed very much. and as many have said, they're not real direct victims of higher yields.

in fact, maybe net beneficiaries on a financial basis. for me, it makes sense, for me, bigger picture, this is an opportunity, we're getting some reassurance about the state of the real economy for the rest of the market. to make a bid to catch up. not to catch up entirely, not to have a massive rotation out of tech, but to participate. because we really haven't seen that except in little episodes, and so i do think you want to see banks, and consumer cyclicals and consumer finance, all of this stuff, that kind of price for a high probability of recession, and maybe get a little bit of relief. >> and certainly one day doesn't a trends reversal make. cpi next week. ppi. there are really important events, not to mention at the end of the week, earnings and they better live up to some hype. better. >> the cpi and how the bond market digest whatever we're going to see. because i really do think that this inflationary story is now the preparation. and you have to go out on a limb to try to take a step -- [ bell ].

>> coming close to the estimates. >> and every now and then, they jump the gun. >> that's right. >> and now a little early. that's what happens around here. everybody is happy because the market is up there. we go. [ closing bell ]. >> have a good weekend. we'll see you on the other side of it. a rollercoaster week for stocks and bonds with a friday rally to finish it up. every major average gains 1%, or more, today, and that is the score card on wall street, but the action is just getting started. welcome to closing bell over time. i'm morgan brennan, john is off today. coming up this hour, apollo's torsten slok to join us for the treasury yields and the red hot jobs number and how that complicates the fed's path toward a soft landing. plus, will the mega deal of the day