partial kcredit? >> i think private kred sit trying to force capital into companies that don't want to go to the capital market. you have to be careful about that. the costs are very high. >> great points. >> sarat, have a great weekend. doesn't look so good for golfing. >> i think we'll be inside. >> thanks for watching. >> "closing bell" starts right now. kelly, thanks so much. welcome. i'm scott wapner live from post 9 at the new york stock exchange. this make or break hour begins with a battle inside the unsettled market. on one side rising rates and geo politics versus those looming mega cap earnings next week. the big question, of course, some of the biggest names in the market be enough to get your money back on track for a late year run? we'll ask our many experts that very question this hour. meantime, there's your scorecard with 60 minutes to go this week of regulation. red day overall, yields are a big part of that story. the ten year topping 5%

yesterday, still hovering near that level. there it is, the ten year. 4.92. it's clearly put significant pressure on regional banks and real estate as both of those sectors are among the hardest hit today. real estate is making a turn, though, as we begin the final stretch. regional banks have been under some significant pressure. the nasdaq suffering as well, as you might imagine. there's microsoft, meta, alphabet and amazon. we throw those four up because they are the four reporting earnings in the coming days, each with a decline about 1%. it takes us to our talk of the tape, what's really riding on the results next week and what is the busiest stretch of earnings season thus far. let's ask dan greenhaus back with me at post 9. it's good to see you. >> thank you, sir. >> it's been a bit of an unsettled week. volatility has picked up a little bit. does tech come in next week and save the day or raise more questions? >> no. listen, i think the important thing to note, i would argue,

about tech is while the market sold off, it's been large evaluation and for most of these names, not apple, but most of the names we've seen revisions to the upside. and from a performance standpoint, google and meta have looked strong in the face of weak tape. that's something to do with digital ad trends, et cetera, but more likely than not you go into next week thinking tech, the big tech names, will be more helpful than hurtful. >> let me ask you this. yields remain elevated, near 5. let's just say the ten year remains near 5%. mega cap earnings are good. is that good enough to outweigh the higher level of the ten year? >> listen, clearly there's been a problem this last leg higher in yields is the story obviously. >> because of the speed, too, right? >> what i was going to say exactly that. it's not really the level per se, the level can be worrisome, it's the speed you get to that level and since mid-july the

market has had a problem with the rate at which rates were going up. if the fed meeting comes and jay powell, we don't raise rates and doesn't really tell us anything we don't know, which should be your expectation going into the meeting, and then the eps or the earnings for those big four, five companies, and visa, mastercard, et cetera, are healthy enough, that sets the stage for what will ultimately be a late year rally. >> a 99% chance probability there's not going to be a hike in november. so that's done. what about yesterday? what was your takeaway from powell? i feel the market didn't know what to make of it. maybe that was the point. >> listen, i sort of have an issue. i follow this very closely and have been following it closely for 20, 25 years, whatever it's been. i don't think he said anything we didn't know. on balance in general the fed isn't telling us anything we don't know. they're data dependent.

but they're in a wait-and-see mode. if things progress the way they're supposed to, they're probably done. i think the baseline, they're probably done. if things get a little hotter, then they'll probably raise one or two more times. >> two data dependents. i think i was reading a suggestion of the same thing. too data dependent, not focused on what they've already done not in the data they're allegedly so dependent on raising the risk of going too far and causing an issue that didn't need to happen in the first place. >> the risk has always been -- and this is true cycle after cycle, the fed overtightens. the analogy i used 12 to 18 months ago, ten guys and girls in a room are not going to get it right. i think what i would push back on mohammed's point and a lot of other people's is just note we don't really know how long and

variable the legs are. >> i think that's part of the point. nor does the fed which means keep that more in mind than the data to make your decision. >> yes. but what i was going to say is the other way, meaning -- >> in other words, the strong economy. that's the data that powell's obviously so fixated on because he talked about it yesterday. there's essentially, and i'm paraphrasing, just too much demand, and that's why inflation on the services side is as sticky as it is and doesn't seem to want to go down anytime in the near future. >> yes. and let's forget the good services and look at american express who reported and when asked if there was weakness said nothing. we're seeing nothing in the way of a weak consumer and a lot of the banks have very positive things to say about loan demand and the consumer. jpmorgan's cfo said nothing in terms of weakness outside of what should be expected.

so far earnings season has gone really well, and, again, forget the macro data from a stock specific standpoint, nothing thus far is giving me pause. and to the point about there being too much demand, i would push back on there being too much demand. what i meniaan by that -- >> i mean too much demand by the fed. too much demand is keeping the economy too strong for their liking which is why they keep talking about having to raise rates, because they are fixated on the fact that data -- the data says the economy is too strong which means they think, allegedly, they need to do more. >> and they would be justified in saying that. what i was going to get to before, i think they have to go in december. the market is at 30/70 they don't. that should be at least 50/50. at the rate we're going -- if you think about the big three economic data points, retail

sales, inflation, jobs, all three were hotter than expected. while they're clearly not going to go in november, they would have pushed back to a meaningful degree by now. i think they may have to hike in december. from a market standpoint, i'm not sure i care about that. the point about lags, everyone talks about, well, just wait, just wait, just wait, the lags will show up, the lags will show up. there might be an argument the lags have already happened and we are not -- this is a much longer conversation but maybe we're not tight enough. leave it for another day. >> i don't know. maybe powell suggested that, too. let's ask cameron dawson of new edge wealth. good to see you. welcome back. i think everybody wants a real clear and simple answer to the idea of whether we can have a late year rally or not, seasonality is on our side, but we have all these other issues, elevated rates, elevated tension in the middle east, and what's going to win out. and then mega caps next week,

too. what's your sense? >> i think the mega caps are the key point here which is that's what's so very different than 2022 when fourth quarter was really weak, we saw weakness into the end of the year despite seasonality because of tax loss selling. the mega caps have been weak all last year and so people were using that as a way to recognize tax losses. that's not happening this year. and maybe it will be delayed in wanting to recognize tax gains which just means the area people will be selling into will be smaller places like the russell 2000 or utilities, staples, health care, those likely can't pull the overall index down. now we would watch the 200 day moving average closely. we bounced off it earlier today. we bounced off it a couple weeks ago. if that doesn't hold, it likely lowers the probability of a big santa claus rally. but if it does, we could see the chase in the window dressing into year end. >> what happens, dan, if the earnings next week, and

basically all of the mega caps except for apple and nvidia, once we turn the calendar into november, is that enough at this point to propel the market like it was enough to take it from the beginning of the year until the very beginning part of the fall when the calendar got dicey, history wasn't on our side? >> i don't know why it would not be. i'm thinking through the underlying demand trends at work in each one of the names. and i'll go back to visa and mastercard which i mentioned earlier, full disclosure, i own visa but have owned it for 15 years. i've heard nothing from american express, nothing out of that type of company either interreporting period or up until today that tells me the consumer will be particularly weak. the consumer is obviously an important driver of economic activity for the tech stocks, again, eps estimates have been drifting up for the last few weeks if not the last few months and so the digital ad market i think is probably going to be pretty strong.

obviously that matters for google, facebook has some other things to mention, meta, i should say, but i don't know why -- and, again, i don't follow them. i'm not the analyst. it seems to me like the setup for them is pretty good. is it enough to drive the market higher? i think so in conjunction with the fed meeting on november 1st in which we won't get a hike and no sort of promise to hike the next meeting. >> cameron, you don't think it's enough? do you disagree with dan? >> i think it could very much through the fourth quarter drag the market higher because it does help boost sentiment and i think if you look at the tech sector, one of the interesting things is on a relative basis, despite the higher rates, it's held up fairly well over the past few months. now 2024 will be a much different question because a lot of the magnificent seven names are seeing significant decelerations in their growth. a name like amazon goes from 322% earnings growth this year, no wonder the stock has been so

strong, to just 30% growth next year. that is still much better than the market, but that deceleration in growth often leads to p/e multiple compression. so it likely is a problem for '24, not necessarily the next couple of months. >> how do we look at multiples, the valuation of the market, the valuation of mega cap tech, because you can't look at it all the same. you can't necessarily suggest, well, the market is too expensive. valuations are too rich, because if you look under the surface beyond the mega cap seven, valuations are probably not too rich. you know what i'm saying? the s&p 493. >> listen, if i had told you however many months ago -- i guess let's call it mid-july, the ten-year bottom, call it early may, was going to go from approximately 3.75 over the next five months, what's the s&p going to do? your answer would not have been higher and yet here we are, and

if you go back even further when the ten year or two year was lower, you wouldn't have expected the market to do what it's done and yet here we are and mega cap tech held up although admittedly the rate sensitivity of the names is much less than it might be for a cyber arc or service now where the earnings are in out years where the models matter more. if you're google, meta, amazon, you're generating enormous cash flow today. the multiple effect that comes with lower or higher interest rates is muted. >> cameron, what would you say is the biggest risk? is it -- i mean, earnings are probably going to come in just fine. they're not going to be horrible. they're not going to be great. they may get over what is a very low bar. is it that the fed has to do more than maybe one more rate hike? is that what we're so afraid of and that's going to just take rates up to a tipping point? what is it? >> i don't think it's one more rate hike. it would potentially be the

pricing out of cuts into next year. there's about 75 basis points of cuts. it's either a lot less, meaning that we don't get cuts because the economy holds in better than expected, or a lot more meaning we get a much more rapid cutting cycle because the economy weakens more than expected. and that would bring you back to the earnings question, which is that one of the things that has underpinned the market all year is they have stayed flat, recession fears and banking issues. if we start going into an earnings revision down cycle, because people are actually afraid of growth and starting to price in a recession, that's where that $245 a share plus 12% growth for 2024 looks too aggressive. now we're not seeing evidence of the need to do that yet because the economic data is holding in. we're watching that closely because the earnings revision down cycle is what could really challenge the market in '24 if

it happens. >> let's remind people, too, if we have, the bar chart that shows you where earnings, dan, estimates are expected to be. cameron makes a good point. we're still pretty optimistic about fourth quarter and then making the turn into 2024. there you go. and then you see the big earnings growth estimates really take a jump into the end of '23, q4 and q1 of '24, q2 of '24. is that too optimistic? everything is riding on that. >> we talked about this the last time i was here. coming out of a decline in earnings. whether you're up 10% or 12% or 8% is largely irrelevant. to cameron's point if the economy is going to improve or at least continue doing what it's doing -- granted, third quarter gdp will be even stronger than i originally thought, i was targeting 3, it might be 4%, we are expected to

have a slowdown here. on the earnings side of things, 8% to 12% are relevant. as long as the economy continues to do what we are doing, if we skirt a recession and earnings are up, even if you hold the multiple and by definition the market has to go up. no, i don't think a miss here or a downgrade there is that big of a deal. what matters are profits. if profits are going up on balance, the market will go up. >> the point is, though, earnings projections have gotten pretty optimistic by virtue of the chart we showed you. >> relative to last year. >> obviously the base was low. but, nonetheless, you have to start living up to that if you think that we can have a meaningful move in the market especially relative to where rates are. that's the key. normally if rates weren't so elevated, you'd say, well, you may not have to meet the moment to those expectations in earnings, but now don't you have to meet them even more so because rates are elevated.

you have to justify the multiple based on something. >> what i will tell you is we're at 5%, we're been at elevated rates for, call it, nine months. whatever you want to define as elevated, and the s&p 500 is fine. now obviously we're in a bit of a sell-off now, and that's something with which we have to wrestle, but on balance, the market multiple is still even for the s&p 500 is called 17, 17 1/2 times forward 12 months not next year. that's pretty good for a 5%. now, again, do you have to meet that? sure. but i'm not saying you have to meet it exactly. 12 can be 10 or 10 can be 8. 12 can't be zero, sure. you can still have growth even if it doesn't match up to the estimates in the market can still be fine. >> how would you address that, how good earnings have to be because next week is the moment of truth. let's be honest, the busiest week thus far. you have mega cap stocks, the nasdaq is down 1.25% today.

it's down near 3% on the week. so you've had a slide in a lot of the stocks going into the earnings. i've got names in a week like tesla, which is down 15%. you have names today, apple, microsoft, alphabet, amazon, everything is weak. >> mm-hmm. a lot is riding on those names in order to deliver, is not give any signs of deterioration, and if up get signs that they're starting to caution a deceleration in growth, then, of course the market would run with that and start marking down estimates which for that 12% growth next year, but if we look broadly on the equal weight s&p 500, probably the most encouraging thing you've been talking about the average stock is that as of today's trading, it's only one multiple turn above where it traded at the lows in october of 2022, because it sat out on the entirety of the rally this year and has come under renewed pressure. so that could set up for a lower bar to jump over into 2024, a

not onerous valuation for the average stock which is a close watch if we see more dumping of those weaker names into that tax loss selling into year end. >> do you want to sum up, too, i noticed today -- i was even debating whether the market started to look better. is it going to make a run at green before the week is over? and then you have the headlines out of d.c. of no speaker yet again going home for the week. we have an unsettled situation there. we're trying to appropriate more money for israel, ukraine, we can't get anything done because of the chaos, if you want to call it that. the market took a leg lower once that news broke. how much does that matter towards sentiment in the mix of everything else? >> it's impossible to quantify, obviously. certainly the lack of a speaker at this moment in time is something to which everybody is paying attention. geo politics more generally, the fact that iran is on the periphery of what's going on and always a risk to oil there. i will just make one final point

separate from that before we get out, just about the slower growth. the next three quarters of gdp estimates are around zero. 0.2, 0.5, something like that. so a slowdown in estimates is already the consensus. while we're talking about healthy earnings expectations, economically we're already there for a slowdown. >> it will be a big one. i appreciate it, dan. cameron dawson, we'll talk to you soon. to our "question of the day," which of the mega cap earnings reports do you think is most important next week? amazon, microsoft, alphabet, meta. head to @cnbcclosingbell on x. we'll have the results later on. let's get a check on top stocks. steve kovach is here for us with that. regions financial is on pace for its worst day after missing on earnings and net interest income. the regional banking giant is

expected to fall around 5% compared to the prior quarter. those shares down 10% right now. and night swift is having its best day in 11 months after handily beating earnings and revenue estimates alongside better than expected guidance. the results have a number of analysts raising their price target with jpmorgan upgrading from neutral to underweight. scott, back over to you. >> steve kovach, we'll see you in a bit. we're getting started on "closing bell." scott black is backbreaking down his top picks. we'll find out why he thinks the fed could hike again this year. he'll make his case after the break. we're live from the new york stock exchange. you're watching "closing bell" on cnbc.

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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. welcome back to "closing bell." the s&p 500 and nasdaq on track as yields remain center stage. the ten year briefly trading above 5%. our next guest says yields should climb even higher, and he sees another rate hike this year. joining us now value investor scott black of delphi management. good to see you. welcome back. >> thank you, scott. >> i can't remember, quite frankly, you sounding as cautious, if not downright negative, as your note suggests you are. earnings estimates unrealistic, nasdaq and russell 2000 are way overpriced. do you really believe all that? >> i really do. i mean, right now based on this year's earnings, the s&p bottom

up is 219 and change. i'm at 214. next year a 12% gain. it's ridiculous for nominal gdp. not that much increase in operating margins. if you look at my numbers, the s&p is selling about 18 1/2 times forward earnings. historically it's been about a 16 to 17 p/e. i think stocks are hemorrhaging and are overpriced. if you look at the nasdaq that's a 26 multiple next year and the russell 2000 is at 23 times next year. they're not cheap at all. and the other thing is you asked me why i think rates will back up. it's not just because of the fed, although i think with core inflation at 4.1%, we're not anywhere close to the 2% level chairman powell wants, but we have huge structural fiscal deficits running $1.4 trillion and $1.5 trillion. over 700 billion followers equal

to the defense budget of the united states. the other thing to take into account is the fed will net liquidate. they've gone from about $8.8 trillion to $8 trillion. so if you look at it, you're going to need higher rates. the other thing the chinese have been net sellers of treasuries over the last year as well. so the long-term supply and demand for treasuries doesn't look all that good. >> but i guess my point is for a guy who makes his living looking for cheap stocks, right, you are famed value investor, this all suggests to me you can't find anything to buy because you don't think it's cheap enough. >> we're at 89, 90% invested. we don't panic and sell. at the margin you want good margins. yes, there are cheap stocks at 11, 12 and 13 p/e, but we own a lot of them.

i can't say we should commitment incremental fund. i do think interest rates will back up. there will be a severe competition for equities in the short term. and the other thing is when you have the s&p earnings growing at 8% and 9%, it's not the true thing. if you look at numbers from the bureau of labor standards or from fact set, the real earnings, if you look apples to apples, grown under 1% this quarter. >> you know it's bad when -- you know it's bad when a value investor thinks the best thing you can do is buy a three-month treasury. that says it all. >> i did pick one stock for you that i thought is doing extremely well. snapple. they've had 13 consecutive up quarters. they don't have 20% on book, that equity is 0.05 and generate nothing but cash and the stock is selling at 12.9 times earnings, and they also have the wind to their back and the average age of the fleet is now

12.5 years is the longest. it's a well-run company. 12.9 times earnings. it's an excellently run company and i still think earnings will be up next year. i have 5% top line growth and i have somewhere between 5% to 7% bottom line growth for next year as well. i don't think we have a lot of possibility the earnings will slip and make a mistake. >> i have to say your suggestion that the russell is overvalued is interesting because it's gotten hammered. small caps have gotten crushed on these concerns that we're going to have a recession down 15% in the last three months alone, and you think it's that overpriced? >> yes, it is, if you look at the p/e ratio. you go through any statistical guide, look at all the small cap

companies. the s&p is seven spots that carry to 17.7% year to date. if you look at equal weighted s&p down 0.3% yesterday. if you look at the russell 2000, down 2.2. the russell 2500 down 0.3. it's just really been the magnificent seven. >> what's your biggest position before i let you go? >> it's a little company in omaha called berkshire hathaway we've owned for years. i don't worry. i'm sure warren doesn't worry on a short-term basis. he runs good businesses. it's not way overvalued, about 1.4 or 1.5 times value. >> well, i'm sure that lets you sleep well at night. it's good to see you as always. we'll see you soon. >> thank you for inviting me. >> that's delphi management's scott black joining us. a news alert on okta.

>> shares of okta down 11.5% after disclosing a hack of its customer support system saying the hackers were able to view files uploaded by customers but also noting this is different than the customer facing service of okta that companies tend to use and that has not been hacked but, again, they've notified all customers affected by this. very few details about specifics of the files uploaded and what kind of data was able to be viewed by the hackers. you can see now falling even further down better than almost 13% now, scott. >> appreciate you giving us that update to us. up next, stocks still under pressure as we come to the close of this week. wells fargo's chris harvey finding opportunity in a few key sectors. he explained where he sees strength right now. will do it after the break.

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welcome back. the major average is under pressure today. s&p on pace now to close out its worst week in a month. all this even as the ten year retreats from its highest level since '07. joining me to discuss is chris harvey of wells fargo. good to see you. a lot of people are negative, as you just heard. you're sticking, though, to your guns. you're sticking to your target, 4200 for the remainder of the year. >> that's right. what we think is you're 7%, 8% off the high. the ten year is at 5% and the stocks haven't created at this time in time. fundamentals are fine and november 1st is a key date. november 1st is when fomc happens. more importantly, it's when we get the treasury refunded and this backup in rates all started because treasury really missed management -- >> you mean the issuance which has created a lot of consternation over the supply coming on the market and that's causing the backup in rates and

who is going to buy it. >> and that's right. you're going to need more paper but can you manage expectations better. i think the other thing to talk about, the curve was inverted by over 100 basis points. >> now it's steepening. now it's 15, 16 basis points. you're not penalized that much so we could see rates begin to firm here. >> what gets us to 4420? that's the year end target. how are we going to get there? roughly 200 points higher than where we are now. >> it's really not much. we were there, almost there the other day, and so really what you need is a little bit of stability, earnings to continue to do what they're doing, and you need the fed to play ball. you get that and you're probably up to -- you could be up to 4600. >> what does the fed playing ball mean? >> okay, a couple things. you have rates going higher, what you want to see is some sort of feedback mechanism, see

people acknowledge rates are higher, it's tighter, and maybe that will slow things down. and they have done that. the other thing you want to see, you want to see the treasury realize, hey, maybe we didn't do this thing properly back in the summertime and we'll hit expectations now. right now we need to calm the market down, and so if you get that, i think things could be very gappy in the rates market because a lot of people are saying to us, the way to lower rates is through higher rates. hey, i'm not going to buy 4.75 but buy 4.25. >> how about next week, mega cap? how much does that hold the key for your outlook here? >> it's very important. obviously if the numbers are good, the stocks rally, that pushes the market higher. we saw some good numbers from tesla -- not good numbers from tesla but we saw good numbers from netflix. and if we get the mega caps performing, that will drive the stock market higher. i think they will. the underlying fundamentals are still strong. i don't think we have a whole lot to worry about.

>> still, you would suggest if you do get a pop towards your target you would sell it, though, you would sell at the strength rather than continue to buy it. why? >> if we look into the first quarter -- the first half of next year, it's not looking so great. we're having a hard time saying, hey, there's a real great recovery coming. there isn't. the second thing there is a lag effect to monetary policy. we haven't seen it yet but will see. the other thing is a lot of your risk aversion assets are oversold, staples, utilities, low volatility. the last time we saw that late '18, late '21, that was a big reversal. >> what are you suggesting that earnings estimates into next year are too optimistic? >> i think so. i think so. you usually don't see great recoveries without a big recession. we haven't had a recession -- we hadn't had a big downturn so where is this great recovery coming from? i don't know. >> we had so much into -- that's why you normally don't see anything like we've seen.

you normally don't have a tightening cycle in as quick a time as this time. you normally don't have a tightening cycle when you had the amount of stimulus you had in the system that we had this time. so let's talk about it. >> where would a great recovery come from? the consumer? the consumer is okay. they're getting stretched. is it going to come from corporations? funding costs are high at this point in time. the only way you get a good recovery things get sloppy in the first half. the fed does have to cut. and interest rates come down in the second half. but that's a really back end loaded recovery and things have to get worse. >> the consumer could slow down. that could take the edge off demand which jay powell needs it to happen. that could cause inflation to come down. it doesn't have to necessarily be you break it and then you have to cut rates to fix it. >> no. what can of growth rate are you going to get from that level? 20% or high single digit growth rate? >> we'll talk to you soon.

enjoy the weekend. a rainy one, unfortunately. chris harvey, joining us. we're tracking the biggest movers as we head into the close. steve kovach back. we have one tech name taking a dip after adjusting its outlook and pharma name seeing a boost after some positive analyst commentary. we'll have all of that when "closing bell overtime" comes back. i'm so glad we did this. i'm so glad we did this. i'm so glad we did this. life is for living. let's partner for all of it. i'm so glad we did this. edward jones ♪ ♪ every day, businessess. everywhere are asking:

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a little more than 15 to go before the closing bell friday. back to steve kovach and the stocks he's watching. >> let's start with hp enterprise deep in the red after lowering expectations for adjusted profit growth this year and the software giant issued 2024 earning guidance that came up well short of analyst expectations. those shares off by more than 6% now. meanwhile, shares of merck outperforming as ubs upgrades to buy from neutral. the price target goes from 122. they aren't fully appreciating the strong pipeline nor key treatments. back over to you. >> steve kovach, thank you very much. last chance to weigh in on our "question of the day." which mega cap earnings report next week do you think is most important? amazon, microsoft, alphabet or meta? you can head to @cnbcclosingbell

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the results, well, those are the results of today's trading thus far. we're at session lows, so we're sucking some wind here as we close it out or get closer to it. so in the meantime, let's get the results of our "question of the day." mega caps earnings report is the most important next week. amazon. that's interesting. almost 38% followed by microsoft and alphabet and meta. a very big week. up next, solaredge is sinking. we'll find out what's behind that move lower and how it's impacting the rest of the solar

space just ahead. that and mucmo wh rehen we take you inside the "market zone."

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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 welcome back to the "closing bell" "market zone." mike santoli and amex's latest quarter. pippa stevens on what's behind the sell-off in solar stock today, that's an ugly space. mike, not a good week for stocks, and we're ending with a wimper as well. >> never was really able to gather a whole lot of upside

momentum, nothing broad except for the first couple days of the week, and we're now testing the floor of this one-month reign. the low close for october on the 3rd. the concern seems to be that yields, even though they're backing off today maybe have helped to do more damage. powell saying maybe the economy is still strong because we haven't been restrictive enough for long enough. that sets out in front of us a murky path. all of that together along with i think more of the vague concerns about stocks not trading well off decent earnings. that can change next week or the world doesn't seem like a particularly trustworthy place. all those things fitting together, i think, getting us in the risk-off mode. if there's a silver lining in the mega cap favorites, really

leading the down side today, the nvidias of the world, it shows you at least a sense there's no easy place to hide. very defensive tone if you look at what is working today which is traditional pharma and the like. >> do you think there's more riding on next week, just given where the fed seems to be and where rates have moved? you really need something to spur us away from that conversation. >> or you need something to remind everybody that beneath it all things seem to be okay. if we can say, and we cannot say based on one day's action, the s&p 500 is at potential support, we're back at the june 2nd levels where we blasted off from, and you have earnings coming through in a big rush that maybe is going to say the next couple of quarters looks like they're plausible in terms of growth rates, yeah, sure, i

can see that happening. the market is not super oversold yet, though. you've really pulled the slingshot back. >> what do you make of american express? pretty good earnings. yet that stock is one of the biggest weights today down more than 5%. what are we supposed to take away? >> financials very suspect. it's trading down with a lot of regional banks. customer volumes, we're a little bit light. not bad. everything seems okay in the here and now for amex, it really does capture this moment we're at where investors are not willing to give the benefit of the doubt to the economy or to companies they're going to be able to keep it up, that will keep working. there was an uptick in charge-off at american express, but, again, like every one of these you look at, it's a big

jump year over year but not up to where we were before the pandemic. you look at 2019 levels, also, this stock, if the earnings are anywhere near where they'r forecast, the stock is cheap relative to history. you don't often get a chance when the economy is not in complete freefall to buy american express at these levels unless you make the case something sort of secular has changed about the business. i know some have made the case. >> you make the point it's as good as it's going to get for a while for american express -- >> or feels like you're going to have to take more pain and go through a little more of the uncertain fundamental times. >> speaking of pain, pippa stevens, solar stocks brutal. what's going on? >> solar edge is down 28% today on pace for its worst day on record. and so there have been a lot of head winds for the solar industry well known by the street. but what happened was the magnitude of solar edge's warning is what took investors by surprise. they said they view the q3

revenues will be 20% lower than prior expectations with q4 taking a hit. they also significantly cut their forecast for margins. they now see that gross margin at 21%, down from a prior forecast of 31%. this all comes down to weakness in europe, essentially distributors are working through an excess of inventory meaning they're not buying from the product manufacturers like solar edge. the street really did not like what it heard from the company. we got five downgrades including from bank of america and goldman sachs. goldman taking its target from 254 down to 131 saying there is no way to defend the stock at this point. now one interesting thing to note is that end phase is also being thrown out alongside solar edge today, but there is a key difference here in that end phase has much less exposure to the european market than solar edge does. so one thing to watch, scott, end phase does report next week. we will be listening for commentary around what they say given that they don't have that same level of exposure to

europe, although the u.s. is not looking so good either. a lot to watch here. solar edge down 27%, the worst day on record. >> pippa, thank you for that. pippa stevens. mike, i'm looking at sector performance. the worst is discretionary. you have to figure tesla is a big part of that. elsewhere industrials down just about 3%, tech down 3%. i mean, you've really had broad-based weakness if you want to call it that. material is down just about three. financials down just about three. utilities down two. pick your spot. >> for a long period of time, even after the market peaked in july, the s&p 500 peaked at that point, it was possible to say, and i was saying it, that cyclicals have still maintained their leadership off the october lows. the credit markets remain relatively firm and not giving you something new to worry about. and i think you've been able to punch some holes in that idea. the average stock is absolutely

taking on a lot of water. equal weighted discretionary is now 16% off its highs. it is down almost 2% for the week, and 5.5% month to date. you're losing a lot of that. part of that, home builder related stuff, anything housing related. one thing we cannot -- we don't have to debate in terms of the effect of monetary policy -- >> mortgage rates 8%. >> home builders just not quite able to buffer that with buying down the rates as easily as they were before. yeah, you've seen supply come up. you've clogged up the entire housing market. it's no longer a driver of economic growth. it really hasn't been much all year. so that's one thing you can say about discretionary and then the rest of it is, once again, yeah, sure, government retail sales report looks pretty healthy. almost 4% annual growth. we don't think it can last. that's what the stock valuations are telling us. >> the other thing, d.c.

ridiculousness, that goes on. and then as someone made the point on "halftime" today, it's hard to be long over the weekend with the middle east still unfolding and, you know, iran hanging out there and it's brought concern from investors. a hard hump to get over. >> i think ultimately vague geopolitical worry is viable but not until you really get the market feeling like it's at this extreme fear point. we haven't gotten there yet. i totally get it. it's why the vix is 21 going into the weekend. on the other hand, we had 15 straight mondays when the s&p was up. it's a bizarre streak, maybe nobody wants to bet it's going to make it to 16, but it is interesting you're having the market down 1.2% and you have a little bit of a give-up type action at 42 and change. so not a lot of fresh buying interest even though bonds backing up. we'll see if that's a one-day quirk or if that's new lasting

dynamic. >> 4225, we're right around the 200 day for the s&p. keep an eye on that as we make the turn into a new week. enjoy the weekend. it's going to be a red friday. the dow will go out right around a 300-point loss. i'll see you on the other side of the weekend. morgan and jon pick it up in "ot." well, a down week and a huge week of earnings ahead is the scorecard on wall street. welcome to "closing bell overtime." i'm jon fortt with morgan. >> why mark zandi thinks it may not last. plus, the latest messaging from the fed including new comments today from atlanta's raphael bostic on cnbc. united auto workers president shawn fain is giving an update on the union strike against detroit's big three automakers this hour. we will bring you headne