i also know how much work the entire spacex team has put in to ensuring there's absolutely nothing we haven't assessed and looked at. >> of course they are testing these new space suits. sarah gills was just speaking. she's one of two spacex engineers in the crew. this is the first time ever spacex employees will be on. overtime, 4:00 p.m. eastern, the whole interview will be there. >> thanks, morgan. thanks for watching "power lunch," everybody. welcome to "closing bell." i'm scott walker from the new york stock exchange. and this make or break hour begins with the road ahead for stocks. with yet another key week looming, more important earnings along with fed chair powell jackson driving the markets. and they're not far from new highs. on that note, let's look at the scorecard with 60 minutes to go in regulation today. the major average is having a strong finish to a solid. it is the dow's best week since

last december, and that's after a slew of economic reads came in way better than expected this week. yields, they're stable too. that's helping the equity picture along. 389 on the 10-year. the likelihood that stocks can reach new records and continue to climb even as many major hurdles are still ahead. let's ask our experts. kevin gore, senior investment strategist for charles schwab, kourtney garcia, wealth manager with gain capital management. it's nice to have both of you back. what do you make of this market? i think its hallmark will go down to be, the bull market anyway, one of resiliency. i mean, at every turn, you throw almost anything at this market and it shrugs it off and continues to do what it's doing. >> i think the downturn that we had about two weeks ago, there was fears that was because we were going into recession. but the fact that you're seeing the markets shrug that off has become because you're getting a lot of good data. we've got cpi, ppi coming out.

you've got retail sales. the big picture is the consumer is holding, inflation is coming down. a lot of the recession fears are likely overblown. and the downturn was more likely due to the yen carry trade than going into recession, which would be the worst thing for the markets. that is ultimately going to put the markets on a positive backdrop. >> do you see it the same way? >> i'm not so sure that when you look at the selloff, the sector action wasn't telling me a lot that the market wasn't expecting or fearing a recession. when you look at the sectors that were underperforming, the broad market, the s&p in that period, the entire drawdown from mid july to early august, it was tech and consumer discretionary. it preceded the peak in the market the waterfall move down. you did see some weakness in cyclicals, but there wasn't -- that you were going into this recession. i understand the fears around why the jobs report came in worse than expected and the uptick in the unemployment rate,

why that could send fears into the market. but i'm not so sure that the message has been one of recession. >> last monday specifically there was a panic attack that we not only were having a positioning unwind but that we were, in fact, maybe closer to a recession than we thought because the employment report, the prior friday, sort of, set everybody off. and then we opened monday and you had that confluence of events, not to mention buffet selling half of his apple stake. and we're like, okay, what's going on here? >> i think even with that, though, it was amazing to me to look at some of the reactions to the jobs report itself as if all of these problems just started to crop up out of nowhere. we've known that the unemployment rate has been drifting higher. payroll growth haez been softening. there have been -- cyclical hiring has been slowing. the list goes on. that's been the trend over time. i don't think there was one particular thing in the jobs report, excluding the uptick in the unemployment rate. but even with that, i think that there's not a lot of supplemental data that are yet confirming that. you can look at the trend in initial jobless claims.

that's starting to roll back over, not confirming the uptick in the unemployment rate. -- that's rising. it doesn't happen when you go into recession. there's enough still in this unique cycle which i think we have to keep in mind from a labor supply perspective that is skewing a little bit different this time. i don't want to completely ignore the unemployment risk, but i think it's an important nuanced look at the labor market for this particular cycle. >> when i asked the question at the top of the show, are we going toward new highs again and are we going to be able to eclipse -- we're 2 to 2.5% away from that. >> yeah. especially when you look at what's been leading off this low, it's tech and discretionary, which is not surprising. but if you get more of those cluster of days where advance is relative to decliners, really strong kind of in the 6 to 7 relative decliners range, i think, yeah, it's plausible to see that. but the key, in my opinion, when you get to that next all-time high, whether it's a week from now, a month from now, is what the big picture looks like under

the surface. so far this year, i think one of the positive -- one of the strongest aspects of this market has been the fact that when you look at the percentage of companies in the s&p above the 200 day moving average, you hang in the 60 to 80% range. 60 is the solid floor, 80, 85% is the ceiling. i think as long as you keep that, you keep everything intact. especially because you have the added benefit of inflation not only rolling over again but inflation surprises being much more tame and much more muted. that tends to be a positive backdrop. >> so, you would agree then with jpmorgan and kevin, the bullish narrative remains intact. that was the headline of one of their notes today. and they do talk about rate cuts being a welcome sign. some people suggest sell the first rate cut. and i think they're implying, well, they're cutting because the economy is softening, whereas others would counter with, no, they're cutting because they're too restrictive and things are working in their favor so they can and should. >> we heard the latter there. i think you're seeing the idea the rates are coming down is

more so because inflation is coming down as opposed to economy being in a bad position. they need to prop it up. that would change the picture as that happens. i think what people started to question about two weeks ago, but we haven't seen that be the case. i think, too, if the fed does head interest rates, there is record levels of cash on hand right now. i think we're at 6.2 trillion. if rates come down you're not going to be giving out 5% interest rates any longer. you're going to start to see some of that money come in. i know we've talked about that, when that's going to happen. that will be the next big catalyst to see the markets go to new highs. >> if you believe what you guys say, and it sounds like you both are reasonably positive for the market here, where do you want to be positioned? tony pasquarella says, stay with the highest quality assets. the implication is you're not going to go here into the russell or anything that is persensitive to either moves in interest rates or the economy. stay essentially with what's worked.

just sit tight, he says. >> i think what's funny about the russell, even if you just use earnings and profitability as your single criteria and you divide the index into the ones that are profitable and not profitable, over the past year the profitable group is up over about 15%. the non-profitable group is down by about 5 or 6%. you're seeing the split and bifurcation. in an index like the russell, i would argue there's more active pic pickers in the large cap space. you really need cyclicals to do well, given, you know, financials, energy, industrials, consumer discretionary. that's about 60% of the russell 2000. so, if those cohorts and those pockets of the market are not doing well and outperforming, it's going to be really hard for that index to exhibit leadership and take the baton away from the large cap indexes. >> i did mention the other hurdles that are in front of us as we're learning along here. earnings, certainly chair powell and jackson hole starting next

week, steve leishman joins the conversation now. steve, if the chair, sort of, set the table at the meeting that ended a few weeks ago, does he go ahead and serve up the appetizer to investors in jackson hole that they're ready to go? >> i think he'll strongly hint that the appetizer is coming. but he can't serve it, scott, until the meeting. and there's a bit of work that we have to do between now and the meeting. i actually have a little list here that you may want to take a look at. the next thing happening here is going to be the chair's speech. but that's followed by a lot of data. you've got to pce a week after that. you have the jobs report after that. then a few days or a week or so before the meeting, the fed gives up cpi report. so, yeah, i think the market and the fed, from what i'm hearing, are pretty well-aligned here. you're going to get a quarter in september, possibly a half, if some of that data goes sour or goes south. and then we'll have a debate about what the next steps are.

i do think, scott, the conversation in jackson hole probably centers around this idea of, okay, let's take this as a given. what's the trajectory from here? is this notion that's baked into the market of 100 basis points between now and the end of the year, does that make sense? and is the 200 that's baked into the futures market between now and a year from now, does that make sense? that's where i hope to gain some understanding of what the fed is thinking. >> i remember, i think, correctly -- and you, of course, correct me if i'm wrong -- that at the start of the hiking cycle, he gave a speech in jackson hole that i think was about 8 minutes long. i remember calling it, like, eight minutes of pain because he said a lot by saying a little. and obviously the markets didn't like it. do you think he has a longer case to make to the markets this time around as to why even with an economy that looks okay that it's prudent to cut and get back to what he thinks is some degree of normal?

>> you know, i think you really hit the nail right there. yes, you're right. it was an eight-minute speech. apparently he ripped up a much longer speech and decided the way to make his point, scott, was to be short and sharp, which he was. i do think now it's interesting that he makes a case for cutting rates that goes beyond the -- of the data. it is going to go this way a little bit, that way a little bit, a little less volatility in the inflation numbers, but look, you could get a .31 of these days, or it could be a .1. he could make a case if that's what he's going to do, he's going to cut rates and point the market toward taking some off the top here. he'll make the case that, look, we are tight by any measure or standard here, and we do not need to be more restrictive than we need to be. i'll point out, scott, i've got a good friend in the music

business. he has a music rental company. and he said to me, steve, make sure you get them to cut in jackson hole, or we're all going to default on our credit lines. >> in other words he's going to maybe get away from kevin being so data dependent and focus on the one piece of data that steve mentions that many are focused on. and that's just the fact that they're too restrictive. >> oh, yeah. i think for sure. no matter what inflation metric you use to measure real rates, you're basically at your highest since about 2007, maybe a little bit higher depending on the metric you use. on the data dependency part, one of the difficulties with the cycle, the difficulties with the fed, is they're still going to be data dependent. it's just which data they choose to focus on and emphasize more. that's shifting clearly from inflation to the labor market. so, they could be very data dependent on labor. the only trouble is sometimes when you get the upward trends in the unemployment rate or you start to see the softening in payroll growth, some of the trends are harder to put back in

the bag. especially in the unemployment rate. it either goes up or goes down with the exception of some supply issues, that may be the difference in this cycle. >> that's precisely -- precisely, steve -- why it's potentially dangerous to be too data dependent from here forward because by the time they react to what is a weak, especially weak, jobs report, it's arguably too late. >> yeah. let me make more confusing what kevin just said because the economists talk about the non-linearity. and i applaud kevin for avoiding that term. but it's a useful one. it basically says things can take off and run away from the line that you were on relatively quickly. there's that concern. we just had -- we talked about, hey, i should be watching unemployment a little bit more than i have been watching it. that can get away from you. and other things as well. we did have a -- you know, you looked at the data this week, scott. it was up and down. and it's kind of like what i think you might expect if you close your eyes and said, what's a soft landing look like?

well, we had a weak housing number today. that's what you would expect. and by the way, goolsbee talked about the idea of there being some policy coming into the economy. you have the strong retail sales number. you have the lousy jobs and unemployment number. but you also had moderating inflation. there's no way and it's very difficult, i think here, scott. you've been doing this for a very long time, and a lot of times you're asking people, what do you think or how do you invest into a market or economy that's going up or how to invest in an economy that's going down? but what do you do when we're going sideways to a little bit up? i think the investment case is much harder. you're going to have changes in the yield curve from here. you're going to have changes in the utility and the coupon that you clip there. there's a lot of stuff in motion, a lot of things to think about. where do you come in on the curve? do you lock in on the tens or is the tens something that goes up

while the two goes down? a lot of stuff in motion to think about. >> certainly. you're a wealth adviser. your clients are asking you, i'm sure, questions about what all of this means. are rate cuts going to be good like i've been told since 2009? they're supposed to be a pretty good thing for stocks. how do you answer the question? >> yeah, you know, different asset classes are going to react differently to this. i think what you want to see is rates will be good for a lot of areas in the markets. stock markets in general, yes, it tends to be a positive. you're also seeing things like housing, which steve brought up, which i thought was interesting. you're seeing housing numbers coming in much less than expected. there's a lot of demand on the sidelines right now. there's not enough housing to go around. you're going to see that demand go right back up the second rates go down. there's a lot of things that are waiting for rates to come down. we've been waiting for months and moss. once it happens, there's a lot to take off. you want to get ahead of the trend before they raise rates, not after. >> the other thing, steve, i

think it was you who made the point, and i think you made this point on social media. but maybe you've expanded on it on one of our programs. i'm also wondering whether chair powell starts to make the case that they have full agreement here on the fed of unanimity, that they agree it's time to do this, that there's no fracture, which only could potentially raise issues of the politicization of the fed if they go in september so close to an election and arguably are going to go two more times after that. >> i think that's right, scott. and i want to stipulate two things before i make this point. one is that i think the fed does what it needs to do regardless of the election. and the second thing is that i think the fed is not really political in this regard. but i do think -- and that powell always wants to have a unanimous board, okay? he's actually worked harder at

that than any other chair who i've ever covered over the course of a couple of decades. that said, i think if you're going to be cutting interest rates ahead of an election, you sure want it to have to be unanimous. you don't want your two trump appointees, for example, to be descenti dissenting or you don't want to not cut rates and have your biden appointees dissenting. you want to have a unanimous face. because every chair cares, i think in the first instance of the economy. and in the second instance, i think they care about the institution of the federal reserve and its reputation and how it looks. and i think that is something that will be on the mind of powell. it makes me think more of a 25 than a 50 for that reason. >> interesting. i want to make sure everybody knows. you're not insinuating in any way either that either cohort, appointee of biden or trump, would do anything with their voting power politically either.

let me throw it out there. you were explicit about that. >> i was able to cover the nomination process of the trump white house, and it was very much -- unlike other nomination processes for other departments, this one was very much like other administrations i have covered before until, kind of, trump went rogue and named judy shelton outside of that process inside the white house. and i know the people who were vetting these people, and shelton came from another part of the apparatus, so to speak. but they were very careful about who they pick. and, look, bowman has been -- who is one of trump's appointees -- more hawkish, but not off the reservation hawkish. she has some points to make about her hawkishness that makes sense to me. and waller has been a really interesting surprise. in fact, he's become one of the thought leaders on the federal reserve. so, he's somebody who's really interesting to watch, who i cover very carefully. and he's a trump appointee. and there's a bunch of other folks who, you know, they seem

to leave their colored robe at the entrance when they come in. >> waller, not afraid to say stuff on his own either, as we learned six, eight months ago, whatever it was at this point. steve, thanks. i appreciate. that's steve liesman. back to positioning. kourtney, what's worked this week? semis are best up 10%, and nvidia is up a lot in its own right, as i look at it this week. almost 19%. technology is up 7.5 this week. discretionary up 5.5. let's focus on discretionary. i think people know the story at this point on tech. was the discretionary trade saved this week? >> i think walmart really came out and helped what is happening with discretionary spending right now. and i think you're seeing the consumer is still holding in there. you're seeing higher income consumers are going down into walmart. the question is, is than outlier or not? we have target reporting werks have lowe's reporting. you're going to get a good picture of the consumer next

week. i think that's something we want to watch. i think what walmart said and the retail sales number, i think that is leading to a positive trade there and that's what you're seeing reflecting in the markets. >> how would you address that? we've had a lot of people say you really don't want to be too exposed to the consumer. did that change? >> we do have an underperform in our sector rating on consumer discretionary itself. a lot of it is related to the evaluation excess you get when you have two members in the index that make up almost 40% of the sector, amazon and tesla, of course. but on an equal-weighted basis, i could see room for maybe an ability to look for companies and screen for companies that as you mentioned earlier, you know, that screen good on quality. so, if it's a profitable name, if it's a profitable industry, high interest coverage ratio, i think that works to the point kourtney was making, though. the entire shift that's going on in the consumption base and what's going on with the consumer. the bullish case is there's just shifts going on within the

overall consumption universe. there's not an outright the bottom falls out all at once, which is an important story that has been intact as the labor market has been intact. it's one of the ways you can gauge in realtime day by day, earnings report by earnings report, that the labor market is still relatively healthy and that consumption is holding up. but it's slowing over time. >> i felt that was the big deal that monday prior. it felt like, uh-oh, is everything going to fall out for the bottom at once? and this week maybe it saved the day in some respects. i've got to run. it's great to see you, kevin. thanks for being here, court. we'll see you soon. don't miss, by the way, steve liesman's coverage of jackson hole. he's going to be live at the economic symposium next week. that's coming a week from today. you'll get the coverage starting on thursday. for seema modi looking at the close. >> we've got our eye on german life sciences company, surging after announcing it secured a

legal victory this week. the court sided with the company in its claims that exposure to round up led to cancer. shares are up around 10% at this hour. and take a look at rivian, moving in the opposite direction. a spokesperson for the ev maker said the company has temporarily suspended production of its commercial delivery vans used by amazon due to a shortage of parts. we're looking at rivian shares down about 4%. scott, back to you. >> seema, thank you. seema modi. we're just getting started on this friday. up next, iphone optimism. apple shares are up double digits from last week's lows. erik woodring is going to break down his latest call just after the break. we're live at the new york stock exchange, and you're watching "closing bell" on cnbc.

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we have some breaking news on the streaming base. steve kovach has those details for us. what are we learning here? >> take a look at shares of the fubo, the sports streaming service. they're up about 17, 18% now. this is after a judge just put forward an injunction blocking venue, another sports streaming service, from launching. that's of course the joint venture between warner brothers discovery, disney, and fox, where they're going to have this combined package of live sports for, i believe it's 43 bucks a month. and this is putting a temporary injunction on that service from launching. it was set to launch this fall based on an antitrust lawsuit filed by fubo tv. for now the judge agrees with fubo and it's going to put on hold the launch so they can have another hearing about this, i think, next week. but you can see shares of fox

and disney and warner not moving too much on this. but fubo is up about 19% now. scott? >> we'll follow it. steve kovach, thank you very much. apple, meantime building on recent momentum amid the broader market buildup. now up 14% off the lows of last week. and a bullish call, erik woodring calls for apple's strongest q3 for iphone builds on record. he joins us now, as you can see. welcome back. it's good to see you. why this newfound optimism here? >> sure. what we've picked up over the last few days is we learned july was a bit better than expected when it comes to iphone demand. we do think that is concentrated primarily in the iphone 15, so not necessarily a full read through to the next cycle. but this is typically a period of time where you get a demand pause ahead of the next iphone cycle. what we're actually seeing is relative strength in the iphone

15. again, around 54 million units in the september quarter. that is a record by about 4 million units compared to any other september quarter prior. just to put that in context, that would imply roughly 55 million iphone shipments in the september quarter. we're currently forecasting about 52.5 million. consensus is about 50 million. so, it's a relatively good data point that we're picking up on late cycle strength here. >> presumably all because of these new a.i.-related innovations. did you put anything into those reports? and i'm curious your take on it to begin with, that some of these features were going to be delayed? what do we know about that, if anything? >> sure. i don't want to overextrapolate lake cycle iphone 15 strength with directly to apple intelligence. it's too hard to make that perfect correlation. but what we have talked about -- and this has been well publicized -- is we do believe the iphone launch event will be sometime around september 10th.

we do believe that ios 18 will come out shortly thereafter, but that apple intelligence will somewhat be piecemeal, slowly rolled out through the ensuing weeks and months. apple told us during the earnings two weeks ago that the chatgpt integration will come by calendar year end. by the way we think about that at least today is maybe get a little bit of different seasonality in the cycle, meaning perhaps consumers wait to upgrade until they see that those software features are in the market. again, it's too early to make that call. but we are about 2 million units below consensus iphone shipments in the december quarter but above in the march and june quarter of 2025. we have that cycle pushed out a little bit simply because we think the apple intelligence rollout will be a bit later than we previously thought. >> were you surprised when you heard that berkshire cut the stake in half? >> you know, i wasn't. warren buffett is obviously a legendary investor.

he's up 10x on his apple position. he bought it around 26, $27 initially, i believe. so, the stock is up considerably. he's talked about the potential for higher capital gains taxes. it feels like it's a good time to maybe take some chips off the board. it is still berkshire's number one position by far. and if you go back to his roots, he's a value investor. apple is a 30 times p/e company today. that's not exactly a value stock. so, he's been public about saying that there's support -- or he has support for apple. he thinks the business model is strong. to me, this is him taking some chips off the table with a 10 banger effect. >> are you comfortable with 30 times? >> i am. i am. so, the way that we think about it is twofold. one, we are predicting a multi-year upgrade cycle. historically, that is what dr drives multiple expansion. so, that's the first point. second to that is if you look back over time, there's a very

clear, positive correlation between services gross profit dollar mix and apple's valuation. we continue to see services outgrowing the product business, which ultimately means services is becoming a greater proportion of apple's gross profit dollar mix. that would support, kind of, a long-term tail wind to apple's valuation. historically back in 2021, the stock peaked 32 to 34 times earnings. so, 30 times is where my price target stands. i feel comfortable with that. >> two more quick things. china, you feeling better about it today? >> china is still a very tough market, to be clear. economically, china is challenging. it is still one of the most competitive markets. scott, we were talking about this a handful of months ago. there was a lot of caution in the market around huawei's return. and i think some of those fears were overblown. there was a point where i was forecasting iphone units in china down 24% year over year

this year. i have them down roughly 8 to 1% this year. and i believe ultimately in 2025, with the iphone 16, china is night headwind. but it is not necessarily a tailwind either. it is a challenging market that apple has to work through. don't forget, the chinese mart phone market is 40% smaller today than it was five years ago. there's still some challenges there. we just don't think they're as significant has we thought perhaps a few months ago. >> the antitrust conversation around google this week has people once again thinking about large cap tech. and obviously apple's been in the cross hairs to some degree somewhat recently. >> sliabsolutely. >> how should we think about that now given the alphabet ruling if at all. >> sure. it's hard to decipher legal rulings this early ahead of time. there's a lot of different avenues this case can go. remember, it is the doj versus google. but obviously apple has a

relatively asymmetric exposure to this case. in the case nothing happened, the status quo remains, we know obviously the doj has now regarded google as a monopolist and something that they cite continuously in their 286-page ruling is the exclusivity relationship that google has with apple. we do believe that apple still has a lot of assets in this relationship. so, almost 30% of all search in the u.s. goes through the safari toolbar. that is a very, very valuable piece of real estate. if apple cannot maintain exclusivity with google, what we believe that they will do is introduce a choice screen, which they've done in the eu already, allow users to choose which gse, which search platform, they want to use, but obviously collect economics from each of those search players if they want to be a part of that search screen. and then when you ultimately search through, for example,

google in this instance, get a traffic acquisition cost. so, in other words, what i'm saying is, i believe that maybe apple can offset the loss of exclusivity with capitalizing on economics through different means. >> all right. good stuff, erik. i'll see you soon. >> thank you so much, scott. >> morgan stanley, as you see, joining us on "closing bell." up next, s&p value stocks joining in on the market comeback. now scott black is back with us. he's cracking open his playbook. he'll give us his top picks, why he sees signs of market euphoria. he'll tell us why when we come back. out you. honestly, i don't do a whole lot here. i'm really just here for the at&t internet, it's super-fast so, any pre-launch concerns? what if nobody buys them? that's mean or, what if everybody buys them? oh, i hadn't thought of that that's probably not gonna happen can we handle that kind of traffic? the network can handle it! i downloaded eight hours of true crime stories

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we're back. stocks looking to end this week's big comeback on another positive note. the s&p 500 just 2% from record highs set in mid july. and value stocks even closer to that milestone, just 1% from an all-time high set two weeks ago. scott black joins us now to share where he's investing. he's delphi's manager and investor. good to see you. good to have you back. >> thank you for having me back. >> we mentioned in the tease to this segment that you think the market is exhibiting some euphoria. in what sense? >> if you look at the p/e ratios -- let's take the nasdaq, for example, selling at 25 times this year's earnings. the russell 2000 is 28 times and based on my calculation 235 of

s&p 500 earnings, the market is about a 23.5 multiple. if you look at the concentration, the nasdaq, the top ten stocks are -- with the exception of meta and alphabet, every one of those other eight out of the ten are somewhere between 33 and 90 times their share's earnings. i'm not saying they're not good companies. they're excellent companies. but these are full multiples going in. and what's happened is i think people are concerned that, you know, we're going to avoid a recession, the fed is suddenly going to drop -- you know, cut the rate, which i suspect they will, 25 basis points, although they haven't reached the 2% inflation target. so, that's mixed in, the imminent cut. i think they liked what they saw when the consumer was up 1% this year month over month. and as i say, the headline cpi number was under 3%, the actual x energy and food was 3.2. so, i think it's just too much expectation already baked in. and the s&p estimates are much

too high. when i did the balanced round table in july, they start at 2.41. they're already down to 2.38. that would imply the back half of the year, the s&p operating will be up over 18%. hard to believe because in the last quarter they were up 7.1. if you put it all together, it seems to me that markets are expensive. >> so, it says to me you are such a famed value investor who doesn't find much value in the market. so, what does that mean? are you waiting for a significant pullback do you think is coming before you would deploy any capital to the stocks you have your eye on? >> no. we always stay fully invested. we're at 90% and 93% investment at all times. at this juncture, we're about 92%. but at the margin, it's getting increasingly difficult to find companies that have stronger equity, strong free cash selling at low multiples. we like companies that aren't in a turn around situation where

you have two or three quarters of down earnings. so, the typical p/e at delphi now is about 12 times earnings, which is half the market. >> what's your best name right now? >> well, i sent you one. it's called ss&c technologies in windsor, connecticut. it's a fintech company. most people don't know it. but it's about a 17 billion market cap. the stock is around $72 a share, and they're going to earn about 5.75 that share. the company generates close to a billion a year in free cash. they basically authorized another billion dollar buyback. and they're strong. when private equity and hedge funds, they're the strongest asset facilitator in terms of back office, algorithms, market to market. they're also the largest transfer, the mutual fund industry. the company's not a -- on the top line. it gross 5 or 6%, but they've increased the operating margins. they've picked up about 170

basis points in operating margin this year. so, you get operating leverage plus buyback. instead of having 5% top line growth, that translates into about 11% bottom line. i think it's awfully cheap. >> okay. do you still like some of the other picks that you named for the round table? >> sure. >> like everett and diamond back and stuff like that? >> absolutely. every one of the stocks, four in the first session and two the summer session, all six, we own all of them. and i want to point out, although global payments is down, they've come in with record earnings quarter after quarter. you know, it's the old ben graham and the short-term it's a -- machine, in the long-term it's a -- machine. it's ridiculous payments are growing roughly double digits on the bottom line. each one of those companies, if you look, had up not quarter, year over year, both in the first and the second quarter of the year. and they all sell at relatively low p/es, anywhere between 8 and

12 times next year's earnings. >> scott, we'll see you soon. i appreciate the time as well. enjoy the weekend. we'll see you soon. coming up next, we track the biggest movers, as we head into the close. seema modi is standing by once again with that. >> less than 20 minutes left in trade, and there is one beaten down chinese tech stock that is surging today. we're going to tell you why after this very short break. ♪ in any business, you ride the line between numbers and people. what's right for the business

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we're 15 to go before the closing bell. back to seema modi for the stocks she's watching. tell us what you see. >> scott, h&r block is higher today after reporting fourth quarter results that issued a 2025 forecast that points to another year of revenue growth. tax services provider also raised its defensive send. looking at shares up over 11%. and jd.com doubling its second quarter profit. earning soared 74% year over year. price cuts and beijing's recent push to get citizens to trade in old home appliances for new ones seems to be paying off. >> seema modi, thanks. still ahead, pharma giant

still ahead after the trial setback. we'll break that down after this.

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sleep number does that. actively cools and warms on each side. during our biggest sale of the year, save 50% on the sleep number limited edition smart bed and free delivery when you add any base. all right. we're now in the closing bell market zone. here now mike santoli here to break down the crucial moments of the trading day. plus seema modi and angelica peebles on what's putting pressure on pfizer today. s&p and up about 4%, nasdaq better than 5. >> the market got back into gear. obviously had that erratic action, that square we had to absorb at the very beginning of the month. and this week not only did you have those gains piled up on the initial recovery we got later last week, but the mechanisms of the market started to click back in and we get these rotations

and gentle movements. it's probably a net positive, of course. the question is whether we've, kind of, become clear of some of those macro challenges or not. and i think the market is looking ahead to a couple of weeks where outside of jackson hole, there's not a whole lot that could knock the probability of an initial soft landing off course. surprises happen, but right now i think it's positive action even if we're a couple percent from the highs. >> discretionary certainly a big story this week, and it's obviously beyond the amazons and the teslas and the nice moves they've had. this was one of those weeks where we refocus the attention on the consumer in a more positive way or at least a less bad way. >> i think it's exactly that. we really had gotten to a point of feeling as if the consumer was at the end of his or her rope. and july was going to be extremely weak. and we got some reassurance on that front. that's all to the good. i do think it, sort of, saved some of the more cyclical parts of the market from really

breaking down. it didn't get them escape velocity. but again, it's a lot of back and forth. the path to an ultimate soft landing is always going to be, you know, be set by a lot of these doubts along the way and mixed data points. so, far, as a say, we're back to 21 times earnings. can we hang on to that as earnings come through? that's a bigger picture question. >> seema, you can't tell the story of this market this week without focusing on the chips. >> you really can't, scott, a sentiment turned during a short period of time. just two weeks ago there was a report about a blackwell delay from nvidia. we saw nvidia and other chip stocks to fall. but it took a couple of days for analysts to acknowledge a three-month delay won't have an effect on demand -- despite amd showing some level of

competition, there really isn't another player that can steal market share from nvidia, as we approach earnings on the 28th. we're looking at nvidia shares just this week up over 17%. this is the best week since may of last year, and it's lifting the broader semiconductor sector and the etfs that stracke these stocks. another piece of news is texas instruments instruments winning a $1.6 billion grant from the department of commerce, as part of the chips act, as the company looks to fast track the buildout of two newfound ris in texas. it also includes 6 to $8 billion in tax credits. there are a number of companies that have been awarded funding from the department of commerce. the key question, scott, for the market is, when do those funds get allocated, something that we've been discussing on the topic with intel and taiwan semias well. but shares of texas instruments sitting out on trally, but the broader sector doing very well. >> seema, thank you. seema modi to angelica peebles

now on what's putting pressure on pfizer, angelica. >> the story today is pfizer is facing a setback in its work to develop a covid/flu combination shot. the vaccine produces a good response against one type of influenza but not the other. so, pfizer is going back to see what changes it can make. and they'll talk to regulators about what the next steps are. and pfizer and moderna are both working on combo covid and flu shots. the idea here is that putting two in one will make easier for people to get and it will boost declining covid sales. pfizer isn't giving up, but this is a pretty big setback. pfizer is saying it could approval for this shot by the end of the year, but now it's not clear when that might happen. >> angelica, thank you. less than two minutes to go. we've got about 90 seconds, a little less than that. taking stock. a couple hours from now, tell us what you're going to be talking about most of all. >> i guess first of all, are investors to essentially think

that the storm has passed that we just went through in the last couple of weeks? also want to drill a little bit into the, sort of, reassessment of the a.i. opportunity. that's one of the three or four major things that seem to be contributing to pressure from mid-july into last week on the market in addition to the growth scare and obviously what was going on with the unwind of the carry trade. there is an a.i. skeptics case that is getting a little more chatter i think, and we're going to try to kick that around. and obviously, you know, nvidia earnings coming up in a couple of weeks seems like the things investors are putting out there. bears are saying, i'm not sure how negative i want to get ahead of that. at the same time, you question exactly how much we paid in advance for all the a.i. growth. >> yeah. all right, mike. i appreciate it. go get them in a couple of hours on "taking stock," again, 6:00 with mike on cnbc. so, we're going to go out pretty green today. in fact, the s&p and the nasdaq are going to post their best

weeks since november. it's going to be the dow's best week since december. so, the best weeks of the year for stocks. this shows you the magnitude of the comeback wea've seen. everybody have a great weekend. i'll see you on the other side. we'll go to overtime now with morgan. >> that's the end of regulation. comerica bank bringing closing bell at the new york stock exchange. that's the scorecard on wall street. the action, though, is just getting started. welcome to "closing bell overtime." i'm morgan brennan. the market comeback rolls on following last monday's massive selloff. it's leek a distant memory. the major average is posting their best week of the year thanks to easing recession fears. tech leads the way up more than 7% up this week. coming up, wedbush's dan ives on