>> deckers has uggs. do they have -- >> what's that one with mr. -- >> ufas? >> hello dude. oh, crocs owns -- what do i know? we're going to leave you now. thanks for watching "power lunch." >> "closing bell" starts right now. welcome to "closing bell." i'm mike santoli in for scott wapner today. this make or break hour begins with a rate cut rocket launch to new records on wall street. investors globally embracing the federal reserve's half percent cut 24 hours ago as the right move for the right reasons, preserving a potential soft landing and stoking risk appetites. here's the scorecard with 60 minutes to go in regulation. cbs and p500 just off the highs. that surpasses its former peak from mid july.

the nasdaq has been the laggard in recent months but is playing a bit of catch-up. the dow above 42,000 for the first time and the russell 2000 participating, although maybe not quite as much as one might expect on this fed rate cut rally up 2.08%. treasury yields responding to the outlook for more rate cuts from a fed less worried in the moment about inflation. the 10-year yield is up a bit. the yield curve steepening, 3.73%. you see twos down below 3.6%. we'll discuss what all this should mean for your portfolio with sherry paul, morgan stanley private wealth adviser, in just a bit. but first our talk of the tape. can it be this simple? the fed easing into a solid economy, good news piled upon good. and how much fuel is left in the market's rocket boosters after gains in 8 of the past 9 days for the s&p 500? let's ask cameron dawson of new

age wealth, vertis investments' joe terranova. and courtney, both cnbc contributors. welcome to all. good to see you. plenty going on. i guess if the top down overarching rules are don't fight the fed don't fight the tape did the market nail it here and what else is to be said about where it might play out? >> i think it's important to note we got this supersize cut this move to ease or less restrict the policy also in a week where we were raising growth forecasts. which is fairly rare in the sense that we have this pretty strong economic backdrop and yet we're getting the-fed fed taking its foot off the brake. so i think that overall that's a good environment for risk assets. we can't forget valuations, positioning, sentiment, growth expectations, all being fairly elevated. but at least in the short term it's a lot to fight. >> it is tough to fight. i guess it's probably worth remembering, though, that it was just a couple of weeks ago where you did have a run of softer than expected economic numbers

and this drumbeat of the fed's falling behind was getting pretty loud. right? and then you got the 50 basis point chatter which man fest tdself. so i guess we can keep swinging through that cycle for a bit. >> and it raises the point that if the fed goes another 50 basis points what is the backdrop that would cause them to do that, meaning will another 50 basis point be because they can, because inflation has come down and they want to get to neutral or they should? it seemed from powell yesterday he said let's not extrapolate the 50 basis points going in the future, let's take a more measured pace. so it's our view they'll go 25 in november and december instead of laying on these big 50s and get to neutral as fast asball po. >> yeah. and that neutral even if it is higher than powell said maybe the market had priced in it's far enough away that i guess moving in that direction is enough for the moment. >> it is very interesting that we're talking about moving to neutral because this is actually the first fed rate cutting cycle that's been an explicit target, meaning they only initiated a

neutral fed funds rate back in 2012. it was at 4.25. it was 2 1/2. now it's 2.9. where we end up tells us how deep this cutting cycle goes. and as powell's comment said it's significantly higher than it was pre great -- or post the great financial crisis. so that could be the ultimate floor of where the fed goes. >> even if as he says we only know it by its works, which means it's not a number fixed in space it's something that we have to see wns we get closer to it we'll trip it. joe, i want to microanalyze the fed's kind of delayed reaction, i mean the market's delayed reaction to the fed. but it is interesting that there was enough of a kind of a rethink of that noisy response yesterday whereas people almost came in today and said let's not overthink p. >> well, we shut the machines off yesterday at 4:00 and everything that happened as far as the 2:00 to 4:00 p.m. price action that's algorithms in the market taking advantage of volatility. it's not financial advisers

saying oh gosh the federal reserve went r50 baesis points not 25 we've got to make portfolio reallocations. i don't put much credibility into the price action from 2:00 to 4:00 p.m. what happened overnight was you had a significant amount of overseas buying from europe, from the middle east, from asia, a lot of sovereign wealth funds getting into the marketplace again, and the trend is a very powerful force. the trend itself might be the most powerful force in the marketplace and we've seen so many times over and over again this secular bull market that's well entrenched which has these catalysts of a federal reserve that's not adversarial, profit margin expansion. we've got disinflation. you've got innovation. all of that collectively leads to an environment where if there's a dip you're going to be buying it. and look today. what do we have? the s&p 500 at a new all-time high. guess what? of the mag 7 only one mag 7 is at a new all-time high today and that's facebook. so it's telling you the market's giving you even more than it gave you last year.

>> yeah. courtney, that's a good point in the sense that among the things we maybe had to complain about let's say halfway through this year, too narrow a rally, too reliant on a handful of stocks, we're not sure if the fed's actually going to kind of pull back a little bit on rates, a lot of that is coming together, those things being answered. how do you view it, though, if a client comes to you and says did we miss it, the market's already up pushing 20% year to date on the s&p, how do we think about returns from here? >> yeah, i think that it's a great question because you're already seeing there's been a move that's happened. so when you look at the last three months you're seeing things like real estate, financials, all these interest rate sensitive sectors have already had huge moves. real estate's up like 17% in the last three months. so yeah, the question is how did i miss this and is that rally going to continue to broaden? and i think as the fed lowers interest rates what we can't forget is how much money is still sitting on the sidelines in cash. there's over $6.2 trillion sitting in cash plus the trillions that are in short-term cds right now that are about to mature and all of that money is about to make its way back into

the markets because if the fed does continue to lower rates at the rate it's expected to be lower you're going to see those money markets probably in the 3% range over the next year as opposed to the 5% it's in now. and as that money makes its way back in that's going to be a boost for the stock markets. and that's why i think there's probably more of a rix of the markets almost melting up as the fed lowers interest rates as opposed to us being on the brink of a recession right now. >> that being said, i mean, i've looked back at this period -- like you never saw a huge amount of money spill into the market all at once from cash, right? it seems to be a buffer to allow people to take more equity risk. but does that exact line of reasoning if you were to tell a client that, not sound like well, there's a lot of people who were late and they're going to come buy it from you right now? isn't there other reasons? it seems to me after the first fed rate cut history says if there's no recession the market goes up. you know what i mean? it's not about like who's going to be the next buyer coming in. >> i think that's exactly right. and i think when you look at historically speaking, markets 70% of the time are higher six

months after the first rate cut. data is definitely on your side. we're starting to see gdp is continuing to grow. the labor market looks strong. inflation's coming down. all of the actual data absolutely backs that. but that cash on top is just going to be an added benefit. i agree with you we've been saying for a long time money should make its way back in. it hasn't but this is not just individual investors like us sitting here, these are institution that's have this money. they can't sit on it forever. they've got investors they've got to talk to. >> the more the market goes up, though, i guess you're getting -- the equity market's bringing your allocation up if you own any of it. cameron, you mentioned positioning and valuation maybe not exactly the sweetest starting points. if we look back the at the mid '90s, soft landing scenario, you went on to five-year returns for the s&p of like 24% per year. that was a cheaper market. it was a less exploited market. you had more room for unemployment to go down. on the other hand, we are actually cheaper a little bit than when we peaked in july. sentiment is a little bit off the boil.

it just seems like we've reset to a fair degree at least to where it's not necessarily as stretched at the moment. >> the one that's reset to the most degree is institutional positioning. so it's dropped down in the deutschbank consolidated positioning report just to the 54th percentile. so that suggests that you have reset the shot clock at least there. now, individual positioning is still about 1% off of its 20-year highs. so that doesn't seem to be washed out. as well as sentiment that has come off its peaks. but it's certainly not washed out. where we're watching the closest is in earnings estimates. and i think that's the wild card as we move into '25. do fed rate cuts make it more likely that we can reach the 14% growth that's priced in? if the answer is yes, great for markets. but if we start to see earnings estimates start to level off we've actually seen 25 estimates get trimmed just slightly in the last month. if they start to level off, that could suggest that because you're starting at higher valuations you get a bit more of a sideways choppy kind of market

as you move into '25. >> yeah. for the third quarter of course estimates have come down quite a bit. so it's going to be maybe a little bit noisy. although joe, i guess the question now is what parts of the market seem like they're either ripe for grabbing the baton or not. you see semis up almost 5% today. it feels like that's still a show me situation. in other words, they kind of surrendered a leadership role here. nvidia trying to make a comeback. not quite able to bump through that ceiling that's been in place for a little while. how do you think about that category of stocks relative to other things that are moving today? >> i think what we're seeing today is a classic example of i aa lot of capital trying to go to places that have not made the all-time high or are not at the all-time high. utilities are down today. real estate is down today. >> defensive stuff that's worked recently, yeah. >> so value is at its all-time high. we're still below the july highs for semis, for the nasdaq 100, for six of the mag seven. so i think capital is flowing in

that direction. i still think you have to stay up in the equity size class with large cap. i'm not sold on the premise that small caps are going to experience this dramatic outperformance because everything's fine with the economy and the federal reserve here they go coming to the rescue. one other report on the federal reserve, you always hear don't fight the fed. keep in mind as has been cited several times on the network today since the first rate hike in march the s&p's actually up 35%. so if you went into cash that didn't work out so well for you. we're in a seasonally weak period. it seems as though everything that we've known in the past we're defying all these quote unquote historical metrics that tell us where we're going. i think cameron's correct to focus on earnings because earnings really are the ultimate wild card. are earnings estimates too high? and if earnings estimates are too high then i think you've got a marketplace. i like you said sideways choppy action because i don't think you

flip the switch where the trend goes bull to bear but then i do think you run in place a little bit and in that environment you focus on quality, you focus on large caps and make sure you have the major sectors like financials, health care and technology. >> i mean, if fairness in terms of that don't fight the fed idea being tested, you know, from january of '22 when it became very clear we were going to have rate hikes, you went down 25% in the s&p and you're up 50. so that gets you your 32 or whatever the numbers come out. in other words, for a while fed got its way. >> i think what the market -- the reason for the significant climb more than anything else is the market efficiently discounted that we were going to have an earnings recession. and we did. we had an earnings recession for all of the three major indexes so we're still waiting on the russell to come out of its earnings recession. thankfully the nasdaq and s&p cam out. but i think that's what the majority of the decline was really about in '22. >> obviously, once inflation peaked, you know, the winds turned as well back in '22 i

guess. courtney, do you have a differing view on the small cap trade or anything else that seems like it might be i guess underkbloit ed underexploited at this point? >> i would take the other side of this where i do think small caps do present an opportunity here because as we face a lowering rate environment they're kind of uniquely positioned to benefit because they have a lot of debt on their balance sheets, they're really dependent on banks which have higher rates right now. so as those come down it's going to benefit their balance sheets. i think it's something you don't want to be overexposed there. i don't think that large cap check trade is over. i just think when you're looking the forward earnings they're expected to grow at a slower pace than some of those interest rate-sensitive sectors. i want to see what has an earnings accelerating as opposed to decelerating. i think some things like small caps, like your real estate, like your financials, i think those are well positioned here. it's kind of that classic story you do want to make sure you stay properly diversified here. i wouldn't get out of tech but i wouldn't chase it right now, not with the valuations they're at. yes, have some small caps, some real estate you want to make sure you take advantage of that. >> it's one of those moments

where it feels like we're going to have to go search for a few more things to worry about because some things are v. been taken care of. a few things that get flagged is guess what, the yen keeps going up. we cared about that for a while. do we still care about that? >> i think that jeff degraaf was interesting this morning in flagging that yen bulls are not at an extreme so positioning has flipped where it was very, very short to now being very long. so possibly that's not as much of a risk. >> exactly. so in other words, it's not going to come out of the blue and surprise us this way by some kind of sharp rally in the yen that scares money out of certain trades. >> and look, complacency is always something that sits in the back ever our mind. yesterday we saw triple c the junkiest of the junk effectively get to its lowest level in two years. people are racing into risk. you're seeing it with the small cap trade today. so we have to be aware that as people pile into risk does that create complacency and effectively create a coiled spring for volatility, which is exactly what we saw on august 5th? >> it is.

and yeah, joe. >> it seems to me the driver of the correction in 2024 has been extremes in positioning and sentiment more than anything else. and that's what happened in april. that's what happened in july. you know, so i think that yes, we're going to get to a point clearly right in the next several weeks where we're going to get extreme bullishness all over again in terms of positioning and sentiment in the market as you always say has to kind of have that relief valve and release some of the stress and pressure from it. and i think investors just have to expect that. but you're still in this secular bull trend. and i don't think you want to look at that type of price action, say okay, we're at this inflection point, because until you are proven wrong with the earnings or the temperament of the federal reserve or even inflation itself this is a bull market. >> right. although i still think there's enough mixed macro data coming through that at some point we'll get a bad number, the market will be up here, it'll seem like it's maybe the start of a trend

and all of a sudden it's we have to keep the economy on a short leash again. >> and the non-discretionary funds will have a lot of fun in that environment with the volatility being elevated. >> quick, courtney, in terms of bonds right here, interesting reactions. is there anything to be done in terms of repositioning within or into or out of bonds? >> this is something we've been working with clients over the last several months of really extending duration on bonds with the expectation that rates are coming down here. and i again think the question is is it too late, have i missed that trend? and no, i think you do want to make sure you are starting to extend your duration because if rates keep coming down here and that's what it's expected to do you're going to keep getting lower rates there. you want to make sure you're taking advantage of that opportunity. >> a little bit of a race out the curve. we'll see how it goes. great to talk to you all. thank you very much. cameron, joe, courtney. let's send it over to pippa stevens for a look at the biggest names moving into the close. >> hey, mike. shares of mobileye having their best day on record after intel said it has no plans to sell its stake in the israel-based self-driving technology company.

in the statement intel said it believes in the future of autonomous driving technology and in what it calls mobileye's unique role as a leader in that lane. still it's been a rocky year for mobileye and the company cut guidance back in august amid weakness in china and the stock is down nearly 70% in 2024. and nextera energy partnersis in the green after jefferies initiated coverage on the stock with a buy rating. the firm said that while the company will likely have to cut its dividend substantially the market has already digested that outcome. jefferies has a $28 target on the stock. those shares up 3 1/2%. mike? >> pippa, thank you. we are just getting started here. up next, much more on today's market rally. plus what's next for the housing sector now that we're in a rate cutting cycle? we'll discuss that with an analyst after this break. er live from the new york stock exchange. the s&p up 1.8%. you're watching "closing bell" on cnbc. at pgim, finding opportunity in fixed income today,

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what happens to the housing market? i don't think any of us really know. and the reason is that we've always experienced lower rates during recessions and we have not had hiking cycles such strong housing prices. so will they go down? if they cut rates. because it unlocks supply. i don't really know the answer to that. i'm very anxious to see the data as it develops. >> that was jeffly gundlach on "closing bell" yesterday. those stocks rallying today. the hxb home builder etf hitting record highs for the third session in a row. this ahead of lennar earnings out after the bell. joining us is wedbush head of

equity research jay mccannless. obviously we've seen some response to lower mortgage rates in some of the new home data the mortgage apps and things like that. what are your expectations for where volumes i guess first industrywide should go from here, are we actually going to see some prolonged relief or not? >> thanks for having me on. i think what we should see for volumes this year probably low single digit growth in starts and existing home sales but then when you start to think in terms of '25 what we're expecting there is probably about 10% resales and then on the new home side thinking 5% to 7% growth is a realistic target for next year. >> okay. which seems reasonable. the line in terms of home builder stocks in particular has been emphasizing the advantages that new builders have had. we got scarcity of supply. their ability to buy down rates. is that advantage diminishing or

is it just, you know, there's so much that we need to meet demand that they'll be okay? >> i think in terms of the demand that's out there you think about the millennials and how the gen zs, those are the largest population groups we've seen since the baby boomers. so you know, we can't build into the sunset but i do think there's a lot of opportunities for the home builders still. the other way that we think about supply is about 76% of mortgages right now have a rate below 5%. i think a lot of people, if mortgage rates stay in the high -- or low 6s, high 5s context as we move into the spring maybe that prolonged the lock-in effect for those people who are in the homes at those lower rates, don't move unless they have to move. and i think that's going to help the builders continue to take market share away from existing homes. it may not be permanent market share gains but i think in this

environment if we stay with a 5 handle or above on a mortgage rate that's going to be ben feshl for the home builders who like you said can buy down mortgage rates, can offer inch incentives, they can do some things your average home seller can't do. >> the building stocks have had a great run, lennar among them. you've also been focused on this tendency for a seasonal trade to develop in this group. what does that tell you based on history? >> historically buying the home builders in october or november and selling them april or may historically has been a good trade and that trade as we talk about in our note as generated on average more alpha than holding the s&p 500 during that period. i do think there's a potential certainly this year for the group to see a seasonal trade begin. the itb is up from july 1st. the etfs that we monitor.

maybe that is working against it. but i would also say that if mortgage rates continue to move lower again into a 5 handle instead of a 6 handle that should be good for affordability and i think would probably be good for demand this spring. >> what in particular should we be looking for in the lennar results in terms of where the bar is set for expectations? i know you're also -- have talked about this idea of a potential spinoff of the land. >> sure. if you think about what mortgage rates did during their quarter, and it's an august quarter end, mortgage rates went down pretty dramatically from call it 6. % on the third year at the beginning of august down to now we're sitting at 6.1. what i think we'll hear is demand may have started a little slow in june for the quarter but then july and august i'm expecting to hear that demand improved and i would assume for september they're still seeing the same trends as mortgage

rates continue to move lower. they have mentioned the last couple conference calls that they are wanting to spin off some of their work in process land assets. we gave it the name land spin. that's not a lennar term. that's something we came up with. but basically it would if they're able to achieve the land spin would help improve their return on equity metrics and some of the other metrics that we watch on the stocks. and i think also what we might hear from them is with prices, with mortgage rates coming down that might give them a little more pricing power than what we're expecting, which could potentially be positive for gross margins for the balance of this year and into fiscal '25. >> all right. jay mccanless, thanks for hoping us get ready for those numbers. appreciate it. >> thank you. >> up next morgan stanley's sherry paul is here with her playbook following yesterday's big rate cut and why she says it's time to recalibrate your portfolio. she'll join me at post 9 after this break. and don't forget you can catch

us on the go catching the "closing bell" podcast on your favorite podcast app. we'll be right back.

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with more than two trillion dollars of their wealth. with an appropriate recalibration of our policy stance strength in the labor market can be maintained. this recalibration of our policy stance, it's a process of recalibrating to recalibrate. >> we're recalibrating policy. >> recalibration of our policy. >> begin to recalibrate. >> recalibrate it. >> recalibrating our policy over

time to a stance that will be more neutral. >> fed chair powell using the word "recalibrate" nine times in yesterday's news conference following the fed's 50 basis point rate cut. our next guest says as the fed recalibrates so should your portfolio. joining me now at post 9 is sherry paul of morgan stanley private wealth. sherry, great to see you. >> great to be here, thank you. >> in what ways should we be fine-tuning or rethinking how we're invested in this market? >> yeah, recalibrate is the word of the day for sure. i think there are three things that investors should be recalibrating. number one would be your mindset. into really good discipline from worrying about what could possibly happen to planning for what will probably happen as the timelines around uncertainty get shorter and shorter. we can talk a little bit more about that. but like obviously we know rates are getting lower. we're getting closer to elections and things like that. number two would be to obviously recalibrate your portfolio to meet the current economic and policy environment. and the third thing would be to recalibrate expectations about

you hon to evaluate risk-adjusted rate of return. as we go forward. and this sort of innovation-driven earnings sort of expansion. but at the same time we're hitting new highs and that causes investors concern. preparing for more volatility. >> and hitting new highs both in the equity indexes and also in a balanced portfolio finally that hit a new high too. so i guess it's time to figure out exactly what that means from here on out. you mentioned to focus probable. rate cuts look extremely probable. but in what con is next in other words, do we still have to be worried about it tipping into recession or not or how you might handle any of those scenarios. >> yeah. thank you for that. well, we are probably -- we are in a slowdown. an earnings slowdown and an economic slowdown. we know that's different from a recession, which is a contraction, and ultimately it's a reset. so probably we stay out of recession, and clients should understand that and start moving out of cash because we know rates are going lower and if you

want to guarantee yourself a pay cut then keep your money in cash. we also know that we're probably going to see more investment banking deals go down as the cost to capital gets cheaper. and what we're advising clients in the portfolio pivot around that is to own that small cap type return on a big cap balance sheet. so we start to really lean into where innovation is taking place and it still continues to be in the u.s. big cap space. over small caps is an example, which tend to not perform when we have a slowing economy even if they get to pick up on the cheaper money. >> does that imply remaining focused on those large tech companies that have already been recognized as being the leading platforms and the innovators? because they have obviously taken a little bit of a back seat in the last couple of months. >> well, it has -- you should have a meaningful exposure to them but what we're seeing this year toward the end of the year since june is the broadening out of performance in the market which investors should be cheering despite any other kind

of geopolitical concerns or domestic political concerns that might be weighing on them. so it is really crucial to decouple the two and find the corridor of opportunity and there are plenty of them in the market right now. >> you mentioned we're obviously six, seven weeks from an election. it seems to me that investors that overfixate on policy and politics and even potentially potential tax implications maybe get distracted from what they ought to be doing or maybe their returns aren't necessarily worth the effort there. how do you advise people navigating around those things? >> yeah, the simple advice is don't trade the politics. what's happening in the markets right now, the decision a company makes about raising the dividend has nothing to do with who sits with the presidency. ai, underpinnings of innovation, and that's an earnings -- you know, it's an expansion and a costcutting bull market that we're in, has nothing to do with who sits in the presidency. and we're probably from a policy standpoint, morgan stanley's

policy team in d.c. believes we end up with a split congress. in that case that's a good hedge on whatever is getting propagated from a political standpoint about at the presidential campaign level. we probably end up with largely the same with one big exception, which is we probably see the trump tax cuts expire and clients should be preparing for that now from an estate tax standpoint in particular. >> you mentioned we'll probably get a pickup in investment banking activity. for an investor what are the direct implications of that? is it just be prepared to maybe have access to ipos? is it about an active m&a environment or something else? >> for most retail investors it's just really investing in those balance sheets that can pivot quickly to purchasing new revenue streams. >> that can be opportunistic. >> absolutely. we know that interest rates are going down, and we've started to see dividend rates go up. so psychologically if you're willing to hold a bond for ten

years why not hold that great company, get the cash flow plus the appreciation. so investing in balance sheets to kind of get that integration of the i.b. transaction would be the best way for most investors to go about it. >> in a sense you buy the buyers or the ones that could be a smart buy -- >> exactly. >> final point about setting expectations in terms of returns from here on out. do you feel you more often have to tell clients listen, lower your sights a little bit, or make sure you're invested to capture the potential higher return? >> it's a little bit of both. but planning, financial planning is crucial right now. so setting expectations around cash needs and then basically bifurcating that out of a diversified portfolio, which remember is for most investors it's to distinguish between strategic investing and diversification, which is correlation, right? we have stocks, bonds cash and maybe some commodities. but within the asset class itself that non-diversifiable risk in your stock portfolio

you've got to be strategically placed in cash across these different sectors because not every sector is going to be an equal beneficiary of the climate going forward and that becomes super key. >> yeah. know where your bets are. >> exactly. >> sherry, great to talk to you. >> thank you. >> appreciate it. up next we're tracking the biggest movers as we head into the close. pippa is back with those. >> rideshare and restaurant are teaming up and the possibilities are endless. the names to watch coming up next.

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19 minutes to the closing bell. let's get back to pippa for a look at the key stocks to watch. >> darden shares propping the best stock in the s&p 500 after the company announced a multiyear partnership with uber for olive garden delivery. the two-year exclusive deal is a departure for the company which has traditionally shunned third-party delivery companies. that partnership is overshadowing darden's weaker than expected earnings report, which missed on the top and bottom lines. owlive garden's same-store sales shrank 2.9% during the quarter with eddie v's and the capital grill also showing weakness. and sticking with delivery companies, doordash is higher. btig upgraded the stock to buy from neutral seeing it sees

signs pointing to ongoing near-term strength as well as what it calls underappreciated longer-term drivers. the company also says doordash is hitting important milestones including positive net income expected in the second half of the year. those shares up nearly 4%. mike? >> pippa, thank you. talk to you again soon. still ahead, your earnings setup. we'll tell you what to watch when fedex and lennar report after the bell. and don't miss the new cnbc sport digital documentary, "wnba rising: inside the season that changed the league." that's on cnbc.com/sport. "closing bell" will be right back.

welcome back. meta shares headed toward a record close. julia boorstin here with more on that move. hi, julia. >> that's right. meta shares are up over 4% following post-fed optimism and well on their way to close at a record high. now,meta has been on a tear, is up over 83% over the past 12 months. today's move higher along with the rest of mega cap tech comes despite two pieces of negative news. the ftc issued a report finding that meta and other social media companies are collecting and using consumer data in a way that endangers people's privacy, recommending that congress pass comprehensive federal privacy legislation and better safeguard for kids and teens. plus the ft reports meta's facing a big fine in the eu over its alleged efforts to dominate classified advertising with its marketplace service. but mike, that's not stopping

the stock, now up 4.25%. >> no not at all stopping. it's one of the only mega cap tech stocks that is now making new highs. and it's hard not to notice the outperformance of meta relative to alphabet. probably the biggest gap between those, you know, over a one-year period on a 60 percentage point gain in meta relative to alphabet. i mean, for as much as meta faces some regulatory friction perhaps nothing compared to what alphabet's up against. >> nothing compared to what alphabet's up against. and also meta has so consistently outperformed in terms of advertising revenue growth. and next week we have meta connect. i've going to be there on wednesday. that's where we expect meta to unveil all sorts of new ai features and also new hardware and seems like there's a lot of optimism that meta's going to be able to continue that growth rate when it comes to advertising. and perhaps we'll see on the hardware side as well. >> there you go. so a potential catalyst just ahead. julia, thanks so much. up next, apple shares popping. leading the tech sector higher

today. what's behind that big move? coming up. and don't miss apollo global ceo marc rowan on cnbc leaders tonight at 7:00 p.m. eastern right here on cnbc. the market zone is next. (woman 1) all right, here we go. uggggh. (man 1) oh no, no, no, no, no, no! (man 2) what's my next step? oh! ugh. (girl) dad. (vo) you break it. we take it. (woman 2) we can take it. (vo) trade in any phone, in any condition at verizon for the new google pixel 9 with gemini. (man 2) give me a recipe with these ingredients.

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citi's seamlessly connected banking, markets and services businesses, deliver global financial solutions. so our client can keep investing in innovations for patients around the world. without pause. for the love of moving our clients forward. for the love of progress. two earnings reports out in overtime today that we're watching. diana olick on lennar. and jason seidel on what he expects from fedex. steve, apple we were just talking about oh, selling off on low new orders for the latest generation of iphones. what do we have today with these gains? >> yeah, what a difference just a couple of days make, right? this is really coming off what

t-mobile ceo mike seifert said at the company's capital markets day yesterday. this was also highlighted this morning by morgan stanley's eric wood, in his note. seifert said about the iphone, "sales are higher than last year, which is saying something because last year's sales were strong." and so this is pretty much the opposite of what we heard monday that analysts like ming ching quo were looking at the smaller preorder windows as sort of evidence that demand for the iphone 16 has been lower than expected. we saw shares drop that day. but keep in mind this is also just one carrier, t-mobile, and all these u.s. carriers including at&t and verizon they offer those major deals to get customers upgrading, even offering free phones or great trade-in values and the like. but look, the iphone 16, it goes on sale tomorrow. so we're going to expect more analysis and data points coming in the coming days probably early next week on what iphone 16 demand looks like. and by the way, we've still got another month or so before the key selling point of these

phones, mike, artificial intelligence, launches on these devices as a software update. >> you mentioned there may be a little disappointment a few days ago was mostly based on the shorter order times, delivery times. people are trying to triangulate into the level of demand from that and then you at the time would say look, it could just be that they're better supplied and that's why you can get these things quicker. >> exactly. >> so we're sitting here watching the shadows of the actual activity trying to figure out what's going on. you mentioned next week we'll have more analysis but will it be hard data in terms of how this is pacing? >> the only hard data we're actually going to get is when apple reports earnings it gives us some guidance either when they report earnings probably end of october, early november. that's going to be the best we get until we really hear from that december quarter results which will represent the first full quarter of iphone 16 sales. until then it's just up to everyone to kind of read the tea leaves. what do those wait times look

like on the online orders or in-store pickups? wall street analysts are going to be all over that picking apart what little scraps of data they can. and again today you see one comment from the t-mobile ceo send shares up 4%. >> i guess it doesn't hurt the nasdaq 100 is up 2 1/2% today. steve, thank you very much. diana, we wait for lennar. what should we look for? >> well, look, mike, lennar's the first of the big builders to report. so it will give us an idea whafz to come. lennar reported strong revenue gains last quarter, beating expectations, but a disappointing sales backlog. and that was likely due to higher mortgage rates. this quarter runs through august 31st. so most but not all of it saw falling mortgage rates. the anch on the 30-year fixed started june at around 7.11% and had fall-tone 6.4% by the end of august. falling rates have juiced the builders' stocks recently with lennar now sitting near a record high. for this report we're going to be less interested in performance over the last quarter and much more interested

in commentary over what they're seeing now now that mortgage rates have come down and the fed of course made its first cut. remember, builders aren't just facing high mortgage rates for their buyers, they're also up against higher construction costs because of those higher interest rates, mike. >> in that way everyone points to the 10-year yield which is up a bit today. that's what 30-year mortgage rates are going to be based off of. but for the builders themselves it would seem they can borrow at different places on the curve and maybe lower fed rates can start to help. >> yeah, they definitely can. and actually, mortgage rates went up yesterday and today. not a lot but just six basis points. but you're right on the builders. they've been buying down mortgage rates for their buyers. but it's going to help them on their side, whether it's land, labor, materials, all that, to see lower interest rates. >> and lennar in terms of its position within the industry, it's a little more entry level? >> well, so it's the second largest home builder. i wouldn't call it entirely entry level. it's a little bit more of a move-up.

d.r. horton tends to be your really entry level and toll brorkts is on the high end the luxury. but lennar definitely has entry-level product for sure. >> so it will be a pretty broad look at demand at the moment. diana, thank you. and jason, fedex, this is a stock that's definitely been in sofrt a recovery operation. it's done better recently. what are you looking for in today's results? >> we think they're going to be in line to maybe even slightly better right now as they report the fiscal first quarter that ended august 31st. i look for muted volume gains here. they're going to be looking for a lot of cost savings out of their drive program as well as their network 2.0. that's going to probably help them throughout the entire fiscal year 25 for fedex. i think we'll get a look into peak season as they report here. and also how are they going to cope with the loss of the usps business here in 2q? >> you mentioned probably maybe unimpressive volumes in general.

to what degree are we going to learn about the macro from their numbers? because it has been a story where they're restructuring the company, it's not all about just a play on aggregate volume. >> yeah, i think if you look across the transportation sector and all the context we have here in our universe it's been pleat sluggish still whether you look at the rails or you look at trucking or you look at logistics companies. i still think we're in a very low growth, maybe slightly negative environment. the cast treat index came out the other day. it showed some improvement but was still on the negative side. i don't think we're going to see a lot from the overall macro side of things. but the look we're getting at the peak season is going to be key. last year we didn't have much of a peak season. this year the peak season's actually a lot more condensed in terms of total days. so what we have seen both of the parcel giants do is, you know, push out some g.r.i.s. and the g.r.i.s that were out

there were pretty strong. i think they're using this season to push out both higher prices and more surcharges to help their bottom lines. >> and which do you prefer at this point? obviously ups has struggled. the valuation gap between ups and fedex has closed to some degree. >> we're still favoring fedex right now. we have a $334 price target. i wouldn't say we don't like ups but we just favor fedex right now. >> and that's based on just the mix and exposure -- >> i think it's based on the mix -- yeah. i think the big thing for us is i think there's a lot of cost savings. again, $2.2 billion through the network and i think fedex has done a very good job of it. we have the potential spin of their ltl division which when you look at it is one of the top-ranked ltl carriers in the universe right now. so we come to our price target by using some of the parts. by putting a six times multiple on their express and brown division and about a 12 multiple on their ltl division.

again, that's right below the leader, old dominion, but slightly above saya and xpl. >> we're looking at the stock kind of struggling to hold on to the earlier gains up half a percent today. fedex that is. jason, thanks very much for the time today. appreciate it. just over a minute before the close. markets still holding on to most of its gains though off the hides. the s&p 500 is up about 1 2/3% at this point. it did have a full 2% gain earlier in the session around midday. you see the dow is at 41622. kind of looking for a record close. in fact, it's above 42,000 right now for the first time. the russell 2000 is up 2% at the moment. and the nasdaq has finally played some catch-up. nasdaq is up 2 1/2% as we speak. getting past the fed meeting and fed rate cut has really drained volatility out of this market. you see 1.8-point drop in the volatility index. and it is also a very broad

rally not just at the index level. you have about 75% of all volume on the new york stock exchange is to the up side as we close in on record highs. the s&p 500 last hit a peak on a closing day on july 16th and it's going to log one right now. just about 1% above that prior high level. that does it for "closing bell." we'll send it to "overtime" with morgan brennan and jon fortt. well, that bell marks the end of regulation. reliance ringing the closing bell at the new york stock exchange. reitar log-tech holdings doing the honors at the nasdaq. a fed-fueled rally sending stocks soaring. helping the dow and s&p 500 close at a close. the nasdaq doing best of all but still about 3 1/2% away. that's the scorecard on wall street but winners stay late. welcome to closing bell overtime. i'm jon fortt with morgan brennan. >> thanks to big gains bri the chip makers the sector is now in the green for the quarter. coming up guggenheim securities' eric mandel on wheth