about chinese stimulus. at one point we hit a record high with the dow, some dovish comments from austan goolsbee. we're trying to hold those gains. >> see if we can get another record high. meantime, thanks, everybody, for watching "power lunch." glad you could be with us today. >> and "closing bell" starts right now. guys, thanks so much. welcome to "closing bell." i'm scott wapner from post 9 at the new york stock exchange. this make or break hour begins with the future of this rally. whether there's still a lot of upside left for stocks. we'll ask blackrock's rick reider. let's look at the scorecard with 60 minutes to go in regulation. looking for more on the dow and s&p. 5716 for the s&p, up one-quarter of 1%. dow good for one as well. nasdaq is working on its own thing today. it's got a little going here. not great. it's been a tight session.

utilities, discretionary, materials, the best performing sectors. tech has been negative. we're trying to pull a little through here in this final stretch. yields, they have been mostly higher as well. that's an area that matters a lot to investors. the ten-year, 3.74, which takes us to the talk of the tape. the fall stretch for stocks and whether the fed just gave the green light to more gains ahead. let's ask rick reider, back at post 9. good to see you. especially after what the fed did last week. what's your big takeaway as to how the market has reacted since? >> by the way, i find it interesting the difference between the bond market and the stock market. the bond market has backed up. sure, we follow short forwards, they backed up almost 20 basis points. ten-years come off, rates higher by 10 to 15 basis points. >> why? why is that? >> because we were pricing in recession. a week or two ago, this

extraordinary movement towards pricing to recession, hard landsing recession, and the fact that the fed was behind and would have to get there, it was too much. that being said, i think we've retraced to the place that's probably okay. i get a kick out of that where people say, equities are rallying because fed's moving. the bond market already knew -- it was already in the price. i think one thing that's a big takeaway is when you go 50 and you talk about we're willing to keep going and you talk about a recalibration, they needed to do, a little we put foam on the runway, the fed is receptive. now that inflation rear oning 2% by many measures under 2%, you have a fed that's sensitive to the economy, sensitive to labor. that's good. is that a positive for equities? 100%. >> how far and how fast do you think they go from here? >> i find equities just okay. not great. for years -- >> i meant the fed but you can talk about equities. >> oh, no. >> given what you said in the

first answer, why do you just see equities as okay? that's somewhat surprising given what you said. >> the best way i value equities, i always look at cash flow discounted by the cost of debt. today the cost of debt is still elevated because of where the fed is. you look at multiples, it's just not -- the equities aren't that interesting. you're still throwing off good return on equity. 18%, 19%. but you're trading at price to book. you're paying a lot for it. you talk about 24 1/2 sometimes off pe off trailing 21 1/2 off forward. that's assuming 15% growth of earnings. you're just paying a lot. for the last couple of years, extraordinary top line revenue growth from tech that motivated the market higher. i think the numbers will continue to be good but the market is pricing that today. it's just okay. if you say moving the needle, would i buy more yielding assets? i definitely would because they're better price than equities. >> so you've made the remark in the last few weeks you think

it's a golden age -- >> i do. >> -- for fixed income. as a result of that, be i always am out with jeffrey gundlach, we speak with him for fed day. not that he disagrees wholeheartedly but he said, i think you have to be extremely careful with your positioning on that so, can you elaborate on why you think it's a golden age? do you need to be more careful or more specific as to exactly where you look? >> so, i've been doing this a really long time. it's very, very rare that you have inflation running at 2% and actually trending a bit lower that you can bias sets that yield. by the way, not really risky assets. you can use securitized assets, high quality, high yield, you can create a portfolio to 6, 6.5, so your real rate of return or real rate of interest is very attractive. at the same time, listen, you always have to be careful in fixed income. the upside of fixed income is we get our money back. you always have to be careful.

today you think about during covid what happened. companies trimmed their debt out. they pushed their debt out. individuals locked in their mortgages. it's pretty rare you get those yields, those real rates at the same time there's no maturity in front of many of these companies. that's pretty good. it's pretty hard to default. if you don't have debt coming due. most companies don't have debt coming due. i think the environment is great. do you be careful? always be careful. how much emerging markets do you need to own in the portfolio? maybe not a lot today because there's yield everywhere. can you build a diversified portfolio with a lot of yield today. i think that's super attractive. relative to equities, that valuation, it's been a couple of decades that you had that sort of divergence between the earnings yield of equities and the earnings yield of -- or the yields are getting -- >> the real bull market now, the next major leg of it, comes in fixed income, not stocks? >> by the way, last week -- not yesterday. it was a pretty ferocious rally

in credit. it was -- spreads keep tightening and tightening. the reason why they are, people have been sitting in -- the trade the last couple of years is i'll sit in cash and buy nvidia offer get six more stocks is, diversify it. now it's like, maybe my cash level is going to come down, the yield on cash will come down. maybe i'm not going to get this explosive growth on earnings. how do i lock in the yield for the next three years, four years, five years. i think that will continue. pretty impressive in terms of the flows that are driving that. >> why can't everything go up kind of nicely from here? you know, don't fight the fed. you and me have both heard since '09. and it's largely worked. >> so, i'll tell you a funny thing. i don't love the valuation of equities. that being said, when i stair at the technicals, the amount of cash sitting there. there's $9 trillion global in money market funds. if you take deposits, if some of this is pledged, $23 trillion. the numbers are staggering.

so, to your point, part of why through convexity i've gotten longer equities. i don't feel comfortable about it but volatility markets are allowing you to do it but there's a lot of cash. with the fed putting foam on the runway, with the fed bringing the rate down, could both equities and debt do well? i think so. my only point is, would you move the needle going into an election, geopolitical risks, would you move the needle a little bit, downshift the risk, take some yield? that's the direction of travel i'm in. >> have you pretty much set your course here on soft landing? that's where you're placing the bulk of your bets? >> no. i actually don't think -- i'll just say, i don't understand the idea of hard landing, soft landing. i think that's a concept from the goods-oriented economy 20 years ago. we think -- so, second quarter gdp ran a 3.0%. we have third quarter at 2.6%. third quarter gdp.

fourth quarter we have downscaling to 1, 1.5%. that's not a recession. that's not a soft landing. that's not a traditional we're going to go into recession on the back side of this cycle. i've said it before. service economies, 70% of consumption is in services. service economies don't exhibit that cyclical, classic cycle dynamic. so, i don't think -- for year people talked about soft landing, hard landing. i just don't think you land. i think you get tired. the economy is a bit tired in a bunch of spaces. i'm not worried about the economy. >> so, you've -- >> i worry about other things. policy, geopolitical but i think the economy is pretty solid. >> have you been thinking differently about potential policy shifts based on what the polls have suggested over the last six weeks? >> a couple things. you have to assume that the election is a dead heat. we can debate how it shifts day to day. the divergence in policy is stark. i talk about corporate tax rate, you think about the implications

of free cash flow deficits are a big deal in terms of how we run trade tariffs. what do you do with all that? i think the big thing is we run -- you run a little less beta in your portfolio. you keep equity volatility, i think, is very cheap. you keep a lot of convexity downside protection in the portfolio today. we are -- this time of year where the seasonals are not great, where the volatility is high, so we built a bunch of protection in the portfolio. with yields where they are, you're clipping so much coupon today. >> normally you would have a conversation about election and policies and differences could be very stark in terms of what the outcome could be for markets. higher taxes, whether it's personal or corporate rates. obviously, you'd say, well, that's not going to be great for markets. the other side is, well, tax cuts are for individuals, corporations can be fantastic as

well. but then we have the deficit issue and the funding of it and we have the expiration of the trump tax cuts, which he suggested he wants to renew, and then the tariffs on top of that. is it more murky for you as the cio of all of that given what i just said? it's not so cut and dry, as you might otherwise think. >> yeah, murky is a good word. by the way, i think what's driven some technicals in the equity market, everybody knew the seasonals. everybody knew we were going to an election. there was a ton of derisking that happened in august. i think that's part of why people have gotten lower on risk -- significantly lower on risk and that's motivated the markets higher. i think the markets -- you look at polls, you look at surveys, people tell you what they think, but they end up doing what they have to do. and today part of why i think we've already -- we've gotten comfortable, i would say the market has gotten comfortable, is so much cash on the sideline.

but from my perspective in terms of managing risks, i like this posture of getting my beta down a little bit, creating a bit more convexity. listen, i don't think we're done with volatility. all it would take -- by the way, you look at that august move, 20% move in the nikkei, you know, dollar/yen trade. there's -- markets are crowded in a bunch of places. you look at what happened to semis. markets get extremely crowded these days. i just think you have to be sensitive. fixed income i tend to diversify it, where i like to concentrate my equities a bit more. i think you've got to be a bit more careful because the crowding in markets is severe. >> do you write off the notion at this point that the fed's late? that they should have started cutting earlier and, therefore, they were behind the curve and even with the 50, they're still behind the curve, they're still too restrictive? and once the labor markets start to get out of their grip, that it can run away from them faster than they're able to deal with? >> i think the fed's behind the

curve, full stop. i think the funds rate, if you assume inflation is 2 or trending below 2, a 5 3/8 wasn't the right price. i think the fed has to get to 4%. you look at business income, small business, there are some parts of the population really hurting. i still think they're behind the curve. what i'm more comfortable with, i think the economy -- this economy is so resilient, so innovative, so flexible, when i write down all my risks, which i pretty much do every day, i write down all the things that keep me up at night. the economy is one i feel pretty good about, that it's going to do it's thing. you watch other parts of the world, china slowing significantly, germany going through softness. the u.s. economy is extraordinary in how it's energy independent, innovative, education, technology. it's pretty hard to screw it up. >> i'm going to leave it there. mic drop. good to see you. >> thanks for having me.

>> thank you. we look forward to talking to you soon. let's bring in mike rode and brin bryn talkington, cnbc contributor. mr. rieder is pretty positive. he made that clear. what do you make of what he said? >> i agree with a lot of what rick said. in terms of where are the areas that are not crowded in the equity markets today that are not expensive and low expectations, i think small caps look attractive from that perspective. they're underowned institutionally. in terms of the steepening yield curve and rate-cutting cycle, the there's, it's probably the best performing asset coming out a year after the fed starts to cut rates as a lot of those spread type businesses like banks, which we're positive on, by the way, start to benefit.

the refinancing risk for a lot of small cap companies, becomes alleviated with lower rates. finally in terms of what rick was saying, if lower rates help stimulate economic growth, that's a pretty good environment for small caps. and small caps are expected to grow in the midteens earnings next year. that's higher than large caps. the magnificent 7 is higher than that. back to where the expectations -- the expectations are really, really high for the magnificent 7. i think the expectations are pretty low for other parts of the market, not the magnificent 7. i'd say as -- we tell our clients, hey, look in areas that have lagged, but are showing potential accelerating earnings because we believe that that stock prices follow accelerated earnings growth. >> bryn, what's your view? >> i think to stick on earnings, if you look at the 493 names, like ex the magnificent 7, these

q3 earnings they are only going to grow 3%. the estimates for q4 are 15%. if those estimates become actual, and i think the market will clearly sniff that out well ahead of time, i think the return we saw over the last month in so many other sectors outside of just the s&p, you're going to continue to see a broadening, but i still think you want to stay mid-large cap just because i think the market, if we do get any weak data from a rotation perspective, i think the hedge funds, the algos, just like the trader mental, will actually be sell small caps. i think from a probability perspective, the large cap -- mid and large cap, high free cash flow dividend yielding names have more room to run as we continue to get earnings estimates actually, you know, start to actually ramp up in names outside of just the six or seven names we always talk about. >> as positive as rick rieder's

outlook is, and yours sounds similar, he does take issue with that number 15% earnings growth. and as a result of that, he takes greater issue with the multiple in the market, 24 times. like too much. it's a big leap to expect that we're going to get 15% earnings growth which would arguably justify or some would say would justify where the stock market is currently valued. how do you deal with that? >> i definitely think the market is starting to, we'll say, be priced for perfection. i think the market is telling us we're having a soft landing. that narrative. so, i think until there's facts to change that, the bias is going to be to the higher. i mean, you see the analysts lifting their price targets for the s&p because they're following the price action. so, i think once again, these are estimated numbers. as i said, they need to become actual. we won't know that, scott, until q1 of 2025 when these numbers

come out. but i do think, though, that barring some exogenous event, and even if an event occurs, the fed put is back. as you said at the top of the show, don't fight the fed. that's been a very good investment thesis in both tightening and easing cycles. so, i'm going to have to go with don't fight the fed, buy the dips and the fed will step in and continue to be now dovish, which i think is bullish for stocks. >> yeah. i guess that's what we've been taught. it seems to have worked reasonably well. mike, you still say there's a 30% chance of a recession. and you're investing as if you expect the economy to continue to slow down. what, in fact, if we have the no lappeding, as rick rieder suggested? forget the recession, that's way off the table, and not even a soft landing, but the economy just keeps humming along. yeah, it may slow a little bit but the bottom line is this economy stays resilient. the fed is just starting to cut

interest rates. and that back drop right there is pretty good. >> yep, cooling inflation and fed cutting, happens pretty rarely, but this is a good setup. you have several longer term trends that are driving economic growth in this country. you have reshoring, companies bringing their fly chain back to the u.s. that is driving job growth. and small and midcap companies are probably the biggest beneficiaries of that. you have artificial intelligence. we all know about that. i think there's been one big beneficiary in nvidia, but that will likely broaden out as we see many utility companies as they're second derivative a.i. plays. finally as rates comes down, the housing market has been on its back for several years. lower rates could help spur sales of existing housing. that's a real driver for the u.s. economy as, you know, in our small cap -- one of our small cap portfolios.

we own landscape supply businesses, roofing companies, companies that will benefit from the acceleration off the bottom in housing. i think there are a lot of good stories that are happening in this economy right now. back to the election, i think reshoring is a bipartisan issue. both sides agree we need to get supply chains back to the u.s. for geopolitical concerns, national security. so, this is a potential five, ten-year trend for the u.s. economy and i think a lot of companies could benefit that's not yet priced into the stocks. >> one of the big debates going into the rate cut is, you have to wait until that happens before you can buy small caps. bryn's made that point for months. yet, mike, you say they're going to outperform. moreattractive valued than large cap stocks. defend that call and i'll let bryn quickly wrap it up. >> it goes back to valuation. i think if you look at -- they're trading about in line with their historical average but the spread between large and

small is the widest it's been in decades. small represents 4% of the u.s. market. that's half of what it's historically been. there's no expectations there. i think we're okay buying some really good businesses. when you do see dollars come into -- before they redistribute from the magnificent 7 or come out of cash and into the market, you'll see kind of rising tide lifting all boats. dollar can go a long way in terms of moving small cap. it's hard to say whether they work this week or six weeks from now, but i think trading at these valuations it's a pretty good starting point. if you look out three to five years, i think you'll look back and say, all right, this was a good opportunity here and you -- maybe you're a little early but your floor is pretty low. >> bryn, quickly. >> yeah, i mean, i think individual small cap names can absolutely work. i think he brings up great points. i just think from a probability perspective, as we're setting asset allocation we want to stay mid/large cap and focus on the

probability that things could get worse. i think the small caps would be -- people would start smelling small caps when we get weak data. >> we'll leave it there. thanks. we'll talk to you soon. let's send it to kate rooney. >> let's start with gm, general motors today struggling after a downgrade to market perform. that came from bernstein, a former bull on the stock. the firm is citing risks to earnings and a potential pricing headwind -- multiple headwinds from inventory as they release ev sales numbers for july and august, which almost matched its total second quarter sales for evs. in the past week gm has also announced layoffs and a recall of almost 500,000 cares. ulta shares lower tumbling after td cowen downgraded that stock from hold to sell. back over to you. >> kaite, thank you.

venture capitalist rashaun williams is back. we're live ak the new york stock exchange. you're watching "closing bell" on cnbc. (♪♪) in life, i'm reminded that it's not about the destination. it is truly about the journey. (cheering) (♪♪) (♪♪) (♪♪)

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we're in the green cross the board, trying to build on last week's rate momentum. my next guest says this rate-dropping environment could be the key, to, quote, open the spigot for tech ipos. joining us is reshaun. sorry about the outcome but you're still wearing it, we'll get there. let's talk tech first. good to see you again. >> thanks for having me. >> what do you think the rate cut really means for venture-backed companies, first and foremost? >> yeah, i think this is finally where market sentiment will

trump fundamentals. we known nonventure capitalists are afraid of nonprofit companies. we get it. we've been shut out of the public markets, we get it. as rates drop, capital costs increase, we're betting the sentiment spreads to venture-backed companies and reopens the spigot for tech ipos. about time but delay does not mean denied. >> i know delayed, not denied, but how delayed? i think that's the big question. we've had conversations with folks from the ceo of goldman sachs to others in your field, vcs who suggest -- i mean,le dro the ceo of goldman sachs, david solomon, was getting active again. when do you think this is going to happen? >> irnlg what you'll see in the next quarter or two are companies testing the market. they've already filed

confidentially s-1s. they've been talking about going public forever. they already know the public sentiment has to improve. once people see access to capital as cheaper and more radr readily available, then these hypergrowth, low profit companies will become more in vogue. we were at an historic low interest rate environment where companies were trading on average at ten times refuse new. in this four times revenue environment, are people really excited to go public? you'll need to see multiple expansion from these hypergrowth companies at the same time the ipo market opens. i think when you see those two things happen, when average revenue -- average multiple on revenue goes from four to middle seven to eight times revenue range and you see ipos happening and trading at par or above, that's when the spigot will completely open for us. >> do you think earnings expectations will be justified? will they be met?

i think that's the question, if the multiple in the market is too high because earnings can't possibly live up to where expectations continue to be. >> well, i think the public market is experiencing for the first time in a long time what the private venture capital market experiences all the time. we're used to seeing 25, 50% on the revenue side. we're used to seeing 14 to 20% on the ebitda. if you're growing at 10% on revenue or 3% to 6% on ebitda, yeah, you would expect multiples to be trading a little lower. you're seeing convergence now where the private markets and the public market multiples are the same because you're seeing revenue growth the same. in fact, if you strip out revenue growth of tech companies in public markets, you might almost be flat. so, i think as the market continues to expand and tech

continues to dominate, you'll continue to see these hypergrowth and high multiples that are prevalent in today's market. >> i know you have your eye on what's taking place with intel. that stock has been on the move since news broke that there's some deal talk around that company. you make the argument in the notes here that you'd prefer they continue alone. why is that? >> i think intel is one of those household names that's done so much for a long period of time and there's so much public and private capital out there to supported this business. they have so many opportunities to pivot and regain that revenue growth that they are historically known to do. you may have a falter in three to four quarters but that doesn't mean a name like intel should go away. i think in my market we're used to seeing big cache names and even back to my wall street days. m&a isn't always good. is it? it is not always the solution. i think intel is a name that's been in the portfolio for so

long. i would love to see them recapture the revenue and earnings growth they've known to have. >> now let's talk about that logo on your shirt. i've said it before on this program. you're an lp of the falcons. we just came out with our valuations list, of course, which got a lot of talk. obviously, number one, the cowboys, $11 billion. no slouch, falcons at a little north of $6 billion. that was number 16 on our list. can you talk about sports as an investable asset at the lp level? we don't have to own these teams outright to make a good and quality long-term investment as a partner? >> i would say any valuation on nfl teams, definitely we talk to the nfl or the team spokesman. i'm want at liberty to speak about that. but, two, some of these teams are publicly traded companies. you can dig into their

financials and you can actually become an owner. i believe the green bay packers, the atlanta braves. what ultimately private investors and public investors are looking for, from my circles, is, one, a noncorrelated asset. people are just too heavily exposed to tech and public markets right now. two, people want those private equity like returns, but they want that bond-like risk. i think profitable sports leagues and teams present that opportunity. where you have that annual recurring revenue associated with a bond-like cash flow on returns and risk profile. but then you have those double digit like returns that are so hard to get with that risk profile. so, i think that's driving the noncorrelated asset, the overall returns you've seen in the market for sports teams over the last decade. >> what kind of shark are you going to be? that's where i'm going to leave it. you'll be a guest shark on "shark tank" this season. we'll watch out for you, but

what are you going to bring? >> season premiere october 18th. i think you'll see something very different. i'm the only shark that is not a founder, that is not an entre entrepreneur, that has solely been a finance guy, watching cnbc his whole life from wall street to venture capital. i bring an extreme amount of two things -- deal-making capabilities and education. i think if anybody watches "shark tank" this season they'll learn more in one season of "shark tank" than two years at the mba program at an ivy. >> best of luck to you. see you soon. up next, mohamed el erian here with his forecast for the fed during this cutting cycle. amelia, unlock the door. i'm afraid i can't do that, jen. ♪ (suspenseful music) ♪ why not? did you forget something? ♪ (suspenseful music) ♪ my protein shake. the future isn't scary. not investing in it is. you're so dramatic amelia. bye jen. nasdaq-100 innovators. one etf. before investing, carefully read and consider

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well, now that the fed has cut rates, the question becomes how far and how fast will they go? joining us is mohamed el erian, good to see you. welcome back. >> thank you, scott. >> now that they timely moved, what's your reaction to what they did? >> i was surprised. i didn't expect them to stop the cycle with a 50 basis point cut. and i didn't expect them to package that in the context of saying the economy is in a good place and they have growing confidence that the labor market is going to remain strong. you normally don't have these two things co-exist. so it raises a bunch of questions about both the journey and the destination, as you just said. >> when you talk about the destination, it obviously becomes, as i asked in the

intro, how far and how fast will they go. i want you to listen to neel kashkari this morning on this network and we can react on the other side to what he said. >> i think after 50 basis points, we're still in a net tight position so, i was comfortable taking a larger first step and then as we go forward, i expect on balance what we'll probably take smaller steps unless the data changes materially. >> what's your reaction to that, smaller steps unless the data changes? >> so, i think that's what we should expect. i would have expected 25 to start with. as you know, i had favored a july cut. i didn't want them to start with 50, because once you start with 50, you build up expectations. look, scott, there's uncertainty about why they cut 50. some people like waller talk about inflation, him being confident that we no longer have an inflation issue. others like goolsbee speak about the need to cut off the tail of

a recession. and then there's a bunch of people in the middle talking about the balance between the two mandates. there's also a wide dispersion as to what the neutral rate is. this is a very unusual cycle that started at an unusual manner and that you cannot be as certain as the market seems to be that we're going to get another 175 basis points of cuts. >> but everything was unusual, right? from 2020 it was you be usual. a once in 100-year event, like the pandemic, skewed everything. whether it related to demand, whether it came to stimulus, what it meant overall to supply chains and fueling a lot of this inflation. so, the whole thing has been abnormal. so, maybe it's okay. they're kind of figuring it out. maybe a little as they go. what's wrong with that? maybe looking back for historical reference is wrong?

>> whether it's the right move or wrong move, we'll find out. and data is going to help. it's really interesting as to how much of the uncertainty that we is due to the pandemic and how much is due to significant secular changes in the world we're living in that would have occurred regardless of the pandemic. i suspect that the balance has shifted significantly towards the latter. most of the effects of the pandemic are now behind us. that's important because if that is the case, then you have got to be less data-dependent and more forward looking. the good news is that the fed is making that pivot. they are actually looking forward and starting to be more strategic. something they haven't been since 2021. >> right. but most of the effects of the pandemic being behind us mean that inflation has come down to the degree that it has, right? you can't have one without the

other. >> but does it mean that the neutral rate is at 2.9% or does it mean that the neutral rate is closer to 4%? that is where these secular changes come in. that's the range people have right now. 2.9 to 4. and the journey is really impacted by this destination. if you ask me, it's more likely that we are near 4% than 2.9%, but that is a view based on what i think was happening to the global supply side, the fragmentation of the global economy, what's happening to wage bargaining. that is the sort of issues the fed is going to have to take a view on going forward. >> you're making the argument they're not as restrictive as it would seem to many? >> correct. not as restrictive as they seem. and the market has run ahead of itself in pricing is in such an aggressive cutting cycle. >> i don't know. the bond market got it right this time, didn't they?

>> well, the bond market was at 25. was 95% of 25 before we got two informed articles from "the wall street journal" and "financial times." that expectation of a 50 did not move on the basis of data. it moved on the basis of this informed reporting from that. yes, the market got it right, but the market got it right because it was informed by these two articles. >> you don't believe the word of the moment, which last week was recalibration, is necessary to the degree at which obviously chair powell thinks it is? >> yeah, i think we recalibrated something else. we recalibrated what it means to start with a 50-basis-point cut. we've only done that three times in history. and every single time it was because the economy was in really bad shape. this is the first time we cut 50 with the economy doing relatively well. that is what is the irony.

we expect aggressive cuts for an economy that faces a very high risk of inflation. i'm still hung up on the fact that you made an argument with me that you wanted them to cut in july, right? and they did not. they were behind the curve. that's what you said. many think they still are, by the way. even by going 50. rick rieder said as much to me 25 minutes ago. if you wanted them to go 25234 july, what difference does it make if they went 50 in september? they made up for it. maybe they took out insurance in the process. >> because it impacts market expectations. it impacts the extent to which liquidity conditions are influenced by the perception of what the fed does. because they did 50, that's quite a few people think they'll do another 50. and that is going to be -- we

are going to be debating up to the november policy meeting, is it 25 or 50? we'll continue this debate because they did 50. so, i'm of the view the fed should get out of the way. the fed was the only game in town for a very long time. they should now step back and start distorting markets. >> we'll see where it goes from here. i appreciate the conversation. mohamed el erian joining us on "closing bell." next, we're tracking the biggest movers into the close. we'll be right back. [sfx: wind, rain and rolling thunder] with the vision to see what's possible

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we're less than 15 from the bell. let's get back to kate rooney for the stocks she is watching. >> we'll start with micron getting a bump after jpmorgan reiterates its overweight rating on the chip stock before earnings later in the week. jp calls out server demand and a.i. outlook. still down 40% from that all-time high hit back in june. and then defense stock, this is aerovironment surging, up 11% after the u.s. army lifted a stop work order on a nearly $1 billion contract. that contract was announced in late august. but it was being protested by

other suppliers. the government account built's office saying in an s.e.c. filing it will still consider what led up to that stop work order. scott, back to you. >> kate, thank you. still ahead, why tesla shares are charging higher in today's session. "closing bell" coming right back.

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mike, looking like a record close for the s&p and dow. it's been a grind it out kind of a day. >> and it's really been a trending market, not a high momentum, you know, go grab the upside in a hurry type of market for a while. you know, with today's gains, we are on the cusp of 20% year-to-date gain for the s&p 500, not including dividends. if it held there or added to it, it would be the second straight 20% plus year. there's precedent, late '90s, but not that common. and it breings you back to the idea that the market is pricing in pretty good scenario but it continues to unfold. i think that's a little of the push/pull in terms of figuring out where we get to from here. >> leslie picker, with the highlights, what did brian moynihan tell you? >> scott, yeah, a lot on the fed. moynahan called the fed's rate cut a good start. he added the fed has an appetite to cut not because the economy is in trouble but because they need to be less restrictive.

>> interesting enough what we're seeing real-time in consumer data in the month of september is a stabilizing of the spending rate around 4.5%, which is a good place for it to be consistent with low growth, low inflation environment, where it was in '17, '18, '19. we feel good about the equilibrium being there. they have to be mindful, if they want a soft landing, they have to keep making sure they stay ahead and get the real rate structure down. >> moynahan said the government debt and fiscal balance will be key determinants to what the interest rate structure looks like in the future. he said, leadership in this country needs to get those under control. i also asked him about berkshire hathaway selling down stock and whether the market should read that as a sign that the stock may be overvalued. he said, not too surprisingly that from his standpoint, the stock is a great buy and they are buying every day. b of a also announcing plans to

open 165 new branches by the end of 2026. scott? >> leslie, good stuff. leslie picker. with brian moynihan to phil lebeau and what's happening with tesla today? >> no specific catalyst but the stock is at levels we haven't seen since july 22nd. there are three catalysts on the horizon. next week we will get the q3 deliveries, october 10th is the robotaxi unveil, and later in october you get the q3 results. there's no guarantee any of these individually will push the stock higher, but keep in mind, we often see shares of tesla move higher ahead of big events like this. scott, back to you. >> phil, thank you. phil lebeau. back to mike santoli. tesla is higher by 5%. mixed elsewhere. nvidia was red for much of the day. it's turned positive as we edge towards the close. >> and lots of differentiation among even the big tech stocks. i think that's probably healthy. we kind of have weaned ourselves off reliance on those stocks.

nvidia first got to today's stock price the first week of june. from that point on to here it's been almost four months, the s&p is up 1.5%. it couldn't have done without nvidia going to the moon. since then it's answered the complaints from a lot of people that the market was too narrow. you know, many things have to go right for us to keep this up. i think the rally has been sufficiently broad so far. we've had three days to rethink it is response of the fed. the market has decided not to do that. it's decided to hold onto these gains. now we face down your typical seasonal headwinds and macro news vacuum, which honestly is just as positive as good economics. >> talking about nvidia, obviously, a lot, but the chips have been a real point of concern within this market. they were mostly negative throughout the entirety of this day. amd is positive. broadcom is positive. taiwan semi, and the aforementioned -- >> yeah, i think it's trying to

make a stand. the market is sloshing around, trying to figure out if that was enough performance. year-to-date basis, s&p and banks neck and neck. it shows you have a little more diverse market if that's what you were after. i just don't know if semis are going to be the thing to grab the market and run with it. >> bells are ringing and it's going to ring in a new closing high for the dow and s&p. i'll send it to "overtime" with morgan and john. >> the president of the republic of south africa ringing the "closing bell" at new york stock exchange. sigma doing the honors at nasdaq. stocks higher with the dow closing at record high. that's the scorecard on wall street. winners stay late. welcome to "closing bell: overtime." i'm jon fortt with morgan n. >> a rare downgrade for microsoft. we'll talk to the analyst who just slashed his rating on the stock and says there's one reason a premium valuation is no longer