l listrine, baby shampoo. this is the kind that won't be a public company in two years, at least there's a good chance. >> wow. >> they're playing our song, chris. thanks. thanks also to bob pisani. and thank you for watching "power lunch." >> maybe the ipos will pick up after today. who knows. "closing bell" starts right now. welcome to "closing bell." i'm scott wapner live from post 9 at the new york stock exchange. this make or break hour begins with central banks on the offensive from china to the u.s. and several points in between. and that is giving a further boost to global stocks today. we will get insight from former fed vice chair richard clarida to go. let's check the scorecard. the major averages all higher. several china-related names like freeport, caterpillar, baidu, and others like wynn, they are surging today, as is micron following its earnings and

guidance to help the chip trade as well today. it does take us to our talk of the tape, where best to position inside this bull market. let's ask chief market strategist for jpmorgan asset management with us at post 9. nice to see you. >> nice to see you. >> what are we supposed to do in this market? we got -- we're done with the rate cut, this one. we're thinking about the elections, like 40 days away. it's nothing. and now we have china, which is stimulating their economy. what does it all mean? >>, so i think the combination of a proactive fed, a continued expansion in the u.s., plus some stimulus out of china putting a bottom on chinese growth is an environment where the global management continues and risk asset management can do well. i think the question for investors is, all right, we're normalizing in economic terms and interest rates, but are my portfolios normalized for that environment?

we find a lot of it tends to be offsides. >> what does that mean? >> if you think about the fixed income side. cash rates were at 5.4%. and we found that investors have a lot of excess liquidity. and they failed to build a core fixed income allocation. so, the average portfolio is 36% core fixed income versus what we think would be normal, 65% to 75%. that's what's coming down. it's cash rates post fed cut. they are down 26 basis points from the one month to three month. that's the area where there's reinvestment risk and we've already started to see some money to build out just more of a core fixed income allocation. >> you think the money that's going to come out of cash, money markets, should find its way into credit, more so than equities? >> i think so. i think a lot of investors have been barbelled, either it's

cash, high yield private credit. i think where it's most offsides is more the core fixed income. there we're talking about investment grade bonds or securitized debt or slightly longer duration paper. that's there for kind of a lock in the income now and get yourself some just in case protection. within the equity side there we think there's more space to rotate within it. still find portfolios very concentrated, by design or not. on growth, on the u.s., and there's plenty of opportunity to kind of readjust. >> so we should be believers in the broadening story as a result of this looser policy from central banks and the economy holding up? >> i think so. it gives us more conviction in the continued soft landing. once we see and have seen central banks be proactive about normalizing interest rates and focusing on the downside to economic growth. and i think the data this morning also gives us more conviction. especially the revision to gdp

and gdi, which kept actual consumption strong but revised up income. hence, up the consumer safings rate by 1.9 percentage points. so, there's still a little bit more gas than expected in the tank there for the consumer to keep going and for nontech related companies to improve. >> what's on the line tomorrow morning with pce, do you think? >> so, i think the market, rightfully so, is focusing less on the inflation side, unless something reaccelerates, which is not expected. so, really what we're focusing on tomorrow is the actual consumer spending data, which was near 3%, as we mentioned, in the second quarter. is actually tracking around 3, 3.5% again this quarter. as gloomy as people feel, they still are spending at an aggregate level. this really keeps this pro risk

broadening out theme intact. >> if you look at the sector leadership, like utilities are up 17.5, and real estate, industrials and materials, does that start to switch around a little bit or is that sort of the -- a bit of a lean in you're alluding to as well? >> it's been interesting to see, especially since mid-july when there was more conviction about a proactive fed and a soft landing. that we've stooarted to see contribution from the rest of the market improve. for example, since mid-july, the mag 7 is down 6%. the rest of the market is up 3%. i think part of it is more the broadening out of the a.i. theme. i think that's what's going on with utilities there and power usage. and but there's also this broadening out into other sectors. some cyclical, some related to other industrial policy like in industrials. the one we would like to see participate a bit more, and we think is a bit overlooked is health care. that's another big theme that we shouldn't overlook. all the innovation in therapies.

some of which is being generated by a.i., by the way. within health care. >> it's the second worst, you know, i use worst in quotes. it's not like it's had a bad year. it's just the second worst relative to everything else that's gone up so much more. why so? >> traditionally health care ends up underperforming during an election year, even though there isn't that much discussion about it this time around versus other election cycles. but i think we're fixated on this other theme of a.i. and the early beneficiaries a.i., and we find it's underappreciated, undervalue the opportunity the separate themes in health care. the last thing i'll say is a lot of investors have looked to invest in health care in the private markets. venture capital, private equity, where some of the new companies are developing these therapies. >> are you watching financials? two weeks from tomorrow we start earnings. we can talk about earnings separately. but what about the financials and the message of performance from that group into how we

should think about the market's overall performance moving forward? >> one of the top three performing sectors this year, a, i think it speaks to how pessimistic, how gloomy people had gotten last year, so valuation and sentiment positioning do matter. the second one, that's the prime example of a sector that is benefiting from more enthusiasm around a soft landing, less fears around an upturn in the credit cycle, whether for individuals or corporations. when it comes to financials, specifically when it comes to banks, we would still very much focus on quality, meaning we would still focus on the large cap banks that are more diversified and have more room to improve or at least maintain their net interest income. >> bottom line for you is that you sound pretty positive on risk assets. >> we sound pretty positive. everything that's gone on is just a normalizing economy, normalizing rates. it's really just whether investors are actually able to benefit from this next leg in

risk assets by normalizing their exposure within the market to different sectors and themes, including some good stories overseas as well. >> let's bring in joe terranova. joe, you heard gabby's points about where she sees this going. what do you think? >> i agree. i think risk assets are in a good place. i think we're in the middle of a second bull market. i think central banks are no longer adversarial, ready to be accommodative if needed. in terms of positioning, i don't think this is necessarily the environment where you want to be overly aggressive and allocate towards high beta areas of the market. you know i am averse to going out and owning small caps here. it doesn't mean i don't believe in the broadening out story. i do. i think you stay higher up in the equity size class and stay focused on large caps. i think what we heard from chinese policymakers is very

constructive for areas of the commodity market and it's interesting because so many people in the last couple of days to me said, this is going to be inflationary. this is going to bring the price of oil higher. all of the commodity space has moved higher except oil. oil has actually moved lower. it is steel, it is copper, those areas will benefit. we'll rebalance at the end of october. i already see the momentum building in a lot of names that we've previously owned, like freeport, like yum china. we're seeing the momentum build once again. we have ownership right now of steel dynamics and caterpillar, which are benefiting -- >> but why do i need -- so, when there was a more defensive pos posture, even within the bull market, a heard of lot of stay high -- stay up in the size class. like the argument you're making now. now that we seem to have a better feel for a soft landing, and the fed is cutting rates, and there's stimulus, as we

said, from central banks elsewhere, china and otherwise, why do i still need to stay so high on the market cap? >> from my perspective, i do see very strong evidence thatle economy is landing not in a soft place but more of a firm place. i think the economy is moderating from a much higher level in labor, but certainly outside of the u.s. and asia, they're experiencing outright deflation. that's why they had this much needed response. i think that gets exported here. i think the economy is cooling somewhat. and i think it's reflected in volatility. >> deflation -- >> i don't think we have a deflationary environment at all. but i think those forces get exported here and do cool the economy, business investment, certainly consumer spending itself. last point on that, volatility is telling us that there's a reason to be defensive. volatility, the vix is at 15. that's a much higher level than

over times this year when the s&p has recorded an all-time high. we're talking a vix sub 12. >> we would agree with the up in quality comment, even though we said we're pro res, that's because of the word normalization. the economy has been growing around 3%. that's not sustainable. we do see some cooling towards a more sustainable 2% rate. consumption's doing well. but certain parts of the income spectrum are trading down, are a bit more stretched. and companies' overall earnings seem to be improving but their margins are still under pressure. that's not a great environment if you're a small cap or deep value, deeply cyclical kind of company. >> okay. malcolm, what's your own view? does it mesh with what you've heard? differ? what do you think? >> yeah, scott, i think i just heard joe and gabby make two separate points that might overlap each other a little more than we might realize, which is

traditionally when we talk about buying the russell 2000, the bulk of what we want to own in there is financials at a time when rates will be more favorable for us. but i think in this case, to the point that gabby was making about owning financials, the net interest margin is not necessarily the place where the real opportunity is to me. and accommodative easing cycle we're heading into. i think realistically what we're heading toward is an opportunity to own the gsibs. net interest margin isn't the thing that should matter to you anymore as an investor in the financials, it's really the deal -- the commissions that these banks earn on deals. it's m&a activity, whether bringing companies public or facilitating, brokering some sort of tie-up between companies. mergers, acquisitions. i think that's where the real opportunity is going to come. so, that is more the argument to stay large there within financials. more than going chasing the smaller cap banks, the regionals

and such. >> are you, malcolm, as positive on risk assets in general as gabby articulated she is? >> i am. i think for one thing, a lot of investment has been made into a.i. over the last couple of years. that's no surprise to anyone. but the point i heard her making before is a lot is spilling over into other industries like utilities where power consumption is ramping up. it's spilling over into areas like real estate where data centers are needing to be built out. all of those other places that are tertiary to the a.i. arms race are still having their opportunity to really boom. we really haven't seen the full weight of all of those investments that touch other areas. i think for risk assets, especially those that are somehow tangential to the a.i. arms race, it's still a good idea to be owning those names. >> can we talk about the valuation of the market, 24

times. there are people who have an issue with that. they say earnings expectations into 2025 are too aggressive at 15% growth. how are you determining that? >> in terms of valuations, it's it's glass half full/glass half empty. market leadership had been so concentrated, the biggest multiple expansion has happened in those ten largest companies. if you strip those out, valuations for the rest of the market are around fair value. not to say anything's cheap. it's just that it's not as euphoric as just the index might tell you. the glass half empty way of looking at it, if you are investing passively and taking that concentration within the market, you may be ripe for some disappointment, some skcorrectis along the way. we've seen that over the last two earnings season with your mag 7, tech-like companies reporting amazing earnings just with high valuations, high expectations. i think an area that's interesting, and we've talked a

lot about is really overseas markets. still discounted versus the u.s. and now actually having catalyst to turn around, take the a.i. story, key beneficiary, taiwan, up nearly 30% this year, and underappreciated one, korea, which has memory semiconductors, which was lagged behind. so there are so other ways to invest in these themes in areas that are a little more discounted. >> two weeks from tomorrow, right, the banks start reporting. and then it's a flood of earnings. we're good this reporting season. is it forward where we need to be a little more cautious or how do you view it? >> i think the comps will be difficult, in particular for technology, in the upcoming quarter. i'm a little concerned with financials as malcolm mentioned in particular. the regional banks, a lot of the regional banks are going to be affected by what has been a little bit of a cooling in business investment. that's a little concerning to me. i've got goldman sachs, jpmorgan.

we have a strong weighting in etf to financials, so obviously i'm going to keep my eye on that. with financials themselves, i think the expectations are very high. i don't know if they were able to meet them. >> malcolm, can we talk about the outcome of the election. we say 40 days. the market hasn't been paying attention to it at all. how should we be thinking about it relative to tax policy, probably more than anything else, whether you have split congress or not, and maybe that's put a little bit of a lid on some of the activity in the market post rate cut because now we're going to get more fixated on what happens in the election and what it means for major policy going forward. >> well, i think maybe the reason we haven't seen too much market movement or too much concern from investors over the outcome of the election is because we assume that whether biden -- excuse me, whether harris or trump is the victor, either administration is going

to be more favorable to business than the biden administration has been to this point, right? i mentioned before we should expect to see a decent uptick in m&a activity among the banks. i think part of the reason for that is a lot of the tech companies that have had their pencils out, looking for opportunity to acquire smaller companies to bring in house to help their operations, they've been holding off for hope that a new ftc chair might come in that would be more willing to allow those deals to close. and i think maybe investors are looking at it on the whole. tax policy, like you said, m&a activity, things like that that are obviously going to be better for the investor class. i think those are the things we're hoping that no matter who ends up winning in november, it's going to be all net positive for those who have been waiting to see. >> joe, tepper made the point this morning that forget really what happens at the -- for the top of the tickets, right, the

presidential race. as long as you have a split congress, the markets are good. >> a lot of the fear in conversations i'm having with advisers is they're holding back on deploying that capital into the market because they want clarity. they want to get to the other side. they want to understand, what's the configuration of government. if you think about impactful legislation since the great financial crisis, impactful legislation that could really affect the portfolio. there's two major pieces. the affordable care act early in president obama's administration and early in trump's administration, the jobs and tax cut act. so, each one of those circumstances required the majority. and i think a lot of advisers are sitting back right now and saying, okay, i need to know, am i going to get the clarity of having gridlock because that's what investors want. investors want the gridlock. that's the best place to be. >> and i think especially around taxes and what's going to happen with the individual tax provisions that expire at the end of next year, i think the place to look, whether the market cares or not, is the

ten-year yield, which is up ten basis points since the fed cut rates. i think it's all about that fiscal uncertainty, which will depend on the composition of congress. >> partly about the deficit going up, funding the deficit, what long-term rates do as a result of that. >> that's right. we'll continue to see a steepening of the curve as that happens. the long end reacting to fiscal, the short end reacting to the fed. >> we'll leave it there. thank you. let's send it to pippa stevens for the biggest names moving into the close. >> shares of carmax are climbing today after the used car retailer reported a better than expected 4.3% rise in sales for its q2 with sales up 5.1% in its retail segment. but earnings came up short as they increased provisions for loan losses. southwest airlines stock is soaring as the carrier upped third quarter revenue forecast and announced $2.5 billion share buyback program as well as changes to its business model as the airline battles activist

investor elliott management. the firm said in a statement that ceo bob jordan, quote, lacks the vision and capability to execute on those initiatives. don't miss southwest's ceo bob jordan coming up on "closing bell: overtime." scott? >> pippa, we will not miss that. thank you. we're just getting started here. up next, former federal reserve vice chair richard clarida is back. he'll give us his forecast for the fed cutting cycle. you're watching "closing bell" on cnbc.

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s&p 500 hitting a record high on the heels of strong economic data this morning. what does all of that mean for the fed's path going forward? following last week's jumbo rate cut? let's ask richard clarida, former fed vice chairman and now pimco global economic adviser. nice to see you again.

welcome back to our program. >> glad to be back. >> were you surprised at all by the 50? >> well, we said it was a close call and it was a close call, by my count. nine folks were leaning to 25, nine to 50, and i think the chair broke the tie. but, you know, looking ahead, it looks like a pretty sensible path. so, i think, let's look ahead. >> i mean, let's do that. let me ask you one question looking back. the dissent from bowman, how should that be taken? if you were still at the fed, how would you take that? >> well, it is the first dissent by a governor in 19 years. reserve bank presidents can and do dissent. i think it indicates it was a close call. i think jay powell is very pers persuasive. hopefully he persuaded the other 11 -- other ten voters to support the 50. >> how far and fast do they go from here?

let's not talk about next year. let's talk about -- let's fixate on the rest of 2024. what do you think happens? >> i think it's pretty finally balanced. certainly given the robust economic numbers today that we saw that reinforces, you know, the case that they laid out through the projections, which is a 25-basis-point cut in november and december for a total of 50 more. you know, on the other hand, the communication from the committee governor, waller, chair powell, president goolsbee and others has indicated they're really looking at the labor market and i do sense that if we got any softening in the labor market data, in particular, say, two or three-tenths rise in the unemployment rate they would probably be inclined to go 50 again. so, right now i think we shifted from a fed looking exclusively at the inflation data to a fed that's looking a lot at the employment data. >> but what do you say to those

who look at the data today, for example, and say, you see, i mean, they didn't have to do 50 and they shouldn't be doing much cutting at all because this is not an economy that needs any sort of help from the fed at this point. the obvious other side of that is, well, they're just too restrictive anyway, so the current rates make no sense relative to where their inflation projections are. >> i think, scott, you phrased this in the connect way. you know, the real question is how restrictive is current policy? certainly the federal funds rate is well north of inflation and north of their estimate of, you know, the neutral rate. you know, on the other hand, financial conditions by the fed's own index are rather easy. if anything, have eased even more since the rate cut. and ultimately this is about demand and supply. so, i do think they'll be open-minded as we go into next

y year. i don't think they're on a preset path. but i think there is a scenario where rates don't come down as fast, certainly as the market thinks, which is an aggressive path where they're down 200 basis points in the next 12 months. we may not see that. >> is their neutral rate right? do you have a good feel as to where neutral really is in the treasury secretary and former fed chief yellen today said, yeah, they're going to cut to neutral. do we even know what that really is in this current environment? >> well, the short answer is no. it is an important input to policy but there's a lot of uncertainty. indeed, the chair made reference to that last week in the press conference. i think there is broad agreement that the funds rate before the cut last week was neutral even into the estimates. i think there is probably room to get rates down. but i do think that -- i do

think uncertainty becomes more relevant the more rate cuts that we see. again, i would look at broader financial conditions, which are not particularly tighter than they were a while back. >> are you firmly in the soft landing camp at this point? i know you have been, but do you remain there? do you worry about the unemployment rate getting away from the fed, that they've waited too long, they're too far behind the curve and it's going to come back to haunt them, it just hasn't shown up yet? >> what i would like to say is historically, you know, the unemployment rate doesn't move very much and then it moves a lot. it's very nonlinear. the fact we're at a point that's a very good position to be in doesn't necessarily tell us we'll stay there. however, there is no indication in the data i see in terms of consumption investment and the

like, and government spending that indicates an economy on the verge of recession. but again, we'll get a labor market report soon enough and then we can reassess. >> how do we view what's happening over in china? how do you think those on the fed are taking all of this in? of course there's been the conversation over the last many months about china exporting inflation. now there's some concern that maybe they'll start exporting inflation. how are those in the room today on our central bank thinking about that? >> when i was there we got a lot of briefing on the global economy, and china has been a remarkable development, scott, that in a period when everybody has had the problem that inflation is too darn low and in china it's too low. producer prices in china are falling. they have an enormous property

bust. a hostel other problems. we've seen both the central bank and i guess today or yesterday the bureau announcing steps, so i think it will be one factor. i don't think it will drive any fed's calculation. the deflation out of china hitting the global goods market has been helping the fed out for sure. >> how do you think they think 40 days out from the election potential changes in policy, tariffs and the like, that could have an impact on inflation? >> i firmly believe, and i think they've communicated this pretty consistently, that they're going to be making decisions in november and december of this year based upon this year's economic data. i don't think they think they have to reverse engineer what the policy will look like in 2025. as we enter and go through 2025,

they'll have a better sense of that. of course that will depend not only on who wins the white house, but control of congress. i think the next two meetings the remainder of this year will be based on the data for this year. >> it will be interesting, to say the least. mr. clarida, i appreciate your time very much. thank you for coming on our program. >> thank you for having me. up next, cnbc sport launching its newsletter. our own alex sherman will join us with those details and why tv executives are focusing on 20 29d in a big way. we'll do it next. with powerful, easy-to-use tools, power e*trade makes complex trading easier. react to fast-moving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity. e*trade from morgan stanley

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welcome back. cnbc sport launching its new weekly newsletter. here to tell us about it is alex sherman. >> a weekly newsletter, the first one is today. you can sign up right now at cnbc.com/sport. you will get the first newsletter in your inbox in about an hour. we'll be showcasing the biggest stories in the world of sports business every week. there will be different parts to the newsletter, there will be a lead story, interview with an outside guest, we have the big number, which this week is 8 million, representing the most expensive super bowl commercials

are going for. those 30-second ads. they go up and up every year. i'm told it's up to $8 million for the most expensive. and other elements. you'll get that in your inbox as part of cnbc sport. >> you're looking at other numbers, too, that we need to pay attention to. one is $111 billion. the other is 2029. do tell. >> yeah. the 2029 one is really the interesting thing to me. look, that's five years away. we all know the media entry has been moving so fast with mergers and acquisition, and the change from traditional tv to paid and streaming. if you look ahead another five years, a, who knows what the media landscape will look like, but the pivotal event happens at the end of the 2029 season. and that's when the nfl has an opt-out clause in their current media rights deals where they could completely rejigger the media landscape by moving sunday afternoon packages, which have existed for decades on broadcast tv networks, over to the big

streamers. it may be that five years from now the world has changed enough so that the reach and the money that the league is making makes more sense for the league to sell a package like that to, say, netflix or amazon rather than cbs and fox, which currently own those networks. what i get into is that executives at these legacy 2029 to figure out, how can we stay in the game? should there be a third sunday package where we don't have to pay as much for it because we don't have the balance sheets to compete with the big tech companies that may bid on these packages. >> you have a q&a with someone well known within the media industry, right? >> jeff zikzucker is this week' q&a. he used to run cnn, this network, universal, to investing in sports and media. he seemed like a great person to be the first newsletter with.

he has the media angle, the investment angle and those are two things we're focused on in the newsletter. he talks about how women's sports is big. and how media companies may be the owners of smaller sports leagues. that's not something we've seen before. imagine netflix, say, actually owning a sports league and then they don't have to rent out or license out the fees for that sports league. it kind of brings it in-house, a new form of vertical inte integration. >> good luck with that. we're excited about it. we'll read it ourselves and we can't wait. that's alex sherman. you can scan the qr code on your screen or go to cnbc.com/sportnewsletter. up next, chris hyzy is with us after the break.

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now make it count. vote it. your opinions matter. your thoughts matter. so speak up at the polls and make your vote matter. the s&p closing in on its fifth straight month of gains. our next guest sees more room to run in the months ahead. joining me with his bull case, chris hyzy, maryland bank of america private bank. my first question, good to see you, is you've been bullish with us. and sounds like you remain so. >> yeah, we've got a lot of momentum behind this. everybody talks about the cash on the sidelines, scott. you and i have talked about this for months. that's one way to gauge it. the most important way to gauge how much momentum you have is changing the wedge that's been in the market. the wedge that's been in the market continues to be the risks that are very tough to measure. geopolitical risks, concerns

around elections, but the biggest wedge that was in the market last year and in 2022 was inflation. that's beginning to go away. it's almost to the fact where no one is talking about whether or not we're going to have inflation that's worrisome. that won't -- we'll revisit that later. the second part is this, the two major economies in the world, now with china joining the fed and the fiscal party in the united states at a time when profits are going up, that strikes me as two tailwinds that create a melt-up that we really haven't talked about. >> how powerful -- you mention these impediments are still in the way. the election and other things. we're not 100% we have this soft landing nailed at this point. we think we do. we hope we do. but we're not fully sold on that, are we? >> no. i mean, one of the things that everybody talks about is this binary approach to a landing, soft or hard. there's a lot of different

scenarios in between those two. you usually have a soft landing for an extended period of time before you get a hard landing. before you get a hard landing you need excessive leverage in the areas that matter most. the consumer or the household and/or the corporation. neither of which have that list or that massive concern that typically is before a hard landing. we have a lot of components of a soft landing. i would like to say it's more of midcycle slowdown with easier financial conditions that should actually create a profit revision to the upside not downside, which is what you would typically see. >> okay. so, you think the debate centers around market valuation, 15% earnings growth expected next year. you think that's all legit? we can meet that, what feels to be a higher bar? >> i think what we can meet is a better outlook than what most are suggesting.

now, when we talk to clients, they're appear serehensive goin in the curve, they are comfortable with the short end of the curve, so they have yet to move out on the spectrum. they're concerned about adding more into the market because of geopolitical risks and/or -- concerns. and they're waiting for a little bit more of the all systems go sign. unfortunately, you know how this works, you climb the wall of worry. next thing you know, things are starting to get better and you're higher. next year the 15%, sure, it's probably going to come down. but what most people believe in terms of real active risks is much lower than that. we think that that gap has to narrow. i think you can see momentum to the upside and profits at a time when financial conditions are going to get easier. >> we have to run. more room to run. chris hyzy on "closing bell." next, we'll tell you what is sending wells fargo higher.

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coming up next, super micro sinking. we'll break down the details coming up. don't miss a first on cnbc interview today with southwest airlines president bob jordan coming up at 4:40 eastern me ti only on "overtime." market zone is next.

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that's a pretty good burn, right? got him. good game. thanks for coming to our clinic, first one's free. we're in the "closing bell" market zone. cnbc senior markets commentator mike santoli here to break down the crucial moments of the trading day. leslie picker. and seema mody watching two big sw swings in the a.i. area. >> if you look at it from a top-down level up a third of a percent on the s&p, it looks like a restrained response relative to this first higher at the open. the you had the china news, the mike k micron news. everything checks out on strength where you would want to see it.

semis leading up 4% as a group on market cap weighted basis. and the restraint in the index, i was just looking, the downside pressure coming from lilly, microsoft, walmart, netflix, ge aerospace, up 40% to 60%. year-to-date winners kind of harvested to be put elsewhere. i think it's okay. positioning seems full. it looks like we're going to sidestep the ugly september headwind. only two more trading days to go. >> barring a surprise warning from pce. we're still waiting for that. it may carry a little less importance because we've moved beyond it. but it still matters. >> i think you still want to be able to check it off. you want to make sure it's still in line with the trend and i think more to the point, the market has itself priced for benign inflation environment, friendly fed and supportive growth picture. all that's great, but you have to have it confirmed along the way. >> china stuff is pretty dramatic if you look at all the

companies, a swath of estee, lvmh, wynn, sands, freeport. pick your sector. >> the communist party of china is pretty good at trading this market because it was really washed out and everybody leaning towards uninvestable. it remains to be seen if this grows into anything more than just this catch-up move because it's been so washed out. you have to give it credit that it actually is the areas that would benefit from domestic consumption are absolutely on the move today. >> leslie, what about wells fargo. there was this news that sent the stock higher midday. >> this is an interesting development. wells fargo shares higher today on reported progress related to lifting an important regulatory restriction on the firm. bloomberg headlines showing the firm has entered a new phase in its seven-year effort to lift an asset cap imposed by the federal reserve. citing people familiar with the matter, the story says wells fargo submitted a third-party

review of its risk and control overhauls to the fed for final signoff. the regulator's cap of $1.59 trillion in assets ever since 2017 has stunted wells fargo's growth and limited earnings upside. but the article said executives still see the fed maintaining that cap into next year. a spokesperson for wells fargo declined to comment, as did the fed. still, wells fargo shares up 5.3%, having their best day since february of this year, scott. >> leslie, thank you. leslie picker. to seema mody and two big swings in the chipmakers. which ones are we talking about today? >> let's first start with micron. wall street playing catch-up after the memory chip player surprised the street with better than expected numbers in guidance. morgan stanley raising price target from $100 $114. wells fargo to $175. ceo telling cnbc the power of a.i. and pivot into high band-width chips which he sees growing into $25 million market

next year, up from $4 billion in 2023. >> a.i. is a great story. frankly, not only in data center. as you look ahead at smartphone and pcs, a.i.-enabled smartphones and pcs are going to require more memory content. so as we go clue calendar year '25, accelerating in the second half of calendar year '25, you'll see smartphone and pcs also continue to drive strong demand for memory. >> micron on track for its best day since 2011. super micro, they are being investigated for accounting violations. it comes a month after hindenberg research published a report accusing the company of accounting fraud. so far, super micro denying any wrongdoing. you'll see shares down 12%. that stock has riden that a.i.

wave but has fallen 50% in the last three months. >> appreciate that. mike, better performance from the semis would help this market. >> no, without a doubt. it's been the engine. still more to prove. nvidia, interesting trading today because it had gone up close to challenging the august highs above 125 to 124 right now. the super micro news seemed to put a damper to. it's all moving in the right direction. if anything micron says, can be extrapolated to the rest of the group. what's interesting to me is the market has found a way. in the absence, this whole quarter of real leadership from mag 7 and semis to essentially stay together and continue to put in new marginal highs. it's not a high momentum market. people aren't jumping in and really assuming there's going to be an immediate quickup side. it probably means you don't

chase anything, it probably means it's okay to buy some pullbacks for now. again, when treasury yields staying in this comfortable zone and the data checking out along the way. >> looking at financials, decent today. tech obviously leading. materials, no surprise on the china news as well. >> fascinating, given the decline in crude prices because of the saudi supply story and energy stocks are pretty rough, to the downside, that's not the textbook china trade. here we have a sorts of quasi china acceleration, reflation rally without the attendant increase in energy costs here. for as much as you could look at the insides of the labor market date sta and stuff like that and say, we have a risk of a hard landing brewing here, it's hard to get one historically when oil prices have been benign. almost every recession is somewhat preceded by a pretty

good run in gasoline prices. not as the cause. we're not seeing it now. >> good stuff. appreciate that. mike santoli. we're going to go out with another closing high for the s&p 500. pce looming in the morning. we'll send you to "overtime" with jon fortt. >> that means it's the end of regulation, ice climate and capital conference ringing the bell at new york stock exchange. currency group doing the honors at the nasdaq. a record close for the s&p 500 as china's material stocks surge. tech gets a boost. mostly semis from micron. that's the scorecard on wall street. winners stay late. welcome to "closing bell: overtime." i'm jon fortt. morgan brennan is off today. coming up, first on cnbc interview, southwest airlines'

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