it's done well brought out to consumers and hotels and restaurants. it's a great story, but at the same time, it's kind of lower level story. it's not high-end. it's a chinese low level, which i think is a way to play it as well. >> michael landsberg, have a great weekend. thank you all for watching "power lunch." we hope you have a great weekend as well. >> "closing bell" starts now. ♪ welcome to "closing bell." i'm mike santoli in for scott wapner. this make or break hour begins with stocks on the verge of sidestepping that scary september we were promised or warned about. the index is holding near-record highs without relying too heavily on big tech. inflation has been tamed and the economy is holding up just fine. here's a look at your scorecard. you see the s&p 500, quite flattish all day, maybe just came back from 0.25% decline. it has been up 11 of the past 14 sessions. it's sitting on a slight gain for the month as well.

the dow, pacing for a record at this point above 42,000, almost 42,400 at this point. nasdaq has been sidelined but still is ahead by around 1% on the week. nvidia, taking a hit in late-day trading after a report last hour that china is urging local companies to stay from nvidia chips, kind of a reiterated policy there, but the stock is down 3% at this point. it's restraining the s&p 500 for sure, been unable to hold rallies above $125 this month. below the surface, the macro message is reassuring. consumer discretionary stocks and industrials have been outperforming all week. market breadth, solidly positive. small caps, perking up a bit today after a bout of underperformance. we'll talk more about how to play all these markets with savita. t . but first, the state of the soft landing debate. joining me now to discuss it al is jpmorgan's david kelry,

warren pies, and shannon. shannon is also a cnbc contributor. david, love to start kind of with the macro view here. you know, when the fed cut rates, it's a week and a half ago, the debate there was, oh, it's a close call, 25 or 50. it's also a close call as to whether the fed is a little bit too late or right on time. economic data since then has seemed, on a net basis, pretty reassuring. >> very much so. first of all, look at all the ddp revisions and the data we got this morning on consumer spending and inventories, durable goods, trade. overall, it looks like we're heading for about a 3% quarter. i'm getting 3.1% for the third quarter so that's very reassuring. we've got plenty of momentum. but also, if you look at those revisions, they say the saving right wasn't as low as people thought and we have had a huge increase in wealth and this increase in wealth, 16 straight months of real wage gain, says a lot behind consumer spendsing. there's a lot behind -- corporate profits also revised up. there's a lot behind corporate

spending so i see plenty of momentum in this economy with or without fed rate cuts last week. >> those revisions certainly send a message that we were not as close to stall speed, perhaps, as we thought and maybe consumers were not really as sort of tapped out as was expected. all those things you just listed, 3.1% real gdp pace right now, huge wealth gains in recent years, is that compatible with a fed that seems pretty aggressive in terms of trying to become more supportive? >> yeah, because the thing is this economy was never that inflation prone. i have had a hard time the last few years defending that point, but the reality is we got hit by pandemic supply chain issues, ukraine. but as all that's faded, it's coming down. as we look at the numbers for september, we think we're going to see a 2.0% number, so the fed can essentially say mission accomplished. i don't think they did all the work. i think that's the nature of the economy, but it looks like this

economy can actually tolerate pretty strong growth, pretty strong demand from consumers and from businesses and still have the inflation rate come down to 2%, which is a pretty good backdrop. >> warren, that obviously would be the ideal scenario. maybe one that you can't fully put your faith in, but i know you have been sticking with the soft landing outlook as well as believing that, you know, stocks can continue to add on from here. what about now with the s&p up 20% and we're kind of rebuilding that general confidence in the soft landing premise? >> soft landing has been our base case for over a year now, and i just don't see anything to dissuade us from that. we've always said there's three real components, resilient economy, and a hyperreactive fed and i think that the september decision to cut rates by 50 basis points, for better or worse, it's definitely a fed being hyperreactive, so i think the soft landing is a base case and it's just a matter of how

much of that is already priced into the market. my view is that even though we have had such a big run-up this year, as we stand at the doorstep of q4, it's kind of crazy, but strategists' forecasts relative to where the market's trading right now are the most bearish they've been on record for as long back as we have that data for. strategists have a year-end target of 5,483. they're like 5% below the s&p 500. we've really never been positioned like that, coming into a q4. only five other q4s where we have had this kind of relative bearishness from strategists and basically every other case the market ends the year up and sometimes quite significantly. so, despite all the move we have had, despite the valuations, and i can definitely go down those negative rabbit holes, despite all that, i don't see the conditions in place for a top. we'll check back in at the end of the year and see where -- if

it gets more frothy as people reset their 2025 estimates, but soft landing, i still think there's upside toward the end of the year here. >> i wonder if tactically we're not going to get too overexcited in the market when we have the election out ahead of us and all these other excuses, maybe, to hold back a little bit. shannon, i guess we shouldn't get too far away from the fact that the last two months, we started the month, and when we got the ism manufacturing numbers and when we got the jobs report, that's what's coming ahead of us next week, we found reasons to get scared about growth again, whether it was valid or not, the market had -- kind of had this little wobble along with it. so, do you think we're there? do you think we can kind of declare relative victory on the fact that the economy is durably holding together? >> well, we know how much hinges on employment, and we understand that, you know, month-to-month, we see some oscillation in consumer confidence. we may see some read-through to consumer spending, a lot of that

is seasonal, depending on what's -- what is the catalyst for consumers to go out there and spend, and so, i think, you know, they'rest there's going to be a lot of emphasis on the jobs numbers. and that's where people have found some of the weakness and the potential for a tipping point lower, if you look at vacancies, the quits rate, the hire rate, if you think about the fact that we are entering into a period where there is expected to be slightly more muted growth. with that said, you know, i would think that, you know, this particular jobs report just given how close we are to the election and the traditional level of volatility that picks up and, obviously, it's a very hotly contested election that we're looking ahead to, we could see a little bit of additional volatility and perhaps some profit-taking as we go through the middle of october. but i would, you know, i would caution to put too much emphasis on this particular jobs number. we've continued to see revisions, and again, to david's earlier point, a lot of the

underlying fundamentals of the economy, they're still fairly robust, and the wealth that's been created is really where we've continued to find some solace in terms of the month-to-month fluctuation in jobs. the bottom line is that kind of post-election, as we know, we would expect there to be some strength in the economy -- in the markets, excuse me, and then everyone's going to start looking forward to 2025 and some of those policy changes, but for now, these next couple of weeks could be an opportunity for those people that are still on the sidelines, mike, cash rates are coming down pretty quickly here, right? so, if you've been waiting for your best opportunities, you might see it over the next few weeks. >> yeah, i mean, i guess people are making those calculations at this point. david, what are the main arguments in pushback to your view that the economy is more resilient? where do they come from? is it effectively, you know, credit delinquencies perking up among some households? is it this idea that once unemployment starts to go up, we

seem like it could become self-reinforcing? >> i think the -- i think there are specific statistics which are scary. i mean, we have had an inverted yield curve. we've had leading indicators go be negative for as long as i can remember, actually, and now we've got the -- >> couple years. >> we've got the rule being triggered by that rise in the unemployment rate, so you have to look through these. i think it's particularly challenging time for economists, because there are so many dispod distortions in the data, particularly when it comes to seasonal effects because we don't know how seasonality may have changed because of the pandemic that you have to look at the overall mosaic and we look at the unemployment claims, the confidence numbers, the ism numbers, as well as the payroll and the household survey, it does tell us slow growth. it doesn't tell us anything keeling over here. and so, you know, overall, it looks okay, but i get all this pushback. generally, i would say, look, i'm not going to fight number by number. i'm going to look at the whole picture. if you look at the whole picture, it says, steady growth, and it also says steady

noninflationary growth. >> yeah, warren, did the china news this week and the market reaction influence the equation at all for you? whether it means it's a little bit more of a backstop on growth or just what the market is willing to price in here in terms of commodities, outside of oil, that is? >> yeah, you know, i think it's a positive, and it's been -- especially for so many months, we've been talking as an industry about why has the rally been so narrow, and now we've seen it broaden out a bit. it gives a little bit of a tailwind to the cyclical portions of the market that haven't participated as much as the growthy areas, so that's definitely a positive. from our perspective, we focus on oil a lot. we have a lot of oil-based clients and we have to be from just in its own silo, i think, oil's reaction has been a little disappointing and it points more toward the supply overhang from opec versus, like, a

recessionary scare from the u.s. and so, there's still some skepticism in the oil patch, but you know, i have to like -- i have to like how the metals reacted and how some of the other cyclical areas of the market reacted to the news. it just joins the tailwinds of big pro-cyclical deficits out of the u.s., a fed that cuts, a.i. productivity story that i think a lot of people want to invest hope in, and now you have china stimulus. so, when you add it all up, it's hard to get a much more favorable macro backdrop. >> yeah. it's true. it's amazing how far we've come in really, like, several weeks of people thinking that it was kind of game over for the recession call. shannon, tactically speaking now, in terms of what the market has served up in the way of relatively opportunities, whether you'd want to reload on the tech trade that's gone sideways for a little while or if you believe that this sort of cyclical migration is worth following. >> our view, mike, has been that

this broadening out is sustainable, and that's really just comes back to earnings and the potential for improved earnings growth and the potential for and realization of the earnings deceleration for those big cap tech stocks. i think that the china news does change the equation slightly, in terms of, you know, as you and i both know, lot of consumer companies, especially global consumer companies, it's always been with an asterisk, right? u.s. performing pretty well, but not china. you know, it's been a hindrance, if you will, to some of the more cyclical companies. take outside of really the true cyclical complex in terms of energy and materials and then think about the fact that if you see a resurgence in china, particularly one that is more focused on stimulus that's designed to increase consumer behavior and consumer spending, well, that has implications not only for the u.s. market but also the european market, and so i think if you're looking for, you know, some potential foundation for a continuation, despite the uncertainty of the

upcoming election, you could be finding this in this china news, although we have yet to have a lot of details on policy. it does seem like the tone is much less on the, we're going to put together a stimulus that's really business focused. it does seem to be more broad, at least what's come out of beijing, at least so far. >> and just, david, final word on whether that is a further cushion in terms of economic growth, what china's doing, or is it, at this point, not a big swing factor? >> i don't think it's a huge swing factor. in theory, it pushes up global demand enough to stop displaegs, but overall, the global economy, the inflation rate is soggy enough. i think we've been doubling up, and i do think people should think strategically about, maybe these valuations are a bit rich, but more to the point, maybe my portfolio is a little bit out of whack and i need to rebalance here after what has been an extraordinarily good year. >> it's a fair point. s&p is up 20%. we're at 21-plus times earnings,

so it's been figured out, at least on some level. david, warren, shannon, thank you so much for the conversation this afternoon. let's send it over to seema mody for the biggest names that are moving into the close. >> 46 minutes left in trade and u.s.-listed shares of novonrdisk are down. jpmorgan says it expects lower sales than wall street initially anticipated. analysts citing a softer than consensus for wegovy. shares are down nearly 3%. acadia health care, sinking to a new 52-week low. the operator of behavioral health care facilities disclosed it's the subject of a government investigation into how patients were treated. the probe follows a "new york times" report that said patients were held against their will to boost revenue from insurance payouts. stock down 16%. mike? >> seema, thank you. see you again in a bit. we are just getting started. up next, a deep dive into the state of the consumer after

today's stronger-nthan-expected data and as nike gears up to report results next week. we're live from the new york stock exchange. you're watching "closing bell" cnbc. (grunting) at morgan stanley, old school hard work meets bold new thinking. ( ♪♪ ) partnering to unlock new ideas, to create new legacies, to transform a company, industry, economy, generation. because grit and vision working in lockstep puts you on the path to your full potential. old school grit. new world ideas. morgan stanley.

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a new upbeat read on the consumer this morning. consumer sentiment index rising to a five-month high in september, up more than 3% from august. my next guest is finding opportunities. joining me now is anisha sherman. great to have you. what sort of general backdrop do we have right now for the consumer going into the final quarter of the year? there was a real scare surrounding some july consumer spending numbers. we maybe have calmed a little bit from there. but how does it seem? >> since july, we have had some good news, a strong back to school surge, so most retailers and brands have had good back to

school numbers, which is a really nice leading indicator for holiday because if you end up with a bad back to school, you come into the holiday with excess inventory and it becomes very promotional. and now, the holiday season is a few days shorter this year, so it is going to be promotional and retailers are eager to get started on it. so, it's going to kick off in october. starting next week. but retailers seem optimistic. it helps that last year's comparables are quite soft so i think we'll see stabilization and growth in retail over the next few months. >> with that, you see the off-price segment as the place to be? even though those stocks, many is of them have done so well. >> they've come off their highs a little bit this week. they aren't exposed to china, so they haven't been beneficiaries of that china trade.

in terms of outperformance, they have continued to outperform the market for the last five, six quarters. they continue to comp positive, secure tradedown volume and i think they will continue to do well through the holiday season, because people are still value seeking. people are still looking for a good deal, and they're incrementally more positive, but they don't have money in the pocket yet. they have aspirations of money in the pocket with the rate cut, but it hasn't quite translated into actual earnings power yet. >> what we hear is a very careful consumer. ross stores, one of those names that remains your top pick at this point? >> i think short-term, ross is my top pick, because it hasn't actually rerated this year. it's derated, despite strong performance year to date. and that's because people have concerns about the low-income consumer. but now, as we see consumer sentiment changing, any benefit to the lower income consumer is going to disproportionately help a value retailer like ross, and we haven't seen the kind of

multiple expansion that we've seen at tjx, so it's relatively undervalued. i do like it for the next couple quarters. i think performance is going to be strong, particularly if the lower income skurl starts becoming more positive into the holidays. >> and i know that you don't directly cover costco, but is there anything in the numbers to make you kind of think differently about how consumers are approaching this period? >> it was not surprising. the comp was still strongly positive. they didn't see an effect of the membership price increase, both good signs that the consumer is still resilient. their doing a lot of reinvesting in price, just like walmart and target, but a lot of that is going into staples, so it's going into the must-have, the food budget, et cetera and that makes a little bit more room to spend on discretionary. so from a discretionary perspective, i would read it as a positive. >> do want to look ahead to nike's results coming next week.

a lot of excitement surrounding the ceo transition but what should we expect to hear from the company about the current performance and outlook? any the ceo won't be on and i don't expect him to be part of the earnings call. he joins in about two weeks. the one thing i do expect is i think they will cut guidance again for the back half. they've now had three quarters of cut or disappointing guidance. i think there's going to be a fourth one. it's the right set-up for the new ceo. i think they're going to try to derisk to come in on a strong note and put out strong numbers so i think we'll get a guidance cut. i don't think it will be a negative catalyst, though, because it is widely expected and it could even be a positive kas list. that's just a clearing event to clear the decks and set the stage for the new leader. >> and the news in china this week and the excitement around the potential stoking of

domestic demand, does that move the needle for you in terms of nike? >> nike has 15% exposure to china. it is a big needle-mover for nike and any other china exposed discretionary name, particularly the cash payments that the government is giving out to consumers because that immediately gets flipped over into discretionary spending. i think that is a big positive. >> and you continue to recommend nike, price target $109, correct? >> that's right. >> aneesha, thanks very much. appreciate it. up next, top technician jeff degraaf is back with how he's navigating the china trade right now, and don't forget, you can catch us on the go by following the "closing bell" podcast. tamra, izzy and emma... no one puts more love into logistics than these three. you need them. they need a retirement plan. work with principal so we can help you

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china stocks in the green again with two etfs to track the group closing in on their best week ever. our next guest says the charts are pointing to more bullish momentum ahead. joining me now is jeff degraaf, renaissance macro's chairman and head of technical research. jeff, good to catch up with you. obviously, very strong, almost vertical moves this week. in your reading, what was the set-up in the china markets going into this news and where does that leave us after this flash rally? >> yeah. thanks for having me, mike. so, a couple things.

we turned bullish on china back in the spring and that was really based on a capitulation signal in some of our works. norlds, people had just had enough and there wasn't anyone left to sell in our view. that did not turn into momentum. that did translate into a bullish trend and went dormant over the summer, which was frustrating, but we stayed with it, and now we're starting to see that pick up. as much as anything, obviously, there are some policy decisions that helped cat lies this, but a real important set-up for this is looking at where the sentiment was, what the flows were doing and the etf flows with china-related were horrendous. people were selling almost panic selling hand over fist and there isn't any exposure from our estimates, and so just to get people back to a market weight, there really was this void that was created and i think that's part of a what you're seeing. we call this the acceleration wall and i think that's part of it, which is just this vacuum that's created by the abundance

of sellers over the last month to three months, really. >> the fact that you were seeing that evidence of what people had been saying about it verbally about it being uninvestable and having no reason to have much exposure, obviously, this rally, i guess, would cause some kind of a rethink of that position, whatever you think about the, you know, long-term sustainability of the policies themselves. so i guess, dynamically and sort of behaviorally, how do things go from here? terms of, you know, if you've been out of it, do you want to look for a reason why this is not sustainable? or is it going to be a chase? >> i think you want to do just the opposite. you want to look for reasons why it might be sustainable. i don't know if we'll end up being right or not, but if we're wrong, i feel like the risk is very well managed. if we're right, there's probably 50% upside.

the one thing i would say, and we thought of this back in march, which, if you look back to 2009, right, when quantitative easing and some of the policy measures were in place, we heard the words uninvestable about u.s. equities, right? that's almost laughable now, 15 years later. we heard the phrase that policymakers were out of bullets, and that phrase, you know, has come up several times in china. so, you know, whether this end up being a correct call or not, i don't know, but the set-up is certainly consistent with some of the big calls we have had throughout the ages and i'm excited about what we're seeing from a sentiment standpoint, from a historical return standpoint and the idea that policymakers are actually kind of throwing anything at it to try to get this to stick. we can talk philosophically, whether it's good in the long run or not. i get it. that's kind of the way that that works, but we set the philosophical side of it to the side and really just focus on the price action, and that price action, to us, is very bullish.

>> yeah. we've spent years talking about the philosophical side of whether it made sense to backstop the u.s. banks and then the markets just ran off and said, not interested in the conversation, really. but jeff, what are the associated plays here? what are you seeing in the evidence, let's say, in u.s. sectors that are linked in one way or another to china? >> i think there's two really interesting things. one is european discretionary, high end luxury good names. they have had a pretty good rally. those aren't good charts. that will be interesting to see if they can power their way through what appear to be more top formations than not. we certainly are looking at that as a proxy. i think interesting we go into the chinese market itself, it's not tech that's leading. it seems like it must be a default because of what we're seeing here, but you're really seeing the outperformance in discretionary in china, which is refreshing, frankly. you're seeing it in financials, which is refreshing as well. and i would put tech in the bottom third there, but in terms

of the u.s., back to your question, the u.s., we're seeing a lot of these materials start to pick up. so, obviously, copper and silver have benefitted from this. gold's already been in an uptrend, but you're seeing it from things like southern, things like freeport and even some of these tertiary names like alcoa and the like. that relationship has actually been with us for a long, long time, for many, many years, so it's refreshing to see that working. i don't think this is about a real estate boom in china. i don't think this is a replay of, you know, what kind of got us to this in the first place. obviously, there's excess supply in those economies. you don't fight the same war twice, but i think there are some of these sign posts that are certainly still bullish and supportive of what we're seeing out of the market overall. >> got you. and just, you know, before we let you go, in terms of u.s. market here, i know you've been kind of giving the s&p trend the benefit of the doubt. where do we sit at this point, having kind of evaded some of the seasonal pain?

>> so, you know, so far, so good. the trends have been -- have been secured, you made a new high. the equal weight made a new high. 20-day highs are not expanding and just as a reference point, the 20-day highs are running about 20%. there's nothing wrong with that. but in china, yesterday, the new high or the 20-day high list, i should say, was running at 88%. that's a fantastic number. that just tells you that it is not about picking winners or losers. it's just the index is going up. just for the u.s., i think we're still in this rotation. we actually see some pretty bad charts in tech, so i want to be careful with tech here. that's not to say that it's all defensive working at the expense of cyclicality because we do see some areas of cyclicality. i think the shift has gone from semiconductors to maybe the power providers. that's pretty interesting that we're seeing new highs there. this is a trend market. trend markets, you'll have oversold conditions, you'll take

two steps forward, one step back, three steps forward, one step back, we don't need to chase a whole lot in the u.s. i think you want to chase in hong kong and china, but for us here, we're looking for uptrends, oversold names that are uptrends, and i think that's the way to play it between now and the end of the year. >> difference between a brand-new bull market over there and a 2-year-old one here. we'll see. jeff, great to talk to you, thanks so much. all right, up next, we're tracking the biggest movers as we head into the close. seema is back with those. >> well, mike, technology stocks have been on a tear this month. we're going to tell you why one stock is sitting out on the rally. that's coming up next.

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22 minutes until the closing bell. let's get back to seema for a look at the key stocks to watch. >> hey, mike. we'll start with rocket labs, soaring to a new 52-week high, the aerospace and defense stock adding 16% following a price target increase from keybanc analysts. the analyst there saying he had increased confidence in the stock and shares are up about more than 50% so far this month. hp, though, sliding more than 3% after getting downgraded from bank of america to neutral from buy. analysts warning of challenges in hp's printing business and that the company is becoming more reliant on stock buybacks

to grow earnings in the coming years. shares are down nearly 4% at this hour, mike. >> all right, seema, thank you. coming up, bank of america securities savita subramanian is standing by with the parts of the market she's now seeing opportunities in. longerhere. us aft t bak "csi bell" will be right back. t of businesses... so i wear a lot of hats. my restaurants, my tattoo shop... and i also have a non-profit. but no matter what business i'm in... my network and my tech need to keep up. thank you, verizon business. (kevin) now our businesses get fast and reliable internet from the same network that powers our phones. (woman) all with the security features we need. (aaron) because my businesses are my life. (kevin) man, the fish tacos are blowing up! (aaron) so whatever's next we're cooking with fire. let's make it happen! (vo) switch to the partner businesses rely on.

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over the last three months by quite a margin, a trend our next guest says could continue as the fed embarks on its latest seizing cycle. let's bring in savita subramanian. savita, it's great to have you. we have had false starts before, i guess, on the value over growth trade, but what are the ingredients as you see them now for why this could last? >> yeah, i think we're in an environment -- i mean, look, let's take stock of what just happened this week. we've got the two biggest economies in the world in stimulative mode. i don't think we should ignore that. we've got an environment where the fed is cutting interest rates as the profit cycle is accelerating. this is unusual. as you know, the fed is usually cutting into a slowing economy, a slowing profits environment. this time, it's different. so, i think those are the factors that we need to pay attention to. the market action this week, i think, is indicative of the idea that you don't want to avoid

cyclicals in this type of environment. i also think the idea of the fed cutting interest rates, it's not only liquidity-inducing, but it's also cutting money market yields for, you know, this massive wash of money that moved into short duration bonds after the fed started hiking, so i think that's the other area where we need to track flows and think about where these assets sitting in retiree accounts and money market funds are going. i think they're going into safe stable income that's more value than growth, so i would stick with value. i mean, we've really seen it start to work. we've seen earnings broaden out in tandem. i think it's kind of all cylinders are firing for a nice long value cycle. >> so, you've kind of named a bunch of the different attributes of what you think should work, right, so you have the income piece, dividend and dividend growth, probably will be a big part of future returns. there's value. there's also, you know, don't be afraid of cyclicals, and then i think a quality bias. where does all that come

together in terms of, you know, overlap, in terms of sectors and can they all kind of feed into the same theme at once? >> yeah, it's interesting, because some of these themes sound a little bit dissonant with one another. where we're finding quality and value in income are in some sectors that you wouldn't necessarily think of as the quality income place. so, for example, large cap real estate. you know, s&p 500 real estate has de minimus exposure to office and much more exposure to power grid, infrastructure, areas that are likely to see continued demand, continued spend. we're early in the starts on, you know, all of the datacenters that tech companies need to power up all these chips they're buying. when you look at financials, i think financials in the large cap space is another higher quality sector than it was back in '08. these companies have basically been starved of capital. energy, same story. these companies have basically

righted themselves since, you know, the last decade, and are now throwing off free cash flow, focused on cash return. i think these are some of the areas of the market that you really want to press. i also think we're in an environment where you can get a little bit smaller. so, as you know, we like the equal weighted s&p 500 over the cap weightedbenchmark, but i also think, you know, mid caps look really interesting here, and our smid team, let by joe tall, have been writing about how mid caps look particularly well positioned to outperform in this type of environment. it's a little more risk on than your typical easing cycle, but i do think, you know, the areas that you want to focus on are materials, we just got china giving the all-clear on materials, and this is a sector that's relatively underweight by professional money managers, you know, areas that have china exposure that are just starting to rally. i think there's a longer themed story there, so you know, these are the areas that i would watch

in the next 12 months. >> so, you kind of named a bunch of these things that seem like they might be positioned to outperform. how do you feel like the overall market at this point is valued in terms of delivering future returns? i know you look at the outright valuations, you look at things like sell-side sentiment and other things that could dictate really what we should expect from here. >> we're at a g point when it comes to the t cheap. the s&p isn't cheap but we think a higher multiple is warranted. the s&p is comparing today's s&p to 1980s s&p is apples to oranges, so maybe 20 is a reasonable multiple, but we're also in a seasonally weak period of the year. we're heading into an election. i think, you know, we're -- we might see a pullback. we might see a healthy correction. here's a point at which the index itself doesn't look as attractive to me. i think that the underlying

rotation within the index is much more compelling, and that's where i have the highest conviction. so, that's what i would be pressing at this point is quality income, cyclicals, maybe a bias towards mid caps rather than megacaps, and thinking about what the -- the fact that the two largest economies in the world are trying to stimulate their economic environments. >> yeah. >> major. >> i guess maybe no need to overthink it too much beyond that initially. savita, always great to talk to you. thanks very much. have a great weekend. >> great to talk to you. thanks. all right, up next, bristle meyers shares popping thanks to a key approval from the fda. the details when we take you inside the market zone. \s

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♪ we are now in the "closing bell" market zone with the dow on pace for a record high. angelica peebles is looking at the drug approval sending bristol myers higher. and nick shares what he's watching in the crucial final moments of the trading day. angelica, bristol myers on this drug approval. >> the fda approving a schizophrenia drug, and this is the first new drug for the brain disorder in 30 years. doctors are excited because it promises to relieve symptoms without the side effects that come with the current drug, things like weight gain and tremors. pricing around $20,000 a year,

and that's similar to other branded schizophrenia drugs. this is an important drug for bristol. the company's spending $14 billion to acquire the developer. bristol, not sharing sales estimates at this point but analysts see it becoming a blockbuster so it's definitely one to watch. >> and the symptom up almost 2% on $100 billion market cap for bristol myers, so pretty significant. thank you very much. c contessa, the win rally continues. >> wynn stock really popped today, up more than 7% after an upgrade from morgan stanley, mike, which sees real advantages in wynn's first mover status, building a casino in the united arab emirates, plus the analysts say that wynn continues to outpace in las vegas, attracting high-end customers against its competitors and deserves re-rating, predicting that buybacks or dividends could spark that.

wynn's bid for a new york city casino full steam ahead and a decision expected next year and finally, wynn's bread and butter, macao, continues to see high-end customers coming in, in spite of the broader slowdown in luxury in china. sands china also got an upgrade from morgan stanley because of the optimism around macao's gambling resilience. we'll find more about wynn at the global gaming expo. i'm heading to vegas in less than two weeks, and sitting down with the ceo then, mike, and really getting a view on all of these forward momentum projects. >> oh, for sure. and contessa, you mentioned these analysts had favorable things to say about wynn, about macao, but of course these stocks really ramped this week with these policy measures unveiled in china. is there a sense out there that that's going to be, you know, a focal point of stimulus for the macao business? or have we taken everything up in china at this point? >> no, i think, really, what their view is, is that these are

resilient, even in times of economic downturn, even when there has been significant crackdowns that crushed macao-facing casinos and stocks. what happened was they rebounded more than ever before so they -- the point of the analyst is that these casinos are resilient in spite of what's happening with the broader picture. will they benefit from what's happening in china? maybe. but they never felt worried about even tension with the united states and china and the ways they might be punished. therefore, it was never really a factor for them. >> interesting. certainly people got focused on it, wynn up 22.5% this week. contessa, thank you very much. nick, we sit here, you know, almost through the month of september, s&p up 20% year to date, everybody was dusting off the post-fed rate cut playbook after the initial ease. what is it all tell you at this point in terms of what's priced in and how the macro is tracking? >> so far, look, the best thing

about september is that we weren't down. s&p volatility is very well known to be pretty bad in september and we're up 1.6% on the month, so some choppiness at the start, we recovered really nicely and that's a great thing to see in what's usually a volatile month. on the macro side, we're seeing good revisions. gdp now, the atlanta fed model, just took its q3 estimate up to 3.1% today so the economy's tracking pretty well. gasoline demand, up 6% year over year for the most recent week that data was out on wednesday. also shows pretty strong consumer activity and we're also seeing initial claims, yesterday's data is looking very solid, down below the three-year average, so the whole idea of a mid-cycle playbook that we use at data trek very much still holds. the economy is chugging along, the fed is cutting rates and there's no obvious krcracks or fissures in the story. >> it all does come together pretty well at this point, despite the scares we have had along the way. the question is, can a market that's already been kind of

pricing in or feeding off of those dynamics, is it able to continue to do so, to more or less discount a continuation of that trend as opposed to any new, fresh, positive catalyst to go higher? >> yes, i mean, the history of sort of pe multiples and stock prices is pretty clear in that it shows that multiples creep up and prices creep up with them as long as there's nothing obvious to derail the story, as long as there's no really strong negative catalyst, which tends to be the thing that really ends economic recoveries, so pe multiples are a function of market confidence and investor confidence, and that should continue to hold through the rest of the year, and obviously, we're going into what are seasonally some much better months, particularly after the election for the s&p, going to december and the old santa claus rally story. >> for sure. you wonder if -- i'm looking at the volatility index. it's actually elevated toward 17 here. it seems like we're going to get within 30 days of the election, you have some geopolitical stuff, people are going to stay on edge for those reasons,

although i guess, bigger picture, you guys took a look at the two-year returns of the nasdaq 100, i guess, or up 67% or so, that's about when the bull market started two years ago, and how does that fit in terms of historical performance and what you might expect in terms of returns to come? >> yeah, so, you're right. that's up 67% over the last two years, and we use two years as a much better way of thinking about medium term returns than just one year returns. it is substantially higher than the average, no doubt about that. averaging around 25%. so, we're chugging along at a pretty good clip off those lows in october two years ago. however, the most important number to know about the nasdaq is it's got to go up 100% over two years in order to indicate really a lot of speculative froth. when it does that, yeah, you're in trouble. but we're nowhere near that level now, so we call it a double is a bubble. when you get a double in the nasdaq over two years, that's when you watch out, and thankfully, we're nowhere close to that now. >> in fact, i mean, you could

always slice these numbers different ways, but the nasdaq peaked before that bear market in november of 2021, so we're coming up on the third year. i think over the past three years, the nasdaq 100's up only 20%. so, if you wanted to map it on to what happens in prior bubbles, we probably have some room to go. >> absolutely. i mean, look at the late '90s, you had a double in a year. so, we're obviously nowhere close to that now. >> and does it seem like this rotation out of tech is something that we should get used to, or do you go back to that idea that, hey, the nasdaq 100 has rarely been kept down for long? >> the rotation story still seems to hold and we're seeing it play through, even this month. the cyclicals are doing pretty well, financials have done well, and obviously, some of the rate sensitive sectors have done well so i'm thinking the tech rally probably has to wait until november/december until that final move at the end of the year. in the interim, investors are looking to put more cyclical

sectors. that's where the upside story is. >> yeah. and of course, remember it's never necessarily a zero-sum game. nick, appreciate the time today. thanks very much. we're going into the close with the dow up about 135. it is, looks like, it's going to be a record close for the dow jones industrials. the s&p 500, off 0.15%. just going to miss record territory. nasdaq off as well. that does it for "closing bell." we'll send it into "overtime" with brian sullivan. >> and that is the end of regulation. pharmaceutical ringing the closing bell at the new york stock exchange. minten international are doing the honors at the nasdaq. mixed bag for the big averages,the dow up, hitting yet another record high. the nasdaq and big tech selling off a little bit ending lower for the day, but still higher for the week. hi, everybody, that is your friday scorecard. i'm not morgan or jon. i'm brian sullivan. good to see you, welcome to "overtime" on a friday. ho