Chip stocks soaring as President Trump eases the ban on huaweis purchase of u. S. Products. Weak manufacturing and Construction Data keeping the gains in check today joining us for the hour to break down the Market Action is lindsey bell from cfra good to see you again. Good to be here. Feels like a market that had a lot of good news baked into it already. Yes it did. I was surprised we held on to the gains for as long as we did. I thought we would get a sell the news type of thing sooner. I think the weak Economic Data not only here in the u. S. , but also in europe and china, really gave the market what they wanted in the terms of the potential for a fed rate cut next month. One day phenomenon or does this selling have some staying power . You know, i got to say, i think it is going to be a little choppy through the month of july, especially as we get into earnings season. We see how tariffs are impacting companies on the ground. Yeah. It is interesting, youre going to get earnings season, you have expectations of the fed and thats going to be in the back pocket of the market up until the meeting and thats going to be viewed as a positive until we hear from jay powell and company. Yeah, you know what, usually what you see if you look back at history, you have a strong first start of the year, you get a weakness in may, rebound in june and then july also can be very choppy given all the Different Things were looking at between earnings, the fed, and trade, i think were going to were in for a choppy july again. Back to you shortly lets drill down on the big stories were watching today Kayla Tausche has the latest on the china trade truce. Seema mody watching the movers here josh lipton covering the surge in chip stocks and Bertha Coombs with the biggest movers at the nasdaq Brian Sullivan in svienna today after an eventful weekend in asia, we now wait to see what china will buy and how much, which Companies Get the Commerce Department licenses to sell to huawei and when Trump Administration officials will travel back to beijing for talks as they were expected to do in may before negotiations broke down the office of the u. S. Trade representative said there are no scheduling announcements at this time President Trump said hes not in a rush this truce, unlike previous truces, has no deadline morgan kayla, thank you. The s p hitting a record intraday high earlier in todays session on the back of the headlines. Seem wa mody has more. The s p still up about. 4 . And 2954, thats the level to watch to see if we can close at a record what is working for the market, financials have outperformed today. And even on friday, after a number of banks passed the fed stress test and also increased their dividends, a number of sell side analysts talking about whether banks are the new dividend play. In fact, the average dividend yield for the s p Financial Sector is at around 3 , which is much higher than the average of the s p 500 which is around 2 lets pivot to trade you touched on this, this intraday reversal were seeing in a number of Global Industrial names like caterpillar, even deere started the day higher by 1 and traded lower. Utx off the highs of the day i want to draw your attention to post six here, watching shares of boeing trade lower to the close, down over 2 and, guys, lower by 5 over the past one week, 5 million shares have exchanged hands. Thats higher than the average back to you. Chip stocks soaring after President Trump eased restrictions on china, Telecom Company huawei josh liston has more from san francisco. The smh, the etf that tracks the chips is headed higher today, after surging 13 in june that was its best month since september 2010 you can see some of the individual movers too, micron, sky works. Chip investors cheering as u. S. And china announced a trade truce and President Trumps suggestion he would lift the ban on u. S. Companies telling equipment to huawei and cases that dont involve National Security craig ellis says the second half of the year is typically a strong one for chips, but says investors will need to see continued signs of trade progress back to you. That rally in semis is helping power the nasdaq, which is outperforming the major averages today on the back of this trade truce Bertha Coombs has a look at the biggest movers there bertha hey, morgan small caps are weak again today, but it is those big caps, apple and others that are providing the biggest lift to the nasdaq yet the phonemaker is still down from the may trade related swoon, as are semiconductors were still seeing a rally wynn getting a lift after strong macau gaming numbers for june. And chinese internet names like ctrip hit hard in may for all of the strength in tech today, it is the nasdaq nontraditional tech and chip names that are collectively outperforming with new all time highs for idexx lab and a half dozen others bertha, thank you Bertha Coombs. Oil prices volatile as opec kicks off its meeting in vienna. Brian sullivan is there with the latest brian . The very latest is breaking news here, two pieces of news confirmed minutes ago by cnbc and our sources inside of opec number one, the group agreed to a longterm cooperation deal with a russia led partnership. Russia not becoming a part of opec officially but part of a partnership. That is a big deal because it effectively strengthens opecs output, increasing their market power to blunt the growth of u. S. Shale number two, their extension they made last year, the Production Cut 1. 2 barrels a day cut longterm compromise and charter with russia agreed to. And Production Cut of 1. 2 Million Barrels a day extended into 2020. Tomorrow the official opec plus meeting with russia. We should learn a lot more, a long day has ended with a deal, finally, for opec. Back to you. Good stuff. Got about 53 minutes until we close it up on wall street. The s p 500 is above its all time closing high. 2954 was the number to watch see on your screen, 2955 is where we currently stand stocks up throughout much of the day. Lets bring in art hogan from national securities, who is joining us, lindsey bell is still here tell us what this day is all about, what the action means to you. I think it is good were fading in the afternoon only because the incremental news we got wasnt new, it is not great. What we did do was avoid worst Case Scenario. Avoiding worst Case Scenario would be escalation, coming back from g20. Thats going to have an immediate economic impact. Now we know where we stand we know what the bid and ask is. Someone has to compromise. And that probably takes a while. Were at or about where we should be. Im not i think we do i think we do very well to spend most of july kind of sideways and rationalizing gains we have. Is it safe to say all the ongoing continued uncertainty around trade is priced into the market here. To a certain extent, yeah what we know what is not priced in is the length, the duration, how long does this take longer it takes to get this behind us, the more economic damage is done coming into may, we thought we were almost done we saw what happened, we found out that would be much longer. We can have another event if something triggers another one of those escalations were at or about where we should be. Unless things get worse. Lindsey what do you think i think the market actually, it was what you saw in todays action, was pricing in a deal getting done the hope of a deal getting done in the near future to your point, if this does extend into the end of the year, were going to have Major Economic implications. Seeing a slowdown in asia, we saw some of the pmi numbers out of europe, germany seeing major weakness, so i think youre starting to see this bleed into economies around the world and then it is only a matter of time before it gets the u. S. About 44 of u. S. Sales for the s p 500 come from abroad so does that mean were the chances of the fed cutting rates this month have just increased . I would say they increased. The market is way ahead of themselves i think the fed is at a point where the longer this lasts, the more they have to step in. I dont think it is july they will cut this year. The fed does not want to upset the market in any great magnitude. If it didnt go at all in july, the market wouldnt take that well, would it depends what we get in between new and then we have g20 behind us, no disasters. Another jobs number. Those will be very telling if both of those are better than expected, i think the fed can sit back and say were very close, but it is just not time yet. How much how much more focused does this put on the jobs report on friday . It is a huge focus for the market for sure. Were seeing some pockets of weakness in manufacturing and housing, seeing that for quite some time now. Because may was so weak, we need june to be better. Got to get the market out of its the defensive posture too. The environment where bond proxies, things like staples, bonds themselves are going up, gold, you have a hard time rallying more broadly if all of those more defensive spaces continue to do well, right very true what will be interesting and we hit this at the top of the segment, financials. Now that theyre able to increase them and pass their test and buying back shares should be very interesting you think about the multiple utilities, staples trading at and how low the yields are, good point. It is important for something to take over leadership and maybe step in here in the search for a yield. Financials are so has health care. I think we would like to see health care pick up some steam, especially because it is the second largest sector within the s p 500. That will cut rates, you could get a steepening curve, which is another catalyst to the financials, they havent had one. They havent had one. A lot of m a activity, great calendar for ipo that action has been very good trading has been very robust arthur, thank you. Thank you. Good seeing you art hogan. Coming up, still ahead, we have much more on the trade truce when we speak with former u. S. Ambassador to china gary locke. Well ask him whether he thinks a permanent deal can get done. And after the break, a multibillion dollar defense deal becoming official over the weekend. Well take a look at the newly combined l3harris technologies and what that deal could signal about other tieups in aerospace and defense space. Right and somebodys wheel house. Oh, yes, it is. As we head to break, a check on our closing bell data tracker. The june ism Manufacturing Index coming in at 51. 7, above expectations, but still the slowest pace since october 2016. Also Construction Spending fell. 8 in may. Versus estimates of. 1 gain veeras the first decline since nombwere back after this break. . . Its gotta scale across my business. Starting here, in procurement, helping us find the right suppliers. Then here in logistic, to avoid disruptions here in sales. Even here im talking about ai we can build to work. Here, predicting trends. And here, wherever our data lives and here, working with all our other ai i think were done here. Expect more from ai. Ibm watson. Oh, wow. You two are going to have such a great trip. Thanks to you, we will. This is why voya helps reach todays goals. All while helping you to and through retirement. Can you help with these . Were more of the plan, invest and protect kind of help. Voya. Helping you to and through retirement. We could see a record close for the s p 500. It is about five points above that level 2959 is where the s p 500 currently sits dow has a gain of one third of 1 over to mike santoli with todays market dashboard michael . Scott, thank you very much. Heres what you got ahead, bashful breakout, thats what we have on our hands for the s p 500. Going to check in on a relatively grumpy bond market. Some happy rally signals, a little happier earlier well get under the surface of the indexes for a look there a look at the sleepy economic expansion finally in the next hour look at the breakout or would be breakout in the s p 500. Here is a five year chart of the s p with significant lines drawn on top of it there, you see that orange line, thats at about 2950 thats around the level that we have been trying to get over today. You see it is kind of critical now. This is probably just a little bit below that right now youve seen a couple of these breakouts that were brief and rolled over, right in the same region now trying to get above that what is maybe hopeful is to look back at this other period that ended in late 2016, you had another 18 month period where you had very, very halting breakouts, never really got anywhere you traded very volatile below it so thats another year and a half period of sideways, before you broke above it thats after the 2016 election, hard to know if we get a catalyst here, but it does seem as if this period that level was around 2100. Right now were still sort of, i think you have to only give this breakout attempt today, kind of a b minus grade right now, given how much of the early levitation was lost so, mike, first of all, this chart is great, because it puts into perspective what it has taken to hit the record highs in recent years but i was trying to sus out what your theme is with all the charts for the next two hours and then it donned on me, is it snow white and the seven dwarves . Thats what it seems like. I couldnt come up with a sneezy and grumpy. That about dopey . Dopey seemed a little bit i didnt want to get too pejorative about it. If youre going to go in, just go. Maybe chart silver. Thats what they were mining yeah. Happy, doc, i had to look them up i couldnt remember all of them. Sneezy i dont remember that one. Always a good bar trivia. Well be back multibillion dollar defense deal became official over the weekend with the completion of the merger of l3 technologies and harris corp. Someone to my left follows this space quite closely. Youve been following a lot of this consolidation and there has been a lot. There has been a lot of consolidation and i sure have been following this as well. This is the new l3harris technologies, merger of equals, announced last october, became official just a few minutes after midnight on june 29th. Right after harris corp. Finished its fiscal 2019 year. The company which began trading here under ticker lhx, down 4 now, hiked the dividend today. New board green lighting a Share Buyback program. This deal is really creating an aerospace and Defense Technology giant. Now the sixth largest u. S. Defense contractor portfolio including military radios, space hardware, here is the plan theyll invest 4 of revenue into research and development. I spoke with the ceo bill brown and coo Chris Kubasik over the weekend, i asked what they would divest as they work to integrate all the different businesses, brown telling me no decisions have been made yet kubasik saying this merger creates another competitor in the sector and, scott, back to your point before, we have seen a lot of consolidation in aerospace and defense. Last month, another merger eof equals between united tech and raytheon the key is for each of these deals, does it create another competitor or does it take away the competition . In the case of l3harris, the stocks of both the companies coming into this merger, rallying 45 , argument could be made theyre going to add to the competition for some of these future pentagon contracts. Spoke earlier today, i heard you on one of the earlier shows talking about the deal and Defense Budgets only going one way and thats up. It would appear to be the case there has been a lot of speculation, a number of analysts have come out and said all these deals, all this m a, maybe this is signaling a top for defense dollars. But if you actually look at the fiscal 20 Defense Budget proposals, legislation coming out of both the house and the senate, represents increases, both of these executives at this company and heard similar comments from folks including United Technologies and raytheon believe that that number will continue to grow because quite frankly the geopolitical risks, china, north korea, russia, iran, theyre not going anywhere all right good stuff thanks. What do you think what do you think of defense stocks now i was wondering if you were going to ask me. I was basking in my moment of reporting, apparently. There has been a lot of m a in the space it hasnt been priced at a maximum premium. Stocks have done very well in this market. I think youre getting good valuations for the deals i think a tieup of l3 and harris is a good thing Midsized Companies theyre going to create size and scale and theyll be able to take some market share hopefully in the defense and electronics space. We view this as a positive all right, we have got 40 minutes before the bell. The dow is currently up 88 points now were on s p record close watch. Level there, 2959, poised to close five points above the last record after the break, an upgrade in the home builder space and a bullish note on etsy well get the word on the street on todays biggest analyst calls next. And later, semistocks are higher on the back of easing huawei restrictions. Well discuss the chip bump and how long it could last with the former Cyprus Semiconductor ceo t. J. Rodgers were back to the closing bell time to get the word on the street needham initiating coverage of etsy with a buy rating and 75 price target the firm says etsy has the right drivers to continue growth and capture new buyers guggenheim raising price target on discovery saying advertising revenue appears more resilient with strong pricing and maintains its neutral rating on that stock and btig upgrading kb home to neutral from sell. Strong guidance. And, lindsey this comes on the heels of a flurry of earlier upgrades from other analysts last week. A litt