Day. It is definitely a top heavy move. You see it up 0. 8 . The equal weighted up too. Nasdaq up by a full percent. Alphabet as mentioned popping this morning. It is now up about 4. 3 and the biggest upside contributor. Apple is ahead as well, 1. 4 on reports that apple might use googles zoo a. I. Capabilities in the iphone. Crude up another the high since halloween. It leads to the talk of the tape. Based on a goldilocks economy, a. I. Excitement and prospect of an easier fed, is the playbook changing . Lets ask adam parker, Research Founder and ceo at a cnbc contributor so. Adam, yeah, those have been the narrative threads that worked pretty well. Almost no pullbacks. Some pockets in the market in the last couple of weeks and things have cooled off but not fallen apart. Where does that leave us . I think the bull case is still intact, right . If the average company can have gross Margin Expansion and if i start thinking earnings will be up for the next few years well be ahead 25 versus 24 and if i think the fed will be accommodative, i think thats a pretty good threelegged stool for optimism. The things im monitoring, i guess to get cautious three things, does china continue to look bad not improve the fundamentals, the u. S. Companies exposure there . Look bad . Maybe ive gotten positive data points lately but we will see. U. S. Consumer, does it slow . I was worried when discover reported then got bought and theres pockets at the subprime but in aggregate the consumer is in pretty good shape and the third thing is maybe dont worry about the front end with the fed but quantitative tightening and the Balance Sheet you worry about but thats how im weighing it and still skewed to the positive in terms of risk taking. So, does that mean also on a tactical basis you would just stick with what has gotten us here . I mean, you have seen thing, for example, i mentioned the pockets and crypto had this huge its backed off a little. Yeah. Youve seen a few little hints that the market is sort of saying enough for now on some of the hot stuff but what about tactically . Most of my clients are Institutional Investors trying to beat the s p 500, so theyre never going to be too big in bitcoin miners or uranium for whatever. I think they are focused on how to play a. I. So to me that trend isnt in the price over a three to five or tenyear view, may be a little ahead of itself tactically. For me theres lots of stuff to own if you say, hey, this will last three, four, five months, fear of missing out and ill run toward the bubble as opposed to away from it. Then you still want exposure to a. I. Semis and software where revenue is accelerating and balance it, which is what we do we offered a note five ways to find something thats not correlated to the a. I. Trade in semiconductors or maybe you own energy in copper where you pointed out, crude sup a little bit. So i think theres ways to balance the portfolio, but i dont think you want to run a fund and say i dont want anything related to a. I. That doesnt seem right to me. Arguably thats what the market in aggregate is doing in a way. Not quite as all in on one trade. We are less than an hour away from nvidia ceos keynote. Kristina partsinevelos is there with more on what we might expect, kristina. This used to be a few hundred people and now expecting 11,000 in this s. A. P. Arena in san jose for Jensen Huangs twohour keynote. Its, yes, a Developers Conference but his words could help add sustainability to the entire a. I. Ecosystem which is why so many are paying attention. Investors, first expect nvidia to launch a new gpu, the b100 which could be two times the performance of its previous h100 chip. Nvidia doesnt usually provide pricing but ive seen estimates anywhere between 40,000 to 50,000 for this chip. And we will hear more products from cpus and how to do better. Extending beyond the pockets of meta and into health care, government and sovereign wealth funs and lastly, inferencing so thats where you use trains, Large Language Models to spit out answers to your queries as a next step of the large language model train. Nvidia and demand is expected to grow and be a major driver for the years to come. The bottom line today is about demand sustainability. Investors want to know is the pace of demand going to keep up, you know, one to two years from now, even beyond that . Theyll also want to see how that 1 trillion total adjustable a. I. Market can go to 2 trillion in just five years and in turn justify owning this soaring stock, which i know you pointed out was up over 2 earlier today. Now down ahead of Jensen Huangs speech. Its gone a whole day with a new alltime closing high and its been a rough patch. You mentioned that huang is expected to give some kind of hint on the sustainability of demand looking out toward the horizon. The company is only a few weeks out of its from its Earnings Report last time. Is there a likelihood he will have, you know, things that are tangible about that supply and demand dynamic at this point . Honestly i would say no. We already heard that. He mentioned in dubai not too long ago, so there are analyst notes guessing hell say it will be roughly 500 billion per year which would obviously be a number we can work with, but in terms of putting financial targets, usually this event is about new products, right, and about how that demand is expanding to other facets of the economy and i think thats where theyre going to lead with and the collaborations which i didnt even get to, the collaborations with other Companies Like micron, like broadcom, perhaps intel, again, i dont know. Ill get the information as everyone else in just an hour but these are all big movers for other names within this space. Last point, the stock down four or five sessions last week and concern that maybe this is a sell the news kind of event. You saw selling heading into this event and yet the stock keeps climbing ten weeks in a row weekly gains even with those drops last week. Yeah, for sure. You know, i would expect big picture vision and well pick it apart once its out there, kristina, thanks very much. Adam, you mentioned before that you didnt think that maybe all of the upside for a. I. Across the market is sort of in the price. In what way . Theres the revenue side where nvidia is clearly the biggest beneficiary and then theres the cost benefit side over the next decade. Youre just starting to see companies talk go it so i think thats what i mean when i say it could be a decade long. Anyone with a lot of data about their employees and about their customers is going to try to get more efficient and that will take years to unfold. I think the other thing about nvidia, i wrote this note a few weeks ago, the nvidia guide trade. If you dont it, what youre saying is youre you think its really close to the peak and you know that even though you probably missed most of the first 2 trillion and will go down 30 which everyone expects at some point as soon as theyre three months away from meeting demand and buy it at the bottom and ride it for the next ways up as though you werent at the previous one. There is inherent arrogance in saying that. Im running a fund, i want exposure to the biggest investment theme over the next decade. This is the best product from the best company in the early phases of its appointment. You can do what you want to say who are their customers and how is it going to happen but its still early days and we all think it will be 30 going down but it could be you sound like a passive indexer. I could buy and 1 out of every 20 goes to nvidia. For the biggest six or seven names you should be close to market weight. You dont know anything about the stock that nobody else does. If large beats small, that explains 50, 60 of their returns and awfully arrogant to say i know something about nvidia that nobody else knows of the hundreds of analysts thats not in the price so, yeah, you should be pretty close, pay low fees for that and make it elsewhere. Probably prudent long strategy. I mean, i guess even if you are active, weve talked about this too, i mean, a 5 position is pretty substantial. Pretty chunky. Pretty chunky, yeah, thats right. Lets bring in Jordan Jackson of jpmorgan asset management. Jordan, good to see you. Good to be here. Lets get to some of the macro setup weve got going on. We mentioned the fed, twoday meeting starts tomorrow. A little bit more play maybe in what comes out of that in terms of the pacing of rate cuts and tolerance for uptick in inflation. Bank of japan before that really expected to have kind of a signature landmark move. What do you expect out of it and what are the market implications . We think the bank of japan has enough ammo to finally get out of negative rates and think they do that tomorrow. Youve got really strong Wage Negotiations that are happening, so a lot of the Big Steel Companies and big auto manufacturers have increased wages at some of the highest levels weve seen multidecade increase, Largest Labor union last week agreed to some pretty significant wage increases. This has been one of the criteria that the bank of japan has been looking for to get out of negative rates and growth side, they gotfourth quarter gdp revised slightly higher and avoid the technical two b backtoback quarters. And this is a backdrop they can exit negative marks. The direction for the currency is the big question. It will be and the other question is, i mean, its been one of the best markets for months and months in japan, best equity markets, you know, is it as good as it seems and can you actually buy that news . Yeah, so the big risk for awhile there was this negative correlation between the value of the currency and the stock market performance. It was very negatively correlated and big multinationals generate a lot of revenue overseas and have roughly negative 0. 6, 0. 7 consistent relationship between the yen and market from 2007 to roughly 2019. Then the pandemic hit and that correlation broke down. Its actually roughly around flat today and when we look at underneath the hood, right, inflation while for consumers its your business, its your friend, you have Pricing Power now and expecting roughly 10 Earnings Growth coming out of japan this year. And so i think, again, theres things that finally be excited about in the equity market, right . So while there is scope for, again, rates to finally move higher, youve got to look at whats already in the price, whats already in forward markets and forward markets have about a quarter percent, 25 basis policy rate by the end of the year unless the bank of japan surprised hawkishly or the fed surprises dovishly, i still think youve got maybe some modest upward pressure on the yen but not enough that will derail equity markets. You can envision a world in which japan looking to exit negative rates and get tighter at the exact moment the rest of the world is looking for an opportunity to go in the other direction. That could cause a lot of friction. So thats kind of the risk. I think theres greatest risk that the fed shows two rate cuts vfrs sticks to the three rate cuts. While over the balance of the last 18 to 24 months its gone in the feds direction. Inflation has gradually come down and labor markets havent toppled over but since december things have stalled out. Wage inflation has proven to be sticky at 4 , 4 and a half and we got downward revisions on the threemonth moving average when it reaccelerated to start off the year, so maybe the fed has to lean into being more patient. Adam, i mean, ive been of the view that this bull market, this rally since october was not mainly or even like a top three reason was that feds got to cut rates soon and deep, right . It seems like if the economy is okay bull markets dont tend to end but how do you see this after weve had all this kind of low volatility upside in the market and bonds at least sniffing out the possibility of higher for longer back on the table . Yeah, i dont even know if im qualified to understand threequarters of what he just said. I dont know anything about it and Japanese Monetary policy, i know even less about. I trade the yen six times in my life and lost money all six times so on the japan side must have bought it. Ill defibrillator to the gentleman to my left. The part that i could debate a little and i dont have a strong view is whether they go from three cuts to two in the consensus view if it matters. I could see somebody saying, you know what, good news is good. Sure. Lets forget all this stuff we invented after the financial crisis, bad is good and good is bad and how about just were in this pocket where decent Economic News means the fed doesnt have to be as accommodative. Were all guilty of using the last three cycles as part of our average, including covid, which dont have anything to do with the current conditions. If they only do it that many times its good. Maybe you can get a couple days where it trades off but holistically could be pretty good and earnings will be up, i think, so maybe thats the only thing im qualified to respond to. Jordan, i guess the other question, the reason you might be concerned is if you think that a lot of the Stronger Economic numbers have been a built of a head fake. In other words, the fed will stay too tight because theyre focusing on theyre sitting here waiting for shelter inflation to come down like everybody expects it to come down and while they wait for that, you know, the underlying economy maybe struggles more but hard to find the evidence of that. Yeah, but importantly they situated themselves where theyre not going from, okay, three to two cuts, so long as theyre not going back to hikes. Yeah, sure. Thats really the key from a macro standpoint so long as the fed remains in this sort of cutting bias and thats three, two, one, i think thats generally pretty supportive. They think rates are restrictive and if you go back to 1980, there are 14 calendar years where there wasnt a recession. 13 of those 14 the equity market was positive and we had a hangover from the tech bubble one year so this is a micro environment that adamtalked about that is supportive Earnings Growth and macro environment that the fed will go towards easing. I agree. If the fed hikes i think were selling all. I agree with that but, look it would also take time probably for them to get to that point of making that. They need different data on jobs andinflation. Our website, you search it and zero search results. I see so many opportunities to buy things underneath that it feels optimistic about security selection, active security selection and the risk reward is still positive. 1985, i have been bringing it up as the ultimate soft landing if everything went perfectly, the fed cut twice, july and december after a long tightening cycle so im sure thats in your data set of markets that treated it well. Yeah, but there was still scope for the Unemployment Rate to keep coming down. Thats a lot of the other stuff doesnt match up, exactly. Well pick and choose as we can. Thanks a lot. Good to talk to you. Lets send it over to steve kovachfor a look at the biggest names moving into the close. Pepsico shares are popping about 4 today after analysts at Morgan Stanley upgraded the stock from overweight to equal weight. Morgan stanley predicted fundamentals that the company will hit bottom in the first half of the year and rebound from there. And then shares of shift4 going down 7 or here after bloomberg reported the ceo told employees on friday that outside offers to buy the company werent enough to make a deal according to the report. The shift4 board thought the oftens did not, quote, sufficiently value the payments possessing company, mike. All right, steve, thanks very much. We are just Getting Started here. Oil prices climbing to a fourmonth high today. Up next were drilling down on that big move. Rbcs Lori Calvasina will tell us why and the other parts of the markets shes banking on ahead. Were live from the new york stock exchange. Youre watching closing bell on cnbc. My name is oluseyi and some of my favorite moments throughout my life are watching sports with my dad. Now, i work at comcast as part of the team that created our ai highlights technology, which uses ai to detect the major plays in a sports game. Giving millions of fans, like my dad and me, new ways of catching up on their favorite sport. Welcome back. A. I. Related tech has been the spotlight for most of the recent rally and Energy Stocks have quietly moved into a leadership position with the sector becoming the best performer over the last month. Our next guest sees more upside ahead. Lori calvasina is here. Good to see you. Thanks for having me. This in the context of a Broader Market feels like a lot of your work is pointing to fairly valued, perhaps, but there are things to do maybe on other areas. Why does energy get in there. I was talking to some of my salespeople and said sectors just havent been that interesting of a discussion lately. Thats true. All of a sudden energy got really interesting and just sort of had this big move and been overweight and viewed it as an inflation hedge and guess what, everyone got worried about it so its doing what we hoped it would do serving the right function but its cheap and my analysts like it much more than my analysts in other sectors so think thats an important read on fundamentals and money flows if you look at the epfr data its starting to shift back. Commodities, materials, energies, industrials, kind of cyclical areas that show benefit if the economy is running hot the way everyone is worried. Is that your read . The underlying commodities have had a move as well and feel thats a Global Demand overlay. I think its the u. S. Is running pretty hot, obviously theres geopolitics when it comes to energy but i do think there is a begrudging acceptance that were not on the brink of recession and things are not that bad and maybe not so much the last couple weeks but maybe about a month ago or so there was a conversation about a bottoming in china we were hearing about so i think were kind of in this weird healing process and energy is benefitting from that. You do mention the general acceptance. This embrace of the not just no recession but things look like theyre humming alon