Cap names in the green today, including nvidia, back above 900 a share, 920 to be exact. Apple puts a touch lower after be Berkshire Hathaway cut for tax purposes, and strong day for uber, after the Company Holds its annual meeting. Weve given you highlights on this day, it does take us to our talk of the tape, the rebound, and whether you can trust it. Lets ask our panel, dan greenhouse with asset management, stephanie link, and steph and court are both cnbc contributors, everybody at post nine, having a little party over here. Steph, can you trust this bounceback . Its been pretty darn strong from the april intraday lows, s p up 4 , russell 2000 up 6. 5, nasdaq up almost 7. Earnings are coming through better than expected. Growth rate year over year is 7. 1 . If you exclude Bristol Meyers 12 billion charge that was 10 . No one was talking about 10 growth, why, because youre going to see the growth, because the growth is coming through. I know everybodys focused on inflation. I am too. But the growth is better than expected. We are running about two, two and a half, according to some gdp trackers, north of three in the economy, a lot of that is because of the job market, we all talk about that. The three and six month average, nonfarm payroll number, even though it was weaker on friday, its 242,000, the average for the last ten years is 166,000 per month. So, thats good. Thats leading to better wages. Thats leading to a better consumer. And then we can talk about this, scott, in more detail if you like, but manufacturing, we talk about the grid, we talk about green, clean, electrify cation, i will tell you, out of all the Conference Calls i listened to during this earnings season thats the number one theme and the most powerful within all of the sectors in the market. You think the bulls have the upper hand . Once again, that last week cleared some friction out of this market, powell was not nearly as hawkish as i think some people feared hed be, earnings last week came in pretty well, yields are calmer, you look at the bond market today, obviously the twoyear, tenyear are down fairly significantly from the boiling point of early last week. All good again . I agree with a lot of what stephanie got to, but ill add what you just mentioned the rate side of things. Underpinning the rally theres a belief that at least for the moment the rates peaked out, jobs report played into that, the ism number dip played into that that. The commentary coming out of an otherwise good earnings season isnt universally bullish as it has been last couple quarters. Thats put a cap onyields, shortterm, its a lift of the market and if that proves to be accurate, we are sort of getting more contreat data, the rates are done going up, to stephanies point that underpins a broader, more long lasting rally. Do you agree, court . Yeah, i think its great, earnings have been positive, the amount of Companies Beating earnings and by the amount theyre beating are above tenyear averages but thats backwards looking and forwards looking, youre seeing earnings per shares, Corporate Management has been more optimistic than pessimistic, meaning the future is looking positive. Youre continuing to see the consumer is truostrong, the s p now above the 50day moving average, and three quarters of the s p 500 companies are above their 200day moving average, its a broad market momentum, a really positive sign. Steph, youre hanging onto the fact that stronger growth is much more important to you, it sounds like, than inflation, which you admit is still sticky. David solomon, ken griffin talked about that. Ken griffin said during his presentation that the fed is either going to cut in september, and if they dont do it in september, theyre going to do it in december. For some, thats enough. That as long as you know a cut is coming, at some point, and the economys as strong as its remaining, then thats good. I dont think were going to see a cut this year. At all . No, not at all. Weve talked about this for the last, say, four or five weeks, ive been thinking that. I dont think inflation is going to get to the 2 3k9 level, or , the reason is not because the u. S. Growth is strong and above trend but we have Global Growth around the world thats stronger than expected. We saw 5. 5 growth in china gdp, the sequential analyzed number in china for gdp is 6. 6 . Intra7 . Japan, low single dinlts, if increasing estimate. Ill come back to you in a second. I have news around boeing. Phil lebeau has that story for us. Phil, what did we learn . Reason its under pressure, the faa is now looking into whether or not boeing employees may have falsified some records regarding inspections of the 787 dreamliner. According to the article boeing did notify the faa that some of the entries may by employees in april, or they notified the faa in april that some entries for some inspections may not be complete. Still waiting to get an update from the faa regarding this look into whats happening with inspections, with the dreamliner, keep in mind the faa has been working with boeing in terms of certifying these aircraft, once theyre finished, doing inspections on those aircraft, still unclear, though, according to this article, what were talking about here. Are we talking about a part of the process that the faa is not involved in, are we talk about, perhaps, documentation that was just not done correctly. Still a number of questions here but no doubt thats the reason greater pressure on shares of boeing down more than 2 3k9. Phil, i appreciate that reporting. Thank you very much. Thats phil lebeau. Stephanie link ill come back to you on the fact that boeing, you continue you have defended the position that you have in the stock, based on the duopoly aspect, thinking its theyll get past a lot of this, its more than noise too. Its more than noise. Theres been some real fundamental missteps within this company over the last year, at least. Yeah, id much rather be talking about the growth around the world, thats better than expected than another day of boeing. The fact that negative news that comes out, the stock continues to fall on negative news. When the stock stops going down on the bad news thats when you know its around the bottoming process. I do think last week was a big deal, the 10 billion debt offering, eight times oversubscribed, very important, thats bridging the Free Cash Flow gap. We know theyre actually going to or they just reported a negative 3. 9 billion. Theyre going to lose Free Cash Flow in this quarter as well. I think youre going to see eventual improvement. Calhoun is gone, hes a lame duck. Waiting for the ceo, thats your catalyst. And thats one of the reasons im sticking with it. Along with what you mentioned in terms of the duopoly. Their backlog, nine years worth of backlog, its valued at almost 500 billion. People want this stuff, theyve got to just get it out. Obviously, in much better quality and much better safety. I get all that. But the stocks already down 32 year to date. Its discounting a lot of bad news. You continue to bet pretty heavily on industrials and this conversation were having about economic growth, higher inflation, rates higher for longer, how long the economy can hang in there, a lot of talk about mega cap tech, you remain focused on the industrial trade, eaton, boeing, down the list, theres others. Mainly aviation, ge, and also this electrify cation, this grid repair we havent touched in over 50 years. Were just maintaining, not actually improving it and theyre going to have to do that. When you have a company Like Quanta Services ceo, talking about the amount of power needed to build out data center for evs and Everything Else, hes quote unquote, said it was mind boggling the amount of demand. Eaton said the same thing, their orders are up huge. These stocks are up a lot on this theme, but i still think were in early innings. What do we do, though, how do we square the cyclical economy trade if we want to umbrella it like that with comments from barken today, the richmond fed president , still talking about long and variable lags in the economy. These are his words. Take the edge off demand and that tightening is eventually going to slow the economy further. Well, that might certainly happen, we might see a slowing down. That would be normal given that weve raised Interest Rates as much as we have. However, its all this fiscal policies that have been put in place, nine trillion dollars worth over the last five years, thats actually more than offsetting the higher rates. Eventually we may slow scott, but i do think theres a lot of pent up demand andi look at the secular stories out there. Thats why i look at electrification, thats a theme i feel confident in. I believe the consumer will hang in there, even if we slow down. To build off what stephanie just said, the theme shes talks about are indeed secular, the grid not talking about that. I agree with you about that because of a. I. Im talking about other direct economic plays that have nothing to do with the grid relative to a. I. , more pure industrial type stocks or other things that are more directly tied to the economy that, you know, in a late cycle economy, and still talking about long and variable lags, like barken is, might not necessarily work as well. I would push back on the idea that what were talking about is Interest Rate sensitive or late cycle. The grid is a secular theme that will play out a while. The building of data centers is every bit as industrial policy as building airports and roads, et cetera. Just because its not a new locomotive, lets say, or new rail tracks doesnt mean its not industrial. That theme, building out of the data center is a secular theme thats insensitive right now and is as every bit as industrial as Everything Else. Thats incredibly powerful for the economy, not because of the data center but the ancillary effects we know its going to spiral throughout the economy. If you like home depot, and you like strong consumer plays, those are the types of things that may be more at risk in a slowing economy and rates that still remain high, i mean, lets be honest, Mortgage Rates are still high, even though rates have started to come down a smidge. 100 . And we might have a bumpy road this career but for the next ten years that also is a secular theme. Were 5 million homes short in this country, you talk to any home builder, we all have, they have theyve underproduced for 13 14 years, scott. You have 5 million millennials, that are First Time Buyers, yes, i get it, its expensive to buy a home and rates are a big deal but i mean, you talk to so many people out there, we have been able to survive with a six, seven, eight percent 30 year fixed and actually existing home sales might struggle because you have so many people, like 80 of the population that has a mortgage under 3 . Thats the difference. But i think new home sales, and the First Time Buyers are going to deliver, and by the way, no matter what your mortgage is, youre constantly putting stuff and buying stuff for inside the home, to the Home Improvement theme. Driving the point home, dont take our word for it, the builders themselves. Thats right. Are saying its not the level of rates that have potentially been a problem, its the shift higher. Yes. Whenever rates go up, demand slows a little bit, traffic slows a little bit, when they start coming back down everyone comes out of the woodwork. That goes to the argument, when some make the argument, well, you know, stocks have traditionally and his corically done well, Interest Rates have not exactly been the biggest burden for stock returns over a period of time and the flipside of that is the same argument, from zero to that level, in such a short and fast amount of time, thats where the impact comes in. Its not the level, its how fast you get to the level. And during that adjustment the stock market fell 27 , credit spreads hit 5, 600 and we did have the adjustment where i and many other people were wrong two years ago thinking a downturn would result. It did not. No. Just look what the stocks did last year, some up 40, 50, 60 in the face of rates going up as high as they did. Court, what do you like here . What parts of the market . Mine, were continuing to look at some of the underrallied areas of the market. A lot of clients dont realize energy has been our best performer this year, talk about that electrifying, thats outperforming growth, continuing the look at the sectors and small caps, broadening is likely going to continue. I think just to hitton your point here, yes we have rates higher, the reason the economy can continue to keep going is that 5 fed fund rate isnt the whole picture. When out of 60 to 80 of people with mortgages under 4 and you have baby boomers, a lot of money, 8 trillion, baby boomers have, 4 trillion in 5 earning money, sustaining that nonlabor growth rate, which is likely going to continue the strengthening of the consumer. Moneys gone back into mega caps, too, last week, and earnings pretty much told you exactly why the money continues to flow there, is that trade back on in full effect . We showed you nvidia, and we can throw it up again on an interday basis, back above the stock got 750, and now above 900 again. I dont think but you used the word trade. I would push back on that as well. This is another secular theme, again, weve made these points indefinitely on the network, these are each 20 different companies, not just one company, theyre the center of whats going on, the capex expenditure trend. That doesnt mean the stock cant go from 920 to 750. Thats volatility in the types of stocks, doesnt mean the underlying credit worthiness are at risk. No, but its it does sort of speak to the way that those trades went, you know, absolutely crazy, and then cooled off a bit. Sure. And you had some questioning as to whether they needed to cool off more if multiples needed to come in a little bit and here we are, weve had a pretty solid rebound since those companies started reporting. This one doesnt report until the 22 7bd. We have a little bit of time. An old friend of mine said, sometimes stocks go up, sometimes stocks go down. Is that the kind of insight you deliver on . You paid big money to hear insights such as that. In reality, all its telling you is that there are theres a fundamental reason to own the names, secular uptrend, earnings continue to grow at multiples of the broader market, they demand premium valuation. Et cetera. Until that theme is challenged theres no reason on balance the stocks shouldnt keep going up and to make the point for the millionth time, valuation is not particularly demanding for most of those names. Is that how you see that too . Yeah, i think ultimately it is going to come down to the valuation and the earnings, right, i mean were getting past this weird where inflation is the big concern. If we have the fed come out and they say, okay, pretty much took a raising of rates off the table, now investors are putting that aside and thats where they are starting to focus on valuation, and fundamentals, now some of your big mega cap sevens, those are still getting pretty expensive, thats where people are starting to look into other areas of the markets and thats going to continue. What if stephs right and the idea, she doesnt think we get any rate cuts, are we cool, do you think the market would be fine with no rate cuts . I dont think you need the rate cuts. Thats the more important thing. If the economy continues on good footing, the consumer is strong, we can maintain this level of a good economy, even when rates are higher. Thats when people started to get worried about, thats pretty much been taken off the table. As long as the next cut is eventually down, thats whats more important. Of course we dont the word need is like a loaded word, i think, when we discuss the market. Do we need a rate cut . No. Well, no, the economy is good. Do multiples and expanding multiples need a rate cut . Maybe. I dont know. To be justified. Do you actually think one or two or even three rate cuts are going to do anything to the overall economy . Its tiny. Doesnt it get harder. From zero to 550 in 18 months. The overall market multiple if rates remain higher for longer. Yes, but i think it goes back to more Long Duration assets, growth assets, part of technology, certainly will get hit and then at the same time you have some of these shorter end cycle stock sectors, you have some more of these value oriented sectors, courtney was just talking about energy, its financials, parts of industrials we talked about, materials, parts of discretionary. The reason were seeing a broadening, scott, is because the earnings are coming in just as good in these other sectors as youve seen in technology. Its not like, you know, small cap earnings have been not talking about small cap. Im not talking about small cap. The sectors i just talked about, i had industrials, go back to that, right, some are reporting 20, 30 Earnings Growth, ive got orders coming out of of eaton up 27 . Thats huge. The visibility that that carries. Same thing with energy. And they still have the tough compares year over year. I actually think that sector is poised to rise higher. Im double the benchmark. I see real value there. Its the earnings picture thats more important. If they can deliver, i think those stocks can actually participate along with tech. And we had rising rates and elevated rates all of last year, what was the single biggest explanatory variable, it was expanding multiples. No limit on stock price growth last year because rates were high and there appears thus far no limiting principle on stock price appreciation in the short term because the rates are going to stay high. Sure. But, if the economy is going to slow even a little bit then well get rate cuts. And rates are going to remain higher for longer, which they obviously are, that at some point the multiple might be challenged by all of that. First of all, yes, thats probably right. But listen, i operate in a quarterly and an annual basis, and im worried about here and now, and here and now the economy is doing fine, earnings doing fine, the themes weve talked about at this table are doing fine, rates havent been a prohibitive variable, stock market is biased to the upside, especially with a fed that by all accounts is screaming they want to cut rates. Justified or not. I wouldnt disagree with any of that. Thats why im here. See, it took 20 minutes for that insight to be dropped. I appreciate that. Dan greenhouse, courtney garcia, and stephanie lane, thanks, everybody. Thank you. And back to