Trade overall, it takes us to our talk of the tape, the great bounce back for stocks and whether it is sustainable. Lets ask adam parker, ceo. You are not so sure this is sustainable and more cautious in a few months . Yes, last week when we spoke, conditions are still the same, an equal chance of a 10 up versus 10 down, that makes me less confident because the data are mixed. For every good thing, i get upside on retail sales, down on housing. There is some good and some bad and enough to feed the bulls and bears. You have to get to a soft landing somehow isnt that the definition are you looking for where are you looking for the economy to keep rolling along and figuring out the inflations way to work in your favor even if it didnt . Erode not imploded, the hominid dialects we knew we were going to slow but at what pace . The good news is, you dont have a synchronous contraction, so many things the cycles were at different times, housing on a different cycle than auto. On the things that are working that things can be positive i think earnings will grow. The street has 278 in earnings next year, is that about 18. 7 times the number. 19 if they are too high. Okay. Not crazy expensive like this is awful, especially with bond yields being lower. It is okay but i dont feel as positive as the risk reward as 12, 15 months ago. An area you are more concerned about, tech. Where, now a couple notes in a row from you, why Technology Investing is getting riskier . How do we get from come in a few weeks, wanting to still be overweight mega cap tech, to now riskier and we are riding the surfboard and time to put it back on top of the car . When you run a portfolio, you get 40, 50 stocks, they have been correctly benefiting from a. I. And semis an software, the debate will be, i had a debate earlier today, how much do i lighten that . The first thing that will result in stagflation, tech and energy and what will be bought is staples why do use stagflation . Inflation picks up cyclically, i dont think that is the base case. The economy is slowing and not stagflation . What you think right now, have hard landing and have soft landing . Are you not convinced by what the fed chair said last week with no stag . No flation . Should i ever be confident with what the fed chair is saying . People have been getting crazy about the stagflation word. In the last two weeks, if you are in my world and searched the previous six months, zero mentions, now it has rocketed in the last two weeks because that one day had a high pce and weak gdp. I dont think it is a base case but tech is ripped. Takes stops and looks at the ballots versus the market or beta, half of the stocks at 1. 2 beta are higher are tech. If we get an economic slowdown, that will go down more than normal. Guys who have done well and up this year, 7, 8, 9, 10, they dont want to lose it all, just like the great pick up, if we get a downdraft like we were at below 5000 a few sessions ago, people will buy a consumer staple or maybe Healthcare Services everyone hates and sell my palantir on the list of risky stocks before it blew up today. It is that logic you are trying to protect against. Okay. We had brad on halftime. A growth manager. He invests in a lot of mega cap tech stocks. Here is his positioning and reaction to what adam has written about protecting your capital. We have taken that our own exposure by 1000 to 2000 basis points in hourlong fund by adding shorts, custom basket shorts, we are worried about some things in the world, and reducing some of the overall position sizes. Again, this is about all or none, not about 100 net long or 0 , this is about oing from 80 net long to start the the close to 60 today. Makes a lot of sense. To me, that is what you are always look, if you are a growth manager, you want exposure for the next several years to ai software, life sciences, you will want to be long in those stocks but times were you will try to manage the risk. This is one of those times . More Risk Management today than six months ago. If i were correctly overweight a lot, i would be lightning until i get more clarity on the direction of how much the economy is eroding and where estimates will come out. A number of companies will do margin expansions, i still think that the fed will be accommodative then not a good cocktail for equities. What is really ripped and looks the most vulnerable is a lot of the highflying stocks. Stan drucker miller, he trimmed his nvidia stock. A longterm believer in it but the flipside, others who say it is not hyped enough relative to what ai will deliver. That was eric schmidt as well, ai is underhyped. I have sympathy for the view you can make money with things obvious in the long term. I dont think the nvidia trade is over. That would not be the one i would lighten. I feel like that is one that benefits the most and has the most upside on revenue. I would lighten other ai stuff. Lets get specific. You dont shy away from giving specific. Which one would you lighten up . A lot of semis that dont benefit as much as nvdia , they are up a lot. Longterm, you want exposure. Semicap equipment is up too much. All great business that will benefit but, if i have a 1500 base exposure in my portfolio and five or six names like this, nvdia would not be my first choice to lighten. Jensen will be on overtime tomorrow. Speaking of declines day over day, me and him in 25 hours. I always remind people, i dont take for granted, people know everything about everybody who come on. You speak to the Semi Conductor knowledge. If you told me 20 years ago that would be adding intel market cap on a oneday basis, i would have laughed in your face. They have done a lot of things right over the last 20 years. I want exposure to the best companies in the first and second year of a 10 year trend. I would rather keep that one and some of the tangentially related once people applying this is from a position of correctly overweight a lot and worried that you could have a correction. The stuff is higher beta. You are talking like palantir. That was on top of the list. Higher beta to, shop at five higher beta tech, shopify, more vulnerable. I want to avoid having a, the market got nervous and things are down. They are down disparately, not because of fundamentals but because they have attributes that people sell first. Are you thinking about, speaking of power, not Energy Stocks so to speak, but utility plays . The power plays into ai . Becoming a popular trend. They added because of the arms race buffett and company talking about it. A lot of investors now looking at these other ai plays not up to the moon in a short time. Surprised we did not get an announcement from a mac seven that they were investing in power. I think you will get them saying we need our own power. We cannot just rely on it, we need these giant centers of ai around the country and power. We dont get enough. Remember when delta bought a refiner . Exactly. There could be more that. The people are playing those names not covered by people used to thinking about it to be 7 or 10 they are thinking about gdp growing. Closet ways to get exposure that are not the obvious except nvdia , i dont know, the best looking person walks in the room and everyone likes them, you decide you dont like them because everyone else does. It does not make sense. Lets bring in shannon. Good to have you. Is it time, as it relates to the growth trade, to protect capital or chase returns . I certainly dont think it is time to chase returns. I think one of the things we have continued to talk about is that, this broadening out trad , we have seen some stalling in that trade with the growth to value trade over the past couple of weeks. Two things have driven that, rates, Interest Rates related to technology, it still matters. We talked about this last week on closing bell. The impact of Interest Rate expectations on technical stocks. And earnings have come in fairly strong for discretionary and technology, you are seeing these questions about this broadening and this rotation, and in the short term, it has been this two factor experience that is creating this pump creating this bump. Where to go . You mentioned healthcare, staples earnings for healthcare have not been that stellar and it is a difficult environment right now where people feeling like, from a Risk Management perspective, they want to lighten up on the tech trade if they have gotten it right. Where are you going from here and where do you feel most comfortable . Those have seen some performance it is tough to truly go defensive from, if you are overweight in tech , and trying to thread the needle in these other exposures and look at some industries and where there may be opportunity. What strikes me about your opinion of the market, the market clearly was soothed by a fed chair was not as hawkish as some feared he would be. He gave you the idea that they definitely want to cut, they will not do it quite yet. And, he had a confidence about him they believe they will pull off this soft landing without the whole thing deteriorating. I almost feel like you want to play a contrarian type of view do what we got last week. That, in some respects in that the pullback in his tracks, and has us back come up 4 , 5 since the april bottom. Shannon is right as usual. Changes to perceptions about rates and changes in perception about growth is what drives the market there was a change about the , people saying maybe they will hike more, he said, no, so i get it. Down 20 basis points. I get that, part of what happened. Now, feels like that is through the pipe and we have to look to the next incremental data point. I think he got helped by a weaker jobs outlook. A data port. A dovish data point from that standpoint we will see what happens over the rest of this month. I think earnings have been decent and guidance has generally been decent. We will get close to a fair level. Will we have a recession . I dont know. I dont think so. I dont know if i care. Do i think earnings are higher for the couple hundred companies . I think so. Will the margin story holdup . I do. I just worry a little bit about the commodities index come up 9 from lowes, maybe the tailwind is less on the input cost. Labor productivity will be huge and it can hold up in this level of economic activity. We will see about ai. Healthcare, her point, the numbers have not been great. Does it set up better for 2025 . I am looking at the middles, what could happen in 2025 . Future earnings and down revisions at humana and united told you it wasnt as bad. Maybe it sets up for better risk reward with low expectations as i look at next year. Maybe early to put on the trade but that is what people are thinking about. As a Small Business, they have massive Pricing Power over me and these are the businesses that ultimately will benefit from ai the most as they dont higher ever again as a Revenue Growth and maybe fire people. They are an ai beneficiary on the cost side. That will be the bold case for healthcare but maybe a little bit too dreamy for shannon. What do you say . If you go back, i have been consistent on utilities and healthcare, on the healthcare side, i dont think you were wrong, there has been so much concentration in terms of performance, so much emphasis on glp1 that the overwhelming opportunities outside of glp1 and healthcare, there is also a management issue, glp1 came out of the gate so fast last year and a lot of Healthcare Services, whether managedcare, disposables, consumables, on the healthcare side, they did not react, they were not ready. Now, they have looked at estimates and what is happening in terms of glp1 and extrapolating that out and modeling and giving better guidance. I agree, it may be a 2025 story. The valuations are setting up to be attractive. I do think there are pockets of opportunity. Right now, the sentiment, especially with amgen last week coming out with their own glp1 offering, that is getting a lot of attention in the short term. A lot of things that look interesting in healthcare. United therapeutics, find the one stock that grows faster with higher margins . There is some dislocations underneath i am hitting my screen, there is some stuff on sale. I should be paying attention to set up for 2025 given your clientele, you spoke to a growth manager, presumably a reasonably well known one, we are coming out of milken in l. A. , hardtofind pessimism, usually they are negative on the market, are the clients you are talking to, are they optimistic on where we are or not . More balance the negative. The ones with big piles of money, i do asset allocation, will always be more negative. I think shannon and i are centered around the headspace. When you go to milken, i have been a couple times, you should feel good about life, you are in the waldorf in beverly hills. You see famous people at every entry and learning interesting things from interesting people. You go to a lot of conferences and find people of that stratosphere, generally are more cautious. People who pick stocks for a living are not outright bullish we do 630 meetings per year, a huge number, people are not max bullish on the stock market right now and this 3 move has not change the view mostly about the fed and some getting the hedge case off the table it does not make hem say i will increase my bond to equity allocation. People believes there will be buybacks from corporate. People think maybe more speculative retail guy comes in and very tactfully. I dont think people with lots of money are like, time to back up the truck for a second half rally. The biggest reason is consumer , china not recovering, and the estimates for the second half, they do hockey stick a little, that is the opposite to the short term sentiment stuff. Shannon, appreciate it, ada , as well. We are watching disney shares, dragging down the dow and on pace for the worst day in 18 months. That follows arnings julia has the details. Reporter disney shares are down over 9 after they said its parts divisions are operating income would be flat in the fiscal Third Quarter. That compares to expectations of doubledigit percentage gains in the quarter and they say that would be a head of a fiscal quarter for rebound expected. Bernstein saying parkes is the anchor of the evaluation, plus the quarterly revenue is lighter than expectations and disney set its direct to consumer entertainment business would report a loss in the fiscal Third Quarter and would not add any new subscribers while the quarter two Linear Television operating income fell 22 and that was the bad news which outweighed the fact that disney be on the bottom line and raised the fullyear earnings outlook and reported a surprise warty 7 million in profits for disney and hulu. Iger said streaming will be a growth driver for the company as a crackdown on password sharing but that is not helping the stock which is down 9 . A little sell on the news perhaps because the stock has had quite a move. Quite a run this year. If you look back over the past several years, still down but the shock is up dramatically this year in part because bob iger defeated the proxy battle with nelson peltz. A sense this accelerated the moves by iger to improve studio performance. We will talk to you soon. Christina now for a look at the other big names moving into the close. Reporter coke up 19 after net sales increased and profitability improved in the first quarter. But the real driver for cocacola consolidated inc. Is the 3. 1 billion stock repurchase plan as the market cap for context before the buyback announcement was 8 million and this buyback represents almost 40 of the market cap. Shares of Consumer Health company kenvue are higher after announcing the lamp of 4 of the workforce, they split from Johnson Johnson a year ago while they still Market Brands like listerine and bandaid, the job cuts are as the transition between both firms winds down. The firm also beat on, quarterly profit estimates. Next, the big bounce back at big tech and whether the rebound has staying power. Doug clinton is here, find out how he is sizing up the mega cap momentum and the names he thinks have more room to run live at the New York Stock Exchange and you are watching closing bell on cnbc. Shares of meta up 31 since the start of year here is what i learned at that time report earlier today. The single greatest beneficiary of the ai boom, because ai powers all of their engagement and weather videos there showing you on instagram or on facebook, or the monetization, the targeting there providing to their advertisers a longterm shareholder, this is different than 2022 as they are the most fit and Efficient Company of the big cat in tech today. Joining me is doug clinton of Deepwater Asset Management , a shareholder of meta. What a difference a couple years makes do you agree with that . I do. I would not say they are the biggest absolute beneficiary, we also on google and you can make a case that google, with what they are doing in ai, has a better plate to create g. I. Then than meta. For all those reasons, ai, and has the advertisements and engagement, those work at meta and they are a more Hungry Company than in 2022. When you hear stan drunkeniller talking about ai, but some say the space has benefited from too much hype. Do you have a comeback . I think it is appropriate. Where we think we are in the cycle, probably three or four of what will be a multiyear ai bull market. Should there be hype . Yes. We still have a long way to go there will be pull back and inevitably from here to peak, whenever that is and stand is the greatest trader ever stan is the greatest trader ever, but there is a lot more to come. If you think the hype is in the third or fourth inning, maybe the multiples are in the eighth inning. Are you comfortable with the valuations of these stocks . We are, you can find stocks in the ai height space with reasonable valuations and if you believe there is more revenue coming from the ai boom, and you look at the top six, about 20 times forward earnings come in the middle of the historic range in the last 10 years, not overly inflated. You look at the names we own like vrt, ai data centerpoint and the trade at mid 30s forward eps and we think that is too low. Alphabet, brad is also a believer in that, which is interesting because there was a point in time, not long ago where he wasnt, he famously sold the stock and criticize management and said they missed out to microsoft. More recentl , you have third point saying, for longerterm investors, alphabet, that mess and the noi