Yes, this is the last hour of trading on this shortened market day and there are fireworks in the stock market a pretty good start to the second half of the year, right extraordinary we are up 200 points just a second ago alltime intraday high for the dow and alltime intraday high for the transports look at financials and Energy Leading the way, some of the laggards for this year and Tom Mcclellan will tell us later why he thinks the bull run is forar from over a new report this morning says President Trumps chief strategist, steve bannon, is pushing for a tax hike for the upper income bracket well get you those details. Youre on a roll. Do you want me to pick this up tesla, yes, its true the model 3 is on its way and the stock market was higher earlier. Its given up many of the gains here ford and General Motors are powering higher after their auto Sales Numbers came out well tell you whats behind all these moves, coming up in fact, tesla says it looks like it wants to turn positive once again im trying to stay focused here yeah. Failed lets start with the markets. Why not . Big rallies hear the dow hitting those alltime highs. Transports doing the same. First time weve seen the transports hit alltime highs since early march. Joining our closing bell exchange, this early monday, kevin karone is with us, steve grasso from Stuart Frankel is on the floor, as well or are you at the post i cant tell on the floor. On the floor. He cant hear what im saying, anyway im on the floor. Rick santelli is at the cme in chicago steve, what about this rally it could not be any clearer. Youve got the financials moving higher youve got Energy Moving higher and Technology Moving lower today. Whats going on here its exactly the case and you know, weve talked about how bearish i was on oil and then oil, that longterm level of support, which is 42, it bounced right around that level, bill and then it gave people the ability to rotate into those underperforming assets, financials, energy, sell the tech, sell the largecap tech. Think about it this way. If large cap tech is up 14 yeartodate, xle is down 13 or thereabouts yeartodate where do you think that performance is going to come from in the back half of the year wheres the next 10 additive to your ortfolio . The risk reward is xle and xlf, better bang for your buck. Kevin, meantime, i thought you had some interesting comments about wealth in this country. We talk a lot about the stock market, but were talking about so some big, round numbers that the American Household is approaching. What does that tell you . Yeah, youre going to probably get to a level pretty soon where household assets are going to get real close to 100 trillion so this is a High Water Mark its three times the level of net worth that we saw just 30 years ago. So wealth is factoring back into this its helping households improve their balance sheet. And when you combine that with a better job market, then overall, the economy feels good so you get the pmi number you got today, and this is helping the psychology of the investor as we move into the summer rick, we continue higher with those yields i want to put you on the spot. Have we seen the lows the for the year, do you think yes, i think we have. Okay. But i would also almost equally say that the 260 high of the year is going to be difficult. Its going to be difficult to challenge that level lets put a face on what bills talking about. You know, boon yields today traded higher than their highest 27yield close but they backed off, just a bit. Their highyield close of the year is 48 basis points and change they came wan whisker of 50 basis points should they ascertain 50 and im pretty sure they will, pretty soon. That would be the highest yields weve seen since the beginning of 2016. The other thing going on is, is that all global rates seem to be hinging on much of whats going on in europe i call it the year of mario. And i think its going to be the year of mario. Because the real issue is, is there really a taper in the works . This is a huge question. You know, we pointed out last week, that we saw a bit of a scare. Bo bund yields popped up over 20 basis points for the week and everybody marched in lockstep. But what that turned out to be is, every monday, as ira pointed out, how much the ecb buys is out there. Well, they used all of their bullets early, didnt have much left, thats what traders were focusing on. But now its caused a series of events that could open the horizon to many of the issues that investors worry most about, higher rates but it isnt necessarily bad you see what the equities are doing, bill . I think that continues we could all argue, for how long mario draghi is going to get away with this, but my guess is, a lot locknger than most of us think. It has to do with the leadership in the equity market, too. The first half of the share was Technology Leading the way now at least for this day, its the financials and the Energy Stocks by the way, alert time magazine, we have already decided, its the year of mario. There you are. I was going to ask steve about what were seeing in those manufacturing numbers this morning. Rick kind of mentioned this, steve. But i saw some economists saying, wow, maybe the Manufacturing Sector is maybe at an Inflection Point here, have been so how do you does that make the industrials or materials attractive or is that reading too much out of a strong report it is probably reading a little bit it is a little bit of a kneejerk reaction, kelly, but i think its more goingto hinge on the dollar and the dollar starts to rally, i think a lot of different areas and sectors could see a lot of kneejerks, as well. If you look at the back half of the year, though, if we dont need tech to just dive off a cliff for financials and energy to rally, we need tech to hold and if tech holds, then those two, energy, financials, will take us over the goal line, and thats what will push this market to 25. 50 in t50 in the s. Look at what its done in the year of draghi look for that to have further gains. You know, kevin, a halt, what about technology here . A hallmark of this bull market since 2009 has been the ability to rotate from sector to sector to sector, even as the whole market that major averages continued higher is that what you think well be seeing here for at least the foreseeable future as the previous Leadership Technology is faltering and now we have new leadership in the equity market here i think so. I dont make much of it. Its a lot of churn. You had a big pop in technology. Maybe it got a little ahead of itself and valuations got a little stretched but youre now seeing the revival of this, what you see the reflation trade last year. Youre seeing it in financials and a steeper yield curve and in energy but the underlying message is that most of the data is strong. And ultimately, as the economy grows, technology has got to be a part of that so if youre a longer term investor, technology will be a part of your portfolio but for the time being, perhaps it just takes a little bit of a breather, as the reflation trade, part ii, gets a little bit more life in it. You know, we dont give health care a lot of, you know, time, steve, but look at humana, thats one of the names near alltime highs today its not as exciting as technology, but it sounds like its not being derailed yet by all the turmoil in washington over the future of well, its actually outperformed so xlv, if you look at the health care index, has outperformed the xlk but recently, kelly, weve seen regulation come off or we shouldnt i shouldnt say its come off. Nothings been done. But when you look at what the initiatives and what the focus are, it seems that the Trump Administration is going to be a lot less onerous than we once had thought, and thats why youve seen biotech run and health care run. So i dont necessarily think that thaey do have to do anything, fortunately, for them. Gentleman, thank you. Steve gets the award for the cutest kid on the familiar of the new york stock exchange. Thank you, all happy fourth of july you, too. Auto sales slowing in june, even as tesla is getting ready to launch the first of its model 3 vehicles lets get to phil lebeau for all the latest phil kelly, the headline numbers for june sales, not terribly impressive for the four largest automakers in the u. S. Lets take a look at them. And when you look at these sales, keep in mind, this is in comparison with june of last year three of the four were up relative to estimates, thats toyota, thats also ford and fiat chrysler, doing just a little bit better than expectations but underneath these headline numbers, the sales really were not terrible youve got to look at the retail sales. And in that area, pickups and suvs remain strong average transaction price, thats what we pay when were at the dealership, it was up slightly compared to last year, at almost 34,500. And then the june sales pace estimate this always gets a lot of attention. Well find out the final number a little later on today. Supposed to come in at 16. 6, 16. 7 million. Put all of this together and thats one reason why you have the auto stocks moving pretty a nice pop today, especially General Motors and ford. Keep in mind, these guys have been beaten down they have not been rallying with the rest of the market over the last six months, so this is welcome to ford investors and to General Motors investors now to the tesla story and a series of tweets that came out late last night from ceo elon musk. The one that got a lot of attention is when he said, hey, folks, july 28th, thats when the first deliveries will take place for the new model 3. Hand over party for the first model 3 customers on the 28th. Production grows exponentially, so in august there should be 100 cars september, above 1,500 and then what happens after that, well, eventually, by the end of december, the production rate, at least according to elon musk, will be 20,000 vehicles for december again, thats the production rate that doesnt mean theyre actually going to have 20,000 vehicles rolling off the line in december shares of tesla were higher earlier this morning, but theyve given back most of that and now have moved slightly negative guys, weve talked about this for some time. July begins a very busy second half of the year for tesla, not only in terms of the autos, but also when you talk about the solar shingles and the possibility for a production plant in china a lot of things on the plate for tesla. Phil, stay there. Lets talk about this, look other things john mcilroy from autoline td is with us, as well lets start broadly. Where do you see the cycle for auto sales right now are we starting to bottom here or what do you think theres no question that sales are tailing off. Weve seen that all year long. In fact, if you add it all up, were probably short about 200,000 buyers compared to this point last year. And we may end up about 300,000 buyers short i think a lot of it has to do with Interest Rates going up, pushes some people out to the margins. The big lenders are being a lot more careful now as to who they write loans for, not all subprime but theres the other thing, too, that we dont have a full handle on just yet whats the impact of all of this ride sharing and car sharing thats going on. Theres anecdotal evidence that this is having an impact, but we dont have any hard numbers on it well, john, how about the impact of tesla. As this thing really starts to hit the masses, how do you think thats going to change the Auto Industry up until now, electric cars have been bought largely by enthusiasts, ev ebb thnthusiast early adopters of the technology the ev3 could be the first model that really opens up electric cars to the masses, to the mass market the reason i say that is tesla has gotten hundreds of thousands of deposits on this car. The likes of which, numbers that is, weve never seen happen with electric cars. It could be a tipping point, not just for tesla, but for the automotive industry. Phil, you know, john brings up an interesting point. I was just sitting here thinking about millennials that i know who have been reluctant drivers. No, i love driving. But i but i dont do much of it lately. Youre not the only one there are others that i know of, as well. And that demographic play, thats big for the Auto Industry, Going Forward, isnt it it is and john talks about the impact of ride sharing, car sharing, how much of that going to curtail auto sales in the future look, were not going to see sales drop off down to 10 million or 9. 5 million like we saw when we had the recession. Thats not happening you will see a gradual slowdown, almost everybody agrees the forecast called for a slowdown, perhaps as low as maybe the m mid15 million range, somewhere around there, in a couple of years. But overall, youre still looking at strong profits for the automakers, relatively speaking, and sales that are relatively robust. The issue is, they are going to have to curtail certain models and thats going to be the tricky part for the automakers they have a terrible track record when it comes to being profitable, as the market moves down well see if they can manage it this time around yeah, thats what makes teslas entry as this is all happening so interesting but john, maybe we should take a step back and acknowledge theyre trying to do something unique here. That tesla is trying to ramp up production in a way even a seasoned car company cant meet. Theyre taking a risk by skipping these tryouts, which many suppliers do. You know,so, have they proved yet that maybe they can do it differently here well, tesla has had a lot of quality problems with its model s and x, but it hasnt turned away buyers. Theyre willing to forgive this car any problems it has because theyre so in love with it but thats been ev enthusiasts early adopters of this technology as you get to the mass market, where this car is going to be maybe the primary car for whoever bias uys it, unlike the model s or model x, those people have additional cars in their household. So if they have any quality problems with this, it could be a real black eye for the company. And youre right, theyre skipping what in the industry they call tryouts of automated equipment. So when you build Assembly Equipment at the supplier plant, you want to assemble it within that supplier facility, cycle it, make sure ervverythings running right. And then you ship that equipment to the automaker teslas skipping all of that in a race to get this car out faster, its a risk. Obviously, theyve decided, its a calculated risk. All right phil, good to see you. John, thanks for joining us today. Happy fourth of july thank you, both just a reminder, yes, this is closing beclosing bell if you tuning in and looking at your watch, this is the final hour of trade because the markets opened for a half day today because of the fourth of july holiday and what a first trading day of the second half of the year it has been the dow was up 200 points, the s p was up, and the nasdaq continues lower. Technology continues to struggle here its fascinating to see the disparity there. President trumps chief strategist, steve bannon, reportedly wants to raise taxes on the rich in order to cut taxes on the middle class. And the airport is pushing new Airport Security guidelines. A new Spirit Airlines ceo tells us how that could impact the industry overall, coming up. Thank you so much. Thank you so were a go . Yes we got a yes what does that mean for purchasing . Purchase. Lets do this. Got it. Book the flights hai si si ya ya ya what does that mean for us . We can get stuff. Whats it mean for shipping . Ship the goods. Youre a go you got the green light. That means go oh, yeah. Start saying yes to your companys best ideas. Were gonna hit our launch date scream thank you goodbye let us help with money and knowhow, so you can get business done. American express open. Welcome back what a strong day were having for the dow, the s p, and the russell. The nasdaq is sitting it out with a drop of more than 0. 25 but 156 point gain on the dow to put it over 20,500 today we hit an intraday high earlier. Bank rate is among the big winners after the personal finance website was acquired by red venture. 14 bucks a share is the price. Thats nearly 1. 25 billion. Its about a 9 premium to bank rates Closing Price on friday and shares trading just below that takeout level i had no idea that bankrate was publicly traded. I didnt quite realize that, either and not only that, it goes for that price, 1. 25 billion. Good for you guys i hope you get a good rate on the financing. I hope they compared offers before accepting one exactly President Trump has been promising major tax cuts, you know, but now his chaief strategist reportedly wants to raise taxes for the wealthiest americans. You cant completely rule out that the white house will at least consider this proposal that comes from steve bannon if only because the plan is still in flux and we also know this administration can be unpredictable. The white house declined to excellent on the speculation, but back in april, Officials Say they would streamline individual rates to just three. 10, 25, and 35 . And thats pretty close to what President Trump had proposed on the campaign trail, as well as the numbers in the house blueprint for tax reform now, raising the top rate would fly against what Republican Leadership on capitol hill has been toiling over for months the ways and means chairman, kevin brady, has talked about the importance of lowering taxes for all incomes, and remember, it is up to congress to negotiate and pass tax reform, not the white house. Gop leadership and the administration have taken great pains to show that they are all on the same page, meeting regularly on kmcapitol hill so, guys, this would be a very public split in policy back over to you and ylan, when we saw the reporter on a short time ago, he tried to emphasize, look, the white house would say, we put this issue to rest a couple of mance washingt months ago, but his report suggests that steve bannon keeps bringing it up i suppose he can raise