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tv   Closing Bell  CNBC  August 23, 2022 3:00pm-4:00pm EDT

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wanted its games on tv so here is a way to expand that audience. >> absolutely. it is fascinating to see the transition as it's happening >> it's a very different year. >> as long as you play the game i want to see in the bar i'm in at the time. >> you are viewing lots of changes among the sportscasting and broadcasting crews it's going to have a different feel to it thanks for watching "power lunch," verybody. >> "closing bell" starts receipt now. stocks trading in a tighter range following the worst day for the major averages since june the most important hour of trading begins now welcome to "closing bell." i'm carl quintanilla in for sara eisen. the bulls latching on to these robust tech earnings but bears watching some weak macro in both europe and the u.s both sides wary of what the fed chair may say at jackson hole on friday check out some of today's big earnings movers. palo alto a big boost.
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macy's and dick's higher as well zoom pulling back after cutting its full-year forecast coming up on today's show a bull and a bear go head to head as the nasdaq comes off that monday decline. we'll debate if now is the time to jump in. is recycling the future? we'll talk about salvaging lithium and other metals from batteries. let's get right to the market dashboard with our senior markets commentator mike santoli. >> ethey're caught in between both bulls and bears wary about what they'll hear from jay powell friday. the s&p 500 no downside follow-through for most stocks today. i think that's a thin read you might grab on to if you were bullish. in terms of gauging what would be a relatively routine pullback after the ramp off the june lows, there's an uptrend it comes in right where the
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50-day average does. it would also be in the area just below 4,000 where you would have given up half that rebound rally. so just in terms of the mental accounting of it, we're still in that zone that says we're okay in a routine pullback. but the market was thwarted right at the 200-day moving average. the other thing we did is pump up against a perceived valuation ceiling. the s&p stacks up and got just to 18 times earnings that's essentially sort of the pre-covid pandemic boom ceiling for this market cycle over the last decade plus nothing hard and fast about it, but that's been where these upside rallies have stalled. however, it's mostly the biggest stocks the equal weighted s&p is pretty much right in the normal range of where it has been both before and after the pandemic it's the top five stocks and really amazon and tesla, to a lesser degree apple and alphabet inflating that
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then small cap stocks are really quite cheap by historical standards. so it doesn't seem to me the average stock is held back by valuation, it's much more about the macro, what's going to happen to yields and how much you want to pay for each dollar of uncertain earnings. >> i love your line about how a pullback into the high 3900s would be pretty routine but might not feel that way. >> sentiment is pretty fragile right now. yesterday and today you saw a little flurry of buying of put options. people are bracing for a little bit of a relapse to the downside also big hedge funds, large speculative funds, are very, very net short the s&p 500 so i understand it nothing is being taken for granted right now. but as they say, definitely both directions, you know, you could be open to both directions risk on friday. >> that's definitely going to be the highlight of the week, mike, thanks we'll talk in a bit. as we said, the nasdaq is outperforming today but is still the big underperformer this
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year, down more than 20% the s&p 500 tech sector has dipped into the red for the month following monday's sell-off joining us this afternoon for a bull-bear debate, dan ives and charlie. good to see you both. >> thanks for having us. >> great to be here. >> dan, you've been bullish on the tech sector but your broader point is that the results coming in from q2 sort of ratify your view. >> yeah. the fund mentals, if you look at earnings season from microsoft, the cloud, cybersecurity to stalwarts like apple and i think even with palo alto last night, fundamentals hold up a lot more than feared and that's really our thesis is that ultimately as this plays out there's going to be a boy fuifurcation in tech it will be tech stocks in the green, especially with a lot of the bearishness that we're seeing. >> charlie, broadly speaking is the pushback the notion that the
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market got overexcited about the rate cycle slowing down and hence got too excited about tech >> well, it's benefitted from lots of tailwinds over the last two years. broadly speaking tech stocks did very well with covid, the pelotons and zooms of the world and have really benefitted from a historically unprecedented low interest rates low interest rates help tech, help growth much more than value stocks so when the tide goes out, we see who's been swimming naked and a lot of tech stocks look unsuited here. so they have had a lot of tailwinds. now we're starting to see how they're going to do in a normal environment. >> what about the notion that we're in some sort of structural innovative cycle where really the macro cyclicality is going to be meaningless with what technology brings to our lives and earnings >> people always say that about tech whenever you're in the '70s or
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the '80s, it's the mainframe computer that will change the world, changes in transportation that's why tech stocks always trade for massive multiples. yet for the last hundred years, value stocks have beaten growth by an average of about 3%. why? because everybody always wants to own the glamorous growing company and don't want to own that steady, stable cash flow company. everybody has the dream of being the next facebook or the next apple. often that doesn't come true which is why value has outperformed growth by so much. >> what do you say to that, dan? people talk about the fed but bottom line 8.5 cpi is a long way from 2 if we have that long road ahead, isn't there the chance that tech stumbles in the midst of it? >> i think there's names like zoom, docusign and others that stumble. but when i look at cloud, we're only 40% of the way through. i think it's the fourth industrial revolution that's playing out in cloud, in
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cybersecurity. you look at rock of gibraltars like apple. so i think it ultimately shows what's going to be a bifurcation of tech. you've got to own the right names. but i think right now in terms of sentiment, it continues to be as negative as i've seen going back to '09, 2010, even despite some of the rally we've seen over the last month. >> that's interesting. charlie, some of the names that you mentioned that were covid beneficiaries, peloton, amazon, netflix, zoom, i don't see a lot of enterprise names in there i wondering if your thesis extends to the possibility that we do get a drawdown in business investment, where enterprise really becomes the locus of any weakness >> very possible i could be careful and say there are some tech names that i think will do fine oracle has a big enterprise business and big hosting bess
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that is reasonably priced at 14 times earnings but a lot of these names just aren't fundamentally you have to go back to valuation. i know that's boring and a lot of investors hate to talk about valuation but it really does matter we have a lot of technology names that have valuations that are unhinged from the fundamentals the reason they have been able to survive in this world is because we had negative real interest rates in a negative interest rate world, a dollar of earnings a year from now is just as valuable as a dollar of earnings next year. that's going to change. >> would you say valuations are unhinged after the last eight, ten months. >> a lot less unhinged my beloved netflix, reed hastings is a great and brilliant man. his stock is reason at 50 cents on the dollar. if you look at the worst performing list, there's a lot of big, popular tech names that are down 50% so yes, the short answer i
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should have said that out front. these names are not nearly as goofy as they were a year ago but that's because tech has performed so badly this year the nasdaq is down 20% while the russell value index is only down 8%. >> dan, one of the areas that you argue will remain robust even in the face of macro uncertainty is cyber i wondering your thoughts on palo alto. you called it a major data point, outperformed 620. why? >> that's been a table pounder name zscaler, crowdstrike and others have had massive success palo alto, it's only the second or third inning of this playing out and they have the cash to go with it. i think it's a golden age for cybersecurity. and that's going to be a firm area that holds up i think last night a huge quarter for not just palo but
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the overall sector. >> dan, you've been pretty good at calling the twitter saga on a play-by-play basis this whistleblower story and elon's tweet today where he says give a little whistle, to what degree do you think this becomes material come trial time >> for musk, this is essentially like christmas morning, a little kid looking under the tree going into delaware, it definitely was a weaker hand this potentially changes the calculus there for twitter, this was not what they wanted to see i think it puts gasoline in the fire the security situation, that's going to get a much closer look been the beltway, so i think this is really going to add to what i think is going to be a very interesting dynamic. >> hence twitter back to almost $40. dan, charlie, great chat good to see you.
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elon musk recently said the lithium business is licensed to print money. after the break we'll talk with the ceo of life cycle. they are working to recycle lithium and provide supply chain shortages in the ev space. you are watching "closing bell" on cnbc. (vo) hi. we're visible. a different kind of wireless company... ...running on a big impressive wireless network. how are we different? we exist only on your phone. so you get unlimited data for just $30/mo, taxes and fees included. plus we have a new plan with 5g ultra wideband. switch today at visible dot com.
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up to tenfold over the next decade according to the department of energy but there is a critical shortage of materials to make these batteries. lifecycle says it can be a sustainable complement to mining joining us today is the ceo. it's great to have you, thanks for the time today. >> great to be on today, thank you. >> i hoped you could give our viewers where we are on these repsscycling efforts versus whee we need to be. >> yeah. so we are a leading lithium battery recycler in north america. we have about three sites operating today. we're building many more now, we're also growing rapidly into europe. to help viewers conceptualize the scale of that, we're probably going to have 20 to 30,000 evs equivalent of material being recycled today. when you think towards 2025,
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2030, that gets to the hundreds of thousands of materials to recycle. hey, isn't recycling ten years away the reality is today as batteries are being made, there is a level of rejects that comes off of making batteries and that's the first wave of material we're dealing with. we deal with lg and other investors and that will work in the second wave with that predominant end of life material. >> interesting as far as the oems in the ev space, do they have a stance on this are they agnostic? do they want to propel it forward or not >> just taking a step back, we started this company in 2016 so six years ago there wasn't a ton of interest in this. people were really wondering why are you doing that today i'd say it's a total 180 for them the reasoning is a multitude of factors. for example, the inflation reduction act is a good pinpoint of what's happening in the
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market there's a huge focus on domestic supply of critical materials what folks may not appreciate is our rochester facility that we're building will be the first new significant source of lithium, nickel and cobalt, whether from recycling or mining in the united states so there's an awakening realization and we've seen a 180 in terms of interest as well as cell manufacturing companies which we work with. >> that's interesting. it's been said those who control the supply chain in the ev space will control the world i do wonderi if you look at a chart of ev adoption over the next five, ten years, what's the delta in terms of how many evs we could get on the road if in fact this goes broadly >> yeah. so i think start with maybe the equivalent of what we're doing at the rochester facility. over 200,000 evs of material in
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and produce the same amount on the way out. so think about current levels of ev uptake in terms of hundreds of thousands of vehicles now getting to the corridors if we could move that needle up a little in terms of recycling, that's great so some recycling companies will say we can recycle our way out of this. recycling is very important to help get that nearer term supply from a domestic source we've also chosen to partner with groups to provide a total solution and say, hey, we need primary material that's clean, good prominence, and recycling to come alongside and that's great validation for us but also as a solution to cell manufacturers. >> stock as we mentioned down at least over 12 months why doesn't it trade more in line with the ev space, at least ner in terms of manufacturers? what's it going to take to get that kind of validation on the
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street >> look, i'd say for us asa company and our focus is execution. so we have numerous facilities operating today. we have a two-phase model. we preprocess batteries and post process. it's going to produce over 8,000 tons approximately of lithium carbonate. a lot of the new mines do about 20,000 tons. and we're producing necickel an cobalt so i think as we continue to execute along that path, there will be an increasing appreciation of that, but that's a critical lynch point as part of our overall execution. >> it's a huge industry issue. some argue a national security issue as well. ajay, appreciate your time good to talk to you. check in on the markets on this tuesday the dow continues to ride a narrow range, down 92.
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s&p with a 1 point gain at 4139. still to come, jeff degraaf is with us he'll tell us if he'd recommend buying those sectors as we go to break, check out some of the top search tickers on not surprisingly once again, the ten-year yieldet gting the most interest followed by amc, zoom, tesla. our clients come to us with complicated situations that occur in their lives. for them it's the biggest milestone, the biggest accomplishment, the sale of a business, or an important event for their family. for them, it's the first and only time. we have seen this literally thousands of times, in thousands of iterations. ♪ ♪ i am vince lumia, head of field management at morgan stanley. whether that's retirement, paying for their children's college education, or their son or daughter getting married, our financial advisors need to make sure
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let's check out today's stealth mover, it is grocery outlet the stock is down 4% the analyst still likes the stock but after rising 40% year to date it has gotten ahead of the fundamentals. now to some sad news surrounding a wall street
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legend tiger management co-founder julian robertson regarded as the father of hedge funds died today from cardiac complications he co-founded his firm in 1980 and built it into a titan of the industry, cultivating a group of successful managers who would come to be known as tiger cubs he was well known for his philanthropic efforts and was a frequent guest on this network and on this show over the years. julian robertson was 90 years old.
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we've got a mixed session for the major averages today following monday's big downturn. the nasdaq is leading the way, the dow lagging down 110 joining us is jeff degraaf who's
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been doing quite a bit of good work about the momentum we've seen the last month. thanks for the time. >> thank you, carl. >> you make the point that the momentum has been strong but also relatively uncommon can you characterize what we've been through this past few weeks? >> yeah, momentum has really built upon itself with breadth and that's really the key to momentum when you have strong momentum, if you don't have breadth, which is just price without a high participation rate, it really doesn't mean much. but several of our indicators have triggered, 20-day highs have triggered, so the combination of those is pretty rare and pretty unique what we find historically is when that happens, it's usually the beginning of a bull market you can have retests it is unusual to have retests. but it has happened in the past. but the momentum signals a very
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powerful signal out the next three to six months and we had that in earnest at the end of july and confirmed in the early part of august >> right there were obviously a lot of eyes watching the 50% retrace and there were a lot of eyes watching the 200-day and then there were eyes watching the stall-out at the 200-day was any of that concerning in these last few days? >> no, not really. you know, what i'm actually encouraged by and this is just 30 years of doing this in the business, i'm encouraged that it's really hard to find the bullish narrative. when i know what the narrative is, it makes it too easy and everybody is invested. this is one of the more disdained rallies and momentum moves i've seen in my career and usually that's a good sign, not a bad sign i can't give you the narrative i'd love to sit here and tell you exactly what's happening, carl, and all the boxes that we're checking but i know that price tends to lead the narrative and we're
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seeing that in earnest that to me is good news, not bad news. >> that's interesting. so if you had to guess what the narrative was that price was implying, is it as simple as peak inflation or do you think there's something else mixed in there that pertains to growth? >> yeah, you have to do that to me, don't you? that's an unfair question. i think you hit it if there's anything that i would be looking at that says, hey, what is consistent with what we're seeing, i think it is the peak inflation fears is probably the better way to put it i don't know that inflation -- in fact, i don't think inflation is 2% by the end of this year, but i think the fears of inflation probably peak somewhere around the humphrey hawkins meeting to be honest with you and whatever happens from this point forward is probably considered good news by the market, not bad. again, that might require a retest and something that builds upon itself as we go but i do think if there's something that squares here with history of the price momentum and that narrative, it would be something to do with peak
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inflation or at least peak inflation fears. >> right so for those who are onboard with you and are riding this idea that it's a robust bear market rally at the very least with real bona fides, at what level do you think we need to start questioning it if we reverse? is it 3900, lower than that? 3650 where does it get interesting? >> the one thing that we do is when we haven't -- when we're still in a bear trend, which we are, we're still in a bear trend, momentum precedes a bull trend. i know that gets confusing but the sequencing is sentiment. you have very bearish sentiment. you develop momentum that momentum develops into trend. between the momentum phase and the trend phase, if you undercut -- when we have the momentum signals that we've had, when you undercut a 20-day low, that starts to raise questions about what the legitimacy of that momentum historically has
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been we did that in '74, we undercut the 20-day low and retested. we did that in '62 and retested. so it has happened in the past again, it's the oddity, not the base case. but that's the way that you protect yourself you always have to have an out in this business to be able to control risk and those parameters for us when we're still in a downtrend after a momentum thrust we'll look at a 20-day low as our signal to pull the rip cord and say something isn't right about this >> you say leadership is murky where would you look for leadership to develop? >> i think it's re-establishing itself in energy so that is one thing. it is not doing so in materials so that's an important distinction that you can look at energy and say this is back to that reflation trade i think it's different than that the materials still look actually very, very weak we are starting to see it in some of the subindustry of the industrials. we're seeing it in things like
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air freight and logistics. we're seeing it in construction and engineering. we're also seeing it, which doesn't help clarify the picture i understand, but we're also seeing it in utilities so utilities is actually the second best performer off the lows so a little unique there in terms of the leadership. what we've been advising clients is, look, you have to be on the balls of your feet and be in an athletic position, be willing to move laterally, forward, backwards. i don't know how this will play itself out, but let's be in an athletic position so we can not be caught flat-footed here. >> finally, bitcoin, would you have expected it to have more power against resistance these last few days? >> not really. i think that's part of the concept capital which we've been really warning clients against now for over a year. and, you know, to me that's at the tip of the spear of concept capital. it rallied it's got a big top overhead. it fell into resistance.
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it really didn't have any momentum, unlike equities, which i think is interesting i'm not willing to be short the market here but i'd certainly be willing to be short bitcoin and some of the cryptos here. >> jeff, great stuff a lot of really smart charts appreciate it as always. good to see you. jeff degraaf here's where we stand in the markets. the dow again about 122, the s&p 500 riding 4135. after the break, the street is buzzing about coinbase after brian armstrong defended the company on cnbc and then short seller jim channos laid out the bear case on halftime. we'll break down both sides. of course you can listen to "closing bell" on the go by following the "closing bell" podcast on your favorite podcast app.
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and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity what's the street buzzing about today? well, it's coinbase. stocks now down 70% year to date brian armstrong was an "tech check" today and talked about his strategy long term >> i do think there's going to be margin compression eventually it has to happen at some point because everything that we're building, others will eventually build it and it will become a little more commoditized we're realizing that trading fees is not going to be that
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thing -- it's still going to be a major part of our business 10 years from now and 20 years from now. but i'd like to get to a place where more than 50% of our revenue is subscription and services. jim channos revealed a short position in coinbase back in march when shares were about $100 higher. he responded to armstrong today on the halftime. >> services and subscriptions was $147 million in the second quarter. that's been flat for four quarters it's not growing and so it's a wonderful thing to sort of have you look elsewhere into the core business, which is of course declining. but services and subscriptions is not growing it's been 140 some million dollars plus or minus for the last four quarters so, you know, that's the problem here is that almost all the drivers are under pressure and yet, and yet the stock trades at
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a stratospheric valuation relative to other broker dealers. >> let's bring in kate rooney and mike santoli to talk about kate's interview from last night. kate, a couple of thoughts one was that he appeared to be softening a bit the industry's stance against regulators, less antagonism but the other thought i had is he seemed a little more reticent, less willing to declare an end to the crypto winter than sam bankman-fried. >> that's a great point, carl. he did say i'm not a fortune teller, i can't predict when this is going to be better and their business is really tied to crypto prices, things like trading volume one of the questions is that cash burn. if this goes on for multiple years, for example, are they in a position to weather the crypto winters people are calling it, but that's one of the issues wall street is really focused on that cash burn in general. they have done layoffs, for
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example, to pare that back but they have pressure coming from companies that are not publicly traded or not seeing that daily repricing that coinbase is getting and they're also operating overseas they have tried to say we are the regulated version of all these companies. we're based in the u.s. and trying to work with the ftc. but interesting, like you mentioned, not going after the s.e.c. saying we're trying to work with the regulators and stay within the guardrails at this point. >> i'm thinking back to a lot of the sale side calls on the run up, mike, and that was about revenue diversification. you can only surmise that the short is paying off for chanos, though. >> it almost has to be if yyou grant that coinbase is going to be one of the winners and one of the middle men in these biz, you have to have assumptions about price and volume for coinbase. if i look at state street or bank of new york, they each have $40 trillion in custody of
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assets razor thin margins, massive technological investments and traded ten times earnings. so it's obviously a long way from here to there, but you wonder what success long term means for this kind of business if it's a broker dealer or look at the e-trade model as well after '99 it was a viable business it did pretty well it got bought out by morgan stanley but never approached the heights of that initial rush of excitement in '99. >> kate, as far as big surprises to you, was there an answer that took you back? >> great question, carl. we heard from earnings a couple of weeks ago, similar themes about margin and cash burn one of the things we haven't heard from brian armstrong was on corporate culture they had really stood out from the silicon valley crowd and said hey, guys, we're doing -- they called it mission first but a lot of people took that as leave your politics at the door. you come to work, you focus on work and that's sort of it.
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silicon valley had been getting into corporate issues and taking a stance politically he was a standout and got a lot of criticism for that. he said in this interview essentially he had heard from other tech ceos and other fortune 500 ceos, hey, we would have loved to have done the same thing but the political pressure was too high behind the scenes some of those conversations gave a little color on that. i think in hindsight he would say it's probably a good thing you've seen some of the corporate pressure with disney, for example, and the charges of woke capitalism that some are calling it but i think they have avoided some of that on the other side it's interesting to see that evolve in the past year or so. >> that is fascinating you really ran the bases with armstrong. great interview, as we said. that's our kate rooney and mike santoli. coming up after the break, the latest on twitter's whistleblower complaint. plus a check on the chips. a prieevw of nordstrom this afternoon when we take you inside the market zone
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while an earnings tool helps you plan your trades and stay on top of the market. we are now in the "closing bell" market zone. mike santoli is here to break down these crucial moments of the trading day. julia boorstin on twitter's whistleblower. and courtney reagan on a very big day for retail mike, in terms of interesting levels today, i guess you'd have to say 10-year holding 3 and brent back to 100. >> exactly the 10-year at 3 in particular seems to be where the bids and stocks kind of go away we've been hovering above it pretty much all day. not a lot of lift but it shows the sensitivities to those
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levels we get that really weak ism services number or the s&p global yields go below 3 and stocks pop a little bit so i think there's a little bit of that kind of computer spy versus spy going on with these numbers. and then crude really rebuilding you know, essentially breaking that downtrend that's been in place since july still some room to the highs, but i think it's explaining why we're kind of just hovering here as opposed to having much direction bouncing back from yesterday. >> spy versus spy, that's a good deep track, mike santoli twitter shares pulling back as the social network's former head of security files this whistleblower complaint over the company's policies surrounding privacy, security and content moderation the whistleblower, peter zatco, said more than half of twitter servers were running out of date software and nearly all employees have access to systems
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or data they should not. it discusses misrepresentations by twitter to elon musk. a twitter spokesperson saying mr. zatko was fired from his senior executive role at twitter in january 2022 for ineffective leadership and poor performance. what we've seen so far is a false narrative about twitter and our privacy and data security practices that is riddled with inconsistencies and inaccuracies and lacks important context. julia boorstin has been covering this all day today and talking about what it may mean, julia, for musk's case. >> well, it certainly seems like it could help musk's case, at least the fact that twitter shares continue to drop, and move away from that price that musk said he was going to be buying the company at 54.20. now twitter is down 7% to $40 the more twitter falls, the less confident investors are that he'll be buying the company at that $54 mark.
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it does raise more questions and feel like all of this will be hashed out on that trial which starts october 17th but this could give more ammunition to musk's legal team, his army of legal experts. >> mike, as we inch toward october and that important trial date, every incremental step will be watched to see how it might affect it. in fact we were waiting to see if elon would tweet about it and eventually he did. >> new yoo, he absolutely did clearly embracing it as a complication for twitter's case in delaware. i think it seems as if the market's assessment is the more that trial starts to seem very noisy and a storm of all these different issues, it just raises the uncertainty factor and twitter's implied legal advantage in holding him to the signed contract, even though this whistleblower assertions, they don't really get at musk's core point that the number of
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monetizable daily active users includes more spam accounts than the company has said in fact he sort of argues the opposite but it doesn't seem to matter because uncertainty about the trial means the stock is going to take a hit. >> right obviously we'll be on watch to see how the judge continues to process this if at all julia, thinks. chip stocks gaining back some ground after the sharp pullback in yesterday's sell-off it now shifts to data center gaming too kristina partsinevelos joins us on where data center is so important. >> hi. i guess the quick answer is consumer electronics across the board weakening, smartphones weakening and some even argue about saturation data center sales, big organizations can not only bring in the hardware stream of revenue but the software side as well soon enough a lot of these servers will need to be even stronger to handle artificial
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intelligence there's a lot of potential for intel, though, the highly profitable data center business actually underperformed quite a lot in the last quarter. the stock just yesterday hit a five-year low. today it's trading a little higher but we might learn a little more about its hold on its market share later on this week that's because nvidia is out with earnings tomorrow the company preannounced weaker revenue stating like you mentioned, carl, the gaming chips face a crypto hangover and challenging market conditions, they're expecting it to continue into q3. but that also means there's going to be much more emphasis placed on data center sales. investors will wanting to see long-term projections and if they will hold out of all of the smh constituents, the semiconductor etf, nvidia has fallen the most from its 52-week high. lastly you have marvell technology it has a lot of strength in 5g
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it could be an opportunity for market share when earnings are out on thursday, but both of these companies, marvell and nvidia can give insight into how lucrative the data center business is, if it's holdings up and if they are stealing market share from intel. >> that's pretty interesting mike, bernstein earlier in the week talked about nvidia and gaming and said we're getting the feeling the buy side would actually like to see a further derisked fiscal q3 outlook because they have had flushes out in gaming and recovered pretty quickly. >> yeah, append with the stock n this much and numbers coming down, there is a sense that people wanting a washout in the numbers and make them achievable and beatable next year so it does tell you the psychology of investors around the whole group, which is you're contending with slowdowns in a lot of the end markets at the same time, all the news flow is about a massive capital investment cycle we need to ramp up the manufacturing capabilities, all
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these different players, and in general it has computed to semi conductors losing their status as a leadership group. it looks like even this last little rally off the lows has given a lot of it back and it seems a little bit toptoppy. so it's not any longer like, wow, everyone loves semis and they're too expensive. it's like they seem reasonable but only if the earnings are achievable next year. >> yeah, a lot of good takes today on intel brookfield as well. macy's shares getting a nice pop today. the company beats on both lines but they do cut their full year sales and profit forecast. says they will need to offer more discounts to get rid of excess inventory, especially in casual and leisure apparel we'll get more results when nordstrom reports after the bell courtney reagan joins us today does macy tell us how they're winnowing down some of those
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inventories? >> it is interesting what they had to say they were about 7% year over year which really is not that bad when you think about the inventory levels that many other retailers put up the ceo told me this morning that actually the inventory levels were in line overall although he said certain categories were out of whack, those were his words to your point, carl, some of those pandemic categories that we were buying so much of, which we're buying less of now, of course they're a little overinventoried and some of the areas consumers are interested in buying macy's would love to be more inventory but does plan to have 55% available for holiday being new, which is very key for a fashion retailer that's what macy's considers itself now, when it comes to what it may portend for nordstrom, if you look just within the bloomingdale's unit of macy's, it was much stronger than macy's overall. overall macy's comparable sales were down 1.6% but bloomingdale's comps were up 6%.
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and on the conference call he specifically talked about luxury and saying that it continues to stand out. they also saw strength with blue america, which is their beauty brand, but it does skew a little more high ending when you're talking about price points. >> mike, we spoke to mike boss who was cautious going into the prints he thought back-to-school is pretty strong on a nominal basis. as this inventory gets worked off, he did think holiday could be somewhat clean. >> yeah, i do think they have mopped up a lot of the issues. it's so hard to look at a macy's and tease out the underlying macro consumer trend from the fact that obviously they're in a managed retreat in a way in terms of department store market share. you look at something like dick's sporting goods, pretty good response to their numbers today. that's a better performing chain retailer that the market pays ten times earnings for
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it seems like that's your upside case so it just shows you how difficult it is at this moment to be a retailer and be persuasive to investors that you've got things figured out and have a growth path doing better than feared and maybe being positioned okay to capture a little bit of a good nominal growth story for macy's is the best you can hope for. >> court, i heard you and tyler talking about cleats and sporting goods at the end of "the exchange" but dick's, hardly any retailer this quarter had a full beat. >> i talked to their ceo and he said you know we're pretty conservative so for us to take up our guidance, you know we feel pretty confident. we're not one of those businesses that follow the economy. if your kid needs new cleats because he grew out of them, you're going to buy it for them. you're not going to say honey, just curl up your toes and get out there. >> right
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you've gotta win, you've gotta win. a couple of minutes to go in the trading day. mike has a lot more on the sb internals that we saw today. >> yeah, they're kind of mixed if you look at the breadth numbers underneath the market, just slightly more advancing volume than declining volume for most of the day. actually closer to 2-1 on the new york stock exchange. a little weaker on the nasdaq. it shows you for the majority of stocks, it really wasn't a lot of downside follow-through to yesterday's decline which was a pretty bruising one at the index level. talked about energy. look at the xop. this is the exploration and production etf it's kind of broken above not the all-time highs but that prior springtime high from april. you can see there on the chart so anybody looking for it looks like it's going to be a topping pattern, it looks like maybe there's some head and shoulders thing, that's a new uptrend that seems to be developing here on the right end of that chart. that's probably going to be encouraging to energy bulls even
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when you have obviously natural gas prices backing off a little bit today. in terms of the volatility index, it has held yesterday's gain the one-year chart, it does show a series of higher highs obviously we're in a pretty confusing and high volatility macro regime the market is showing that 24 is not a worrisome level but it shows you ahead of the jackson hole conference and then heading into september, you might understand people bracing for a little more bumpiness, carl. >> well said, mike the vix of course hitting those three-week highs and we'll see how that affects trading in the weeks to come. mike mentioned energy by the way. a lot of things that got lost were the comments by the saudis about potentially cutting production if in fact the market appeared overbloated to them as we said earlier, brent did get to 100 the first time since august 12th. as for the industrials, down 147. again, all roads sort of lead to friday and to jackson hole we actually fell a bit this
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morning on those weaker than expected pmis, the lowest since 2020 rebounded a little bit goldman did come out later and say we do expect powell to reiterate the case for slowing the pace of tightening we'll see how that develops the next couple of days. that does it for "closing bell." let's sending it to "overtime" with the judge [ bell ringing ] carl, thank you very much. welcome, everybody, to "overtime. i'm scott wapner you just heard the bells, we are just getting started here at post 9 at the new york stock exchange in just a few minutes i'll speak live with erin browne and get her current playbook on the markets today. dwight anderson, a so-called tiger cub is with us on the life and legacy of hedge fund pioneer julian robertson who sadly passed away today at the age of 90 we'll get his reflections coming up. we begin with our talk of the tape, whether stocks are set up for a big friday fall or


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