Closing Bell: Mag 7 Trade, The Big Business of Nascar 9/8/26

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Scott Wapner (1:00)

Alright guys, thanks so much. Welcome to Closing Bell. I'm Scott Wapner, live from Post9 here at the New York Stock Exchange. This Make or Breakout begins with these jittery markets. Oil, Brian and Kelly just talking about rising on more strikes in Iran. You had those reports that were just emerging in the last few moments, maybe causing a little bit more consternation in the markets. Yields higher as well. That's a big story, of course. With that Fed meeting looming next week, we put it all into perspective today with our experts. We'll do that in just a moment. I'll show you the scorecard here with 60 to go in regulation. The majors have been red all day long, led by a drop in financials. Healthcare has been a loser as well today.

A lot of that having to do with Amgen. Take a look at that stock down near 10 percent. I mentioned that one first because it's having a big impact on the Dow and it is in response to poor trial results from Novartis. It's having a day of its own down more than 14 percent. Got the details on all of that coming up as well. Elsewhere, Apple's lowered a day ahead of its key iPhone event tomorrow. We'll talk more about that. Pretty good day for the chip names today. AMD is looking especially strong, about 6 percent. Qualcomm's higher on a data center deal with Amazon, watching both of those moves. All of it takes us to our talk of the tape. How to play the markets right now. Let's ask our panel. Sofie's Liz, Thomas Solis' Dan Greenhouse, JPMorgan's Abby Yoder. Good to have everybody with us. Abby, I'll turn to you first. You've been bullish on every conversation that we've had. You just revised your earnings estimates higher by 4 percent for the year.

What do I do with a market that's jittery?

Our attention has shifted from earnings to oil and yields.

Even though the earnings story is pretty good and you say it's going to get even better, what's the yin-yang on all of that, you think?

Abby Yoder (2:51)

I think you continue to focus on earnings. If over time, that's what's really going to be driving the market, that's what you pay attention to. Yes, to your point, we revised higher earnings, which 4 percent doesn't really sound like that much after what we just had from 2Q.

We had earnings growth 30 percent and this is the seventh consecutive quarter of double-digit earnings growth. But I think it's really important to keep in mind because of that earnings growth and because of the earnings revisions that we've had, the multiple for the S&P 500 has contracted from 22 and a half times to 19 and a half times. So I think a lot of those uncertainties that we're talking about are reflected in the market multiple, particularly in tech.

Scott Wapner (3:25)

So still some would say historically rich, earnings have to live up to the hype.

Abby Yoder (3:33)

Yes.

Scott Wapner (3:35)

That's going to be everything, especially with yields backing up, right? Because that puts the multiple into a little bit more of a question. And you're confident that earnings are going to maintain momentum for the 12 months that are coming, not the 12 months that just finished, which have obviously more certainty.

Abby Yoder (3:53)

Yes. So looking forward, you're going to see a deceleration in the growth rate, right? Like core operating earnings for 2026 are going to grow 20 percent. So that's excluding those one-time gains that have been talked about. So going into next year, it's going to be closer to mid-teens, right? So you're seeing that deceleration that's reflected in the market multiple. And to your point on yields, that is certainly the biggest risk out there, I think, in terms of what's going on with the equity market. Maybe not so much from a multiple perspective, just from a fundamental perspective, right? Like the longer that you have like longer-dated yields at these levels, the more restrictive it comes, even for the likes of the hyperscalers, right? Because they are now a different balance sheet story as it relates to the fact that they are raising debt, so are more interest rate sensitive.