Closing Bell - Closing Bell: 3/28/25

Episode Date: March 28, 2025

From the open to the close, “Closing Bell” and “Closing Bell: Overtime” have you covered. From what’s driving market moves to how investors are reacting, Scott Wapner, Jon Fortt, Morgan Brennan and Michael Santoli guide listeners through each trading session and bring to you some of the biggest names in business.

All right guys thanks so much welcome to closing bell of Scott Waffner live from Post 9 right here at the New York Stock Exchange this make or break out begins with sinking stocks as more economic data disappoints and more tariffs take hold. Here

is how things look with 60 to go in regulation decidedly weaker as you know by now for the majors the first quarter nearing its end the worst day for the S&P since March 10th now down five of the past six weeks. Consumer related stocks dragging things lower following the worst read on

sentiment since November of 2022. Tech also falling hard. Amazon, Alphabet, Meta, Microsoft all deeply in the red today. And speaking of tech, the CoreWeave IPO hitting the market today opening a couple of hours ago. There is your trade up a couple of percent. We'll have a report on that coming up as well. More pain for Ford and GM as investors rethink their exposure to the auto industry following the Trump tariffs. We're following all of that.

It does take us to our talk of the tape. The great reassessment, if you will. So bullish investors were at the beginning of this year and now taking down risk and looking for cover. We'll begin with our senior economics correspondent Steve Leesman on the Fed's difficulty of addressing the twin problems of weak growth and higher inflation. We've had some Fed speak already and we're going to get more today Steve during this hour in fact.

Yeah, we'll be listening for Bostick later. The trouble for the Fed Scott is trouble on both sides of the mandate. Today's data shows stronger inflation and weaker real growth. Here are the key numbers from all the data. That core PCE ticking up by a tenth compared to last month, a tenth better than, higher than expectations,

and the year over year ticking up, and real spending just 0.1% after the decline in February. In January, it was the worst two month average for real consumer spending since the pandemic. Tariffs indeed might have shown up in the February inflation data with the biggest rise in goods inflation since August 2023 and inflation expectations closely watched by the Fed rising sharply. The one year ahead numbers jumped to 5%.

The more worrying and more closely followed five-year numbers jumping to 4.1, the highest since 1993, and the partisan divide looks to be disappearing though. Still the market continues to bank on rate cuts from the Fed, even boosting those probabilities today. June, now 72% probability for a first cut, second cut coming in December, and a higher probability of the third cut 60% for December Today is a day Scott when the soft data met the hard data the best effect can hope for is a strong or decent jobs report next week and a return to consumer spending as

Tariff inflation passes through the system. So there's only one problem on one side of the mandate is a problem We are directly from one of those policymakers Monday when Richmond Fed President Tom Barkin He enjoyed just exclusively right here Scott on the closing bell And I'm looking forward to that speaking of which we've already heard from him this week Moussalaam Barkin throw Mary Daly into the mix who was speaking earlier to who said her number one focus is inflation She said now so you've had a hawkish mix of talk this week. Now for the record daily did say she does think two cuts are

still reasonable but she also said she didn't have all that much information to make that call. Bostic told us that he's down to one cut this year. Mooselem talking about probably the only one so far explicitly

saying that if we do get much higher inflation we could be hiking rates. So I think there's a dispersion of views on the Fed about how to deal with this inflation. Moosala more concerned about indirect inflation than he is the direct, which he says can pass through. And Scott, I think the biggest issue, at least the first issue for the market, is the timing of that cut. When will the Fed feel confident that the inflation numbers

are reflecting only one time issues with tariffs and not a broader problem? I mean, I see another issue too. If the administration is willing, I know it's a strong word, if they're willing to put the economy into a recession to further try and kill inflation and also get the 10-year lower,

which Treasury Secretary Besant has made it his central goal at this point. But yet inflation remains sticky and maybe even a little higher. What in the world does the Fed do? Well, first of all, you hope that the administration doesn't really believe that line of thinking because you don't want to mess around.

You don't just have a recession and yada, yada, yada. You come out of it. Bad things can happen and you can't really control that situation. It's why you try to avoid negative growth. And it's probably the reason why the market is so insistent that the Fed, even despite an inflation problem, will address weakness in the economy to keep it out of that negative zone because of the uncertainties, the consequences that you don't know what will happen.

But the other sense of your question, Scott, I think is 100% right. The Fed could use some help from the administration right now. And even it was Barkin yesterday who, when I read it, I was kind of thinking between the lines. And I thought he was saying, hey, throw us a bone here, guys. At least figure out what you're gonna do so we can start the price. And he had that quote, Scott,

I think we reported yesterday. He said, it's not just regular fog. This is the kind of fog where you pull over, you stop driving, and you put on your hazard lights. Yeah. I mean, in some respects, there's been a telegraphing of what might come from the administration. That's why I ask the question I do. Disturbance, detox, all of that, and really the lack of a strong notion that recession's

off the table, right? They haven't gone as far. Even the president, when asked directly in various interviews, hasn't taken it fully off the table. Scott, in all of my years of covering economic policy, I have never seen an administration say, it's okay to have a recession, that what we're going to do is so big and so great

that we will risk a recession to make it happen. I think I've said this before, but there's two rules of one rule of parenting and economic policy which is don't scare the children. And what you have here is a situation where you have literally scared the children and you have the sentiment numbers are crashing and they're now showing up in the consumption data. People have the income, Scott, but they haven't spent it. That's why we saw that rise in the savings rate.

That looks like a direct reflection to me of the issue of higher income but still lackluster consumption. So it's really something worth watching. And what's fascinating to me is the administration could make all of this go away and probably accomplish all of its goals without these kind of uncertain policies, without these kind of drastic changes. It could probably get to where it wants to go over time, but it seems to be insistent that it knows better.

And honestly, the American consuming public is telling the administration you do not know better. All right, Steve, thank you very much for your insight. Our senior economics correspondent, Steve Leesman. We get more now with Goldman Sachs' vice chairman, the former Dallas Fed president, Robert Kaplan. Mr. Kaplan, it's nice to see you again. Thanks for being here on this important day. How much of a spot, so to speak, is the Fed in here? Well, the Fed isn't, to me, it isn't in a spot of its own making.

It's dealing with a number of structural changes being driven by the administration. Having said that, inflation is sticky. It's likely to get stickier because of cost issues and supply side issues. And yes, growth is slowing. We don't know how much. And I think for the Fed, the smartest thing they can do, which I think you're hearing, is rather than jump into this fog, it's to slow down and let it clarify and be patient and don't make decisions before it clarifies. And that's what they're gonna do.

But part of the issue here is, you know, you're dealing with a slowdown in the economy that seems undeniable at this point. You're dealing with still sticky inflation, which also seems undeniable at this point. They have to decide which part of the mandate matters more. Potentially, there's going to be a moment where they have to make a critical decision. Can they do that?

And what do you think it would be? So let me tell you what I would do and I'd be arguing for in my seat at the Fed. As long as inflation is sticky, I'm going to be reluctant to lower rates. Having said that, if I see a slowing in the economy beyond, and I mean below, 1 and 3 quarters percent, such that it creates a meaningful spike up in the unemployment rate, then I'm going to have to consider taking action. But I will tell you, if we wind up muddling along at 1 and 1 half, 1 and 3 quarters growth, and the unemployment rate inches up.

Because of lack of labor supply, which is a new factor here, lack of labor supply, the unemployment rate doesn't inch up as fast as I would have thought. I'm going to be reluctant to move. The trigger for me would be a spike up and a concern that we're going to have a dramatic move up in unemployment And and a downward cycle there and so that's what I'm watching for When does stagflation start to raise real alarm bells within the Fed? Do you think they're thinking about it now and would that be their worst nightmare? It's where we are right now Growth is slowing.

Prices are sticky. The first listen up to January 20th, the sticky prices were due to excess demand, in my opinion, because of excess fiscal spending. We're now pulling off the fiscal spending. That by itself would have been, I would guess, would have slow growth, but would have been disinflationary. But we're replacing the demand-driven inflation with supply issues, lack of labor supply, tariffs, cost issues.

And so the uncertainty, as your guests have been saying, is causing consumers to be more cautious. It's causing businesses to be more cautious. We are in kind of a slower growth, sticky inflation period right now. That is stack inflation. The issue is, is growth going to slow dramatically more than what we're seeing? I.e., is it going to go from expecting 2 and 1 quarter, 2 and 1 half to 1 and 3 quarters? Is it going to slow to 1 or down to stall speed?

And that's what the Fed and what I would be and I am watching for. If it just is sluggish, 1 and 1.5, 1 and 3 quarters, and unemployment kind of inches up but is not running away from us, I think then I want to do nothing until I see some improvement in inflation. And we're likely to see the opposite. We're likely to see a backup in inflation, which makes me want to pause. The Fed just got done in a two-year fight to fight inflation. They had the transitory episode. They were late in raising rates, stopping the bond buying, and they've gotten down, let's say, to the 20-yard line or the 10-yard line. And they really, if they can avoid it, don't want to stop the fight here unless there's a compelling

move up in the unemployment rate. And so when people say, will the Fed act, they'll act, but they'll be more reactive than proactive. And they need to see a meaningful, I think, deterioration beyond what they put in the SEP, the Summary of Economic Projections. I think the average beyond what they put in the SCP, the summary of economic projections. I think the average was 1.7. My guess is they need to see something worse than that and a higher unemployment rate.

And so they're gonna be more reactive and more constrained. Now I feel like Chair Powell thought he got down to the one yard line and was about to punch it in, but the ball got snapped over his head. Now they're back at the 10 yard line. Now they're reassessing how they're going to score this touchdown in the face of such tremendous uncertainty. If you're suggesting that stagflation is already here, watch out earnings, right?

Yeah. And so the other thing I would say is the reason I think my reaction function would be to be more reactive, if I'm late by a meeting or two, if the unemployment rate starts moving up, I think I'd be willing to make that mistake and be criticized for that. If on the other hand, inflation starts moving up beyond 3%, and expectations are drifting up to where that's an issue that might take a couple of years to solve, not a couple of meetings. Boy, I really want to avoid that kind of scenario. So yeah, you're torn here.

They're going to agonize. And when you're in this situation, the smartest thing you can do, don't make big prognostications, take it one meeting at a time, and realize this confusion is being caused by other policies. Try to be as patient as you can stand and let them clarify before you make decisions.

I'm trying to think of like the whole, the big picture here, wondering sort of how we find ourselves here. And you said a word earlier during this conversation that stuck with me, and you said structural, that the administration is making structural changes to the economy. So my question to you would be can you Restructure the whole economy, which is what they're trying to do move from public to private At the same time you're trying to Restructure the whole dynamic of global trade

While at the same time you're trying to restructure our decades old global alliances. One of those is hard enough. All three, you risk breaking something. And I'm wondering if we're in the throws and stages of that. Yeah. So to your point, the big drivers of slowing growth, government spending cuts, but we know why we're doing that.

We wanted to try to de-leverage because we're historically highly leveraged. People will debate how it's being done, but that's why they're doing it. The immigration curtailment they're doing, but there's also millions of workers in this country that are not criminals, have been here for years, and they're very uncertain whether they're going to be deported. They're afraid to go out shopping. Many of them I'm hearing from CEOs are afraid to come to work. That is having a chilling effect on growth. A clarification of their status so they can get back to work and start living their lives

again would be helpful. Regulatory review should be helpful, but it's on the come. It hasn't happened yet. And the fourth one, tariffs, will raise costs. Businesses right now were praying that Mexico, Canada, logistics and supply chain arrangements would be maintained. It's clear now they're not going to be. And they'll come up with solutions, but they'll involve price increases, maybe lower margins, other actions.

And those type of decisions also will lower growth. I think making some decisions and prioritizing would, as I think Steve said, might raise the probability the administration will achieve their goals, create a more organic economy, create less government-led spending, more deleveraging, achieve their goals, and make it more possible, some phasing, some prioritization. But we're not yet seeing that, and I think that's why we're dealing with this situation we're talking about today. Yeah. I appreciate the conversation, as always.

Robert, be well. We'll see you soon. See you soon. That's Robert Kaplan. CoreWeave, the other big story today, making its market debut today at the NASDAQ. Christina Parts-Nevoulos is here with the very latest on how that is trading in its debut. Christina? Well, it did.

It was around 40 bucks below initial expectations. And you can see, yeah, 40, 16 right now. So let's just say it's above the $39 opening price. The CEO, Mike Intractor, telling CNBC they needed to right size the transaction based on buyer interest, aka they're adapting to tougher market conditions. This IPO is set to raise about 1.5 billion and value the company at 19 billion. That's based on what's being sold or 23 billion. If you count all the potential shares, that's fully the diet, fully diluted figure, which is really quite impressive for a company that was founded in

2017 as a crypto miner. I caught up with CoreWeave's CEO earlier and he reiterated that CoreWeave's debt appears more manageable because it's systematically paid down through reliable revenue streams like Microsoft contracts. The assets, such as GPUs, retain more value than critics suggest. And lastly, new major partners like OpenAI are really a vote of confidence in CoreWeave. It's a long-term viability. Or as he said, to me, they wouldn't do business without us if they didn't do their due diligence on their financials.

So this IPO really matters just beyond CoreWeave. It's a temperature check for pure AI infrastructure companies. And then more broadly shows us whether there's still appetite for IPOs while markets remain unpredictable. Shares up, we wouldn't call it that. It's really just hovering just a dollar above the opening price of $39. Scott?

All right. Thanks for that. We'll continue to watch that, of course. Dow is down about 700 points still. Now let's bring in Charles Schwab's Lizanne Saunders. She joins me now on the phone. It's nice to have you and thank you so much for being with us today, Lizanne. Thanks, Scott. Nice to hear you.

I've been talking a lot about this great reassessment trade from what was to what is. What was on January 1st isn't what is today. What investors thought some three months ago, they think far differently today in terms of pro-economy, pro-market, pro-deals, M&A. Now we are in this no man's land of uncertainty. Are you as well reassessing what this market may do now? Well, frankly, what we have been saying is reminding people that you couldn't really apply Trump 1.0 playbook to Trump 2.0, because what we got in Trump 1.0 was the candy first and the spinach later.

We knew the spinach was coming first this time. It was made clear by the administration, even during the campaign season. There was maybe hope that it was going to be psychologically offset by the candy. But I'd also remind people that there's sort of a reassessment of maybe the candy, because we're not really talking about new tax cuts coming at the end of this year, the beginning of next year, just an extension of the existing tax cuts. That represents much less juice relative to what we got in 2017. And your comments, your conversation with Kaplan before I think was an important one,

because alongside this, we're also dealing with the compression of the supply side of the labor force. And that's starting to come into the calculus and into the numbers, not to mention we're seeing a bit of catch down by the hard data to what has already been pretty weak soft data. What do I do then? I mean, in the role that you have and the way that you think big picture about the market,

do my allocations change? Do I need to just rethink what I thought was gonna happen for the entirety of this year? Do I dial back my earnings expectations now? All of that. Well, earnings expectations are certainly being dialed back. You have 14 weeks in a row now where estimates for 2025 have been coming down. That's a pretty long stretch. And the loftier estimates, when we were looking at about 14% or 15% expected growth for this year, that was predicated on record-breaking profit margins.

I think it's the profit margin piece of this that's being called into question. In terms of allocation, you know, my colleague Jeff Kleintop, who's our international strategist, has really been kind of, we all have been collectively trying to pound the table on the notion that you want to be globally diversified. Harder sell when we were in the mindset of US exceptionalism and the US market is the only game in town, but wanted to really remind people of the benefits of international diversification. That's certainly paying dividends. And then within the US equity market, you and I talk about this all the time, we've

been very factor-focused with a high-quality wrapper around the factors that we have been emphasizing. And one in particular that we kind of added to the focus list as we came into this year was that low volatility factor. So I think there's a way to sort of find a little bit of an anchor and some safety within the equity market, staying up in quality, looking for that defense, bringing in factors like low quality, I mean low volatility. And I think that's the best way to navigate this environment where rotations are fierce The prior darlings are getting pretty slammed so there are places to hide

Within the equity market and that's basically our broad advice I'm glad you referenced the conversation with with Robert Kaplan who also said that stagflation is here, that this is what it is. So, and this is coming from a former Fed official no less. I've seen some notes reference that word. I'm not sure I've heard a former Fed official come out and say, this is it. Stagflation can't be good for stocks at all.

Of course not, because it does put the Fed in a bit of a bind because you've got the inflation part that limits their ability to cut aggressively into any kind of weakness in the economy. So I think it reinforces this notion that they're in pause mode, and it is probably the right position to be. I think what we're watching unfold here in real time

is that the market has become the arbiters of these various policies and the nature by which we're getting information on these policies. We're not getting forward-looking perspective from the Fed because nobody knows what the near term future looks like. But we are seeing it in the data, not just future looks like, but we are seeing it in the data, not just the soft data, but we're now seeing in the hard data. I

thought the personal income and spending numbers were interesting today because the income side was fairly healthy. That would typically be supportive of consumption trends, and that has been until very recently, but now you see a bit of a paring back. You're certainly seeing it in the forward-looking confidence measures in the business community, the NFIB-type data, even ISM-type data. You look at the verbatims from companies. And to your point about stagflation, during fourth quarter reporting season, big spike

in mentions of stagflation in conjunction with recession. You see it in Google search trends. So it is absolutely in the zeitgeist now. I just did five client events in Denver yesterday and the day before and that was the number one theme of questions that inflation slash recession so we did it's top of mind. I'm just thinking you know the market right now the S. and P. is is a little bit below fifty six hundred Goldman Sachs is earnings number next year is $280 for 2026. 20 times multiples where the market is now, we're at 20 times.

That's 5600. That's higher than where we are now. That doesn't even take into account stagflation or recession. You can't tell me that 20 times earnings is the right number if in fact stagflation becomes a thing and a recession, God forbid, actually happens. Correct, in fact, we have a table that we show all the time which goes back in history and looks at the relationship between rates of inflation via the CPI and valuations

as measured by the forward PE. The sweet spot in terms of when historically the market's been able to support a higher PE has come maybe not coincidentally around that 2% target of the Fed. You start to move either way down, market doesn't like deflation, tends to have a lower multiple,

but certainly as you move higher, you tend to see downward pressure on that multiple. So I think you're right that any continued upward pressure on inflation or maybe even inflation expectations, all else equal puts downward pressure on the multiple. In an environment right now where we've got both the numerator and the denominator in the valuation equation moving in the wrong direction. Yeah, I mean, processions are inevitable. I mean, you're going to have one at some point.

My point in bringing it up now, and I say, God forbid we have one, nobody had that on their bingo card three months ago. And that's part of the point, the great reassessment that investors came in pretty bulled up, the majority did, I would say. And now we are going through this period of figuring out what in the world this market is going to do. Well Scott, what's also important is the connection points between the equity market and the economy. It makes me think a bit about the recession in 2001, which was not severe from an economic standpoint.

In fact, if it weren't for the big ugly bear market from 2000 to 2002, I think we probably wouldn't have had an economic recession that declared one. It was just the feeder from the equity market at that time because household exposure to equities was at an all-time high. We're well above that now. Whether you look at the Fed's flow of funds data, if you look at the Buffett model of total market cap divided into GDP, we're looking at all time highs in terms of exposure.

So at some point, we have to start to do the calculus of weakness in the equity market, and how does that feed into the economy a bit more directly than in an environment where you don't have that kind of lofty exposure? And by the way, it's not just the upper income folks. You go down all the way different income categories and you compare to pre-COVID era, increased equity exposure across all income cohorts. So that ripple effect is something to be mindful of

if the sell-off here persists. Yeah, pain potentially spread wider than it has been, maybe ever, just because the more people who own stocks these days. Lizanne, thanks so much. Appreciate your time. My pleasure. We'll talk to you soon.

Thanks, Scott. Lizanne Saunders. Let's send it to Pippa Stevens now for looking at the biggest names moving into this close. Pippa? Hey, Scott, well, cautious consumers and inflation concerns are hitting Lululemon as the athletic wear maker issue

disappointing full-year guidance. Lululemon's CEO saying US traffic has dropped due to economic uncertainty. Shares of Shell and BP moving lower as activists are rising 2% as the U.S. Space Force adds Rocket Lab to the list of companies it's considering for its launch providers. And finally, shares of Shell and BP moving lower as activist investor Elliott Management takes a short position in rival Shell. That's according to financial filings. Elliott taking a short position of 0.5% in Shell in the middle of an activist campaign against BP, hoping to redirect strategy at the oil giant Scott All right, Pippa. Thanks so much Pippa Stevens We do have some breaking news in the court case between JP Morgan Chase and FinTech startup Frank Leslie Picker with those details

What are we learning here Leslie? Hey Scott the founder of that FinTech startup Frank Charlie Charlie Javis Has been found guilty at a fraud trial. If you recall, she had sold that college financial aid startup, Frank, to JP Morgan for $175 million back in July, 2021. And then later she was accused of falsely telling that US bank that Frank had 4.25 million customers, not the $300,000 it actually had. This verdict took place after five weeks of a trial in a Manhattan federal court before

the U.S. district judge. The sentencing for Javis will be August 26th. I'll send it back to you. All right, Les, thanks. Leslie Picker. We're just getting started here. Up next, Intelligent Alpha's Doug Clinton is standing by with his take on the tech space

during the sell-off today. Markets in general. We're live at the New York Stock Exchange. And you're watching Closing Bell on CNBC. ["Crossing the Borders"] All right, welcome back. Let's send it to Steve Kovach now for a closer look at how big tech is faring in today's session and two words, not well. Yeah, it's not looking pretty, Scott.

Then the tech heavy NASDAQ, of course, hit worse than those other indices today, down better than two and a half percent. Let me run through some of the names we talk about so often. Apple, off more than two percent, better than two and5%. Let me run through some of the names we talk about so often. Apple off more than 2%, better than 2.5% actually. We already know it's subject to those 20% China tariffs. Still unclear if Apple's gonna have to raise prices. More tariff news coming next week, of course. Then Microsoft down more than 3%.

Recent reports, it's scaling back its AI build out and that couple that with Alibaba's Joe Tsai's warning on a data center bubble bad mix right there Nvidia Same issue there. There's data centers, of course rely on Nvidia's chips It's down better than 1% and for a peek at what the market thinks of the consumer and ad market Take a look at meta alphabet and Amazon. They're all down more than 4% Scott Steve, thank you. Steve Kovac. Now let's bring in Doug Clinton. He's the founder and CEO of Intelligent Alpha.

It's good to see you. Likewise, Scott. What's your take here on this market, particularly tech? It feels like it's been more than a month now where we could describe big tech performances just not well. And I think the AI trade just in general as performing not very well. But here's my bottom line. If you zoom out, if we kind of play forward into the future

and look at what happened over the last couple of years, I think the story will still be that we have two to four years ahead of us where AI will continue to rally. We will continue to see big CapEx builds and ultimately adoption from consumers. So, I still think we're in that period. But what is happening here, I think, is the core question. If you're a believer in the AI trade, how should you think about what's going on right now?

I think it's really important to remember, we've had two years right now, basically, of almost no turbulence for the AI trade. From the end of 22 to roughly the beginning of this year, this is the first real challenge I think the trade has had. And if you zoom back to the dot com era, the first time that the dot com trade was in question, it actually took about 200 days from the point where that turbulence started to returning to a new high on the Nasdaq. And so I'm not predicting we need six months of this kind of turbulence. But I do think if you believe in AI, you have to be patient and stick with the names you really believe in.

But I mean, I can be a believer in AI. And just like I was a believer, like the collective, I was a believer in the Internet. That didn't mean that I need to pay the P E's that the stocks were trading at. I think it begs the question of what strategy then to your point, Scott, do you want to take as an investor in one of these mega tectonic tech shifts? And with the AI trade or the dot com trade, if you want to try to trade, you know, when the trade gets too hot, you try to exit, to try to trade, when the trade gets too hot, you try to exit, you try to time it,

the risk that you take is, AI stocks could go down another 10, 15% from here. I wouldn't be surprised by that, but I think valuations have gotten more reasonable. But the risk you take is they could rip 20, 30% in your face and then you beg the question of when do I get back in? And so I'm thinking about this trade more on that two to four year time scale. I want to make sure I have enough exposure so I'm not kind of trying to get in and out

and missing the bigger picture or the smaller picture. When you say AI stocks, that's a generalized comment because it can cover so many, it can go down 10 to 15% more. Are you talking about the mega cap the hyperscalers or you talking about some of the momentum names that are more tied into data center and the powering of those. More than mega caps and then I do think some of I would go more on the software side a little bit in terms of some of the newer exposure that we've had in our AI powered portfolios. But yes the mega caps I think that 10% to 15% range,

to me that still feels like the near-term downside risk in the worst-case scenario. And I think certain names, you know, NVIDIA, it feels like it has been blown out. That's really the only mega-cap we own right now in our LIVR Intelligent Alpha ETF. On the software side, which I do think things could be a little bit more interesting there,

where there are still some growthy names that have had some healthy pullbacks, you look at a HubSpot. I think that that's a name where they are obviously building AI tools for their users. We've had this phenomena of vibe coding in the software side for developers. I think this idea of vibe marketing where people who maybe they're not designers, they're not expert creatives, they can go and use some of these AI tools and create really compelling ads. I mean they look professional. I think companies like HubSpot could benefit from that. You

might start to see some inflection in their numbers in the back half of the year from it. I see Vertiv is on your holdings list and that's the kind of stock that I was referring to right the the data centers and the power providers and all that. Do you have concerns with with holding that stock at current levels? It's obviously been a terrible name. It's down 23% in a month and it's down 36% year to date. That one's been absolutely brutal. And I would come back to what do you believe on the AI trade side and the data center side?

And for us, again, we use AI to manage our portfolios. And so these stocks are picked based on what our AI algorithms believe about this AI trade. I think if you look at Vertiv right now, it's trading at a PE, if I recall, in the mid-20s, which is, I think, the low that we've seen over the past five years. If you think about the altitude of where it's at, it's certainly come down a lot. Now, could it come down more? Yes, but fundamentally, do I still think that there's going to be a lot more data

center construction? For them, liquid cooling has always been a big part of the story. It hasn't come on yet. I still think you have that liquid cooling carrot going forward and that's why I would stick with it. We'll talk to you soon. Doug, thanks so much for your time. I appreciate that. Thanks, Doug.

That's Doug Clinton. Sell-off picking up steam here. Dow's down more than 700 still as we speak about 735. Ed Yardeni with Yardeni Research joins us now. Thank you for being here today too. Robert Kaplan, I'm not sure if you had a chance to see our conversation, said stagflation is what this is. Forget about the talk of is it going to be, it is this.

If that's true, what does that mean? I don't really think it's true. If we're talking about a 1970s style stagflation, it's not even close. And if we're talking about even a moderate stagflation, I'll give you a moderate stagflation for a couple of quarters here. I think the tariffs are already having an impact on boosting inflation, but we're talking about inflation between two and a half and three percent. That's not exactly inflation.

And the trend is still downwards. And I think the productivity numbers are going to continue to push inflation downwards. And on the stag side, we're all over the map in the first quarter with all sorts of different estimates out there. But we think it's going to be kind of something around 1% with a plus sign, not a negative sign. And on the positive side, we think the consumer is actually going to spend. They have lots of income. We saw that this morning. And I think people just forget about the weather. I mean, I know it sounds ridiculous to base it all on the weather, but I'm going to

wait to see what March and April consumer numbers are gonna look like, because I think they're gonna be strong. I mean, the evidence would suggest that this was not a weather phenomenon at this point. There's been too much soft data, if you will, to confirm that. Let me ask you, right?

I mean, that's kind of true at this point. It's kind of true, but January was the coldest. Not kind of true, I'm sorry. It is true. It is true. It's kind of true, but January was the coldest month. January since 1988, February was just about as bad. So they really stood out as extremely cold months.

And I think you're gonna see a nice big bounce back in retail sales during March and April. And oh, by the way, I think there's going to be a lot of auto sales as people kind of front run an increase in auto prices because of the tariffs. Let me ask you this. Your target for this year, best I know, is 6,400. How confident are you in that? in that earnings estimates are already coming down Yeah, you know we're below fifty six hundred you think we're gonna get to sixty four. Is that at risk?

It's at risk. Sure. I mean there's always risk and I did I guess in early March raise the Probability of a recession as I think just about everybody did. We raise it from 20% to 35%, which is a pretty significant increase. There's people out there with 40%. There's one or two that think it's inevitable. I don't think it's inevitable. I think the consumer will make a solid comeback. And I think capital spending, certainly the uncertainty is going to weaken some areas of capital spending. But as we know, there's a lot of money already committed to building manufacturing facilities that have to be equipped with state-of-the-art automation and robotics. That's just not going to go away. Well, it's also not going to happen tomorrow or next week.

Well, it's happening already because under Biden's stimulus program to build manufacturing plants, a lot of them aren't complete. They're still working on them. I mean, here in New York, we finished LaGuardia, which is a nice, beautiful airport. And now if you go to JFK, as you know, it's a mess because they're building three terminals.

There's a lot of construction going on around the country. Still, it's not that suddenly because of tariffs, everything gets shut off. No, but the longer we're having conversations like this and the tariff news continues to come, oh, by the way, April 2nd is next week. You're going to live in this period of uncertainty that we've had. Absolutely. That's the issue. That's right about that.

That's correct. Absolutely. That's the issue. That's correct. Absolutely. And I think everybody's so worried about April 2nd that maybe once the news is out and the administration's already backed off on making these reciprocal tariffs reflect non-tariff barriers. So that is certainly better news than what we were expecting. And there's going to be a lot of negotiations going on. There's already a lot of negotiations going on. And Scott, as we've all seen, this administration is, particularly the president,

is prone to change their mind and to give us that kind of zig and zag. And that's got the market, obviously, quite concerned. But I think at the end of the day, the tariff negotiations are probably going to lead to lower tariffs. Well, I go back to the point that we were discussing with Lizanne Saunders that if you believe where earnings are projected to be in 2026, I use the Goldman number of 280 bucks. Twenty times that's fifty six hundred. Can you with any level of confidence make an argument today that this market's justified to trade at 20 times earnings which are already coming down?

Well if you take Goldman's numbers, the answer is no. But I think Goldman's numbers reflect a more pessimistic outlook for the economy over the rest of this year into next year than I'm anticipating. I haven't given up on the roaring 2020s concept. It's worked awfully well for me in the first half of the decade, a record high in the stock market, record high in real GDP. I think it's going to work in the second half of the decade, a record high in the stock market, record high in real GDP. I think it's going to work in the second half of the decade here. And I think that the economy is going to come out of this stronger, not weaker. Right now, the administration has kind of thrown all of their

restrictive policies at the economy. And I think you're going to see more impact, positive impact from deregulation, from a continuation of tax cuts, and just less government involvement in the economy. We shall see. And we will talk to you again. Ed Yardeni, thanks so much as always. Up next, we track some massive moves today in the chip space. Details coming right after the break. Ten from the bell to Christina now for a look at some of the chips that are trading very

poorly today, Christina. Yeah, and that's why I got to start with Wool Speed because it's facing its worst trading day in history. Shares are down 52% amid ongoing financial struggles. Despite receiving $192 million in tax credits, the company faces debt refinancing challenges, negative margins, factory closures, and delayed profitability. It's also still seeking government support while only projecting cashflow positivity

by fiscal year 2027. You've got the regulars you've been talking about, Scott. Inflation, tariff concerns, upcoming chip export restrictions, the diffusion rules, they're all weighing on the chip sector with the SMH and SOX ETF down about 3% or so, lower than actually Nvidia at this point. Custom chipmaker and AI darling as well, Broadcom on pace for its fifth negative week in six. It's actually its worst quarter ever. Stock down about 28% year to date. And then lastly, I'll end with Intel. Those shares are down nearly about 4%. As investors really digested Thursday's announcement

about a board shakeup, the chip giant revealed that three directors are heading for the exit as the company's looking to bring in fresh blood with expertise that better matches where they're trying to go strategically, shares down about 4%, Scott. All right, Christina, thanks so much. Christina Parsonevolo, still ahead gold,

a bright spot in today's down tape. Been a bright spot for a while now now above $3,000 an ounce. We'll have more on that in the market zone next. We're now the closing bell market zone. CNBC senior markets commentator Mike Santoli here to break down these crucial moments of the trading day. Plus Pippa Stevens on the rare bright spot in today's sell off. Financials

also hit hard today. Leslie Picker is going to join us with those details. Mike just give me your thoughts on what's happening here. Yeah I mean obviously some form of a retest of that low from a couple of weeks ago. I've been talking

about it for a while now how you know you had this kind of credible chance that that was going to be at 10 percent down the economy hangs in there people are able to look forward to some resolution on tariffs it just proved to be a very unimpressive on assertive response now that being said it's not desperate get me out panic time in the action the the VIX is under 22 the last time we hit this level 5500 and change on the downside just a couple of weeks ago.

We were above that. So what you sometimes are looking for in this testing process is lower selling intensity, fewer stocks making new lows, even as we get toward these levels. It's tempting to try to say maybe the sentiment surveys and just the gloom out there is overdone relative to the damage that's been inflicted on the stock market or the economy. I think it's time to ask that question.

The equated S&P is only down a percent and a half. That said, do we still think we're gonna get clarity next week? Do we think we're gonna clear ourselves of this overhang, have prices reset enough that the bar's low for earnings? I think that's what we're gonna be fighting with for a while here. You take anything out of the core weave IPO,

which is modestly red? One, I say it's good when investors are discerning about the biggest deal in a while that's trying to harness itself to the most obvious, huge big picture theme in the market for the last two years. I do think that it shows you that we're just not gonna give the benefit of the doubt to pure hardware-based, kind of all or nothing type companies

that are trying to play this trend. So even though it shows you that maybe we're at a moment where these companies are not gonna be rewarded for just investing a ton in this space, I do like the fact that you've shown the skepticism that Nvidia's been dead money for nine months. I don't think tech leadership is gonna sort of pick itself up and resume at this point,

but I do think that it shows you that we're willing to sort of use some skepticism when it comes to the big names. Six months ago, that chart would probably make a lot different. Yeah. Pippa, tell us, speaking of charts, what is a bright spot in this market? Scott, well, gold because this trade just keeps on shining with gold hitting its 17th

record this year as trade tensions, elevated growth uncertainty and inflation fears prompt a flight to safe haven assets. Bank of America noting this week saw three point two billion dollars flow into gold Including a one-day record of two point two billion the firm also upping its golds target to thirty five hundred dollars per ounce Gold is now pacing for its best quarter since 1986 which is boosting the miners with the GDX adding fifteen percent in the last month the miners with the GDX adding 15% in the last month. Citi saying today that it's a quote once in 40 year gift for gold producers as margins hit multi decade highs.

The firm forecast gold remaining high or going even higher this quarter and next before moving to a more conservative base case. Now also quickly check out silver because it did dip a bit today but it did hit its highest level since 2012 earlier today. Scott. All right, Pippa, thank you. That's Pippa Stevens. Leslie Picker, tell us about the financials. Yeah, you got fintech firms like PayPal, insurers like MetLife and Prudential

and alternative asset managers like Blackstone and Apollo. They're really leading the sector to the downside today, but it's pretty broad based here. Growth concerns once again taking aim at financials, which are adversely impacted by any drop in consumer sentiment and the risk of inflation intensifying. We're also exactly two weeks out, Scott, from the start of first quarter bank earnings, which will provide a fresh read on how much the macro and policy noise is impacting everything from investment banking to loan demand. Still, Mike Mayo of Wells Fargo out with a new note today calling for an industry-wide improvement thanks to better profitability dynamics for loan making, decent credit quality,

and likely solid trading at larger banks, especially given the volatility in Q1. He also says he expects an inflection from deregulation to be the biggest in three decades, Scott. Alright, Leslie, thank you. That's Leslie Picker back to Mike, but 90 seconds or so left. April 2nd, clearing event, we'll see. Jobs report. Yes. Got a big week.

The jobs report is pretty big. I mean, obviously the bond market's telling you full on growth scare at this point. There's this fear out there. I know you had the stagflation conversation a couple of times. The point is you're being disappointed on both fronts it's not necessarily like we have massive unemployment and raging inflation but it seems like the risks are just too uncomfortable

that's going to hem in the Fed if the job market looks like it's hanging in there and unemployment is contained at least you can maybe cool that off on the growth side just a little bit I do think it's very very foggy in terms of looking at what the consumer outlook is for here. I hear what Ed Yordeni is saying about dry powder building up because the incomes have been outpacing spending for a quarter, but it's also hard to ignore what the company's been saying. That's right.

And the companies are basically trying to look through and say, we just don't see a buildup of demand. There's a lot of caution out there along with the consumer so the good news is good news economy versus stock market at some point we might notice that by the coming and the economy is going to remain you know reasonably resilient that's in that.

Mike, all of you as well. Of course, we're going to go out decidedly red here to end the week. We'll end the quarter next week. And then, of course, we'll find out on April 2nd what happens in the next tariff stage, if anything. I'll see you then. Morgan picks it up in O2.