Closing Bell - Closing Bell 4/5/24

Episode Date: April 5, 2024

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.

Welcome to Closing Bell. I'm Scott Wapner, live from Post 9 here at the New York Stock Exchange. This make or break hour begins with the bounce back as the major averages, well, they had erased most of Thursday's decline. We're still positive, not quite as good as we were. We're going to track it over the final stretch. That after the jobs report came in hotter than expected. Interest rates on the rise a bit. We're going to ask our experts over this final stretch what it means for this rally going forward. And that includes the Wharton professor, Jeremy Siegel. He's going to join me momentarily, and we're excited for that interview. In the meantime, your scorecard with 60 minutes to go and regulation looks like this.

We are going to end the week, it looks like, on a high note, but not quite as high as it looked just a couple hours ago. Yes, we're still decidedly green. All S&P sectors as well were in the green for much of the day. I'm looking at utilities right now, though. They have moved flat. Tech and Com Services, they've been on the run today, outperforming another new high from Meta, a strong session as well for Amazon and NVIDIA. And let's, of course, show you interest rates, mostly higher along the curve today. Fed Governor Bowman saying just about midday her base case is for rate cuts and a

continued decline in inflation. Talked about risks, though, to both scenarios and that it's too soon to make a move now, as many have been saying. It takes us to our talk of the tape, the record rallies run and whether it can keep going. Let's ask Wharton School professor of finance, Jeremy Siegel, also Wisdom Tree's chief economist. Professor, it's good to see you on this Friday. Welcome back. Happy to see you, Scott. Been a bit of a turbulent week. It certainly has. So assess the rally. Where are we? I thought this was an absolutely great labor market report.

You know, I think I mean, if you want to call it Goldilocks, it's Goldilocks. Unemployment, 3.8 percent, strong gains, wages under control. And don't forget, you know, there's that wedge of productivity between wages and inflation. So interpreting, you know, high wages does not necessarily translate into high inflation. Very honestly, I think it makes next week's CPI and PPI even more important in terms of what the Fed will do. But I think the most important thing is that if you tell me what would you rather have, a strong economy through 2024 or Fed rate cuts, I'll take the former. I think a strong economy and strong earnings

is the best thing for stock prices. Rate cuts could either signal lower inflation, that's good, but it also could signal economic weakness, and that's bad. So I'm not as concerned about when the Fed cuts rates. I want to see certainly inflation on a down path. I think it looks like it is, but a strong economy is the most important. Have you dialed back your own expectations for when you think rate cuts will happen because the economy has remained stronger than many have expected?

I know PIMCO today takes it to two after the jobs report. Hatsias at Goldman still hanging on three. But others say, hey, we might not get any before the fall and we might not get any at all. What about your own expectations? I was on the morning of the, you know, of the March FOMC meeting, and I thought that they were only going to two. Of course, we were that close. One person who changed would have made it two. I thought they were going to be more hawkish because when I was looking at the data, I said, you know, I don't think it could be two. And I, in fact, thought that more people would actually go towards one than two. So I was a little bit surprised that they hadn't surprised. They hadn't

responded. Listen, Scott, what we call the neutral rate, you know, what economists call that our star, that long run interest rate where under stable two percent inflation. Let's face the fact that has risen. It's no longer long run..5 percent that the Fed dot plot say. I think it's, you know, 3.5 percent and maybe even higher than that. So because growth is higher, because fixed income are just not the hedge that they used to be. People are turning to stocks. They're turning away from bonds. That means that interest rates have to be higher in the market and higher for longer, I think, is not inconsistent with a strong market through 2024. Well, see, that's the big debate. Higher

for longer in a strong market, because there certainly is a feeling that the market is at least somewhat reliant on rate cuts. Maybe not today, maybe not in June. But at some point this year, you're going to need to see them because a large part of the rally from the October low until now is on the expectation of rate cuts. So how can they coexist? Well, I mean, what we'd love to see, and I think even if the economy is strong, if we get really good inflation numbers, and don't forget that shelter component, which, you know, I think is, you know, distorted in those BOS statistics, if it finally comes down, because data that I work with say that we're really near 2%,

if you use real data on rentals and shelter. If that comes down, even with a strong economy, the Fed will certainly lower rates. Now, I think the expectation year over year core for next week is 3.7. I'll tell you, if it comes in 3.6 or below expectations, boy, I think we could have a fueled stock market rally. I mean, that's the very best scenario. Second best is strong economy, keeping rates the way they are. The worst is a weakening economy, stubborn inflation. The Fed stays where it is. I don't see that in the cards. So listening to everything that you've said, Professor, surprises me at how you continue to be so negative about the job that Fed Chair Powell has done. You did a discussion with the New York Fed President John Williams.

And I know you know where I'm going because I just saw the look at your face. I saw the look on your face. This was at the Economic Club of New York, where you said, you said, quote, giving Powell a Nobel Prize would be like giving the Nobel Prize to a drunk driver that ran over a pedestrian but got him to the hospital in time to save his life. How can you say that after you suggest the economy is so strong, the market is ripping and from the lows and we don't need any rate cuts, but yet the Fed chair has done a terrible job? How? I stand by that quote. Scott, remember 2021 and 2022? We had an incredible boom, housing market, stock market, crazy speculation, SPACs, NFTs, and everything. At the same time, the Fed was buying mortgage-backed securities, keeping interest rates at zero, telling banks and everyone else we're not letting those rates rise. That's the fault. Yeah, I think they landed on their feet, but we shouldn't have been

in the situation that we were in with inflation that was actually over 10 percent of properly measured and still went up over these four years, you know, higher than many people's wages and the source of a lot of people's dissatisfaction with the economy. So, yes, he landed on his feet, luckily, at the end. But he didn't have to do he we shouldn't have had to go through what we went through that is what i meant it feels like you're getting okay ending i feel like you lay all the blame though at the fed chair's feet he's not the one who came up with the inflation reduction act he is not the one who passed all the other stimulus and maybe we did that in a level of excess that caused more of the inflation

than the Fed waiting too long to start raising interest rates. Scott, he did not have to give the presidents all the money that they wanted to spend $9 trillion on, you know, four separate programs, two under Trump, two under Biden, you know, nine times the

stimulus we had in a much worse financial crisis in 2007 and 8. He just printed the money and handed it to them. That's why no tax increase, no going to the bond market. He did not have to do that. If he did not have to do that, we would have raised interest rates in 2021. We would not have had the inflation that we had over the last four years. Many people would look at the scenario now and say, you know what, it was a very difficult job that he had. He had to raise interest rates in such a rapid pace, the fastest in 40 years. Right. Inflation was nine percent. And look where they've gotten it. They've managed to, in your words, land the plane.

And we have a stock market that hits record highs. Right. But, you know, they landed the plane. But it doesn't mean that we can forgive him for what happened over four years with the cumulative inflation of 20 percent. He's landing the plane on a soft landing. And I give him credit for that. But I certainly am still extremely critical of the Fed in the first two years following the pandemic.

Let's look back at the market, which we said, you know, obviously it's had a bit of a turbulent week. And now we're on the cusp of earnings, which are going to have a large decision in where this thing goes from here. What are you expecting? I mean, expectations are down from where they were. We're still looking for four to five percent growth in the quarter. But what are your own expectations? I think that those are right. I mean, what normally happens when you look out on expectation is they come down during the year, and then they go below so that firms surprise by a penny or two pennies or five cents on the upside. It's called the hook. So you see them sort of going down over time, and then about a week, two weeks before the announcements, they hit their low, and then we beat by two or three percent. And that's pretty good in terms of

looking at the year over year. It looks like GDP is in the low twos. You know, the Fed thinks 2.1 for the whole year. I actually think it might be even higher than that. So and, you know, in the background, you know, Scott, we do have AI that I think is really over the next 10 years going to raise productivity by 1% or more in the economy. And that's a very positive long-term outlook for equities. And, you know, some people have looked at the market, obviously, with the kinds of stocks that have gone up, chips and things related to AI, beyond the names that are in the marquee light, so to speak, like NVIDIA and such, but still don't necessarily see a bubble. That was what Steve Cohen said to the network this week. David Einhorn told me a couple of days ago, it's not a bubble.

Do you share that view? Yeah, I share that view. You know, I did the article about the Internet stocks in January, February, March of 2000, and those were big cap stocks and their average price earnings ratio was 200. The average price earnings ratio of these stocks at the NVIDIAs and or the MAG7 are about 30, 30 looking forward on earnings. So they're one quarter. Now, it was way overvalued debt, right? I mean, you know, the NASDAQ went down 75% from that peak and, you know, way overvalued then. But we are not there. I mean, we're really at PE ratios that are one-third to one-quarter of where they were in the beginning of 2000 in the Internet bubble.

So, you know, I'm not saying it's impossible to get there. You know, anything's possible, speculation in the market. And I think I even mentioned maybe on your show earlier that if NVIDIA is priced like those, you know, JDS, Uniface, EMC, Sun Microsystem, Oracle, and all those were priced, what, 24 years ago, you know, NVIDIA would be somewhere around $3,000 to $4,000 a share. Wow. Your point's well taken. Yeah. I appreciate that. And I think that's the important thing to remember. Let's bring in CNBC contributor Bryn Talkington of Requisite Capital into our conversation.

Bryn, it's good to see you. Of course, as always, you've heard what the professor has to say. What's your own view? Well, it's always great to be on with you and the professor. I think as it relates to, I want to spend more time going forward, but as it relates to, you know, Powell, I agree, but I think more the frustration is, you know, we've had so much fiscal spend really over the last eight years, but really the last six. And that the Fed did not acknowledge the simple math equation of what all of that fiscal spend would do to the inflationary pressures, to me, is the issue that I have looking back. OK, let's not look back. Let's look forward. The rally, is it going to continue or are we exhausted? Are we resting? What are we doing? I think the market looks a little tired here.

I mean, obviously, we're having a good day today after yesterday's sell off, which I think we're actually more inspired by Neil Kashkari's comments about rates. I think that we're going to be in this consolidation phase for a while because I think the market has definitely woken up to the fact that, hey, we may only get one cut. We may get zero cuts. We have a very strong economy, which is wonderful. I will say on the very positive side, you can have a strong economy and not have high inflation. Those don't have to be positively correlated because, once again, wage growth is growing at a, I think, benign rate. And so you do have the, you know, more people in

the workforce. So I think it's great to see growth. I think that the PCE over the next couple of months will be really key to see if the Fed cuts rates. And also, like, as it relates to energy, which we have all been talking about, the Fed doesn't can't do anything about energy, doesn't look at energy. And so I think those type of inflationary pressures that the Fed can't control are not going to mandate their narrative on whether they cut rates or not. How much time, Bryn, do you think and I use it, how much time, so to speak, do you think Powell has before the market loses patience with the timeline that the Fed, you know, might be on? OK, we wanted a lot of cuts. Now we're not getting that. We wanted three. Maybe we're not getting that. We thought we were getting one in June. Maybe we don't get that.

How much time does he have before the market loses patience with the whole thing? Well, I think we have a pretty short window of the summer because I think that, you know, Chairman Powell especially doesn't want to be political. And so I think as we get closer to the election, that September, October, to me is somewhat going to be off the table because you don't want to have that type of narrative leak into the market. And so I think summer is where we're going to see a rate cut. Or if we see one, we would see it in the summer. And then I believe there's actually a Fed meeting on Election Day. So that could be a possibility as well. But I think as long as we get one cut or a signaling, that's going to continue to be very positive to the market. Professor, what's your favorite part of the market right now as we debate the broadening

that we've witnessed, whether it's just prudent to stay in the large cap tech area? What do you like? Long term, I think, you know, we see both small, mid cap and value stocks at very large discounts off their historical average valuations. In the short run, really, I still, even though there's been a bit of a pause, I'm not sure the momentum players are done with the MAG-7 or whatever new configuration we have of them. And they may play that a little bit longer. So it's pretty a question of whether you're a short and intermediate term. They may go to new highs. We may see NVIDIA break that thousand. It almost did on one day. But over the long run, historical valuations still on the mid caps, small caps are 13, 14, 15. That

that's proved to be a winner in the long run. Well, I hear some people trying to make the case for those now, though, where, you know, the counter argument is you need rate cuts. You need rates to come down for those stocks to work. How would you assess that? You know, I'm not absolutely sure need rates to go. You know, it was only a year ago, Scott, if you remember, everyone said, oh, the rate cuts affect the tech stocks the most because they're long lived assets. All of a sudden, it's now changed somehow. Oh, no, the rate cuts are necessary for the smaller stocks because they need that stimulus. It's interesting how that changed. I mean, certainly in the banking area, in the real estate, in the commercial real estate area, you know, I was listening to your last hour. That's that's a case where those sectors that are exposed, the rate cuts are very critical.

But for the other sectors, I think it's the strength of the economy really is most most important. And Trump's all those other factors. Brian, you want to take the other side of that, because I think you do stand on the other side. I do. I just think this the small cap is such a narrow window to get right. other factors. Bryn, you want to take the other side of that? Because I think you do stand on the other side. I do. I just think the small cap is such a narrow window to get right. And especially when you think a small cap value is heavily regional banks. I want to steer clear of that. Small cap growth isn't necessarily profitable.

And the big difference between the MAG-7 or just like mega cap or large cap tech is the cost of funding. Those companies are making so much money their cost of borrowing is still very low. These small caps which are very reliant on interest rates and borrowing I just think that's going to put

a cap a cap on that. I don't think the algo traders which are really important to understand from a flow. Are going to be leaning into small caps meaningfully as long as we're having this debate about rate cuts and we if we are going to have higher for small caps meaningfully as long as we're having this debate about rate cuts. And if we are going to have higher for longer, I would still step to the

side of small caps just because of that growth value gives you two areas, regional banks and nonprofit. But I think the markets will step aside from what about bring the big banks because we're going to get the earnings start next week and then we're going to be talking about earnings literally every day for a month. Yeah, well, I mean, I don't own any, right? So I look at other metrics, but I think you've seen, you know, Morgan Stanley doing well. If we get M&A, obviously Goldman Sachs, Morgan Stanley. But I still think if you look back the past few years, outside of J.P. Morgan, I mean, the banks really have just not been a participant in this rally. So I would just say I'm going to go down to the Q's or the S&P as an allocation versus adding to the banks at this point.

We will leave it there. Bryn talking to you. Thanks so much, Professor. I always appreciate the conversation. We will see you soon. I am certain of that. That's Professor Jeremy Siegel of the Wharton School. Skybridge Capital's Anthony Scaramucci is next. We'll find out how he is navigating this volatile week for stocks, whether the rally's foundation is starting to show some cracks, plus Bitcoin is roaring back, and that's been good for him and his firm. We'll talk about whether there's more room to run and what's behind it. Do it next, the New York Stock Exchange.

You're watching Closing Bell on CNBC. All right, welcome back. We've fixed the mic. Christina Partsenevalos has a look at the stock she's watching. Christina. We have. I guess I can't move very much in this booth. But when Mizzouho out with a new customer survey for Amazon Web Services, their findings show a sales cycle that is speeding up, increasing IT budgets dedicated to infrastructure, which bodes well for AWS, and lastly, improved consumption. And that's why they're betting AWS can grow 20% year-over-year and why it remains a top pick for them with a price target now of $230. Shares are trading at $184.50, up 2.5% today. Shares of ride-hailing app Uber are up over 3% on a price target increase from Jefferies to $100. Shares right now are $77, so there's still about $23 to go. The bank cited the

various ways for people to use the app, like Uber Green, Uber Pet, Package Express, the list continues, as well as improved bookings growth. The analysts bet there's still much more room for Uber to grow within food delivery as well, hence their buy rating. That's why the stock's up. Scott? All right, Christina, thank you. Christina Parts in Nevelos. We'll see you in a bit.

Bitcoin pulling back today amid a broader crypto sell-off the back of a hotter than expected March jobs report. The cryptocurrency has been retreating from last month's all time high of nearly seventy four thousand dollars, fueled by a wave of demand from spot Bitcoin ETFs. Joining me now, Post 9, Anthony Scaramucci of Skybridge Capital. Welcome back. Good to see you here. Thanks, Scott. Good to be here. So maybe the ETFs played a role. I think we can all agree on that. But Bitcoin's back. Why? What are all the reasons you think? Well, I mean, I think the ETF was a big reason. I think the regulatory hurdle where the United States government is now allowing a QSIP to be attached to Bitcoin is a big reason. And I think, you know, Wall Street as well as anybody, when Wall Street gets a product like this, it's like a selling machine and it's generating lots of demand for the product.

And I think we're surprised that there's over 10 billion dollars in the first quarter of new flows for something like Bitcoin. Why? Why are you surprised? Well, it took it took a year for GLD, the gold ETF, to get to $10 billion. And so this did it in 25% of the time. And, you know, not to bore everybody, but Bitcoin's network spits out about 900 coins a day. That's going to get cut in half probably April 20th or so. And so you're going down to 450 coins. And you probably have 2,000 to 3,000 coins of base demand at a time when the supply is going to get cut. So they said earlier that Bitcoin, the price of Bitcoin, the ETF was priced in. They're now

saying that the halving is priced in. I don't believe that either. I think I think Bitcoin has a lot more to go here. What do you think of hedges against inflation, interest rates? I've heard some people cite currency devaluations around the world playing a significant role as well. How would you assess that? I see Bitcoin still as a technical asset that's still adopting. It's about a 6% global adoption in terms of world's population. That puts it around $19.98 for Web 1, just to give you the arc of it. So I don't see it that way that there's a big

currency issue. I don't think it becomes a Bitcoin standard, but I do think it becomes a digital store of value akin to gold. And so what's that issue for everybody right now? Where should that trade to if we're in price discovery mode? I'm just simply saying it could trade to half of the valuation of gold, which is a six to eight, ten times move from here. It's not going to happen overnight. It's going to come with great volatility. But I want investors that are in SkyBridge and know us to be a part of this story. Do you think it's correlated still somewhat to, you know, either risk assets, broadly speculative assets? And if you do, does it ever divorce itself from that? In

other words, if there's a sizable pullback in the Nasdaq and the momentum trade, does that go along with it? Right. So it seems like it's sort of decoupling a little bit. Yesterday, the market was weak. Bitcoin was strong. There's a little bit of a decoupling. You mentioned the inflation issue. Let's just point this out to the viewers. The U.S. dollar's lost about 22 percent of its value since January of 2020. Bitcoin's gone up eight to one. Now, you can say, OK, well, Anthony, you're dot plotting, you're picking a high dot for Bitcoin. Maybe Bitcoin drops 50 percent due to its volatility. But I think the arc of it is an inflation hedge. It doesn't necessarily mean that it's a short-term inflation hedge. But if you own Bitcoin, anybody that's owned Bitcoin in a rolling four-year period of time,

they've actually done well. So they've never lost money if they're able to hold on to it for periods like that. Do you have in your mind a target level as people still try and throw those out, which you think is reasonable? So I've been consistent with this. And I basically say that the halving is going to come on or about April 20th. Typically, what's happened over the 18 months since the halving, you get a 4x move in Bitcoin. Let's be a little bit more conservative than that. I've been saying that it's about $170,000 for this cycle. But Bitcoin is a cyclical

product, in my opinion. Waves of people come into it. The demand is there. And then it goes through, you know, pulls and drags, if you will. So I think it gets to one hundred and seventy thousand by the end of the cycle. We also like Solana fully disclosed. We have smaller positions like Algorand and smaller positions like Avalanche. We're looking at some other tokens. But Bitcoin's a big kahuna. So obviously we think of Bitcoin, we think of FTX. Think of FTX. I think of, in some respects,

they purchased a 30% stake in your firm. They did. You got to know Sam very well. I did. So the sentence recently comes down. What were your thoughts when you heard the number? Was it severe enough? What are your just general thoughts on how this has all transpired? I think I'm getting soft in my old age, okay? I felt very bad for the kid, okay?

He hurt my business. He hurt my reputation. We sold a piece of our business. He lied to a lot of people. He hurt a lot of people. But when you really look at him clinically, he looks like a very damaged guy. He'll likely spend 18 to 20 years of his future in that sentence. If you talk to the bankruptcy people, there could be 90 plus billion dollars of assets that they're going to be able to divvy up among people. People will get their money back, but it was dollarized. So what does that mean? If I own six Bitcoins at $17,000, I'm getting 17,000 times six worth of value from the bankruptcy. But Bitcoin went to $67,000. So a lot of people upset about that as well. When I heard the sentence, I thought it was light. But, you know, I'm not unhappy with that sentence for Sam.

I feel bad for him and his family. And listen, he'll come out as a 50-year-old man, and we'll have to see what he does with his life when he comes out. You know, I'm curious as to what you made of part of the argument from his own legal team to the very issue of what you talked about, about the investors. Well, they argued for leniency partly because they said, well, look, investors didn't lose any money, but Bitcoin's rallied back to where it has. You seem to take issue with that notion. I don't like the argument because Sam broke the law. Sam committed fraud. He was found guilty. The prosecutors knew that before the trial

started. They had a 98, 99 percent conviction rate. That argument should have been made before the trial started and we wasted the taxpayers' money on the trial.. That argument should have been made before the trial started and we wasted the taxpayers' money on the trial. And then they should have said, okay, we're going to plead guilty to this. And he probably would have gotten a reduced sentence. I think the problem is that he's got some mental illness. I think the judge did take into consideration because if you looked at the sentencing grid, the sentence was relatively on the lower end of the spectrum in terms of duration. But they should have made that argument earlier.

Somebody should have gotten to Sam, and maybe he's just a hard guy to get to, and said, look, you're obviously guilty. Plead out and you'll get a lower and a reduced sentence and you'll have some longer chance in your freedom to reclaim your life. He didn't do that. And but look, it's behind us. Here's something that people don't like me saying. I'm just going to share it with you. I think Gary Gensler did the whole industry a favor. He had the Bitcoin futures ETF approved

in November of 2021. If you just follow the administrative law, he should have approved the spot ETF shortly thereafter. He didn't do that. Okay, and so he got sued for something that's called arbitrary and capricious administration of the law. But the one plus year delay in the spot ETF exposed over leverage in the system, exposed fraud in the system. And so I do think he deserves credit for that.

Whatever my issues are with Gensler and the SEC as it relates to crypto overall, this is a sturdier 67,000 than the prior 68,000, 69,000 in November of 2021. That's an interesting perspective you have. I want your perspective, too, since we talked about as maybe one of the catalysts being inflation and hedging against that. What's your own expectations are for what the Fed is going to do? Eventually, we think we had Steve Cohen and David Einhorn on the network this week who both weighed in on what their own expectations are for rate cuts. Three, one, none. Listen, I saw.

I think the market expects three cuts. I think that's the number. I don't I don't I don't disagree with that. You know. I think inflation's been somewhat contained. And I think, I mean, ultimately what it'll come down to is that a true statement or not. We think, the Fed thinks eventually it's going to come down to 2% inflation rate. What do you think? I think that's going to be hard. How many times are they going to cut this year? I think fewer than are priced in right now so fewer than three sure do you think they're they cut you think there's a chance they don't do anything there's a chance i think re inflation is re-accelerating i think there's a lot of indication of that what do you think all right so i'm going with the med owner on this okay

over over you know i mean not just because i love the mets i think steve's going to be right i think they cut at least three times. At least three times? At least three times. It could be more. I know that's a little bit out of consensus right now. Three is almost out of consensus now. The Fed is jawboning.

They've only got a blunt instrument of either raising rates or lowering rates, but they also have something called moral suasion, and they're jawboning the markets right now because they like where the inflation numbers are. You see the inflation numbers coming down. And they want them to stay down. And they want people to be girded up. If they start cutting rates or signaling rates, they don't want market euphoria, particularly going into the election.

It's a very tough time for the Fed. Remember, Alan Greenspan raised rates during the Bill Clinton election. People don't remember this. This was 32 years ago. And George Herbert Walker Bush accused him of playing politics. So the Fed has a matrix right now of keeping the markets calm, getting inflation down to the number that they want and not being accused of playing politics. And so that's a very tough matrix to run the gamut through. But I think they have no choice. They cut the rates. We're not talking about the debt,

but let's talk about it for a second. Over a trillion dollars in interest payments at these through. But I think they have no choice. They cut the rates. We're not talking about the debt, but let's talk about it for a second. Over a trillion dollars in interest payments at these rate levels. Jerome Powell himself and many others have said we've got a huge debt crisis in the country and we've got to get that under control as well. And I think the Fed is going to help the Congress buy some time with lower than expected interest rates. All right. At least three at least. Scaramucci never holds back. I appreciate it. It's good to see you as always. Good to be here. All right. We'll see you soon. All right. Coming up, going beyond the mega caps. That is how one top money manager is looking to play the next leg of the AI trade. Aldridge Dan Chung, he is here at Post 9 to lay his top ideas out and make his case for why the bull market is just getting

started. Closing bells coming right back. We are back. Stocks are rebounding today, shaking off some early quarter pain, but still heading for a weekly loss. Back in October, our next guest called this the beginning of a new bull market. So here to share where he sees this market heading now is Aldridge CEO and CIO Dan Chunks. Good to see you. Thanks for coming by. Thank you. So S&P is up 21% since you made that call. I know you're probably feeling pretty good about yourself.

This is a what have you done for me lately business, though. Where are we going from here? Well, I think there's still a lot of room to run and a lot of time to run. First quarter earnings about to come up. I think it's really interesting that we had good news in the economy in the jobs report. And unlike a couple days ago, when people feared that might mean that, you know, Fed easing was off the table, the markets rallied and rallied quite strongly. I think it's a sign, actually, interestingly, that, you know, there's a strong fundamental underlying support for the market because the Fed is going to cut in coming year, years. And at the same time, the economy same time the economy is moving along well. And so that's a very positive combination for corporate earnings and the market will

follow that. Are we not as beholden to interest rates as cuts as maybe we thought we were? Have we come around to the idea that a stronger economy trumps rate cuts and we can deal with it for a while? Well, we've been in the camp that fundamentals trump everything. And rates, of course, can affect fundamentals. But at the position that we're in now, which was the bias is clearly too cutting, even if we're holding on hold for longer than perhaps the market thought, the bias is towards downward over the next couple of years. And so that's the positive

support for the equities. OK, so it's it's as long as you know that the hiking trend is over and the new trend from the Fed is starting, that's good enough. Yes. You were bullish large cap tech like NVIDIA, Amazon, Microsoft. So those stocks in your, since your call in October have come a long way. Yeah, like 70% for NVIDIA or more, I think. Do you still like them or they come too far too fast? So the good thing about NVIDIA and some of them is that their earnings and revenue growth is almost keeping up pace with the stocks. So they haven't gotten extreme in valuation yet. And but it's the opportune time now to also think about what will be the next beneficiaries of AI, as well as a strong economy. How are you doing that? What stands out to you? If a lot of money has been made,

the easy money, I should say, has been made in these names for the time being, where can I make the easy money now? Well, there's never any easy money. But I think actually AI is powerful enough that it's going to drive investment and therefore growth across multiple sectors. But I'll give an example. In traditional media, TV, movies, there's a large percentage of cost that's in the production and post-production. We see Netflix, for example, as an interesting AI beneficiary that people don't think about. But it's on the cost structure.

They spend $18, $19 billion a year in producing their content. A lot of that production cost could be significantly reduced by AI. Do you believe in the broadening story? The broadening of the market story? Yeah, absolutely. I mean, my partner, Uncle Crawford, here was earlier. I guess now we're talking about the Fab Four instead of the Magnificent Seven. Right.

I have a little bit of doubt. I think the three that are getting dropped are still very good companies, but they're going through some transitions. And that's Tesla, Google, and Apple. I think they will be very strong players and benefit from AA, maybe in a little bit second stage, although whenever Tesla finally gets automated driving really nailed down, that's going to be a singular moment. But yes, we see a broadening of the market into other sectors. And for example, electricity demand is up a lot because the computing intensity of AI-driven servers demands a lot of energy. And utilities, of course, have been far out of favor.

We're not typically seen as utility investors, but we see some interesting opportunities in utilities just because of electrical demand. Interesting. I appreciate your time. Thanks for coming by. Thank you. That's Dan Chung here of Alger at Post9. Up next, we're tracking the biggest movers into the close.

Christina Partsinella standing by once again with that. Christina. Well, customers are increasingly considering the shift to Snowflake. And Krispy Kreme's new partnership is a game changer. I'll tell you why next. All right, we're less than 15 from the bell. Let's get back to Christina for a look at the stock she's watching. I'm watching Krispy Kreme.

Their partnership with McDonald's is a, quote, game changer, according to Piper Sandler, analyst. The McDonald partnership means thousands of new locations for Krispy Kreme over the next several years, and why they think a $20 price target is reasonable for the company over the next year or so. You can see shares trading at $15.50 right now, but up 8% today just on this note.

Customer interest is also increasing with software firm Snowflake. That's what Rosenblatt analysts found after attending a customer event in Toronto with several hundred regional customers. Although they do expect revenue growth to be slower this year for Snowflake, they believe new product launches will help drive future growth, hence the rating switch from neutral to buy and why the stock is up over one and a half percent. Scott. All right.

Thank you very much, Christina. Parts of Navalo still ahead. Energy's record run. The sector looking to lock in its best weekly win streak in more than 15 years. We're drilling down on some of this week's top performers and what's behind those big moves. Back right after this. Welcome back.

Earlier this week, I sat down with Greenlight Capital's David Einhorn at the Sohn Conference for a wide-ranging interview. To watch that entire sit-down, you can head over to CNBC.com slash pro. I hope you do. Up next, more trouble for Tesla. Shares slipping on new questions now about the company's plans for a low-cost EV. We've got the details and what it might mean for the other players in that space as well. We'll take you inside the Market Zone next. We're now in the closing bell market zone cnbc senior markets commentator mike santoli here to break down the crucial moments of this trading day plus pippa

stevens on a big week for oil and the energy stocks and philip oh on reports tesla is abandoning plans for a low-cost model well it, it's been an interesting day, an earthquake notwithstanding, Mike Santoli. And, you know, we're making it through and trying to shake it off. I think that's what the markets have been up to as well. You know, there's been more to think about, I think, this week. If you are really just relying on the fact that this has been such an unflappable tape and nothing has managed to kind of knock it off course, you do have bond yields

making their move in response to good news on the economy. You do have oil not doing much today, but holding the gains for the week. And you had the first time the market did not hold this very, very short term support. Now it's trying to regain it today. We're still hanging around this area, around 5,200 in the S&P. We first got to on Fed Day, March 20th. So it's worth keeping in mind what we've been mostly doing for the past two or three weeks is pressing the upside. Do we have the horses for that? Can we basically justify we're going to ease into a great economy? Or do we have to more or less consider a little more ambiguous timing and reasons for what the Fed might do? All right, Pippa, Mike just talked

about energy and the kind of week it's been for those stocks. Tell us more. Yes, got another record high for energy today, which earlier this week did take out the prior all-time high that stood for a decade. And it is the best sector this week, as you said, on the heels of oil jumping to a five-month high and Brent taking out the $90 mark. Now, the refiners continue to do very well here with MPC, Philips 66, and Valero all hitting records today. Gasoline futures have outperformed the underlying commodity this year, which is good for refiners' margins, although rising oil does make their input costs higher. Exxon also hitting a record today, the company filing its Q1 earnings consideration with targets essentially in line with analyst estimates,

although Exxon did point to weakness in nat gas pricing as well as fuel derivatives. And one area to watch is the services companies, Wolf Research, called the OIH chart, a technician's dream over the past three years, saying to buy any pullbacks. Scott? All right, Pippa Stevens, thanks so much for that. All right, Phil, let's talk some Tesla. Let's try to get to the bottom of a story that was reported and then refuted. So where are we? We're no closer to understanding what's going to happen with the so-called Model

2. Scott, this is important because the small car that Tesla has reportedly been planning for years, many call it the Model 2, that's widely viewed as the next catalyst for Tesla. Well, today, Reuters was out with a report citing employees who said that they heard this at a town hall meeting, as well as documents that Reuters saw. They claim that Tesla has decided we're not going to put out a retail version of a small car

that might start at around $25,000. Instead, we're going to focus on robo-taxis. And again, we should point out, Reuters put this report out citing sources. No sooner had that happened than Elon Musk went on to X, and somebody brought up Reuters, and he said, Reuters is lying. Again, when might we get some clarity, Scott? Well, they're going to be reporting their Q1 results April 23rd. So that's when we will hear from Elon Musk. Now, you would hope that by then we will get some clarity, or at

least at that time, we'll get some clarity about what might happen with a small car. But we've thought that in the past on some of these conference calls, Scott, and he has not talked about a small car, aside from very vague terms like, well, yeah, in the future, we'd like to come out with a lower priced model. But that's where we stand. And investors not waiting around either for any more answers. They're selling the stock down three and a half percent today. Phil LeBeau, thank you very much for that two minute warning. You just heard the music. Mike Santoli, I'll come back to you. CPI, PPI next week. Banks, the end of the week, kickoff earning season. And we pretty much are going to get back, at least right now, almost all of the S& the end of the week, kickoff earning season. And we pretty much are going to get back, at least right now, almost all of the S&P losses of a day ago. We're going to get

back the losses of the full day yesterday. What I've been keeping an eye on is from the highs of yesterday afternoon, which is 52.50. So we got back maybe a little more than half of those. If you consider 52, it's basically the all-time highs. I mean, it's a little above that. So we're only a percent from the all-time highs. And we, it's a little above that. So we're only a percent from the all-time highs. And we've been in the process of just sort of going sideways more or less for a couple of weeks, have been managing to deal with the further pricing out of rate cuts. And I think also coming to terms with the idea that we just have a higher metabolism economy. And inflation is kind of where it is between two and three.

And real growth is somewhere between two and three. That's good nominal growth. The market itself is still leaning towards cyclical parts, cyclical sectors, cyclical groups within it. That's a good news story as well. The question is commodities going to break out if CPI and PPI, if they're hot at all, I do think it could create a little bit. We're a little confused about the trend. Let's back away a little bit. We still have some sentiment to probably reset here. Got to keep an eye on geopolitics, too, which flared up yesterday afternoon,

a little benign today. But nonetheless, that's always sort of the overhang. Yeah. And I think that goes in the category of you can't handicap it. It's one more thing on top of whatever else to worry about. It's like the tired, overstimulated toddler problem. You add one thing to the mix that you can't sort out and sometimes you get a cancer. You have a good weekend. All of you as well. We're going to go out green across the board as the bell rings on this Friday on Wall Street.