Closing Bell - Closing Bell: Has the Turbulence Run Its Course? 4/15/25

Episode Date: April 15, 2025

Trivariate’s Adam Parker, American Century Investments’ Mike Rode and JP Morgan Asset Management’s Jordan Jackson weigh in on today’s market action and map out where they see stocks headed from here. Plus, Ankur Crawford from Alger highlights the stocks she is betting on amid all of the tariff uncertainty. And, Cais founder Matt Brown discusses alternative investments. 

And welcome to Closing Bell. I'm Scott Wopder live from Post9 here at the New York Stock Exchange. This Make or Break Hour begins with one big question. Should you be more or less optimistic about stocks? Given so many people seem to be on one side of that answer. We will ask our guests that question over this final stretch. The scorecard looks like that was 60 to go in regulation today. Fairly muted action, you know what actually might be a good thing given the recent volatility. Just take a deep breath. Staples utilities they are among the best groups

reflecting the defensive tone today for sure. Banks doing pretty well following more earnings from Bank of America and Citi and probably the most important thing right now a more calm bond market as well yields

moving lower today. So a little bit of the edge coming off there. The dollar closely watched lately as well a bit stronger today and that too is pretty good to see given some of the consternation about the currency markets lately as well. It does take us to our talk of the tape. Has the recent turbulence run its course or not? The VIX today certainly suggesting a more calm environment as it is actually back below 30. Feels like forever since we've seen that. Let's ask Adam Parker what this is all about. He's the founder and CEO of Trivariate Research, the CNBC contributor. Welcome. Good to see you. You sat down and you're like wow

it's a little calmer and I was like that's a good thing. It is. Actually right it feels like let's say catch our breath and try and figure out where we are. What would you tell people now? You know, it's funny, I have a dinner, I have a dinner coming tonight with like seven or eight CIOs. I'm curious to see who's bullish, who's bearish and get the landscape cross asset types. But I feel worse about the equity market right now

than I did a week ago, only because we're up. And I don't have any more certainty about how long these tariffs are gonna last. What, you know, I think everybody in the world knows guidance isn't gonna be great, and, or if there is guidance, but it's just hard to know if my original assumption, you know, okay, my 2026 earnings are now my 2027s,

but pushed out a year, stocks are down enough that that's about in the price, and we're back to even, or if people now are expecting this recovery that I don't think will be the same V-shaped economic recovery we've gotten in previous cycles. I'm a little worried about that. Look, there's nothing worse.

I mean, the best thing is you can be a contrarian bull and be right. I love that. So the nine CIOs that you got dinner with tonight, how many hands are gonna go up in the air for bullish? So we force them, and the same crew is here at the beginning of the year in January, only me and one other were bearish first half of the year, everyone else for bullish. So we force them and the same crew was here at the beginning of the year in January. Only me and one other were bearish first half of the year,

everyone else was bullish. It'll be interesting to see if not the market's down, they're all bearish or not. It'll be an interesting, you know, a tell signal. You had the Bank of America fund manager survey today was like the most negative or one of the most negative in 20 and 25 years. So that feels like, oh man, I want to be there.

It's just, I think in this case, like more uncertain and every ounce of me wants to get bullish when everyone's bearish, but uncertainty is supposed to be bad for multiples. And what's coming on the other side of this, isn't gonna be fiscal stimulus, balance sheet expansion and a lot of Fed accommodation, which is kind of accompanied the previous recovery.

So it may be a little bit of a slower fundamental path, and so therefore, I don't know if we snap back to whatever everyone's targets were. It's only April, in January everyone had 7,000 targets. Now that seems like a mile away. Okay, well, because you did have more target cuts. Wells Fargo Investment Institute to 59 to 6100, that's their range.

Jeffries to 53, I mean everybody has dialed it back. 59 to 61, we great. I mean, that'd be double digit returns. I think we'd all sign all our money in that right now. That feels like a home run for sure. You said fewer rate cuts or a less accommodated Fed. What if we actually get more than we think at this point? I thought Waller's comments yesterday were pretty interesting.

If you figure that inflation is going to continue to come down, both because it was already trending that way and if there's a pullback in demand, that the Fed now is going to be uber focused on the labor market. And if now we start to see the labor market start to soften even further, the Fed's going to become more engaged. And they're going to do whatever they have to do to keep that from fully falling apart.

So I have two responses to that. Well, three. One is, I don't know. OK. Two is, I think you can look at the prices of things that are made in China and other areas at big stores at Target, at Walmart, and Costco and track if they're getting more expensive, toasters and things. Let's just see because I don't know if I believe prices are going down.

I think the big debate would be sure if we're really going to have a recession, prices go down but are stocks going to act great if the economy rolls? So that's like the tension. But when are you supposed to buy stocks when it looks bad if the Fed's getting engaged? So I think it's, right, and I think the last point is like, I track really carefully the relationship between the perception about rates in the future,

the so-called 12 month, 24 month forward Fed Fund futures, and price to forward earnings of stocks. I know that in the last cycle you saw they were hiking and at some point people said, I don't care they're still hiking, they're almost done, I'll buy stocks. That was day one of 2023, right? Now-

It's just not quite the Fed, right? You get ahead of whatever's gonna happen. But now I'm sort of saying, okay well things ripped in 23 and 24 when we knew they were gonna be accommodated even they were, but at some point if they do 50 or 75 more, it's not because

I'm psyched about the accommodations because things are eroding. I actually think what's interesting to think about a little bit is maybe some of the data we saw from the financials isn't as bad as people thought, right? It's not like the guys who run banks are morons. They have a lot of data and they weren't going to say, like, things are fine in March or we don't know about it, but they kind of told you generally that things are holding up a little better than they were. They were able to give guidance when most people and other companies can't give anything.

I didn't see, if you really look at the underlying businesses at BAML, at JPM last Friday, I didn't see them saying like the consumer is really tanked off in the first part of April. So the hard data I actually thought was upside surprise to the bank so far. I would say that's better than I thought. There was an interesting commentary today

from Rick Reader of BlackRock I wanted your take on because I think so many investors and market watchers like you all normally would think of where do you hide out in situations of equity volatility? You buy bonds, you buy treasuries. Well, that hasn't worked. And well, the dollar gets a bid,

I'm not talking about today, that hasn't worked. So Rick Reader says, with increasing uncertainty around correlation, safe havens and global relationships, we believe that being dynamic and utilizing the full toolkit to manage risk is increasingly important today. What does that mean to you? So I went back, I looked, we only could find the data back to the 60s, so 65 years of data.

We looked at all the periods we've had like that one where both bond yields back up in the equity market went down. We identified 17 such periods. We looked at the subsequent three month returns after it happened. It was about the average quarterly performance for the S&P. So I couldn't come up with a firm playbook for what to do in this situation. And I was hoping I could.

So I think the answer is, and we put in our notes on day five long and five short, I think the answer is find things that you feel confident at better estimate achievability, even in sort of an eroding economy or one that's not gonna be great for the next six or 12 months. And that's my idea.

I think this should be good for stock picking and good for identifying those that have pricing power and or those that don't. So I don't know if it's great for, you know, increasing my exposure to risk, but I think it's fine for focusing on where I feel confident that the numbers are more achievable than other parts of the market.

And that's the focus. What about this, that the administration put the pedal on the floor so heavy with such a heavy foot at the beginning, right, that it looked like we're gonna kind of crash into a wall, right? But what happens if that means now at every incremental step the pedal comes up, pedal comes up, pedal comes up, get a little more smooth down the road? White House today, I mean Megan Casella, our reporter at the White House, 15 deals under consideration.

Believe we can announce deals quote unquote very soon. I guess all I really care about or the thing I care about the most is the China relationship. And that I don't, I haven't seen or read anything that makes me think there's been short-term action. I thought the comment from the president last Wednesday that Xi was disrespectful was a

little bit worrisome to me because it seemed like they're not that close. I think what you and I would have thought would happen would be there would be some closer conversations about some disconnects they have that can work their way toward a path of harmony. That clearly didn't happen the way maybe some of us would have anticipated. And so at the end of the day, I don't think we're in a sustained trade war with countries that are one-tenth our size. It hurts them 10 times as much.

So I'm not that worried about anything sustained with Canada, Mexico. I saw some comments today. It's really the China situation that I don't think is better today than it was nine days ago. And that's the worrisome part. I know. Look, you have to pay attention to everything, including who the White House sends out to talk on television, whether you think things are about to get worse or potentially better.

The interesting thing is that Jamie Dimon of JP Morgan gave an interview today to the Financial Times and he made some interesting comments on this topic. Leslie Picker is following that for us and joins us now. He commented on a lot of things including the Treasury Secretary Scott Besson and maybe the hopes that Jamie Dimon has for who takes more of the public lead, if you will, in talking about tariffs and doing these negotiations. No, that's right Scott. He expressed optimism about Secretary Besson's ability to to get the job done, but he did say in this interview,

one of the key aspects of this interview with the FT was that he was urging the government to engage with China, that they need to have these talks. And there was a really interesting quote from this conversation, where he said, quote, We should be careful. I don't think anyone should assume that they have a divine right to success, and therefore don't worry about it. In other words, just because the U.S. has been successful in the past economically, militarily, doesn't mean they will continue to do so, especially if this world order is

rearranged in a way that isn't favorable to the U.S. Of course, this comes, you know, as bank earnings are wrapping up, at least for the big six bank earnings here in the U.S., Scott. Some interesting takeaways this quarter. Number one is that so far it doesn't appear that the trade war headlines, at least as they took place in the first quarter, have really had much of an impact on consumer and credit quality in the big banks, as they report. I know you guys were talking about this a little

bit ago, too—this idea that, you know, in terms of delinquencies, those have remained pretty stable, consumer spending appears pretty stable. J.P. Morgan did note that there may be a little bit of a pull-forward effect of consumers trying to spend in order to get out in front of tariffs if they do cause some sort of price increase. So, that's something to keep an eye out for. But outlooks were stable as well. The banks that do give guidance, especially for net interest income, either maintained

their outlooks for the year or for the end of the year, in the case of Bank of America, or in J.P. Morgan's case, they actually raised their net interest income for the year slightly. Yeah, Leslie, thank you for going through that. It's a perfect segue, Leslie Picker. Back to you, Adam. I mean, these could have been a lot worse than they actually were, and the commentary,

not that it was overwhelmingly fabulous, could have been a little worse too. No one really knows what's gonna happen from here. If the tariffs have had such a negative impact on consumer sentiment that it's going to start showing up in hard data. If you get any sort of clarity, maybe you get these 15 deals, maybe business starts to feel a little bit better. I think that's right. I think the question is, is that all it is? It's just kind of one week or quarter

and we're back to where we would have been otherwise in Q3, Q4, we still have that, it's only the first quarter results, there's still a lot of 25 in front of us. Or is the lack of confidence from the CEOs of the big companies and how to run their businesses kind of get them to really pump the brakes until they understand the rules of the game more

and then the damage is more than that. Right now we're still assuming that earnings grow 25 versus 24 in kind of a mid-single-digit sort of range, but the bottom-up numbers are still higher than that, right? So the question is, does anyone care? Do people know they're too high, et cetera? The numbers for 2026 bottom-up consensus are actually for over 10% earnings growth.

So I think the question is, do people just really view that? So the second thing we need to see, we showed the bank results there, but what we didn't show is that they really just performed in line with the S&P since Friday, right? So we didn't see them outperform, they just kind of participated perretto with the market.

So I'm looking for a company that misses their guides down and the stock doesn't act bad, and so far I haven't seen that. Yeah, that's one of the tells. What I was alluding to as well with Leslie regarding the people who are not only trying to make these trade deals, but the ones who are out there publicly articulating

the administration's perspective and point of view. To that, Diamond says of the Treasury Secretary, basically that he should be the main man negotiating. Quote, I know him a little bit. I think he's an adult. I don't agree with everything the administration is doing, so I'm not arguing that point, but I think he's the guy who should probably be negotiating these trade agreements. If that were the case, if he had more of a forward role, certainly publicly, right, would

you feel better about the stock market, to Diamond's point? I think institutional investors would feel better about that in aggregate. I think they've been somewhat disappointed about how this has unfolded so far, just I think surprised to the downside of the magnitude of things. And I think people would want that, the institutional investors I talked to probably would want a more active role. But it's unclear what will happen. I think most people are assuming that benign outcome

you're talking about, that ultimately we're gonna hold up a poster board and say, hey, we got a lot of these countries to come our way, we did a lot of great for America, look what we did, and so whether that happens or not, and so when do we get that we win poster board and then we can go back to thinking. Tax cuts and deregulation. Back to when we were on election night here together, what got everyone frothed up.

And I think that's what people are hoping for. I don't know anybody economically thinks that those two things equal each other, that the damage from the tariffs so far will be offset by extending the taxes and the regulation. Those things take longer to hit the P&L. So that's the other thing I'm worried about. It's like the backward check mark. We go down a lot, but we don't come up quite as much when we get the extension of the tax stuff.

So I think what we're talking about two different things. One is the multiples. I think the multiples will expand if people start feeling like we got more details, we got somebody who knows what they're doing, who's an adult in the room to use, you know, Jamie Dimon's words. But in terms of the E part,

I'm a little less confident it snaps back until we just get the rules of the road a little bit clearer. All right, you stay with me. Let's bring now into the conversation Mike Road of American Century Investments and Jordan Jackson of JP Morgan Asset Management. It's great to have you both with us. Mike, you've been sitting here the whole time

listening to all this. What's your key point after everything that you've heard? Sure, I think back to what you were saying about the toolbox, right? There are areas of the market in a portfolio that have been underutilized the last two years when it's been all S&P, all growth, all momentum, and look at areas like dividends, value, lower volatility.

Those should be bigger parts of the portfolio because they're trading at more attractive valuations, they provide reduced volatility, and you're gonna see earnings growth from a lot of these companies, whether it's consumer staples, healthcare, even financials. So there's some good opportunities there that are still attractively valued.

And if we do go into a recession, the earnings growth should hold up much better than in other areas like in the broader market. And the S&P is still pretty expensive trading at about 20 times versus historical 16 17. So there would you be buying the equal weight right now instead of yeah I think you have to assume there's two things you have to assume that over the next six to 12 months there's positive news coming out of China, US and China. If you believe that and if you believe the best the you believe the best part,

the worst part is behind us, you could see some upside as we head into 2026. Do you think that? Do you think the worst is behind us? In terms of volatility, I don't know. Let me know what the next tweet is, what the next truth social post is with China, and we'll see from there.

But I think where you wanna go is the areas that are less expensive, and I know you're gonna kill me, but small caps, mid caps are trading well below their average, whereas large caps are still trading above their average. So there are areas of the market where there's a pretty bad outcome already priced in,

and you're okay to be there no matter what happens. Jordan, Mike sets the scene pretty well I think, and articulates what I've heard from other investors. I'm, and what one told me the other night, I'm forced to trade social media posts, not invest in companies. I'm used to investing in companies. Today I can't do that,

because I don't know what company's gonna I can't do that because I don't know what company's gonna be able to do what because they don't know either. Yeah, I mean that's the world we find ourselves in where sentiment continues to be the driving factor and as an extension of that, social media and what's coming out of the administration is really driving a lot of the volatility.

And so I agree with a lot of what's been said. I think volatility is going to remain elevated in the short term. But I think if investors are willing to change their perspective a little bit, certainly over the next three to six months, I think it's gonna be a very bumpy ride. But if you ask, I think a group of investors

over the next 12 to 18 months, will stocks be higher than where they are today, I think most hands will go up. so you know if you're looking at the market and maybe you're getting a little bit of a discount relative to where we're at the start of the year I think if you got a longer time horizon it's it's okay to start to add a little bit of risk. What am I supposed to do with the 60-40 portfolio Jordan just knowing what's happened with both equities and bonds I think the 6040 is really 50 30 20 and I think you need to really begin to

embrace alternatives within client portfolios whether that be hedge funds that can take advantage of the volatility right they can go long and short volatility whether it be real assets that are an inflation hedge and inflation pass through, we've seen gold continue to be a good diversifier and hit all-time highs as well. And then I think higher quality parts of private credit, private equity, again these are sort of longer term, close your eyes and open them back up in three to five years. But I think you really have to start embracing other truly diversified sources of income and uncorrelated return streams to public

markets and over the next market cycle. How would you address that Mike as well? Yeah I think within that 50 equities that Jordan's recommending I think you have to have it really well diversified and include small caps and mid caps. In terms of the alternatives you have to have it really well diversified and include small caps and mid caps In terms of the alternatives you have to be aware that your money is locked up for potentially a decade less liquid very less Like so it's something to be aware of kind of really depends on the investor and your time horizon But yeah longer term, you know the other your point about bonds not being you know an area of of safety You know, we would recommend being sort of short to intermediate, not long term. And then dividends, again,

really represent a good opportunity to not only get 3%, 4% yield, but then you get some 4% or 5% earnings growth on top of that. That's high single digits, which over 100 years has been pretty good annualized returns for stocks. Two years of 25% returns kind of spoiled us. It's unlikely to go back to that. How would you address that? I mean hedge funds they have the ability to be more tactical. Private equity expectations coming into the year for realizations haven't been

met. Some suggest that this is going to be one of the biggest tests for private credit since the explosion in assets to that area has happened. So you have a lot of questions about alternatives right now and how they perform in this kind of market for people. Well there's two ways to think about it. One is you can own the public companies that all the alternatives they get 75% or whatever of their profits from fees and this if the stocks go down 25% which a lot of have they should be pretty close to buys I mean these stocks are getting killed you look across blacks and Apollo KKR and then the so I think the actual public equities that do it are somewhat attractive and then you know

obviously when you listen to Jamie Dimon and he says he's gonna go after private credit or something maybe that's not great for JP Morgan stock but it ain't good for the guys who do it, because they're so powerful. So I think you gotta pick and choose. I think alts are always a good idea. Some of the smartest and best stock pickers I know are hedge fund managers, not just because they're clients, but truly they spend all their time diving into accounting

and other issues. I guess the only thing I'd say is if people wanna take risk and they really think we're close to the bottom, I just spent a long time on my favorite sector, semiconductors, and if you just take like the SOCs, the 30 stocks in there, I think more than half of them are down 40% in the last six months. So if you think stocks are going to dissipate, if you think the market works, you've got to own tech. I looked at the last 20 times the market was down 10%

or more and what worked the three months after. Tech worked 19 of the 20 times, tech averaged the best in the recovery, and semis have gotten creamed, and probably are going to grow above GDP. So if you want to take risks, you feel like we're close, I would just buy semis. I think that's going to work. You can buy small cap semis too, sure, but I'd buy the good big ones would be good too. Well, I want to end on that with you, Jordan, because I feel like you have a just completely opposite view of where Mike comes at this market talking

about leaning into small caps and leaning into cyclicals where you suggest neither would be your strategy right now. Well I think we're getting ready to step into a period where economic growth is going to take a step down and when you look at frothy year earnings per share estimates for small cap companies at 35%, 40% earnings growth this year, I think that's woefully optimistic. Their analysts are already overly optimistic on average coming into the year and trying to forecast earnings.

I think you've got growth that's going to slow down. Consumers are showing signs of slowing down. And so I think, you know, right now at the very least, small caps are cheap for a reason. Now, could we be looking at fiscal stimulus, getting injecting to the economy next year, pretty sizable bounce back in economic activity next year? Sure. And so perhaps if we, you know, get on a call here in another two quarters or so, will I be talking about small caps? Perhaps. But I think right now I'm still leaning again a little bit more defensive, a little bit more larger cap in my exposure just given the healthy amount of uncertainty over the near term.

Maybe the last quick word. Do you have a rebuttal? Yeah, I think a rebuttal. Yeah. I think the bad a lot of bad news is priced in small caps are down 25 percent from the peak large caps are down what 10 15 percent max. So again I hear your point makes sense. But what our expectation expectations are pretty low. All right.

We'll leave it there. Thanks everybody. We'll see everybody soon. Good to see you. All right. We will now go to Christina parts of Neos for a look at the biggest names moving into this close today. Hi Christina.

Hi Scott. Well let's start with Albertson disappointing guidance, setting shares lower about 8% right now. Executives on the earnings call said they're seeing pressure from competitors and that's forced Albertson to put more items on discounts, hurting margins. Shares are down, like I said, 8% having their worst day since 2002. Meantime, HP Enterprises, HPE's shares are in the green after activist investor Elliott built a more than $1.5 billion stake in the server maker.

This is according to a source telling CNBC, Elliott hopes to engage the company in discussions on how to improve, what else? Shareholder value. And that's why you can see shares up over 5%. Scott? Alright, Christina, thanks so much, Christina parts of Neville's. We're just getting started here up next. Aldridge's uncle Crawford. She's going to reveal the stock she's betting on right now amid all this volatility and uncertainty right here.

Post nine next. Welcome back stocks have bounced sharply over the past week but the S&P 500 is still down more than 10 percent from its February high. So is the market starting to regain its momentum or is more volatility ahead? Let's ask Alders on Crofford. She's back with us at Post Night. Welcome back. Good to be here. I feel like you've gotten more cautious

since the last time I saw you. As I look at the notes, I see phrase it's a delicate balancing act, likely range bound until there's certainty. Lean more defensively. This is a change, isn't it? Absolutely, I mean, things have changed. And so one can't be, can't stick their head in the sand and pretend like nothing has changed.

Things have changed. We, we threw a huge wrench into the, the global economic prospects to the geopolitics in which we live. So you know, part of being an investor is actually having that ability to change and recognize we're in a changing environment. You say as well, as an investor, you don't have to do something every day, but there are days that come around

where things feel really bad. Yeah. And you wish you did, and maybe you didn't. Are we here yet? So here's, I think we're in a really interesting spot where stocks have come in a lot. There are some stocks that are down 50 percent. Have the fundamentals changed? The fundamentals may have changed as the economy slows and it slows faster than we think. However, the valuations are becoming more compelling. But you have to act, you know,

the day that it feels really bad and we need to do it right now, I think there has to be a little bit more prowess of understanding what is happening in the economy. And as long as the goalposts are changing and they're not set, I think it's really hard for the market to go back to highs. When you're talking about things changing

and fundamentals changing and goalposts changing, are we mostly getting to earnings changing and therefore you're not exactly sure what's of value now because you're not really sure what earnings are gonna be? I think it more stems from what the Trump administration is doing with the tariffs and the impact it will have on you know company revenues and earnings, the consumer, so there's a clear kind of waterfall effect into our economy

with the tariffs. Even if you get deals you're suggesting that some of the damage has been done which maybe hasn't been fully felt yet. Oh for sure right but look once we get deals it will be easier to move forward because then we at least know which direction to go versus right now it is there's a hundred and forty five percent tariff no now it's zero. Oh, no, no, it's 20%. It's 10%. So, we're a little bit all over the map. It's been a whiplash. It's been a whiplash.

And so, how do, if you're a CEO, how do you even work in this environment? How, I mean, I agree with all the people who are saying that we, I think companies won't be able to guide. Because it is an ever-changing environment where a single tweet is changing the outcomes. And that's why I say right now we might be in this kind of a back and forth market. There are values that are setting up. There are companies that are on a long-term basis, and when I'm thinking long-term, I'm saying even over the next six months,

that I think are gonna come through this just beautifully. And I think that the AI trade is actually quite misunderstood. In what way? If you look at where NVIDIA is trading today, it trades at less than a market multiple, even on cut numbers on 2026. Demand for GPUs is through the roof.

I mean, Sam Altman tweets every day about how he needs more GPUs. You have tweets about GPUs melting because they're being so overused. So when there's such demand for a product, and it is an existential need for companies like Google to invest. I'm pretty sure that Nvidia's kind of prospects over the next few years are just fine. But what about GPUs in a declining GDP universe?

What Satya Nadella was talking about like yeah we're spending all this money but you know we're still tied to GDP and where economic growth is to at least some degree. So I think I so I I think people are trying to take capex and they're assuming capex is all one big lump and all of it goes to GPUs. There's in fact a caEx that is devoted to AI and there is a CapEx that is devoted to non-AI kind of regular cloud spend. When people are talking about,

when Satya is referring to yes, we're gonna have to pull back on CapEx or if he's referring to that, I believe he is referring to the non-AI part versus, and Satya's a little bit different because he's Microsoft and they're pulling back from the open AI relationship, but it's that non-AI part that's at risk.

And video doesn't play in the non-AI part of the data center. They are only on the accelerated compute part of the data center. Lastly, the stocks that you like in this environment are not out of AI or mega caps, right? It's Visa, it's Netflix, and Heiko. Why those now?

So I think it's more of what can give you visibility in an uncertain environment, right? So- Your Netflix subscription. Your Netflix subscription is great value if we're going into a recession. You're not going out for dinner, you might as well watch a movie, right? So, and Visa's saying it's an inflation beneficiary.

HICO is a aftermarket parts supplier for planes that is a penetration story. So all of these have a bit more visibility than economically hypersensitive. Thanks for being here. We'll see you soon. Ankur Crawford of Alger right here, Post 9. Up next, case founder Matt Brown.

He's going to tell us how he thinks investors should be diversifying their portfolios right now. Talking alts next. All right, we're back. I've heard a lot of fund managers and strategists talk about the benefits of diversification in volatile times like this, but what if that includes alternative assets that aren't as liquid as equities? Joining me here at Post9 is the case founder and CEO and chairman, Matt Brown. It's good to see you.

Scott, great to be back. Especially now. I mean, you've built a whole business connecting investment managers with asset managers specifically around alternative investments right? So the private markets I guess could be a little more stable in crazy times but also as I said less liquid. So how should we be thinking about this now? Yeah first of all thanks for having me back on. You know 15 years ago we built a platform that connects financial advisors across America

with some of the greatest alternative asset managers. And we've been providing a bridge for those two communities to be able to invest, learn, and allocate to those strategies. And you're absolutely right. Alternative investments, just simply due to the fact that they are illiquid in many cases or have long duration liquidity don't fall they're not volatile like the equity markets are today. It's too early to tell you know in the

recent week or so what the impact will be on alts going forward but we have enough data going back to say the global financial crisis or COVID moments of stress in the market where you see that, you know, with every crisis does come an opportunity. And the ALTS managers that are on our platform that we've been speaking with have a lot of dry powder and they're excited now to carefully see the new environment and deploy capital. I guess you know when you talk about private equity you know if you if you look at the stocks of many of those companies they haven't done well in this environment because people have had to change their expectations for realizations. The investor who wants a piece of the private equity pie says this is going to be a much better environment than the prior right for private equity realizations. Thus the stocks are gonna go up,

my investments in the private market is gonna do well and yet we're sitting on our hands waiting for stuff to happen. I mean, therein lies some of the issues that can exist. Right, for the few private equity or private credit firms that are actually public and investors have chosen to buy their equity. There is of course the volatility and you know market volatility affects all publicly traded companies but the fundamentals of these companies the

private equity firms and their underlying investments do have that stability and that benefit to a client portfolio that obviously allows for less correlation more diversification, and that's why what you're seeing in the individual investor world is a move away from that 60-40 portfolio to really the 50-30-20, 20 being alternative investments that get the benefit of that illiquidity premium and the lack of correlation. That's exactly what one of our guests from JP Morgan Asset Management said, but 15 minutes ago, 50-30-20 was, you know, maybe the new breakdown.

And maybe this was the most stark reminder of what could happen with 60-40 when you have upset in the equity market and in the bond market at the same time. Let me ask you about private credit. One and a half trillion dollar asset class and fast growing, obviously. I read, you know, earlier as I was preparing for this that some are suggesting that this moment could be the first

very big test for private credit since it really started exploding as an asset class, just given where we are. The uncertainty around the economy and what a downturn could mean for private credit assets. What do you think? Look, I think there's a lot of conversation around the size of the private credit market.

I'm not sure why that is necessarily, but that seems to be a topic that keeps coming up. On a relative basis, it's not that large. It has grown quickly, but private credit and private credit managers are at the top of the capital stack, and they're insured by all the equity in the company. In a market like this, I think that's where I'd like to be. I think that's where you'd like to be. So we monitor the private credit managers on our platform very closely. Paulo Aries, others, and I will tell you that

speaking with their CEOs, their confidence levels right now that to look at the dry powder that they have, re-underwrite their pipeline and start deploying after this volatility or market disruption, that the confidence is quite high. I can tell you why there's so much focus on the number because it's just like there's so much focus on it's not

like 450 on the 10-year is some unsustainable level it's the rate of change in part that so many assets have flown into into private credit that it's taken it from an asset class that a lot of people had never heard of that's right to where it's available and open to the kinds of investors who never had access to it. Therefore, the level of assets just continues to grow larger, so there remains an even bigger focus on it. And then you see Blackstone's announcement today

with Wellington actually creating product to combine private credit with traditional assets in the actual same vehicle to be able to reach investors and give them the diversification and hopefully that illiquidity premium bump inside their traditional portfolio. So there's a lot of creativity in product structuring as well. Should we just invest in sports as the ultimate alternative asset class? I mean, you know, I'm joking, but it's like the one area, especially if you invest in the

highest of the high quality asset, where it seems to only go one way now that I've jinxed it. But you know the point. Well, the point's clear. You know, I think that just to rewind the clock, sports were not an asset class or sports media and entertainment were not an asset class that were accessible broadly, especially sports. I mean, it was really the last few years where a few firms pioneered with the leagues to open up for institutional capital to even take out some of the owners or diversify their holdings. It's an uncorrelated asset.

It has a great compounding return effect that's proven. And in in markets like this it feels pretty good to own a few sports assets. Also it's a rare asset. I mean how many sports teams are there out there? Sure. Well that's the scarcity value obviously that has you know certainly played a huge role in why valuations continue to go up and to the right. Thanks for being here. It's a good check up on alternatives and we'll see at your conference in the fall. Thanks Scott. Take care. It's Matt Brown. Case. All right. Up next, we're tracking the biggest movers as we head into the close back to Christina, who is standing by for that.

Thanks, Scott. Well, we have a beauty giant facing a brutal double downgrade while a power shift rocks the luxury world. the stock she's watching. Tell us what you see. Well, let's stick with retail, Scott. A shifting of the guard in European luxury today. Hermes has overtaken LVMH as Europe's most valuable luxury company by market cap. The parent company behind Louis Vuitton, Tiffany and Sephora saw shares tumble after reporting

an unexpected drop in first quarter sales because he shares down almost 8% right now. Also, a rough day for beauty giant Kodi as Bank of America delivered a rare double downgrade slashing their price target to $4.50 and issuing a cell rating on the company. Analysts point to declining market share and weaker consumer spending as key concerns behind the move. That's why shares are down almost 9%, Scott. All right, Christina, thanks. Christina Partzaneval is coming up.

We run you through what to watch for when United Airlines reports in OT just after this All right. Coming up next, a rundown of key earnings we are watching in OT. The market zone. United Airlines reporting at OT today. Phil LeBeau tells us what to expect plus CNBC senior markets correspondent Bob Pizzani here to break down these final moments of the trading day. Phil, we begin with you and I think Ed Bastin and Delta probably front ran this from a sentiment standpoint. So we'll hear from Kirby and United. Yeah, and it's all about what are they seeing right now and what are they expecting.

Look, the first quarter, you never want to say it doesn't matter, but it really doesn't because that's not what the investors are going to be focused on. So when we get the numbers in a few minutes, a couple of things. Yes, the earnings estimate is 76 cents a share. Whether they come above that or below that, that's really not going to drive the sentiment on the stock. It's do they lower guidance? Remember, Delta pulled their guidance for the full year. And what's happening in terms of bookings? How strong are they right now?

All of the airlines, if you look at the airline index, Scott, they've been under pressure, even before Delta last week said, we're pulling our guidance for all of 2025. So, did you take a look at United? Remember, we get the numbers in a little bit, and we're really going to be focused on that guidance, not just for the second quarter,

but more importantly, for the rest of this year. And then tomorrow morning on Squawk Box, we talk to CEO Scott Gerbe. Forward to that interview, Phil. Thank you. That's Phil LeBeau. Bob Pizzani, as I said, is here, our senior markets correspondent. So this is what a calm market actually feels like.

I almost forgot. You had it right at the top. Calm is good. It's essentially a few days of up and now we're flatlining. And that's for very good reason because there's still not a compelling reason to own the market so what's good today smallest intraday swings we've seen since all this craziness started on April 3rd we had better earnings out of the bank group that's a good sign the VIX is below 30 again that's good yeah first time since

since April 3rd yields have been down the dollars up a little bit all this is a good sign here look at the VIX little bit. All this is a good sign here. Look at the VIX there below 30 there. That's a good sign here. The volumes today, Scott, dramatically lower. I mean, 50% below what it was just a few days ago, even for some of the big ETFs like the S&P 500 ETFs. You had the best interview of the day, Debrav Golakos at JP Morgan. And there's a man I greatly respect who basically threw his hands up and said, don't even ask me what earnings are going to be like in 2025.

You saw he came on with you telling me he reduced his numbers on the S&P. He went down to 5,200 I think the number was. He reduced his earnings estimate, but when you pressed him correctly, where are we going? He said, we just don't know. And he changed the subject saying, let's talk about 2026.

Now you're in trouble. You're the first three months of the year we've got nine months to go and he's changing the subject to 2026 there's a man I respect and that's a sign of how clueless a man like like the bravo Lacos basically saying I have no real idea what's going on I thought that was a very honest interview on his part today and a sign of how difficult it's going to be for the rest of the year. Thank you very much. We'll be glad, obviously, to have kept you to the muscle.

And as you said, a much calmer market today. I'll see you on the other side in the overtime.