Closing Bell - Closing Bell: Make It or Break It Week 4/8/24

Episode Date: April 8, 2024

Can stocks continue to rise if bond yields do as well? Anastasia Amoroso from iCapital, Steve Liesman and JP Morgan Asset Management’s Jordan Jackson discuss. Plus, billionaire investor Marc Lasry breaks down where he sees opportunity right now and what he thinks the Fed’s next move could be. And, Google’s cloud conference kicks off tomorrow. We discuss what’s at stake for the company’s AI strategy – and the stock. 

All right, 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 a make-it-or-break-it week for the rally. As rates continue to rise, stocks remain unsettled, never mind earnings, which are about to begin as well. We'll ask our experts over this final stretch what is really at stake this week, including the billionaire investor Mark Lazzari. He'll join me in just a few. In the meantime, your scorecard with 60 minutes to go and regulation looks like this. The story really continues to be about that backup in yields. Take a look. 442 is where we currently stand on the 10-year. Well, that's putting pressure on the major averages today. No real conviction

either way for the Dow S&P and NAS. Big week gets going. It's going to be a big one. There's your look at the major averages now. Yes, we are green across the board, not decidedly so, but we'll take it given what's happening with yields, PPI, CPI, earnings all in the days ahead. We are watching tech as always, meta and Amazon, a couple of bright spots today, both hitting new highs today. Meta then turning negative. It's down about 1%. Amazon is still in the green. It takes us to our talk of the tape, whether stocks can continue to rise if bond yields do as well. Let's ask Anastasia Amoroso, iCapital's chief investment strategist, with me here at Post 9. It's good to see you. Good to see you, Scott.

That is the key question, right? If rates continue to back up, are stocks going to go down? Well, so far, so good for stocks, even though bond yields are rising. And of course, the reason for that is that bond yields are rising because growth is improving as well. And yes, there's also an improvement or deterioration, I should say, in inflation expectations. But for now, because you have better earnings expectations, we can shake that off. So I think if the moves are somewhat contained here, I think we're fine despite the backup. But obviously, if you have anything closer to a breakout to 480, I think we would have to worry about. OK, so you agree with what Tony Pasquarello of Goldman Sachs was talking about in his new note, where he says he asked this question, which I think is the most relevant question of any right

now. When do higher rates begin to bite? And he suggests a move towards 480 is where things could get tricky. Yeah, I think the move right now has been more about the pickup in economic growth. It has been about stronger payrolls. It has been about stronger manufacturing and therefore the Fed pushing back the rate cut expectations. But to the extent that the move starts being driven by inflation expectations. So, of course, we've got CPI on Wednesday. And if that's a surprise and that continues to reprice inflation expectations higher, I think that's where it becomes dangerous for stocks. Are you still optimistic about the overall direction for the market and the economy? Jamie Dimon's out talking

in his letter about sort of we have this foregone conclusion almost the markets do that it's going to be a soft landing where he says markets are pricing in 70 to 80 percent chance of that. I believe he says, quote, the odds are a lot lower than that. I'm still in the soft landing camp, but I actually think that the last several weeks or months of data has really reinvigorated the no landing camp. And so we wrote this piece last week about an uptick in manufacturing. I actually think that's a really big story for the rest of the year is we're starting to see an uptick in the U.S., China, global manufacturing, new orders component is improving. But I think we're early innings of what is typically a nine-month uptick in manufacturing.

So if that's the case, then you could have a lot of cyclical momentum that develops in the economy. And, Scott, this used to be a one-engine economy with the U.S. consumer really supporting the globe and supporting all the industries. But now if that browns out and you can have industrials and materials and energy participate. I think that's what gives me confidence on the economic front. Do we need rate cuts or not? If we need them, how soon do we need them? Maybe not. Maybe not for the broader market. And that's really the question that we had to ask ourselves last week is, you know, can

the market still be OK without the rate cuts? I think the answer is yes, because, of course, Scott, I look to the earnings picture and earnings for the S&P expected to be up about 11%. We're looking at the earnings revisions, and the net earnings revisions have flipped into positive territory. And I suspect as the year progresses and if we're right on manufacturing, we'll see the cyclical earnings uptick as well. So if that's the case, then maybe you don't actually need rate cuts,

especially if the consumer is able to function with that. The caveat that I would have to that is not everybody needs a rate cut except if you're an interest rate sensitive sector. So if you're in real estate, if you're in housing, if you're an unprofitable tech, I think it does get painful. If your stock happens to be in the Russell, you probably need a rate cut. Yeah. And this is an interesting part of the story because typically when manufacturing picks up, when you have the cyclical momentum, you have small caps that typically outperform the S&P

by five percentage points, except for I don't want to make the call on small caps right now when because 40 percent of small cap exposure to debt is actually floating rate. So if the Fed doesn't cut rates, you know, the leverage does still become prohibited for these small caps. So square this for me, because, you know, in, let's say, late October, right at the bottom, before we started this incredible rally and we set new records for stocks, we did that, one would think, on the expectation and the anticipation and the discounting of future rate cuts. OK, the economy was good. Here we are and we're saying, well, never mind that. We can still go up and we don't even need the rate cuts that we thought we needed,

that we thought sent this rally into motion in the first place. How do we square that? So you almost had this perfect relay race because you're right. In October, we were expecting rate cuts and that's what's going to support the economy eventually. But instead, what happened is the economy was able to find enough momentum to actually start to re-accelerate. You look at the city surprise index, if you look at any surprise index, you see that, well, if you look at Atlanta GDP now, close to 3%, consensus going into the year was about 1% GDP growth. So that's what happened is I think the consensus

realizes maybe we don't need the rate cuts if it's growth that's able to support us here. Interesting. Steve Leisman, our senior economics correspondent, has been on this very question throughout the day. And Steve, I think you called it a hawkish tilt as you sort of looked at the current makeup of the Fed speakers who matter most in the days prior and who are starting to maybe lean towards being a little more hawkish. I should say, though, as I ask you that not exactly the Fed chair. And that's important. No, I think the Fed chair still is sort of in the middle, usually gauging his committee, guides his committee. I think what's happened, Scott, is first the dots leaned hawkish and then the rhetoric leaned hawkish. And I think that what

we're hearing is the reflection of this movement of the dots essentially to the right. You had people give up the idea that maybe you would do more than three cuts and then you just barely hung on to the median of three cuts in the dot. And you also had people move up their sense of where neutral is. And now the rhetoric's come along with that, which, you know, you kind of in this in this environment, Scott, you start to think about a hawk as somebody who thinks maybe more more probability on the idea of no cuts or just one cut, more concern about the recent inflation numbers, whereas Powell still seems to be holding out hope that, you know, or holding on to the forecast that essentially says that inflation will come down. But there's folks like Neil Kashkari there who's saying, you know what, maybe we don't need to cut it all. Chris Waller says, you know what, let's hang out at a higher

rate for longer. And then Michelle Bowman, Lori Logan talking a lot about the potential upside risk to inflation. And there's Bostic, who you know on our air not too long ago. Scott talked about the idea of one cut in the fourth quarter. I mean, but oh, how far we've come, though, right? If we if we are declaring that a hawk now as part of the Fed is a one or maybe none, that's a long way from where we were before, because I think our greatest worry and maybe it still is in the in the backdrop of, well, what if we have to do another hike? And I don't hear that entering into the debate at all, at least now.

Well, Bowman is the one person who talks regularly about the idea that if inflation does not behave, the Fed could reverse course. It has a low probability in our Fed surveys. But you're looking right now, Scott, at the Fed rate cut probabilities. And you know what 50 percent is. Well, in some in some places, it's just a toss of a coin. So right now, we're even money on the idea of cutting rates at all in June. July slipping a little bit. And then if you look at the January 2025 Fed funds contract, which, as you know, is the measure of the market's gauge of how many cuts all year. And you'll see we're trading, you know, at 2.7, 2.6, 25 basis points cuts with the 0.6 there. So there's 471 almost

at the high. If you went back on this chart to September or October, that's when it was around 480, which is where they think the rate cuts will be. So that would be 50 or 60 basis points of cuts if we got that high. So, yeah, it's slipping away right now. I just want to add to what Anastasia was saying, 100 percent right looking at the CPI. But as you know, over the last several months, the PPI has become almost equally important to the CPI because what fills in and tells us about the PCE, the Fed's preferred inflation indicator. And you know what, Scott,

you're out of excuses. If you've been excusing the data for January and February, you don't have those excuses for March. So this is really I don't know if you want to call it the rubber match or the telltale sign or the benchmark, whatever word you want to use. It's the one that matters. That's why we've been calling this, and we did at the top of our program today. Yes, it's the make it or break it hour, but also what is likely to make it or break it week in some respects for this rally. You stay with me, Steve. Do you think, Anastasia, are we underestimating or not listening closely enough to the rising volume of the more hawkish members now

on the Federal Reserve Board? I think we should be paying close attention because one thing that really caught my attention last week was when Loretta Mester is really talking about the balance of risks and saying the risks are now such that it might be riskier to cut too soon versus to cut too late. So that's something we have to pay attention to. The other thing she said is that we really need to see more convincing evidence that disinflation is still the trend and that it has not flipped. So I think that does set up some risk going into Wednesday. You know, to Steve's point, we have been seeing an uptick in ISM prices paid, for example.

And yes, we have this goods deflation, but are we now going to the next several months where we can have an uptick in goods inflation? So the Fed is going to pay attention to that. And my answer to that is I don't think it derails the whole disinflation story because goods represent about 12 percent of the CPI. Energy is about another 7 percent. But given the hawkish rhetoric from the Fed, I could see the markets being concerned about it. The other thing, too, Steve, I would assume is that the Fed doesn't want to see rates back up too much and put it in a more difficult spot. I think that's right. I want to just add one thing to what Anastasia was saying and what I had said earlier.

I don't think that I don't know, rogue's list of Fed mugshots we put up there, I don't feel like these are ideological hawks. I feel like this is their read of the data. And I feel like if you go back and look at the history of these folks, they have been dovish when it came to cutting rates to zero. So I don't feel like we're dealing with, you remember before we'd had what felt like ideological hawks on the Fed. Kosh Kari is as bad was as dovish as as you would find anywhere in the world. Excellent point. And I think what you know, this is just Neil's read of the data right now. His sense of where we are. I don't feel like it is it is it is core.

He's a hawk who wants to keep rates higher than they need to be. And in answer to the question at the end you had earlier about do we need a cut? Well, yeah. If rates are higher than they need to be, then it would be nice and I think effective and useful to reduce them. If indeed you're putting too much restraint on the economy. Look, if the economy wants to run and doing so would not be inflationary, then by all means, let's let it go. I hear you. Love your insight as always, Steve. Thank you. Steve Leisman, our senior economics correspondent. Let's bring in Jordan Jackson now of J.P. Morgan Asset Management into the conversation.

It's good to see you as well. Welcome. I'm going to ask you the question that Pasquarello is asking people. When do higher rates begin to bite? What would your answer be to that? I think when we start flirting with around 5%, that's when you'll start to see rates really begin to bite. But, look, I've been arguing since the beginning of the year that we're probably going to see 4.5% on the U.S. 10-year before we get down to 4%. You know, as has been talked about on the show already, June, July, pretty much a coin flip on where they go again. If the markets continue to skew towards one to two cuts and fully price in two cuts or one and a half cuts, you'll probably see the 10-year hit four and a half percent. That being said, so long as the narrative is still around cutting rates and not hiking rates,

I think the market can continue to grind higher. Okay, so Jordan, you've got a day today when you've got Chris Harvey over at Wells Fargo. He bumps his target on the S&P to 55.35. Now, in fairness, I mean, it was 46.25, so he had to move it up, but he also had the choice not to move it up that much. He did not do that. Adam Parker, frequent guest on this program, gives three reasons for the resilience of the rally in which he says accommodative Fed.

Right. That's to your point. Gross margin expansion and earnings growth for several years. Remember, we're coming off of three consecutive periods of bad earnings. We expect the tide to turn this quarter. That's exactly right. And when you look over, this has really been a micro market, right? The market is now caring about earnings. We've seen earnings be the driving component of stock price appreciation this year, not so much valuations. And then I think when you look underneath the hood, right, obviously last year, if you teased out the MAG-7 earnings growth, earnings were negative for the rest of the market.

When you actually forecast out to the fourth quarter of this year, so fourth quarter 2024 over fourth quarter 2023, obviously, you know, comps are going to be a bit favorable. But the rest of the market is expecting about earnings growth of around 15% by the time you hit to the fourth quarter, whereas, again, the MAG-7, or let's call them the Fab Five, so to speak, are actually going to be converging down to that number. So I think this is an earnings backdrop in which earnings are playing catch up, which is really important and, again, very, very supportive for stocks in this environment. So, Anastasia, earnings

expectations have come in as time has gone on, right? We're 10 percent growth for this quarter. Now we're looking for four to five. Are we going to be that good? And if we're just that good, is that okay? Yeah, well, I think the bar has been reset lower. And I actually do like that going into the earnings season. You know, first of all, you're right. Several weeks ago, we were looking at 5% earnings growth expected for this quarter. Now, as you mentioned, it's closer to three. But the other thing that's really interesting is the number of negative pre-announcements going into the quarter is really above the five or 10 year average. So I like the fact that the bar has been reset. What I also like to go back to the manufacturing stories, the reason I keep talking about it is because while it's only 20 percent of the GDP, it's 50

percent of earnings are tied to the goods and the manufacturing story. And so if we could have that uptick, if we could have the upwards earnings revisions, and we have sectors from industrials to materials to financials to energy begin to benefit from that. Well, they have already. I mean, the broadening of the market was legit, which started in March. The question, Jordan, is does the broadening story continue? And is it believable even in a market of backed up rates? I think it does. And the fact is, obviously, as we continue to move through the year, first quarter reporters, earnings reports are going to be important. Remember, markets are forward looking, right? So as we start to look ahead towards 2025, markets are still calling

for about 11 percent EPS growth this year, but tagging on an additional 13% EPS growth for 2025. So as you start to get into the forward PE next 12 months, 2025 earnings start to get more and more important. The fact that you're getting that broader breadth of positive earnings growth expectations feeding through into some of the 2025 numbers, that gives me support and confidence. So let me ask you this now, Anastasia, because I've just gotten a note passed to me or a section of a note from Marco Kalanovic, J.P. Morgan. OK, he's been broadly negative U.S. equities for as long as I can remember. OK, and I mean, tongue in cheek, but we're talking like at least a year. OK, so his new mention says that he sees opportunities in utilities. OK, and real estate.

It's notable. It's not like broad bullishness, but it's notable considering he has urged people for a while to stay away from U.S. equities. Well, I don't know. Are we finally getting some inklings of opportunity in places that we may not realize, like utilities, okay? You say, well, yields are backed up. Why would I want utilities? Because you're going to go the yield. But if you think yields are going to come down, then utilities are maybe a place to be. And then real estate, quote, is of interest, too. That's right. Well, the calling utilities doesn't scream bullish to me necessarily, because I think for utilities to do well, one of the things that would need to happen is yields need to be materially lower. But as we're just

talking about higher economic growth and also potentially higher inflation sort of goes the other way, you may make a case when it comes to utilities is that the demand for energy, the demand for the build out of the electricity grid and the demand for wind and solar that actually can bode well for some of those utilities. And if you get that coupled with lower yields, that's a positive story. Look, on real estate, Scott, I actually talked about this on your show, the Halftime Report, about that being one of the top contrarian trades for this year. If we get to the point where the Fed does actually cut interest rates, I think real estate is one of the top contrarian trades for this year. If we get to the point where the Fed does actually cut interest rates, I think real estate is one of the biggest beneficiary sectors.

And by the way, we were talking about the concerns about CPI, maybe not having the rate cuts, but the Fed actually looks at core PCE, which we get later in the month. If we do get a print that's below 2.8%, is inching towards 2.5%, I still do think the Fed does cut rates. If they do, real estate is that contrarian trade that you would want to add to. Jordan, lastly, you like utilities as well, along with energy, health care and staples. Last point to you.

Sure. It's generally maintaining a bit more defensive posture within portfolios relative to a cyclical one. Now, obviously, all that we've talked about, inflation potentially remaining a bit sticky, the Fed staying a little bit higher for longer, right? Growth, while still strong, taking a step down in the back half of the year. All that is supportive of a more defensive posture. Now, that's not to say we're not finding opportunities in the tech sector and parts of discretionary, but we think you've got to be very, very selective and really focus on quality within those more cyclically exposed. But yeah, I think leaning a little bit more defensive makes a whole lot of sense. And importantly, when you look at the

earnings stability, earnings expectations stability, you're seeing a lot more resilient earnings expectations amongst the defensive parts of the market relative to the cyclicals. All right. I appreciate it very much, the conversation. We'll see you soon. Jordan, thank you. Anastasia, of course, our thanks to you as well for being here at Post 9. Let's send it over to Steve Kovach now for a look at the biggest names moving into the close. Steve. Hey there, Scott. Yeah, let's start with TSMC shares at more than one and a half percent today after securing up to six point six billion dollars in financing from the U.S. government to make chips in this country. The money comes from the Chips and Science Act, of course, and so far,

Intel has been awarded the most money from the act, up to $8.5 billion. Meantime, shares of video game publisher Take-Two Interactive, they're up 2% after Citi analysts upgraded the stock from neutral to buy. Much of the expected growth is coming from the next grand threat auto game, which Take-Two announced would launch in 2025. The analysts here expect the new GTA to drive nearly $3 billion in bookings for Take-Two, Scott. We'll see you in a little bit. Steve Kovach, thank you very much.

We're just getting started here. Up next, billionaire investor Mark Lazzari of Avenue Capital is back with us. He's going to break down the Fed's next move, where he is finding the best opportunities in the markets right now and beyond. We are live from the New York Stock Exchange. You're watching Closing Bell on CNBC. Well, you've heard all about it. And there it is. Let's show it to you. There it is. That's a live shot from NASA of the total solar eclipse. It's happening right here in New York. Over the next hour, the eclipse will continue cutting diagonally across North America before exiting over eastern Canada into the Atlantic. It is the first solar eclipse to be visible in the U.S. since 2017.

It will last until 2044. You get your glasses? You're not outside. Mark Glasry is here with us as we keep an eye on the markets and the eclipse. Treasury yields hitting their highest levels of the year. Investors are awaiting key inflation data. You're not into the eclipse? No, not really. You're not investing in the eclipse? You're investing in everything else. Everything else is fine. The eclipse, I'm good with. All right. So we're talking a lot about rates and rate cuts, right? And the

calculus has obviously changed. What are your own expectations in terms of rate cuts? Do you think we're going to get any this year? How many and when? Look, I think you're going to have it. You know, the question is, is it one or two? I think it's closer to one. Right now, the Fed's in no rush. The economy is doing well. You're seeing that, as far as the Fed is concerned, things are fine. And until they start seeing that there's a problem, their biggest worry is still inflation. So there's no rush on them cutting rates. How have you sort of dialed back your own expectations of, let's say, six months ago, what you thought was going to happen? The market has come a long way from pricing in seven to three. And now we have people like you and others saying one or, hey, maybe, maybe none. So how have you reset your

own expectations over this period? I think for us, we don't really invest based on what's happening on rate cuts. Like where rates are is actually great, just simply because we're lending money around 12% to 15%. Still? Still. With this direct lending is still a... It's specialty lending. It's people who need money. And it's still a critical part of your investing strategy.

Yeah, it's continued. It's actually going extremely strong in Europe because there's more issues. Less here in the United States, but Europe and Asia, people need capital. It feels like it's more, that space I feel like has exploded almost more than any other. It has. There's so many players. Does that impact you at all? Is it more competitive? It is more competitive. That part has changed, but you got to remember the biggest competitor were banks, right? So that's who we were competing.

And their cost of capital was far, far lower than ours. So now if I'm competing against an Aries or an Apollo or anybody else, their cost of capital is roughly the same as mine, maybe a little bit lower. So you're still able to compete. And there's quite a bit to do for all of us. For me, we're just trying to do smaller deals because you're not going to have as much competition. Are there are there any concerns about too much of that activity in preparation for you coming on? I saw an IMF blog. OK, it said private credit warranted a closer watch. They called it opaque with limited

oversight and vulnerabilities. What would your response to that be? Well, I think what ends up happening is regulators want to know everything, right? And I don't blame them because the more they know, the more there's a belief they can protect the economy. Here, they don't know who we're lending money to, whereas they could go into a bank because the bank's regulated belief they can protect the economy. Here, they don't know who we're lending money to, whereas they could go into a bank because the bank's regulated and they know where the banks lend at what rate. So I think that's what the fear is or the concern is that when there's a problem, there's going to be less that a regulator can do because they've got less control over the economy.

Is that a legitimate concern? Honestly, at the end of the day, I don't think so. We're going to lend based on the fact that we think we're going to get our money back, plus our interest, right? We're not doing anything stupid. And I don't think any of the other firms are. I'm not thinking about you guys doing it. Of course, you're not doing anything stupid. But what if you're lending money to, you know, firms who ultimately, if they won't be able to pay the money back, if the economy turns south or if interest rates go much higher. I hope so. Then we'll get control of those companies.

That's why you always that's why you're always one step ahead. Lasry, you're always thinking about that. Do you think there's going to be more issues like that that are advantageous for you? I think there will be. I think as there is a lot of capital out there. There are issues with the economy. People say that the economy is doing great, and I think it is. But ultimately, at the end of the day, the cost of that capital has gone up for companies. So because of that, you're going to have more issues. The Fed's only going to lower rates when they see we're going into recession.

Right. So really, you think that you don't think that they'll just be able to do it because inflation is going to come closer to target. And we know they're going to cut before it gets there anyway. But if if inflation is level, why would you lower rates? And the economy is doing strong. You're not going to lower rates unless there's an issue. Well, you could lower rates so that you're going to people like people like Mark Lassner. We don't get to take advantage of all of these distressed opportunities

that might be caused if they left rates too high for too long. That's true, but the Fed is never early, right? They're always late, and that's going to be the problem. So I think for us and others, you're going to have all these opportunities. Will you make of what Jamie Dimon had to say in his letter? It's been much talked about today, and in case you didn't see it, he said, markets seem to be pricing in a 70% to 80 percent chance of a soft landing. I believe the odds are a lot lower than that. What do you think? Look, I don't like betting against Jamie.

He sees a ton of data, right? He sees everything he's got. He's lending money. I think Jamie's probably right. But at the end of the day, I'd love to have the information that he has, you know, from the seat that he's at. We just you know, we don't see things as much or as well as he can just simply because we're not lending to as many people. We don't have all the consumer information that he has from sort of all the credit card info. So Jamie's got a pretty good seat. And I think he's done a really good job over the last couple of years. He said interest rates could soar to 8 percent or more in coming years, that they're prepared for a broad range of outcomes. Does that sound outlandish to you? I think that's hard. I think the only way rates really move up is if inflation really all of a, the Fed hasn't been able to get that in control.

And you'd have to raise rates. But by doing that, you're talking about a real recession in this country. You know, the biggest problem people have is if you think about it, to buy a home, the cost of that has gone up. A lot. Yes, 100% in the last year. That's why people don't feel the economy is doing that great. For you and I, the economy is great because it has the stock market's gone up. All the things we're doing

have worked out. But if you're an average consumer, your cost of goods has gone up 25 percent and your cost of home housing has gone up 100 percent and your cost of fuel has gone up 25, 50 percent. Those are real things for the average American. That's why it's an issue. And that's why you've got this disconnect between people thinking the economy is doing well and people thinking, no, actually, it hasn't. It's not doing well and it's worse for me. You think that's been hurting President Biden, whom I believe you're still supporting, because, I mean, you hit on a good point. We can sit here and say that, well, inflation has come down from 9% to 2.7% or 3% or what have you. Prices haven't come down.

So the rate of prices going up has slowed. The price of milk and eggs hasn't come down. So people are still going to the grocery store or wherever and still paying what they were paying before. So what? The rate of inflation. All right. So the prices have stopped going up as much as they were. I think that's the disconnect. I think that's the problem. That's what's hurting Biden,

because ultimately the only thing people care about is do they have a place to live? That's gone up. The cost of that, you can't afford it. Cost of food has gone up and the cost of heating has gone up. So that's not good. Yes, the stock market has gone up 20%, and that's great if you've got money to invest in the market. But if you don't and you're just making ends meet, you've got issues. Are you going to be giving the president or the campaign any advice this go-around? I tell them what I tell you. You do? You're in dialogue with them?

You're in dialogue with the folks that are within the campaign. You are now. I am, but a lot of other people are. I think that's the issue that the campaign's got to deal with. Let me ask you about another opportunity, a big one that I know you see, and that's through sports. We talked the last time you were here, and it's gotten a lot of press, this sports fund that I think you're continuing to raise, correct? That's correct. So you've invested in bull riding?

Yes. Why that? I know about pickleball, which was public already. We talked about that. But bull riding now? Yeah, because what we're trying to do is find sports that people three or five years ago were not looking at. And today they are. So right now you've got the average NBA games, about a million and a half.

Do you know what an average pick an average bull riding on CBS Sports is? It's over a million Americans. So you're what we're looking for is sports that are growing and that there's opportunities to do. It's one of the reasons we invested in the PGA. You know, it's things where we could invest that we think media rights are going to keep going up, but also that you've got more and more people who are interested and want to watch that. Okay, so you're part of the strategic sports group. Yes. That made a big investment in the PGA. Where are we on the talks between PGA and Live as you're now starting to get the Rory McIlroys of the world and other big names who are suggesting we need to figure this out quick because it's becoming an issue.

It's becoming a distraction. Are we any closer to a resolution? I think there's been talks going on. I think it's better than it was three months ago. I think they're moving forward. The question is, will they be able to cut a deal? Obviously, I hope they do. Just like I would say Tiger, Rory, or anybody who's involved wants to end up having a resolution of this because it's better for the game. Can you speak to what the, you know, what's the major sticking point at this point and how involved are you in the actual conversations? Shockingly, it's money. But I'm not involved really in the negotiations. And that's because that's going on directly, I think, with the folks at the PGA and PIF. Okay. It's great to visit with you.

It's always good. It's been a minute. It's great to see you. Yeah. Good to have your insights as always. Mark Lazary, Favenu, joining us here on Post 9. Up next, Google's cloud conference is kicking off tomorrow. So what could this event reveal about the tech giant's AI strategy going forward? We will discuss that and what's at stake for that stock just after the break. Closing bells coming right back. Welcome back. Shares of Alphabet up 1.5 percent. There's the stock today and that's ahead of its Google cloud conference tomorrow. Bank of America out with a note this morning saying that event could boost AI sentiment on the stock. And I suppose that is much needed. Deirdre Bosa joins us now.

So how important, Dee, is this event tomorrow? You know, with all the narrative where it's gone over the last, I don't know, seems like forever at this point, they need a boost. It's like musical chairs, right? And that's why these events are so important, because it's a chance for each of the mega caps, whether that's Google, whether that's Microsoft, whether that's going to be Apple at WWDC, to really tell investors and developers and customers how they are going to give them an edge in generative AI. So Google's event, the stakes are really high. It has to have a really consistent, clear message, because when we think about the last 12 to 18 months how google

has been talking about generative ai it's kind of been all over the place right we started with bard we had duet now we finally have gemini and it feels like everything is going to fall under gemini but in the same way that microsoft has used copilot as the name for its family of ai generative ai tools google's going to have to do the same thing with Gemini. And it has an advantage here because a lot of Google applications are cloud native, right? Like workspace.

So it can get a leg up once again, but it's going to have to do it in a way that is convincing, that is clear, that shows off sort of they're pioneering in this space, right? I keep coming back to that, Scott. Google was here before anyone else,

yet somehow over the last 12 to 18 months, their position has been in question. It has. It's so interesting because it's not as though, Dee, and you know this, of course, it's not as though the stock has so dramatically underperformed, let's say Microsoft, for example,

even though the narrative would have you believe that this company's AI ambitions have been all but left for dead. Yeah. And part of that is when you come out with sort of a new product, a new chatbot like a Gemini and chat GPT have these issues as well. There's going to be issues because users are going to go on and try and trip it up, too. So Google most recently announced its Gemini, you know, layers of generative AI chatbots. And they had a few stumbles, like its image generating product. They had to suspend it because it was going a little bit too politically correct. So they have a lot to make up for here. One of the things that investors should listen for are options, right? And you hear about these investments. Google and Amazon

both have been pouring billions of dollars into an AI darling like an anthropic. And that is in order to bring it into sort of their cloud platform and tell developers and customers that we have so many different tools. We have so many different foundational models. The choice is yours as you're building. And whatever your ambition is with generative AI, this cloud infrastructure, whether that be Microsoft or Google or Amazon, has the right tools. So part of that race is just access to all the different foundational models. Yeah, no, your points are well taken. And, of course, they've had some self-inflicted wounds and very much so in this whole rollout process. We'll see how this goes tomorrow. Dee, thank you. Deirdre Bosa joining

us there on Alphabet. Up next, we're tracking the biggest movers into the close. Steve Kovac is back with us for that. Steve. Hey there, Scott. Yeah, we're going to tell you about one stock upgraded to buy after a big sell off last week and another rising on a futuristic transportation promise. Reveal those names when closing Belkin's back after this. All right, we're about 15 from the close. Back to Steve Kovach now for the stocks he's watching. Steve. Hey, Scott. Yeah, well, let's look at Ulta Beauty. It's up 2% or so today following an upgrade from buy to hold from the analysts over at Loop Capital. That follows last week's sell-off of the stock, which Loop's analyst says were, quote, overdone. They said sales comps for the company

will improve this year and there's a possibility of a cash dividend. Meantime, shares of Tesla, they're up nearly 5% today after CEO Elon Musk said he would reveal the company's robo-taxi at an event on August 8th. Tesla has not given a formal update on its robo-taxi plans since Musk promised a softer update would enable 1 million Tesla robo-taxis next year. That was almost five years ago, Scott. All right, Steve, I appreciate that. Steve Kovach coming up. GE, Vrnova popping in today's session. We're going to tell you what is sending that GE spinoff higher today and why there could be more upside ahead. Closing bells coming right back.

All right, coming up next, Bitcoin rallying again up nearly 4%, touching 72,000 earlier today. There it is, just shy of that level. The question is, can the momentum continue and how might it impact the rest of the crypto space? We will discuss that and more when we take you inside the Market Zone next. We're in the closing bell Market Zone now. CNBC Senior Markets Commentator Mike Santoli here to break down the crucial moments of this trading day. Plus, Seema Modi on J.P. Morgan's bullish GE Vernova call. MarketsO now. CBC Senior Markets Commentator Mike Santoli here to break down the crucial moments of this trading day. Plus, Seema Modi on JPMorgan's bullish GE Vrnova call.

And Kay Rooney on Coinbase rallying as Bitcoin tops 72,000 today. Mike, turn to you first. Looks like we touched negative on the Dow. We've gone negative on the SPY as well. We have. And we really are waiting and seeing. I mean, sometimes we say we're waiting and seeing. We genuinely are for the inflation numbers. Some things might have changed, sort of technical, maybe just the shadings of the characteristics of this rally last week with a little more of a pullback,

with the idea, by the way, we haven't made a new high in a week and a half. That's the longest stretch since January when we first made it. Oh, the nerve of this market. Exactly. That's the point. It's kept to such high standards of just how relentless the rally has to be. That said, the fact that oil traded soft today and the volatility index down three quarters of a point suggested to me we were somewhat tensed up for potential geopolitical escalation over the weekend. We didn't get it. Now it's just inflation. Fed's on a sole mandate right now. And that's what we have to worry about. Yeah. I like Pasquarello. I mentioned a couple times today asking, when do rates take a bite?

I think every investor is is thinking along the same lines. And I don't know if everybody's coming up with the same answer that it needs to get the 10 year, for example, to four eight. I think if you still get a little bit of a backup above four or five, you're going to say you at least have a reflex back away type of an instinct. I think at that level,.8 is one full percentage point above the recent low. So I think if the velocity does matter, as everybody says, I also don't think it's worth reminding people. In mid 2022, we thought three was the number. In late 2022, market couldn't handle three and a half. Last year, it was four. So over time, if the economy hangs in there and

shows it's not fully sensitive to it and it's not blasting higher in yield like it was last fall, we're probably OK. But I do think we're testing right now the tolerance for for slightly higher rates near four. And maybe we needed it to just a bit of a reality check. Sima Modi watching GE Vrnova today. What do we know? Well, Scott, since GE Vernova spun out of GE about a week ago, we've seen the stock fall by around 8 percent. That may be due to existing shareholders saying, hey, I want more exposure to aerospace versus the energy story. Either way, J.P. Morgan this morning saying this is a buying opportunity, upgrading the stock to overweight with a price target of one hundred and forty one dollars, referencing the strength in GE Vernova's

electrification business. They say this business can outperform as data center electricity demand increases. There's just more demand, Scott, for these companies that operate in managing the grid as power scarcity becomes an issue. So that seems to be what's driving this upgrade. And you're seeing shares up about 6 percent. The next big driver for the stock, analysts are saying, is going to be earnings on April 25th. All right. We'll look forward to that. Seema, thank you very much. Seema Modi on GE. Ivanova to Kate Rooney now on Coinbase. I guess we shouldn't be surprised that Coinbase is rallying if Bitcoin is. Yeah, exactly, Scott. As goes Bitcoin, so goes Coinbase and the rest

of those crypto stocks. But for Bitcoin in particular, the rally really started over the weekend. It picked up some steam during early trading in Asia, topped $72,000 today. We have seen strong demand really since January when that group of Bitcoin ETFs launched. Analysts over at Glassnode estimate an average of $79 billion when it comes to inflows per month this year. There is also some investor excitement around something called the halving, which is coming up later in April that cuts the newly created supply of Bitcoin in half. And among the risks out there, though, to Bitcoin, tax season might be one. Fundstrap points out a potential pullback if traders do need to cash out to pay Uncle Sam. Coinbase also higher on

the back of Bitcoin. Barclays upping its price target on that name by nearly 30 bucks today. Still underweight, though, and there has been some retail selling around Coinbase. According to Schwab's trading activity index today, Coinbase was one of the most sold names by individuals in the last month. You got MicroStrategy as well, the largest corporate holder of Bitcoin, higher today, too, Scott. All right. Appreciate that, Kate. Thank you. That's Kate Rooney. Back to Mike Santoli. You know, we haven't talked about earnings yet, and we're obviously kicking off with the banks. But this season is going to be interesting given the number of sectors that have done really well to start the year.

It's not just saying, hey, the bar is really high for tech. No, I mean, maybe the bar is really high for financials, up 11 percent on the year. Maybe it's really high for industrials, up 10 percent on the year and energy up 16. Yeah. And stock com services up 18 and tech as well. I do think especially for certain slices of industrials, which have really run and which are seen to be these now longer term second to growth stories. The bar is higher. What I did find interesting facts that says, you know, analysts always trim their estimates over the course of a quarter. They've done so again. It's now under 4% expected, three and a half, whatever it is. But they cut estimates less than is usual over the course of the three months. So that suggests that, you know, company guidance,

it's all getting filtered in. And it seems like we really are about to hopefully see that inflection where the majority of sectors start to participate in earnings growth. That said, even with that happening, the outside the MAG7, I think we're still talking flattish year over year earnings. So it's probably the second half of this year when a lot of that has to kick in. And we'll see if guidance with this reporting season starts to shed any light on that. I'm watching 6,200 even on the SEC. Yeah, we'll kind of stick in there for a little bit. See if we can close above that.

Looks like we'll stick there. Dow's going to go right to the flat line. I'll see you tomorrow. Into OC with Morgan.