Closing Bell - Closing Bell Overtime 11/15/22

Episode Date: November 15, 2022

A fast-paced look at the after-hours moves and late-breaking news live from the New York Stock Exchange. Closing Bell Overtime drills down into stocks and sectors, interviews some of the world’s most influential investors and gets you ready for the next day’s action. ===

Sarah, thank you very much and welcome everybody to Overtime. I'm Scott Wapner. You just heard the bells were just getting started from post nine here at the New York Stock Exchange. In just a little bit, I'll speak to Bitcoin Uber bull Anthony Pompliano, the man they call Pomp, on the FTX fallout and whether the crypto crash has any chance of reversing anytime soon. We're also watching reports of course from Europe about those Russian rockets landing in Poland. Stocks unsettled on those breaking headlines. All of it only underscoring the risks that still lie within this market. And that is where we begin with our talk of the tape. Does this bounce have room to run? Let's ask Joe Terranova, Virtus Investment Partners chief market strategist right here on set with me. Good PPI, yields down, dollar down, stocks up until we got that headline out of Europe. A little geopolitical angst bumping up against what is really right now a peak inflation trade and the pricing in, Scott, of 50 basis points on December 14th. I think that's what the market has done here since last Thursday's inflation report. So the mood is different for the market, right?

The mood is no longer trying to focus on a breakdown in the mega caps, the cryptocurrency contagion, a headline like today, what Treasury yields are doing and building up short positions. It's actually the reverse. The mood right now is thinking, let's unwind some of the short positioning, whether it's in the Chinese equities, some of the non-profitable consumer discretionary and technology names. Let's focus on the fact that a 10-year treasury is at 379, its lowest level since October. And, oh, let's point up towards that 200-day moving average. It seems to be gravity at 4076 because I think the mood of the market believes we can get there. Still can't get a close above 4000. I mean, that's pretty decent resistance for the time being. You need to you need to get some momentum over that if you can reach some of these more lofty levels that some say we can between now and the end of the year.

You need real buy in. you need a broad-based rally, not so much this handoff where one day it's materials and energy, financials and industrials leading the market higher while the mega caps sit on the bench. Technology sits on the bench. Are we going to get that broad-based buy-in? That's why we're sitting right now at $39.91 because we really haven't had that broad-based buy-in where technology, consumer discretionary, consumer services, they're up the equivalent of a lot of those value-oriented sectors. But some say you don't need those stocks, the mega caps, to participate.

I mean, you've made the counterargument, but I hear plenty say, no, you don't need it. There's money going into other areas of the market. This trade is not going to be favored for a while. It's all about value. Buy the cyclicals. Don't buy these stocks. You've heard it, too, because the chorus is growing louder. The reason that I'm doing this 30-plus years is I know my limitations.

I rely on statistics. Statistically, the market needs the participation of Apple, of Microsoft, of Alphabet, of Tesla, of the mega caps. There has to be good behavior on the part of those companies for there to be a broad based rally. Well, why does it have to be broad enough that those stocks participate as long as the others pick up the slack? Because unfortunately, the market right now is fickle. The market right now is on or off. The market is one or the other. The market is binary. And if we're making a binary decision on such statistically important equity names, then you're never going to be able to build the type of momentum that is going to take this market aggressively. I use that

word aggressively, aggressively to the upside. Well, I mean, I'm thinking of 4,100 even on the S&P. You don't necessarily need Apple and Microsoft and Alphabet and Amazon to take you to 4,100. But what happens thereafter? That's what the problem is. Because if you tell me that the market goes to 4,100 and we fail, that does not look good technically on the charts. Well, where do you think we're going? You failed to break out above the 200-day moving average. The market needs to get above 4,100 and follow through. And I'm not asking the market to follow through over the following weeks or certainly month,

but the market needs to over the coming quarter or the coming quarter and a half, the market needs to be 4,300, 4,350 thereafter. Need to have a sustained breakout through a significant price point being the 200-day moving average. All right. So Krinsky today, BTIG, Jonathan Krinsky was with us yesterday. People are chasing this strength. We'd fade that enthusiasm. That's what he said. You agree with that? Why is he wrong? I wouldn't chase the strength in high beta, non-profitable companies, which is what's happening right now. Kevin Gordon yesterday said the same thing from Schwab. I'd fade it. I'm not buying Chinese equities right now. I'm not buying Roblox. I know Roblox is down in the mid-30s. I'm not buying Peloton. I'm not buying Roblox. I know Roblox is down in the mid-30s. I'm not buying Peloton.

I'm not buying non-profitable companies. I'm not just going to step out and assume that risk in this environment because I don't know what's coming economically. I understand that we're going to price in 50 basis points from the Federal Reserve. And then what? What happens thereafter? So I still want to focus on owning the quality companies within the market. And you can find them. The popular trade right now is find me the double bottom. Do you know what I mean by that?

The double bottom is a June low and an October low. Home Depot, which was added recently to Joe T. Great earnings report today. OK, resiliency, strong sales, strong margin. But the best the best identifying metric that gives me confidence about the stock, 264 low in June. We attempt to break it in September, 265 low. Now you've got that double bottom formation. Find me stocks like that, I'll own them. But see, I'm not talking about those once high-flying tech stocks that you referenced before that. I'm thinking of things like the chips, for example, have risen a lot in a very, very short period of time. Those are the ones that I'm thinking, is it time to fade

those names? Moves that are so outsized in a reasonably short period of time against a backdrop that is still challenged. Great. That's a great question because you had this universal rally. You could have just bought the SMH. I think Josh bought the SMH. I think he bought the SMH. He did really well. You had this universal exposure to the semis over the last several weeks. I don't think we're in that place anymore.

I think now you have to tactically mine for which companies, which companies have that lower beta exposure, which companies have a better balance sheet. I can tell you within Jyoti, we own Avago, we own KLA Corp, we own Microchip, we own Texas Instruments. That's not owning names like NVIDIA and some of the other high-flying semiconductor names. I think that's going to be important moving forward. Outside of that, I mean, you bought Walmart today. I did. What's the statement there? Stepped right Outside of that, I mean, you bought Walmart today. I did.

What's the statement there? Stepped right back in again. Remember, it's a consumer staple. I looked at my portfolio. I had room for a consumer staple. I love this company. We all know over the last several years, you've done the halftime show with me. You know I've been in and out of Walmart.

May 16th, May 17th, horrible earnings. I liquidated it at $137 At that point, I got right out. Now, what do you have today? You have a company that's come back. They've cleaned up the inventories. They've cut them in half. They've got a nice buyback that I think is really something that investors need to focus on as you move forward. And I also think they're benefiting from the affluent consumer maybe looking for discount opportunities within their store. At Walmart. Yes, at Walmart. I think you're beginning to see a little bit of that. You just heard Brian Nickel with Sarah on Closing Bell talking about Chipotle. How resilient the affluent consumer is. Yeah, I'm always going to talk about

Chipotle. Well, because you own that stock. I just want to make sure our viewers know who he is, right? You can't just assume that everybody knows everybody. Well, everyone's watching Closing Bell. Yeah, but that doesn't mean they know who Brian Nicol is necessarily. Fair enough. Every single person. Let's expand the conversation. Let's bring in Erica Clower of Jenison Associates and Jessica Inskip of Options Place.

Good to have you both with us. Erica, I read the notes, and you sound pretty positive on the market, dare I say. Am I am I right or wrong? You are right. I mean, I think that's from Jenison's perspective. We do take a longer term perspective. But one of the things that I think impacts our thinking short term is that we've seen estimates come down so hard. And specifically looping back to your comments regarding the semiconductor sector, we've seen estimates come in very, very significantly, to which something like a micron. Estimates at the beginning of the year for 2023 were $10 in earnings per share. Now, they're about $1.75. So we've seen the estimates come in quite significantly. We've seen inventories

come down across the board of semiconductors. And at the same time, the secular drivers of demand appear to be very much in place. That is demand for personal computers and smartphones taking a backseat to applications such as data center, automotive applications and industrial. So, Jessica, how far does this rally legitimately go? Have we gone too much too soon? Is this make sense to you or not? Yeah. So I think there's this psychological aspect where the market likes to hang on to any anticipation of a less restrictive Fed. And I completely agree with Jyoti in the term, that 200 daily moving average around 40, 78 is something to watch and we can certainly head to. Seasonality is in our favor. There is just that

psychological aspect where we feel, yes, earnings revisions are coming down. There is better CPI data. It's not consistent data and it's certainly not showing us balance in the labor market, but these better earnings are going to fuel a stronger rally. So we'll see if it overcomes, but I'm only in the short term to the end of the year. I think post next CPI reading or when Powell tells us again, how restrictive he's going to be. And mind you, restrictive does still means he's how high for how long. So if he keeps interest rates higher for an elongated period of time, we don't have insight into that. So there are a lot of uncertain items that could cause the market to retract. Erica, weigh in on this question of tech. I think it is the debate within the market right now.

To what degree does the market, quote unquote, need tech to propel it higher. Does it or doesn't it? I think absolutely the market needs tech and I think it's going to get it. I think that the interesting thing that we're seeing right now is that it's not just the old wall personal computers and smartphones driving the technology market. In essence, every industry is a technology industry and the adoption of technology is still in very early phases. If we look, for example, at the number of cars that are automated, if we look at the number of cars that are electrical, if we look at the industrial applications of things like robotics or medical instrumentation, we're still very, very early days with regards to adoptions of

these key trends. Jessica, what about you? You've pitched innovative tech companies. Automation has been a key theme. Is that still where you want people to be? Still plays due to the imbalance in the labor market, but I think there's two answers to your question. So I agree with Erica. Yes, there is technology sprinkled across every sector and you can look for opportunities there. And it's increasingly more part of our everyday lives. But as far as the broader markets are concerned, Apple and Microsoft are a huge component of the S&P 500. So in order to see a broad, that's a narrow rally, really. But in order to have levels supported,

you also have to see those very specific powerhouses uphold the market because they have the ability to do the inverse. Let's talk about one of those powerhouses, at least one time powerhouse NVIDIA, right? Earnings tomorrow. Hugely important. Given where the SMH, as we said already, has come from and how much this stock got hammered down. I think it's so critical because of PC demand. We already know that's not good, though. How about if it gets a little better?

How about if you begin to see... All of a sudden? Well, the possibility is that that could occur. And if you begin to see a little bit of that green shoot within the semiconductor industry, that builds more of the positive momentum. I still believe semiconductors were kind of first into this process of valuations resetting. They're going to be the first out. And I think we're seeing that. I think they're coming out of

it. NVIDIA can provide a little bit of future glimpse into an improving environment. Whether or not we get it, I don't know, but I think that's what you look for tomorrow. What's the likelihood? I mean, what's the probability of getting it? That seems to me like slim and none. They're all of a sudden going to say that the PC market that everybody else has dumped on is good? I would say the probability is just as good as the commanders beating the Eagles before the game was played last night. Whatever, dude. I don't know about that. I mean, we'll see what happens with that. Erica, how about that? NVIDIA, how high should our hopes be? I think that NVIDIA is, in order to invest in NVIDIA, I think you really have to have a longer

term perspective. At Genesyn, we've been involved with the name for many, many years now. And we have ridden with the company through this adjustment period. And we've seen this before. But I wanted to make one critical point with regards to the PC market. I think going forward, we may be pleasantly surprised by the PC market because the state work-from-home market, I think, is going to turn out to be a lot more sticky than it has in the past. So the demand for replacement PCs and or laptops, I think, will end up being stronger over a multi-year period from here. But as it relates to NVIDIA, I think the critical thing to remember is that the biggest driver of the stock, in my opinion, is the data center. And that market has, the data points thus far have been quite constructive throughout

2022. It's been a market that's been mostly insulated from some of the macro factors as companies like Facebook and Amazon commit to their data center spending. So as long as that market remains intact, I think we will see NVIDIA continue to work higher because I think most of the analysts have de-risked their estimates with regards to the gaming market. Specifically, you've seen that estimates for 2023 have come in from $6.50, $7 to around $4 to reflect that PC weakness and specifically the demand from the consumer for game cards, as well as cryptocurrency. So if we can pass the hurdle on the data center market,

I think that longer term, our view at Genesyn is that we're going to see the stock continue to move higher. Last word to Joe. I still believe that to build the momentum, you have to have the evolution of a positive story within the semiconductor industry. You'll potentially get that tomorrow night. All right. We'll see. Joe, thank you. Erica, Jessica, thanks to you as well. Let's get to our Twitter question of the day. We want to know if today's PPI print gives an all clear for stocks into the end of the year. You can head to at CNBC Overtime on Twitter. Cast your vote. We'll share the results coming up a little later on in the show, in which we're just getting started here in overtime.

Up next, new developments in the stunning collapse of FTX. The fallout sending shockwaves across the entire crypto complex. Anthony Pompliano, the man they call Pomp. He's one of the biggest crypto bulls out there. His first reaction to FTX is shocking downfall. And later, more on those breaking headlines out of Europe. The market's on edge following reports of Russian missiles landing in that NATO country. We'll bring you the latest on what we know at this hour, what it means for the market.

We'll do it next. We're back in overtime. The fallout from the FTX collapse continues to reverberate in markets. And now there's word that another crypto player might be in trouble. Few investors over the past couple of years have celebrated Bitcoin's rise like Anthony Pompliano, better known as Pomp. From frequent appearances on this very network to a popular podcast, he's been spreading the gospel far and wide. He is with us now, as you can see, for his first TV interview since the FTX story broke. Welcome. It's good to have you in overtime, Anthony. Absolutely. Thanks so much

for having me. Yeah. What is your reaction to what happened with FTX? Yeah, listen, I think there's one major theme. Everyone is shocked and they're shocked because most of the narrative over the last couple of years has been major players are shunning regulation. They don't want to engage in the United States. They want to run and hide in other jurisdictions. And I think part of why this is so shocking is this was a player that not only was regulated in some regard, some of their entities, but also was engaging in Washington and with regulators. And so I think that that just led to a bigger and bigger surprise. One other thing that I want to call out also is there's an individual, Ian Allison at Coindesk, who actually broke part of this story with one

of the balance sheets. And I think that it's important that this wasn't the mainstream media, this wasn't some of the critics, this was actually somebody within the crypto ecosystem who works at a crypto media company who did this. And so I think that's another interesting point as well. What was your relationship, if any, with FTX? Did you have money with them? We had a business that had some money with them. We have a number of funds and different entities that were either investors, LPs that had money on the platforms. I've got a business where they had an

advertising relationship with FTX US. And so, you know, this was a major play, the second largest crypto exchange in the world. And to see this happen, I think, again, it's just pretty shocking. Yeah. What's the status of whatever money you had with them, the advertising relationship you had? Do you do you have any idea or what the status of it is now? I think that most people are all sitting there saying, what's going on, right? And that's unfortunate because there's so many great things that are happening in this industry. And we can touch on some of those advancements. But I think right now, everyone is kind of operating with the same amount of information, which is what they're reading on Twitter. And that's unfortunate. There's a lot of people who are upset, who are mad,

who frankly don't know what to do. And hopefully that that gets cleared up quickly. We can get some more information. But right now, I think there's just a lot of people who are saying, I don't have any information. I don't know what's going on. I mean, you're pretty well connected in the crypto world. Have you spoken with Sam Bankman-Fried? I've not spoken with Sam. I don't think many people have spoken with Sam. I think that Sam is obviously dealing with a lot of stuff right now. And frankly, the conversations in private of many people in this industry are saying, I think, three things. One, this is shocking. Two, they are very surprised at how well some of the assets are holding up, given the second largest crypto exchange in the world just imploded and had to file for bankruptcy. And then the third thing is there's a lot of people wondering what's next, right?

Does this chill institutional interest? How will this actually affect retail interest? What is going to happen to some of the technologies that people were very excited about? What will the results be for other infrastructure players, both the regulated and unregulated players? There's a lot of open questions that I think are important to talk through. But ultimately, I think that the industry is coming together and saying to themselves like, this is a big moment. It's a negative moment. But ultimately, they still have deep conviction that Bitcoin is going to end up

continuing to thrive in the future. You tweeted last night. I'm going to quote from it. I know many of you are mad, upset, hurt and confused. I am sorry. Unfortunately, I don't have more information on what to do. I have Bitcoin locked on platforms as well. This sucks. There's no hiding that. You say I am sorry. What are you sorry for? Yeah, I think that every single person in this industry right now is sorry that anyone is suffering, right? Part of the beauty of Bitcoin specifically is that Bitcoin is going to usher in a better future. That's the promise of the technology. It is going to restore the ability to maintain your purchasing power over long periods of times. It is going to bring economic empowerment to billions of people around the world.

Now, of course, as we have seen many times in this industry, there are ups and downs. There are things that people try, right? In many cases in the past, the implosions or the failures that we've seen have just been people experimenting where it didn't work. This seems to be something else. I think we'll get more information on that over time. I don't know if we can call that yet, but obviously that would be an important detail. And so sorry is just in general. When you see people suffering, you don't want to see that.

These are many people that I know very well, people who have worked hard, who have tried to build that future that they want to see. And, you know, already I think people were having a lot of pain or experiencing a lot of pain. If you look across the last year, Bitcoin's down 75%. Now, there's a lot of stocks that are down significantly as well. Facebook's down 65%. Nvidia, Amazon, they're down 45%, right? So just the Federal Reserve has said they are going to destroy demand. They've done an excellent job of destroying investment demand. And it looks like they're starting to get inflation under control to some degree as well. But to have an entire year where it's basically been down only for asset prices across markets to then have this kind of big moment, it just hurts, right? People want to go back to having the good times. They want to see that

future ushered in. And ultimately, I think that we need to have these moments because it does create resilience. But but it still sucks when you go through it. at the outset on this network from the beginning, on your own podcast and in other media forums, pushing Bitcoin relentlessly as a store of value, as the kind of asset that seems to be far from maybe what it actually was, at least at this particular time. How would you respond to that sort of criticism? Well, you guys have had Warren Buffett and Charlie Munger and paraded him around the network as these great investors, which they absolutely are. They're some of the best investors that have lived during our lifetime. But if you go back to the beginning of the pandemic, when Bitcoiners were calling out saying the undisciplined monetary and fiscal policy was going to debase the dollar, inflation would not be transitory, and Bitcoin would be an asset that

you would want to fly to to look for safety. If you go and you look, Bitcoin has outperformed Berkshire Hathaway. It's outperformed most assets, right? It's up almost 100% during this period of absolute insane, undisciplined monetary and fiscal policy. And so, yes, it is down 75% over the last year. But Bitcoiners also continue to just hammer the same point over and over and over again. Dollar cost average, long-term hold into a finite asset where demand will

increase because the debasement of currencies and what we have seen is that continues to play out. And so what I always tell people is don't listen to what I'm saying. Just simply watch what I'm doing. And I've been buying multiple times this year as the price has been falling. I continue to dollar cost average. I continue to have very high conviction in this asset. And just as I used to come on this show in 2018 and say, I believe that Bitcoin over a long period of time will outperform a lot of other assets. I still believe that today. And I'm putting my money where my mouth is.

And time will tell. I know you are. You are. But isn't it dangerous to suggest that others put money where your mouth is and time will tell you. I know you are. You are. But isn't it dangerous to suggest that others put money where your mouth is, given what's happened to go from, you know, 60 plus thousand to where we are today? And you mentioned Munger and Buffett, by the way. Munger, who has called crypto rat poison in the past, said just this morning that crypto is, quote, rife with fraud and delusion of crypto itself. He said, quote, the country did not need a currency

that was good for kidnappers. Carl Icahn the other day told me it's lawless like the Wild West. Those guys were pilloried, especially Munger and Buffett, by people like you when they made those initial statements. Doesn't this bear out that they're right? No, I think there's two things here. First is, if we're going to talk about just pure performance, Shopify and DoorDash are down 75 to 90 percent, right? They're stocks, literally just tech stocks that are openly talked about on financial networks that are down more than Bitcoin. So if Bitcoin is so great, are we now going to argue that Shopify is not valuable, that it's over? No, of course not. So I think that that's just an argument that doesn't really have

any legs. In terms of Charlie Munger, as I've said over and over and over again, they do not understand the technology. To confuse Bitcoin and crypto, one, is a false comparison. The second thing is that the U.S. dollar is used more for money laundering or criminal activity than Bitcoin. The former CIA director came out with a study to show that, right? And so as you go through the arguments, I get it, right? People want to have the headline grabbing kind of anti-Bitcoin statements. They want to have the critiques. But as you continue to look at the technology, this is a decentralized peer-to-peer network that has a great track record of protecting purchasing power over long periods of time. And Bitcoiners are trying to usher back in timeless investing principles.

Warren Buffett and Charlie Munger, buy great assets, hold them forever. That is a Bitcoin principle. Dollar cost average into great assets. That is a Bitcoin principle. And so I believe that if Warren Buffett and Charlie Munger were 25 to 35 years old today, they'd be Bitcoiners. The difference, though, is they didn't have the opportunity to allow for decentralized software-based money to come along to store their assets. Bitcoin has outperformed their investments over the last decade, and it has continued to during this period of undisciplined monetary

and fiscal policy. And I believe that they will continue to hate on Bitcoin. They will continue to say things that show they don't understand it. The problem is, is if you want to do and you make the analogy to various stocks, you can do a fundamental analysis on a company's projected earning power over a set period of years, decide what the correct valuation is to pay for that future growth. You can't do any of that in crypto. You can't do any of that with Bitcoin. You can be a believer in blockchain technology and still think that crypto is a highly speculative asset based on next to nothing? Well, again, I don't believe that to be true, right? So I would say two things. One is you can definitely do a fundamental analysis. Take hash rate as an example. Bitcoin is the most

secure computing network in the world. Hash rate's at an all-time high. Price is down 75% and hash rate keeps climbing. There's a dislocation between price and fundamentals. 67% of the Bitcoin that is in circulation right now today has not moved in 12 months. The price of Bitcoin fell 75% and 67% of the Bitcoin didn't move. We are watching the greatest battle of 2022 where it is Bitcoiners and the hodlers versus the macro environment. And I'm willing to bet, and I am betting, that the Bitcoiners will outlast the macro tightening financial conditions. And ultimately, the Federal Reserve and other central banks around the world will have to return to loose monetary and fiscal policy. And what we will see is that the hodlers will still be hodling. They will still be Bitcoining. And ultimately, the people who do not understand the technology will continue to hate on it.

But Bitcoin doesn't care. It produces block after block after block of transactions. And it is the only monetary policy in the world over the last three years that did not change. We have such a thing. I reference it. Forgive me for interrupting you, but there's a report and I reference this at the top of the segment here about another crypto related entity that may be in trouble. Wall Street Journal reporting that BlockFi is preparing for a potential bankruptcy. I watched a clip before we did this interview in which you called it a, quote, rocket ship.

Get on board. You said, I am bullish, bullish, bullish. I mean, isn't that part of the problem? Don't you have any regrets whatsoever for making statements like that and perhaps putting people who are less experienced than you into some of these assets? Yeah, I mean, Scott, you can take anything out of context. I've literally recorded twelve hundred podcast episodes, right? You can go back and find all kinds of crazy stuff. But the context you're talking about was I was an investor want to take that and somehow spin it or pull it out of context, I think is inappropriate. Instead, what I think we should be talking about is the fact that we have businesses in the United States who now are suffering at the hands of what appears to be a potential fraud. Again, we will get those details. But now, as those businesses are suffering, we have funds,

we have different centralized infrastructure companies. This all happened in the United States, which supposedly we were yelling and screaming about people who are running around trying to avoid regulation. We need to get our act together in the United States because this technology is not going away. This is not one of the. This is not about pointing fingers. This is this is not about pointing fingers. This is not about that. I think it's mostly about understanding the power that you have with as many Twitter followers as you have, with the captivating voice and articulate way that you describe this asset in an environment that grew to be highly speculative. You don't think that you have the power to influence people to get into certain areas of the market

that maybe they shouldn't be in? You don't think that's a fair question to ask? You can ask whatever questions you want. Scott, CNBC is the most powerful financial network in the world and people critique CNBC for pumping Bitcoin. I don't see anyone on CNBC apologizing for that. You talk about an asset. Just because somebody criticizes you for something doesn't mean they're right.

And so if you're going to argue that CNBC is not as powerful as me with a single Twitter account, that's insane. And so ultimately, there's no difference between any of the media platforms, right? I have a media platform. It happens to be under my name. You have a media platform. There's plenty of people. You've been talking about Bitcoin all day. At the end of the day, people will critique the assets. But the Bitcoiner mantra, dollar cost average, hold a great asset forever. Those are timeless investing principles that Warren Buffett, Charlie Munger there are other companies and stocks and assets that go up and down in price. This is how markets work.

And so no, I don't think that CNBC should be criticized for talking about an asset. You have people who come on who like it. You have people who come on that don't like it. I have people who talk about it positively. I have people who talk about it negatively. That is where the conversation lies. And rather than simply going around

and trying to yell and scream at each other in the bad times, what I think we should do is we should encourage more conversation. We should have conversations like this where people who like the asset, who don't like the asset, come together, they discuss it, and then ultimately the free market will decide what happens. I have a view. I'm expressing that in the market, and we'll see what happens. Okay. It is undeniable that confidence in this asset class has taken a tremendous hit. I don't agree with that. You don't think confidence has taken a hit? Really?

67% of Bitcoin. Don't listen to anything anyone says. 67% of Bitcoin in circulation has not moved. It's an all-time high. It's never been higher. Bitcoiners are holding. They are not selling this asset. That's what the mainstream media does not understand. Bitcoiners do not care about the price. And you can see it in the data. It's all on chain.

Anyone in the world can evaluate it. They probably bought it higher and they're not selling it. So they're holding on, in your words, for dear life because they're believers still. They don't want to believe that their investment is not coming back. I mean, that's not true either, because wallet addresses on chain with point one and point oh one Bitcoin. This is literally hundreds to a couple thousand dollars. The number of wallet addresses on chain continues to hit all time highs.

The people, not institutions, not nation states, the people continue to buy Bitcoin. It is available for anyone in the world to audit on chain data. That people continue to buy Bitcoin. It is available for anyone in the world to audit on-chain data. That is the beauty of Bitcoin. This is not up for opinion. It's not up for debate. There is hard data that you can go on. You can look at yourself. 67% of Bitcoin is not being sold. And the number of wallets on-chain that continue to dollar cost average into this asset is going up. It's hitting all-time highs. You don't think that institutions are going to more closely scrutinize the investments that they make in this space after the FTX blow up? You really don't believe that? You don't think

the average investor is going to sit at home and think maybe crypto isn't what I thought it was? I'm afraid of losing all my money despite what Anthony Pompliano suggests I might want to do. Well, Scott, see, you're conflating two things. You're conflating the centralized equity investments with Bitcoin, which is a decentralized currency. I'm talking about the confidence in the space itself. I'm talking about the confidence, which has clearly taken a hit. How couldn't it? When an individual like Sam Bankman-Fried has his fortune literally blow up overnight, when one of the largest crypto exchanges in the world blows up overnight and fortunes are lost, small fortunes by people who can't afford to lose it are lost,

you don't think that there's going to be more scrutiny on the kinds of investments that are made both by individuals and institutions in the future? And you don't think it's relevant to discuss what restores that confidence in what is still a fledgling asset class with next to no regulations whatsoever? Well, I never said that

there wasn't going to be more scrutiny. I absolutely believe that. I've tweeted that publicly. The second thing is it is regulated. You have to stop saying that. This industry is regulated in the United States. If you run a centralized exchange, you have to go get approvals from regulators. The regulators are doing the best job that they possibly can to continue to have oversight here. Saying it's unregulated in the United States is just false. That is inaccurate information. There are places in the world where it is not as regulated as in the United States. The actors in the United States of America want to do three things. They want to build great companies that solve problems for customers. They want to be regulated in a way

where they feel like they can operate their business and also adhere to whatever rules the regulators believe are accurate. And the third thing that they want to do is that they want to create economic opportunities. That is what capitalism is about. That is what this country was built on. It is what the American dream is all about. And if there's obviously not regulated enough, even the biggest players in the business suggest that it needs more regulation. Bernie Madoff was regulated. Of course, if bad people are going to do bad things, duh, of course.

But the regulations only work if people are telling the truth. If the auditors go in and they audit, and in this case, there's accusations that somebody created a backdoor to change the numbers so the auditors couldn't tell. Ultimately, bad people do bad things, but that doesn't mean it's not regulated, right? That's not what that means. And the big players aren't saying bring on more regulation. What they're saying instead is, hey, we understand where the rules are. We need to get this right. In the United States of America, we cannot create rules that push people outside the U.S. We have to do this here in the U.S. The U.S. has the best capital market system in the world, and it is the shining light on the hill. If we want to continue to do

that, especially in this industry, we have to have rules that make sense. We have to do it so that people can actually operate their businesses within it. And what you will find is there is great appetite in the operators and entrepreneurs to work with regulators to create that environment. And I think actually regulators and the entrepreneurs want that together. They're working as hard as they can on it. But to say that there is not regulation in the United States is just flat out false. We're going to leave it there. Anthony, I appreciate your time so very much. We will pick up the conversation at another moment. Yep, that's Anthony Pompliano joining us there here in overtime. Coming up, Carnival making a big move lower in overtime. Let's get to Seema Modi with the details. Seema. Shares of Carnival, Scott, are moving lower here

after the company announcing plans to raise more debt, commencing a private offering of a billion dollars. This is a convertible senior note due 2027 that the company says will be used to refinance debt. Now, shares are moving down about 11 percent after a pretty nice run over the past month on this notion that a reacceleration in travel, a rebound in bookings would reduce the chances of Carnival having to raise more debt, and it could actually strengthen its balance sheet. Reach out to the company for more clarity, but the stock, again, moving 10 percent lower on news that the company plans to raise more debt.

Scott? All right, Seema, appreciate that very much. Up next, more on those reports of Russian missiles landing in Poland and what growing geopolitical risk might mean for the markets and your money. The Financial Times' Raina Faruhar joins us to weigh in on what she calls the new economic landing in Poland and what growing geopolitical risk might mean for the markets and your money. The Financial Times' Raina Faruhar joins us to weigh in on what she calls the new economic order. Overtime's back in two. All right, welcome back. We're following breaking news out of Poland today.

Reports of Russian missiles landing in that NATO country. Contessa Brewer has the very latest for us. Contessa? Scott, Polish officials say their president, Duda, is speaking to President Biden on the phone. Polish officials say they are assessing whether they need to consult with other countries under Article 4 of its treaty with NATO. And Poland confirms it is ramping up its military readiness. A government spokesperson said after top leaders just finished an emergency meeting, they say two Polish citizens died in an explosion. NBC News still cannot confirm reports by the Associated Press that two Russian missiles landed in Poland, killing two people. A senior administration official says something hit Poland, but it's unclear what it was or whether it was indeed a Russian weapon.

The State Department calls the reports incredibly concerning and says right now they are being investigated. We have seen these reports out of Poland and are working with the Polish government and our NATO partners to gather more information. We can't confirm the reports or any of the details at this time. Russia's defense ministry denies reports that Russian missiles hit Polish territory, and a number of NATO nations are now voicing support for Poland with officials vowing they will help their NATO ally defend its territory. It is an ongoing situation here, Scott. We've got tabs on it. All right. Good stuff. Contessa, thank you. That's Contessa Brewer. For more on this developing story, let's bring in Rana Foroohar.

She is a global business columnist and associate editor at The Financial Times and a global economic analyst at CNN. She's also the author of a new book titled Homecoming, The Path to Prosperity in a Post-Global World. It's good to see you again. Welcome. Great to see you. So you make the argument that markets are going to be much more sensitive to geopolitical issues than ever before, as we're learning once again today. Oh, 100%. You can see that in all the headlines. You know, we've come from really decades of having the Fed managing everything, cheap money, cheap labor coming from Asia and cheap energy. A lot of it was going from Russia into Europe. All that's going away now, right? The Fed has changed directions.

China says it wants to be a dual circulation economy. That means it wants to keep more of its supply at home, not be the factory of the world, be more regional. And war in Ukraine means cheap energy is over. So everything in our paradigm is changing. You sort of go to the idea that we're going to witness and maybe we're seeing the early stages of a new economic order. Yeah, no, absolutely. I think that you're going to see not globalization circa, you know, 1992. You're going to see a kind of a regionalization where the U.S. is going to have its orbit. And you can see that, I think, in stocks already. I mean, big tech stocks, which are the ultimate in global stocks, right,

have been correcting, whereas you're seeing mid-sized industrials doing better. That means people are looking for CapEx to be poured into making things in America. Europe's going its own direction. China's going to have its own supply chains. We're here thinking about inflation and the impact on the markets. And what you said, you know, the era of cheap money, cheap energy, cheap labor is over. You're describing almost inflationary environment that's here to stay in some respects. Well, I think that that's probably true.

And that's kind of the rub for politicians, right? You know, this idea of made in America, make America great again. It sounds good, except what that means really is a lot of capex, bringing supply home, paying labor more. I mean, I think ultimately this is going to create more resiliency in our economy and it's going to take us to a better place. But in the short term, there's no question it's going to be inflationary. It's like this movement of almost trying to go back to how things used to be. I sort of spin that to what these headlines coming out of Russia are and the point of Putin's war to begin, begin, make Russia great again, right, bring the Soviet Union back together.

It sort of speaks to the same kinds of themes that you're talking about in your book and how it relates to markets, you know, globally, the way we need to think about it. Well, you know, you're hitting something. You're hitting the downside of something that also, I think, has a more positive side, which is that, you know, we left everything to the market in the last 50 years. And the truth is that countries have different political economies. They have different values. And we thought that, you know, free trade was going to make everybody more like us. Well, you know, China is not becoming more like us. China has its own system that works for China. Europe has different ideas of its own. The U.S. has its own system. I think that that's OK. I think more regionalization

is actually going to be OK. Of course, you know, it's also going to come with some bumps. The world is not flat. Who's going to have a lastly, who's going to have more of a say in the the economic order, if you will, going forward, us or China? Wow, what a great question. You know, I think there's a lot of arrogance often in the U.S. We think we're pulling all the levers. China said in 2015 that it wanted to decouple from U.S. technology. That was a year before Trump came into office and Lighthizer pulled up the scrim. And, you know, I think that China is going to be a very powerful actor on the world stage. And I think we're just beginning to see that.

Love the conversation. Congrats on the book. Thank you. Thanks for being here. Great to see you. That's Rana Foroohar joining us now. Still ahead, seeking safety. One top portfolio manager making the case for small caps into year end.

He breaks down that strategy just ahead. We're back in overtime. Small caps have been on a tear over the past month. Our next guest calling them, quote, the asset class to buy in a recession. Really? Joining me now at Post, well, joining me here at the New York Stock Exchange, Sebastian Page, CIO and global head of multi-asset at T. Rowe Price. It's good to see you. Welcome.

Thank you. Thanks for having me. Interesting call. Buy small caps before you go into a recession. Aren't they the things that lead you in? You know, I think now is the time to be selectively contrarian. I'm OK having cash as a buffer in the portfolio, but we're overweighting small caps. The valuation case is really good. We all know the price earnings ratio is 12. That's close to a 20-year low. Really widespread relative to large cap. But also the macro is good because

small caps are less exposed to a strong dollar. And yes, you want to be early in buying. If you have a year, 18-month horizon, now's a good time to start leaning in. The gloom and doom narrative has run far enough as far as small caps are concerned. Even if we are, I don't know, six months away from a recession, it's not too early to buy them now? That's okay. I mean, I will say this, if we get a recession, I put the probabilities about 50%. This is going to be the most anticipated recession of all time look i think stocks generally are fairly expensive but this spread between small and large caps is quite attractive and by the way small caps their earnings have grown a bit faster than large caps over the last 12 months and we've

had a bear market right small caps have actually outperformed by about 500 basis points to large caps over the last 12 months. So they're already showing resilience. Again, think 12, 18 months ahead. You build some optionality in the portfolio. There's so much gloom and doom. We're getting close to a buy risk moment. We're already starting selectively. I call it being selectively contrarian with small caps. I mean, you're still underweight stocks. Let's be clear. We are underweight stocks. We're invested.

I think it always helps to stay invested when you navigate transitions like this one. This, Scott, is a critical time in capital markets history. And we're going through a regime shift. So you want to stay invested. But we are underweight stocks, neutral on bonds, on treasuries. And you want to stay invested. But we are on the way to stocks neutral on bonds, on treasuries. And we have the cash buffer. I don't think the buy risk moment is here yet. We're just starting selectively, not just small caps. We're looking at high yield and we're looking at value stocks as well. Lastly, this rally, how much further can it go, do you think?

I think this is temporary. You know, it's very hard to time the bottom no one should really try to time the bottom but we could revisit some lows and the issue is that right now markets are getting excited about two good prints on inflation but if you step back and think about it it's like look we've had two good prints relative to expectations. A wise man once told me, Scott, the secret to happiness in life is to lower your expectations. Well, now we have 7.7 percent CPI inflation and that turns to be good news. I think inflation is going to be sticky. The Fed's going to have a tough job.

Housing, education, transportation, strong employment is going to be tough. And it's a treacherous road ahead. All right, Sebastian, thanks for the time. Thank you. We'll talk to you soon, Sebastian Page. Up next, Santoli's last word. The Twitter question, we asked if today's PPI print gives an all clear for stocks for the rest of the year. Most of you saying no.

58.3 percent. Let's get to Mike Santoli for his last word. Once again, I would say 41 percent of people saying it's an all clear is significant. That's a good number. I mean, obviously, I don't think there is an all clear. That's the whole thing. We all know that. But the weight of the evidence is building up on the right side of things. If you're bullish for the rest of the year, I think just because maybe you can get some faith in the downtrend in inflation, but also, you know, semiconductors showing some life, credit markets are tame. You know, a lot of the background noise is calmed down a little bit in this market. So we'll see how much oomph it has. I also think it's pretty significant. Crypto is doing what crypto is doing.

You know, you see massive distress in that area. There's tremendous paper losses that have been absorbed at this point. Anyway, we think it's paper losses. And so far, the overall market is managing to hang in there a little bit. Maybe it sells you how marginal the activity was in the first place. But I think it was a material risk that that was actually going to bring up for sure down with it. I wonder if we'll see any selling into the strength in those certain pockets. Like you said, the chips, for example, have rallied so much. Maybe NVIDIA tomorrow, by the way, earnings here in overtime precipitates that move one way or the other. It's like further belief in it or throws water on it. Up 33 percent, I think, off the low, the semiconductor index. It's actually maybe got a better run at its August highs than the overall market does, which is surprising

considering how bad things got. So there's a hope trade involved in all this. But I don't think it's necessarily just on nothing. It's basically on trying to anticipate the fact that we have a firming economy at the same time. we think maybe the Fed can take its foot off the brake just a little bit. Yeah, like as Leisman said, right, these two inflation reports give the Fed the opportunity to start the clock. That's right. Start the clock on what's next. And when you already have gotten to the place where you've priced in higher than 5% on the Fed funds, which we did coming into this month, It doesn't take that much to back off of that a little bit. So who knows?

We'll see if we build up the calluses. These sessions are always interesting. I appreciate it. We'll see you tomorrow. That's Mike Santoli, who's going to be back here tomorrow with his last word. I, of course, will see you there. We do have those earnings fast monies now.