Closing Bell - Closing Bell Overtime: 3/31/26

Episode Date: March 31, 2026

From the open to the close, “Closing Bell” and “Closing Bell: Overtime” have you covered. From what’s driving market moves to how investors are reacting, Scott Wapner, Melissa Lee and Michael Santoli guide listeners through each trading session and bring to you some of the biggest names in business. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The bell is bringing an end to the trading day at the NYSC Dimensional Fund Advisors, ringing the bell and at the NASAC, Royal Gold. Welcome to closing bell over time. Live from Studio B at the NASAC market site. I'm Melissa Lee along with Mike Santoli. Stock soaring today on reports Iran is open to ending the war. Closing near the highs, the Dow and the SB 500 up more than 2%. The NASAC up nearly 4%. Its biggest one-day game since May.

Our markets team is all over today's action. Christina Parts-Nevelas on stocks. Brian Sullivan on the somewhat muted move. in the price of oil. Rick Santelli is watching bonds. But let's begin with the very latest on a possible end to the Iran War. Amon Javers joins us from Washington with what we've heard and what we know, Amon. Yeah, a possible end might be going a little too far, Mike, but we do have this report from Axios, which is reporting that China and Pakistan are floating a new proposal to end the war in Iran. Essentially, it would be a ceasefire in exchange for safe passage in the Strait of Hormuz. Now,

Axios is citing a conversation with the foreign minister of Pakistan. for their reporting. The publication says President Trump declined to comment to them on the specifics. What he has said publicly is that negotiations are ongoing. And if Iran doesn't cut a deal that he likes by April 6th, he's going to bomb civilian infrastructure such as power plants. Now, the president took to social media this morning to hurl some criticism at American allies who he argues have been insufficiently supportive of the United States. Now, he wrote that France has been very unhelpful and warned that the USA will remember any road of the UK, I have a suggestion for you. Number one, buy from the U.S.

We have plenty. And number two, build up some delayed courage, go to the straight, and just take it. You'll have to start to learn to fight for yourself. The USA won't be there for you anymore, just like you weren't there for us. But what many countries appear to be doing here is cutting side deals to pay Iran for safe passage of their ships, creating a significant new revenue stream now for the Islamic Republic that did not exist before the war, guys. Back over to you. How about the reporting that sent stocks flying, you know, in the noon hour or so that they would be open, Iran would be open to an end to the war should it secure certain guarantees? Yeah, I mean, Iran has said that before, going back to last week, right? And what they've said

is they want sovereignty over the Strait of Hormuz. They want reparations and war payments for for damage from the United States. There's a whole set of conditions that Iran has. said would have to be met in order to end the war. So the idea that moved the market today that Iran is proposing conditions to end the war is something new is not quite right. You know, the question is whether Iran is more or less willing to get to a deal that doesn't involve some of their more extreme conditions like, say, sovereignty over the Strait of Hormuz, like reparations and war payments from the United States, which presumably would be non-starters with the Trump administration.

At the very least, Damon, we do have confirmation that the two sides are talking. I mean, if anybody was in doubt that these are ploys of some sort in terms of saying that they're talking or that they're offering this and that, they have exchanged messages, according to reports. Yeah, we don't know exactly how directly, right? We don't know if there are phone calls. We don't know certainly if there have been any face-to-face meetings, but we do see these signals being sent by both sides in public and through the Pakistani mediators that are floating these initial ideas. is it we're sort of at the same point we were last week where these ideas are being floated by both sides, but they're also ideas that are completely untenable for each side. So can China and Pakistan somehow break that now that we've got, you know,

all of Asia deeply concerned with the last arrivals of pre-war oil in Asia and shortages, you know, in the offing there? We'll see. Amen, thank you. Amon Javors in Washington for us. And even with this rally, Mike, we're at Thursday levels, basically. Obviously, you're coming out of a deep hole. And you can sort of see the sequencing of this to some degree.

We did close on the lows yesterday. You had these three failed rallies over three days. We closed pretty much at midsummer levels of last year. So the scene was set. I do think that just at the moment where the market stopped solely fixating on de-escalation, upside risk, you finally got a little bit of a hint. And it started overnight with the Wall Street Journal report that the president was willing to essentially declare victory without re-overimbing.

opening the street. So I do think that plus the fact it's quarter end. You did have new money flushing in. And I don't want to discount the possibility that, you know, we actually could be positioning for some kind of a cessation of hostilities. And oil did come down, even though not very well. So you had a lot of things fall into place in an oversold market. But to your point, not yet to Thursday's highs. And really it would have taken like a 5% gain from yesterday's close to even kind of break this pattern of a steep slide and get back to the 20-day moving average, which sometimes is where oversold rallies stall. And you mentioned the oil reaction.

I mean, I thought that, you know, the fact that the equity rally was not confirmed by other asset classes also didn't make any sense and sort of gave you the inkling that, you know, investors are in it. They're in this rally. And yet there is that hesitation. There is knowing that tomorrow could be a completely different head. The equity market is definitely a little more emotional and springload. Look, the VIX came in like four points.

That's something. That's not irrelevant. So I think, again, it's sort of like impressive without being decisive is the way I would characterize the rally. So for more on today's big market moves, let's bring you Christina Parks and Nevelas. Well, risk was back on the menu. You guys talked about it. And that really showed up in the stock leaders. The Meg 7 all finished higher by more than 2.5%.

Adding more than $750 billion in market cap value in just a single session. This highest line here, biggest gainer, was met up over 6%. InVIDIA, though, is the biggest boost to the NASDAQ 100. Point-wise, finishing above a key $170 technical level, and that really helped lift Marvell, too, after news that Invidia plans to invest $2 billion into Marvell and also allow Marvell to play a bigger role in Nvidia's AI system. That's why Marvell closed 12% higher.

The rally also spilled over to other AI and memory names. Sandusk Western Digital were among the day's better performers, though they're still lower on the week. We also saw a solid move back in momentum, growth, like Coinbase, micro strategy. They're seen as proxies. So really, this is the kind of the session where investors chase beta and ignore maybe the defensive corners of the market. Oil sensitive names join the move, airlines and cruise lines did rise on hopes for lower oil prices and as the market really kept looking for signs that the conflict could ease.

But on the flip side, the defenses we just talked about, they kind of lied. Costco, Pepsi, snack maker, Mondalese, all closed lowers. Money just rotated out of safety and back into those higher growth names that we started with, guys. Dr. What do you? Christina, thanks. Christina Parts Nevelas. We saw a big reaction in stocks to today's news, but less so in oil, as we were just talking about, down only slightly, but still above $100 a barrel. This is the national average for gas. It's $4 a gallon. Brian Sullivan joins us now. I mean, at the very, I don't know, do you think that we're going to go back to normal? It doesn't sound like many oil strategists believe that that is in the cards. Well, here's the

problem, and here's the difference between a stock and something you trade on paper, and you could trade those oil futures right there. But a physical barrel, Melissa and Mike, it rides on a ship that takes weeks or months to get back to whatever state you might call is normal. I think the oil market is going to be a little more sanguine, maybe a little more skeptical about some of these headlines in the equity market. You've also got a bunch of stuff I'm sure you'll get to in the show in the equity market, coiled spring valuations, all these things that when you have this kind of a headline, the equity market was ready to rip higher. The oil market, not the same thing. Again, we have to wait and see some kind of an outcome, and even then it's going to take days, weeks, or months for that change, whatever that change may be, to trickle through those markets.

So, yes, the price of oil coming down a little bit today, oil-related stocks down a little bit, but let's be clear, the price of oil still over $100 a barrel, which means it's more expensive now than it was two weeks ago, despite these headlines. And kind of layering on the back of what Eamon was talking about, Iran can say it once sovereignty, over the Strait of Hormuz. I don't care what Iran says. I've been to the Strait of Moos. It is in international waters. Oman controls half of it. Dubai controls part of it on the other side. Iran gets a couple miles off their coast. So Iran can say what it wants, but in no means can enforce sovereignty over that straight because it doesn't simply own it. Oman, Dubai and others will have something to say about that still slight upticking ships going through that channel. A lot of them, of course, are paying Iran right now. But until guys, that channel is fully open.

see the number of ships going through the Straitorhamoes and the Babel Mandeb straight going into the Red Sea until that number is back to where it was. The oil market will not be quote back to normal. The question is, how much is this price increase getting layer on to the bottom line of earnings for Exxon, Conoco, Chevron, and more. I did the numbers. 2021 to 2022, guys, when we saw the Russia-related spike, earnings for those three companies, rose on average 250% year over year, 2.50% year over year. We'll have to wait a couple weeks to get those numbers to see, but that's what the market had been betting on, at least until today. Well, let's say things even go back to normal. I mean, in terms of traffic through the

straight, I mean, there is still going to be, I would imagine, a new embedded higher risk premium associated with oil to transit through the straight, even if there is a, so-called ceasefire just because the risk is going to be higher going forward. And then, of course, you have the damage to the NAC gas fields, which is still going to cause shortages of things like helium and other aspects. That won't go back right away at all. Yeah, two different things. So natural gas, you are right.

The Qatar oil field called Ross LaFan. That's the name. Get to hear that name or get to know it. That could be down for five years. Okay, that's about 5% of total LNG supply in the world. Most of that is going to Asia. By the way, the increased prices for LNG is direct. directly benefited stocks like Venture Global, VG, Chenier, ticker, LNG, and some others. Exxon, by the way,

just very quietly, very quietly yesterday started supplying their Golden Pass project with Qatar Energy outside of Houston. That's a big one kind of to keep an eye on. But from oil, you're exactly right. Listen, what is normal? Is the new normal in oil? It was 60 to 65, before the war began, Melissa? Is that going back down to 60 or 65? Exactly, zero people. that I have talked to. Maybe you can find somebody. Zero people have talked to say that price is where we're going to be in a couple of months and that that new normal, maybe 80, 80 to five bucks, assuming we get some kind of resolution to this war. So the bottom line revenue, earnings, profitability, free cash flow will fall to these companies. The question is, how much? And did

the market overstate that amount in this huge bid up in some of these stocks we've had in the last couple of weeks. Yeah. So at least somewhat higher for somewhat longer is likely the good bet. We'll see how the stocks do respond to that idea. Brian, thank you. Bon Yields did move lower on all this news. Let's get to Rick Santelli in Chicago and actually extended a, I guess, pretty dramatic two or three day move, Rick. Absolutely. As a matter of fact, you and I run on Thursday, Mike, and we noticed the following chart, which I've added a few days to, that two-year yields stopped tracking oil and really the whole curve did, but two-year did first. That chart goes back to Thursday. It gave you definitely

an early sign because isn't that what it's all about? We know what oil's doing and Sully's right, but it's the rest of the markets. Now, if we look at this in a general way, mid-east market moves, the conflict moves, are reversing. Okay, let's look at two's and ten since the day before the conflict and realize those were cycle low yield closes the Friday before the conflict. What did yields do? They went up. What are they doing now? They're going down. Let's look at gold. Day before the conflict. What's gold been doing? Going down. What is it doing the last couple of days? It's going up. Dollar index. Day before the conflict, what is it doing? It's going up. We had a lot of closes above 100. I remember when we went below 100 last year. The press was just all over it.

Yes, now it's going down. These moves are reversing. Does that mean the conflict? The conflicts over and we're going back to normal? I don't know, but what I do know is that these market moves are worth money. And just like Liberation Day, you ignore them at your own profit peril. Mike, Melissa, back to you. Rick, thank you, Rick Santali. Well, those unconfirmed reports out of Iran sparking the market rally today. And if there is a complete de-escalation, our next guest says the S&P 500 could get back to 6,900. Joining us now is Ban Ki-Chata, chief global strategist at Deutsche Bank. Thank you. Great to have you with us. Thanks.

So things just go back to normal and go higher. I mean, that's really the way it can work, even if oil prices, if certain commodity prices remain higher for longer. So, you know, first, I would say 6,900 is not normal. We were stuck in range for four months, essentially, since October. What I would say is what we got today is a circuit breaker. Circuit breakers can sometimes mark a bottom, not always. I'm a little skeptical about the drivers of the circuit breaker today, because we've seen this before. We saw it also in Trade War 1.0 some years ago.

So, you know, we'll see what happens. But I would argue, you know, the market is very underweight, so you're going to get a squeeze. After all, it is the President of the United States saying that this is over. And so you need to fix your positions. We've seen this many times before. Trade War 1.0, the S&P 500 was in a range for 18 months. Okay? It's 10% wide. And, you know, if you can just draw the S&P 500 and the range, and you put in all the escalatory and de-escalatory measures, and you code them green for de-escalatory and red for escalatory. You will see all the greens are at the bottom and all the reds are at the top.

So, you know, yeah, it's a circuit breaker. So I'm skeptical that this is truly it. I mean, we are talking about potentially the largest oil shock in history, not to be overdramatic, but that's a big number. And, you know, in terms of coincidences or similarities, you know, I've seen this chart, which we can all blow apart, but it's a fact. I mean, it's just a CPI in the 1970.

and we're right at the middle there. We have managed to create an oil shock at precisely that point. And everybody's forecast is that inflation picks up from here. I would say on equity, so there's a lot of discussion on inflation and what that's going to do to the bond market. But I think it's worth a reminder on a day like this that the response of equities to inflation is and was in the 1970s identical to what the 10-year did.

You just need to invert the multiple and do the earnings yield on the same scale. And if I didn't tell you which was which, you wouldn't be able to tell me either. So that obviously has to remain in the back of investors' minds. On the other hand, and today's action probably speaks to this, there is a sense out there that there is a kind of threshold moment where maybe it doesn't spill over into really completely undermined the fundamental case or really kind of essentially getting out of control in terms of how much fundamental damage it does, and we're somewhere near that moment. And so I just wonder how much you're reassessing, you know, the real building blocks of what

the stock market should be worried about at this point. So not reassessing the building block. I mean, we are reassessing, but coming to the conclusion of no change. So if you start from, you know, the GDP side, the kind of oil price shock we've had goes, you know, yes, of course, it's negative for GDP, but it's within the band of measurement error. I'm talking about, you know, 0.1, 0.2% of GDP. GDP is pretty volatile. If you go from there to earnings, earnings are actually getting marked up, and the move up in energy and a couple of stocks in tech is outdoing all of that.

So, I mean, if you were really to think about the S&P 500 as a source, stock, then earnings are going up. So, you know, we remain basically very constructive as you get past this. It is our view that we will get past this. One of the reasons is this doesn't really change, basically, the outlook. Of course, there's negatives, and, you know, the rest of the world is more vulnerable, Europe and Asia. And you got to remember that S&P 500 sales, the rest of the world, are somewhere between 30 to 40 percent. That's a big number. So we're not really completely insulated as far as the S&P 500 is concerned. We are insulated to some extent on the GDP side.

Well, how do you think about that in terms of a longer impact on Europe and Asia? I mean, Bryant had mentioned the net gas field there has damaged. And the Qatar Energy CEO has said it could be offline for as long as five years until it's restored. And that will be lasting, longer lasting pain overseas, which U.S. companies will feel through their international earnings. Yes, I would completely agree with that. No issue. And, you know, what it's brought up again, basically for the third time in five years is the vulnerability of supply chains. And so I think, you know, ironically, it might basically increase the incentive for companies to develop

redundant supply chains so that you can call and pull on them, even though they're not basically as efficient. So we've gone from, you know, we used to have them in the old days and very slow, then we moved to just in time delivery and now we're starting to move back in the other direction. I mean, I don't think from an economic efficiency point of view, that's a good thing, but it will in the end, you know, increase resilience. Thank you, thanks. Good to see you, Pinky Chattah. Thank you. Nike earnings are out. Let's get to Gabrielle Fon Rouge, who has got the numbers. Gabi. Yeah, hey, Melissa, so Nike reporting earnings per share of 35 cents on

revenue of 11.28 billion. That's a beat on both the top and bottom lines, but a bit of a mixed picture regionally. North America revenues came in basically in line with expectations at 5.03, but China is a beat. Sales in the region came in at 1.62 billion. That's ahead of expectations of 1.5 billion. Nike tells us it's confident in North America, and it is making progress in China when it comes to inventory and assortment. We're also told that sportswear across the business. Now, this is a potential growth driver for Nike remains a headwind. But they are excited for the World Cup. It's a potential as a sales driver. And one of the main things we're going to be watching tonight is clarity on the turnaround plan and when we're going

to have to wait for the call for more details. You know, that's when they usually have the guidance. We do have a statement from CEO Elliott Hill who said, quote, the pace of the progress is different across the portfolio. He has said this again. He said, quote, the work is not finished, but the direction is clear. Melissa, back over to you. Gabby, thanks, Gabrielle Fon Rouge. Meantam, we are watching R.H as well, falling sharply after hours after reporting its results. A company earned $1.53 a share, but the estimate was there 222. Revenue also amiss.

Same story for gross margins. It now sees full year of revenue growth of 4 to 8%. The current consensus was for 8.8% increase. We're seeing those shares take a tumble down by 13.5% right now. All right. Well, we've got a news alert on OpenAI. Mackenzie Scalos has the details. Mac.

Hey, Mike. So opening eye has just closed a $122 billion round and an $852 billion post-money valuation after adding another $12 billion tranche from venture investors. Now, that follow-on financing is being co-led by a mix of VCs, including A16Z, D.E. Shaw and Co2, as well as Abu Dhabi's MGX, with Microsoft also participating. This, of course, building on the deal last month with Amazon, Nvidia, and SoftBank. Opening. The AI says that for the first time, it extended participation to individual investors through banking channels, raising more than $3 billion from retail. And we're also learning that Open AI shares will now be offered through several ARC-Invest

ETFs. I spoke with CFO Sarah Fryer earlier and asked whether the company is seeing more momentum in enterprise sales in the wake of the Pentagon Anthropic fight. She told me the biggest driver in its B2B business right now is actually the Amazon partnership with OpenAI starting to see meaningful upside from AW&E. us as a route into enterprise customers. They're now generating $2 billion in revenue per month with more than 50 million subscribers and enterprise on track to make up about half of total income by the end of the year.

Guys? You know, Mac, these fundraising rounds, and they've gone on for so long and at such high valuations, I honestly wonder exactly how much is left for the public market once it gets there because they've obviously, as you mentioned, open it up to retail. it feels as if people can own a piece of this, even pre-IPO. Precisely. And they're also competing against two other big IPOs potentially coming this year. SpaceX is looking to raise $75 billion as soon as June. There's reporting that Anthropic could look to list in October.

But ultimately, that $122 billion isn't automatically being wired over to them. Think about the Amazon investment. It's $50 billion, only $15 billion of which is guaranteed. need, they have to go public or hit AGI in order to unlock the next $35 billion tronch. So even though this money buys them a runway, they do ultimately still need to hit the public market in order to unlock all of that funding. McKenzie, thanks. McKenzie Segalos.

Up next, an analyst's reaction to Nike's numbers ahead of the company's conference call plus will have much more in today's big market rally as we close out the quarter and the month. You're watching closing bell over time, live from the NASAC market site. Nike shares are moving lower despite the company beating on the top and bottom lines. Let's bring in Oppenheimer senior retail analyst, Brian Nagel. He has a buy rating on the stock, a 120 price target. Stock now, barely above 50.

Brian, look, felt like top line, you know, across the board and also in the different geographies was about on estimate, but better margins. What did you draw out of the number so far? Well, thanks for having me. Look, I think this is another, you know, and again, with Nike, you know, we get more information on the conference call which starts at 5 Eastern. But look, as I look through these results initially, I think this is another what I call kind of building block type quarter for the company.

They're very much in the early stages, I believe, of their turnaround. I think they're doing a very good job of getting the business set for better growth going forward. But look, this quarter is still not a great quarter. You know, we're still not these numbers, even the bright spots, North America, or when they talk about the running category, are still not necessarily Nike-esque. But again, I do think we see a healthy stabilization in the building blocks for better results over the next several quarters. So North America was pretty much in line, maybe a slight miss.

China was a beat. But the commentary in North America was not Nike-esque. China, the commentary could reflect some of the uncertainty that we have injected because of higher oil prices and the impact on the Chinese consumer, Brian. I'm just, I'm wondering, you know, the stock is down 2.5 percent. this point. What do you think the street is not getting? What are we looking for? I mean, what is a concern here? Well, I mean, look, the concern, I mean, I guess I think broadly speaking, or probably most simplistically, you know, the concern is just how long is this turnaround going to take? Okay, so I talked to a lot of our clients on Nike and, you know,

there's optimism out there that here you have a big, powerful, global brand, okay, with new leadership, okay? And, you know, at some point they're going to get this right. The biggest though, is how long is this going to take? You know, and what kind of pain, you know, near-term pain will the company have to, sort of say, endure in order to get to that, you know, to that better performance. So that's why the concern here. I mean, you've had Elliott Hill now, the CEO for a year, you know, which again, in the whole scheme of things is not very long, but, you know, in Wall Street terms, and we tend to look things at shorter timeframes. And, you know, so the market is starting to ask, okay, when do we get those much better

aggregate growth numbers? And I also wonder just exactly how much leverage there is in coming years, even if things start to turn, to get earnings back to what we got used to not that long ago, right? I mean, I think the estimate for the current fiscal year is what they earned 10 years ago. Yeah, you know, that's a great question. So, I mean, we've done a lot of work around us. We think, you know, if we're looking at, in our opinion, again, we're very much longer-term bulls on this stock, but we think that these current numbers very much underappreciate the longer-term earnings power of Nike. And there's a lot of what I consider to be still transitory factors happening here. You know, the company has intentionally taken down their lifestyle business in size.

They've not, you know, they really have not yet mitigated or offset tariffs. You've seen them clear out inventory within the global marketplace. And I'm sure they're going to talk about some of the more specific actions are taken in China. Now, there's costs associated with all this. So as we're looking at the earnings today, you know, these earnings are very much reflecting these costs. I think, you know, again, we get past this. You get the new product innovation, the new reestablished relationships with their key wholesale. partners, you're going to see earnings rebound, you know, and it can get to be what we, you know,

like what we saw historically from Nike. But look, right now, the real key is, I mean, if you're looking at earnings now, that's not really reflective, at least in my mind, of the true underlying earnings power of this company. Yep, Bill, you and the street are bullish on this one price target that you have is 120. Brian, great to see you. Thank you for your analysis. Thank you. We are seeing the stock pretty much after our session lows at this point down more than 3%. For sure. All right, stocks having their biggest one-day rally in nearly a year, but could they turn right back around if the next piece of news on Iran is bad, much more on the markets. Coming up.

And as we head to a break, here's a look at the Mag 7 this quarter. The group shaved more than $2 trillion in market cap over that time. Microsoft, Tesla and Meta, all down more than 13%. Microsoft, the biggest loser of all, off 23%. Amazon, Alphabet, Invidia, and Apple, down between 10 and 6% for the quarter. All seven names did close higher today. Welcome back to closing bell overtime, live from the NASDAQ market site. Stocks jumping today, closing near the highs on hopes for the war in Iran, is nearing an end.

The S&P up about 3%. It was 4% for the NASDAQ. This wraps up a lousy month for the major averages, losses of about 5% across the board. We have not seen a month that bad since last March. Today also wrapping up the first quarter, of course, the NASDAQ down 7%, but the Russell actually in the green, so far this year. A big theme today that bounce back in some hard hit areas. These include the Mag 7 laggard, such as Meta and Microsoft. Invidia had a 5% gain roughly $200 billion in market

cap gained. The memory optical and AI buildout names also reversing yesterday's losses. Two sectors did finish in the red, energy, which is still up 10% in March, and the safety sectors. Utilities and staples were basically flat. Time now for our CNBC News Update with Julia Borson. Hi, Julia. Hi, Melissa. A federal judge has ordered construction to be stopped on President Trump's new White House ballroom. In his order, the judge said construction must stop until Congress approves the project, adding that the president is the steward of the White House for future generations and not the owner. The massive ballroom is being built at the former site of the East Wing and has faced criticism from preservationists since construction began last year.

TSA absences fell sharply Monday after workers received paychecks for the first time in over a month. DHS said only 8.6% of TSA agents called out compared to more than 12% on Friday. Still, the partial government shutdown drags on, and Congress has not reached a deal on TSA funding. And Delta Airlines has tapped Amazon Leo to provide faster internet service on hundreds of jets starting in 2028. Delta says that Amazon satellite Wi-Fi will initially be available on 500 domestic aircraft. Amazon is working to build out its fleet of low-Earth orbit satellites with 3,000. 200 in orbit right now and hundreds more ready to be launched. Back over to you. Julia, thanks, Julia Borson. Sox having their best days since last May, but is this

bounce back durable? We'll take a look at what the options market is saying and take a look at the moves in gold this month since the war began. The commodity is down 12% for the month. Its first negative month in nine and its worst monthly decline since June 2013. It was up for the quarter. It's fifth straight positive quarter. Welcome back to closing bell overtime. The The options market is suggesting today's rally may be overdone with the Sibos saying they're seeing mostly profit taking with investors selling out of existing bullish positions. So what is that telling us about whether this rally can last? Let's bring in Mandy Shoe, CBO's global markets head of derivatives market intelligence. Good to see you.

Good to be here. So tell us about this setup before we got this rally, what people were doing, what it indicates about whether it was short covering or a chase or anything like that. Yeah, sure. I'd say the theme in the options market over the past week has been actually just fading large moves in both directions. So last Thursday and Friday when we got that big sell-off, what we saw was actually mostly monetization of existing hedges. So people who had hedge going into the move selling out and actually people adding to upside calls playing for a rebound of the so-called taco trade, right? And then on a move like today, a big, big update in the market, the opposite. So people come in those who had bought upside calls selling out of it, others adding on to new, adding new.

new downside protection, basically giving the view that upside from here is likely to be limited, so they're profit taking. What are the views of volatility going out, whether it be equities, bonds, or oil? Yeah, so the positioning in the options market has obviously flopped quite a bit, and we're seeing big moves in the VIX, but if you look in the oil options market, actually, one of the things we've been consistently highlighting is just that positioning there has been remarkably consistent this entire time that most of the hedging, the flow that we've seen in the oil options market is people positioning for further upside in oil. So call demand being very, very strong relative to downside put demand.

And this being the case, not just for short-dated options, which is where typically people go to play these headlines, but also longer-dated options. So if you look at like six-month options in oil, that's also inverted, meaning calls of trading at a premium to put, extremely rare. So over the past 20 years, happened only three times in the past, 2008, when oil went to $140, $2011 Arab Spring and 22 during the Russia-Ukraine crisis. All three times, oil spent considerable amount of time being very, very elevated. So the oil options market is saying this disruption is likely to be rather prolonged.

A lot of the work that I kind of review every day, people kind of doing this array of indicators, pointed to the overall pukal ratios coming into this week as not necessarily showing extremes of the sort that would be a really clear contrarian signal that the market was bottoming. Where does that sit? Sure. Yeah. So put call ratio is a very common indicator. I would say maybe it's a little bit less reliable of an indicator because it doesn't tell you the direction of the tray. So whether people were selling the calls or buying the calls. Exactly. So the indicator that we look at, which is skew actually measures the price of the puts versus the price of calls. But that that is consistent with the put call ratio declining. So coming into this week, we were seeing lesser demand for downside protection, more demand

for upset calls, like I mentioned, I do think in the equity market, there is still this very strong belief that there is a Trump put in the market and that if we do get a severe sell-off, there's likely to be a policy reversal, capitulation, the so-called taco trade. That's what we saw at the end of last week. Now, you know, whether we're going to get it this time, whether it would actually be effective, given, you know, geopolitical war is very different from a trade war. That's, you know, to be seen, but certainly in the positioning the option market indicate that people still believe there is a Trump put in the market, and any time we get a sell

off, you do see that bullish flow coming in. Just reading the notes, it struck me as very interesting that since the war began, that there's been a collapse in volatility in tech and AI as people are more focused on geopolitical. That seems like an opportunity potentially for investors who are in that trade right now. Yes, so relative to what was happening in February, the February was all about the AI trade and what we saw in February was the volatility of tech names, or if you look at QQQQ, the ETF, the volatility of QQ relative to SPX blow out to a one-year high. because that is where all the risks was concentrated in the market was the AI trade.

Since then, that has gone from a one-year high to a near one-year low as people look away from the AI trade to these macro-risk. So what we've seen in the market is stocks now becoming more correlated. So when AI was a theme, we saw a lot of dispersion, people trying to figure out the winners and losers of AI trade. Now it's all about the macroeconomic outlook, right? What's the outlook for inflation, for growth, stocks and sectors trading much more correlated together. And that is helping to put upward pressure on the VIX. And just as a quick note, you mentioned that the day-to-day activity seems to be mostly kind of fading whatever that daily move is. Is that pretty much the routine when you look at the options flow?

I always feel like the kind of zero-data expiration options, the heavy activity in that is mostly just kind of mean reversion trade throughout the day. So specifically zero-d-tete, we see pretty balanced in terms of like people chasing momentum, playing for reversal, people taking directional views or income. But I would say this fading of the moves, that's more of a recent phenomenon. So what we see actually in February going into this beginning of March was actually a lot of hedging demand, even when, you know, market was going down. This recent reversal, as we've kind of made new lows, I think that's more of a newer, newer development. Mandy, good to see you. Thank you.

Thank you. Thank you. Thank you. Up next, Fast Fonnie's Guy Dalmi will be here to tell us whether you should believe even today's bounce and how he is trading the rally. And take a look at the software ETF IGV, ending the day higher by more than 3%. The rally, though, not making a huge dent in the big losses for the quarter with the ETF down 24%. All but 11 names closed lower, led by Adelassian, Pager Duty, Unity, D-Wave Quantum, and Intap,

which were all down more than 43%. Welcome back to overtime. Shares of McCormick and Unilever under pressure after the SpiceMaker, announced it is merging with Unilever's food business, which includes brands such as Helmand's mayonnaise and Norse soup mixes. Under terms of the deal, Unilever will receive nearly $16 billion in cash, and Unilever shareholders will control about 65% of the new company. That news overshadowing McCormick's first quarter earnings, which beat Wall Street's top and bottom line estimates. You know, it seems like we're in a phase of kind of like mopping up some of the

consumables businesses out there that have come on hard to. times valuations are low, companies look into demurge. I guess maybe this is the old best foods. I don't even know, but had Helmand's Mays in there. Skippy peanut butter maybe. But, you know, we see this, Brown Foreman in play potentially. And of course, we were talking about Estee Lauder the other day as well. And the market doesn't really like it. It doesn't see a lot of value being created in these things. I mean, it's under assault. Yeah. Ultra-processed foods are no longer in. So it's just in their expense, I mean, for consumer who's under pressure, you're not buying the brand name. For sure. And also, people love the McCormick story because it was kind of clean with, you know, spices and seasonings.

It was a very particular type of. Yeah. Couldn't get coriander. I mean, there was short. We had shortages. It's true. They said they sent coriander to guys here. They couldn't get coriander? You couldn't get coriander? Were there lines on the streets for coriander? No, this was COVID because everybody was eating in and everybody was cooking at home. And you couldn't get it. Do you remember they sent us a box of spices? That I remember. Because things were in shortage. Coriander shortage. You've heard it all.

Anyway. By the way, mayonnaise is gross. I'm just putting it out there now. They have different flavors of mayonnaise. Which is even worse. No, I mean, nobody loves it. Everybody has. Anyway, please.

Let's talk more about today's rally guy. What'd you make of it? I'm sure Mike has thoughts. But look, quarter end month, and I get it. I think the market was looking for an excuse to rally. It got it in the form of whatever we heard today. I don't know if it's been validated or not. It doesn't matter.

But here's what should be concerning, I think. The VIX is still either side of 25, which over the last year or so, that's still elevated. Energy stocks did not collapse at all. And the underlying commodity really didn't sell off all that much as well. I don't know. I don't know what to make of it. I think, again, the market was looking for an excuse. And in markets like we have now, the most violent rallies take place in these types of markets.

So label me a bit of a skeptic right now. Yeah, I mean, if you came into this week, I'm saying this middle of the day, the playbook said, we're in a sell rallies market. The burden of proof is on the bowls. Anytime you get it, you know, it's got to clear these hurdles. It's not even above any of the big kind of trend lines. On the other hand, you get a move like today, and all of a sudden it has to force people to think, sometimes you get a V-bottom.

Sometimes the market knows something's real before it seems like we can believe it. And people say, you know what? It was April of last year where we had that huge downtraft that lasted all of maybe three or four days. And if you tried to fade that, it was a fool's error. We had a huge rip one day. and then it gave two-thirds of it back. A little bit bad. It'll chop you up along the way.

Also, we were way more stretch of the downside, which I always say, fine. That means we're not going to go up 40% in six months, maybe like we did then at from the low. It's a tough call. I still look at the VIX and say, all right, the VIX is telling a story. Again, the commodities didn't sell off in a meaningful way.

And what's, I think, a little bit different, this was sort of setting up pre-war. We're five weeks into this war or whatever they're calling it now, but some of the foundational stuff was starting to show cracks before. That hasn't gone away. We don't talk about it as much because of what's going on in the Middle East,

but that has not abated at all. So you might be able to solve this problem, hopefully, but the problems that existed are still there. I'm curious for V-Bottom. You want to see volume, but do you also want need to see that sort of V reaction when it comes to the other asset classes? Do you need to see the sell off and bond?

You want to see it's, yeah. Right. Oh, yeah, no, you didn't get that. Oh, and I'm totally not saying you can make the call one way or the other right now. I think it just puts people on alert, do I want to fight it here at this level, two and a half percent off of a six-month low? I mean, that might not be the battle you want to pick right there.

Remember in The Wizard of Oz? I saw it in the first run, 1939. Yeah. But remember they're coming out of the woods and all the munchkins are singing you're out of the woods and they're all happy and they're running to the Emerald City there. But remember, the Wicked Witch, she put like little poison on the poppies and they all fell asleep. So let's not get ahead of ourselves. We haven't made it to the Emerald City yet.

Or the poppies. Well, maybe we're in the midst of the poppies right now. Poppies, remember that whole thing? This is all a dream then? Is this what you said? Well, the Wizard of, can I tell you something? Are we real? Was it a dream?

Was it a dream? Real life is in black and white. I think we all know that. I agree with that. See you later, Guy. I'll be here. We'll see the rest of the crew, of course, at the top of the hour. We joined by Barclay's head of equity strategy, Vinuk Krishna, to get his take on today's rally.

All right. Step next. Find out which stocks are driving to come back in industrials today and the key earnings and economic data that you need on your radar tomorrow. Closing bell overtime live from the NASDAQ market site. Be right back. Welcome back to overtime. Industrials are the worst performing sector this month, but they help lead today's rally. Sima Modi has some details. Hi, Sima. Hey, Mike. As Melius Research analyst note absent the war, the industrials were entering a much-needed up cycle with manufacturing activity picking up, and Caterpillar has really been the poster child of this growth with AI fueling its power gen and oil and gas business, which makes

up roughly 30% of its bottom line. Its engines are used across drilling rigs in the Middle East. It's also doubling capacity. GE-Vernova, which makes gas turbines and energy equipment used increasingly by the hyperscalers that are building data centers. Also saw its shares climb nearly 7% on the day. Engine Maker Cummins rebounding as well. As did the AI infrastructure names like Eaton, Verde, Parker Hanofin that make the wiring and cooling equipment that go inside data centers. There was a report earlier today that Iran could aim to take aim at the biggest tech companies in the U.S., raising concerns about their infrastructure overseas, but the latest headlines suggest that risk has been reduced for now. Guys?

Seema, thanks. Seema Modi. And let's get your set up with tomorrow's trade today. We'll get fresh reads on how food companies are faring when Canagra, Lanwestin, and CalMane Foods report earnings. And on the economic front, we'll get February retail sales and the March 8P jobs reports. Of course, those are snapshots in time. A lot of things have changed at this point. The earnings will be interesting. But of course, how the markets tomorrow still digest the rally that we saw today is going to be very telling. Without a doubt. I mean, you definitely had some unusual accelerants in today's rally. I think a lot of people pointing to that kind of quarter and a lot of hedges coming off and things like that. And as I mentioned,

you didn't really clear a lot of the upside hurdles that people would have put out there. But it is interesting. And we've been so susceptible to overnight news flow for obvious reasons. So we'll see how that goes and obviously how oil trades into the morning. It's going to do it now for overtime. Fast money begins right after this quick break.