Closing Bell - Closing Bell Overtime 7/21/22

Episode Date: July 21, 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.

All right, Sarah, thanks very much. Welcome, everybody, to Overtime. I'm Scott Wapney. You just heard the bells. We're just getting started here at Post 9. Another top tech name on deck for earnings, Snap reporting momentarily. Its numbers closely watched for a clue on the state of digital advertising. It's also a first mover read on Facebook and Alphabet, which both report next week. In other words, even if you don't own shares of Snap, this report is critically important at a time when the Nasdaq has really been outperforming lately, including again today. So we'll bring you the report as soon as it hits. And of course, the stock move that follows. We've also got star venture capitalist Rick Heitzman to react to all of that.

Anthony Scaramucci, by the way, will also be here a little bit later on for the latest on withdrawals at his firm due to the crypto crash. We begin, though, with our talk of the tape, whether this jump is justified, whether you can count on the rally continuing. So let's ask Solus Alternative Investment Management, Dan Greenhouse. He's the chief strategist and the economist there. He's with us at Post 9. Another strong finish here. By the way, Nasdaq up one plus percent three days in a row. Yeah, I mean, clearly it's been a pretty powerful rally off the off the low a couple of days ago. And it's been led by technology. Obviously, names like Netflix and Amazon are among the strongest performers off the low. Tesla, obviously. But also, interestingly,

the homebuilders, which have had a pretty strong rally here, even as the macro data has not been cooperating at all. Is it justified? So the question I asked at the very top of the show, is this move justified? Do you believe it? Yeah, well, I mean, listen, I've been on with you a couple of times where we've discussed a rally or a bounce and whether it's been justified. And in each case, sure. In most cases, what we'll call bear market rallies are 10%, 11%, 12% off the lows.

And in that sense, if that's what's happening now. So you still think that it is a bear market rally rather than something more significant? By the way, we just showed the S&P 500 knocking on the door at 4,000. Sure. Finishes at 3,999. Yeah. Let's see in the settlement here if it even ticks to $4K. But it's just emblematic of the move that we've had.

You're not willing to say that it's anything more than a bear market bounce. No, I'm not. Well, first of all, at the risk of creating a headline on CNBC.com, like, we could bounce up to $4,100 or $4,200, something like that. That would be perfectly in line with history. Last time I was on, I said we could bounce up to 4,400, and we immediately went straight down thereafter. That's what bear market rallies do. But again, the price action has been such, and the fundamentals have been such, that there's no reason to think that we are coming out of the bear market. And until either the price

action or the fundamentals tell me otherwise, then you have to believe that that's still the case. So let's go fundamentals. So what if I say, OK, coming into earnings, you and everybody else, I mean, everybody was sort of batting down the hatches for bad numbers. Now, they haven't been like blow the doors off amazing, but they've been far from horrific. That's one thing. Sure. Economic data, not great. Not great at all. We got that again today.

Philly Fed, the conference board leading economic indicators was ugly, too. So we're sort of, you know, the yin and the yang of where we are, what all of that means for the Fed. But at least we have earnings that aren't completely falling out of bed. And that's one of the reasons why the market has been able to do what it's doing. And I agree with that. And admittedly, when you go through the 20 percent of the S&P market cap that's reported thus far, still a small portion, commentary is mixed. You have some of the transport logistic companies that have reported that seem to suggest that things are generally OK. You have Bath and Body Works, which which preannounced not very good numbers at all and had fairly negative things to say. So I don't think you can come out of this and say everything

is on the up and up. But I also think clearly it hasn't been less far as bad as perhaps I would have thought. But there's still a lot of room to go here. We've got several more weeks of this. And I think the important thing to note, too, is nothing that has happened so far gives you any reason to believe that the Fed is in full throttle on fighting inflation. Inflation's still high. so earnings are great. If anything, that emboldens and the economy is not falling off a cliff. Parts of it are troublesome, but that only emboldens the Fed to stay the course. Well, yes, but at the same time, and we've talked about this in the past, you cannot ignore what gasoline prices are doing.

For the Federal Reserve, for central banks in general, not to get too wonky, inflation matters, but so does inflation expectations. And for the average consumer out on the street, inflation expectations is really one of two things. The price of gasoline at the pump and the price of milk in the supermarket. And if one of the two are coming down at a fairly expedient pace, then that's going to help contain inflation expectations which over time will be the first the first indication that the Fed has a an all-clear so to speak to to not necessarily stop hiking but at least not do so so as aggressively all right so let me just remind everybody once again we are waiting on snap earnings they are

expected momentarily we'll bring you that report as it crosses in the end the stock move and in an environment where the Nasdaq has really been rallying, Tesla pretty well, Netflix was way better than what was feared. This is going to be an interesting tell as you start to look into next week when the rubber meets the road on earnings. Let's broaden out the conversation if we could. Bring in Hightower Stephanie Lincoln, requisite capital management, Brent Talkington, both course CNBC contributors excuse me Steph you first as I said to Mr. Greenhouse here to my left NASDAQ is up better than one percent three days in a row the significance of that if any to where you think this is going well uh Scott you know I'm thinking that we're

in a trading range and we have been in a trading range for a while. So I've been saying choppy volatility is on the rise and that sort of thing. Until the Fed signal that they're done tightening or until we get really, really bad data, then we're probably we're probably really going to have these headwinds. Right. And they've barely even started to tighten. Right. They're not even at neutral yet. So you have a Fed that is behind the curve and playing catch up into a slowing economy. You mentioned the Philly Fed. That was really pretty dismal. Initial claims are starting to rise as well. And so I think the weaker economic news, along with inflation, along with a strong dollar, and let me tell you, I've listened to a dozen calls so far from earnings, and it has been dollar and it has been inflation. Even if companies have pricing power,

they're having problems on the cost side of things. So I think we're just going to chop around for a while. So the AAII sentiment got so incredibly negative, so extreme. And historically, when it gets that extreme, yeah, you do have a rally and a pretty fierce one, and it could last a while. And I actually think that this growth rally over value, and it's been beating by 500 basis points since June, I think that's sort of interesting. But I don't think you want to get over your skis on growth or over your skis on value. You have to be more balanced because we do have the Fed. We do have inflation. Historically, that's not good for long-duration assets.

And we have a ways to go in terms of what the Fed is going to be doing. This is all going to come down. I'm glad you ended on what the Fed is going to do, Bryn. It's all going to come down to what the Fed's comfortable with, right? How much is the Fed content with slowing the economy and to what degree? Is a mild recession acceptable to the Fed? Because if we don't have a recession, we're going to get right to the doorstep, it feels like, right? As we said, Philly Fed, ugly. LEI, ugly. Housing has been ugly. Job cuts,

we're starting to hear about more of those. And those numbers are only likely to pick up. So it really depends on how far the Fed wants to press the case on inflation and put the economy into whatever tough state that it's going to go into as a result. Right. I think the key with the Fed next week, I think 75 is like in the cards that we all feel that's going to happen. It's going to be their words. It's going to be what they say. Are they going to use more words like measured? Are they going to are they going to continue to be really hawkish? Because I think those words are incredibly important. You know, Jay, they've said that the recession is not their base case. I think, though, investors are going to remain very frustrated all year long. I mean, you know, Stephanie said it so well.

You don't want to get over your skis on really any one sector. And as long as the Fed is tightening, both reducing their balance sheet and raising rates, I think it's going to be really hard for our investors or the markets to really get multiple expansion. Because Scott, if you think about this, oil spikes have preceded recessions. Inverted yield curves have preceded recessions. Aggressive Fed have preceded recessions. We have all three this year. And so really what I'm anchoring on is trying to figure out what's actually priced in. But what I am really interested in is, and I've been talking about this, is a lot of these tech stocks continue to make higher lows and are really creeping up. And to me, that's a really good sign of a bottoming process.

And I think that Netflix came out and you actually traded up after their earnings is another good sign of some of these stocks that are down 60 and 70 are actually bottoming out. Yeah, we really snap is imminent. I just want to remind everybody of that. We'll have that the moment that it comes out. You wanted to say something. I mean, exactly right. What you want to see your stocks rallying on bad news on the idea that that I told you I'm going to lose two million subscribers. I lose a lot, but it's not quite as good. Yeah, I lose a million. I don't lose 2 million. So, hey, let's throw a party.

Let's throw a party. And that's good. But something Bryn said is also bears commenting on the Fed, that a mild recession is not their base case. I mean, that and 275 is going to get me on the subway. The Federal Reserve has no credibility whatsoever, as does anybody. This is a $20 trillion economy. And the idea that a bunch of people sitting around the table have any idea with any specificity, the degree of recession they're

going to cause is just not borne out by the data. You know, you know, Steph, I just want to get to before we get to a snap, which I expect any second now. It's not like you're doing nothing in the market. I've documented both on this show and halftime of moves you've been making. You just bought a new one, too, and that's Broadcom. Yeah, it's my first semiconductor name in a long time, Scott. Tell me why. Well, I think down 23 percent, traded 13 times earnings. It yields 3.2 percent. But most importantly, the company had a conference and a meeting recently, and they talked about supply and demand.

Steph, forgive me. I'm going to interrupt you because I'm going to go to Julia for Snap and then I'll come back to you. Julia, what do we have? Snap earnings and revenue both coming in below expectations. A two cent per share loss, that's double the loss anticipated, while revenue of $1.1 billion is a hair short of the $1.14 billion that analysts had estimated. Now, the company's daily active users growing faster than expected. Snap adding 15 million daily users in the quarter for a total of 347 million DAUs. Snap also announcing a $500 million stock buyback plan. So we got for guidance, no top or bottom line guidance for the third quarter. The company does usually give some guidance, but Snap estimates that daily active users in the third quarter will be 360 million in Q3. That is five and a half million more than analyst consensus. But there is some guidance in a little bit of a revenue guide here. The company warning that so far this quarter, revenue is flat year over year.

That's a big disappointment from the 18% revenue growth that Wall Street was projecting for the entirety of Q3. And it's certainly way down from the 50% year over year growth that investors had become accustomed to over the past five years. That's the average over the past five years. Now, that downturn is blamed by Snap on platform policy changes. Of course, that's referring to Apple. Also, increased competition and then macroeconomic challenges. You see shares are now down 17%. Scott? So let's get into a couple of things here that I notice that maybe you can speak to. Average revenue per user, the estimate was $3.57. They come in at $3.20. That's far below, obviously, where expectations were. And just to remind everybody, too, Julia, from what I have here, remember, last time they reported in April,

they gave their guidance of revenue growth year over year of between 20 and 25 percent. They came out only a month later and cut that guidance. And Evan Spiegel at the time said they would miss. They'd be at the low end of the range. Not only did they not make the low end of the range as the street was expecting 18, they're flat. That is an incredible disappointment for where the company even saw things. Yeah, flat for that for so far in Q3, Scott. So I think it's really interesting here that CEO Evan Spiegel has taken a very different tone in this letter. He says that it will likely take some time before we see significant improvements. He says we are not satisfied with the results we're delivering regardless of the current headwinds. But he does lay out a couple of ways that they are focusing on opportunities to drive growth,

despite the macroeconomic pullback, talking about direct response ads and also how to better drive productivity. I know we've been talking a lot throughout the day today about companies either halting hiring or doing layoffs. He says they're looking at, quote, a substantially reduced rate of hiring and strict reprioritization of goals and initiatives across the company. So some commentary there about where it looks like they're going to be doing cost-cutting. One other thing, Scott, Snap extended Evan Spiegel and his co-founders' contracts and announced that if the stock hits $40 a share, it'll do a split through a one to one dividend, though the stock is now at less than $13 a share. Yeah, I see here they're going to cut back on hiring as well. Julia, thank you. We'll hear

from you, I'm sure, before our show comes to an end. The headline really here. And Steph, I'll go to you, right? The headline, weakest ever sales growth, citing the digital ad spending slowdown. You own Facebook. Let's throw up shares. I want to see just if there's anything in sympathy here of either Alphabet or Meta, because that's directly where you would see it if there is. And just that speaks to the environment, really, that we're in. This weakening economy and fears of a slowdown in spending.

And there you go. In the OT, you got MetaShares down 6%. Yeah, well, okay. So there's a big difference between in valuation between Snap and Meta, and that's one of the reasons why I favor Meta. And I also think that Meta has more size and scale. They've got 2 to 3 billion daily active users and monthly active users. While Snap did post better daily active users, everything else was not good, right? So I think

that we've heard enough news, negative news from Zuckerberg and team. We already know that they have problems and they have to fix reels and they are doing it, but they also have Instagram. They also have WhatsApp. They also have Oculus. So there's a lot of drivers for the long term that I think this company can deliver over the long term, double-digit earnings and upper single-digit revenues. The valuation discrepancy is crazy, though, right? So Snap trades at 124 times earnings and Meta trades at 13. Meta trades at seven times EBITDA, which means they're profitable and price-to-sales at four times. So Snap's not even profitable. You can't even talk about that.

And not only that, I want to see the free cash flow number at Snap because it was expected to be negative, and I bet it is. Whereas Meta has over $24 billion in free cash flow. So you're talking about different apples and oranges. It's not that they're going to be immune from the slowdown in digital advertising, but I think there's a lot baked in for a high quality blue chip company in this sector yeah dan greenhouse and steph let me ask you a question in an environment where the economy is weakening and i have to be a little more closely watching where i spend my ad dollars isn't it fair to say that a quote-unquote proven platform like a google or a meta is a better destination for my money than a

than a snap which is disproportionately weighted towards a younger demographic uh more crypto those sorts of things isn't it an argument in favor of meta absolutely the rois are crazy and they're so much better than traditional advertising plus meta has 10 million advertisers and they're not going away right so so you just have to step back and see which one you want to play i get my people like snap on the stock also by way of rally significantly this week so it's giving back all that and then some often this thing is down sixty four percent on so i think it could be an m a candidate at some point it's been in my

mind but uh... from a fundamental point of view that is a much better shape. Now, that's not going to say that they're going to have a great quarter. It's just, I think, longer term, they just have a better model. Yeah. Although, Bryn, I could just say a slowdown is a slowdown is a slowdown, and everybody gets impacted, some obviously more than others, but everybody gets impacted. Yeah, everyone gets impacted, but I agree with Stephanie on Facebook though, because Instagram is an advertiser's dream.

And if you're going to advertise in one spot, you're going to pick Instagram. I mean, it's such a powerful medium. And I think that as investors, the problem with Snap is really the valuation. And so if you're going to have slowing revenue, slowing sales, slowing ARPU, and you have 143 trailing earnings, it's just too expensive right now with all of those hurdles in

front of it. And so I think people will pick their spots. I mean, I see Facebook is down, what, 5.5% right now. So clearly down in sympathy. But I think at 13 and 14 times earnings, and you're going to, I think, continue to see Instagram be really strong for Facebook. I think it's a good value here. Goodness. I mean, the valuation is still too expensive. The stock's down 75 percent plus in the last year, even in a shorter period of time. And you're telling me it's still way too expensive. What the heck was it when it was where it was before? Well, you know, it is what it is, right? It's like there's no way I don't think investors are going to look at Snap, whether it's at 16 or 13, and it barely has an E and say they have slowing growth, slowing revenue, slowing ARPU. And then I'm going to give it multiple expansion

when the Fed is extending out that duration. I just don't think that's realistic right now. And so it's expensive until it's not. But right now in this kind of market, I don't think this stock is going to get even remotely a bid around here. Yeah, I mean, when that's that's the kind of market you're in. Yeah. But you had these high flying names. They get obliterated. And then you come out, Dan Greenhouse, and say it's still expensive. Yeah. I mean, for the youth out there, this is a bear market. And there is no, you know, to cue off of Bryn's point, there was a year and a half, over the last year and a half, where with rising interest rates, there was no tolerance for excessive valuations.

And now in the market in which we find ourselves, there's no tolerance considering growth is slowing and the Fed is tightening. And given the stock's performance when it's already down as much as you said, it's just perfectly emblematic of the environment in which we find ourselves where you have to be very careful as corporate management right now. Excuse me. You cannot allow a quarter like this to happen or you're going to get punished exactly as snap is being punished. Steph, I've got to believe, even as though you make a bullish case to our audience, that you must be a little perhaps more concerned at this moment than you were at, say, $359 before we began our show and this number came out, maybe hoping that it wasn't going to be as bad as it apparently is for a stock that's down 26 percent that's doing a drag

on some of the ones in your book. Yeah, by the way, the free cash flow number it's not negative one hundred forty seven millions of people were expecting negative fifty one so even worse than i thought and again i'd like to be cast low at matter which is very strongly have a buyback yes i'm worried there's no question about it especially since the stock has rallied about six percent in the last week week and a half so it's giving back what it actually just gained

so i will see what they report obvious well telegraphed by zuckerberg that they are that they're cutting optics capex anything that they can people so the whole industry is doing the same thing so we're going to see how what the reactions are next week especially for the big five it's gonna be a very wild week and we could be swinging back and forth and as i mentioned

we're gonna be a trading rate for now we could be swinging back and forth. And as I mentioned, we're going to be in a trading range. We're not out of the woods by any means for not some time. Yeah, we'll leave it there. It's going to be a big week. We'll be here in OT covering all of it, too. Dan Greenhouse, thank you. Steph, Bryn, I'll see you soon. Let's get to our Twitter question of the day now.

We want to know what is the best social media stock to own right now? Snap, stock's down 26% this moment. Meta, Twitter, or Pinterest, which now has an activist in it you can head to at cnbc overtime to vote we'll share the results later on in our show we're just getting started here in overtime up next more reaction to that blockbuster from snapping in a down way of course as you see shares here in overtime down 25 percent noted venture capitalist rick Heitzman. He's standing by with his big takeaways from that quarter and later. Skybridge Capital's Anthony Scaramucci joins us.

The latest on withdrawals at his fund. What he thinks about investing in Bitcoin now. We're back here in overtime. Two minutes. We're back. Bitcoin pulling back today. This comes after a strong couple of days up more than 9 percent just this week. Joining us now is SkyBridge Capital founder and CNBC contributor Anthony Scaramucci.

Welcome. It's good to see you here. Good to be here, Scott. So the headline for you, obviously, this week was that you had halted withdrawals in one of your funds, a smaller fund called Legion Strategies, which which you dealt with on Squawk Box earlier in the week. Headline New York Times says you're facing a, quote unquote, mass exodus of investors from your funds, including the flagship fund. You want to expand on that? Is that true? Well, I mean, you know, Morgan Stanley put a sell on the fund, and so people are redeeming. And so, you know, we're having an orderly exit. But I think what sometimes happens is, you know, people sell bottoms at times. I mean, it does happen.

We're all fallible. And I think, you know, time will tell whether that's the right thing to do. Meantime, my sales team's out there raising money. People do like bottoms as well. So, I mean, it's a mix of both things. But yeah, listen, SkyBridge is having a difficult time. I would be remiss in saying otherwise. I want to be a straight shooter on your air at all times. But I do think in the difficulty, there's great opportunity for SkyBridge. The last time I faced this kind of difficulty,

Scott, was in 2008. And we did some pretty strategic things. You know, we bought Citibank's fund of funds, the one that you're referencing right now. Right. And so there's some big opportunities for us. But yes, investors, you know, Bitcoin has not done well. It's been a core position for us. And I think some people want to take the exit. And we're allowing people to take the exit pursuant to those documents.

Right. You have gates and things like that, right? It's not a gate. Well, it's time. You have time frames. It's an interval fund. And so we have a tender. The board sets the tender.

We set the tender. People will get out pursuant to the document that they signed. Listen, I'm a customer-facing person. I want to do the right thing for all customers. So, unfortunately, in a time like this, it's a balancing test. You've got customers that want to stay in. They want the integrity of the portfolio intact. You want customers to leave. You can't just sell the liquid stuff, Scott, and leave the remaining customers that want to stay in with the illiquid stuff. So you have to balance that. We have an independent

board that's advised by outside counsel. I think they've done an amazing job, frankly. I'm confident that SkyBridge's best days are still ahead of itself. This is the fifth anniversary for my White House press conference. It is. I saw that. I'm hoping to spend five years of hell and hellstorm. And, look, I think the good news is for us, I've got an optimistic, great group of people that I'm working with, and we'll work our way through the problem. You put this in perspective, though, a moment ago.

This is the worst situation you've been in for the firm since 08. That kind of puts things into perspective, Anthony. Definitely. Definitely the worst situation. Again, everyone's having a different situation. We have the worst market crisis since 1970, right? First half of the year, worse since 1970. But I think for us, with Bitcoin down 50 percent on the year, we had a big position in

Bitcoin. The ironic thing about our position is we bought the coins at around 18,000. So they went to 69,000, traded back to 22,000. Of course, you take money in at the top, Scott, and money leaves at the bottom. So I wish people would recognize that and stay calm and be with us. The irony is if we went from 18,000 to 22,000, everyone would be happy right now. But it didn't go that way. But I like I like the Bitcoin long term, the Bitcoin investment. I know you do. We I guess I think it's fair to say we we hope as investors sort of speaking for all for all of us who are investors that we learn from our mistakes at some point. Do you think you made a mistake?

Do you regret being as exposed to Bitcoin as you obviously were? I don't regret it. I think that the... Was it a mistake? Was it a mistake? Well, listen, in hindsight, I can tell you every phone book of many mistakes. So if you want to qualify the last six months of it as a mistake, yes, but invite me on the air hopefully in three years and then we can recant it. Remember, there were guys that bought Amazon into the March 2000 debacle. I think the stock went from like 115 to six. People said, well, that's obviously a mistake. Jeff Bezos, they had his face on Barron's with a bomb, Amazon.bomb. He shot himself into outer space and

took Captain Kirk with him 15 years later. So to me, is it a mistake? Short term, it's a mistake. But remember, everybody's a long term investor until they have short term losses. And so I want to measure the Bitcoin investment over a four year interval. I think if you've held Bitcoin for a rolling four year cycle, you have made money. That was the integrity of the position at the time that we made it. And so I don't want to say that it's a mistake. But if we want to be a Monday morning quarterback, of course, I would have loved to have sold all my Bitcoin at the top. Of course.

And bought it back at $17,000. But we can't do that in the markets. And so I don't necessarily say that it's a mistake. But let's measure it over three to five year period. What if my response to you was the only reason it was up to where it was in the first place was because of a raging bull market that got supercharged towards the end of it by the liquidity from the Fed? Yeah. So in a more normalized environment, what allows you to be as bullish long term on Bitcoin as you obviously are? Well, it's a really good question. And so the answer to that is there's been exponential growth in wallets. There has been an exponential growth in transactions on Bitcoin. There are guys like Jack Mollers working on this through the Lightning Network. And I think over time, Bitcoin will be a peer-to-peer transaction rail system for a good part of the economy.

And there'll be underlying technologies like Ethereum or perhaps Algorand that will also be a part of that. And so when I look at the technology, study the technology, I find it hard-pressed to believe that this will not be part of our future. But I understand the bear case. The bear case is, well, there was a boom, liquidity-driven boom. Bitcoin and other technologies at a high volatility got taken up, and they got shot to pieces on the way down. But I see it a little differently than that. I see the economy normalizing, inflation numbers tapering. I think the Fed switches its policy stance by the

end of the year. And then I think you get into a more normalized market. And I think if Bitcoin's 30 or 40,000 and we bought it at 18,000, all things considered, I think it's a pretty good investment. The New York Post, before I let you go, said you're raising, are you raising money for a new fund? Yeah. They say you're, quote unquote, doubling down on crypto in the face of all of this. Well, we are raising money for new funds. I'm just not sure if I'm allowed to talk about that on the air or not,

but we are. There was a report that we are raising money. And so, yes, I mean, the firm is committed to its cryptocurrency. We only have 20 percent in those funds

that you're referencing, but we do have core specific cryptocurrency funds. And yes, we're making a macro bet that this is a big part of the future. To remind people that are old like me, not you, but me. Thank you. March of 2000. You obviously want to come back on the program.

March of 2000 was a rough year for people. A lot of my generation swore off technology and they made a horrific mistake because those technology companies that were down 80, 90 percent in the March 2000 debacle are now at the top of the S&P 500. And so I'm encouraging people to think long term. Don't overreact to the current market cycle. But, you know, listen, I got to take the heat and I've got to be accountable to investors, which is why I'm on your show. And I appreciate I know they do that.. Your candor. But I do. I don't necessarily love the sinking boat in The New York Post where I'm on the SS Mooch and I'm heading down. But I like to also think that, you know what, when that happens, it's usually a sign of a bottle.

We shall see. Anthony Scaramucci, I appreciate it very much. Thanks for having me. Thanks for being here in overtime. It's time for a CNBC News Update with Shepard Smith. Hey, Shep. The SS Mooch. I like it.

Scott, thanks. From the news on CNBC, here's, Shep. The SS Mooch. I like it. Scott, thanks. From the news on CNBC, here's what's happening. The president has COVID. He's COVID positive, but says he'll continue to carry out all of his duties while quarantining in the White House residence. That from the press secretary, Corrine Jean-Pierre, this afternoon. His symptoms described as very mild. The White House COVID coordinator, Dr. Ashish Jha, saying Mr. Biden is taking Paxlovid, the antiviral therapy that's used to lessen symptoms. The president is vaccinated and double boosted. And Dr. Jha says he expects him to respond well to the treatment. The former Minneapolis cop Thomas Lane sentenced to two and a half years in prison today

for violating George Floyd's civil rights. Then Officer Lane held Floyd's legs. Officer Derek Chauvin knelt on his neck for more than nine minutes. Prosecutors had asked for more than five years. George Floyd's family called the sentencing insulting. And the defense rests in Steve Bannon's criminal contempt trial. Bannon's lawyers did not call any witnesses, did not present any evidence, then promptly asked the judge to dismiss the charges, which is wrote. They haven't ruled yet. Closing argument set for tomorrow.

Tonight, we're learning more about the evidence and testimony expected at the January 6th hearing this evening. On the news, right after Jim Cramer, 7 o'clock Eastern Time. And then live coverage of the primetime hearing with no commercial interruption starts immediately after the news on CNBC. Scott, back to you. All right, Shep, appreciate that very much. Thank you. That's Shepard Smith. Snap shares, they are plummeting after missing on the top and the bottom lines. Up next, we have reaction from star venture capitalist Rick Heitzman. Don't miss that. Shares now down just about 25 percent in overtime. Another check on shares of Snap in overtime. Joining me now with reaction to that quarter,

you see the stock is pretty much in this holding pattern here of settling down 25 percent, at least for this moment. Let's talk to star venture capitalist Rick Heitzman. He's the founder of First Mark Capital. What's your read here, Rick? It's good to see you again, obviously. Hey, good seeing you, Scott. This is a mess. I think this is kind of the worst case scenario that we could have envisioned. So it's a combination of operating as well as macro problems. From an operating perspective, they relied on DAUs. They relied on what their customers were doing. And there's probably a couple of different things. There's a competitive aspect from Instagram and TikTok.

But then there's also just a consumption pattern kind of coming out of a pandemic. What does it mean for Snap? The second piece is light on ARPU. And they're not quite sure after pre-announcing them missing the low end, what are they going to do? And then the third leg of the stool, also incredibly negative, is suspending guidance for Q3 and beyond. So, you know, they don't it's very clear that the economy and their business is, you know, is unprojectable at this point, which is obviously a huge negative sentiment. Yeah, I mean, it's unprojectable. It's, I guess, the best word to use here, as you put a real reality check, I think, on where this currently stands, right? Lack of visibility, how you can report your earnings in April and guide

down less than a month later and then not even come close to what your guidance was last time. It just gives you and I don't know if it's a way to take some of the I don't want to use the word blame, but the onus off of of Spiegel and the executive team over there. It's hard to project anything, as you just said, especially in this space. But that's that's part of your job as a public company. Right. I mean, I think if you're a younger, mature company, we work with a lot of private companies. You can sometimes say, hey, I'm uncertain given COVID, I'm uncertain given what's going on. But you can't give guidance and then pull that back a month later and then miss it and then say, hey, I can't give guidance anymore. It's a real responsibility if you're a $25 billion company.

I hear you. Cut spending, cut hiring. Is this going to be now the new normal for tech? It's not just Snap that's talking about it. Right. Microsoft, Google, Apple reports of it slowing spending, et cetera. And I think that's the problem for Snap is it's the last one. So Google just announced a couple of days ago they're suspending hiring. Uber was on the front end of this in March where people were seeing real leadership to cut spending in what a lot of people assumed was going to be a recessionary, recessionary like environment. A few people thought they were so exceptional that they didn't have to have to take those expense steps. And it seems like they're now being punished for not being proactive. And I think you're seeing this in Snap and you might see it in a couple other tech companies who are going to see their top line softening and they were slow to react on the expense side. Yeah. Speaking of other tech companies,

you just used the words, the last one to announce these sort of hiring slowdown in terms of those larger tech names. They are the first one to report these sort of hiring slowdown in terms of those larger tech names. They are the first one to report some of the ones that we talked about. That's a decided negative here now for some of the ones we've talked about, whether it's meta or alphabet. So how do we read through to that? Well, I think that what you're seeing on the consumption patterns, Instagram, I think is going to continue with a good consumption pattern. So, you know, of the three problems that Snap has, consumption patterns, I feel like that might not roll over necessarily into Instagram or Pinterest. But from a monetization perspective and an R-proof perspective, I think what you're seeing is a slowing of the consumer, a slowing of CPG companies spending on all ads, especially online ads.

And you're going to see a softening of ARPU across the board for this whole sector. So if this is what's happening in the public marketplace, what does the private marketplace look like right now where you basically make your living? Yes, I tried it. You know, it's it's it's also been a little bit rough. I think the best companies, you know, we started to see the cracks in November, December and then in January, February started to take action. So what you're seeing is probably folks no different than Snap that feel like they got the memo late. The companies that aren't performing as well are just taking those actions. What you're seeing in the private marketplace where you might even have more control, especially on your spend, that the best CEOs took action in the first quarter and now they're actually getting ready to play offense. So there's a much more discrepancy among quality of management and quality of opportunities in the private marketplace.

But we're fortunately seeing those best companies getting ready to play offense in the second half or being able to react to the market wherever it might take us. I called you a star venture capitalist. That's why. Thanks for helping us make sense of it. I'll see you soon. Oh, we'll try to figure it out. Thank you, Scott. Yeah, like everybody else. Rick Heisman, thank you. Up next, a new jolt of energy, another halftime trader getting back on the oil train. And that trade will break it down in today's Halftime Overtime. Let's do today's Halftime Overtime. Re-energize the Halftime Investment Committee returning to the energy trade after the sector's recent pullback. First, it was Joe Terranova adding EOG resources.

Now, Jim Labenthal buying ExxonMobil. There's going to be a secular supply-demand imbalance for years to come. I know Exxon's reporting next week. I'm not trying to predict which way earnings are going. I'm just starting a position here. I'll add to it. 4% dividend yield, single digit, multiple and secular reasons for it to continue to grow going forward. So for me, as I said, it's a no brainer. All right.

That's Hightower's. That's Jim Lamenthal. Hightower's Stephanie Link is back with us now. So what do you think of that? You own Chevron, of course, over ExxonMobil. But what do you think of Jim's thesis as to why he calls this a no-brainer? Yeah, because the stocks have come down like 15%, 20%, 25% from their highs. And I've been overweight energy all year long. I actually am even more overweight with my recent purchase in Occidental. But the industry has changed their strategy, Scott. They're not focusing as much on growing production. They're growing production, but not aggressively, given where prices are at

and where they historically have increased production. Instead, they're focusing on shareholder returns, dividends and buybacks, special dividends and that sort of thing. So I think the supply-demand situation stays very tight. And I want to do a barbell. So I do have the Chevron, which is just like Exxon, right? I mean, but I do think Chevron has better assets on the nice dividend yield of 4%. I have this technology, hidden technology plan, Schlumberger, which by the way, reports tomorrow. I think it's going to be a very good one. And I also have Diamondback Energy, which is an EMP company, which has raised their dividend and put in special dividends a couple of times this year. So it's crazy the kind of things that we're seeing from some of these companies in terms of

providing shareholder value. So let me ask you this. Why isn't the slide in those shares going to continue if almost every economic, pure economic metric is coming in weak and decidedly so? So if we're going to be worried about demand moving forward in a matter of however many months, isn't that going to be a negative for these stocks it certainly could certainly um but these companies their break-evens are at 40 to 50 oil and as i mentioned these companies are not focusing on increasing supply at all and that's why the price has gone up so much so to me i i think that at these levels they're minting money at even 40 to 50 oil they're minting money at even 40 to 50 dollar oil. They're minting money and they're focusing. They're totally changing their strategy. They used to drill, baby drill. Right. And now they're not.

And so they are focused on the shareholder and ESG and clean and green. And that's what's changed. And what has changed also is the stocks have come down, but the multiples have come down even more. So they're even cheaper here at these levels. Steph, we'll leave it there. Thank you. That's Stephanie Link. I'll see you soon for sure. We're tracking some big movers in overtime. Christina Partanavalo standing by with that as always. Christina. We've got another company taking a hit from the strong U.S. dollar. This time it's the maker of Barbie and Hot Wheel. And it's truly not cutting it. Shares of Boston Beer plunging. I'll tell you why after this short break. As always, we're tracking the biggest movers in overtime. Christina Partsenevel is on the case for us as usual. Christina. You mean what do we have on

tap right now? Boston Beer earnings, and that's causing shares to fall over 10 percent. Revenue beat, but earnings missed. The company's slashing its full year earnings per share guidance. Last year, or last quarter, I should say, they guided in a range of $11 to $16. Now they're saying the range is going to be $6 to $11. So that's a huge drop. Shipment volume for Q2 fell 1% because truly hard seltzer, that was the pun before, and angry orchard aren't as popular anymore. Shares of Intuitive Surgical, a company that makes robots for non-invasive surgery, are plunging also in the OT after the company missed the street's earnings per share estimates by about 5 cents. Revenue came in lighter. Stock is down 13 percent right now. And then we've got

a big beat by Barbie and Fisher pricemaker Mattel. Earnings per share of 18 cents, that's triple the street's expectation. Revenues came in higher than anticipated, but the company did say they took a four percentage point hit on revenue due to the strong U.S. dollar. Despite this really strong earnings beat, they are reiterating their full year guidance. Shares right now are down over two and a half percent. Don't miss the CEO of Mattel on Mad Money tonight with Jim Cramer coming up at 6 p.m. Eastern time. Scott, back to you. All right. Sounds good. Christina, thank you. Still ahead, our two minute drill. One money manager revealing which auto related stock he thinks is cheap right

now. We're back in overtime after this. We're back in overtime. Let's get the results now of our Twitter question of the day. We asked, what is the best social media stock to own right now? 70% of you saying Meta. Interesting, given what Snap just said ahead of Meta's report next week, which, of course, we'll have live here in overtime. Up next, our two-minute drill. One money manager seeing a buying opportunity in a financial stock.

That name when we come back. Time for the two minute drill. Joining us now, Mark Travis. He's intrepid capital president. It's good to see you. Give me a comment quickly, if you would, on the market in general, where you think we are after a sizable move. Well, I think the market's starting to discount Fed and easing up on the tightening. I think we'll get 75 beeps next week. We don't meet in August and they maybe, you know, don't maybe give us 50 beeps in September. So I think the market's discounting six to nine months out. And that's that's helping equi prices. All right. So if that's the scenario, the stocks I want to buy, according to you, are the triple Vs, Valvoline. Why?

Well, I think you've got great same-store sale growth. You've got old cars out on the road. Everybody knows how expensive used and new vehicles are. So I think the fleet in America is probably 11 years at this point. And they have 1,600 quick lube stations. So they've got rapid point, and they have 1,600, you know, oil quick lube stations. So they've got rapid growth and they're expanding that. In addition, for their traditional lubrication business, they've got Aramco, as mentioned, as a bidder for the business.

They're going to split it apart. So I think at this valuation, it makes sense. Okay. And how about Jeffries, J-E-F? You know, Scott, this is a business I've followed a long time. Originally, it was called Lucadia, run by Mr. Steinberg, who's still the chairman. Rich Hadler now runs it, known as Jeffries. They've sold off recently the remnants of Lucadia, the merchant bank, and they've used a lot of that cash to buy back in the shares, pays a nice

dividend north of 3 percent and it trades for less than its tangible book value. So I think that's going to work out for people at this price. OK, your last pick, WNS, WNS Holdings. I'm going to just mention that to our viewers. I'm going to leave it there because I want to I do want to hit the stock of overtime. Mark, I'll talk to you soon, and I know we'll have you back. But I do want to throw up shares of Snap and leave you on another look here. If Snap opened at this level, it would be the third worst decline ever for those shares. It gives you an idea of just what we're looking at here,

a decline, as I see, greater at this moment than 26 percent, the weakest ever sales growth for that company, a significant cutback in spending, including in hiring. And we'll have to keep our eye on that. And you can be certain that the folks who are coming up in just five seconds or so on Fast Money will do just that. Let's go there right now.