Closing Bell - Closing Bell Overtime: Bear Market Bounce? Exclusive with Avenue Capital’s Marc Lasry 5/16/22

Episode Date: May 16, 2022

Is a bear market bounce on the horizon? Greg Branch from Veritas Financial Group weighs in. Plus, Marc Lasry from Avenue Capital says his base case is a “recession.” And, what type of recession could potentially come? Michael Santoli takes a deep dive into that question in this “Last Word.”

Welcome to Overtime. I'm Scott Warnby. You just heard the bells. We, of course, are just getting started right here at Post 9. In just a few minutes, I'll speak exclusively to billionaire investor Mark Lazzari on where the best opportunities are in these highly unsettled markets. We'll also do some whale watching today, those 13F filings dropping during the OT. We are on the lookout for them. We do begin, though, with our talk of the tape, the bear bounce and whether a significant one is coming, and if so, how long it might last. We, with our talk of the tape, the bear bounce and whether a significant one is coming. And if so, how long it might last. We'll ask Greg Branch of the Veritas Financial Group. He's with me live. It's good to see you. You've been negative.

I know you've said that on this program a number of times, but even you were looking for some kind of a bounce. Where is it? It disappeared with that horrible CPI number. Remember, I've been talking about the base effect and expecting certainly more than 20 basis points of easing. And since we didn't get that, yes, we're going to face a 5% from May of 2021. But I'm less hopeful that even that will matter. What that means is that I think that they're going to have to start to reconsider whether or not 75 basis points is appropriate. Now, we'll hear from Jerome tomorrow, but we know that the more hawkish messages usually come from James Bullard. And I'm anxiously awaiting what he's going to put out in the press. But that's concerning, Scott. You know, I've long said that there are names in tech that will

deliver double digit earnings growth that have consistent, sustainable demand, tethered to secular tailwinds. But if we're looking at 75 basis points, there's better places to find safety because just the pathology, just the psychology of the tech tech trying to fight an interest rate rise of that magnitude does give me some concern. So I don't see one on the horizon. Yeah. Everything you said makes perfect sense. But still, I mean, we got pretty oversold. Are you telling me that Thursday off the low and the Friday carryover was it that this bear market bounce that people were looking for and some were looking, by the way, for bounces that were fairly substantial through the month? That's it.

You don't think we're going to have any more upside and we're going to go back to thinking about all the fears that we had? I do. I do. And, you know, I like simple math. And so, you know, when I was talking about the S&P being fair value, being somewhere less than 4000, I was looking at its single digit growth, Scott, which put me at around 215 and eight times multiple gave me 3870. But typically, if we are going to go into a recession back into this year, and I do believe we will, that is typified by about a 30% decrease in earnings. Now, I'm not there yet. And even though all the big banks keep coming closer to my target, I'm now moving the bar. I'm actually looking for a low single-digit contraction this year. And if we're going to see 195 in earnings at 18 times, that means the S&P is worth about $3,500.

Yeah, I mean, look, you're not the only one who thinks we could get to numbers like that. Now, albeit, those who agree with you think that we are going to have a bounce before we go down to that level. I mean, even Mike Wilson. Who has been more bearish than Mike Wilson? And even he is looking for a quote material bear market rally. Now, after that, he thinks that the support level is close to thirty four hundred. Jonathan Krinsky, he thought we were going below four thousand. Did he talks about forty two hundred as a bounce? And then we go back to thirty four, thirty five hundred. So you guys are not out of the same zip code. It's just you think maybe we get

there a little bit differently. Yeah. And look, if what you're looking for is a balance, the only thing I can see is that there will be companies that put up really, really strong second quarters. And so that might give us some tailwind, some optimism as we go into that midsummer. Travel and entertainment spending should be strong. We saw that from the credit card companies. If the consumer continues to have a heightened sense of optimism throughout all of this, then, yeah, I'm not opposed to saying that we could see some rallies throughout, particularly into those earnings. But the direction is down to me, Scott. Maybe you're too negative. Maybe you're simply too negative and you're doing what Marco Kalanovic

of JP Morgan put a note out today during the halftime program and said that equity markets and people like you are pricing in too much recession risk. He says we estimate U.S. and euro area equity markets are pricing in a 70 percent probability of a near term recession. And you are looking for one in 2022. He says we're also skeptical of the idea that April's equity fund outflow, the highest since March of 2020, is only the beginning of a more protracted phase of outflows. We therefore maintain a pro risk stance. What if earnings are not going to be as bad or the sky is not going to fall as far and as hard as you suggest it will? So there's one other pathway, right?

And I'm glad you mentioned the inflows. If Europe enters a really acute recession or a protracted recession or energy prices and there's a commodity and energy price weaponized, we might see flows from other regions of the world into the U.S. for some relative safety. And so that could be a tailwind as well if I was looking to be optimistic. But my long-term view is just based on the data. I don't like to be bearish. I don't necessarily like to be negative, but it's where the data is leading me right now. I mean, you know, it is what it is in some respects. I mean, you know, it's not like you're the only one out on an island all bared up while everybody else is throwing a party still.

Let's expand the conversation. Greg, let's bring in Bryn Talkington from Requisite Capital, who joins us now. Bryn, it's good to see you back. Are you as negative, as measured, as concerned as Greg is in your, let's take near- term view of the market, because there has been sort of a growing chorus, if you will, of people who say I'm still negative on the long term. But that doesn't mean we still can't have a meaningful or, as Mike Wilson would say, material bounce in stocks. Well, all the technicians, I mean, really, everyone's been wrong this year.

It's been really tough. I think that, you know, we only got, what, a Friday rally and one hour on Thursday. And if today we had, once again, a big sell-off, the queues were down, the only thing that was positive was really energy, health care, and maybe utilities, the energy and health care. I just think, Scott, we're in this conundrum that unemployment's low, the consumer's healthy, and the conundrum is that that's going to give the Fed a runway to continue to raise rates. Now, also, gas prices are up in May over April, and I'm pretty sure food commodities are also going to be up May over April. And so when you look at inflation slowing, I think really where the market's so weak is I

don't think month over month when we get the numbers in a few weeks are going to be slowing. We're still moving in this higher inflation, stickier economy, stickier inflation. And just equities just don't do well in that environment unless you're in energy. And let's be honest, right? There are people, Bryn, you've heard them, I mean, we hear them all the time. Oh, the Fed is going to turn more dovish if the equity market continues to look more ugly, right? And as Richard Fisher said, from your neck of the woods, the former Dallas Fed president, is you're looking at the wrong thing if you think that the Fed put is still somewhere down there, wherever the equity market may go to trigger it,

as long as credit markets don't start acting too squirrely, and they're not, the Fed is not coming to your rescue. I would totally agree. I mean, the credit markets have just been, you know, moving up with yields, but they're definitely very quiet right now. And so I don't think that the Fed is going to come in right now because once again, they're trying to slow down the economy. And so I think we're range bound on the upside because why would we get a meaningful rally, Scott? Why would we get a meaningful rally

when we know the Fed is just going to come out and talk tough and talk hawkish? It's just going to bring the market down. And so, I mean, there are years, unfortunately, when equities go down and I could paint the scenario where this is one of those years where we just stay down. I just think it's really complicated to look at even six months and say, yeah, the back half is going to be better because of midterms that historically happens. I just think we're in uncharted waters and you really have to go back to the 70s to see when inflation was this high and inflation was this far over the 10-year Treasury. And I just think it's somewhat of a new playbook. And most investors just aren't ready for that and are still waiting for a buy-the-dip type when the Fed comes in and pivots. I think they

will pivot, Scott, but I think they're going to pivot when something breaks. So, Greg, if we're in these uncharted waters, as Bryn suggests we are, where's the life raft? Where does it is it energy? Is it health care? Is staples the obvious plays that continue to work, including today? I just looked before we were beginning the program today. S&P sectors that are doing the best. And it's, of course, those. Yeah. And I think I think that that's right, that what has been working will continue. You know, Scott, you know my overarching philosophy is that I like to look at companies that have sustainable growth tethered to a secular tail end, that have pricing power, that have margins that are at least insulated, but hopefully showing me some margin expansion. And so you'll find that in many of the sectors you just named, you know, looking at Energy, Kinder Morgan or Exxon Mobil, looking in financials at Visa, MasterCard, you know, like those names for a while. And some of these banks, as they start to get very, very close to

tangible book value as well, and of course, health care, which has the ultimate price and power as well. But one thing that Brink Intimidate does concern me, and that is that that very healthy consumer balance sheet, that very healthy household balance sheet, we're starting to see the cracks in that. We eliminated $80 billion of credit card debt during the pandemic, but that number soared by $41 billion in February and $52 billion in March. We had 229 applications, sorry, 229 million applications in the first quarter, which is above pre-pandemic seasonality. And so you're starting to see the savings rate go down. You're starting to see the consumer lever up. It'll be a good summer for travel and entertainment spending, which means it'll probably be a good summer for those stocks. But the back half is treacherous. Now, tell me this. How can you think we're going to have a recession in 2022?

How can you just go through telling me why the consumer is going to fall apart? And right before that, you said that you're starting to like the banks because they're getting closer to tangible book value. Or however you characterize it, if you think that the economy is going to slow and that the consumer is going to fall out of bed. But yet I want to buy the banks, which haven't done anything, but they're going to do better in that environment. So let me tie it all together for you. There's a price at which I'm going to buy a leading financial institution and put it away and forget about it. And if what your historical trading range has been is one point two times to one point seven times price to book, then, yeah, if you're going to get down below tangible book, I'm going to buy it and forget about it and look at it again a couple of years from now, just as we did in June

of 2020 when the banks were trading below tangible book value. But yes, I do think that the consumer, the duration of this healthiness of the consumer balance sheet is starting to be tested. And I do think that it will be one of the causes for the recession is reduced consumer demand, along with all the other factors that we know are predictive of recession, like a doubling of energy prices, a tightening Fed, a reducing balance sheet. So I do not think any of those things are necessarily at odds with each other. All right. I got to go because I got some news coming down the pike right now. Greg Branch, I appreciate it. Bryn Talkington, I know that I'll see you soon as well. We mentioned those 13 F filings are coming out fast and furious during overtime. We do have one from Appaloosa. That's David Tepper. Leslie Picker has that for us. Hi, Les.

Hey, Scott. Yeah, a big kind of about face here with regard to mall names. Now, if you recall last quarter, that was the quarter through the end of last year, Tepper was dipping his toes into some mall stocks, names like Dix, Footlocker, and Gap. Those three names he has now sold out of as of the end of the first quarter of the year, the quarter through March. These were relatively small positions for Appaloosa, but broadly speaking, an interesting play nonetheless. Also during the quarter, paring back Kohl's by 58%, Macy's by 22%, and Nordstrom by 18%. But on the flip side, during the quarter, they actually upped e-commerce, the largest e-commerce company in the world, Amazon, up by 21% to hold $277 million at quarter and largest e-commerce company, at least here in

the U.S. Now, keep in mind, these positions are as of the end of March. They may have changed in the six weeks since then. But again, kind of an about face on some of these retailers, mall names that we mentioned last quarter. Yeah. And I mean, as you know, as well as I do, he's among the most nimble that have ever lived. I mean, in terms know, as well as I do, he's among the most nimble that that have ever lived. I mean, in terms of making if this is from the end of March, so much has changed since the end of March. The markets have gotten much more turbulent. You know, he's the one, again, who told me that he thought the Fed had a little bit of a credibility problem. So it was obvious that he had taken a more cautious stance on what the overall environment looked like. And even though, you know, as Kramer said the other day,

as Tepper told him that he had covered his NASDAQ short and stressed for a trade, you have to believe that his view of the world at this very moment, Les, is more cautious than it's been in quite some time. Yeah, if this is any reflection of his view on the consumer, it's that they may not be back out shopping in the way that perhaps he expected to at the end of the year. Again, these were small positions, but you did have kind of a scattering of these small names that you don't typically see in some of the big 13 Fs, or at least you haven't in recent years as they've opted maybe for some big tech names or some high growth stocks, some recent IPOs, names like that. So to see these names pop up in an Appaloosa filing was newsworthy, got some headlines. This quarter, though, seems like it's perhaps less of a big play for the firm.

Yeah, when Tepper sneezes about the market, it gets headlines, and for obvious reasons. Leslie, thank you very much. That's Leslie Picker. I know we'll see you again soon because we expect these to come out any time during this hour, and we'll certainly bring them to you. For now, let's get to our Twitter question of the day. We're asking, will the U.S. enter a recession this year in calendar year 2022? You can head to CNBC at CNBC Overtime, cast your vote. Yes or no? Simple. We'll bring you those results at the end of the show. Coming up right here in Overtime, Avenue Capital CEO Mark Lazzari joins us right here at Post 9. We'll get his updated take on market volatility. If he thinks a recession is, in fact, in the cards this year.

Overtime is back in two minutes. We're back in overtime now. Our next guest was right on the money when he told us almost two months ago to this very day that the volatility in the markets would continue. Mark Lazzari back with us at Post 9 today to talk about the market, though. We almost came on the air here still spilling over about your bucks. Yeah, it was a rough series, but at least I got seven games. And, you know, I give a lot of respect to the Celtics. They played great.

And I hope now they win the championship since they beat us. Yeah, that's absolutely right. I mean, you have a smile on your face, so you're taking it all as, you know, you have to take it. Look, you were here last on March 15th. That's almost two months to the day. So much has happened since then. That was the day before the Fed hiked by 25.

Then they hiked 50 most recently. Where are we now in the markets in your mind? Look, I think the Fed will raise one more time. But the economy, and I know people are saying it's going to be a lot more. Yeah, I mean, I'm like, and I know people are saying it's going to be a lot more. Yeah. But I mean, I'm like one more time. No, no. But it's part of it is you're starting to see that things are really slowing down.

That's having an effect. You're going to see that inflation is going to start coming down a little bit. It should. But I don't think the Fed wants a real recession. I would be surprised if that's what they want. But if they keep raising rates, that's what's going to keep on happening. I mean, you're assuming or insinuating that they can control it, of course, and history suggests that they can't. I agree. But I think if the Fed keeps raising rates, things will get a little bit, things will continue to get worse. I mean,

the markets right now have gone down. They're down a tremendous amount. Like seven weeks in a row for the Dow. And it's going to continue. So I think the Fed has accomplished what they wanted to accomplish. And I think inflation will start getting into check in the next couple of months. I keep hearing from so many people, no, the economy can withstand this. The economy is very strong. Are you seeing something different? Now, granted, you know, we're in New York. I mean, we're kind of in a bubble in some respects in New York. You're, you know, you go to the Midwest, as we said at the top for the Bucks games, and you talk to a lot of people who live in places elsewhere than here. Are you feeling something different? No, I think the economy is strong. I think it is. But you're fragile. You're strong. And all of a

sudden things can turn on a dime. So I don't think you want. You're strong, and all of a sudden things can turn on a dime. So I don't think you want to go to the point where all of a sudden you've pushed things too much. And I think the Fed is very cognizant of what's going on. So, yeah, maybe you have one or two more increases, but you don't want to have the markets down like 25%, 30%. This raises a really interesting issue, and that is the Fed put, which people declared dead. And in your wheelhouse, the credit markets aren't going crazy at the notion of all of this and financial conditions tightening. When Richard Fisher was here, but a week ago, I asked him, what does the Fed think about the stock market going down? He's like, as long as the credit markets don't seize up, then the Fed's not going to be deterred from doing what they're doing. And I would agree with that. I would agree with that. But the cost of

capital has actually started going up, right? I mean, it really has. I mean, I think for us, we're able to charge more. You're seeing that every fixed income instrument is coming down. So it's harder to raise money today. And that's OK. I think the Fed's fine with that. But the harder it gets and the more credit markets end up starting to have an issue, that's great for somebody like me, but it's not great for the average American. So when they say Powell should not have taken 75 basis points off the table, you disagree with that?

You think if he would have kept it on the table, the market's gotten much more upset than they already seem to be? I actually think it was fine for what he did because I don't think he wants to end up saying, look, yeah, we're going to raise it 75 bips. I think the 50 bips was fine. They'll raise it again. They may do one more. I'd be surprised if the Fed does it three times. You talk about opportunity, things that are bad for some investors are good for you. Where have the best opportunities been in the last couple of months since I saw you last?

Well, if you take a look, I mean, for us on the private credit side, you're able to lend money. We were lending money before around sort of 8 to 10. You're lending money now 12 to 15 percent. Yeah, 12, 15 percent. I mean, you're just you've got a lot more people on the sidelines. You're able to charge more. You've got more collateral. I think our business is doing great.

But you're seeing out there that there's issues. I mean, people are losing huge amounts of money. In Asia itself, the high-yield market has gone down in tremendous amounts, down about. You had $300 billion of value. Today, it's about $187 billion. Wow. So if you sort of think of that, the cost of capital they were lending around, you could do new issues of $25 billion. For this year, it's been about $2.5 billion.

So people need capital. It's not like all of a sudden people have stopped. So for us, we're able to lend in Asia for quite a bit of money, Europe, the same thing. Everybody's nervous, right? And they should be, right? Because nobody knows how long this is going to last. So when there's nervousness, there's a huge amount of opportunity, at least on the private credit side, on the credit side. So it sounds to me like that's much more of a opportunity for you now than, say, corporates or sovereign debt or things like that.

For us, there is one of the things we're doing right now is we're actually buying COVID, you know, business interruption claims. We're going to people and we're buying the claims that they had against insurance companies on the claims they had for COVID. And we're able to buy those. And then we're going to go against those insurance companies and try to collect on that. So speaking of Asia, the last time you were here, which really struck us, is when you said that your view of China had completely changed. I don't know if it's, you know, evolved at all in the last couple of months, but what do you see now? Is it only getting worse, your view? Are you pulling back even more? Yeah, we're out of China right now. Totally out of China. Yeah, we're not, I mean, there's no need to invest in China right now. You can invest in sort of the

region. You can invest in Australia. You can invest in India. You can invest in Hong Kong. I know Hong Kong's part of China, but you can invest in the region and you've got a legal system that works. The worry in China right now is just what the government is doing of sort of with COVID just closing cities down, that you just the economy is getting hit pretty hard in China right now. You close your offices there. I mean, you pull all your people. We did. And you don't see an avenue of getting back. We may go back, but we'll go back when things open up. I mean, I think right now there's no need for us to be there and wait. We ended up opening our offices and everybody moved

to Singapore. So for us, everything's going very, very well out there. Wow. So give me your view in the time we have left of the last review of the world over the next, the rest of this year. I mean, midterms are going to cause volatility and gosh knows what else. We still have, you know, the war going on over Russia, Ukraine. Give me the playbook. People ask you, what do you tell them? Look, I think energy prices are going to continue to go up. That's definitely going to happen. I think you're going to find that the markets are going to be kind of tough. I think the cost of capital is going to be going up. I think right now you want to be cautious.

You want to take your time. You want to get overpaid for whatever risk you're taking. There's no need for you to be a hero today, at least over the course of the next three to six months. You've got time. You might as well wait because you're right. The midterms, you know, as to what's going to happen, that's going to create more volatility. That's going to send a message as to where this country is. And we're going to find that out. And that's literally what? That's five months from now. It's coming up. So I think over the next three to six months, I would just, I'd be a little bit careful. Yeah, you should come in when, you know, you should buy things when you think they're really cheap. But I wouldn't worry. If you miss it today, you'll still have an opportunity in a couple of weeks or a couple of months. Is your base your base case recession or is that still that's my base case your base case is recession yeah i think i think you're going into a recession over the course of the next six to 12 months wow so it could even happen in calendar year 2022. it'd be hard i think it'll yeah i think it'll be 23. um i think the economy is strong but there's some fundamental issues out there.

Wow. All right. I appreciate the update from you. Thank you. Thank you. Thanks for the time. Yeah, man. That's Mark Lazzari again with Avenue. Up next, Goldman Sachs slashing its S&P price target for the year. We speak with the firm's chief global equity strategist, Peter Oppenheimer, about the big headwinds ahead for investors. Overtime is back right after this. Back in overtime now, it's time for a CNBC News update with Shepard Smith. He is live in Buffalo tonight. Shep. Hi, Scott. From the news on CNBC, here's what's happening yet again in America. This time, Buffalo, New York, the scene of another mass shooting, 10 people confirmed dead. And where today we learned it could have been so much worse, the police commissioner announced today,

it appears to the authorities that the supermarket behind me, the top supermarket, was just the intended first stop on a racist-fueled murder rampage that the suspect told police he wanted to shoot and kill more black people. Tonight, a community in anguish will speak with the loved ones left behind after yet another senseless tragedy. The latest on the investigation as authorities comb through a hate-filled manifesto allegedly posted online by the shooter himself. And the plague of white supremacy will speak with an expert in the fight against domestic terrorism in America in team CNBC coverage on the news,

live from Buffalo, right after Jim Cramer, 7 o'clock Eastern time tonight. Scott, back to you. All right, we'll see you then, Shepard Smith. Thank you. Yet another year-end price target for stocks has become a casualty of the steep sell-off in stocks. Goldman's chief U.S. equity strategist, David Koston,

cutting his S&P number to 4,300 from 4,700. We're joined now by the firm's chief global equity strategist, Peter Oppenheimer. Peter, welcome to Overtime. It's nice to see you today. Thank you, Scott. Good to see you. Yeah. Do you share David's view of at least the U.S. equity market? Yes, I do. I think there's clearly a lot of headwinds, and you've spoken about them at length in your show, growing concerns about a recession, the ongoing war in Ukraine and rising inflation rates. And in that context, it's very difficult for the U.S. in particular, I think, to see anything other than some valuation contraction. Earnings have been good, but valuations are coming down. There's better value, I think, in other markets outside of the U.S. Such as? Well, it's interesting that if you look at the

S&P, you know, it started the year at a multiple of about 21. It's come down now to around 17 times. But if you look at markets elsewhere, the U.K. is on around 10.5 times earnings, most of Europe around 12 times, much of Asia around 12 times earnings. These numbers are actually below long-run averages. Now, some of that, of course, is because of sector differences. But the merit that the US had in a lot of long-duration technology is really where most of the damage is now being done. So we do think there's some value coming back into equities now. And when you look at the most cyclical parts of them in the U.S. and elsewhere, there does seem to be a lot of damage that is priced in in terms of economic prospects now. What I've been reading about, especially, let's say, in Europe and particularly the U.K.,

the economy there deteriorating? And I don't want to necessarily use the word rapidly, but perhaps not far off from that. Yeah, I think both the UK and the rest of Europe are skirting a recession. The proximity to the supply chain shocks and dangers around the war in Ukraine are obviously that much greater. And they're much more sensitive to the rises in energy prices and food prices. The U.S., of course, is much more self-sufficient. That being said, there is a reasonable easing of fiscal policy that's coming through in Europe, which will offset some of those pressures.

And also worth noting that across Europe and indeed in the U.S., one positive point is that private sector balance sheets are actually quite strong. Households, corporate balance sheets, and of course, banks as well. None of this would stop a recession, but I do think it would limit some of the worst second, third round effects, some of the systemic effects that you often find in recessions in the past. Yeah, I wonder if the monetary policy curve, though, is going to change more rapidly than people think, particularly over in Europe, where, you know, they certainly seem a heck of a lot more more dovish. Obviously, the Bank of England,

what it what it recently said, leads one to believe that. And then there doesn't seem to be much impetus from the ECB either to get on the same calendar, if you will, of the Federal Reserve. I think that's right. Bear in mind, there is more slack in Europe, particularly in terms of the labor market and especially in continental Europe than there is in the U.S. or US or the UK. The Bank of England, of course, has been more dovish recently, but really reflecting a belief that slower growth coming through as a result of some of the shocks that we described would actually contain inflation and prevent rates from needing to rise perhaps as quickly as in the US. But there is, as I said, more slack. Core

inflation hasn't risen as quickly. But nonetheless, we do expect rates to be rising in Europe as well. All that being said, worth emphasizing that even at the peak of interest rates in this cycle in the U.S. and across Europe, rates are likely to be lower than they have been in previous cycles, particularly in real terms. And that, I think, again, will prevent some of the worst risks of deeper recessions. And some damage now, of course, is already reflected in stock prices. So, in a sense, what's important to emphasize here is not so much where we're going, but where we're going relative to what's being priced. And I think some value is beginning to come back, certainly in parts of the markets that we watch. What about finally emerging markets? I

mean, I'm not sure if you just heard my conversation with Avenues Mark Lazzari, who talks about how strictly prohibitive the markets just have, the environment, the economy, the markets, everything has seemingly become over there. Do you like emerging markets such as China and other parts of Asia better than the U.S. from here? Well, I think in an environment where the dollar is going up and U.S. interest rates are still rising, it's tough to get very optimistic in the near term. That being said, there is some real value there. And our strategists, my colleagues in Asia actually think that China does offer decent rebound opportunities as you get closer

to a peak of interest rates being priced in the U.S. So, in the very short term, I think there's a big hurdle. But as we look out over sort of six to 12 months, some of the better value that we've been describing here, I think will come to play out and we will see some reasonable upside in equity markets, particularly outside of the U.S., where you've got more cyclicality, more value exposure. And I think some relief when it comes from some easing of the dollar and U.S. interest rates. All right. We'll make that the last word. Peter, I appreciate your time so much. That's Peter Oppenheimer from Goldman Sachs, again, the chief global equity strategist joining us. We have more 13 Fs are hitting. Leslie Picker has the latest there

following the money, Les. Hey, Scott. Yeah, we're starting to get a decent sample size at this hour. And picking up on some trends in the travel space that I wanted to share with you, we just received Pershing Squares 13F filing, which showed that they pared back their stake in Hilton during the quarter by about 21% of their holding that they had at the end of the year. Melvin also slashing exposure in some travel names including Expedia, Hilton, Marriott, Hyatt, but they did take a new stake in MGM Resorts. Now that was a name that Corvex actually paired back during the quarter by 57% and Corvex also sold out of Wynn Resorts. Appaloosa took a new stake in Las Vegas Sands. Very, very, very, very small stake worth

just about $20,000 at quarter end, plus another small stake in wind. So you see some differing opinions on the travel space, but I do have to wonder if some of that has to do with a play on inflation. As we know, travel has been a key part of that equation, Scott. Yeah, no doubt. Leslie, thank you. That's Leslie Picker. More from the 13F filings. Up next, new drama in the Twitter takeover. Elon Musk going head to head today with Twitter's CEO. We're breaking down the details, including what Musk himself said just a short time ago. First, though, Christina Partsenevelos is tracking some big stock moves in the OT. Hi, Christina. Hi, Scott. And there's no doubt there is some moves.

I will tell you which customer is cutting some of its Boeing order, why United Airlines is changing its guidance for the rest of this year, and which video games helped Take-Two's latest earnings report. All of that right after this short break. We're tracking some big movers in the OT. Christina Parts of Novelos is here with that. Christina? Scott, I wanted to start with Take-Two Interactive reported its revenues for its fourth quarter today, stating net bookings of $845 million, which grew 8% from a year ago. The company said existing titles from Grand Theft Auto, the NBA, as well as Red Dead Redemption franchises helped sales. Full-year bookings, though, their guidance actually came in a little bit light. Keep in mind, though, Take-Two's plans to acquire mobile gaming company Zynga for just over $12 billion. That's still pending, but could help Take-Two grow rapidly

in mobile games. Chinese music streaming company Tencent Music posted Q1 earnings of $0.06 a share, a penny short of estimates, although revenue came in slightly higher at just over a billion bucks, and yet a drop from last year. So revenues are actually down 15%. The company still posted 80 million online music paying users. Shares are up over 2% in the OT. And I want to switch over to United Airlines because that was moving in the after hours. The company provided an update regarding its financial outlook for the second quarter of this year, stating, quote, the demand environment has continued to improve, resulting in higher unit revenue outlook. Shares right now are climbing over 2.5%. The CEO will be on CNBC tomorrow at 8.10 a.m. Eastern Time.

Scott Kirby, which you're seeing on your screen right now. And then last but not least, since we're sticking with, let's say, planes, shares of Boeing hit a session low today into the close after customer China Southern announced that they would cut their fleet plans by more than 100 MAX Boeing jets. The reason for the cut? China Southern blames delivery uncertainty around the MAX. Shares closed negative today, but we're seeing, again,

a little bit of movement on the upside in the OT, Scott. All right, Christina, thank you. Christina Partsenevelos up next, deal drama. Twitter shares under pressure yet again today. Elon Musk and Twitter's CEO going head to head over fake accounts. We'll bring you the very latest. Twitter shares falling further today as the future of that company's deal with Elon Musk remains in question. The drama, though, continues to play out mostly on Twitter, with Musk and the current CEO keeping their thumbs awfully busy. Platformers Casey Newton joins us now with more on the social soap opera.

He is also a CNBC contributor. It is a soap opera, right? I mean, this has become that. As the world turns on Twitter. That's right. Every day, a new twist to the story, and it just might involve a poop emoji. Yeah, and you know what?

It's funny you say that, because I'm literally, I pulled up the string of tweets between Musk and Agrawal, the CEO, and it's Musk putting a poop emoji at him. I mean, what are we supposed to make of where this is going? It's seemingly devolving by the minute. Look, Elon Musk signed a binding agreement to buy Twitter. This thing should be in its sort of final review. But instead, it seems like he either wants to renegotiate the deal or back out of it at a conference today in Miami. He said that it would not be out of the question to, I don't know, try to somehow get a deal at a lower price.

And of course, he's also complaining about bots and spam, which led to this exchange with Agarwal. So lots going on here. So I'm wondering if you think any of his questions, dare I say complaints, about the lack of information that he feels like he's getting from Twitter is valid. That the way that they've reported these numbers of fake accounts, bots, spam, et cetera, has been underreported. And it does have a legitimate impact on the company's business and the way advertisers would view Twitter, as he says himself, Musk does. So how do advertisers know what they're getting for their money? This is fundamental to the financial health of Twitter. That's what he tweeted back at Parag.

Right. I have to say, this is an extremely flimsy pretext. Remember that when Elon Musk bought Twitter, the thing that he said in his announcement was he was buying it to get rid of the bots. So to turn around three weeks later and say, I don't know about buying this company, sure seems like it has a lot of bots, just doesn't pass the smell test. Also keep in mind that for the last eight years, Twitter has filed with the SEC estimates of how many bots are on the platform. They say it's less than 5% of the user base. So these are legal filings that they've made with a federal agency. And it just sort of strains credulity to assume that Elon is on to some, you know, massive bot scandal unfolding at Twitter. And even if that were the case, he still signed a

binding agreement to buy the company. Well, the bottom line, I guess, is that there was no real due diligence done. So it's not like he can turn around, in my estimation, the securities lawyer or an M&A lawyer. I am not. But having not done due diligence, it's awfully hard to make the claim that they misrepresented, being Twitter, the number of fake accounts they may have before you agreed to engage in this sort of deal in the first place. That's right. You know, analysts are saying that even if Musk were right, even if 40 percent of the accounts on Twitter were bots, it would not invalidate the deal for all the reasons that we've already discussed. It would not be seen as a material event under the terms of the contract. So the

whole thing seems to be a sideshow to distract us from the fact that Elon has buyer's remorse. So now what? What's your guess on where this goes now? Because I mean, this really does seem like it's going to take these turns every day, if not every few hours? I mean, I think Elon is going to continue to violate securities laws. There will be no consequences toward him whatsoever. And Twitter's weak board and CEO will just kind of throw their hands up and hope for someone to rescue them. But, you know, despite everything he's done so far, incredibly, Elon still seems to have all the power here. That's a rather cynical view of things, don't you think, Casey?

I mean, bottom line, is the deal going to happen or not at a lower price? You know, I think based on my understanding, as crazy as it seems, I do think Elon can somehow negotiate for a lower price because the Twitter board is so weak. They already rolled over for him once. What's to say they wouldn't roll over again if push came to shove? And I do think that it looks like it's headed that way. It's not like they rolled over for him. There was only one, you know, bull or horse in a rodeo. I mean, it was they they they they rode the guy that they had.

I mean, there was no white knight emerging. And as best my knowledge, no one's reported that there is one waiting in the in the offing to come in. So we'll see. I'm sure we'll speak to you again, Casey Newton. I appreciate it. That's Casey Newton from Platformer up next, our two minute drill. We're finding some key opportunities for your portfolio in this volatility. And coming up top of the hour, a ton of retail earnings on deck on Fast Money. The crew is going to break down what to expect. We're back after this.

Hey, we're back in the overtime. Stocks finishing the day with slight gains. Joining us now, Burns McKinney, NFJ Investment Group Portfolio Manager for our two-minute show. It's good to see you. I'm going to start with the one stock that maybe surprises me the most, just given what the environment looks like and certainly what it may end up looking like, and that's Texas Instruments, TXN. Why do you like it here and now?

Well, Texas Instruments, first and foremost, it's about valuation. And right now you get Texas Instruments at a discount on a price to earnings basis to semiconductor peers. But likewise, the most important thing that we've been looking for in this type of market, you have market volatility, you have inflation. So what we're looking for is dividend paying stocks. And Texas Instruments in name, they have, you're getting a two and a half percent dividend yield. That's nearly twice that of the broader market. They raised it by 13% last year, and they have a track record for generating huge amounts of free cash flow, 10% growth per year for the last two

decades. Now, those are the numbers in terms of what you're getting. Text instruments is not about calculators anymore. They're the global leader, one of the global leaders in analog chips, which simply put, that's the blocking and tackling of the chip world. You know, they collect data from everyday devices and convert it to digital form, which means that really what you're getting in Texas Instruments is a play on the Internet of Things. And really, even more interestingly in this market would be just infrastructure spending. You know, anything you're doing to try to, you know, reduce energy efficiency, they're going to end up being a major part of that. That just kind of makes me more nervous, right? I mean, they're in autos, industrials. They're really in all parts of the economy at

a time where we're genuinely worried about what's going to come in the next several months. Let's go to another one, FedEx, which is another one in question. Frankly, I mean, the stock has not been great. Why do you think it will be? Well, again, this is one for which the bad news is largely priced in. That's what you look for in this type of market. Right now, you're getting FedEx in a multiple that's half that of the S&P 500. Again, you have a name that they raised the dividend by 15 percent last year, which really speaks to management's confidence in the business. And, you know, really, again, we know what we're looking at today is inflation and an inflationary environment. The most important thing you can get any name is pricing power. And, you know, when you have FedEx again, they trade also at a discount to UPS.

You know, a duopoly really provides pricing power. Burns, we'll talk to you soon. That's Burns McKinney joining us in our two-minute drill. Up next is Santoli's last word. The results now of our Twitter question. We asked, will the U.S. enter a recession in 2022? Wow, look at that. Look at that. 51 nearly to 49 said yes, we will.

Mike Santoli here with his last word. You wonder why the market is where it is and, you know, is fighting with itself on where it wants to go. Look at that. At least in the public perception, a bit of a coin flip. I would say the leading indicators that have worked over time are not really flashing red, but we're going to debate this for a long time. And I think that if the economy continues to wobble, we get another quarter of like a technical negative GDP, real GDP like we got in the first quarter. It's going to be about what kind of recession we might be in. Nominal growth might still be pretty good because inflation is not under control yet. Companies feed off of the top

line of the economy. That's nominal growth. So I wonder if, in fact, it would be something where Wall Street wouldn't love it, wouldn't be good for multiples, but maybe Main Street doesn't suffer that much. It might be almost the upside-down version of 2020 where the real economy was on its back and Wall Street really did fine. So we bounced off the mat on Thursday, and we actually did a Friday that didn't feel horrible

on Saturday morning. What does it mean for the bounce, this alleged bear bounce that's coming? They revealed a slight cushion. It's like 5%, 6%. 5% from the intraday low to the high. On the NASDAQ, I guess. And on the S&P, even intraday.

It doesn't really, I think it's basically inconclusive any way around. What's interesting is even those people who say this is nothing but a reflex bounce have to allow that it could go up another 5% or 7% and still just be a reflex bounce and not change the trend. So that's why we're in this real gray zone in terms of what the tactics mean. Look, I like the fact that almost nobody, almost nobody is saying that was the low. They're saying it's a low. Even the ones who think we're getting a bounce suggest that we're still going eventually lower. We'll see. We'll see. Yep.

Santoli's last word. There it is. Thank you. I'll see you again tomorrow. It does it for us.